| Item | Description | Page | ||
| Special Note Regarding Forward-Looking Statements | 2 | |||
| PART I | ||||
| 1 | Business | 4 | ||
| 1A | Risk Factors | 9 | ||
| 1B | Unresolved Staff Comments | 21 | ||
| 2 | Properties | 21 | ||
| 3 | Legal Proceedings | 21 | ||
| 4 | Mine Safety Disclosures | 21 | ||
| Executive Officers of the Registrant | 21 | |||
| PART II | ||||
| 5 | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 23 | ||
| 6 | Selected Financial Data | 25 | ||
| 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 | ||
| 7A | Quantitative and Qualitative Disclosures About Market Risk | 41 | ||
| 8 | Financial Statements and Supplementary Data | �� | 43 | |
| 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 89 | ||
| 9A | Controls and Procedures | 89 | ||
| 9B | Other Information | 90 | ||
| PART III | ||||
| 10 | Directors, Executive Officers and Corporate Governance | 90 | ||
| 11 | Executive Compensation | 91 | ||
| 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 91 | ||
| 13 | Certain Relationships and Related Transactions, and Director Independence | 91 | ||
| 14 | Principal Accounting Fees and Services | 91 | ||
| PART IV | ||||
| 15 | Exhibits and Financial Statement Schedules | 91 | ||
| Signatures | 92 | |||
| Exhibit Index | 94 |
| Item | Description | Page |
| Special Note Regarding Forward-Looking Statements | ||
| Part I | ||
| 1 | Business | |
| 1A | Risk Factors | |
| 1B | Unresolved Staff Comments | |
| 2 | Properties | |
| 3 | Legal Proceedings | |
| 4 | Mine Safety Disclosures | |
| Executive Officers of the Registrant | ||
| Part II | ||
| 5 | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
| 6 | Selected Financial Data | |
| 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| 7A | Quantitative and Qualitative Disclosures About Market Risk | |
| 8 | Financial Statements and Supplementary Data | |
| 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |
| 9A | Controls and Procedures | |
| 9B | Other Information | |
| Part III | ||
| 10 | Directors, Executive Officers and Corporate Governance | |
| 11 | Executive Compensation | |
| 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
| 13 | Certain Relationships and Related Transactions, and Director Independence | |
| 14 | Principal Accountant Fees and Services | |
| Part IV | ||
| 15 | Exhibits and Financial Statement Schedules | |
| Signatures | ||
| Exhibit Index | ||
Upon the closing of the Charter Acquisition, we changed the composition of our reportable segments to reflect the changes in our internal organization resulting from the integration of the acquired businesses.
Total Lubrication Management
We sell lubrication equipment globally, and provide reliability services primarily in North and South America.
2014
is expected to be filled within the current fiscal year.| December 31, | ||||||||||||
| 2012 | 2011 | 2010 | ||||||||||
| North America | 2,805 | 728 | 638 | |||||||||
| Europe | 6,107 | 1,232 | 1,260 | |||||||||
| Asia and Middle East | 4,397 | 251 | 262 | |||||||||
| Central and South America | 2,424 | — | — | |||||||||
| Other | 553 | — | — | |||||||||
| Total associates | 16,286 | 2,211 | 2,160 | |||||||||
| December 31, | ||||||||
| 2014 | 2013 | 2012 | ||||||
| North America | 3,340 | 2,667 | 2,805 | |||||
| Europe | 6,415 | 6,761 | 6,107 | |||||
| Asia and Middle East | 4,696 | 4,722 | 4,397 | |||||
| Central and South America | 3,255 | 2,963 | 2,424 | |||||
| Other | 645 | 646 | 553 | |||||
| Total associates | 18,351 | 17,759 | 16,286 | |||||
Government Contracts
Sales to U.S. government defense agencies and government contractors constituted approximately 1% of our revenue in 2012. We are subject to business and cost accounting regulations associated with our U.S. government defense contracts. Violations can result in civil, criminal or administrative proceedings involving fines, compensatory and treble damages, restitution, forfeitures, and suspension or debarment from U.S. government defense contracts.
Our international operations are subject to the laws and regulations of the U.S. and many foreign countries. Failure to comply with these laws may affect our ability to conduct business in certain countries and may affect our financial performance.
We are subject to a variety of laws regarding our international operations, including the U.S. Foreign Corrupt Practices Act and the U.K Bribery Act of 2010, and regulations issued by U.S. Customs and Border Protection, the U.S. Bureau of Industry and Security, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) and various foreign governmental agencies. We cannot predict the nature, scope or effect of future regulatory requirements to which our international sales and manufacturing operations might be subject or the manner in which existing laws might be administered or interpreted. Future regulations could limit the countries in which some of our products may be manufactured or sold, or could restrict our access to, and increase the cost of obtaining, products from foreign sources. In addition, actual or alleged violations of these laws could result in enforcement actions and financial penalties that could result in substantial costs. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
shares and our business, financial condition and results of operations.these sanctionsvarious sanction and embargoesembargo laws may result in enforcement or other regulatory actions.these sanctionsvarious sanction and embargoesembargo laws to which we and our operations may be subject may result in enforcement or other regulatory actions. Specifically, from time to time, certain of our independent foreign subsidiaries sell products to companies and entities located in, or controlled by the governments of, certain countries that are or have previously been subject to sanctions and embargoes imposed by the U.S. government, and/United Nations or the United Nations.other countries where we maintain operations. In March 2010, our Board of Directors affirmatively prohibited any new sales to Iran by us and all of our foreign subsidiaries. With the exception of the U.S. sanctions against Cuba and Iran, the applicable sanctions and embargoes generally do not prohibit our foreign subsidiaries from selling non-U.S.-origin products and services to countries that are or have previously been subject to sanctions and embargoes. However, our U.S. personnel, each of our domestic subsidiaries, as well as our employees of foreign subsidiaries who are U.S. citizens, are prohibited from participating in, approving or otherwise facilitating any aspect of the business activities in those countries, including Syria. These constraints impose compliance cost and risk on our operations and may negatively affect the financial or operating performance of such business activities.laws and embargoesembargo laws may not be effective, and as a consequence we may face enforcement or other actions if our compliance efforts are not or are perceived as not being wholly effective. Actual or alleged violations of these laws could result inlead to substantial fines or other sanctions which could result in substantial costs. In addition, Syria, Iran and certain other sanctioned countries currently are identified by the U.S. State Department as state sponsors of terrorism, and recently have been subject to increasingly restrictive sanctions. Because certain of our independent foreign subsidiaries have contact with and transact limited business in certain U.S. sanctioned countries, including sales to enterprises controlled by agencies of the governments of such countries, our reputation may suffer due to our association with these countries, which may have a material adverse effect on the price of our shares.shares and our business, financial condition and results of operations. In addition,shares.OFAC.the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”). Cuba is also identified by the U.S. State Department as a state sponsor of terrorism. We have submitted a disclosure report to OFAC regarding these transactions. As a result of these sales, we may be subject to fines or other sanctions. Further, during the 2012 fiscal year a few of our independently-operated foreign subsidiaries which we acquired in 2012 made the final shipments necessary to wind down four sales agreements involving parties identified in section 560.304 of title 31 of the Code of Federal Regulations, which transactions were conducted in accordance with applicable U.S. and E.U. economic sanctions, statutes and regulations in effect at that time. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Disclosure under Section 13(r)(1)(D)(iii) of the Exchange Act.”United StatesU.S. are subject to the U.S. Export Administration Regulations, administered by the U.S. Department of Commerce, Bureau of Industry and Security, which require that an export license is obtained before such products can be exported to certain countries. Additionally, some of our products are subject to the International Traffic in Arms Regulations, which restrict the export of certain military or intelligence-related items, technologies and services to non-U.S. persons. Failure to comply with these laws could harm our business by subjecting us to sanctions by the U.S. government, including substantial monetary penalties, denial of export privileges and debarment from U.S. government contracts. The occurrence of any of the foregoing could have a material and adverse effect on our business, financial condition and results of operations.2012,2014, we derived approximately 80%76% of our sales from operations outside of the U.S. and we have principal manufacturing facilities in 2026 non-U.S. countries. Sales from international operations, export sales and the use of manufacturing facilities outside of the U.S. by us are subject to risks inherent in doing business outside the U.S. These risks include:
Further, we may be subject to foreign currency translation losses depending upon whether foreign nations devalue their currencies, movements in exchange rates between highly inflationary currencies and our reporting currency and the amount of monetary assets and liabilities included in the balance sheets of our operations denominated in currencies considered to be highly inflationary. The BDT Investor may exercise significant influence over us, including through its ability to elect up to two members of our Board of that may be beneficial to our stockholders. control or other strategic transaction concerning Colfax. Position St. Louis University. 2012. We expect the impact of changes in foreign exchange rates to negatively impact our results of operations beginning in the first quarter of 2015 as a result of the strengthening of the U.S. dollar against most currencies. Fluid Handling $486.8 million and $64.0 million, respectively. growth (decline): increase in Net sales from existing businesses our fabrication technology segment. Orders, net of cancellations, from existing businesses end markets. remeasure the Company’s equity investment in Sicelub to fair value upon increasing the Company’s ownership to 100%. Year Ended December 31. 2012 In 2013, Gross reduce gross profit margin. Changes in foreign exchange rates during 2014 had a $44.0 million negative impact on Gross profit. 2012. Acquisition. Restructuring and other related charges 2012. and $1.2 million of costs incurred in connection with the refinancings, partially offset by the favorable impact of lower borrowing rates associated with the Second and Third Amendments to the Deutsche Bank Credit Agreement and lower outstanding borrowing levels. 2013. receivables financing facility is December 21, 2015, which may be extended from time to time. The facility contains representations, warranties, covenants and indemnities customary for facilities of this type. The facility does not contain any covenants that we view as materially constraining to the activities of our business. acquired. and other restrictions. Less Than One Year More Than 5 Years 2014 During We do not enter into derivative contracts for trading purposes. $15.7 million. Page Victor Technologies Holdings, Inc. 17, 2015 17, 2015 amounts (LOSS) INCOME amounts noted these adjustments. As of December 31, 2013, there were $231.3 million of revenues in excess of billings and $214.8 million of billings in excess of revenues on long-term contracts in the Consolidated Balance Sheet. an indefinite-lived intangible asset included in the gas- and fluid-handling segment for the year ended December 31, 2013. This impairment resulted from a decline in anticipated revenue related to this asset. The impairment loss is included in Selling, general and administrative expense in the Consolidated Statement of Operations for the year ended December 31, 2013 and was calculated as the difference between the fair value of the asset under the relief from royalty method and its carrying value as of the date of the impairment test. The fair value of that intangible asset was $2.8 million as of December 31, 2013, there was no value of this intangible asset as of December 31, 2014, and was included in Level Three of the fair value hierarchy. 2014. The fair value of these assets of $3.3 million as of December 31, 2014 are included in Level Three of the fair value hierarchy and are not material to the Consolidated Financial Statements. Revenues and expenses are translated at average rates of exchange in effect during the year. administrative expense in the Consolidated Statement of Operations was $1.2 million. Peru. On controlling interest. Acquisition and was accounted for as an equity transaction, as the Company increased its controlling interest. Charter is impracticable. 2008. Gas and Fluid Handling Fabrication Technology 2013: Gross Carrying Amount Gross Carrying Amount Accumulated Amortization subfacility. 2014 revolving credit facility. 2014. adjustment. Number of Options Weighted- Average Exercise Price Weighted- Remaining Term (In years) Aggregate Intrinsic Value(1) (In thousands) Restricted Stock Units The performance criterion was met for the PRSUs granted during the year ended December 31, 2013. The performance criteria have not yet been met for the PRSUs granted during the year ended December 31, 2014. Number of Units Weighted- Average Grant Date Fair Value Number of Units Weighted- Average Grant Date Fair Value Company. A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Consolidated Balance Sheets is as follows: 2013. 2013. Actual Asset Allocation December 31, Target Level One Level Two Level Three Total Level One Level Two Level Three Total The Company’s pension assets included in Level Three of the fair value hierarchy consist of multi-strategy hedge funds and the fair value is equal to the aggregate net asset value of units held by the Company’s pension plans. There were no transfers in or out of Level Other Post- Retirement Benefits For one additional plan the rate has already reached its long term level of 5%. Fair Value Measurements Level One Level Two Level Three Level One Level Two Level Three Foreign Currency Contracts – related to supplier purchases contracts: Unrealized (loss) gain (560 81 — Realized gain (loss) (20 — During 2014, the Company made the final cash payment, totaling $3.5 million, to settle the COT-Puritech contingent payment liability. During the year ended December 31, 2014, the Company recognized an unrealized gain related to the Clarus contingent payment liability, as the performance criteria are no longer expected to be met. Contingencies percentage could change. 2014, comprised of an increase in asbestos-related liabilities of $14.5 million partially offset by an increase in expected insurance recoveries of $7.6 million. claims. June 29, 2012(1)(2) September 28, 2012 December 31, 2012 2013. July 1, 2011 September 30, 2011(1) December 31, 2011(1) 2014 2014. Procedures.” 17, 2015 /s/ STEVEN E. SIMMS /s/ C. SCOTT BRANNAN /s/ MITCHELL P. RALES /s/ PATRICK W. ALLENDER /s/ THOMAS S. GAYNER /s/ RHONDA L. JORDAN /s/ CLAY H. KIEFABER /s/ A. CLAYTON PERFALL /s/ RAJIV VINNAKOTA * Unless otherwise noted, all exhibits are incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 001-34045). Charged to Expense(1) Charged to Other Accounts(2) 103,785 20,676 167,723 372,039tointo the environment, such as soil or groundwater, we could be required to remediate such contamination, which could be costly. Moreover, noncompliance could subject us to private claims for property damage or personal injury based on exposure to hazardous materials or unsafe working conditions. In addition, changes in applicable requirements or stricter interpretation of existing requirements may result in costly compliance requirements or otherwise subject us to future liabilities. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.15 will limit our ability to engage in specified types of transactions. These covenants would limit our ability to, among other things:TheLimitations imposed by the Deutsche Bank Credit Agreement's various covenants and the additional leverage taken on by us could increase our vulnerability to general economic slowdowns which could have a materially adverse effect on our business, financial condition and results of operations.businessesan acquired declines,business decline, we could incur, under current applicable accounting rules, a non-cash charge to operating earnings for Goodwill impairment. Any determination requiring the write-off of a significant portion of unamortized intangible assets would adversely affect our business, financial condition, results of operations and total capitalization, the effect of which could be material.2012,2014, approximately 80%76% of our sales were derived from operations outside the U.S. A significant portion of our revenues and income are denominated in foreign currencies. Large fluctuations in the rate of exchange between foreign currencies and the U.S. dollar could have a material adverse effect on our business, financial condition and results of operations. Changes in the currency exchange rates may impact the financial results positively or negatively in one