Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 24, 2016 | |
Entity Registrant Name | COCA COLA CO | |
Entity Central Index Key | 21,344 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 4,312,959,416 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | ||
NET OPERATING REVENUES | $ 10,633 | $ 11,427 | $ 32,454 | $ 34,294 | |
Cost of goods sold | 4,131 | 4,577 | 12,671 | 13,428 | |
GROSS PROFIT | 6,502 | 6,850 | 19,783 | 20,866 | |
Selling, general and administrative expenses | 4,009 | 4,207 | 11,682 | 12,490 | |
Other operating charges | 222 | 264 | 830 | 1,166 | |
OPERATING INCOME | 2,271 | 2,379 | 7,271 | 7,210 | |
Interest income | 164 | 155 | 472 | 459 | |
Interest expense | 182 | 138 | 485 | 713 | |
Equity income (loss) - net | 281 | 200 | 678 | 402 | |
Other income (loss) - net | (1,106) | (871) | (315) | 709 | |
INCOME BEFORE INCOME TAXES | 1,428 | 1,725 | 7,621 | 8,067 | |
Income taxes | 378 | 272 | 1,618 | 1,937 | |
CONSOLIDATED NET INCOME | 1,050 | 1,453 | 6,003 | 6,130 | |
Less: Net income (loss) attributable to noncontrolling interests | 4 | 4 | 26 | 16 | |
NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY | $ 1,046 | $ 1,449 | $ 5,977 | $ 6,114 | |
BASIC NET INCOME PER SHARE (in dollars per share) | [1] | $ 0.24 | $ 0.33 | $ 1.38 | $ 1.40 |
DILUTED NET INCOME PER SHARE (in dollars per share) | [1] | 0.24 | 0.33 | 1.37 | 1.39 |
DIVIDENDS PER SHARE (in dollars per share) | $ 0.35 | $ 0.33 | $ 1.05 | $ 0.99 | |
AVERAGE SHARES OUTSTANDING (in shares) | 4,315 | 4,349 | 4,322 | 4,357 | |
Effect of dilutive securities (in shares) | 49 | 50 | 52 | 53 | |
AVERAGE SHARES OUTSTANDING ASSUMING DILUTION (in shares) | 4,364 | 4,399 | 4,374 | 4,410 | |
[1] | Calculated based on net income attributable to shareowners of The Coca-Cola Company. |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
CONSOLIDATED NET INCOME | $ 1,050 | $ 1,453 | $ 6,003 | $ 6,130 |
Other comprehensive income: | ||||
Net foreign currency translation adjustment | 86 | (1,266) | 415 | (3,544) |
Net gain (loss) on derivatives | (101) | (236) | (666) | 65 |
Net unrealized gain (loss) on available-for-sale securities | (82) | (608) | 79 | (1,701) |
Net change in pension and other benefit liabilities | 39 | 24 | 128 | 129 |
TOTAL COMPREHENSIVE INCOME (LOSS) | 992 | (633) | 5,959 | 1,079 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 2 | (5) | 17 | 1 |
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY | $ 990 | $ (628) | $ 5,942 | $ 1,078 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 11,147 | $ 7,309 |
Short-term investments | 11,265 | 8,322 |
TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 22,412 | 15,631 |
Marketable securities | 3,157 | 4,269 |
Trade accounts receivable, less allowances of $472 and $352, respectively | 4,082 | 3,941 |
Inventories | 2,751 | 2,902 |
Prepaid expenses and other assets | 3,091 | 2,752 |
Assets held for sale | 2,463 | 3,900 |
TOTAL CURRENT ASSETS | 37,956 | 33,395 |
EQUITY METHOD INVESTMENTS | 16,917 | 12,318 |
OTHER INVESTMENTS | 1,110 | 3,470 |
OTHER ASSETS | 4,526 | 4,110 |
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $10,122 and $9,783, respectively | 11,172 | 12,571 |
TRADEMARKS WITH INDEFINITE LIVES | 6,183 | 5,989 |
BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES | 4,438 | 6,000 |
GOODWILL | 10,865 | 11,289 |
OTHER INTANGIBLE ASSETS | 760 | 854 |
TOTAL ASSETS | 93,927 | 89,996 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 11,153 | 9,660 |
Loans and notes payable | 12,088 | 13,129 |
Current maturities of long-term debt | 3,473 | 2,676 |
Accrued income taxes | 396 | 331 |
Liabilities held for sale | 682 | 1,133 |
TOTAL CURRENT LIABILITIES | 27,792 | 26,929 |
LONG-TERM DEBT | 31,663 | 28,311 |
OTHER LIABILITIES | 3,984 | 4,301 |
DEFERRED INCOME TAXES | 4,243 | 4,691 |
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 | 14,882 | 14,016 |
Reinvested earnings | 66,457 | 65,018 |
Accumulated other comprehensive income (loss) | (10,209) | (10,174) |
Treasury stock, at cost — 2,727 and 2,716 shares, respectively | (46,814) | (45,066) |
EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY | 26,076 | 25,554 |
EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 169 | 210 |
TOTAL EQUITY | 26,245 | 25,764 |
TOTAL LIABILITIES AND EQUITY | $ 93,927 | $ 89,996 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS Parentheticals - USD ($) shares in Millions, $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Allowance for Doubtful Accounts | $ 472 | $ 352 |
Accumulated Depreciation | $ 10,122 | $ 9,783 |
Common Stock - Par Value | $ 0.25 | $ 0.25 |
Common Stock - Shares Authorized | 11,200 | 11,200 |
Common Stock - Issued | 7,040 | 7,040 |
Treasury Stock - Cost | 2,727 | 2,716 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Oct. 02, 2015 | |
OPERATING ACTIVITIES | ||
Consolidated net income | $ 6,003 | $ 6,130 |
Depreciation and amortization | 1,323 | 1,443 |
Stock-based compensation expense | 191 | 171 |
Deferred income taxes | (98) | 212 |
Equity (income) loss - net of dividends | (417) | (150) |
Foreign currency adjustments | 193 | (76) |
Significant (gains) losses on sales of assets - net | 364 | (550) |
Other operating charges | 277 | 697 |
Other items | (205) | 859 |
Net change in operating assets and liabilities | (908) | (346) |
Net cash provided by operating activities | 6,723 | 8,390 |
INVESTING ACTIVITIES | ||
Purchases of investments | (12,733) | (12,006) |
Proceeds from disposals of investments | 13,210 | 10,403 |
Acquisitions of businesses, equity method investments and nonmarketable securities | (767) | (2,489) |
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | 745 | 416 |
Purchases of property, plant and equipment | (1,561) | (1,670) |
Proceeds from disposals of property, plant and equipment | 92 | 50 |
Other investing activities | (319) | (117) |
Net cash provided by (used in) investing activities | (1,333) | (5,413) |
FINANCING ACTIVITIES | ||
Issuances of debt | 22,667 | 34,298 |
Payments of debt | (20,406) | (30,159) |
Issuances of stock | 1,295 | 732 |
Purchases of stock for treasury | (2,509) | (1,966) |
Dividends | (3,028) | (4,313) |
Other financing activities | 198 | 230 |
Net cash provided by (used in) financing activities | (1,783) | (1,178) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 231 | (774) |
CASH AND CASH EQUIVALENTS | ||
Net increase (decrease) during the period | 3,838 | 1,025 |
Balance at beginning of period | 7,309 | 8,958 |
Balance at end of period | $ 11,147 | $ 9,983 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of significant accounting policies | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited 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 generally accepted accounting principles 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, 2015 . When used in these notes, the terms "The Coca-Cola Company," "Company," "we," "us" or "our" mean The Coca-Cola Company and all entities included in our 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 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . 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 2016 and 2015 ended on September 30, 2016 and October 2, 2015 , 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. Effective January 1, 2016, we transferred Coca-Cola Refreshments' ("CCR") bottling and associated supply chain operations in the United States and Canada from our North America segment to our Bottling Investments segment. Additionally, effective August 1, 2016, the Company formed a new Europe, Middle East and Africa operating group consisting of the business units that were previously included in the Europe and the Eurasia and Africa operating groups. As a result, our organizational structure consists of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate. Accordingly, all prior period segment information presented herein has been revised to reflect these changes in our organizational structure. Advertising Costs The Company's accounting policy related to advertising costs for annual reporting purposes, as disclosed in Note 1 of our 2015 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 A hyperinflationary economy is one that has cumulative inflation of 100 percent or more over a three-year period. In accordance with U.S. GAAP, local subsidiaries in hyperinflationary economies are required to use the U.S. dollar as their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized currently in income. Venezuela has been designated as a hyperinflationary economy. In February 2015, the Venezuelan government announced that the two previously used currency conversion mechanisms had been merged into a single mechanism called SICAD and introduced a new open market exchange rate system, SIMADI. Management determined that the SIMADI rate was the most appropriate legally available rate and remeasured the net monetary assets of our Venezuelan subsidiary, resulting in a charge of $27 million recorded in the line item other income (loss) — net in our condensed consolidated statement of income during the nine months ended October 2, 2015 . During the nine months ended September 30, 2016 , the Venezuelan government devalued its currency and changed its official and most preferential exchange rate, which should be used for purchases 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 and the SICAD rate has been eliminated. The Venezuelan government also announced that the SIMADI rate would be replaced by the DICOM rate, which will be allowed to float freely and is expected to fluctuate based on supply and demand. As a result, 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. dollars 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 . We recorded a write-down of $56 million during the nine months ended October 2, 2015 . These write-downs were recorded in the line item other operating charges in our condensed consolidated statements of income. We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. As a result of the Company's revised expectations regarding the convertibility of the local currency, we recognized impairment charges of $3 million and $55 million during the three and nine months ended October 2, 2015 , respectively, recorded in the line item other operating charges in our condensed consolidated statements of income. As of September 30, 2016 , the combined carrying value of the net monetary assets of our Venezuelan subsidiary, the receivables from our bottling partner in Venezuela and the intangible assets associated with products sold in Venezuela was $88 million . Despite the additional currency conversion mechanisms, the Company's ability to pay dividends from Venezuela is still restricted due to the low volume of U.S. dollars available for conversion. As a result of the newly announced floating DICOM rate, the Company expects to continue to record losses on foreign currency exchange, may incur additional write-downs of receivables or impairment charges and will continue to record our proportionate share of any charges recorded by our equity method investee that has operations in Venezuela. Recently Issued Accounting Guidance In May 2014, the Financial 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 both retrospective and prospective methods of adoption and will be effective for the Company beginning January 1, 2018. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance in ASU 2014-09 and has the same effective date as the original standard. During the three months ended July 1, 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting; and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients. These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Company is currently evaluating the impact that the adoption of these standards will have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard was retrospectively adopted by the Company on January 1, 2016. As a result, $96 million and $1 million of debt issuance costs at December 31, 2015, were reclassified to long-term debt and current maturities of long-term debt, respectively, from other assets. In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes . The amendments in this update 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. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments will be effective for the Company beginning January 1, 2017. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. 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 requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with 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 the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. ASU 2016-02 is effective for the Company beginning January 1, 2019 and we are currently evaluating the 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. ASU 2016-09 is effective for the Company beginning January 1, 2017 and will require us to recognize excess tax benefits and tax deficiencies in the consolidated income statement when the awards vest or are settled. These changes are currently recognized in capital surplus in our consolidated balance sheet. Additionally, the guidance requires excess tax benefits to be presented as an operating activity in the statement of cash flows rather than as a financing activity. 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 August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for the Company beginning January 1, 2018 and we are currently evaluating the impact that ASU 2016-15 will have on our consolidated financial statements. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2016 | |
Acquisition and Divestures [Abstract] | |
Acquisition and Divestitures [Text Block] | ACQUISITIONS AND DIVESTITURES Acquisitions During the nine months ended September 30, 2016 , our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 767 million , which primarily related to our acquisition of Xiamen Culiangwang Beverage Technology Co., Ltd. ("China Green"), a maker of plant-based protein beverages in China, and a minority investment in CHI Limited ("CHI"), a Nigerian producer of value-added dairy and juice beverages, which is accounted for under the equity method of accounting. Under the terms of the agreement for our investment in CHI, the Company is obligated to acquire the remaining ownership interest from the existing shareowners in 2019 based on an agreed-upon formula. During the nine months ended October 2, 2015 , our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 2,489 million , which primarily related to our strategic partnership with Monster Beverage Corporation ("Monster") and an investment in a bottling partner in Indonesia that is accounted for under the equity method of accounting. The bottling partner in Indonesia is a subsidiary of Coca-Cola Amatil Limited, an equity method investee. We also acquired the remaining outstanding shares of a bottling partner in South Africa ("South African bottler"), which was previously accounted for as an equity method investment. We remeasured our previously held equity interest in the South African bottler to fair value upon the close of the transaction and recorded a loss on the remeasurement of $19 million during the nine months ended October 2, 2015 . This bottler was deconsolidated in conjunction with the Coca-Cola Beverages Africa Limited transaction discussed further below. Monster Beverage Corporation On August 14, 2014, the Company and Monster entered into definitive agreements for a long-term strategic relationship in the global energy drink category. The transaction contemplated under these agreements ("Monster Transaction") closed on June 12, 2015. As a result of the Monster Transaction, (1) the Company purchased newly issued shares of Monster common stock representing approximately 17 percent of the outstanding shares of Monster common stock (after giving effect to the new issuance); (2) the Company sold its global energy drink business (including NOS, Full Throttle, Burn, Mother, Play and Power Play, and Relentless) to Monster, and the Company acquired Monster's non-energy drink business (including Hansen's Natural Sodas, Peace Tea, Hubert's Lemonade and Hansen's Juice Products); and (3) the parties amended their distribution coordination agreements to expand distribution of Monster products into additional territories pursuant to long-term agreements with the Company's existing network of Company-owned or -controlled bottling operations and distribution partners. The Coca-Cola system also became Monster's preferred global distribution partner. The Company made a net cash payment of $2,150 million to Monster, of which $125 million was being held in escrow, subject to release upon achievement of milestones relating to the transfer of Monster's distribution rights to our distribution network. The escrow was released in June 2016 upon the expiration of the escrow term as certain milestones relating to the transfer of Monster's domestic distribution rights to our distribution network had not been achieved. However, due to the probability that these milestones will be achieved at a future date, the Company has accrued $125 million related to these future payments to Monster. The Monster Transaction consisted of multiple elements including the purchase of common stock, the acquisition and divestiture of businesses and the expansion of distribution territories. When consideration transferred is not solely in the form of cash, measurement is based on either the cost to the acquiring entity (the fair value of the assets given) or the fair value of the assets acquired, whichever is more clearly evident and, thus, more reliably measurable. As the majority of the consideration transferred was cash, we believe the fair value of the consideration transferred is more reliably measurable. The consideration transferred consisted of $2,150 million of cash (including $125 million initially held in escrow) and the fair value of our global energy business of $2,046 million , which we determined using discounted cash flow analyses, resulting in total consideration transferred of $4,196 million . As such, we have allocated the total consideration transferred to the individual assets and business acquired based on a relative fair value basis, using the closing date fair values of each element, as follows (in millions): June 12, 2015 Equity investment in Monster $ 3,066 Expansion of distribution territories 1,035 Monster non-energy drink business 95 Total assets and business acquired $ 4,196 In addition to our ownership interest in Monster's outstanding common stock, the Company is represented by two directors on Monster's 10 member Board of Directors. Based on our equity ownership percentage, the significance that our expanded distribution and coordination agreements have on Monster's operations, and our representation on Monster's Board of Directors, the Company is accounting for its interest in Monster as an equity method investment. As a result of the Monster Transaction, the North America Coca-Cola system obtained the right to distribute Monster products in territories for which it was not previously the authorized distributor ("expanded territories"). These distribution rights are governed by an agreement with an initial term of 20 years , after which it will continue to remain in effect unless otherwise terminated by either party and there are no future costs of renewal. As such, these rights were determined to be indefinite-lived intangible assets and are classified in the line item bottlers' franchise rights with indefinite lives in our condensed consolidated balance sheet. CCR is the distributor in the majority of the expanded territories. The remainder of the territories are serviced by independent bottling partners. Of the $1,035 million allocated to the expanded distribution rights, the Company derecognized $341 million related to the expanded territories serviced by the independent bottling partners upon the close of the transaction. As consideration for these rights, the Company received an upfront payment of $28 million related to these territories, and we will receive a payment per case on all future sales made by these independent bottlers for the duration of the distribution agreements. As these payments are dependent on future sales, they are a form of contingent consideration. We elected to account for this consideration in the same manner as the contingent consideration to be received in the North America refranchising, discussed below. This resulted in a net loss of $313 million recorded in the line item other income (loss) — net in our condensed consolidated statement of income during the nine months ended October 2, 2015 . During the nine months ended October 2, 2015 , the Company recognized a gain of $1,715 million on the sale of our global energy drink business, primarily due to the difference in the recorded carrying value of the assets transferred, including an allocated portion of goodwill, compared to the value of the total assets and business acquired. After considering the loss resulting from the derecognition of the expanded territory rights serviced by the independent bottling partners, the net gain recognized on the Monster Transaction was $1,402 million , which was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. Additionally, under the terms of the Monster Transaction, we were required to discontinue selling energy products under certain trademarks, including one trademark in the glacéau portfolio. The Company recognized an impairment charge of $380 million upon closing, primarily related to the discontinuation of the energy products in the glacéau portfolio, which was recorded in the line item other operating charges in our condensed consolidated statement of income. During the nine months ended October 2, 2015 , based on the relative fair values of the total assets and business acquired, $1,620 million of the $2,150 million cash payment made was classified in the line item acquisitions of businesses, equity method investments and nonmarketable securities in our consolidated statement of cash flows. The remaining $530 million was classified in the line item other investing activities in our consolidated statement of cash flows. Divestitures During the nine months ended September 30, 2016 , proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $745 million , primarily related to proceeds from the refranchising of certain of our territories in North America. During the nine months ended October 2, 2015 , proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $416 million , related to proceeds from the refranchising of certain of our territories in North America and proceeds from the sale of a 10 percent interest in a Brazilian bottling partner as a result of the majority owners exercising their right to acquire additional shares from us. North America Refranchising In conjunction with implementing a new beverage partnership model in North America, the Company refranchised territories that were previously managed by CCR to certain of our unconsolidated bottling partners. These territories generally border these bottlers' existing territories, allowing each bottler to better service local customers and provide more efficient execution. By entering into comprehensive beverage agreements ("CBAs") with each of the bottlers, we granted certain exclusive territory rights for the distribution, promotion, marketing 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, 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 to the respective bottlers in exchange for cash. These rights include, where applicable, the distribution rights acquired from Monster in 2015 for the respective territories. During the nine months ended September 30, 2016 and October 2, 2015 , cash proceeds from these sales totaled $732 million and $217 million , respectively. Included in the cash proceeds for the nine months ended September 30, 2016 and October 2, 2015 was $181 million and $51 million , respectively, from Coca-Cola Bottling Co. Consolidated ("CCBCC"), 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. Additionally, in September 2015, the Company announced the formation of a new National Product Supply System ("NPSS") which will facilitate optimal operation of the U.S. product supply system. Under the NPSS, the Company and several of its existing independent producing bottlers will administer key national product supply activities for these bottlers, which currently represent approximately 95 percent of the U.S. produced volume. As part of the NPSS, it is anticipated that each of these bottlers will acquire certain production facilities from CCR in exchange for cash, subject to the parties reaching definitive agreements. We recognized losses of $1,089 million and $794 million during the three months ended September 30, 2016 and October 2, 2015 , respectively. During the nine months ended September 30, 2016 and October 2, 2015 , we recognized losses of $1,657 million and $827 million , respectively. These losses primarily related to the derecognition of the intangible assets transferred or reclassified as held for sale and were included in the line item other income (loss) — net in our condensed consolidated statements of income. See further discussion of assets and liabilities held for sale below. We expect to recover the value of the intangible assets transferred to the bottlers under the CBAs through the future quarterly payments; however, 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 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. During the three and nine months ended September 30, 2016, the Company incurred $17 million of expense related to payments made to certain of our unconsolidated bottling partners in order to convert their bottling agreements to a CBA with additional requirements ("Final Form CBA"). The additional requirements 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 previously refranchised territories for each of the related bottling partners will be governed under the same Final Form CBA, which will provide consistency across their territories and, as bottling agreements held by other U.S. bottlers are also converted, across the U.S. bottling system. The expense related to these payments was included 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. 