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FAIR VALUE MEASUREMENTS (Tables)
12 Months Ended
Dec. 31, 2012
Fair Value Measurements Disclosure [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
The following tables summarize those assets and liabilities measured at fair value on a recurring basis (in millions):
 
December 31, 2012
 
Level 1

 
Level 2

 
Level 3

 
Netting
Adjustment1

 
Fair Value
Measurements

Assets:
 
 
 
 
 
 
 
 
 
Trading securities
$
146

 
$
116

 
$
4

 
$

 
$
266

Available-for-sale securities
1,390

 
3,068

 
135

2 

 
4,593

    Derivatives3
47

 
583

 

 
(116
)
 
514

Total assets
$
1,583

 
$
3,767

 
$
139

 
$
(116
)
 
$
5,373

Liabilities:
 
 
 
 
 
 
 
 
 
    Derivatives3
$
35

 
$
98

 
$

 
$
(121
)
 
$
12

Total liabilities
$
35

 
$
98

 
$

 
$
(121
)
 
$
12

1 
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and also cash collateral held or placed with the same counterparties. Refer to Note 5.
2 
Primarily related to long-term debt securities that mature in 2018.
3 
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3

 
Netting
Adjustment1

 
Fair Value
Measurements

Assets:
 
 
 
 
 
 
 
 
 
Trading securities
$
166

 
$
41

 
$
4

 
$

 
$
211

Available-for-sale securities
1,071

 
214

 
116

2 

 
1,401

    Derivatives3
39

 
467

 

 
(117
)
 
389

Total assets
$
1,276

 
$
722

 
$
120

 
$
(117
)
 
$
2,001

Liabilities:
 
 
 
 
 
 
 
 
 
    Derivatives3
$
5

 
$
201

 
$

 
$
(121
)
 
$
85

Total liabilities
$
5

 
$
201

 
$

 
$
(121
)
 
$
85

1 
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and also cash collateral held or placed with the same counterparties. Refer to Note 5.
2 
Primarily related to long-term debt securities that mature in 2018.
3 
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
Assets measured at fair value on a nonrecurring basis
Assets measured at fair value on a nonrecurring basis for the years ended December 31, 2012 and 2011, are summarized below (in millions):
 
Gains (Losses)  
 
December 31,
2012

 
2011

 
Exchange of investment in equity securities
$
185

1 
$
418

5 
Assets held for sale
(108
)
2 

 
Valuation of shares in equity method investee
10

3 
122

6 
Cost method investments
(16
)
4 

 
Equity method investments

 
(41
)
7 
Available-for-sale securities

 
(17
)
8 
Inventories

 
(11
)
9 
Cold-drink equipment

 
(1
)
9 
Total
$
71

 
$
470

 
1 
As a result of the merger of Andina and Polar, the Company recognized a gain of $185 million on the exchange of shares we previously owned in Polar for shares in Andina. This gain primarily represents the difference between the carrying value of the Polar shares we relinquished and the fair value of the Andina shares we received as a result of the transaction. The gain was calculated based on Level 1 inputs. Refer to Note 17.
2 
The Company and Coca-Cola FEMSA executed a share purchase agreement for the sale of a majority ownership interest in our consolidated Philippine bottling operations. As a result of this agreement, the Company was required to classify our Philippine bottling operations as held for sale in our consolidated balance sheet as of December 31, 2012. We also recognized a loss of $108 million during the year ended December 31, 2012, based on the agreed upon sale price and related transaction costs. The loss was calculated based on Level 3 inputs. Refer to Note 17.
3 
The Company recognized a gain of $92 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at a per share amount greater than the carrying value of the Company's per share investment. Accordingly, the Company is required to treat this type of transaction as if we sold a proportionate share of our investment in Coca-Cola FEMSA. This gain was partially offset by a loss of $82 million the Company recognized due to the Company acquiring an ownership interest in Mikuni for which we paid a premium over the publicly traded market price. This premium was expensed on the acquisition date. Subsequent to this transaction, the Company accounts for our investment in Mikuni under the equity method of accounting. The gain and loss described above were determined using Level 1 inputs. Refer to Note 17.
4 
The Company recognized impairment charges of $16 million due to other-than-temporary declines in the fair values of certain cost method investments. These charges were determined using Level 3 inputs. Refer to Note 17.
5 
As a result of the merger of Arca and Contal, the Company recognized a gain of $418 million on the exchange of the shares we previously owned in Contal for shares in the newly formed entity Arca Contal. The gain represents the difference between the carrying value of the Contal shares we relinquished and the fair value of the Arca Contal shares we received as a result of the transaction. The gain and initial carrying value of our investment were calculated based on Level 1 inputs. Refer to Note 17.
6 
The Company recognized a net gain of $122 million, primarily as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at per share amounts greater than the carrying value of the Company's per share investment. Accordingly, the Company is required to treat this type of transaction as if we sold a proportionate share of our investment in Coca-Cola FEMSA. The gains the Company recognized as a result of the previous transactions were partially offset by charges associated with certain of the Company's equity method investments in Japan. The gains and charges were determined using Level 1 inputs. Refer to Note 17.
7 
The Company recognized impairment charges of $41 million related to an investment in an entity accounted for under the equity method of accounting. Subsequent to the recognition of these impairment charges, the Company's remaining financial exposure related to this entity is not significant. This charge was determined using Level 3 inputs. Refer to Note 17.
8 
The Company recognized impairment charges of $17 million due to the other-than-temporary decline in the fair values of certain available-for-sale securities. These charges were determined using Level 1 inputs. Refer to Note 17.
9 
These assets primarily consisted of Company-owned inventory as well as cold-drink equipment that were damaged or lost as a result of the natural disasters in Japan on March 11, 2011. We recorded impairment charges of $11 million and $1 million related to Company-owned inventory and cold-drink equipment, respectively. These charges were determined using Level 3 inputs based on the carrying value of the inventory and cold-drink equipment prior to the disasters. Refer to Note 17.
Summary of the fair value of pension plan assets for U.S. and non-U.S. pension plans
The following table summarizes the levels within the fair value hierarchy used to determine the fair value of our pension plan assets for our U.S. and non-U.S. pension plans as of December 31, 2012 and 2011 (in millions):
 
