26. Accounting for Financial Instruments (continued)  27. Fair Value Measurements 130 Teck 2012 Annual Report The following table provides information regarding the effect of U.S. dollar forward sales contracts that are derivative  instruments designated as cash flow hedges on our consolidated statements of income and comprehensive income in  2012 and 2011: Our hedges of net investments in foreign operations were effective, and no ineffectiveness was recognized in profit  for the period. Net investment hedge Certain of our financial assets and liabilities are measured at fair value on a recurring basis and classified in their entirety  based on the lowest level of input that is significant to the fair value measurement. Certain non-financial assets and  liabilities may also be measured at fair value on a non-recurring basis. There are three levels of the fair value hierarchy  that prioritize the inputs to valuation techniques used to measure fair value, with Level 1 inputs having the highest  priority. The levels and the valuation techniques used to value our financial assets and liabilities are described below: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets  or liabilities. Marketable equity securities are valued using quoted market prices in active markets. Accordingly, these items are  included in Level 1 of the fair value hierarchy. Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, or inputs  that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Derivative instruments are included in Level 2 of the fair value hierarchy as they are valued using pricing models or  discounted cash flow models. These models require a variety of inputs, including, but not limited to, contractual terms,  market prices, forward price curves, yield curves, and credit spreads. These inputs are obtained from or corroborated  with the market where possible. Also included in Level 2 are settlements receivable and settlements payable from  provisional pricing on concentrate sales and purchases because they are valued using quoted market prices for forward  curves for copper, zinc and lead. Level 1 – Quoted Prices in Active Markets for Identical Assets Level 2 – Significant Other Observable Inputs (Cdn$ in millions) 2012 2011 Gains recognized in other comprehensive income (effective portion) $ 8 $ – Gains reclassified from accumulated other comprehensive income into income (effective portion)  9 6 Location of gains reclassified from accumulated other comprehensive income into income Revenue Revenue Notes to Consolidated Financial Statements  Years ended December 31, 2012 and 2011