period and not another, which may make it difficult to compare our operating results from different periods.requirepurchase a substantial amountsamount of raw materials, and purchase parts and components from suppliers. The availability and prices for raw materials, parts and components may be subject to curtailment or change due to, among other things, suppliers' allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and prevailing price levels. Any significant change in the supply of, or price for, these raw materials, or parts andor components could materially affect our business, financial condition and results of operations. In addition, delays in delivery of componentsraw materials, parts or raw materialscomponents by suppliers could cause delays in our delivery of products to our customers.internet,Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including procurement, manufacturing, distribution, invoicing and collection. These technology networks and systems may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components, power outages, hardware failures or computer viruses. In addition, we may be subjectour efforts to avoid or mitigate the impact of cyber-based attacks and security breaches may not be successful in avoiding a material breach, which could result in unauthorized disclosure of confidential information or damage to our information technology networks and systems if our efforts to mitigate or otherwise contain any attacks or breaches are unsuccessful.systems. If these information technology systems suffer severe damage, disruption or shutdown and business continuity plans do not effectively resolve the issues in a timely manner, our business, financial condition and results of operations could be materially adversely affected.1720122014 includes $396.5$279.4 million held in jurisdictions outside the U.S., which may be subject to U.S. income tax penaltiesif repatriated into the U.S. and other restrictions if repatriated intorestrictions. In addition, the U.S. and foreign countries have considered changes to existing tax laws, including allowing existing provisions to expire, that could significantly impact the treatment of income earned outside the U.S. An increase in our effective tax rate could have a material adverse effect on our after-tax results of operations.are initially convertibleshares were converted into an additional 12,173,291 shares of Colfax Common stock to the BDT Investor.in February 2014. Pursuant to registration rights agreements we entered into with the Investors in January 2012, the Investors and their permitted transferees have registration rights for the resale of the shares of Colfax Common stock acquired as a result of the Charter Acquisition and, with respect to the BDT Investor, shares of Colfax Common stock issuable upon conversion of the Series A Preferred Stock. In April 2012, we filed a prospectus supplement under which the Investors may resell these shares. In addition, Mitchell P. Rales and Steven M. Rales have registration rights for the resale of certain shares of Colfax Common stock pursuant to a 2003 registration rights agreement as amended.entered into in 2003 and amended in 2013. These registration rights would facilitate the resale of such securities into the public market, and any such resale would increase the number of shares of Colfax Common stock available for public trading. For instance, in May 2013 the BDT Investor and certain of its permitted transferees sold 4,000,000 shares of Colfax Common stock to underwriters for public resale. Sales by the BDT Investor, Markel, Mitchell P. Rales or Steven M. Rales or their permitted transferees of a substantial number of shares of Colfax Common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of Colfax Common stock.Our Amended and Restated Certificate of Incorporation contains provisions that grant the BDT Investor certain rights which may limit our flexibility in operating our business and structuring our corporate governance.So long as the BDT Investor and its permitted transferees beneficially own, in the aggregate, at least 50% of the Series A Preferred Stock issued to the BDT Investor under the securities purchase agreement with the BDT Investor (the “BDT Purchase Agreement”), the BDT Investor's written consent is required in order for us to take certain corporate actions, including:the incurrence of certain indebtedness (excluding certain permitted indebtedness) if the ratio of such indebtedness to EBITDA (as defined in the Deutsche Bank Credit Agreement) exceeds certain specified ratios, measured by reference to the last twelve-month period for which financial information is reported by Colfax (pro forma for acquisitions during such period);the issuance of any shares of preferred stock;any change to our dividend policy or the declaration or payment of any dividend or distribution on any of our stock ranking subordinate or junior to the Series A Preferred Stock with respect to the payment of dividends and distributions (including the Colfax Common stock) under certain circumstances;any voluntary liquidation, dissolution or winding up of Colfax;any change in our independent auditor;the election of anyone other than Mr. Mitchell P. Rales as Chairman of our Board of Directors;any acquisition of another entity or assets for a purchase price exceeding 30% of our equity market capitalization;any merger, consolidation, reclassification, joint venture or strategic partnership or similar transaction, or any disposition of any assets (excluding sale/leaseback transactions and other financing transactions in the ordinary course of business) of Colfax if the value of the resulting entity, level of investment by Colfax or value of the assets disposed, as applicable, exceeds 30% of our equity market capitalization;any amendments to our organizational or governing documents, including the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws; andany change in the size of our Board of Directors.The Amended and Restated Certificate of Incorporation also provides that, so long as the BDT Investor and certain permitted transferees beneficially own at least 10% of the Colfax Common stock (on a fully-diluted basis), the BDT Investor's written consent is required to alter, amend or repeal the provisions of the Amended and Restated Certificate of Incorporation which sets forth the authorized number of members of our Board and the BDT Investor's nomination rights in respect of members of our Board. The above factors could limit our financial and operational flexibility, and as a result could have a material adverse effect on our business, financial condition and results of operations.Directors.The sharesDirectors, as a result of its ownership of a significant percentage of outstanding Colfax Common stock and Series A Preferred Stock owned bystock.representbeneficially owned approximately 22%11.1% of the voting rights in respect of the Company's issued share capital. Theoutstanding Colfax Common stock. provides that the BDT Investor's consent is required before we may take certain actions for so long as the BDT Investor and its permitted transferees beneficially own in the aggregate at least 50% of the Series A Preferred Stock issued pursuant to the BDT Purchase Agreement (as discussed above). As a result, the BDT Investor may have the ability to significantly influence the outcome of any matter submitted for the vote of our stockholders. The BDT Investor may have interests that diverge from, or even conflict with, those of Colfax and our other stockholders.The Amended and Restated Certificate of Incorporation also provides that the BDT Investor will have the right to exclusively nominate (1) two out of eleven directors to our Board of Directors so long as the BDT Investor holdsand its permitted transferees beneficially own in the aggregate at least 20% of the outstanding Colfax Common stock, (calculated on a fully diluted basis, assuming conversion of the Series A Preferred Stock at the then-existing conversion price), with one of its nominees to serve on the Audit Committee of our Board of Directors and one of its nominees to serve on the Compensation Committee of our Board of Directors, and (2) one out of ten directors to our Board of Directors so long as the BDT Investor and its permitted transferees beneficially own in the aggregate less than 20% but more than 10% of the outstanding Colfax Common stock, (calculated on a fully diluted basis, assuming conversion of the Series A Preferred Stock at the then-existing conversion price), with such nominee to serve on the Audit Committee and the Compensation Committee of our Board of Directors. Further, so long as the BDT Investor and certain permitted transferees beneficially own at least 10% of the Colfax Common stock, (calculated on a fully diluted basis, assuming conversion of the Series A Preferred Stock at the then-existing conversion price), the BDT Investor’s written consent is required to alter, amend or repeal the provisions of the Amended and Restated Certificate of Incorporation