Snapple 2012 Annual Report Download - page 82

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
64
2012 Impairment Analysis
Fair value is measured based on what each intangible asset or reporting unit would be worth to a third party market participant.
For our annual impairment analysis performed as of December 31, 2012, methodologies used to determine the fair values of the
assets included an income based approach, as well as an overall consideration of market capitalization and our enterprise value.
Management's estimates of fair value, which fall under Level 3, are based on historical and projected operating performance.
Discount rates were based on a weighted average cost of equity and cost of debt and were adjusted with various risk premiums.
As of December 31, 2012, the results of the annual impairment tests indicated no impairment was required. The estimated
fair value of each reporting unit exceeded the carrying value for all of the Company's goodwill by at least 50%. The estimated fair
values exceeded the carrying values for $2,658 million of the Company's indefinite lived intangible assets by at least 50%.
2011 Impairment Analysis
Based on the Company's review of the facts and circumstances and updated assumptions, the Company did not recalculate
the fair values for the annual impairment analysis for goodwill, brands or distribution rights during 2011. The Company employed
a carryforward approach, in accordance with U.S. GAAP, since DPS concluded it was remote that changes in the facts and
circumstances would have caused the fair value of these assets to fall below their carrying amounts. This conclusion was based
on the following factors: (1) the fair value of goodwill, brands and distribution rights exceeded their carrying amounts by a
substantial margin in the 2010 annual impairment analyses performed; (2) the Company's business performance during 2011 was
in line with the forecast used to estimate fair value in the impairment analysis performed during 2010; (3) the Company's outlook
for 2012 and beyond is in line with the forecast used to estimate fair value in the impairment analysis performed during 2010;
(4) other significant assumptions used in estimating fair value, such as the Company's weighted average cost of capital, have
improved since the 2010 impairment analysis performed; (5) the assets and liabilities that make up the reporting units have not
changed significantly since the 2010 fair value determination; and (6) DPS has experienced significant appreciation in the
Company's market capitalization. As such, no impairment was recorded for the indefinite lived intangible assets and goodwill as
of December 31, 2011.
7. Other Current Liabilities
Other current liabilities consisted of the following as of December 31, 2012, and 2011 (in millions):
December 31, December 31,
2012 2011
Customer rebates and incentives $ 226 $ 225
Accrued compensation 105 98
Insurance liability 43 35
Interest accrual and interest rate swap liability 27 52
Dividends payable 70 68
Other 118 125
Total other current liabilities $ 589 $ 603