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"). As of December 31, 2015, our German bottling operations were classified as held for sale. 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 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 based on our equity ownership percentage, our representation on CCEP's Board of Directors and other governance rights. Coca-Cola Beverages Africa Limited In November 2014, the Company, SABMiller plc and Gutsche Family Investments entered into an agreement 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 Limited ("CCBA"), the Company: (1) contributed its South African bottling operations to 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 and a 3 percent interest in CCBA's South African subsidiary and (4) acquired several trademarks that are generally indefinite-lived. 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, and the Company exercised that option on October 10, 2016. Refer to Note 16 for more information. Keurig Green Mountain, Inc. In February 2014, the Company purchased newly issued shares in Keurig Green Mountain, Inc. ("Keurig") for $1,265 million , including transaction costs of $14 million . In May 2014, the Company purchased additional shares of Keurig in the market for $302 million , which represented an additional 2 percent equity position in Keurig. Subsequent to these purchases, the Company entered into an agreement with Credit Suisse Capital LLC ("CS") to purchase additional shares of Keurig which would increase the Company's equity position to a 16 percent interest based on the total number of issued and outstanding shares of Keurig as of May 1, 2014. Under the agreement, the Company was to purchase from CS, on a date selected by CS no later than February 2015, the lesser of (1) 6.5 million shares of Keurig or (2) the number of shares that shall cause our ownership to equal 16 percent . The purchase price per share was the average of the daily volume-weighted average price per share from May 15, 2014, to the date selected by CS, as adjusted in certain circumstances specified in the agreement. CS had exclusive ownership and control over any such shares until delivered to the Company. In February 2015, the Company purchased 6.4 million shares from CS under this agreement for a total purchase price of $830 million . As this agreement qualified as a derivative, we recognized a loss of $58 million in the line item other income (loss) — net in the condensed consolidated statement of income during the nine months ended October 2, 2015 . The Company recognized a cumulative loss of $47 million in the line item other income (loss) — net in the condensed consolidated statements of income over the term of the agreement. The purchases of the shares were included in the line item purchases of investments in our condensed consolidated statement of cash flows, net of any related derivative impact. The Company accounted for the investment in Keurig as an available-for-sale security, which was included in the line item other investments in our condensed consolidated balance sheet. In March 2016, a JAB Holding Company-led investor group acquired Keurig for $92 per share. 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 North America Refranchising As of September 30, 2016 , the Company had entered into agreements, or otherwise approved plans, to refranchise additional territories in North America. For 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 based on the agreed-upon sale price. The Company expects that these territories will be refranchised within the next 12 months. Refranchising of China Bottling Operations In July 2016, the asset group that includes the Company-owned bottling operations in China and a related cost method investment met the criteria to be classified as held for sale. We were not required to record these assets and liabilities at fair value less any costs to sell because their fair value approximates our carrying value. The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our condensed consolidated balance sheets (in millions): September 30, 2016 December 31, 2015 Cash, cash equivalents and short-term investments $ 68 $ 143 Trade accounts receivable, less allowances 80 485 Inventories 188 276 Prepaid expenses and other assets 85 83 Equity method investments — 92 Other investments 42 — Other assets 19 25 Property, plant and equipment — net 1,548 2,021 Bottlers' franchise rights with indefinite lives 1,171 1,020 Goodwill 337 333 Other intangible assets 40 115 Allowance for reduction of assets held for sale (1,115 ) (693 ) Total assets $ 2,463 1 $ 3,900 3 Accounts payable and accrued expenses $ 328 $ 712 Current maturities of long-term debt — 12 Accrued income taxes 14 4 Long-term debt — 74 Other liabilities 1 79 Deferred income taxes 339 252 Total liabilities $ 682 2 $ 1,133 4 1 Consists of total assets relating to North America refranchising of $884 million , China bottling operations of $1,562 million and other assets held for sale of $17 million , which are included in the Bottling Investments and Corporate operating segments. 2 Consists of total liabilities relating to North America refranchising of $253 million and China bottling operations of $429 million , which are included in the Bottling Investments operating segment. 3 Consists of total assets relating to CCEP of $2,894 million , North America refranchising of $589 million , Coca-Cola Beverages Africa Limited of $398 million and other assets held for sale of $19 million , which are included in the Bottling Investments, Europe, Middle East and Africa, and Corporate operating segments. 4 Consists of total liabilities relating to CCEP of $924 million , North America refranchising of $123 million and Coca-Cola Beverages Africa Limited of $86 million , which are included in the Bottling Investments and Europe, Middle East and Africa operating segments. 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. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstracts] | |
Investments | INVESTMENTS Investments in debt and marketable securities, other than investments accounted for under the equity method, 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 are carried at either amortized cost or fair value. 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 trading securities and realized gains and losses on available-for-sale securities are included in net income. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in our consolidated balance sheets as a component of AOCI, except for the change in fair value attributable to the currency risk being hedged. Refer to Note 5 for additional information related to the Company's fair value hedges of available-for-sale securities. Trading Securities As of September 30, 2016 and December 31, 2015 , our trading securities had a fair value of $ 379 million and $ 322 million , respectively, and consisted primarily of equity securities. The Company had net unrealized gains on trading securities of $ 37 million and $ 19 million as of September 30, 2016 and December 31, 2015 , respectively. The Company's trading securities were included in the following line items in our condensed consolidated balance sheets (in millions): September 30, 2016 December 31, 2015 Marketable securities $ 277 $ 229 Other assets 102 93 Total $ 379 $ 322 Available-for-Sale and Held-to-Maturity Securities As of September 30, 2016 and December 31, 2015 , the Company did not have any held-to-maturity securities. As of September 30, 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 $ 1,266 $ 484 $ (35 ) $ 1,715 Debt securities 4,792 113 (15 ) 4,890 Total $ 6,058 $ 597 $ (50 ) $ 6,605 1 Refer to Note 14 for additional information related to the estimated fair value. As of December 31, 2015 , 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 $ 3,573 $ 485 $ (84 ) $ 3,974 Debt securities 4,593 64 (25 ) 4,632 Total $ 8,166 $ 549 $ (109 ) $ 8,606 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 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Gross gains $ 21 $ 44 $ 131 $ 85 Gross losses (6 ) (15 ) (42 ) (27 ) Proceeds 2,072 1,016 8,889 3,320 As of September 30, 2016 and December 31, 2015 , the Company had investments classified as available-for-sale in which our cost basis exceeded the fair value of our investment. Management assessed each of the available-for-sale securities that were in a gross unrealized loss position on an individual basis to determine if the decline in fair value was other than temporary. 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 of these assessments, management determined that the decline in fair value of these investments was not other than temporary and did not record any impairment charges. The Company uses two of its insurance captives 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 solvency capital requirements. The Company elected to invest its solvency capital in a portfolio of available-for-sale securities, 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 30, 2016 and December 31, 2015 , the Company's available-for-sale securities included solvency capital funds of $ 976 million and $ 804 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 30, December 31, Cash and cash equivalents $ 1,635 $ 361 Marketable securities 2,880 4,040 Other investments 967 3,280 Other assets 1,123 925 Total $ 6,605 $ 8,606 The contractual maturities of these available-for-sale securities as of September 30, 2016 were as follows (in millions): Cost Estimated Fair Value Within 1 year $ 1,994 $ 1,994 After 1 year through 5 years 2,277 2,336 After 5 years through 10 years 186 204 After 10 years 335 356 Equity securities 1,266 1,715 Total $ 6,058 $ 6,605 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 30, 2016 and December 31, 2015 . Our cost method investments had carrying values of $ 143 million and $ 190 million as of September 30, 2016 and December 31, 2015 , respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventories | |
Inventories | 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 market. We determine cost on the basis of the average cost or first-in, first-out methods. Inventories consisted of the following (in millions): September 30, December 31, Raw materials and packaging $ 1,513 $ 1,564 Finished goods 952 1,032 Other 286 306 Total inventories $ 2,751 $ 2,902 |
Hedging Transactions and Deriva
Hedging Transactions and Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Hedging Transactions and Derivative Financial Instruments | |
Hedging Transactions and Derivative Financial Instruments | 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 debt, in hedging relationships. All derivative instruments are carried at fair value in our condensed consolidated balance sheets 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 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 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 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 . 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 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. 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 Derivatives Designated as Hedging Instruments Balance Sheet Location 1 September 30, 2016 December 31, 2015 Assets: Foreign currency contracts Prepaid expenses and other assets $ 283 $ 572 Foreign currency contracts Other assets 155 246 Commodity contracts Prepaid expenses and other assets — 1 Interest rate contracts Prepaid expenses and other assets 20 20 Interest rate contracts Other assets 290 62 Total assets $ 748 $ 901 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 153 $ 51 Foreign currency contracts Other liabilities 60 75 Interest rate contracts Accounts payable and accrued expenses 98 53 Interest rate contracts Other liabilities 69 231 Total liabilities $ 380 $ 410 1 All 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 14 for the net presentation of the Company's derivative instruments. 2 Refer to Note 14 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 Derivatives Not Designated as Hedging Instruments Balance Sheet Location 1 September 30, 2016 December 31, 2015 Assets: Foreign currency contracts Prepaid expenses and other assets $ 198 $ 105 Foreign currency contracts Other assets 4 241 Commodity contracts Prepaid expenses and other assets 22 2 Commodity contracts Other assets 1 1 Other derivative instruments Prepaid expenses and other assets — 17 Other derivative instruments Other assets 1 3 Total assets $ 226 $ 369 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 47 $ 59 Foreign currency contracts Other liabilities 9 9 Commodity contracts Accounts payable and accrued expenses 41 154 Commodity contracts Other liabilities 1 19 Interest rate contracts Other liabilities 2 1 Other derivative instruments Accounts payable and accrued expenses 6 5 Other derivative instruments Other liabilities 1 2 Total liabilities $ 107 $ 249 1 All 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 14 for the net presentation of the Company's derivative instruments. 2 Refer to Note 14 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 cash 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 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 qualified for the Company's foreign currency cash flow hedging program were $ 6,783 million and $ 10,383 million as of September 30, 2016 and December 31, 2015 , respectively. The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency denominated debt due to changes in foreign currency exchange rates. For this hedging program, the Company records the change in carrying value of the foreign currency denominated debt 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. During the nine months ended October 2, 2015 , the Company discontinued the cash flow hedge relationships related to swaps that had a notional amount of $2,590 million . Upon discontinuance, the Company recognized a loss of $92 million in OCI, which will be reclassified from AOCI into interest expense over the remaining life of the debt, a weighted-average period of approximately 10 years . The Company did not discontinue any cash flow hedging relationships during the three and nine months ended September 30, 2016 . The total notional values for the Company's cross-currency swaps were $1,851 million and $566 million as of September 30, 2016 and December 31, 2015 , respectively. 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 were designated and qualified for the Company's commodity cash flow hedging program were $ 3 million and $ 8 million as of September 30, 2016 and December 31, 2015 , 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 of the interest rate swap agreements that were designated and qualified for the Company's interest rate cash flow hedging program were $1,500 million and $3,328 million as of September 30, 2016 and December 31, 2015 , respectively. 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 three months ended September 30, 2016 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 1 The 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 of income. 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 30, 2016 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 ) 1 The 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 of income. 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 three months ended October 2, 2015 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 $ 1 Net operating revenues $ 170 $ — 2 Foreign currency contracts 22 Cost of goods sold 16 — 2 Foreign currency contracts — Interest expense (3 ) — Interest rate contracts (223 ) Interest expense 1 (3 ) Commodity contracts (1 ) Cost of goods sold (1 ) — Total $ (201 ) $ 183 $ (3 ) 1 The 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 of income. 2 Includes 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 October 2, 2015 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 $ 727 Net operating revenues $ 468 $ — 2 Foreign currency contracts 52 Cost of goods sold 44 — 2 Foreign currency contracts 18 Interest expense (7 ) — Interest rate contracts (187 ) Interest expense (2 ) (3 ) Commodity contracts (2 ) Cost of goods sold (2 ) — Total $ 608 $ 501 $ (3 ) 1 The 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 of income. 2 Includes a de minimis amount of ineffectiveness in the hedging relationship. As of September 30, 2016 , the Company estimates that it will reclassify into earnings during the next 12 months $330 million of gains 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 30, 2016 , such adjustments had cumulatively increased the carrying value of our long-term debt by $ 279 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 $ 6,928 million and $7,963 million as of September 30, 2016 and December 31, 2015 , 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 of derivatives that related to our fair value hedges of this type were $ 1,232 million and $ 2,159 million as of September 30, 2016 and December 31, 2015 , respectively. The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the three months ended September 30, 2016 and October 2, 2015 (in millions): Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income 1 Three Months Ended September 30, 2016 October 2, 2015 Interest rate contracts Interest expense $ — $ 151 Fixed-rate debt Interest expense (1 ) (152 ) Net impact to interest expense $ (1 ) $ (1 ) Foreign currency contracts Other income (loss) — net $ (67 ) $ 82 Available-for-sale securities Other income (loss) — net 66 (87 ) Net impact to other income (loss) — net $ (1 ) $ (5 ) Net impact of fair value hedging instruments $ (2 ) $ (6 ) 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 in the fair values of derivatives designated as fair value hedges had on earnings during the nine months ended September 30, 2016 and October 2, 2015 (in millions): Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income 1 Nine Months Ended September 30, 2016 October 2, 2015 Interest rate contracts Interest expense $ 398 $ (71 ) Fixed-rate debt Interest expense (364 ) 79 Net impact to interest expense $ 34 $ 8 Foreign currency contracts Other income (loss) — net $ (37 ) $ 217 Available-for-sale securities Other income (loss) — net 34 (231 ) Net impact to other income (loss) — net $ (3 ) $ (14 ) Net impact of fair value hedging instruments $ 31 $ (6 ) 1 The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of hedge effectiveness. Hedges of Net Investments in Foreign Operations Strategy The Company uses forward contracts and non-derivative financial instruments to protect the value of our investments in a number of foreign subsidiaries. During the year ended December 31, 2015 , the Company designated a portion of its euro-denominated debt as a hedge of a net investment in our European operations. The change in the carrying value of the designated portion of the euro-denominated debt due to changes in exchange rates is recorded in net foreign currency translation adjustment, a component of AOCI. 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 to offset the changes in the values of the net investments being hedged. 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 30, 2016 December 31, 2015 September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Foreign currency denominated debt $ 11,740 $ 10,912 $ (67 ) $ (104 ) $ (323 ) $ (386 ) Foreign currency contracts 565 1,347 (9 ) 274 (235 ) 680 Total $ 12,305 $ 12,259 $ (76 ) $ 170 $ (558 ) $ 294 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. 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 October 2, 2015 . In addition, the Company did not have any ineffectiveness related to net investment hedges during the three and nine months ended September 30, 2016 and October 2, 2015 . 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 of cash flows. 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 fair values 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 values 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 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. 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 in our condensed consolidated statement of income, as applicable. The total notional values of derivatives related to our foreign currency economic hedges were $ 3,915 million and $ 3,605 million as of September 30, 2016 and December 31, 2015 , 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 selling, general and administrative expenses in our condensed consolidated statement of income, as applicable. The total notional values of derivatives related to our economic hedges of this type were $ 573 million and $ 893 million as of September 30, 2016 and December 31, 2015 , respectively. The following 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 Location of Gain (Loss) September 30, 2016 October 2, 2015 Foreign currency contracts Net operating revenues $ (6 ) $ 34 Foreign currency contracts Cost of goods sold — 2 Foreign currency contracts Other income (loss) — net — (26 ) Interest rate contracts Interest expense 2 — Commodity contracts Net operating revenues — (9 ) Commodity contracts Cost of goods sold (9 ) (133 ) Commodity contracts Selling, general and administrative expenses (1 ) (14 ) Other derivative instruments Selling, general and administrative expenses 3 (12 ) Other derivative instruments Other income (loss) — net — (24 ) Total $ (11 ) $ (182 ) Nine Months Ended Derivatives Not Designated Location of Gain (Loss) September 30, 2016 October 2, 2015 Foreign currency contracts Net operating revenues $ (34 ) $ 43 Foreign currency contracts Cost of goods sold 4 3 Foreign currency contracts Other income (loss) — net (116 ) (75 ) Interest rate contracts Interest expense 2 — Commodity contracts Net operating revenues 3 (8 ) Commodity contracts Cost of goods sold 68 (152 ) Commodity contracts Selling, general and administrative expenses 3 (13 ) Other derivative instruments Selling, general and administrative expenses 11 (11 ) Other derivative instruments Other income (loss) — net (14 ) (86 ) Total $ (73 ) $ (299 ) |