which setsset forth the authorized number of members of our Board and the BDT Investor’s nomination rights in respect of members of our Board.In addition, the percentage of Colfax Common stock owned by the BDT Investor, Mitchell P. Rales and Steven M. Rales and the governance rights of the BDT Investor could discourage a third party from proposing a change of control or other strategic transaction concerning Colfax.which could decrease the value of its shares.third-partythird party to acquire us without the consent of our Board of Directors. These include provisions include prohibiting stockholders from taking action by written consent, prohibiting special meetings of stockholders called by stockholders and prohibiting stockholder nominations and approvals without complying with specific advance notice requirements. In addition, our Board of Directors has the right to issue Preferred stock without stockholder approval, which our Board of Directors could use to effect a rights plan or “poison pill” that could dilute the stock ownership of a potential hostile acquirer and may have the effect of delaying, discouraging or preventing an acquisition of Colfax. Delaware law also imposes some restrictions on mergers and other business combinations between Colfax and any holder of 15% or more of its outstanding voting stock. Althoughholds more than 20%Mitchell P. Rales and Steven M. Rales, as well as the director nomination rights of our outstanding voting stock, this provisionthe BDT Investor, could discourage a third party from proposing a change of Delaware law does not apply to it.Fulton,Annapolis Junction, Maryland in a facility that we lease. As of December 31, 2012,2014, our gas- and fluid-handling reportable segment had 711 principal production facilities in the U.S. representing approximately 760,000748,508 and 36,00063,700 square feet of owned and leased space, respectively, and 2946 principal production facilities in 1319 different countries in Asia, Europe, Central and South America,the Americas, Australia and South Africa.Africa, representing a total of 2.7 million and 0.8 million square feet of owned and leased space, respectively. Additionally, as of December 31, 2014, our fabrication technology operating segment hashad a total of 46 production facilities in the U.S., representing a total of 1.3 million and 0.4 million square feet of owned and leased space, and 2730 outside the U.S., representing a total of 8.18.2 million and 1.21.9 million square feet of owned and leased facilities, respectively, in over 1317 countries in Australia, Central and Eastern Europe, Central and South America and Asia.16,15, “Commitments and Contingencies,” in the Notes to the Consolidated Financial Statements.Name Age Steven E. Simms 5759 President and Chief Executive Officer and Director, Colfax Corporation C. Scott Brannan 5456 Senior Vice President, Finance, Chief Financial Officer and Treasurer Clay H. Kiefaber 5759 Executive Vice President, Chief Executive Officer, ESAB Global and Director, Colfax Corporation Daniel A. Pryor 46 Executive Vice President, Strategy and Business Development Ian Brander 5153 Chief Executive Officer, Howden William E. Roller50Executive Vice President, Colfax Fluid HandlingLynn Clark 5557 Senior Vice President, Global Human Resources Daniel A. PryorDarryl Mayhorn 4450 Senior Vice President, StrategyPresident and Business DevelopmentCEO of Colfax Fluid HandlingA. Lynne Puckett 5052 Senior Vice President, General Counsel and Secretary Stephen J. Wittig 5052 Senior Vice President, Colfax Business System and Supply Chain Strategy President–GroupPresident-Group Executive from 1998 to 2000 and as an executive in Danaher’s tools and components business from 1996 to 1998. Prior to joining Danaher, Mr. Simms held roles of increasing authority at Black & Decker Corporation, most notably President–EuropeanPresident-European Operations and President–WorldwidePresident-Worldwide Accessories. Mr. Simms started his career at the Quaker Oats Company where he held a number of brand management roles. He currently serves as a member of the Board of Trustees of The Boys’ Latin School of Maryland and is actively involved in a number of other educational and charitable organizations in the Baltimore area.21Masco‚Masco, Mr. Kiefaber was Group Vice President of Masco Builder Cabinet Group. He previously spent 14 years in increasingly senior positions in Masco’s Merillat Industries subsidiary. Mr. Kiefaber holds an M.B.A. degree from the University of Colorado and a B.A. degree from Miami University.William E. Roller has served as our Executive Vice President, Colfax Fluid Handling since November 2010. He most recently served as Executive Vice President‚ Colfax Americas and was responsible for Colfax’s business in the Americas as well as the global oil & gas and defense solutions organizations. He joined Colfax in 1999 as General Manager‚ Imo Pump. In addition to Imo Pump‚ he managed Zenith Pump‚ LSC and Baric Group upon the acquisition of those businesses. He joined Colfax from Precision Auto Care‚ Inc. where he was Senior Vice President of Manufacturing and Distribution for 2 years. From 1991 until 1997‚ Mr. Roller worked for AMF Industries in several increasingly responsible manufacturing roles. Previous to AMF‚ he spent 4 years with FMC Corporation in various manufacturing roles. Mr. Roller is a graduate of the Virginia Polytechnic Institute and State University‚ with a B.S. in Chemical Engineering and an M.B.A. from the University of Virginia Darden School.joined Colfax Corporation in 2013 ashas been the Senior Vice President, Global Human Resources.Resources since January 2013. Prior to joining Colfax, she served as senior vice president, global human resources for Mead Johnson Nutrition. Her experience includes extensive work at the board and operating levels, broad human resources leadership capabilities, talent management, organization design and development and M&A. Ms. Clark held roles of increasing responsibility in human resources at Bristol-Myers Squibb from 2001 to 2009, and wasprior to this with Lucent Technologies and Allied Signal Corporation leading executive development and then serving as human resources leader for headquarters functions betweenfrom 1993 and 2001. Prior to transferring intoher experience in human resources, she worked for 15 years in sales and marketing, most recently as a general manager for Drake Beam Morin – a global consulting firm in employee development, retention and transition – in Richmond, Virginia. Ms. Clark started her career as a career counselor at George Washington University in Washington, DC.marketing. Ms. Clark has a bachelor of science in education and a master of science in college student personnel from Bowling Green University in Ohio.Daniel A. Pryorserved as ourbeen the Senior Vice President‚ StrategyPresident, President and Business DevelopmentCEO of Colfax Fluid Handling since January 2011.July 2014. Prior to joining Colfax‚ heColfax, Mr. Mayhorn was a PartnerPresident of the Rexnord Aerospace Group and Managing Director with The Carlyle Group‚ athe Chief Human Resources Officer of Rexnord Corporation. His professional career includes leadership roles at various global alternative asset manager,industrial companies, including Danaher Corporation and Eaton Corporation. Mr. Mayhorn is an alumnus of the University of Missouri, where he focused on industrial leveraged buyouts and led numerous portfolio company and follow-on acquisitions. While at The Carlyle Group, he served on the boardsearned a Bachelor of portfolio companies Veyance Technologies, Inc., John Maneely Co., and HD Supply Inc. Prior to The Carlyle Group‚ he spent 11 years at Danaher CorporationScience degree in roles of increasing responsibility‚ most recently as Vice President – Strategic Development. Mr. Pryor earned his M.B.A.Business Administration. He has a master’s degree in business administration from Harvard Business School and his B.A. in Economics from Williams College.22Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities4, 2013,2, 2015, there were approximately 18,91633,511 holders of record of our Common stock. The high and low sales prices per share of our Common stock, as reported on the New York Stock Exchange, for the fiscal periods presented are as follows: Year Ended December 31, 2012 2011 High Low High Low First Quarter $ 37.64 $ 27.61 $ 23.50 $ 17.79 Second Quarter $ 35.56 $ 26.01 $ 25.34 $ 20.46 Third Quarter $ 36.79 $ 24.43 $ 28.75 $ 20.10 Fourth Quarter $ 40.52 $ 33.14 $ 32.69 $ 17.90 Year Ended December 31, 2014 2013 High Low High Low First Quarter $ 72.56 $ 58.30 $ 48.82 $ 40.29 Second Quarter $ 75.37 $ 67.16 $ 53.65 $ 42.22 Third Quarter $ 75.26 $ 56.23 $ 57.49 $ 50.13 Fourth Quarter $ 58.63 $ 45.48 $ 64.37 $ 54.53 Index since the date of our initial public offering on May 8, 2008.Index. The graph assumes that $100 was invested on May 8, 2008December 31, 2009 in each of our Common stock, the Russell 2000 Index and the S&P Industrial Machinery Index, and that all dividends were reinvested.
