NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Financial Instruments The Company does not hold or issue derivative financial instruments for trading or speculative pur- poses. The Company periodically uses forward foreign exchange contracts as economic hedges of anticipated transactions and firm purchase and sale commitments. These contracts are marked to fair value on a current basis and the respective gains and losses are recognized in other income (expense). The Company also periodi- cally enters into interest-rate swap agreements to moderate its exposure to interest rate changes. Interest-rate swaps are agree- ments to exchange fixed and variable rate payments based on the notional principal amounts. The changes in the fair value of these derivatives are recognized in other comprehensive income for qualifying cash flow hedges. In July 2012, the FASB issued amended guidance to simplify how entities test indefinite-lived intangible assets for impairment. The amendments permit an entity to first assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired and whether it is necessary to perform the quantitative impairment test for indefinite-lived intangible assets required under current accounting standards. The amend- ments are effective for annual and interim impairment tests of indefinite-lived intangible assets performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The Company does not expect the amended guidance to have a material impact on its consolidated financial position, results of operations, cash flows and disclosures when adopted. The table below provides the accumulated balances for each classi- fication of accumulated other comprehensive income (loss), as reflected on the Consolidated Balance Sheets. In December 2011, the FASB issued amended guidance on the dis- closure requirements on the offsetting of financial assets and liabilities. The amended disclosures will enable financial statement users to compare balance sheets prepared under U.S. GAAP and International Financial Reporting Standards (“IFRS”), which are subject to different offsetting models. The disclosures will be lim- ited to financial instruments and derivatives instruments that are either offset in accordance with the U.S. GAAP offsetting guidance or subject to enforceable master netting arrangements or similar agreements. The amendments will be applied retrospectively for interim and annual periods beginning on or after January 1, 2013. The amended guidance will not have a material impact on the Company’s disclosures. Certain prior year amounts have been reclassified to conform to the current year presentation of discontinued operations. On June 19, 2012, the Company sold Azonix Corporation (“Azonix”), which was formerly part of the Controls segment, to Cooper Industries for $44.8 million, of which $0.9 million and $0.5 million were recorded in the third and fourth quarters, respectively, resulting in an after tax gain of $14.5 million. As a result, the Consolidated Statement of Operations presents Azonix as a discontinued operation. In February 2013, the Financial Accounting Standards Board (“FASB”) issued amended guidance on the reclassifications out of accumulated other comprehensive income. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amend- ments are effective for fiscal years and interim periods within those years beginning after December 15, 2012. The amendments should be applied prospectively and early adoption is permitted. The Company does not expect the amended guidance to have a material impact on its consolidated financial position, results of operations, cash flows and disclosures when adopted. The operating results of the discontinued operations for the years ended December 31, 2012, 2011 and 2010 were as follows: On June 28, 2012, the Company sold certain assets and operations of the Company’s valve service center in Houston, Texas, which was formerly part of the Fluid Handling segment, to Furmanite Corpo- ration for $9.3 million, resulting in an after tax gain of $4.6 million. As a result, the Consolidated Statement of Operations presents the Company’s valve service center in Houston, Texas as a discontinued operation. (a) Net of tax benefit of $89,540, $76,179, and $32,091 for 2012, 2011, and 2010, respectively. Recently Issued Accounting Standards Note 2 – Discontinued Operations Reclassifications Accumulated Other Comprehensive Income (Loss) 42 (in thousands) December 31, 2012 2011 2010 Currency translation adjustment $ 69,729 $ 64,910 $ 77,183 Cumulative changes in pension and postretirement plan assets and obligation, net of tax (197,806) (158,422) (65,665) Accumulated other comprehensive (loss) income (a) $(128,077) $ (93,512) $ 11,518 (in thousands) For year ended December 31, 2012 2011 2010 Net Sales $25,544 $45,498 $38,506 Income from discontinued operations before income taxes $ 3,777 $ 5,693 $ 1,862 Provision for income taxes (1,321) (1,993) (652) Income from discontinued operations, net of income taxes $ 2,456 $ 3,700 $ 1,210