Debt and Borrowing Arrangements
Debt and Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Debt and Borrowing Arrangements Disclosure [Abstract] | |
Debt Disclosure [Text Block] | DEBT AND BORROWING ARRANGEMENTS During the nine months ended September 30, 2016 , the Company issued Australian dollar-, euro- and U.S. dollar-denominated debt of AUD 1,000 million , €500 million and $3,725 million , respectively. The carrying value of this debt as of September 30, 2016 was $5,009 million . The general terms of the notes issued are as follows: • AUD 450 million total principal amount of notes due June 9, 2020, at a fixed interest rate of 2.6 percent ; • AUD 550 million total principal amount of notes due June 11, 2024, at a fixed interest rate of 3.25 percent ; • $225 million total principal amount of notes due November 16, 2017, at a variable interest rate equal to the three-month London Interbank Offered Rate ("LIBOR") plus 0.05 percent ; • $1,000 million total principal amount of notes due May 30, 2019, at a fixed interest rate of 1.375 percent ; • $1,000 million total principal amount of notes due September 1, 2021, at a fixed interest rate of 1.55 percent ; • $500 million total principal amount of notes due June 1, 2026, at a fixed interest rate of 2.55 percent ; • $1,000 million total principal amount of notes due September 1, 2026, at a fixed interest rate of 2.25 percent ; and • €500 million total principal amount of notes due September 2, 2036, at a fixed interest rate of 1.1 percent . During the nine months ended September 30, 2016 , the Company retired upon maturity $1,654 million total principal amount of notes due September 1, 2016, at a fixed interest rate of 1.8 percent . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees As of September 30, 2016 , we were contingently liable for guarantees of indebtedness owed by third parties of $ 550 million , of which $ 246 million related to variable interest entities. These 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 individually significant. The amount represents 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 to 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, (2) the tax position is "more likely than not" to be sustained, but for a lesser 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. The number of years subject to 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, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. Refer to Note 13 . On September 17, 2015, the Company received a Statutory Notice of Deficiency ("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 that the Company's United States 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 markets. The Company has followed the same transfer pricing methodology for these licenses since the methodology was agreed with the IRS in a 1996 closing agreement that applied back to 1987. The closing agreement provides prospective penalty protection as long as the Company follows the prescribed methodology and material facts and circumstances and relevant Federal tax law have not changed. On February 11, 2016, the IRS notified the Company, without further explanation, that the IRS has determined that material facts and circumstances and relevant Federal tax law have changed and that it may assert penalties. The Company does not agree with this determination. The Company's compliance with the 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. The IRS designated the matter for litigation on October 15, 2015. To the extent the matter remains designated, the Company will be 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 to pursue all available administrative and judicial remedies necessary to resolve this matter. 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. 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. The Company regularly assesses the likelihood of adverse outcomes resulting from examinations such as this to determine the adequacy of its tax reserves. The Company believes that the final adjudication of this matter will not have a material impact on its consolidated financial position, results of operations or cash flows and that it has adequate tax reserves for all tax matters. However, the ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest and any potential penalties could have a material adverse impact on the Company's financial position, results of operations or cash flows. 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 $ 568 million and $ 560 million as of September 30, 2016 and December 31, 2015 , respectively. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Comprehensive Income | |
Comprehensive Income | COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our condensed consolidated balance sheets 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 as part of the line item equity attributable to noncontrolling interests. AOCI attributable to shareowners of The Coca-Cola Company consisted of the following (in millions): September 30, 2016 December 31, 2015 Foreign currency translation adjustments $ (8,743 ) $ (9,167 ) Accumulated derivative net gains (losses) 30 696 Unrealized net gains (losses) on available-for-sale securities 367 288 Adjustments to pension and other benefit liabilities (1,863 ) (1,991 ) Accumulated other comprehensive income (loss) $ (10,209 ) $ (10,174 ) 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 30, 2016 Shareowners of The Coca-Cola Company Noncontrolling Interests Total Consolidated net income $ 5,977 $ 26 $ 6,003 Other comprehensive income: Net foreign currency translation adjustments 424 (9 ) 415 Net gains (losses) on derivatives 1 (666 ) — (666 ) Net change in unrealized gains (losses) on available-for-sale securities 2 79 — 79 Net change in pension and other benefit liabilities 3 128 — 128 Total comprehensive income $ 5,942 $ 17 $ 5,959 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments. 2 Refer to Note 3 for additional information related to the net unrealized gain or loss on available-for-sale 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 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 period 1 (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 derivatives 1 (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 securities 2 (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 liabilities 3 56 (17 ) 39 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (189 ) $ 133 $ (56 ) 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and net investment hedging activity. 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 period 1 (558 ) 214 (344 ) Reclassification adjustments for net investment hedges recognized in net income 1 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 derivatives 1 (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 securities 2 103 (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 liabilities 3 193 (65 ) 128 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (555 ) $ 520 $ (35 ) 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and net investment hedging activity. 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. Three Months Ended October 2, 2015 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ (1,279 ) $ 22 $ (1,257 ) Net foreign currency translation adjustments (1,279 ) 22 (1,257 ) Derivatives: Gains (losses) arising during the period (200 ) 79 (121 ) Reclassification adjustments recognized in net income (183 ) 68 (115 ) Net gains (losses) on derivatives 1 (383 ) 147 (236 ) Available-for-sale securities: Unrealized gains (losses) arising during the period (606 ) 13 (593 ) Reclassification adjustments recognized in net income (29 ) 14 (15 ) Net change in unrealized gain (loss) on available-for-sale securities 2 (635 ) 27 (608 ) Pension and other benefit liabilities: Net pension and other benefit liabilities arising during the period (7 ) 1 (6 ) Reclassification adjustments recognized in net income 47 (17 ) 30 Net change in pension and other benefit liabilities 3 40 (16 ) 24 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (2,257 ) $ 180 $ (2,077 ) 1 Refer to Note 5 for additional information related to the net gain or loss 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 October 2, 2015 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ (3,664 ) $ 86 $ (3,578 ) Reclassification adjustments recognized in net income 63 (14 ) 49 Net foreign currency translation adjustments (3,601 ) 72 (3,529 ) Derivatives: Gains (losses) arising during the period 606 (229 ) 377 Reclassification adjustments recognized in net income (501 ) 189 (312 ) Net gains (losses) on derivatives 1 105 (40 ) 65 Available-for-sale securities: Unrealized gains (losses) arising during the period (2,034 ) 369 (1,665 ) Reclassification adjustments recognized in net income (58 ) 22 (36 ) Net change in unrealized gain (loss) on available-for-sale securities 2 (2,092 ) 391 (1,701 ) Pension and other benefit liabilities: Net pension and other benefit liabilities arising during the period 53 (15 ) 38 Reclassification adjustments recognized in net income 142 (51 ) 91 Net change in pension and other benefit liabilities 3 195 (66 ) 129 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (5,393 ) $ 357 $ (5,036 ) 1 Refer to Note 5 for additional information related to the net gain or loss 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. 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 during the three and nine months ended September 30, 2016 (in millions): Amount Reclassified from AOCI into Income Description of AOCI Component Financial Statement Line Item Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Foreign currency translation adjustments: Divestitures, deconsolidations and other Other income (loss) — net $ 242 1 $ 445 1,2 Income before income taxes 242 445 Income taxes (18 ) (48 ) Consolidated net income $ 224 $ 397 Derivatives: Foreign currency contracts Net operating revenues $ (139 ) $ (416 ) Foreign currency contracts Cost of goods sold (8 ) (40 ) Foreign currency contracts Other income (loss) — net (40 ) (38 ) Foreign currency and interest rate contracts Interest expense 1 9 Income before income taxes (186 ) (485 ) Income taxes 71 183 Consolidated net income $ (115 ) $ (302 ) Available-for-sale securities: Divestitures, deconsolidations and other 1 Other income (loss) — net $ (4 ) $ (4 ) Sale of securities Other income (loss) — net (15 ) (89 ) Income before income taxes (19 ) (93 ) Income taxes 4 22 Consolidated net income $ (15 ) $ (71 ) Pension and other benefit liabilities: Divestitures, deconsolidations and other 2 Other income (loss) — net $ — $ 64 Recognized net actuarial loss (gain) * 48 143 Recognized prior service cost (credit) * (5 ) (15 ) Income before income taxes 43 192 Income taxes (15 ) (64 ) Consolidated net income $ 28 $ 128 1 Primarily related to the deconsolidation of our South African bottling operations and related equity investment. Refer to Note 2. 2 Primarily related to the deconsolidation of our German bottling operations. Refer to Note 2. * 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. |
Changes in Equity
Changes in Equity | 9 Months Ended |
Sep. 30, 2016 | |
Changes in Equity [Abstract] | |
Changes in Equity | CHANGES IN EQUITY The following table provides 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 Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non- controlling Interests December 31, 2015 $ 25,764 $ 65,018 $ (10,174 ) $ 1,760 $ 14,016 $ (45,066 ) $ 210 Comprehensive income (loss) 5,959 5,977 (35 ) — — — 17 Dividends paid/payable to shareowners of The Coca-Cola Company (4,538 ) (4,538 ) — — — — — Dividends paid to noncontrolling interests (19 ) — — — — — (19 ) Contributions by noncontrolling interests 1 — — — — — 1 Deconsolidation of certain entities (34 ) — — — — — (34 ) Purchases of treasury stock (2,475 ) — — — — (2,475 ) — Impact related to stock compensation plans 1,593 — — — 866 727 — Other activities (6 ) — — — — — (6 ) September 30, 2016 $ 26,245 $ 66,457 $ (10,209 ) $ 1,760 $ 14,882 $ (46,814 ) $ 169 |
Significant Operating and Nonop
Significant Operating and Nonoperating Items | 9 Months Ended |
Sep. 30, 2016 | |
Significant Operating and Nonoperating Items | |
Significant Operating and Nonoperating Items | SIGNIFICANT OPERATING AND NONOPERATING ITEMS Other Operating Charges During the three months ended September 30, 2016 , the Company recorded 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 rates 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 recorded 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. During the three months ended October 2, 2015 , the Company incurred other operating charges of $264 million . These charges included $141 million due to the Company's productivity and reinvestment program and $75 million due to the integration of our German bottling operations. In addition, the Company recorded an impairment charge of $38 million on one of the trademarks included in the glacéau portfolio, primarily as a result of foreign currency exchange rate fluctuations that impacted the fair value of the asset. In addition, the Company recorded a $3 million impairment charge on a Venezuelan trademark. 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 2 for additional information on the Monster Transaction. Refer to Note 15 for the impact these charges had on our operating segments. During the nine months ended October 2, 2015 , the Company incurred other operating charges of $ 1,166 million . These charges consisted of $323 million due to the Company's productivity and reinvestment program and $204 million due to the integration of our German bottling operations. In addition, the Company recorded impairment charges of $418 million primarily due to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and incurred a charge of $100 million related to a cash contribution we made to The Coca-Cola Foundation. The Company also incurred a charge of $111 million due to the write-down of receivables from our bottling partner in Venezuela and an impairment of a Venezuelan trademark primarily due to changes in exchange rates as a result of the establishment of the new open market exchange system. Refer to Note 11 for additional information on the Company's productivity, integration and restructuring initiatives. Refer to Note 2 for additional information on the Monster Transaction. Refer to Note 1 for additional information on the Venezuelan currency conversion mechanisms. Refer to Note 15 for the impact these charges had on our operating segments. Other Nonoperating Items Interest Expense During the nine months ended October 2, 2015 , the Company recorded charges of $320 million due to the early extinguishment of certain long-term debt. These charges included the difference between the reacquisition price and the net carrying amount of the debt extinguished, including the impact of the related fair value hedging relationship. Refer to Note 15 for the impact this charge had on our operating segments. Equity Income (Loss) — Net During the three and nine months ended September 30, 2016 , the Company recorded net charges of $14 million and $35 million , respectively. During the three and nine months ended October 2, 2015 , the Company recorded a net gain of $3 million and a net charge of $79 million , respectively. These amounts represent the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees, including charges incurred by an equity method investee due to changes in the Venezuelan bolivar exchange rates. Refer to Note 15 for the impact these items had on our operating segments. Other Income (Loss) — Net 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 Final Form CBAs. Refer to Note 2 for additional information on the North America refranchising, the deconsolidation of our South African bottling operations and the conversion payments. Refer to Note 15 for the impact these items had on our operating segments. During the nine months ended September 30, 2016 , the Company recognized a gain of $1,323 million due to the deconsolidation 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 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 Final Form CBAs. Refer to Note 2 for additional information on the deconsolidation 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. Refer to Note 15 for the impact these items had on our operating segments. During the three months ended October 2, 2015 , the Company recorded charges of $815 million primarily due to the refranchising of certain bottling territories in North America. Refer to Note 2 for additional information on the North America refranchising. Refer to Note 15 for the impact these items had on our operating segments. During the nine months ended October 2, 2015 , the Company recorded a net gain of $1,402 million as a result of the Monster Transaction and charges of $848 million primarily due to the refranchising of certain bottling territories in North America. In addition, the Company incurred charges of $19 million as a result of the remeasurement of our previously held equity interest in a South African bottler to fair value upon our acquisition of the bottling operations, and $6 million as a result of a Brazilian bottling entity's majority interest owners exercising their option to acquire from us an additional equity interest at an exercise price less than that of our carrying value. The Company recognized a foreign currency exchange gain of $277 million associated with our euro-denominated debt partially offset by a charge of $27 million due to the remeasurement of the net monetary assets of our Venezuelan subsidiary using the SIMADI exchange rate. Refer to Note 2 for additional information related to the Monster Transaction, North America refranchising, the acquisition of the South African bottler and the sale of a portion of our interest in the Brazilian bottling entity. Refer to Note 1 for more information related to the charge due to the remeasurement in Venezuela. Refer to Note 15 for the impact these charges had on our operating segments. |
Productivity, Integration and R
Productivity, Integration and Restructuring Initiatives | 9 Months Ended |
Sep. 30, 2016 | |
Productivity integration and restructuring initiatives | |
Productivity, Integration and Restructuring Initiatives[Text Block] | PRODUCTIVITY, INTEGRATION AND RESTRUCTURING INITIATIVES Productivity and Reinvestment In February 2012, the Company announced a four-year 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 Coca-Cola Enterprises Inc.'s ("Old CCE") former North America business. In February 2014, the Company announced the expansion of our productivity and reinvestment program to drive incremental productivity by 2016 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 on four key areas: restructuring the Company's global supply chain, including manufacturing in North America; 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. The Company has incurred total pretax expenses of $ 2,243 million related to this program since it commenced. These expenses were recorded in the line item other operating charges in our condensed consolidated statements of income. Refer to Note 15 for the impact these charges had on our operating segments. Outside services reported in the table below primarily relate to expenses in connection with legal, outplacement and consulting activities. Other direct costs reported in the table 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 30, 2016 (in millions): Accrued Balance July 1, 2016 Costs Incurred Three Months Ended September 30, 2016 Payments Noncash and Exchange Accrued Balance September 30, 2016 Severance pay and benefits $ 76 $ 9 $ (20 ) $ — $ 65 Outside services 9 — (5 ) — 4 Other direct costs 22 50 (43 ) (11 ) 18 Total $ 107 $ 59 $ (68 ) $ (11 ) $ 87 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 30, 2016 (in millions): Accrued Balance December 31, 2015 Costs Incurred Nine Months Ended September 30, 2016 Payments Noncash and Exchange Accrued Balance September 30, 2016 Severance pay and benefits $ 144 $ 21 $ (102 ) $ 2 $ 65 Outside services 8 17 (22 ) 1 4 Other direct costs 52 149 (130 ) (53 ) 18 Total $ 204 $ 187 $ (254 ) $ (50 ) $ 87 Integration of Our German Bottling Operations In 2008, the Company began the integration of our German bottling operations acquired in 2007. The Company incurred 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. The Company had $ 122 million accrued related to these integration costs as of December 31, 2015 . During the nine months ended September 30, 2016 , the Company deconsolidated our German bottling operations. Therefore, there was no remaining accrual balance as of September 30, 2016 . Refer to Note 2. |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Plans | |
Pension and Other Postretirement Benefit Plans | PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following (in millions): Pension Benefits Other Benefits Three Months Ended September 30, October 2, September 30, October 2, Service cost $ 59 $ 66 $ 6 $ 7 Interest cost 79 95 8 9 Expected return on plan assets (161 ) (176 ) (3 ) (3 ) Amortization of prior service cost (credit) — (1 ) (5 ) (5 ) Amortization of net actuarial loss 46 50 2 3 Net periodic benefit cost $ 23 $ 34 $ 8 $ 11 Special termination benefits 1 4 — — — Other — — 31 — Total cost recognized in statements of income $ 27 $ 34 $ 39 $ 11 Pension Benefits Other Benefits Nine Months Ended September 30, October 2, September 30, October 2, Service cost $ 178 $ 199 $ 17 $ 21 Interest cost 239 285 23 28 Expected return on plan assets (490 ) (529 ) (9 ) (9 ) Amortization of prior service cost (credit) (1 ) (1 ) (14 ) (14 ) Amortization of net actuarial loss 138 149 5 8 Net periodic benefit cost $ 64 $ 103 $ 22 $ 34 Special termination benefits 1 17 9 — — Other — — 31 — Total cost recognized in statements of income $ 81 $ 112 $ 53 $ 34 1 The 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 . During the nine months ended September 30, 2016 , the Company contributed $ 519 million to our pension plans, and we anticipate making additional contributions of approximately $ 180 million during the remainder of 2016. The Company contributed $ 92 million to our pension plans during the nine months ended October 2, 2015 . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income taxes | |