2012, 20112014, 2013 or 2010. Year Ended and As of December 31, 2012(1) 2011(2) 2010(3) 2009(4) 2008(5) (In thousands, except per share data) Statement of Operations Data: Net sales $ 3,913,856 $ 693,392 $ 541,987 $ 525,024 $ 604,854 Cost of sales 2,761,731 453,293 350,579 339,237 387,667 Gross profit 1,152,125 240,099 191,408 185,787 217,187 Selling, general and administrative expense 895,452 162,761 133,507 116,240 125,190 Initial public offering-related cost — — — — 57,017 Charter acquisition-related expense 43,617 31,052 — — — Restructuring and other related charges 60,060 9,680 10,323 18,175 — Asbestos coverage litigation expense 12,987 10,700 13,206 11,742 17,162 Operating income 140,009 25,906 34,372 39,630 17,818 Interest expense 91,570 5,919 6,684 7,212 11,822 Provision for income taxes 90,703 15,432 11,473 8,621 5,465 Net (loss) income (42,264 ) 4,555 16,215 23,797 531 Less: income attributable to noncontrolling interest, net of taxes 22,138 — — — — Dividends on preferred stock 18,951 — — — 3,492 Net (loss) income available to Colfax Corporation common shareholders $ (83,353 ) $ 4,555 $ 16,215 $ 23,797 $ (2,961 ) Net (loss) income per share—basic and diluted $ (0.92 ) $ 0.10 $ 0.37 $ 0.55 $ (0.08 ) Balance Sheet Data: Cash and cash equivalents $ 482,449 $ 75,108 $ 60,542 $ 49,963 $ 28,762 Goodwill and Intangible assets, net 2,853,279 245,873 200,636 175,370 175,210 Total assets 6,129,727 1,088,543 1,022,077 1,006,301 907,550 Total debt, including current portion 1,728,311 111,518 82,500 91,485 97,121 Year Ended and As of December 31, (In thousands, except per share data) Statement of Operations Data: Net sales $ 4,624,476 $ 4,207,209 $ 3,913,856 $ 693,392 $ 541,987 Cost of sales 3,145,631 2,900,987 2,761,731 453,293 350,579 Gross profit 1,478,845 1,306,222 1,152,125 240,099 191,408 Selling, general and administrative expense 1,011,171 864,328 908,439 173,461 146,713 Charter acquisition-related expense — — 43,617 31,052 — Restructuring and other related charges 58,121 35,502 60,060 9,680 10,323 Operating income 409,553 406,392 140,009 25,906 34,372 Interest expense 51,305 103,597 91,570 5,919 6,684 (Benefit from) provision for income taxes (62,025 ) 93,652 90,703 15,432 11,473 Net income (loss) 420,273 209,143 (42,264 ) 4,555 16,215 Less: income attributable to noncontrolling interest, net of taxes 28,175 30,515 22,138 — — Dividends on preferred stock 2,348 20,396 18,951 — — Preferred stock conversion inducement payment 19,565 — — — — Net income (loss) available to Colfax Corporation common shareholders $ 370,185 $ 158,232 $ (83,353 ) $ 4,555 $ 16,215 Net income (loss) per share—basic $ 3.06 $ 1.56 $ (0.92 ) $ 0.10 $ 0.37 Net income (loss) per share—diluted $ 3.02 $ 1.54 $ (0.92 ) $ 0.10 $ 0.37 Balance Sheet Data: Cash and cash equivalents $ 305,448 $ 311,301 $ 482,449 $ 75,108 $ 60,542 Goodwill and Intangible assets, net 3,916,486 3,242,252 2,853,279 245,873 200,636 Total assets 7,245,098 6,601,184 6,129,727 1,088,543 1,022,077 Total debt, including current portion 1,539,244 1,487,091 1,728,311 111,518 82,500 During 2014, we completed the Victor Acquisition. See Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K for additional information. In February 2014, we sold newly issued Common stock and entered into a Conversion Agreement with BDT CF Acquisition Vehicle, LLC (the “BDT Investor”) pursuant to which the BDT Investor exercised its option to convert its shares of Series A Perpetual Convertible Preferred Stock into shares of our Common stock plus cash. See Note 11, “Equity” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K for additional information. During 2013, we completed the acquisitions of GII, Clarus, TLT-Babcock, Alphair, ČKDK and Sicelub and increased our ownership of Soldex. In February 2013 and November 2013, we refinanced our Debt, and in May 2013 we sold newly issued Common stock. See Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K and Part I, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information. During 2012, we completed the acquisitions of Charter, Soldex and Co-Vent and increased our ownership of ESAB India Limited (“ESAB India”) and CJSC Sibes. The Charter Acquisition transformed Colfax from a fluid-handling business into a multi-platform enterprise with a strongbroad global footprint, which makes financial comparison to previous periods difficult. Additionally, in conjunction with the Charter Acquisition in January 2012, we refinanced our Debt and sold newly issued Common stock and Series A Preferred Stock. In March 2012, we sold newly issued Common stock. See Part I, Item 1. “Business,” Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K and Part I, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information.(2)(4)During 2011, we completed the acquisitions of Rosscor and COT-Puritech in February and December, respectively. See Part I, Item 1. “Business” and Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K for additional information. (3)(5)In August 2010, we acquired Baric. See Part I, Item 1. “Business” and Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements in this Form 10-K for additional information.(4)In August 2009, we acquired PD Technik for $1.3 million, net of cash acquired. See Part I, Item 1. “Business” in this Form 10-K for additional information.(5)In May 2008, we refinanced our Debt in conjunction with our initial public offering.§Overview§Results of Operations§Liquidity and Capital Resources§Critical Accounting PoliciesData,”Data”, Part I, Item 1A. “Risk Factors” and the accompanying Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this Form 10-K. The MD&A includes forward-looking statements. For a discussion of important factors that could cause actual results to differ materially from the results referred to in these forward-looking statements, see “Special Note Regarding Forward-Looking Statements.”Upon the closing of the Charter Acquisition, we changed the composition of our reportable segments to reflect the changes in our internal organization resulting from the integration of the acquired businesses. We now report our operations through the following reportable segments:·Gas & Fluid Handling – a global supplier of a broad range of gas- and fluid-handling products, including pumps, fluid-handling systems and controls, specialty valves, heavy-duty centrifugal and axial fans, rotary heat exchangers and gas compressors, which serves customers in the power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial and other end markets; and·Fabrication Technology–a global supplier of welding equipment and consumables, cutting equipment and consumables and automated welding and cutting systems.no longer usesdoes not use indices other than general economic trends to predict the overall outlook for the Company. Instead, the individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and outlook for the future.As a result of the Charter Acquisition, weoperatingOperating income (loss) before Restructuring and other related charges.the Comparability of Our Reported Results2012,2014, approximately 83%78% of our sales were shipped to locations outside of the U.S. Accordingly, we are affected by levels of industrial activity and economic and political factors in countries throughout the world. Our ability to grow and our financial performance will be affected by our ability to address a variety of challenges and opportunities that are a consequence of our global operations, including efficiently utilizing our global sales, manufacturing and distribution capabilities, the expansion of market