Snapple 2011 Annual Report Download - page 87

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
67
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.
2010 and 2009 Impairment Analyses
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, 2010 and 2009, 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, 2010 and 2009, the results of the Step 1 analysis indicated that the estimated fair value of our indefinite
lived intangible assets and goodwill substantially exceeded their carrying values and, therefore, are not impaired.
7. Other Current Liabilities
Other current liabilities consisted of the following as of December 31, 2011, and 2010 (in millions):
Customer rebates and incentives
Accrued compensation
Insurance reserves
Interest accrual and interest rate swap liability
Dividends payable
Other
Total other current liabilities
December 31,
2011
$ 225
98
35
52
68
125
$ 603
December 31,
2010
$ 224
102
29
16
56
126
$ 553