Snapple 2012 Annual Report Download - page 104

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
86
RECURRING FAIR VALUE MEASUREMENTS
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis
as of December 31, 2012 (in millions):
Fair Value Measurements at December 31, 2012
Quoted Prices
in Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Level 1 Level 2 Level 3
Commodity contracts $ — $ 5 $ —
Interest rate contracts — 35 —
Total assets $ — $ 40 $ —
Commodity contracts $ — $ 1 $ —
Interest rate contracts — 3 —
Foreign exchange forward contracts — 2 —
Total liabilities $ — $ 6 $ —
The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis
as of December 31, 2011 (in millions):
Fair Value Measurements at December 31, 2011
Quoted Prices
in Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Level 1 Level 2 Level 3
Interest rate contracts $ — $ 30 $ —
Foreign exchange forward contracts — 1 —
Total assets $ — $ 31 $ —
Commodity contracts $ — $ 12 $ —
Interest rate contracts — 33 —
Foreign exchange forward contracts — 1 —
Total liabilities $ — $ 46 $ —
The fair values of commodity forward contracts, interest rate swap contracts and foreign currency forward contracts are
determined based on inputs that are readily available in public markets or can be derived from information available in publicly
quoted markets. The fair value of commodity forward contracts are valued using the market approach based on observable market
transactions, primarily swap agreements, at the reporting date. Interest rate swap contracts are valued using models based primarily
on readily observable market parameters, such as LIBOR forward rates, for all substantial terms of the Company's contracts and
credit risk of the counterparties. The fair value of foreign currency forward contracts are valued using quoted forward foreign
exchange prices at the reporting date. Therefore, the Company has categorized these contracts as Level 2.
As of December 31, 2012 and 2011, the Company did not have any assets or liabilities measured on a recurring basis without
observable market values that would require a high level of judgment to determine fair value (Level 3).