opportunities in Asia, successfully completing global strategic acquisitions and engineering innovative new product applications for end users in a variety of geographic markets. However, we believe that our geographic, end market and product diversification may limit the impact that any one country or economy could have on our consolidated results.80%76% for the year ended December 31, 20122014, is derived from operations outside the U.S., with the majority of those sales denominated in currencies other than the U.S. dollar. Because much of our manufacturing and employee costs are outside the U.S., a significant portion of our costs are also denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant to our discussion.the Charter Acquisition hasthat our diversified our operations and limitslimit the impact of a downturn in any one market on our consolidated results.gasgas- and fluid-handling products typically have higher margins than products with commodity-like qualities. However, we are sensitive to price movements in our raw materials supply base. Our largest material purchases are for components and raw materials including steel, iron, copper and aluminum. Historically, we have been generally successful in passing raw During 2012, our mix of consumables and aftermarket products and services was significantly impacted by the Charter Acquisition. Year Ended December 31, 2012 2011 2010 Foremarket and equipment 45 % 78 % 76 % Aftermarket and consumables 55 % 22 % 24 % Year Ended December 31, 2014 2013 2012 Foremarket and equipment 47 % 47 % 45 % Aftermarket and consumables 53 % 53 % 55 % discussion of Net sales, orders and order backlog for 2012 in comparison to 2011 is a proforma comparison that includes the operations acquired in the Charter Acquisition for the comparable period of the prior year, which excludes the first 12 days of each annual period presented. The change in Net sales due to acquisitions represents the change in sales due to the following acquisitions by bothacquisitions:Charter:On October 31, 2012, the Company completed the acquisitionautomation and air and gas handling, for a total purchase price of approximately 91%outstanding commonadditional 12 days of operations is included in the change in Net sales due to acquisitions in 2013.investment shares of Soldex for approximately $186.1 million (the “Soldex Acquisition”). Soldex is organized under the laws of Peru and complements our existing fabrication technology segment by supplying welding products from its plants in Colombia and Peru. the Co-Vent for $34.6 million. Co-Vent specializes in the custom design, manufacture, and testing of industrial fans, with its primary operations based in Quebec, Canada. As a result of this acquisition, Colfax has expanded its product offerings in the industrial fan market. approximately $8.5 million, including the assumption of debt. Sibes is a leading supplier of welding electrodes to customers in Eastern Russia and strengthens ESAB’s position in the attractive Russian welding consumables market, particularly in the energy and natural resources end markets.December 6, 2011,October 31, 2012, Colfax completed the acquisition of COT-Puritech, Inc.approximately 91% of the outstanding common and investment shares of Soldex for $187.2 million. Soldex is organized under the laws of Peru and complements our existing fabrication technology segment by supplying welding products from its plants in Colombia and Peru. On August 5, 2013, Colfax completed a total purchase price, net$14.9 million tender offer for common and investment shares of cash acquired,Soldex resulting in an increase in our ownership of $39.4 million which includes the fair value of estimated additional contingent cash payments of $4.3 million. The additional contingent cash payments will be paid over two years subjectsubsidiary from approximately 91% to the achievement of certain performance goals. COT-Puritech, Inc. is a national supplier of oil flushing and remediation services to power generation plants, refinery and petrochemical operations and other manufacturing sites, with its primary operations based in Canton, Ohio.99%.July 1, 2011, ESAB acquired 60% of Condor Equipamentos Industriais Ltda (“Condor”), a leading Brazilian manufacturer of gas apparatus used in welding applications, for cash consideration of R$25.2 million.On March 28, 2011, Howden completed the acquisition of Thomassen Compression Systems BV (“Thomassen”), a leading supplier of high-powered engineered compressors to the oil, gas and petrochemical end market, for approximately €100 million.On March 3, 2011, ESAB completed the acquisition of LLC Sychevsky Electrodny Zavod (“Sychevsky”), a leading Russian electrode manufacturer based in the Smolensk region for $19.2 million.On FebruaryApril 14, 2011,2014, Colfax completed the acquisition of RosscorVictor Technologies Holdings, Inc. ("Victor") for $22.3net cash consideration of $948.8 million, net of cash acquired. Rosscorsubject to certain adjustments (the “Victor Acquisition”). Victor is a supplierpre-eminent global manufacturer of multiphase pumpingcutting, gas control and specialty welding solutions. The acquisition complemented the geographic footprint of our fabrication technology segment and certain other highly engineered fluid-handling systems, with its primary operations based in Hengelo, The Netherlands.On August 19, 2010, Colfax completedexpanded our product portfolio into new segments and applications. For the acquisitionyear ended December 31, 2013, Victor had net sales and operating income of Baric, a supplier of highly engineered fluid-handling systems primarily for lubrication applications, with its primary operations based in Blyth, United Kingdom.For 2012, our consolidatedproforma net sales of $3.8$3.9 billion in 20112012 to $3.9$4.2 billion (which excludes operations acquired in the Charter Acquisition for the first 12 days of each annual period presented)2013. In 2014, our Net sales increased to $4.6 billion. The following tables presenttable presents components of our proforma consolidated Net sales and, for our gas- and fluid-handling segment, proforma order and backlog growth: Net Sales Orders(1) Backlog at Period End $ % $ % $ % (In millions) Proforma as of and for the year ended December 31, 2011 $ 3,839.1 $ 1,924.6 $ 1,288.3 Components of Change: Existing businesses(2) 202.2 5.3 % 54.0 2.8 % 117.5 9.1 % Acquisitions(3) 86.5 2.2 % 100.4 5.2 % 9.4 0.7 % Foreign currency translation(4) (213.9 ) (5.6 )% (83.0 ) (4.3 )% (33.8 ) (2.6 )% 74.8 1.9 % 71.4 3.7 % 93.1 7.2 % As of and for the year ended December 31, 2012 $ 3,913.9 $ 1,996.0 $ 1,381.4 __________(1)Represents contracts for products or services, net of cancellations for the period. Net Sales Backlog at Period End $ % $ % $ % (In millions) As of and for the year ended December 31, 2012 $ 3,913.9 $ 1,996.0 $ 1,431.5 Components of Change: 107.5 2.7 % (15.3 ) (0.8 )% (58.6 ) (4.1 )% 246.9 6.3 % 96.4 4.8 % 231.2 16.2 % (61.1 ) (1.5 )% (15.7 ) (0.7 )% (26.7 ) (1.9 )% 293.3 7.5 % 65.4 3.3 % 145.9 10.2 % As of and for the year ended December 31, 2013 $ 4,207.2 $ 2,061.4 $ 1,577.4 Components of Change: (79.0 ) (1.9 )% (0.1 ) — % (42.9 ) (2.7 )% 635.2 15.1 % 251.7 12.2 % — — % (138.9 ) (3.3 )% (26.3 ) (1.3 )% (132.2 ) (8.4 )% 417.3 9.9 % 225.3 10.9 % (175.1 ) (11.1 )% As of and for the year ended December 31, 2014 $ 4,624.5 $ 2,286.7 $ 1,402.3 (2)Excludes the impact of foreign exchange rate fluctuations and acquisitions, thus providing a measure of growth due to factors such as price, product mix and volume.