Income Taxes | INCOME TAXES Our effective tax rate reflects the benefits of having significant operations outside the United States, which are generally taxed at rates lower than the U.S. statutory rate of 35 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 2016 to 2027 . 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 of accounting, which are generally taxed at rates lower than the U.S. statutory rate. At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year. This estimate reflects, among other items, our best estimate of operating results and foreign currency exchange rates. Based on current tax laws, the Company's estimated effective tax rate for 2016 is 22.5 percent . However, in arriving at this estimate we do not include the estimated impact of significant operating and nonoperating items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. 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 $378 million ( 26.5 percent effective tax rate) and $272 million ( 15.8 percent effective tax rate) during the three months ended September 30, 2016 and October 2, 2015 , respectively. The Company recorded income tax expense of $1,618 million ( 21.2 percent effective tax rate) and $1,937 million ( 24.0 percent effective tax rate) during the nine months ended September 30, 2016 and October 2, 2015 , respectively. As of September 30, 2016 , the gross amount of unrecognized tax benefits was $343 million . If the Company were to prevail on all uncertain tax positions, the net effect would be a benefit to the Company's effective tax rate of $ 183 million , exclusive of any benefits related to interest and penalties. The remaining $ 160 million , which was recorded as a deferred tax asset, primarily represents tax benefits that would be received in different tax jurisdictions in the event the Company did not prevail on all uncertain tax positions. A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions): Nine Months Ended September 30, 2016 Beginning balance of unrecognized tax benefits $ 168 Increase related to prior period tax positions 160 1 Increase related to current period tax positions 13 Decrease related to settlements with taxing authorities (1 ) Increase (decrease) due to effect of foreign currency exchange rate changes 3 Ending balance of unrecognized tax benefits $ 343 1 The increase is primarily related to a change in judgment about one of the Company’s tax positions as a result of receiving notification of a preliminary settlement of a Competent Authority matter with a foreign jurisdiction. This change in position did not have a material impact on the Company's condensed consolidated statement of income during the nine months ended September 30, 2016, as it was partially offset by refunds to be received from the foreign jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company had $148 million and $111 million in interest and penalties related to unrecognized tax benefits accrued as of September 30, 2016 and December 31, 2015, respectively. If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would also be a benefit to the Company's effective tax rate. 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 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Productivity and reinvestment program $ (20 ) 1 $ (49 ) 8 $ (65 ) 1 $ (124 ) 8 Other productivity, integration and restructuring initiatives — — 9 — 2 — 9 Transaction gains and losses (246 ) 3 (291 ) 10 (363 ) 4 173 11 Certain tax matters 7 5 (6 ) 12 84 5 (6 ) 13 Other — net 8 6 — (38 ) 7 (168 ) 14 1 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 . 2 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 . 3 Related to a net charge of $1,204 million that primarily consisted of charges related to $1,089 million of losses 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 Final Form CBAs, 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 . 4 Related to a net charge of $561 million that primarily consisted of charges related to $1,657 million of losses 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 Final Form CBAs, 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 are 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 . 5 Primarily related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. The components of the net change in uncertain tax positions were individually insignificant. 6 Related to charges of $99 million that included a $76 million charge due to the 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 . 7 Related to charges of $230 million that 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 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 . 8 Related to charges of $141 million and $323 million during the three and nine months ended October 2, 2015 , respectively. These charges were due to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11. 9 Related to charges of $75 million and $204 million during the three and nine months ended October 2, 2015 , respectively. These charges were due to the integration of our German bottling operations. Refer to Note 10 and Note 11. 10 Related to a net charge of $859 million that included $815 million of charges primarily due to the refranchising of bottling territories in North America and a $38 million charge due to the impairment of certain trademark assets. Refer to Note 2 and Note 10. 11 Related to a net gain of $102 million that primarily consisted of a $1,402 million net gain related to the Monster Transaction, partially offset by a $418 million charge due to the impairment of certain trademark assets, $848 million of charges due to the refranchising of bottling territories in North America, a $6 million additional charge related to the sale of a portion of our equity investment in a Brazilian bottling entity, and a $19 million charge related to the remeasurement of our equity interest in a South African bottler to fair value. Refer to Note 2 and Note 10. 12 Primarily related to amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties. The components of the net change in uncertain tax positions were individually insignificant. 13 Primarily related to prior year audit settlements and amounts to be recorded for changes to our uncertain tax positions, including interest and penalties. The components of the net change in the uncertain tax positions were individually insignificant. 14 Related to charges of $639 million that primarily consisted of a $100 million cash contribution to The Coca-Cola Foundation, $320 million associated with the early extinguishment of long-term debt, $27 million due to the remeasurement of the net monetary assets of our Venezuelan subsidiary into U.S. dollars using the SIMADI exchange rate, $111 million due to the write-down we recorded related to receivables from our bottling partner in Venezuela and an impairment of a Venezuelan trademark, and $79 million due to our proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 1 and 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 valuation allowances are primarily a result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS Accounting principles generally accepted in the United States define 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 accounting principles generally accepted in the United States, 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 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 and Available-for-Sale Securities The fair values of our investments in trading and available-for-sale 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 and available-for-sale securities classified as Level 2 are priced using quoted market prices for similar instruments or non-binding 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 value 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 estimated fair value of our derivative instruments. The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 (in millions): Level 1 Level 2 Level 3 Other 4 Netting Adjustment 5 Fair Value Measurements Assets: Trading securities 1 $ 199 $ 113 $ 3 $ 64 $ — $ 379 Available-for-sale securities 1 1,715 4,741 149 3 — — 6,605 Derivatives 2 1 973 — — (573 ) 6 401 7 Total assets $ 1,915 $ 5,827 $ 152 $ 64 $ (573 ) $ 7,385 Liabilities: Derivatives 2 $ 10 $ 477 $ — $ — $ (368 ) $ 119 7 Total liabilities $ 10 $ 477 $ — $ — $ (368 ) $ 119 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 $223 million in cash collateral it has netted against its net asset derivative position. 7 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $ 401 million in the line item other assets; $9 million in the line item accounts payable and accrued expenses; and $ 110 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio. The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in millions): Level 1 Level 2 Level 3 Other 4 Netting Adjustment 5 Fair Value Measurements Assets: Trading securities 1 $ 183 $ 101 $ 2 $ 36 $ — $ 322 Available-for-sale securities 1 3,913 4,574 119 3 — — 8,606 Derivatives 2 2 1,268 — — (638 ) 6 632 8 Total assets $ 4,098 $ 5,943 $ 121 $ 36 $ (638 ) $ 9,560 Liabilities: Derivatives 2 $ 24 $ 635 $ — $ — $ (488 ) 7 $ 171 8 Total liabilities $ 24 $ 635 $ — $ — $ (488 ) $ 171 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 $184 million in cash collateral it has netted against its derivative position. 7 The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position. 8 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $ 79 million in the line item prepaid expenses and other assets; $ 553 million in the line item other assets; and $ 171 million in the line item other liabilities. Refer to Note 5 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 30, 2016 and October 2, 2015 . 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 30, 2016 and October 2, 2015 . 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 accounting principles generally accepted in the United States. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The gains or 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 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Assets held for sale 1 $ (1,044 ) $ (799 ) $ (1,490 ) $ (822 ) Intangible assets — (41 ) 2 — (473 ) 3 Investment in formerly unconsolidated subsidiary — — — (19 ) 4 Valuation of shares in equity method investee — — — (6 ) 5 Total $ (1,044 ) $ (840 ) $ (1,490 ) $ (1,320 ) 1 The Company is required to record assets and liabilities that are held for sale at the lower of carrying value or fair value less any costs to sell based on the agreed-upon sale price. These losses related to refranchising activities in North America, which were calculated based on Level 3 inputs. Refer to Note 2. 2 The Company recognized a loss of $41 million , which included a $38 million impairment charge on one of the trademarks in the glacéau portfolio and a $3 million impairment charge on a Venezuelan trademark. These losses were derived using a discounted cash flow analysis based on Level 3 inputs. Refer to Note 1, Note 2 and Note 10. 3 The Company recognized a loss of $473 million , which included $418 million of impairment charges primarily due to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and a $55 million impairment charge on a Venezuelan trademark. The charges were primarily determined by comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 1, Note 2 and Note 10. 4 The Company recognized a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015. U.S. GAAP requires the acquirer to remeasure its previously held noncontrolling equity interest in the acquired entity to fair value as of the acquisition date and recognize any gains or losses in earnings. The Company remeasured our equity interest in the South African bottler based on Level 3 inputs. Refer to Note 2 and Note 10. 5 The Company recognized a loss of $6 million as a result of the owners of the majority interest in a Brazilian bottling entity exercising their option to acquire from us a 10 percent interest in the entity's outstanding shares. The exercise price was lower than our carrying value. This loss was determined using Level 3 inputs. Refer to Note 10. Other Fair Value Disclosures The carrying amounts of cash and cash equivalents; short-term investments; receivables; accounts payable and accrued expenses; and loans and notes payable approximate their fair values because of the relatively 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 debt instruments. As of September 30, 2016 , the carrying amount and fair value of our long-term debt, including the current portion, were $ 35,136 million and $ 36,658 million , respectively. As of December 31, 2015 , the carrying amount and fair value of our long-term debt, including the current portion, were $ 30,987 million and $ 31,308 million , respectively. |
Operating Segments
Operating Segments | 9 Months Ended |
Sep. 30, 2016 | |
Operating Segments [Abstract] | |
Operating Segments | OPERATING SEGMENTS Effective January 1, 2016, we transferred CCR's bottling and associated supply chain operations in the United States and Canada from our North America segment to our Bottling Investments segment. Additionally, effective August 1, 2016, the Company formed a new Europe, Middle East and Africa operating group consisting of the business units that were previously included in the Europe and the Eurasia and Africa operating groups. As a result, our organizational structure consists of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate. Accordingly, all prior period segment information presented herein has been revised to reflect these changes in our organizational structure. Information about our Company's operations as of and for the three months ended September 30, 2016 and October 2, 2015 by operating segment is as follows (in millions): Europe, Middle East & Africa Latin North Asia Pacific Bottling Corporate Eliminations Consolidated 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 2015 Net operating revenues: Third party $ 1,764 $ 993 $ 1,468 $ 1,247 $ 5,900 $ 55 $ — $ 11,427 Intersegment 169 19 1,112 159 48 — (1,507 ) — Total net revenues 1,933 1,012 2,580 1,406 5,948 55 (1,507 ) 11,427 Operating income (loss) 930 538 585 571 85 (330 ) — 2,379 Income (loss) before income taxes 945 535 581 576 (547 ) (365 ) — 1,725 Identifiable operating assets 4,506 1,463 16,383 1,784 23,067 30,786 — 77,989 Noncurrent investments 1,161 673 128 166 8,134 4,672 — 14,934 As of December 31, 2015 Identifiable operating assets $ 4,156 $ 1,627 $ 16,396 $ 1,639 $ 22,688 $ 27,702 $ — $ 74,208 Noncurrent investments 1,138 657 107 158 8,084 5,644 — 15,788 During the three 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 $2 million for Europe, Middle East and Africa, $ 22 million for North America, $ 22 million for Bottling Investments and $ 14 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 10 and Note 11 for additional information on each of the Company's productivity, restructuring and integration initiatives. • 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 million for Bottling Investments due to costs incurred to refranchise certain of our North America bottling territories. Refer to Note 10 . • Income (loss) before income taxes was reduced by $14 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. 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 Final Form CBAs. Refer to Note 2. • Income (loss) before income taxes was reduced by $1,089 million for Bottling Investments primarily due to the refranchising of certain bottling territories in North America. Refer to Note 2 and Note 10 . • 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 October 2, 2015 , the results of our operating segments were impacted by the following items: • Operating income (loss) and income (loss) before income taxes were reduced by $4 million for Latin America, $ 31 million for North America, $2 million for Asia Pacific, $ 151 million for Bottling Investments and $ 29 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 Europe, Middle East and Africa due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11 . • Operating income (loss) and income (loss) before income taxes were reduced by $48 million for Corporate primarily due to impairment charges on certain of the Company's intangible assets. Refer to Note 10 and Note 14 . • Income (loss) before income taxes was reduced by $794 million for Bottling Investments and $21 million for Corporate primarily 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 $3 million for Europe, Middle East and Africa 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 . Information about our Company's operations for the nine months ended September 30, 2016 and October 2, 2015 by operating segment is as follows (in millions): Europe, Middle East & Africa Latin North Asia Pacific Bottling Corporate Eliminations Consolidated 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 2015 Net operating revenues: Third party $ 5,405 $ 2,995 $ 4,237 $ 3,816 $ 17,721 $ 120 $ — $ 34,294 Intersegment 471 56 3,311 476 143 — (4,457 ) — Total net revenues 5,876 3,051 7,548 4,292 17,864 120 (4,457 ) 34,294 Operating income (loss) 3,036 1,641 1,874 1,876 239 (1,456 ) — 7,210 Income (loss) before income taxes 3,085 1,649 1,865 1,890 (240 ) (182 ) — 8,067 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 10 and Note 11 for additional information on each of the Company's productivity, restructuring and integration initiatives. • 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 certain of 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 Final Form CBAs. Refer to Note 2. • Income (loss) before income taxes was reduced by $1,657 million for Bottling Investments primarily 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 October 2, 2015 , the results of our operating segments were impacted by the following items: • Operating income (loss) and income (loss) before income taxes were reduced by $3 million for Europe, Middle East and Africa, $7 million for Latin America, $ 104 million for North America, $ 361 million for Bottling Investments and $ 53 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 Asia Pacific due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11 . • Operating income (loss) and income (loss) before income taxes were reduced by $418 million for Corporate due to an impairment charge primarily related to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction. Refer to Note 2 and 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 increased by $1,402 million for Corporate as a result of the Monster Transaction. Refer to Note 2 and Note 10 . • Income (loss) before income taxes was reduced by $827 million for Bottling Investments and $21 million for Corporate primarily due to the refranchising of certain bottling territories in North America. Refer to Note 2 and Note 10 . • Income (loss) before income taxes was reduced by $320 million for Corporate due to charges the Company recognized on the early extinguishment of debt. Refer to Note 10 . • Income (loss) before income taxes was reduced by $33 million for Latin America and $105 million for Corporate due to the remeasurement of the net monetary assets of our local Venezuelan subsidiary into U.S. dollars using the SIMADI exchange rate, an impairment of a Venezuelan trademark and a write-down the Company recorded on receivables from our bottling partner in Venezuela. Refer to Note 1 and Note 10 . • Income (loss) before income taxes was reduced by $19 million for Corporate as a result of the remeasurement of our previously held equity interest in a South African bottler to fair value upon our acquisition of the bottling operations. Refer to Note 2 and Note 10 . • Income (loss) before income taxes was reduced by $6 million for Corporate as a result of a Brazilian bottling entity's majority interest owners exercising their option to acquire from us an additional equity interest at an exercise price less than that of our carrying value. Refer to Note 10 . • Income (loss) before income taxes was reduced by $3 million for Europe, Middle East and Africa and $76 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. Refer to Note 10 . |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTS Coca-Cola Beverages Africa Limited In October 2016, Anheuser-Busch InBev ("ABI") acquired SABMiller plc, including its controlling interest in CCBA. Subsequently, the Company announced that it has chosen to exercise its contractual right to acquire ABI's controlling interest in CCBA at fair value in order to implement our long-term strategic plan in CCBA's territories with other partners. The Company will negotiate the terms of the transaction with ABI according to the contractual parameters. The transaction is subject to regulatory approval. The Company will also negotiate with potential partners to refranchise CCBA as soon as practical following regulatory approval of the transaction with ABI. North America Refranchising In October 2016, additional bottling territories in North America met the criteria to be classified as held for sale. Therefore, we are required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the estimated sale prices, which will result in an estimated loss of $ 248 million in the fourth quarter of 2016. This loss is primarily related to the write-down of intangible assets due to the accounting treatment for the contingent consideration that will be received in exchange for the grant of the exclusive territory rights. The Company expects these territories to be refranchised at various times throughout 2016 and 2017. Refer to Note 2 for additional information about North America refranchising. The following table presents information related to the major classes of assets and liabilities related to these additional territories, which are included in the Bottling Investments operating segment (in millions): Inventories $ 39 Prepaid expenses and other assets 6 Other assets 1 Property, plant and equipment — net 231 Bottlers' franchise rights with indefinite lives 180 Goodwill 61 Other intangible assets 9 Allowance for reduction of assets held for sale (248 ) Total assets $ 279 Accounts payable and accrued expenses $ 15 Deferred income taxes 66 Total liabilities $ 81 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation [Policy Text Block] | Basis of Presentation The accompanying unaudited 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 generally accepted accounting principles 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, 2015 . When used in these notes, the terms "The Coca-Cola Company," "Company," "we," "us" or "our" mean The Coca-Cola Company and all entities included in our 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 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . 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 2016 and 2015 ended on September 30, 2016 and October 2, 2015 , 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. Effective January 1, 2016, we transferred Coca-Cola Refreshments' ("CCR") bottling and associated supply chain operations in the United States and Canada from our North America segment to our Bottling Investments segment. Additionally, effective August 1, 2016, the Company formed a new Europe, Middle East and Africa operating group consisting of the business units that were previously included in the Europe and the Eurasia and Africa operating groups. As a result, our organizational structure consists of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Bottling Investments; and Corporate. Accordingly, all prior period segment information presented herein has been revised to reflect these changes in our organizational structure. |
