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FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Assets and liabilities measured at fair value on a recurring basis | The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions):
September 30, 2022 | Level 1 | Level 2 | Level 3 |  | Other 3 | Netting Adjustment | 4 | Fair Value Measurements |
Assets: |  |  |  |  |  |  |  |  |
Equity securities with readily determinable values 1 | $ | 1,719 |  | $ | 185 |  | $ | 17 |  |  | $ | 91 |  | $ | — |  |  | $ | 2,012 |  |
Debt securities 1 | — |  | 1,881 |  | 9 |  |  | — |  | — |  |  | 1,890 |  |
Derivatives 2 | 72 |  | 648 |  | — |  |  | — |  | (537) |  |  | 183 |  | 7
Total assets | $ | 1,791 |  | $ | 2,714 |  | $ | 26 |  |  | $ | 91 |  | $ | (537) |  |  | $ | 4,085 |  |
Liabilities: |  |  |  |  |  |  |  |  |
Contingent consideration liability | $ | — |  | $ | — |  | $ | 1,561 |  | 5 | $ | — |  | $ | — |  |  | $ | 1,561 |  |
Derivatives 2 | 6 |  | 1,891 |  | — |  |  | — |  | (1,817) |  | 6 | 80 |  | 7
Total liabilities | $ | 6 |  | $ | 1,891 |  | $ | 1,561 |  |  | $ | — |  | $ | (1,817) |  |  | $ | 1,641 |  |
1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There are no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 Represents the fair value of future milestone payments related to our acquisition of fairlife in 2020, which are contingent on fairlife achieving certain financial targets through 2024 and, if achieved, are payable in 2023 and 2025. These milestone payments are based on agreed-upon formulas related to fairlife’s operating results, the resulting values of which are not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model. 6 The Company has the right to reclaim $1,325 million in cash collateral it has netted against its derivative positions. 7 The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $90 million in the line item prepaid expenses and other current assets, $93 million in the line item other noncurrent assets and $80 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.
December 31, 2021 | Level 1 | Level 2 | Level 3 |  | Other 3 | Netting Adjustment | 4 | Fair Value Measurements |
Assets: |  |  |  |  |  |  |  |  |
Equity securities with readily determinable values 1 | $ | 2,372 |  | $ | 230 |  | $ | 17 |  |  | $ | 104 |  | $ | — |  |  | $ | 2,723 |  |
Debt securities 1 | — |  | 1,556 |  | 33 |  |  | — |  | — |  |  | 1,589 |  |
Derivatives 2 | 69 |  | 588 |  | — |  |  | — |  | (459) |  | 6 | 198 |  | 8
Total assets | $ | 2,441 |  | $ | 2,374 |  | $ | 50 |  |  | $ | 104 |  | $ | (459) |  |  | $ | 4,510 |  |
Liabilities: |  |  |  |  |  |  |  |  |
Contingent consideration liability | $ | — |  | $ | — |  | $ | 590 |  | 5 | $ | — |  | $ | — |  |  | $ | 590 |  |
Derivatives 2 | — |  | 96 |  | — |  |  | — |  | (82) |  | 7 | 14 |  | 8
Total liabilities | $ | — |  | $ | 96 |  | $ | 590 |  |  | $ | — |  | $ | (82) |  |  | $ | 604 |  |
1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There are no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 Represents the fair value of future milestone payments related to our acquisition of fairlife in 2020, which are contingent on fairlife achieving certain financial targets through 2024 and, if achieved, are payable in 2023 and 2025. These milestone payments are based on agreed-upon formulas related to fairlife’s operating results, the resulting values of which are not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model. 6 The Company is obligated to return $331 million in cash collateral it has netted against its derivative positions. 7 The Company does not have the right to reclaim any cash collateral it has netted against its derivative positions. 8 The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $198 million in the line item other noncurrent assets and $14 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.
Gains and losses on assets measured at fair value on a nonrecurring basis | The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the following table (in millions):
| Gains (Losses) |
| Three Months Ended |  | Nine Months Ended |
| September 30, 2022 |  | October 1, 2021 |  | September 30, 2022 |  | October 1, 2021 |
Assets held for sale | $ | — |  |  | $ | (266) |  | 2 | $ | — |  |  | $ | (266) |  | 2
Other-than-temporary impairment charges | — |  |  | — |  |  | (96) |  | 3 | — |  |
Impairment of intangible assets | (57) |  | 1 | — |  |  | (57) |  | 1 | — |  |
Valuation of shares in equity method investee | — |  |  | — |  |  | (24) |  | 4 | — |  |
Total | $ | (57) |  |  | $ | (266) |  |  | $ | (177) |  |  | $ | (266) |  |
1 During the three and nine months ended September 30, 2022, the Company recorded an impairment charge of $57 million related to a trademark in Asia Pacific, which was primarily driven by a change in brand strategy resulting in revised projections of future operating results for the trademark. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs. 2 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. During the three and nine months ended October 1, 2021, the Company recorded charges of $266 million in the line item other income (loss) — net related to the restructuring of our manufacturing operations in the United States. These charges, which were calculated based on Level 3 inputs, primarily impacted the line item property, plant and equipment in our consolidated balance sheet. 3 The Company recorded an other-than-temporary impairment charge of $96 million during the nine months ended September 30, 2022 related to an equity method investee in Russia. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results. 4During the nine months ended September 30, 2022, we recognized a net loss of $24 million on assets measured at fair value on a nonrecurring basis. The net loss was recorded as a result of an equity method investee issuing additional shares of its stock. Accordingly, the Company is required to treat this type of transaction as if the Company had sold a proportionate share of its investment. This net loss was determined using Level 2 inputs and primarily resulted from the recognition of cumulative translation losses.

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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