Represents contracts for products or services, net of cancellations for the period, for our gas- and fluid-handling segment.(3)Represents the incremental sales, orders and order backlog as a result of acquisitions.
Excludes the impact of foreign exchange rate fluctuations and acquisitions, thus providing a measure of growth due to factors such as price, product mix and volume.(4)Represents the difference between sales from existing businesses valued at current year foreign exchange rates and sales from existing businesses at prior year foreign exchange rates.proforma increasedecrease in Net sales from existing businesses in 2012during 2014 compared to 2013 was attributable to increasesdecreases of $161.5$47.7 million and $40.7$31.3 million in our fabrication technology and gas- and fluid-handling and fabrication technology segments, respectively. Orders, net of cancellations, from existing businesses for our gas- and fluid-handling segment increasedwere flat during 20122014 in comparison to 2011 primarily due to growth2013 as declines in the oil, gas and petrochemical, power generation and mining end markets were offset by growth in the marine and general industrial and other end markets.following tables present components of our Net sales order and backlog growth for 2011: Net Sales Orders(1) Backlog at Period End $ % $ % $ % (In millions) As of and for the year ended December 31, 2010 $ 542.0 $ 532.8 $ 313.5 Components of Change: Existing businesses(2) 48.8 9.0 % 65.0 12.2 % (1.1 ) (0.4 )% Acquisitions(3) 81.3 15.0 % 64.0 12.0 % 40.2 12.8 % Foreign currency translation(4) 21.3 3.9 % 21.0 4.0 % (5.4 ) (1.7 )% 151.4 27.9 % 150.0 28.2 % 33.7 10.7 % As of and for the year ended December 31, 2011 $ 693.4 $ 682.8 $ 347.2 __________(1)Represents contracts for products or services, net of cancellations for the period.(2)Excludes the impact of foreign exchange rate fluctuations and acquisitions, thus providing a measure of growth due to factors such as price, product mix and volume.(3)Represents the incremental sales, orders and order backlog as a result of acquisitions.(4)Represents the difference between sales from existing businesses valued at current year foreign exchange rates and sales from existing businesses at prior year foreign exchange rates.increased by $48.8 million, or 9.0%, during 20112013 compared to 2010 due2012 was attributable to an increase in demand in all end markets, except defense. The timing of sales and orders to customers$138.1 million in our defense end market,gas- and fluid-handling segment, which we began including with marine end market sales and orderswas partially offset by a decrease of $30.6 million in 2012, vary from period to period due to the timing of specific ship programs. Net sales were positively impacted by the changes in foreign exchange rates during 2011 in comparison to 2010.increasedfor our gas- and fluid-handling segment decreased during 20112013 in comparison to 20102012 due to increased demanddeclines in allthe oil, gas and petrochemical, mining and general industrial and other end markets, except defense. Additionally, we experienced a declinewhich were partially offset by growth in commercialthe power generation and marine order cancellations from $16.4 million during 2010 to $6.1 million in 2011 primarily due to the impact of improved economic conditions. now reports results in two reportable segments: gas and fluid handling and fabrication technology. The following tables summarizetable summarizes Net sales by reportable segment for each of the following periods: Year Ended December 31, Proforma 2012 2011 (In millions) Gas and Fluid Handling $ 1,901.2 $ 1,757.1 Fabrication Technology 2,012.7 2,082.0 Total Net sales $ 3,913.9 $ 3,839.1 The sales comparisons discussed above, for 2012 in comparison to 2011, are on a proforma basis (which excludes operations acquired in the Charter Acquisition for the first 12 days of each annual period presented). Sales comparisons for 2011 in comparison to 2010 represent the Net sales reported by Colfax for those periods as a proforma comparison is not considered meaningful for those periods. Further, cost information for Charter, ESAB and Howden is not available for 2011 under the presentation required by the Exchange Act and, as such, proforma discussions are limited to sales. Year Ended December 31, 2014 2013 2012 (In millions) Gas and Fluid Handling $ 2,329.6 $ 2,104.0 $ 1,901.2 Fabrication Technology 2,294.9 2,103.2 2,012.7 Total Net sales $ 4,624.5 $ 4,207.2 $ 3,913.9 Baric, Fairmount Automation, Houttuin, Imo, LSC, COT-Puritech, Portland Valve, Tushaco, Warren and Zenith.Imo. Colfax Fluid Handling is a supplier of a broad range of fluid-handling products, including pumps, fluid-handling systems and controls, and specialty valves. the selected financial data for our gas- and fluid-handling segment: Year Ended December 31, 2012 2011 2010 (Dollars in millions) Net sales $ 1,901.2 $ 693.4 $ 542.0 Gross profit 567.1 240.1 191.4 Gross profit margin 29.8 % 34.6 % 35.3 % Restructuring and other related charges $ 8.7 $ 8.6 $ 5.8 Selling, general and administrative expense 412.6 142.7 112.8 Selling, general and administrative expense as a percentage of Net sales 21.7 % 20.6 % 20.8 % Asbestos coverage litigation expense $ 13.0 $ 10.7 $ 13.2 Segment operating income 141.5 86.7 65.4 Segment operating income margin 7.4 % 12.5 % 12.1 % Year over year fluctuations for 2012 in comparison to 2011 for selected financial data are primarily due to the addition of the Howden operations. Year Ended December 31, 2014 2013 2012 (Dollars in millions) Net sales $ 2,329.6 $ 2,104.0 $ 1,901.2 Gross profit 696.7 626.7 567.1 Gross profit margin 29.9 % 29.8 % 29.8 % Restructuring and other related charges $ 26.5 $ 10.4 $ 8.7 Selling, general and administrative expense 438.9 355.9 425.6 Selling, general and administrative expense as a percentage of Net sales 18.8 % 16.9 % 22.4 % Segment operating income 254.2 270.7 141.5 Segment operating income margin 10.9 % 12.9 % 7.4 % $161.5$31.3 million Net sales growthdecrease due to existing businesses, as discussed and defined under “Sales, Orders and Backlog” above, during 20122014 in comparison to 20112013 was primarily due to declines in the oil, gas and petrochemical, power generation and marine end markets, partially offset by growth in the mining and general industrial and other end markets. Additionally, Net sales increased by $287.9 million due to acquisitions and changes in foreign exchange rates had a negative impact of $31.0 million. Gross profit increased during 2014 reflecting the impact of acquisitions. Gross profit margin increased during 2014 in comparison to 2013 as improved margins through cost control and restructuring savings in our gas-handling business were more than sufficient to offset the lower margins of the acquired entities. Restructuring and other related