Advertising Costs, Policy [Policy Text Block] | Advertising Costs The Company's accounting policy related to advertising costs for annual reporting purposes, as disclosed in Note 1 of our 2015 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 [Policy Text Block] | Hyperinflationary Economies A hyperinflationary economy is one that has cumulative inflation of 100 percent or more over a three-year period. In accordance with U.S. GAAP, local subsidiaries in hyperinflationary economies are required to use the U.S. dollar as their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized currently in income. Venezuela has been designated as a hyperinflationary economy. In February 2015, the Venezuelan government announced that the two previously used currency conversion mechanisms had been merged into a single mechanism called SICAD and introduced a new open market exchange rate system, SIMADI. Management determined that the SIMADI rate was the most appropriate legally available rate and remeasured the net monetary assets of our Venezuelan subsidiary, resulting in a charge of $27 million recorded in the line item other income (loss) — net in our condensed consolidated statement of income during the nine months ended October 2, 2015 . During the nine months ended September 30, 2016 , the Venezuelan government devalued its currency and changed its official and most preferential exchange rate, which should be used for purchases 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 and the SICAD rate has been eliminated. The Venezuelan government also announced that the SIMADI rate would be replaced by the DICOM rate, which will be allowed to float freely and is expected to fluctuate based on supply and demand. As a result, 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. dollars 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 . We recorded a write-down of $56 million during the nine months ended October 2, 2015 . These write-downs were recorded in the line item other operating charges in our condensed consolidated statements of income. We also have certain U.S. dollar denominated intangible assets associated with products sold in Venezuela. As a result of the Company's revised expectations regarding the convertibility of the local currency, we recognized impairment charges of $3 million and $55 million during the three and nine months ended October 2, 2015 , respectively, recorded in the line item other operating charges in our condensed consolidated statements of income. As of September 30, 2016 , the combined carrying value of the net monetary assets of our Venezuelan subsidiary, the receivables from our bottling partner in Venezuela and the intangible assets associated with products sold in Venezuela was $88 million . Despite the additional currency conversion mechanisms, the Company's ability to pay dividends from Venezuela is still restricted due to the low volume of U.S. dollars available for conversion. As a result of the newly announced floating DICOM rate, the Company expects to continue to record losses on foreign currency exchange, may incur additional write-downs of receivables or impairment charges and will continue to record our proportionate share of any charges recorded by our equity method investee that has operations in Venezuela. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In May 2014, the Financial 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 both retrospective and prospective methods of adoption and will be effective for the Company beginning January 1, 2018. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the guidance in ASU 2014-09 and has the same effective date as the original standard. During the three months ended July 1, 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting; and ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients. These amendments are intended to improve and clarify the implementation guidance of ASU 2014-09 and have the same effective date as the original standard. The Company is currently evaluating the impact that the adoption of these standards will have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard was retrospectively adopted by the Company on January 1, 2016. As a result, $96 million and $1 million of debt issuance costs at December 31, 2015, were reclassified to long-term debt and current maturities of long-term debt, respectively, from other assets. In November 2015, the FASB issued ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes . The amendments in this update 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. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments will be effective for the Company beginning January 1, 2017. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. 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 requires lessees to recognize on the balance sheet a right-of-use asset, representing their right to use the underlying asset for the lease term, and a lease liability for all leases with 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 the use of a modified retrospective transition approach, which includes a number of optional practical expedients that entities may elect to apply. ASU 2016-02 is effective for the Company beginning January 1, 2019 and we are currently evaluating the 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. ASU 2016-09 is effective for the Company beginning January 1, 2017 and will require us to recognize excess tax benefits and tax deficiencies in the consolidated income statement when the awards vest or are settled. These changes are currently recognized in capital surplus in our consolidated balance sheet. Additionally, the guidance requires excess tax benefits to be presented as an operating activity in the statement of cash flows rather than as a financing activity. 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 August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for the Company beginning January 1, 2018 and we are currently evaluating the impact that ASU 2016-15 will have on our consolidated financial statements. |
Acquisitions and Divestitures A
Acquisitions and Divestitures Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | As such, we have allocated the total consideration transferred to the individual assets and business acquired based on a relative fair value basis, using the closing date fair values of each element, as follows (in millions): June 12, 2015 Equity investment in Monster $ 3,066 Expansion of distribution territories 1,035 Monster non-energy drink business 95 Total assets and business acquired $ 4,196 |
Assets and Liabilities Held for Sale | The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our condensed consolidated balance sheets (in millions): September 30, 2016 December 31, 2015 Cash, cash equivalents and short-term investments $ 68 $ 143 Trade accounts receivable, less allowances 80 485 Inventories 188 276 Prepaid expenses and other assets 85 83 Equity method investments — 92 Other investments 42 — Other assets 19 25 Property, plant and equipment — net 1,548 2,021 Bottlers' franchise rights with indefinite lives 1,171 1,020 Goodwill 337 333 Other intangible assets 40 115 Allowance for reduction of assets held for sale (1,115 ) (693 ) Total assets $ 2,463 1 $ 3,900 3 Accounts payable and accrued expenses $ 328 $ 712 Current maturities of long-term debt — 12 Accrued income taxes 14 4 Long-term debt — 74 Other liabilities 1 79 Deferred income taxes 339 252 Total liabilities $ 682 2 $ 1,133 4 1 Consists of total assets relating to North America refranchising of $884 million , China bottling operations of $1,562 million and other assets held for sale of $17 million , which are included in the Bottling Investments and Corporate operating segments. 2 Consists of total liabilities relating to North America refranchising of $253 million and China bottling operations of $429 million , which are included in the Bottling Investments operating segment. 3 Consists of total assets relating to CCEP of $2,894 million , North America refranchising of $589 million , Coca-Cola Beverages Africa Limited of $398 million and other assets held for sale of $19 million , which are included in the Bottling Investments, Europe, Middle East and Africa, and Corporate operating segments. 4 Consists of total liabilities relating to CCEP of $924 million , North America refranchising of $123 million and Coca-Cola Beverages Africa Limited of $86 million , which are included in the Bottling Investments and Europe, Middle East and Africa operating segments. 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. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstracts] | |
Schedule of trading securities | The Company's trading securities were included in the following line items in our condensed consolidated balance sheets (in millions): September 30, 2016 December 31, 2015 Marketable securities $ 277 $ 229 Other assets 102 93 Total $ 379 $ 322 |
Available-for-sale securities and held-to-maturity securities | As of September 30, 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 $ 1,266 $ 484 $ (35 ) $ 1,715 Debt securities 4,792 113 (15 ) 4,890 Total $ 6,058 $ 597 $ (50 ) $ 6,605 1 Refer to Note 14 for additional information related to the estimated fair value. As of December 31, 2015 , 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 $ 3,573 $ 485 $ (84 ) $ 3,974 Debt securities 4,593 64 (25 ) 4,632 Total $ 8,166 $ 549 $ (109 ) $ 8,606 1 Refer to Note 14 for additional information related to the estimated fair value. |
Schedule of Realized Gain (Loss) [Table Text Block] | 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 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Gross gains $ 21 $ 44 $ 131 $ 85 Gross losses (6 ) (15 ) (42 ) (27 ) Proceeds 2,072 1,016 8,889 3,320 |
Investments by Balance Sheet Grouping | The Company's available-for-sale securities were included in the following line items in our condensed consolidated balance sheets (in millions): September 30, December 31, Cash and cash equivalents $ 1,635 $ 361 Marketable securities 2,880 4,040 Other investments 967 3,280 Other assets 1,123 925 Total $ 6,605 $ 8,606 |
Contractual maturity amounts of the investment securities | The contractual maturities of these available-for-sale securities as of September 30, 2016 were as follows (in millions): Cost Estimated Fair Value Within 1 year $ 1,994 $ 1,994 After 1 year through 5 years 2,277 2,336 After 5 years through 10 years 186 204 After 10 years 335 356 Equity securities 1,266 1,715 Total $ 6,058 $ 6,605 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventories | |
Inventories | Inventories consisted of the following (in millions): September 30, December 31, Raw materials and packaging $ 1,513 $ 1,564 Finished goods 952 1,032 Other 286 306 Total inventories $ 2,751 $ 2,902 |
Hedging Transactions and Deri27
Hedging Transactions and Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Hedging Transactions and Derivative Financial Instruments | |
Derivative instruments, fair value, designated as hedging instruments | 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 Derivatives Designated as Hedging Instruments Balance Sheet Location 1 September 30, 2016 December 31, 2015 Assets: Foreign currency contracts Prepaid expenses and other assets $ 283 $ 572 Foreign currency contracts Other assets 155 246 Commodity contracts Prepaid expenses and other assets — 1 Interest rate contracts Prepaid expenses and other assets 20 20 Interest rate contracts Other assets 290 62 Total assets $ 748 $ 901 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 153 $ 51 Foreign currency contracts Other liabilities 60 75 Interest rate contracts Accounts payable and accrued expenses 98 53 Interest rate contracts Other liabilities 69 231 Total liabilities $ 380 $ 410 1 All 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 14 for the net presentation of the Company's derivative instruments. 2 Refer to Note 14 for additional information related to the estimated fair value. |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block] | 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 Derivatives Not Designated as Hedging Instruments Balance Sheet Location 1 September 30, 2016 December 31, 2015 Assets: Foreign currency contracts Prepaid expenses and other assets $ 198 $ 105 Foreign currency contracts Other assets 4 241 Commodity contracts Prepaid expenses and other assets 22 2 Commodity contracts Other assets 1 1 Other derivative instruments Prepaid expenses and other assets — 17 Other derivative instruments Other assets 1 3 Total assets $ 226 $ 369 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 47 $ 59 Foreign currency contracts Other liabilities 9 9 Commodity contracts Accounts payable and accrued expenses 41 154 Commodity contracts Other liabilities 1 19 Interest rate contracts Other liabilities 2 1 Other derivative instruments Accounts payable and accrued expenses 6 5 Other derivative instruments Other liabilities 1 2 Total liabilities $ 107 $ 249 1 All 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 14 for the net presentation of the Company's derivative instruments. 2 Refer to Note 14 for additional information related to the estimated fair value. |
Derivative instruments, designated as hedging instruments, gain (loss) in statement of financial performance | 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 three months ended September 30, 2016 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 1 The 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 of income. 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 30, 2016 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 ) 1 The 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 of income. 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 three months ended October 2, 2015 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 $ 1 Net operating revenues $ 170 $ — 2 Foreign currency contracts 22 Cost of goods sold 16 — 2 Foreign currency contracts — Interest expense (3 ) — Interest rate contracts (223 ) Interest expense 1 (3 ) Commodity contracts (1 ) Cost of goods sold (1 ) — Total $ (201 ) $ 183 $ (3 ) 1 The 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 of income. 2 Includes 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 October 2, 2015 (in millions): Gain (Loss) Recognized in OCI Location of Gain (Loss) Recognized in Income 1 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 $ 727 Net operating revenues $ 468 $ — 2 Foreign currency contracts 52 Cost of goods sold 44 — 2 Foreign currency contracts 18 Interest expense (7 ) — Interest rate contracts (187 ) Interest expense (2 ) (3 ) Commodity contracts (2 ) Cost of goods sold (2 ) — Total $ 608 $ 501 $ (3 ) 1 The 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 of income. 2 Includes a de minimis amount of ineffectiveness in the hedging relationship. |
Derivative instruments, fair value hedges, gain (loss) recognized in income | The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the three months ended September 30, 2016 and October 2, 2015 (in millions): Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income 1 Three Months Ended September 30, 2016 October 2, 2015 Interest rate contracts Interest expense $ — $ 151 Fixed-rate debt Interest expense (1 ) (152 ) Net impact to interest expense $ (1 ) $ (1 ) Foreign currency contracts Other income (loss) — net $ (67 ) $ 82 Available-for-sale securities Other income (loss) — net 66 (87 ) Net impact to other income (loss) — net $ (1 ) $ (5 ) Net impact of fair value hedging instruments $ (2 ) $ (6 ) 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 in the fair values of derivatives designated as fair value hedges had on earnings during the nine months ended September 30, 2016 and October 2, 2015 (in millions): Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income 1 Nine Months Ended September 30, 2016 October 2, 2015 Interest rate contracts Interest expense $ 398 $ (71 ) Fixed-rate debt Interest expense (364 ) 79 Net impact to interest expense $ 34 $ 8 Foreign currency contracts Other income (loss) — net $ (37 ) $ 217 Available-for-sale securities Other income (loss) — net 34 (231 ) Net impact to other income (loss) — net $ (3 ) $ (14 ) Net impact of fair value hedging instruments $ 31 $ (6 ) 1 The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of hedge effectiveness. |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | 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 30, 2016 December 31, 2015 September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Foreign currency denominated debt $ 11,740 $ 10,912 $ (67 ) $ (104 ) $ (323 ) $ (386 ) Foreign currency contracts 565 1,347 (9 ) 274 (235 ) 680 Total $ 12,305 $ 12,259 $ (76 ) $ 170 $ (558 ) $ 294 |
Schedule of Derivative Instruments Not Designated as Hedging Instruments Gain (Loss) in Statement of Financial Performance [Table Text Block] | The following 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 Location of Gain (Loss) September 30, 2016 October 2, 2015 Foreign currency contracts Net operating revenues $ (6 ) $ 34 Foreign currency contracts Cost of goods sold — 2 Foreign currency contracts Other income (loss) — net — (26 ) Interest rate contracts Interest expense 2 — Commodity contracts Net operating revenues — (9 ) Commodity contracts Cost of goods sold (9 ) (133 ) Commodity contracts Selling, general and administrative expenses (1 ) (14 ) Other derivative instruments Selling, general and administrative expenses 3 (12 ) Other derivative instruments Other income (loss) — net — (24 ) Total $ (11 ) $ (182 ) Nine Months Ended Derivatives Not Designated Location of Gain (Loss) September 30, 2016 October 2, 2015 Foreign currency contracts Net operating revenues $ (34 ) $ 43 Foreign currency contracts Cost of goods sold 4 3 Foreign currency contracts Other income (loss) — net (116 ) (75 ) Interest rate contracts Interest expense 2 — Commodity contracts Net operating revenues 3 (8 ) Commodity contracts Cost of goods sold 68 (152 ) Commodity contracts Selling, general and administrative expenses 3 (13 ) Other derivative instruments Selling, general and administrative expenses 11 (11 ) Other derivative instruments Other income (loss) — net (14 ) (86 ) Total $ (73 ) $ (299 ) |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Comprehensive Income | |
AOCI attributable to the shareowners of The Coca Cola Company | AOCI attributable to shareowners of The Coca-Cola Company consisted of the following (in millions): September 30, 2016 December 31, 2015 Foreign currency translation adjustments $ (8,743 ) $ (9,167 ) Accumulated derivative net gains (losses) 30 696 Unrealized net gains (losses) on available-for-sale securities 367 288 Adjustments to pension and other benefit liabilities (1,863 ) (1,991 ) Accumulated other comprehensive income (loss) $ (10,209 ) $ (10,174 ) |
Comprehensive Income (Loss), Apportioned between Shareowners of the Coca-Cola Company and Noncontrolling Interests [Text Block] | 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 30, 2016 Shareowners of The Coca-Cola Company Noncontrolling Interests Total Consolidated net income $ 5,977 $ 26 $ 6,003 Other comprehensive income: Net foreign currency translation adjustments 424 (9 ) 415 Net gains (losses) on derivatives 1 (666 ) — (666 ) Net change in unrealized gains (losses) on available-for-sale securities 2 79 — 79 Net change in pension and other benefit liabilities 3 128 — 128 Total comprehensive income $ 5,942 $ 17 $ 5,959 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments. 2 Refer to Note 3 for additional information related to the net unrealized gain or loss on available-for-sale securities. |
OCI attributable to the shareowners of The Coca-Cola Company | 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 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 period 1 (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 derivatives 1 (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 securities 2 (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 liabilities 3 56 (17 ) 39 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (189 ) $ 133 $ (56 ) 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and net investment hedging activity. 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 period 1 (558 ) 214 (344 ) Reclassification adjustments for net investment hedges recognized in net income 1 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 derivatives 1 (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 securities 2 103 (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 liabilities 3 193 (65 ) 128 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (555 ) $ 520 $ (35 ) 1 Refer to Note 5 for additional information related to the net gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and net investment hedging activity. 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. Three Months Ended October 2, 2015 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ (1,279 ) $ 22 $ (1,257 ) Net foreign currency translation adjustments (1,279 ) 22 (1,257 ) Derivatives: Gains (losses) arising during the period (200 ) 79 (121 ) Reclassification adjustments recognized in net income (183 ) 68 (115 ) Net gains (losses) on derivatives 1 (383 ) 147 (236 ) Available-for-sale securities: Unrealized gains (losses) arising during the period (606 ) 13 (593 ) Reclassification adjustments recognized in net income (29 ) 14 (15 ) Net change in unrealized gain (loss) on available-for-sale securities 2 (635 ) 27 (608 ) Pension and other benefit liabilities: Net pension and other benefit liabilities arising during the period (7 ) 1 (6 ) Reclassification adjustments recognized in net income 47 (17 ) 30 Net change in pension and other benefit liabilities 3 40 (16 ) 24 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (2,257 ) $ 180 $ (2,077 ) 1 Refer to Note 5 for additional information related to the net gain or loss 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 October 2, 2015 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ (3,664 ) $ 86 $ (3,578 ) Reclassification adjustments recognized in net income 63 (14 ) 49 Net foreign currency translation adjustments (3,601 ) 72 (3,529 ) Derivatives: Gains (losses) arising during the period 606 (229 ) 377 Reclassification adjustments recognized in net income (501 ) 189 (312 ) Net gains (losses) on derivatives 1 105 (40 ) 65 Available-for-sale securities: Unrealized gains (losses) arising during the period (2,034 ) 369 (1,665 ) Reclassification adjustments recognized in net income (58 ) 22 (36 ) Net change in unrealized gain (loss) on available-for-sale securities 2 (2,092 ) 391 (1,701 ) Pension and other benefit liabilities: Net pension and other benefit liabilities arising during the period 53 (15 ) 38 Reclassification adjustments recognized in net income 142 (51 ) 91 Net change in pension and other benefit liabilities 3 195 (66 ) 129 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (5,393 ) $ 357 $ (5,036 ) 1 Refer to Note 5 for additional information related to the net gain or loss 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. |
Income statement location of adjustments reclassified from AOCI into income | 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 during the three and nine months ended September 30, 2016 (in millions): Amount Reclassified from AOCI into Income Description of AOCI Component Financial Statement Line Item Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 Foreign currency translation adjustments: Divestitures, deconsolidations and other Other income (loss) — net $ 242 1 $ 445 1,2 Income before income taxes 242 445 Income taxes (18 ) (48 ) Consolidated net income $ 224 $ 397 Derivatives: Foreign currency contracts Net operating revenues $ (139 ) $ (416 ) Foreign currency contracts Cost of goods sold (8 ) (40 ) Foreign currency contracts Other income (loss) — net (40 ) (38 ) Foreign currency and interest rate contracts Interest expense 1 9 Income before income taxes (186 ) (485 ) Income taxes 71 183 Consolidated net income $ (115 ) $ (302 ) Available-for-sale securities: Divestitures, deconsolidations and other 1 Other income (loss) — net $ (4 ) $ (4 ) Sale of securities Other income (loss) — net (15 ) (89 ) Income before income taxes (19 ) (93 ) Income taxes 4 22 Consolidated net income $ (15 ) $ (71 ) Pension and other benefit liabilities: Divestitures, deconsolidations and other 2 Other income (loss) — net $ — $ 64 Recognized net actuarial loss (gain) * 48 143 Recognized prior service cost (credit) * (5 ) (15 ) Income before income taxes 43 192 Income taxes (15 ) (64 ) Consolidated net income $ 28 $ 128 1 Primarily related to the deconsolidation of our South African bottling operations and related equity investment. Refer to Note 2. 2 Primarily related to the deconsolidation of our German bottling operations. Refer to Note 2. * 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. |
