ACCUMULATED OTHER COMPREHENSIVE INCOME. The change in components for accumulated other comprehensive income are as follows (in millions): FOREIGN UNREALIZED UNREALIZED CURRENCY GAIN LOSS ON TRANSLATION (LOSS) ON DERIVATIVE GAIN (LOSS) SECURITIES INSTRUMENTS TOTAL ----------- ---------- ----------- ------ Balance at December 31, 2003............ $ 13.3 $ 1.7 $(42.5) $(27.5) Change in component................... 55.5 1.1 (1.9) 54.7 Reclassification adjustments into earnings........................... -- 2.5 (0.2) 2.3 Income tax effect..................... -- (1.4) 0.5 (0.9) ------ ----- ------ ------ Balance at December 31, 2004............ 68.8 3.9 (44.1) 28.6 Change in component................... (38.0) (0.6) 18.7 (19.9) Reclassification adjustments into earnings........................... 0.7 (4.4) 3.2 (0.5) Income tax effect..................... -- 1.9 (8.1) (6.2) ------ ----- ------ ------ Balance at December 31, 2005............ 31.5 0.8 (30.3) 2.0 Change in component................... 33.1 (0.9) 7.2 39.4 Reclassification adjustments into earnings........................... -- (1.0) 2.2 1.2 Income tax effect..................... -- 0.7 (1.2) (0.5) ------ ----- ------ ------ Balance at December 31, 2006............ $ 64.6 $(0.4) $(22.1) $ 42.1 ====== ===== ====== ====== NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
ACCUMULATED OTHER COMPREHENSIVE INCOME. Other comprehensive income (loss) is recorded as a component of shareholders equity. As of December 31, it consists of: 2006 2007 Increase Increase January 1 (Decrease) December 31 (Decrease) December 31 Cumulative foreign currency translation gains $ 6,495 $ 521 $ 7,016 $ 5,873 $ 12,889 Minimum pension liability (645 ) 370 (275 ) (877 ) (1,152 ) Minimum post-retirement liability — 444 444 2,892 3,336 $ 5,850 $ 1,335 $ 7,185 $ 7,888 $ 15,073
ACCUMULATED OTHER COMPREHENSIVE INCOME. Other comprehensive income (loss) is recorded as a component of shareholders equity. As of December 31, it consists of: 2007 2008 Increase Balance at Increase Balance at January 1 (Decrease) December 31 (Decrease) December 31 Cumulative foreign currency translation gains (losses), net of tax $ 7,016 $ 5,873 $ 12,889 $ (10,990 ) $ 1,899 Minimum pension liability, net of tax (275 ) (877 ) (1,152 ) (7,098 ) (8,250 ) Minimum post-retirement liability, net of tax 444 2,892 3,336 1,172 4,508 Comprehensive income $ 7,185 $ 7,888 $ 15,073 $ (16,916 ) $ (1,843 ) Fair Value. In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of SFAS 115,” which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. Unrealized gains and losses arising subsequent to adoption are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company adopted this statement as of January 1, 2008 and elected not to apply the fair value option to any of its financial instruments. At December 31, 2008, the $50 million notional amount interest rate swap agreement is the only significant financial instrument for which hedge accounting is a consideration. This financial instrument is accounted for and reported as a fair value hedge under the requirements of FAS 133 “Accounting for Derivatives and Hedging Activities.” This swap agreement was terminated by the counter party on February 1, 2009 pursuant to the call provisions of the agreement with a $3.0 million termination payment to Thermadyne. 46 Table of Contents THERMADYNE HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
ACCUMULATED OTHER COMPREHENSIVE INCOME. Other comprehensive income (loss) is recorded as a component of stockholders equity. As of December 31, it consists of: 2008 2009 Increase Balance at Increase Balance at January 1 (Decrease) December 31 (Decrease) December 31 Net income Cumulative foreign currency translation gains (losses), net of tax $ 12,889 $ (10,990 ) $ 1,899 $ 7,279 $ 9,179 Minimum pension liability, net of tax (1,152 ) (7,098 ) (8,250 ) 318 (7,932 ) Minimum post-retirement liability, net of tax 3,336 1,172 4,508 (1,825 ) 2,683 Comprehensive income (loss) $ 15,073 $ (16,916 ) $ (1,843 ) $ 5,772 $ 3,929 Table of Contents THERMADYNE HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) Fair Value. The Company does apply the fair value option to financial instruments which measures and reports unrealized gains and losses in earnings. In December 2009, the Company’s Australian subsidiary entered into a forward purchase agreement with Commonwealth Bank to purchase $3,000 U.S. dollars over a 3-month period. At December 31, 2008 the Company had a $50 million notional amount interest rate swap accounted for and reported as a fair value hedge. This swap agreement was terminated by the counter party on February 1, 2009 pursuant to the call provisions of the agreement with a $3.0 million termination payment to Thermadyne. The carrying values of the obligations outstanding under the Working Capital Facility, the Second Lien Facility and other long-term obligations, excluding the Senior Subordinated Notes, are estimated to approximate fair values since these obligations are fully secured and have varying interest charges based on current market rates. The Company’s Senior Subordinated Notes traded at 95% and 56% at December 31, 2009, and 2008, respectively, based on available market information.