December 31, 2012
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3

 
Total

 
Level 1

 
Level 2

 
Level 3

 
Total

Cash and cash equivalents
$
187

 
$
199

 
$

 
$
386

 
$
152

 
$
75

 
$

 
$
227

Equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   U.S.-based companies
1,847

 
20

 
14

 
1,881

 
1,366

 
15

 
14

 
1,395

   International-based companies
910

 
54

 

 
964

 
865

 
82

 
6

 
953

Fixed-income securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Government bonds

 
562

 

 
562

 

 
773

 

 
773

   Corporate bonds and debt securities

 
982

 

 
982

 

 
718

 

 
718

Mutual, pooled and commingled funds
504

 
1,006

 

 
1,510

 
167

 
557

 
5

 
729

Hedge funds/limited partnerships

 
125

 
400

 
525

 

 
140

 
349

 
489

Real estate

 

 
257

 
257

 

 

 
270

 
270

Other

 
7

 
510

1 
517

 

 
99

 
518

1 
617

Total
$
3,448

 
$
2,955

 
$
1,181

 
$
7,584

 
$
2,550

 
$
2,459

 
$
1,162

 
$
6,171

1 
Includes $510 million and $514 million of purchased annuity contracts as of December 31, 2012 and 2011, respectively.
Reconciliation of the beginning and ending balance of Level 3 assets for U.S. and non-U.S. pension plans
The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for our U.S. and non-U.S. pension plans for the years ended December 31, 2012 and 2011 (in millions):
 
Hedge
Funds/Limited
Partnerships

 
Real Estate

 
Equity
Securities

 
Mutual,
Pooled and
Commingled
Funds

 
Other

 
Total

2011
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
317

 
$
242

 
$
15

 
$
20

 
$
303

 
$
897

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
 
   Related to assets still held at the reporting date
9

 
35

 
4

 
(5
)
 
61

 
104

   Related to assets sold during the year
(3
)
 
(5
)
 

 
6

 

 
(2
)
Purchases, sales and settlements — net
26

 
(2
)
 
(1
)
 
(16
)
 
146

 
153

Transfers in or out of Level 3 — net
1

 

 
2

 

 
2

 
5

Foreign currency translation
(1
)
 

 

 

 
6

 
5

Balance at end of year
$
349

 
$
270

 
$
20

 
$
5

 
$
518

1 
$
1,162

2012
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of year
$
349

 
$
270

 
$
20

 
$
5

 
$
518

 
$
1,162

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
 
   Related to assets still held at the reporting date
(8
)
 
13

 

 

 
1

 
6

   Related to assets sold during the year
24

 
3

 

 

 

 
27

Purchases, sales and settlements — net
35

 
(27
)
 

 
(5
)
 
(2
)
 
1

Transfers in or out of Level 3 — net

 
(2
)
 
(6
)
 

 
(4
)
 
(12
)
Foreign currency translation

 

 

 

 
(3
)
 
(3
)
Balance at end of year
$
400

 
$
257

 
$
14

 
$

 
$
510

1 
$
1,181

1 
Includes $510 million and $514 million of purchased annuity contracts as of December 31, 2012 and 2011, respectively.
Summary of the fair value of postretirement benefit plan assets
The following table summarizes the levels within the fair value hierarchy used to determine the fair value of our other postretirement benefit plan assets as of December 31, 2012 and 2011 (in millions):
 
December 31, 2012
 
December 31, 2011
 
Level 1

 
Level 2

 
Level 3 1

 
Total

 
Level 1

 
Level 2

 
Level 3 1

 
Total

Cash and cash equivalents
$
1

 
$
12

 
$

 
$
13

 
$

 
$
86

 
$

 
$
86

Equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S.-based companies
81

 

 

 
81

 
70

 

 

 
70

International-based companies
4

 

 

 
4

 
13

 

 

 
13

Fixed-income securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government bonds
75

 
3

 

 
78

 

 
2

 

 
2

Corporate bonds and debt securities

 
5

 

 
5

 

 
6

 

 
6

Mutual, pooled and commingled funds
11

 
5

 

 
16

 

 
3

 

 
3

Hedge funds/limited partnerships

 
1

 
2

 
3

 

 

 
2

 
2

Real estate

 

 
2

 
2

 

 

 
2

 
2

Other

 

 

 

 

 
1

 

 
1

Total
$
172

 
$
26

 
$
4

 
$
202

 
$
83

 
$
98

 
$
4

 
$
185

1 
Level 3 assets are not a significant portion of other postretirement benefit plan assets.