Changes in Equity (Tables)
Changes in Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Changes in Equity [Abstract] | |
Changes in Equity | The following table provides 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 Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non- controlling Interests December 31, 2015 $ 25,764 $ 65,018 $ (10,174 ) $ 1,760 $ 14,016 $ (45,066 ) $ 210 Comprehensive income (loss) 5,959 5,977 (35 ) — — — 17 Dividends paid/payable to shareowners of The Coca-Cola Company (4,538 ) (4,538 ) — — — — — Dividends paid to noncontrolling interests (19 ) — — — — — (19 ) Contributions by noncontrolling interests 1 — — — — — 1 Deconsolidation of certain entities (34 ) — — — — — (34 ) Purchases of treasury stock (2,475 ) — — — — (2,475 ) — Impact related to stock compensation plans 1,593 — — — 866 727 — Other activities (6 ) — — — — — (6 ) September 30, 2016 $ 26,245 $ 66,457 $ (10,209 ) $ 1,760 $ 14,882 $ (46,814 ) $ 169 |
Productivity, Integration and30
Productivity, Integration and Restructuring Initiatives (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Cost and Reserve [Line Items] | |
Productivity and Reinvestment [Table Text Block] | 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 30, 2016 (in millions): Accrued Balance July 1, 2016 Costs Incurred Three Months Ended September 30, 2016 Payments Noncash and Exchange Accrued Balance September 30, 2016 Severance pay and benefits $ 76 $ 9 $ (20 ) $ — $ 65 Outside services 9 — (5 ) — 4 Other direct costs 22 50 (43 ) (11 ) 18 Total $ 107 $ 59 $ (68 ) $ (11 ) $ 87 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 30, 2016 (in millions): Accrued Balance December 31, 2015 Costs Incurred Nine Months Ended September 30, 2016 Payments Noncash and Exchange Accrued Balance September 30, 2016 Severance pay and benefits $ 144 $ 21 $ (102 ) $ 2 $ 65 Outside services 8 17 (22 ) 1 4 Other direct costs 52 149 (130 ) (53 ) 18 Total $ 204 $ 187 $ (254 ) $ (50 ) $ 87 |
Pension and Other Postretirem31
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Pension and Other Postretirement Benefit Plans | |
Periodic benefit cost, pension and other postretirement benefit plans | Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following (in millions): Pension Benefits Other Benefits Three Months Ended September 30, October 2, September 30, October 2, Service cost $ 59 $ 66 $ 6 $ 7 Interest cost 79 95 8 9 Expected return on plan assets (161 ) (176 ) (3 ) (3 ) Amortization of prior service cost (credit) — (1 ) (5 ) (5 ) Amortization of net actuarial loss 46 50 2 3 Net periodic benefit cost $ 23 $ 34 $ 8 $ 11 Special termination benefits 1 4 — — — Other — — 31 — Total cost recognized in statements of income $ 27 $ 34 $ 39 $ 11 Pension Benefits Other Benefits Nine Months Ended September 30, October 2, September 30, October 2, Service cost $ 178 $ 199 $ 17 $ 21 Interest cost 239 285 23 28 Expected return on plan assets (490 ) (529 ) (9 ) (9 ) Amortization of prior service cost (credit) (1 ) (1 ) (14 ) (14 ) Amortization of net actuarial loss 138 149 5 8 Net periodic benefit cost $ 64 $ 103 $ 22 $ 34 Special termination benefits 1 17 9 — — Other — — 31 — Total cost recognized in statements of income $ 81 $ 112 $ 53 $ 34 1 The 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 . |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income taxes | |
Changes in the gross amount of unrecognized tax benefits | A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions): Nine Months Ended September 30, 2016 Beginning balance of unrecognized tax benefits $ 168 Increase related to prior period tax positions 160 1 Increase related to current period tax positions 13 Decrease related to settlements with taxing authorities (1 ) Increase (decrease) due to effect of foreign currency exchange rate changes 3 Ending balance of unrecognized tax benefits $ 343 |
Schedule of income tax expense (benefit) associated with significant operating and nonoperating items for the interim periods presented | 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 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Productivity and reinvestment program $ (20 ) 1 $ (49 ) 8 $ (65 ) 1 $ (124 ) 8 Other productivity, integration and restructuring initiatives — — 9 — 2 — 9 Transaction gains and losses (246 ) 3 (291 ) 10 (363 ) 4 173 11 Certain tax matters 7 5 (6 ) 12 84 5 (6 ) 13 Other — net 8 6 — (38 ) 7 (168 ) 14 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets and liabilities measured at fair value on a recurring basis | The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 (in millions): Level 1 Level 2 Level 3 Other 4 Netting Adjustment 5 Fair Value Measurements Assets: Trading securities 1 $ 199 $ 113 $ 3 $ 64 $ — $ 379 Available-for-sale securities 1 1,715 4,741 149 3 — — 6,605 Derivatives 2 1 973 — — (573 ) 6 401 7 Total assets $ 1,915 $ 5,827 $ 152 $ 64 $ (573 ) $ 7,385 Liabilities: Derivatives 2 $ 10 $ 477 $ — $ — $ (368 ) $ 119 7 Total liabilities $ 10 $ 477 $ — $ — $ (368 ) $ 119 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 $223 million in cash collateral it has netted against its net asset derivative position. 7 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $ 401 million in the line item other assets; $9 million in the line item accounts payable and accrued expenses; and $ 110 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio. The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in millions): Level 1 Level 2 Level 3 Other 4 Netting Adjustment 5 Fair Value Measurements Assets: Trading securities 1 $ 183 $ 101 $ 2 $ 36 $ — $ 322 Available-for-sale securities 1 3,913 4,574 119 3 — — 8,606 Derivatives 2 2 1,268 — — (638 ) 6 632 8 Total assets $ 4,098 $ 5,943 $ 121 $ 36 $ (638 ) $ 9,560 Liabilities: Derivatives 2 $ 24 $ 635 $ — $ — $ (488 ) 7 $ 171 8 Total liabilities $ 24 $ 635 $ — $ — $ (488 ) $ 171 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 $184 million in cash collateral it has netted against its derivative position. 7 The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position. 8 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $ 79 million in the line item prepaid expenses and other assets; $ 553 million in the line item other assets; and $ 171 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio. |
Assets and liabilities measured at fair value on a Nonrecurring basis | The gains or losses on assets measured at fair value on a nonrecurring basis are summarized in the table below (in millions): Gains (Losses) Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Assets held for sale 1 $ (1,044 ) $ (799 ) $ (1,490 ) $ (822 ) Intangible assets — (41 ) 2 — (473 ) 3 Investment in formerly unconsolidated subsidiary — — — (19 ) 4 Valuation of shares in equity method investee — — — (6 ) 5 Total $ (1,044 ) $ (840 ) $ (1,490 ) $ (1,320 ) 1 The Company is required to record assets and liabilities that are held for sale at the lower of carrying value or fair value less any costs to sell based on the agreed-upon sale price. These losses related to refranchising activities in North America, which were calculated based on Level 3 inputs. Refer to Note 2. 2 The Company recognized a loss of $41 million , which included a $38 million impairment charge on one of the trademarks in the glacéau portfolio and a $3 million impairment charge on a Venezuelan trademark. These losses were derived using a discounted cash flow analysis based on Level 3 inputs. Refer to Note 1, Note 2 and Note 10. 3 The Company recognized a loss of $473 million , which included $418 million of impairment charges primarily due to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and a $55 million impairment charge on a Venezuelan trademark. The charges were primarily determined by comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 1, Note 2 and Note 10. 4 The Company recognized a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015. U.S. GAAP requires the acquirer to remeasure its previously held noncontrolling equity interest in the acquired entity to fair value as of the acquisition date and recognize any gains or losses in earnings. The Company remeasured our equity interest in the South African bottler based on Level 3 inputs. Refer to Note 2 and Note 10. 5 The Company recognized a loss of $6 million as a result of the owners of the majority interest in a Brazilian bottling entity exercising their option to acquire from us a 10 percent interest in the entity's outstanding shares. The exercise price was lower than our carrying value. This loss was determined using Level 3 inputs. Refer to Note 10. |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Information about our Company's operations for the nine months ended September 30, 2016 and October 2, 2015 by operating segment is as follows (in millions): Europe, Middle East & Africa Latin North Asia Pacific Bottling Corporate Eliminations Consolidated 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 2015 Net operating revenues: Third party $ 5,405 $ 2,995 $ 4,237 $ 3,816 $ 17,721 $ 120 $ — $ 34,294 Intersegment 471 56 3,311 476 143 — (4,457 ) — Total net revenues 5,876 3,051 7,548 4,292 17,864 120 (4,457 ) 34,294 Operating income (loss) 3,036 1,641 1,874 1,876 239 (1,456 ) — 7,210 Income (loss) before income taxes 3,085 1,649 1,865 1,890 (240 ) (182 ) — 8,067 Information about our Company's operations as of and for the three months ended September 30, 2016 and October 2, 2015 by operating segment is as follows (in millions): Europe, Middle East & Africa Latin North Asia Pacific Bottling Corporate Eliminations Consolidated 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 2015 Net operating revenues: Third party $ 1,764 $ 993 $ 1,468 $ 1,247 $ 5,900 $ 55 $ — $ 11,427 Intersegment 169 19 1,112 159 48 — (1,507 ) — Total net revenues 1,933 1,012 2,580 1,406 5,948 55 (1,507 ) 11,427 Operating income (loss) 930 538 585 571 85 (330 ) — 2,379 Income (loss) before income taxes 945 535 581 576 (547 ) (365 ) — 1,725 Identifiable operating assets 4,506 1,463 16,383 1,784 23,067 30,786 — 77,989 Noncurrent investments 1,161 673 128 166 8,134 4,672 — 14,934 As of December 31, 2015 Identifiable operating assets $ 4,156 $ 1,627 $ 16,396 $ 1,639 $ 22,688 $ 27,702 $ — $ 74,208 Noncurrent investments 1,138 657 107 158 8,084 5,644 — 15,788 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Event [Line Items] | |
Schedule of Subsequent Events [Table Text Block] | The following table presents information related to the major classes of assets and liabilities related to these additional territories, which are included in the Bottling Investments operating segment (in millions): Inventories $ 39 Prepaid expenses and other assets 6 Other assets 1 Property, plant and equipment — net 231 Bottlers' franchise rights with indefinite lives 180 Goodwill 61 Other intangible assets 9 Allowance for reduction of assets held for sale (248 ) Total assets $ 279 Accounts payable and accrued expenses $ 15 Deferred income taxes 66 Total liabilities $ 81 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Hyperinflationary Economies (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Oct. 02, 2015USD ($) | Sep. 30, 2016USD ($) | Oct. 02, 2015USD ($) | Mar. 28, 2014 | |
Venezuelan Trademark impairment | $ 3 | ||||
Venezuelan subsidiary | |||||
Official Exchange Rate Set by Government for Non Essential Goods | 6.3 | ||||
Remeasurement Charges on Subsidiary Assets | $ 27 | ||||
Accounts Receivable Write-Down | $ 76 | $ 76 | 56 | ||
Venezuelan Trademark impairment | $ 3 | 55 | |||
DIPRO Rate | 10 | 10 | |||
Net Monetary Assets, Receivables and Intangible Assets | $ 88 | $ 88 | |||
Corporate | Venezuelan subsidiary | |||||
Remeasurement Charges on Subsidiary Assets | 27 | ||||
Accounts Receivable Write-Down | $ 111 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies Recently Issued Accounting Guidance (Details) $ in Millions | Dec. 31, 2015USD ($) |
Long-term Debt [Member] | |
Long-term debt | |
Debt Issuance Costs, Gross | $ 96 |
Current Maturities of Long Term Debt [Member] | |
Long-term debt | |
Debt Issuance Costs, Gross | $ 1 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Details) - USD ($) shares in Millions, $ / shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Feb. 11, 2015 | Dec. 31, 2015 | Jun. 12, 2015 | Apr. 03, 2015 | Dec. 31, 2014 | Jun. 27, 2014 | May 01, 2014 | Feb. 27, 2014 | |
Acquisition and investment activities | ||||||||||||
Proceeds from disposals of businesses, equity method investments and nonmarketable securities | $ 745 | $ 416 | ||||||||||
Produced volume percentage in the US | 95.00% | 95.00% | ||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | $ (815) | $ 1,323 | (848) | |||||||||
Acquisitions of businesses, equity method investments and nonmarketable securities | 767 | 2,489 | ||||||||||
Remeasurement on previously held equity interest | $ 0 | 0 | 0 | 19 | ||||||||
Payments for (Proceeds from) Other Investing Activities | 319 | 117 | ||||||||||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 41 | 0 | $ 473 | ||||||||
Exercise of Options | 10.00% | |||||||||||
Total assets | 2,463 | 2,463 | $ 3,900 | |||||||||
Total liabilities | 682 | 682 | 1,133 | |||||||||
Indefinite-Lived Trademarks | 6,183 | 6,183 | 5,989 | |||||||||
Corporate | ||||||||||||
Acquisition and investment activities | ||||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | 1,323 | $ (21) | |||||||||
Gain (Loss) on Disposition of Business | 1,715 | |||||||||||
Remeasurement on previously held equity interest | 19 | |||||||||||
Net Gains From Investee Transactions, Equity Investment Sales and other gains | 1,402 | 18 | 1,402 | |||||||||
Impairment of Intangible Assets (Excluding Goodwill) | 48 | 418 | ||||||||||
North America [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Cost incurred to convert bottling agreement | $ 17 | $ 17 | ||||||||||
South African subsidiary of Coca-Cola Beverages Africa Limited [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Equity Method Investment, Ownership Percentage | 3.00% | 3.00% | ||||||||||
Monster Beverage Corporation [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Equity Method Investments, Fair Value Disclosure | $ 3,066 | |||||||||||
Acquisitions of businesses, equity method investments and nonmarketable securities | 1,620 | |||||||||||
Equity Method Investment, Ownership Percentage | 17.00% | 17.00% | ||||||||||
Payments to Acquire Businesses, Gross | 2,150 | |||||||||||
Payments for (Proceeds from) Other Investing Activities | 530 | |||||||||||
Escrow Deposit | $ 125 | $ 125 | ||||||||||
Other Significant Noncash Transaction, Value of Consideration Given | 2,046 | |||||||||||
Noncash or Part Noncash Acquisition, Value of Assets Acquired | 4,196 | 4,196 | ||||||||||
Term of License Agreement | 20 years | |||||||||||
Finite-lived Intangible Assets Acquired | 1,035 | |||||||||||
Indefinite-Lived Trademarks | $ 95 | |||||||||||
Coca-Cola Beverage Africa [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Remeasurement on previously held equity interest | 19 | |||||||||||
Equity Method Investment, Ownership Percentage | 12.00% | 12.00% | ||||||||||
Payments to Acquire Equity Method Investments | $ 150 | |||||||||||
Keurig Green Mountain, Inc. [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Available for Sale Securities, Percent | 2.00% | 16.00% | ||||||||||
Available for Sale Securities, Equity Securities | $ 830 | $ 302 | $ 1,265 | |||||||||
Sale of Stock, Price Per Share | $ 0 | $ 0 | ||||||||||
Proceeds from Disposals of Investments | $ 2,380 | |||||||||||
Transaction Costs | $ 14 | |||||||||||
Available for Sale Securities, Shares | 6.4 | 6.5 | ||||||||||
Coca-Cola European Partners [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Equity Method Investment, Ownership Percentage | 18.00% | 18.00% | ||||||||||
Monster Beverage Corporation [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (313) | |||||||||||
Other intangible assets | 341 | 341 | ||||||||||
Proceeds from Sale of Intangible Assets | $ 28 | |||||||||||
Disposal Group Name [Domain] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Cash, cash equivalents and short-term investments | $ 68 | $ 68 | 143 | |||||||||
Trade accounts receivable, less allowances | 80 | 80 | 485 | |||||||||
Inventories | 188 | 188 | 276 | |||||||||
Prepaid expenses and other assets | 85 | 85 | 83 | |||||||||
Equity method investments | 0 | 0 | 92 | |||||||||
Other Investments | 42 | 42 | 0 | |||||||||
Other assets | 19 | 19 | 25 | |||||||||
Property, plant and equipment - net | 1,548 | 1,548 | 2,021 | |||||||||
Bottlers' Franchise Rights with indefinite lives | 1,171 | 1,171 | 1,020 | |||||||||
Goodwill | 337 | 337 | 333 | |||||||||
Other intangible assets | 40 | 40 | 115 | |||||||||
Allowance for reduction of assets, held-for-sale | (1,115) | (1,115) | (693) | |||||||||
Total assets | 2,463 | 2,463 | 3,900 | |||||||||
Accounts payable and accrued expenses | 328 | 328 | 712 | |||||||||
Current maturities of long term debt | 0 | 0 | 12 | |||||||||
Accrued income taxes | 14 | 14 | 4 | |||||||||
Long-term debt | 0 | 0 | 74 | |||||||||
Other liabilities | 1 | 1 | 79 | |||||||||
Deferred income taxes | 339 | 339 | 252 | |||||||||
Total liabilities | 682 | 682 | 1,133 | |||||||||
Others [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Total assets | 17 | 17 | 19 | |||||||||
Brazilian Bottling Operation [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Exercise of Options | 10.00% | |||||||||||
CCEAG [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | 1,400 | |||||||||||
Gain (Loss) on Derivative Used in Net Investment Hedge, Net of Tax | (77) | |||||||||||
Disposal gain (loss) of a business net of transaction cost | 1,288 | 1,288 | ||||||||||
North America Territory [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Proceeds from Sale of Productive Assets | 732 | $ 217 | ||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (1,089) | $ (794) | $ (1,657) | (827) | ||||||||
Agreement Term | 10 years | |||||||||||
Agreement Renewal Term | 10 years | |||||||||||
Total assets | 884 | $ 884 | 589 | |||||||||
Total liabilities | 253 | 253 | 123 | |||||||||
China Bottling Operation [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Total assets | 1,562 | 1,562 | ||||||||||
Total liabilities | 429 | 429 | ||||||||||
Equity Method Investee [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Proceeds from Sale of Productive Assets | 181 | 51 | ||||||||||
Coca-Cola Beverage Africa [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | (21) | ||||||||||
Deconsolidation, Gain (Loss), Amount | $ (21) | |||||||||||
Total assets | 398 | |||||||||||
Total liabilities | 86 | |||||||||||
Coca-Cola European Partners [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Total assets | 2,894 | |||||||||||
Total liabilities | $ 924 | |||||||||||
Other income (loss) - net | ||||||||||||
Acquisition and investment activities | ||||||||||||
Impairment of Intangible Assets (Excluding Goodwill) | 380 | |||||||||||
Other income (loss) - net | Keurig Green Mountain, Inc. [Member] | ||||||||||||
Acquisition and investment activities | ||||||||||||
Net Gains From Investee Transactions, Equity Investment Sales and other gains | $ 18 | |||||||||||
Derivative, Loss on Derivative | $ 58 | $ 47 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total trading securities | $ 379 | $ 322 |
Trading Securities | ||
Trading Securities Unrealized Holding Gains (Losses) | 37 | 19 |
Marketable Securities | 277 | 229 |
Other Assets | $ 102 | $ 93 |
Investments (Details 2)
Investments (Details 2) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Available-for-sale securities, by type | ||
Available-for-sale Securities Fair Value | $ 6,605 | $ 8,606 |
Available-for-sale Securities, Amortized Cost Basis | 6,058 | 8,166 |
Available-for-sale Securities Gross Unrealized Gains | 597 | 549 |
Available-for-sale Securities Gross Unrealized Losses | (50) | (109) |
Equity Securities | ||
Available-for-sale securities, by type | ||
Available-for-sale Securities Fair Value | 1,715 | 3,974 |
Available-for-sale Securities, Amortized Cost Basis | 1,266 | 3,573 |
Available-for-sale Securities Gross Unrealized Gains | 484 | 485 |
Available-for-sale Securities Gross Unrealized Losses | (35) | (84) |
Debt Securities | ||
Available-for-sale securities, by type | ||
Available-for-sale Securities Fair Value | 4,890 | 4,632 |
Available-for-sale Securities, Amortized Cost Basis | 4,792 | 4,593 |
Available-for-sale Securities Gross Unrealized Gains | 113 | 64 |
Available-for-sale Securities Gross Unrealized Losses | $ (15) | $ (25) |
Investments (Details 4)
Investments (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Available-for-sale and held-to-maturity securities by balance sheet line item | ||||||
Cash and cash equivalents | $ 11,147 | $ 9,983 | $ 11,147 | $ 9,983 | $ 7,309 | $ 8,958 |
Marketable securities | 3,157 | 3,157 | 4,269 | |||
Other investments | 1,110 | 1,110 | 3,470 | |||
Other assets | 4,526 | 4,526 | 4,110 | |||
Available-for-sale Securities Fair Value | 6,605 | 6,605 | 8,606 | |||
Proceeds from Sale of Available-for-sale Securities | 2,072 | 1,016 | 8,889 | 3,320 | ||
Available-for-sale Securities Gross Gains | 21 | 44 | 131 | 85 | ||
Available-for-sale Securities Gross Losses | (6) | $ (15) | (42) | $ (27) | ||
Available-for-sale Securities [Member] | ||||||
Available-for-sale and held-to-maturity securities by balance sheet line item | ||||||
Cash and cash equivalents | 1,635 | 1,635 | 361 | |||
Marketable securities | 2,880 | 2,880 | 4,040 | |||
Other investments | 967 | 967 | 3,280 | |||
Other assets | 1,123 | 1,123 | 925 | |||
Available-for-sale Securities Fair Value | 6,605 | 6,605 | 8,606 | |||
Solvency capital | $ 976 | $ 976 | $ 804 |
Investments (Details 5)
Investments (Details 5) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Investments [Abstracts] | ||
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis | $ 1,994 | |
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Fair Value | 1,994 | |
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Amortized Cost Basis | 2,277 | |
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value | 2,336 | |
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Amortized Cost Basis | 186 | |
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value | 204 | |
Available-for-sale Securities, Debt Maturities, after Ten Years, Amortized Cost Basis | 335 | |
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value | 356 | |
Available-for-sale Securities, Amortized Cost Basis | 6,058 | $ 8,166 |
Available-for-sale Securities Fair Value | 6,605 | 8,606 |
Cost Method Investments [Abstract] | ||
Cost-method Investments, Aggregate Carrying Amount | 143 | 190 |
Equity Securities [Member] | ||
Investments [Abstracts] | ||
Available-for-sale Securities, Amortized Cost Basis | 1,266 | 3,573 |
Available-for-sale Securities Fair Value | $ 1,715 | $ 3,974 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory balances | ||
Raw materials and packaging | $ 1,513 | $ 1,564 |
Finished goods | 952 | 1,032 |
Other | 286 | 306 |
Total inventories | $ 2,751 | $ 2,902 |
Hedging Transactions and Deri44
Hedging Transactions and Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Derivative Instrument Detail [Abstract] | |||||
Maximum length of time over which future cash flow exposures are hedged (in years) | 3 years | ||||
CCEAG [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Gain (Loss) on Derivative, Net | $ (77) | ||||
Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | 1 | $ (3) | $ (1) | $ (3) | |
Net Investment Hedges | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 12,305 | 12,305 | $ 12,259 | ||
Foreign currency denominated debt | Net Investment Hedges | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 11,740 | 11,740 | 10,912 | ||
Foreign currency contracts | Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 6,783 | 6,783 | 10,383 | ||
Foreign currency contracts | Net Investment Hedges | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 565 | 565 | 1,347 | ||
Commodity contracts | Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 3 | 3 | 8 | ||
Interest Rate Contracts | Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 1,500 | 1,500 | 3,328 | ||
Interest Rate Contracts | Fair Value Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 6,928 | 6,928 | 7,963 | ||
Available-for-sale Securities [Member] | Fair Value Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 1,232 | 1,232 | 2,159 | ||
Cross Currency Swap | Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 1,851 | $ 2,590 | 1,851 | $ 2,590 | 566 |
Designated as Hedging Instrument [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 748 | 748 | 901 | ||
Derivative instruments, liabilities, fair value | 380 | 380 | 410 | ||
Designated as Hedging Instrument [Member] | Foreign currency contracts | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 283 | 283 | 572 | ||
Designated as Hedging Instrument [Member] | Foreign currency contracts | Other Assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 155 | 155 | 246 | ||
Designated as Hedging Instrument [Member] | Foreign currency contracts | Accounts payable and accrued expenses | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 153 | 153 | 51 | ||
Designated as Hedging Instrument [Member] | Foreign currency contracts | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 60 | 60 | 75 | ||
Designated as Hedging Instrument [Member] | Commodity contracts | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 0 | 0 | 1 | ||
Designated as Hedging Instrument [Member] | Interest Rate Contracts | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 20 | 20 | 20 | ||
Designated as Hedging Instrument [Member] | Interest Rate Contracts | Other Assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 290 | 290 | 62 | ||
Designated as Hedging Instrument [Member] | Interest Rate Contracts | Accounts payable and accrued expenses | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 98 | 98 | 53 | ||
Designated as Hedging Instrument [Member] | Interest Rate Contracts | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 69 | 69 | 231 | ||
Not Designated as Hedging Instrument [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 226 | 226 | 369 | ||
Derivative instruments, liabilities, fair value | 107 | 107 | 249 | ||
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 3,915 | 3,915 | 3,605 | ||
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 198 | 198 | 105 | ||
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Other Assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 4 | 4 | 241 | ||
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Accounts payable and accrued expenses | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 47 | 47 | 59 | ||
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 9 | 9 | 9 | ||
Not Designated as Hedging Instrument [Member] | Commodity contracts | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative, Notional Amount | 573 | 573 | 893 | ||
Not Designated as Hedging Instrument [Member] | Commodity contracts | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 22 | 22 | 2 | ||
Not Designated as Hedging Instrument [Member] | Commodity contracts | Other Assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 1 | 1 | 1 | ||
Not Designated as Hedging Instrument [Member] | Commodity contracts | Accounts payable and accrued expenses | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 41 | 41 | 154 | ||
Not Designated as Hedging Instrument [Member] | Commodity contracts | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 1 | 1 | 19 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 2 | 2 | 1 | ||
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Prepaid expenses and other assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 0 | 0 | 17 | ||
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Other Assets | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, assets, fair value | 1 | 1 | 3 | ||
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Accounts payable and accrued expenses | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 6 | 6 | 5 | ||
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Other Liabilities | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative instruments, liabilities, fair value | 1 | 1 | $ 2 | ||
Other Income (loss) - net | Foreign currency contracts | Cash Flow Hedging [Member] | |||||
Fair Value, Derivatives Designated and Not Designated as Hedges | |||||
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net | $ 0 | $ 0 |
Hedging Transactions and Deri45
Hedging Transactions and Derivative Financial Instruments (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Gains and (losses) related to derivative instruments | |||||
Anticipated gains (losses) cash flows hedges, estimated reclassification to earnings during next twelve months | $ 330 | ||||
Fixed-rate debt | |||||
Gains and (losses) related to derivative instruments | |||||
Increase (Decrease) in carrying value due to hedge adjustments | 279 | $ 279 | |||
Cash Flow Hedges | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 22 | $ (201) | (583) | $ 608 | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 185 | 183 | 486 | 501 | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 1 | (3) | (1) | (3) | |
Cash Flow Hedges | Foreign currency contracts | Net operating revenues | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (48) | 1 | (348) | 727 | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 141 | 170 | 419 | 468 | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | (2) | 0 | (3) | 0 | |
Cash Flow Hedges | Foreign currency contracts | Cost of goods sold | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 9 | 22 | (34) | 52 | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 8 | 16 | 41 | 44 | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 | (1) | 0 | |
Cash Flow Hedges | Foreign currency contracts | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 0 | 0 | 0 | 18 | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | (2) | (3) | (6) | (7) | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 | 0 | 0 | |
Cash Flow Hedges | Foreign currency contracts | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 36 | 25 | |||
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 40 | 38 | |||
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 | |||
Cash Flow Hedges | Interest rate contracts | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 26 | (223) | (226) | (187) | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | (2) | 1 | (6) | (2) | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 3 | (3) | 3 | (3) | |
Cash Flow Hedges | Commodity contracts | Cost of goods sold | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (1) | (1) | 0 | (2) | |
Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 0 | (1) | 0 | (2) | |
Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 | 0 | 0 | |
Fair Value Hedges | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (2) | (6) | 31 | (6) | |
Fair Value Hedges | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (1) | (1) | 34 | 8 | |
Fair Value Hedges | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (1) | (5) | (3) | (14) | |
Fair Value Hedges | Fixed-rate debt | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (1) | (152) | (364) | 79 | |
Fair Value Hedges | Foreign currency contracts | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (67) | 82 | (37) | 217 | |
Fair Value Hedges | Interest rate contracts | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 151 | 398 | (71) | |
Fair Value Hedges | Available-for-sale Securities [Member] | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 66 | (87) | 34 | (231) | |
Net Investment Hedges | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (76) | 170 | (558) | 294 | |
Net Investment Hedges | Foreign currency contracts | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (9) | 274 | (235) | 680 | |
Net Investment Hedges | Foreign currency denominated debt | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (67) | (104) | (323) | (386) | |
Designated as Hedging Instrument [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Liability, Fair Value, Gross Liability | 380 | 380 | $ 410 | ||
Not Designated as Hedging Instrument [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Liability, Fair Value, Gross Liability | 107 | 107 | $ 249 | ||
Derivative, Gain (Loss) on Derivative, Net | (11) | (182) | (73) | (299) | |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Net operating revenues | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (6) | 34 | (34) | 43 | |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Cost of goods sold | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 0 | 2 | 4 | 3 | |
Not Designated as Hedging Instrument [Member] | Foreign currency contracts | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 0 | (26) | (116) | (75) | |
Not Designated as Hedging Instrument [Member] | Interest rate contracts | Interest Expense [Member] | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 2 | 0 | 2 | 0 | |
Not Designated as Hedging Instrument [Member] | Commodity contracts | Net operating revenues | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 0 | (9) | 3 | (8) | |
Not Designated as Hedging Instrument [Member] | Commodity contracts | Cost of goods sold | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (9) | (133) | 68 | (152) | |
Not Designated as Hedging Instrument [Member] | Commodity contracts | Selling, general and administrative expenses | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | (1) | (14) | 3 | (13) | |
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Other Income (loss) - net | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | 0 | (24) | (14) | (86) | |
Not Designated as Hedging Instrument [Member] | Other derivative instruments | Selling, general and administrative expenses | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative, Gain (Loss) on Derivative, Net | $ 3 | $ (12) | $ 11 | (11) | |
Foreign currency denominated debt | Cash Flow Hedges | |||||
Gains and (losses) related to derivative instruments | |||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (92) |
Debt and Borrowing Arrangemen46
Debt and Borrowing Arrangements (Details) € in Millions, AUD in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016AUD | Sep. 30, 2016AUD | Sep. 30, 2016USD ($) | Sep. 30, 2016EUR (€) | |
Long-term debt | ||||
Issuance of long term debt | AUD 1,000 | $ 3,725 | € 500 | |
Carrying value of debt | $ 5,009 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 1.80% | |||
Notes retired upon maturity | $ 1,654 | |||
Australian notes due June 9, 2020 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | AUD | AUD 450 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 2.60% | |||
Australian notes due June 11, 2024 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | AUD | AUD 550 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.25% | |||
Notes due on November 16, 2017 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | $ 225 | |||
Debt Instrument, Basis Spread on Variable Rate | 0.05% | 0.05% | 0.05% | |
Notes due on May 30, 2019 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | $ 1,000 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 1.375% | |||
Notes due on September 1, 2021 [Member] [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | $ 1,000 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 1.55% | |||
Notes due on June 1, 2026 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | $ 500 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 2.55% | |||
Notes due on September 1, 2026 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | $ 1,000 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 2.25% | |||
Euro notes due on September 2, 2036 [Member] | ||||
Long-term debt | ||||
Issuance of long term debt | € | € 500 | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 1.10% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Tax Years 2007-2009 [Member] | ||
IRS Claim | ||
IRS Claim | $ 3,300 | |
Guarantees of indebtedness owed by third parties | ||
Guarantees | ||
Guarantees of indebtedness owed by third parties | 550 | |
VIEs maximum exposures to loss | 246 | |
Risk Management Programs | ||
Risk Management Programs | ||
Self-insurance reserves | $ 568 | $ 560 |
Comprehensive Income (Details)
Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
AOCI Attributable to the Shareowners of The Coca Cola Company | |||||
Accumulated other comprehensive income (loss) | $ (10,209) | $ (10,209) | $ (10,174) | ||
Consolidated net income | 1,050 | $ 1,453 | 6,003 | $ 6,130 | |
Other comprehensive income: | |||||
Net foreign currency translation adjustment | 86 | (1,266) | 415 | (3,544) | |
Net gain (loss) on derivatives | (101) | (236) | (666) | 65 | |
Net unrealized gain (loss) on available-for-sale securities | (82) | (608) | 79 | (1,701) | |
Net change in pension and other benefit liabilities | 39 | 24 | 128 | 129 | |
TOTAL COMPREHENSIVE INCOME | 992 | (633) | 5,959 | 1,079 | |
Foreign currency translation adjustments: | |||||
Translation adjustment arising during the period | (130) | (1,279) | 332 | (3,664) | |
Reclassification adjustments recognized in net income | 242 | 445 | 63 | ||
Gains (losses) on net investment hedges arising during the period | (76) | (558) | |||
Derivatives: | |||||
Reclassification adjustments recognized in net income | (186) | (485) | |||
Available-for-sale securities: | |||||
Reclassification adjustments recognized in net income | (19) | (93) | |||
Pension and other benefit liabilities: | |||||
Reclassification adjustments recognized in net income | 43 | 192 | |||
Recognized prior service cost (credit) | (5) | (15) | |||
Foreign currency translation adjustments: | |||||
Translation adjustment arising during the period | 41 | 22 | 39 | 86 | |
Reclassification adjustments recognized in net income | (18) | (48) | (14) | ||
Gains (losses) on net investments hedges arising during the year | 29 | 214 | |||
Derivatives: | |||||
Reclassification adjustments recognized in net income | 71 | 183 | |||
Available-for-sales securities: | |||||
Reclassification adjustments recognized in net income | 4 | 22 | |||
Pension and other benefit liabilities: | |||||
Reclassification adjustments recognized in net income | (15) | (64) | |||
Foreign currency translation adjustments: | |||||
Translation adjustment arising during the period | (89) | (1,257) | 371 | (3,578) | |
Reclassification adjustments recognized in net income | 224 | 397 | 49 | ||
Gains (losses) on net investments hedge arising during the year | (47) | (344) | |||
Derivatives: | |||||
Reclassification adjustments recognized in net income | (115) | (302) | |||
Available-for-sale securities: | |||||
Reclassification adjustments recognized in net income | (15) | (71) | |||
Pension and other benefit liabilities: | |||||
Reclassification adjustments recognized in net income | 28 | 128 | |||
Divestitures, deconsolidations and other [Member] | Other income (loss) - net | |||||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | 242 | 445 | |||
Available-for-sale securities: | |||||
Reclassification adjustments recognized in net income | (4) | (4) | |||
Pension and other benefit liabilities: | |||||
Divestitures, deconsolidations and other | 0 | 64 | |||
Foreign currency contracts | Other income (loss) - net | |||||
Derivatives: | |||||
Reclassification adjustments recognized in net income | (40) | (38) | |||
Foreign currency contracts | Net operating revenues | |||||
Derivatives: | |||||
Reclassification adjustments recognized in net income | (139) | (416) | |||
Foreign currency contracts | Cost of goods sold | |||||
Derivatives: | |||||
Reclassification adjustments recognized in net income | (8) | (40) | |||
Foreign currency and interest rate contracts | Interest Expense [Member] | |||||
Derivatives: | |||||
Reclassification adjustments recognized in net income | 1 | 9 | |||
Sale of securities | Other income (loss) - net | |||||
Available-for-sale securities: | |||||
Reclassification adjustments recognized in net income | (15) | (89) | |||
Amortization of net actuarial loss | |||||
Pension and other benefit liabilities: | |||||
Reclassification adjustments recognized in net income | 48 | 143 | |||
Shareowners of The Coca-Cola Company | |||||
AOCI Attributable to the Shareowners of The Coca Cola Company | |||||
Foreign currency translation adjustment | (8,743) | (8,743) | (9,167) | ||
Accumulated derivative net gains (losses) | 30 | 30 | 696 | ||
Unrealized net gains (losses) on available-for-sale securities | 367 | 367 | 288 | ||
Adjustments to pension and other benefits liabilities | (1,863) | (1,863) | (1,991) | ||
Accumulated other comprehensive income (loss) | (10,209) | (10,209) | $ (10,174) | ||
Consolidated net income | 5,977 | ||||
Other comprehensive income: | |||||
Net foreign currency translation adjustment | 424 | ||||
Net gain (loss) on derivatives | (666) | ||||
Net unrealized gain (loss) on available-for-sale securities | 79 | ||||
Net change in pension and other benefit liabilities | 128 | ||||
TOTAL COMPREHENSIVE INCOME | 5,942 | ||||
Foreign currency translation adjustments: | |||||
Net foreign currency translation adjustments | 36 | (1,279) | 219 | (3,601) | |
Derivatives: | |||||
Gains (losses) arising during the period | 22 | (200) | (585) | 606 | |
Reclassification adjustments recognized in net income | (186) | (183) | (485) | (501) | |
Net gain (loss) on derivatives | (164) | (383) | (1,070) | 105 | |
Available-for-sale securities: | |||||
Unrealized gains (losses) arising during the period | (98) | (606) | 196 | (2,034) | |
Reclassification adjustments recognized in net income | (19) | (29) | (93) | (58) | |
Net change in unrealized gain (loss) on available-for-sale securities | (117) | (635) | 103 | (2,092) | |
Pension and other benefit liabilities: | |||||
Net pension and other benefits arising during the period | 13 | (7) | 1 | 53 | |
Reclassification adjustments recognized in net income | 43 | 47 | 192 | 142 | |
Net change in pension and other benefit liabilities | 56 | 40 | 193 | 195 | |
Other Comprehensive Income (Loss) attributable to The Coca-Cola Company | (189) | (2,257) | (555) | (5,393) | |
Foreign currency translation adjustments: | |||||
Net foreign currency translation adjustments | 52 | 22 | 205 | 72 | |
Derivatives: | |||||
Gains (losses) arising during the period | (8) | 79 | 221 | (229) | |
Reclassification adjustments recognized in net income | 71 | 68 | 183 | 189 | |
Net gain (loss) on derivatives | 63 | 147 | 404 | (40) | |
Available-for-sales securities: | |||||
Unrealized gains (losses) arising during the period | 31 | 13 | (46) | 369 | |
Reclassification adjustments recognized in net income | 4 | 14 | 22 | 22 | |
Net change in unrealized gain (loss) on available-for-sale securities | 35 | 27 | (24) | 391 | |
Pension and other benefit liabilities: | |||||
Net pension and other benefits arising during the period | (2) | 1 | (1) | (15) | |
Reclassification adjustments recognized in net income | (15) | (17) | (64) | (51) | |
Net change in pension and other benefit liabilities | (17) | (16) | (65) | (66) | |
Other comprehensive income (loss) attributable to The Coca-Cola Company | 133 | 180 | 520 | 357 | |
Foreign currency translation adjustments: | |||||
Net foreign currency translation adjustments | 88 | (1,257) | 424 | (3,529) | |
Derivatives: | |||||
Gains (losses) arising during the period | 14 | (121) | (364) | 377 | |
Reclassification adjustments recognized in net income | (115) | (115) | (302) | (312) | |
Net gain (loss) on derivatives | (101) | (236) | (666) | 65 | |
Available-for-sale securities: | |||||
Unrealized gains (losses) arising during the period | (67) | (593) | 150 | (1,665) | |
Reclassification adjustments recognized in net income | (15) | (15) | (71) | (36) | |
Net change in unrealized gain (loss) on available-for-sale securities | (82) | (608) | 79 | (1,701) | |
Pension and other benefit liabilities: | |||||
Net pension and other benefits arising during the period | 11 | (6) | 0 | 38 | |
Reclassification adjustments recognized in net income | 28 | 30 | 128 | 91 | |
Net change in pension and other benefit liabilities | 39 | 24 | 128 | 129 | |
Other comprehensive income (loss) attributable to The Coca-Cola Company | (56) | $ (2,077) | (35) | $ (5,036) | |
Noncontrolling Interests | |||||
AOCI Attributable to the Shareowners of The Coca Cola Company | |||||
Consolidated net income | 26 | ||||
Other comprehensive income: | |||||
Net foreign currency translation adjustment | (9) | ||||
Net gain (loss) on derivatives | 0 | ||||
Net unrealized gain (loss) on available-for-sale securities | 0 | ||||
Net change in pension and other benefit liabilities | 0 | ||||
TOTAL COMPREHENSIVE INCOME | 17 | ||||
Net Investment Hedges | |||||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | 242 | 368 | |||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | (18) | (18) | |||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | $ 224 | 350 | |||
Germany bottler deconsolidation [Member] | |||||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | 77 | ||||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | (30) | ||||
Foreign currency translation adjustments: | |||||
Reclassification adjustments recognized in net income | $ 47 |
Changes in Equity (Details)
Changes in Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Changes in Equity | ||||
December 31, 2015 | $ 25,764 | |||
Comprehensive income (loss) | $ 992 | $ (633) | 5,959 | $ 1,079 |
Dividends paid/payable to shareowners of The Coca-Cola Company | (4,538) | |||
Dividends paid to noncontrolling interests | (19) | |||
Contributions by noncontrolling Interests | 1 | |||
Deconsolidation of certain entities | (34) | |||
Purchases of treasury stock | (2,475) | |||
Impact related to stock compensation plans | 1,593 | |||
Other Activities | (6) | |||
September 30, 2016 | 26,245 | 26,245 | ||
Reinvested Earnings | ||||
Changes in Equity | ||||
December 31, 2015 | 65,018 | |||
Comprehensive income (loss) | 5,977 | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | (4,538) | |||
Dividends paid to noncontrolling interests | 0 | |||
Contributions by noncontrolling Interests | 0 | |||
Deconsolidation of certain entities | 0 | |||
Purchases of treasury stock | 0 | |||
Impact related to stock compensation plans | 0 | |||
Other Activities | 0 | |||
September 30, 2016 | 66,457 | 66,457 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in Equity | ||||
December 31, 2015 | (10,174) | |||
Comprehensive income (loss) | (35) | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | 0 | |||
Dividends paid to noncontrolling interests | 0 | |||
Contributions by noncontrolling Interests | 0 | |||
Deconsolidation of certain entities | 0 | |||
Purchases of treasury stock | 0 | |||
Impact related to stock compensation plans | 0 | |||
Other Activities | 0 | |||
September 30, 2016 | (10,209) | (10,209) | ||
Common Stock [Member] | ||||
Changes in Equity | ||||
December 31, 2015 | 1,760 | |||
Comprehensive income (loss) | 0 | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | 0 | |||
Dividends paid to noncontrolling interests | 0 | |||
Contributions by noncontrolling Interests | 0 | |||
Deconsolidation of certain entities | 0 | |||
Purchases of treasury stock | 0 | |||
Impact related to stock compensation plans | 0 | |||
Other Activities | 0 | |||
September 30, 2016 | 1,760 | 1,760 | ||
Capital Surplus | ||||
Changes in Equity | ||||
December 31, 2015 | 14,016 | |||
Comprehensive income (loss) | 0 | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | 0 | |||
Dividends paid to noncontrolling interests | 0 | |||
Contributions by noncontrolling Interests | 0 | |||
Deconsolidation of certain entities | 0 | |||
Purchases of treasury stock | 0 | |||
Impact related to stock compensation plans | 866 | |||
Other Activities | 0 | |||
September 30, 2016 | 14,882 | 14,882 | ||
Treasury Stock | ||||
Changes in Equity | ||||
December 31, 2015 | (45,066) | |||
Comprehensive income (loss) | 0 | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | 0 | |||
Dividends paid to noncontrolling interests | 0 | |||
Contributions by noncontrolling Interests | 0 | |||
Deconsolidation of certain entities | 0 | |||
Purchases of treasury stock | (2,475) | |||
Impact related to stock compensation plans | 727 | |||
Other Activities | 0 | |||
September 30, 2016 | (46,814) | (46,814) | ||
Noncontrolling Interests | ||||
Changes in Equity | ||||
December 31, 2015 | 210 | |||
Comprehensive income (loss) | 17 | |||
Dividends paid/payable to shareowners of The Coca-Cola Company | 0 | |||
Dividends paid to noncontrolling interests | (19) | |||
Contributions by noncontrolling Interests | 1 | |||
Deconsolidation of certain entities | (34) | |||
Purchases of treasury stock | 0 | |||
Impact related to stock compensation plans | 0 | |||
Other Activities | (6) | |||
September 30, 2016 | $ 169 | $ 169 |
Significant Operating and Non50
Significant Operating and Nonoperating Items (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Other Operating Charges | ||||
Other operating charges | $ 222 | $ 264 | $ 830 | $ 1,166 |
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 41 | 0 | 473 |
Venezuelan Trademark impairment | 3 | |||
Costs incurred to refranchise NA territories | 73 | 170 | ||
Charges associated with pending and closed transactions | 1,204 | 859 | 561 | |
Noncapitalizable transaction costs | 37 | |||
Other Nonoperating Items | ||||
Gains (Losses) on Extinguishment of Debt | (320) | |||
Equity Income (Loss) - Net | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | (3) | 35 | 79 |
Other Income (Loss) - Net | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (815) | 1,323 | (848) | |
Remeasurement on previously held equity interest | 0 | 0 | 0 | 19 |
Valuation of shares in equity method investee gains/ (loss) | 0 | 0 | 0 | (6) |
Foreign currency exchange gain on Euro denominated debt | 277 | |||
Latin America [Member] | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 4 | 7 | ||
Corporate | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 14 | 29 | 42 | 53 |
Impairment of Intangible Assets (Excluding Goodwill) | 48 | 418 | ||
Cash Contribution Expense | 100 | 100 | ||
Noncapitalizable transaction costs | 29 | |||
Other Nonoperating Items | ||||
Gains (Losses) on Extinguishment of Debt | (320) | |||
Equity Income (Loss) - Net | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 3 | |||
Other Income (Loss) - Net | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | 1,323 | (21) | |
Net Gains From Investee Transactions, Equity Investment Sales and other gains | 1,402 | 18 | 1,402 | |
Remeasurement on previously held equity interest | 19 | |||
Valuation of shares in equity method investee gains/ (loss) | (6) | |||
Bottling investments [Member] | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 22 | 151 | 300 | 361 |
Costs incurred to refranchise NA territories | 73 | 170 | ||
Noncapitalizable transaction costs | 8 | |||
Equity Income (Loss) - Net | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | 32 | 76 | |
Other Income (Loss) - Net | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (1,089) | (794) | (1,657) | (827) |
North America [Member] | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 22 | 31 | 80 | 104 |
Other Income (Loss) - Net | ||||
Cost incurred to convert bottling agreement | 17 | 17 | ||
Productivity and Reinvestment [Member] | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 59 | 141 | 187 | 323 |
Integration of German Bottling and Distribution Operation [Member] | ||||
Other Operating Charges | ||||
Productivity, integration and restructuring initiatives | 75 | 240 | 204 | |
Venezuelan subsidiary | ||||
Other Operating Charges | ||||
Venezuelan Trademark impairment | 3 | 55 | ||
Accounts Receivable Write-Down | 76 | 76 | 56 | |
Other Income (Loss) - Net | ||||
Remeasurement Charges on Subsidiary Assets | 27 | |||
Venezuelan subsidiary | Latin America [Member] | ||||
Other Operating Charges | ||||
Accounts Receivable Write-Down | 76 | 76 | ||
Venezuelan subsidiary | Corporate | ||||
Other Operating Charges | ||||
Accounts Receivable Write-Down | 111 | |||
Other Income (Loss) - Net | ||||
Remeasurement Charges on Subsidiary Assets | 27 | |||
South African bottling operations [Member] | Corporate | ||||
Other Income (Loss) - Net | ||||
Deconsolidation, Gain (Loss), Amount | $ (21) | $ (21) | ||
Trademarks [Member] | ||||
Other Operating Charges | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 38 | $ 418 |
Productivity, Integration and51
Productivity, Integration and Restructuring Initiatives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Productivity and Reinvestment [Member] | ||||
Productivity, Integration and Restructuring Initiatives Disclosures | ||||
Accrued Balance, Beginning Balance | $ 107 | $ 204 | ||
Cost incurred | 59 | $ 141 | 187 | $ 323 |
Payments | (68) | (254) | ||
Noncash and exchange | (11) | (50) | ||
Accrued Balance, Ending Balance | 87 | 87 | ||
Restructuring and related costs incurred to date | 2,243 | 2,243 | ||
Productivity and Reinvestment [Member] | Severance pay and benefits | ||||
Productivity, Integration and Restructuring Initiatives Disclosures | ||||
Accrued Balance, Beginning Balance | 76 | 144 | ||
Cost incurred | 9 | 21 | ||
Payments | (20) | (102) | ||
Noncash and exchange | 0 | 2 | ||
Accrued Balance, Ending Balance | 65 | 65 | ||
Productivity and Reinvestment [Member] | Outside Services [Member] | ||||
Productivity, Integration and Restructuring Initiatives Disclosures | ||||
Accrued Balance, Beginning Balance | 9 | 8 | ||
Cost incurred | 0 | 17 | ||
Payments | (5) | (22) | ||
Noncash and exchange | 0 | 1 | ||
Accrued Balance, Ending Balance | 4 | 4 | ||
Productivity and Reinvestment [Member] | Other direct costs [Member] | ||||
Productivity, Integration and Restructuring Initiatives Disclosures | ||||
Accrued Balance, Beginning Balance | 22 | 52 | ||
Cost incurred | 50 | 149 | ||
Payments | (43) | (130) | ||
Noncash and exchange | (11) | (53) | ||
Accrued Balance, Ending Balance | 18 | 18 | ||
Integration of German Bottling and Distribution Operation [Member] | ||||
Productivity, Integration and Restructuring Initiatives Disclosures | ||||
Accrued Balance, Beginning Balance | 122 | |||
Cost incurred | $ 75 | 240 | $ 204 | |
Restructuring and related costs incurred to date | $ 1,367 | $ 1,367 |
Pension and Other Postretirem52
Pension and Other Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | |
Net periodic pension and other Postretirement benefit cost | ||||
Contributions to pension plan | $ 519 | $ 92 | ||
Pension plans, anticipated additional contributions for remainder of current fiscal year | 180 | |||
Pension Benefits | ||||
Net periodic pension and other Postretirement benefit cost | ||||
Service cost | $ 59 | $ 66 | 178 | 199 |
Interest cost | 79 | 95 | 239 | 285 |
Expected return on plan assets | (161) | (176) | (490) | (529) |
Amortization of prior service cost (credit) | 0 | (1) | (1) | (1) |
Amortization of net actuarial loss | 46 | 50 | 138 | 149 |
Net periodic benefit cost (credit) | 23 | 34 | 64 | 103 |
Special termination benefits | 4 | 0 | 17 | 9 |
Other | 0 | 0 | 0 | 0 |
Total cost recognized in statements of income | 27 | 34 | 81 | 112 |
Other Benefits | ||||
Net periodic pension and other Postretirement benefit cost | ||||
Service cost | 6 | 7 | 17 | 21 |
Interest cost | 8 | 9 | 23 | 28 |
Expected return on plan assets | (3) | (3) | (9) | (9) |
Amortization of prior service cost (credit) | (5) | (5) | (14) | (14) |
Amortization of net actuarial loss | 2 | 3 | 5 | 8 |
Net periodic benefit cost (credit) | 8 | 11 | 22 | 34 |
Special termination benefits | 0 | 0 | 0 | 0 |
Other | 31 | 0 | 31 | 0 |
Total cost recognized in statements of income | $ 39 | $ 11 | $ 53 | $ 34 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Income taxes | |||||
U.S. statutory rate (as a percent) | 35.00% | ||||
Effective tax rate estimated for 2016 (as a percent) | 22.50% | 22.50% | |||
Income tax expense | $ 378 | $ 272 | $ 1,618 | $ 1,937 | |
Effective tax rate (as a percent) | 26.50% | 15.80% | 21.20% | 24.00% | |
Schedule of unrecognized tax benefits | |||||
Balance of unrecognized tax benefits | $ 343 | $ 343 | $ 168 | ||
Increase related to prior period tax positions | 160 | ||||
Increase related to current period tax positions | 13 | ||||
Decrease related to settlements with taxing authorities | (1) | ||||
Increase (decrease) due to effect of foreign currency exchange rate changes | 3 | ||||
Impact of unrecognized tax benefits on effective tax rate if Company were to prevail on all uncertain tax positions | 183 | 183 | |||
Alternative jurisdictional tax benefits if tax positions do not prevail | 160 | 160 | |||
Income Tax Contingency [Line Items] | |||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 148 | 148 | $ 111 | ||
Tax expense (benefit) associated with significant operating and nonoperating items for the interim periods presented | |||||
Productivity and reinvestment program | (20) | $ (49) | (65) | $ (124) | |
Other productivity, integration and restructuring initiatives | 0 | 0 | 0 | 0 | |
Transaction gains and losses | (246) | (291) | (363) | 173 | |
Certain tax matters | 7 | (6) | 84 | (6) | |
Other - Net | 8 | 0 | (38) | (168) | |
Unusual and/or infrequent items [Abstract] | |||||
Net charges | 1,204 | 859 | 561 | ||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (815) | 1,323 | (848) | ||
Other Tax Expense (Benefit) | 80 | 80 | |||
Costs incurred to refranchise NA territories | 73 | 170 | |||
Net Gain | 102 | ||||
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 41 | 0 | 473 | |
Valuation of shares in equity method investee gains/ (loss) | 0 | 0 | 0 | (6) | |
Remeasurement on previously held equity interest | 0 | 0 | 0 | 19 | |
Unusual or Infrequent Event Charges | 99 | 230 | 639 | ||
Gains (Losses) on Extinguishment of Debt | (320) | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | (3) | 35 | 79 | |
Tax litigation expenses | 9 | 19 | |||
Productivity and Reinvestment [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Productivity, integration and restructuring initiatives | 59 | 141 | 187 | 323 | |
Integration of German Bottling and Distribution Operation [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Productivity, integration and restructuring initiatives | 75 | 240 | 204 | ||
Corporate | |||||
Unusual and/or infrequent items [Abstract] | |||||
Productivity, integration and restructuring initiatives | 14 | 29 | 42 | 53 | |
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | 1,323 | (21) | ||
Net Gains From Investee Transactions, Equity Investment Sales and other gains | 1,402 | 18 | 1,402 | ||
Impairment of Intangible Assets (Excluding Goodwill) | 48 | 418 | |||
Valuation of shares in equity method investee gains/ (loss) | (6) | ||||
Remeasurement on previously held equity interest | 19 | ||||
Cash Contribution Expense | 100 | 100 | |||
Gains (Losses) on Extinguishment of Debt | (320) | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 3 | ||||
Bottling investments [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Productivity, integration and restructuring initiatives | 22 | 151 | 300 | 361 | |
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (1,089) | (794) | (1,657) | (827) | |
Costs incurred to refranchise NA territories | 73 | 170 | |||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | 32 | 76 | ||
North America [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Productivity, integration and restructuring initiatives | 22 | 31 | 80 | 104 | |
Cost incurred to convert bottling agreement | 17 | 17 | |||
Venezuelan subsidiary | |||||
Unusual and/or infrequent items [Abstract] | |||||
Devaluation of Venezuela Bolivar, write-down of receivables and charges from equity investees | 27 | ||||
Accounts Receivable Write-Down | 76 | 76 | 56 | ||
Venezuelan subsidiary | Corporate | |||||
Unusual and/or infrequent items [Abstract] | |||||
Accounts Receivable Write-Down | 111 | ||||
Trademarks [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 38 | $ 418 | |||
Coca-Cola Beverage Africa [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | (21) | |||
CCEAG [Member] | |||||
Unusual and/or infrequent items [Abstract] | |||||
Disposal gain (loss) of a business net of transaction cost | 1,288 | $ 1,288 | |||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | $ 1,400 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | $ 379 | $ 322 |
Available-for-sale securities | 6,605 | 8,606 |
Derivative, Collateral, Obligation to Return Cash | 223 | 184 |
Derivative, Collateral, Right to Reclaim Cash | 17 | |
Level 1 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 199 | 183 |
Available-for-sale securities | 1,715 | 3,913 |
Derivatives, assets | 1 | 2 |
Total assets | 1,915 | 4,098 |
Derivatives, liabilities | 10 | 24 |
Total liabilities | 10 | 24 |
Level 2 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 113 | 101 |
Available-for-sale securities | 4,741 | 4,574 |
Derivatives, assets | 973 | 1,268 |
Total assets | 5,827 | 5,943 |
Derivatives, liabilities | 477 | 635 |
Total liabilities | 477 | 635 |
Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 3 | 2 |
Available-for-sale securities | 149 | 119 |
Derivatives, assets | 0 | 0 |
Total assets | 152 | 121 |
Derivatives, liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Other [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 64 | 36 |
Available-for-sale securities | 0 | 0 |
Derivatives, assets | 0 | 0 |
Total assets | 64 | 36 |
Derivatives, liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Netting Adjustment | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 0 | 0 |
Available-for-sale securities | 0 | 0 |
Derivatives, assets | (573) | (638) |
Total assets | (573) | (638) |
Derivatives, liabilities | (368) | (488) |
Total liabilities | (368) | (488) |
Fair Value Measurements | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Trading Securities | 379 | 322 |
Available-for-sale securities | 6,605 | 8,606 |
Derivatives, assets | 401 | 632 |
Total assets | 7,385 | 9,560 |
Derivatives, liabilities | 119 | 171 |
Total liabilities | 119 | 171 |
Prepaid expenses and other assets | Fair Value Measurements | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivatives, assets | 79 | |
Other Assets | Fair Value Measurements | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivatives, assets | 401 | 553 |
Accounts payable and accrued expenses | Fair Value Measurements | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivatives, liabilities | 9 | |
Other Liabilities | Fair Value Measurements | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Derivatives, liabilities | $ 110 | $ 171 |
Fair Value Measurements (Deta55
Fair Value Measurements (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Nonrecurring fair value measurements | |||||
Assets held for sale | $ (1,044) | $ (799) | $ (1,490) | $ (822) | |
Intangible assets | 0 | (41) | 0 | (473) | |
Investment in formerly unconsolidated subsidiary | 0 | 0 | 0 | (19) | |
Valuation of shares in equity method investee gains/ (loss) | 0 | 0 | 0 | (6) | |
Total | (1,044) | (840) | (1,490) | $ (1,320) | |
Exercise of Options | 10.00% | ||||
Carrying amount of long-term debt, including the current portion | $ 35,136 | $ 35,136 | $ 30,987 | ||
Trademarks [Member] | |||||
Nonrecurring fair value measurements | |||||
Intangible assets | (38) | $ (418) | |||
Venezuelan [Member] [Member] | |||||
Nonrecurring fair value measurements | |||||
Intangible assets | $ (3) | $ (55) |
Fair Value Measurements (Deta56
Fair Value Measurements (Details 3) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Other fair value disclosures | ||
Long-term debt, including the current portion, carrying amount | $ 35,136 | $ 30,987 |
Long-term debt, including the current portion, fair value | $ 36,658 | $ 31,308 |
Operating Segments (Details)
Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Oct. 02, 2015 | Sep. 30, 2016 | Oct. 02, 2015 | Dec. 31, 2015 | |
Net operating revenues: | |||||
Third party | $ 10,633 | $ 11,427 | $ 32,454 | $ 34,294 | |
Intersegment | 0 | 0 | 0 | 0 | |
Total net revenues | 10,633 | 11,427 | 32,454 | 34,294 | |
Operating Income (Loss) | 2,271 | 2,379 | 7,271 | 7,210 | |
Income (loss) before income taxes | 1,428 | 1,725 | 7,621 | 8,067 | |
Identifiable operating assets | 75,900 | 77,989 | 75,900 | 77,989 | $ 74,208 |
Noncurrent investments | 18,027 | 14,934 | 18,027 | 14,934 | 15,788 |
Impairment of Intangible Assets (Excluding Goodwill) | 0 | 41 | 0 | 473 | |
Costs incurred to refranchise NA territories | 73 | 170 | |||
Noncapitalizable transaction costs | 37 | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (815) | 1,323 | (848) | ||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | (3) | 35 | 79 | |
Valuation of shares in equity method investee gains/ (loss) | 0 | 0 | 0 | (6) | |
Gains (Losses) on Extinguishment of Debt | (320) | ||||
Venezuelan subsidiary | |||||
Net operating revenues: | |||||
Accounts Receivable Write-Down | 76 | 76 | 56 | ||
Europe, Middle East & Africa [Member] | |||||
Net operating revenues: | |||||
Third party | 1,852 | 1,764 | 5,369 | 5,405 | |
Intersegment | 0 | 169 | 264 | 471 | |
Total net revenues | 1,852 | 1,933 | 5,633 | 5,876 | |
Operating Income (Loss) | 914 | 930 | 2,897 | 3,036 | |
Income (loss) before income taxes | 922 | 945 | 2,950 | 3,085 | |
Identifiable operating assets | 4,337 | 4,506 | 4,337 | 4,506 | 4,156 |
Noncurrent investments | 1,315 | 1,161 | 1,315 | 1,161 | 1,138 |
Productivity, integration and restructuring initiatives | 2 | 6 | 3 | ||
Refinement of previously established accruals - credit | (1) | ||||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | (3) | 3 | |||
Latin America [Member] | |||||
Net operating revenues: | |||||
Third party | 949 | 993 | 2,787 | 2,995 | |
Intersegment | 16 | 19 | 50 | 56 | |
Total net revenues | 965 | 1,012 | 2,837 | 3,051 | |
Operating Income (Loss) | 435 | 538 | 1,470 | 1,641 | |
Income (loss) before income taxes | 447 | 535 | 1,485 | 1,649 | |
Identifiable operating assets | 1,964 | 1,463 | 1,964 | 1,463 | 1,627 |
Noncurrent investments | 823 | 673 | 823 | 673 | 657 |
Productivity, integration and restructuring initiatives | 4 | 7 | |||
Refinement of previously established accruals - credit | (1) | (2) | |||
Income (expenses) related to subsidiary events | (33) | ||||
Latin America [Member] | Venezuelan subsidiary | |||||
Net operating revenues: | |||||
Accounts Receivable Write-Down | 76 | 76 | |||
North America [Member] | |||||
Net operating revenues: | |||||
Third party | 1,661 | 1,468 | 4,759 | 4,237 | |
Intersegment | 1,003 | 1,112 | 2,978 | 3,311 | |
Total net revenues | 2,664 | 2,580 | 7,737 | 7,548 | |
Operating Income (Loss) | 666 | 585 | 1,982 | 1,874 | |
Income (loss) before income taxes | 653 | 581 | 1,978 | 1,865 | |
Identifiable operating assets | 16,406 | 16,383 | 16,406 | 16,383 | 16,396 |
Noncurrent investments | 123 | 128 | 123 | 128 | 107 |
Productivity, integration and restructuring initiatives | 22 | 31 | 80 | 104 | |
Cost incurred to convert bottling agreement | 17 | 17 | |||
Asia Pacific | |||||
Net operating revenues: | |||||
Third party | 1,315 | 1,247 | 3,818 | 3,816 | |
Intersegment | 145 | 159 | 437 | 476 | |
Total net revenues | 1,460 | 1,406 | 4,255 | 4,292 | |
Operating Income (Loss) | 583 | 571 | 1,892 | 1,876 | |
Income (loss) before income taxes | 589 | 576 | 1,903 | 1,890 | |
Identifiable operating assets | 2,257 | 1,784 | 2,257 | 1,784 | 1,639 |
Noncurrent investments | 166 | 166 | 166 | 166 | 158 |
Productivity, integration and restructuring initiatives | 2 | 1 | |||
Refinement of previously established accruals - credit | (1) | ||||
Bottling investments [Member] | |||||
Net operating revenues: | |||||
Third party | 4,809 | 5,900 | 15,631 | 17,721 | |
Intersegment | 31 | 48 | 116 | 143 | |
Total net revenues | 4,840 | 5,948 | 15,747 | 17,864 | |
Operating Income (Loss) | 124 | 85 | 222 | 239 | |
Income (loss) before income taxes | (734) | (547) | (897) | (240) | |
Identifiable operating assets | 17,390 | 23,067 | 17,390 | 23,067 | 22,688 |
Noncurrent investments | 12,223 | 8,134 | 12,223 | 8,134 | 8,084 |
Productivity, integration and restructuring initiatives | 22 | 151 | 300 | 361 | |
Costs incurred to refranchise NA territories | 73 | 170 | |||
Noncapitalizable transaction costs | 8 | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (1,089) | (794) | (1,657) | (827) | |
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 14 | 32 | 76 | ||
Corporate | |||||
Net operating revenues: | |||||
Third party | 47 | 55 | 90 | 120 | |
Intersegment | 0 | 0 | 5 | 0 | |
Total net revenues | 47 | 55 | 95 | 120 | |
Operating Income (Loss) | (451) | (330) | (1,192) | (1,456) | |
Income (loss) before income taxes | (449) | (365) | 202 | (182) | |
Identifiable operating assets | 33,546 | 30,786 | 33,546 | 30,786 | 27,702 |
Noncurrent investments | 3,377 | 4,672 | 3,377 | 4,672 | 5,644 |
Productivity, integration and restructuring initiatives | 14 | 29 | 42 | 53 | |
Impairment of Intangible Assets (Excluding Goodwill) | 48 | 418 | |||
Noncapitalizable transaction costs | 29 | ||||
Benefit (charge) due to refranchising of territories or deconsolidation of bottlers | (21) | 1,323 | (21) | ||
Cash Contribution Expense | 100 | 100 | |||
Net Gains From Investee Transactions, Equity Investment Sales and other gains | 1,402 | 18 | 1,402 | ||
Our proportionate share of unusual or infrequent items charge/(gain) recorded by equity method investees | 3 | ||||
Valuation of shares in equity method investee gains/ (loss) | (6) | ||||
Gains (Losses) on Extinguishment of Debt | (320) | ||||
Income (expenses) related to subsidiary events | (105) | ||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | (19) | ||||
Corporate | Venezuelan subsidiary | |||||
Net operating revenues: | |||||
Accounts Receivable Write-Down | 111 | ||||
Corporate | South African bottling operations [Member] | |||||
Net operating revenues: | |||||
Deconsolidation, Gain (Loss), Amount | (21) | (21) | |||
Intersegment Eliminations [Member] | |||||
Net operating revenues: | |||||
Third party | 0 | 0 | 0 | 0 | |
Intersegment | (1,195) | (1,507) | (3,850) | (4,457) | |
Total net revenues | (1,195) | (1,507) | (3,850) | (4,457) | |
Operating Income (Loss) | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | 0 | 0 | 0 | 0 | |
Identifiable operating assets | 0 | 0 | 0 | 0 | 0 |
Noncurrent investments | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Event Subsequent E58
Subsequent Event Subsequent Event (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | ||
Total assets | $ 2,463 | $ 3,900 |
Total liabilities | 682 | $ 1,133 |
North America Refranchising [Member] | ||
Subsequent Event [Line Items] | ||
Inventories | 39 | |
Prepaid expenses and other assets | 6 | |
Other assets | 1 | |
Property, plant and equipment | 231 | |
Bottlers' Franchise Rights with indefinite lives | 180 | |
Goodwill | 61 | |
Other intangible assets | 9 | |
Allowance for reduction of assets, held-for-sale | (248) | |
Total assets | 279 | |
Accounts payable and accrued expenses | 15 | |
Deferred income taxes | 66 | |
Total liabilities | $ 81 |