charges increased during 2014 primarily due to an increase in restructuring actions to reduce structural costs and integrate the acquisitions made during the fourth quarter of 2013. Selling, general and administrative expense for 2014 increased compared to 2013 primarily as a result of an increase of $66.3 million due to acquisitions, a $13.4 million impairment loss related to identifiable intangible assets, a $4.0 million loss on disposition of a small fluid-handling business line and a $1.3 million loss from the use of the SICAD II exchange rate at our Venezuelan fluid-handling business, partially offset by an unrealized gain of $2.9 million related to the Clarus contingent payment liability, as the performance criteria are no longer expected to be met.allthe power generation, marine and general industrial and other end markets, except marine.partially offset by declines in the oil, gas and petrochemical and mining end markets. Additionally, $56.6Net sales increased by $83.9 million due to acquisition-related growth, including 12 additional days of activity in Howden, which was partially offset by a decrease of $19.2 million due to changes in foreign exchange rates. Gross profit increased during 2013 reflecting the impact of higher volumes. Gross profit margin remained consistent in 2013 with 2012 due to the positive impact of our strong cost control activities offset by the lower margins on the sales associated with the entities acquired in 2013. Additionally, $4.5 million of acquisition-related amortization expense and $15.1 million increased recurring intangible amortization expensewas reflected in comparison to 2011 is reflected inGross profit for 2012. Selling, general and administrative expense for 2012.As further discussed above, Net sales increased by $151.4 million, or 27.9%, during 2011 compared to 2010 due to an increase in demand in all end markets, except defense. Gross profit margin for 20112013 decreased compared to 20102012 primarily due to lower gross margin associated with the foremarket salesa decrease of Rosscor and Baric during the period, partially offset by positive leverage of fixed costs given substantially higher sales volume$56.6 million in 2011. The acquisitions of Rosscor and Baric contributed $15.8 million to the increase inacquisition-related amortization expense. Selling, general and administrative expense during 2011. Additionally, asbestos liability and defense costs increasedfor 2013 was reduced by $4.4a $13.8 million during 2011 comparedgain to 2010.principally marketed under theseveral brand names, most notably ESAB brand name,and Victor, which we believe is a leadingare well known in the international cutting and welding company with roots dating back to the invention of the welding electrode.industry. ESAB’s comprehensive range of cutting and welding consumables includes electrodes, cored and solid wireswire and fluxes. ESAB’s fabrication technology equipment ranges from portable unitswelding machines to large customcustomized cutting and automated welding systems. The Victor Acquisition complemented the geographic footprint of our fabrication technology segment and expanded our cutting equipment and consumables, gas control and specialty welding product lines. Products are sold into a wide range of end markets, including oil & gas, power generation, wind power, shipbuilding, pipelines, mobile/off-highway equipment and mining. the selected financial data for our fabrication technology segment: (Dollars in millions) Net sales $ 2,012.7 Gross profit 585.1 Gross profit margin 29.1 % Restructuring and other related charges $ 45.2 Selling, general and administrative expense 444.9 Selling, general and administrative expense as a percentage of Net sales 22.1 % Segment operating income $ 140.2 Segment operating income margin 7.0 % Year Ended December 31, 2014 2013 2012 (Dollars in millions) Net sales $ 2,294.9 $ 2,103.2 $ 2,012.7 Gross profit 782.1 679.6 585.1 Gross profit margin 34.1 % 32.3 % 29.1 % Restructuring and other related charges $ 31.6 $ 25.1 $ 45.2 Selling, general and administrative expense 516.3 459.9 444.9 Selling, general and administrative expense as a percentage of Net sales 22.5 % 21.9 % 22.1 % Segment operating income $ 265.8 $ 219.6 $ 140.2 Segment operating income margin 11.6 % 10.4 % 7.0 % $40.7$191.7 million Net sales increase during 2014 compared to 2013 was primarily the result of acquisition-related growth of $347.3 million, partially offset by changes in foreign exchange rates which had a negative impact of $107.9 million. The $47.7 million Net sales decline due to existing businesses, as discussed and defined under “Sales, Orders and Backlog” above, during 20122014 in comparison to 20112013 was primarily the result of decreases in consumable volumes in most geographies. Gross profit and gross profit margin for 2014 increased reflecting the positive impact of cost control activities. Additionally, Gross profit and gross profit margin during 2014 were positively impacted by the higher gross margins at Victor, which were partially offset by acquisition-related inventory step up expense of $9.0 million. The increase in Selling, general and administrative expense during 2014 was primarily due to increased consumablean acquisition-related increase of $95.5 million and equipment sales ina $5.0 million loss from the Americas, Russiause of the SICAD II exchange rate at our Venezuelan fabrication technology business, partially offset by significant cost control activities and the Middle East. Year over yearimpact of change in foreign exchange rates.other selected financial data above is not practical, as further discussed above. Additionally,change in foreign exchange rates. Gross profit and gross profit margin for 2012 were negatively impacted by acquisition-related inventory step-up expense of $18.7 million.Profit-profit and gross profit margin were favorably impacted by the fixed costs eliminated by several manufacturing site closings in late 2012 and the higher gross profit margins at Soldex. Additionally, Selling, general and administrative expense increased by $29.9 million due to the acquisition of Soldex. This amount includes the impact of the devaluation of the Venezuelan bolivar fuerte during the first quarter of 2013, which resulted in a foreign currency Year Ended December 31, 2012 2011 2010 (In millions) Gross profit $ 1,152.1 $ 240.1 $ 191.4 Gross profit margin 29.4 % 34.6 % 35.3 % Year Ended December 31, 2014 2013 2012 (Dollars in millions) Gross profit $ 1,478.8 $ 1,306.2 $ 1,152.1 Gross profit margin 32.0 % 31.0 % 29.4 % $912.0$172.6 million increase in Gross profit during 20122014 in comparison to 20112013 was attributable to increases of $585.1$70.0 million in our fabrication technology segment and $326.9$102.6 million in our gas- and fluid-handling segment and our fabrication technology segment, respectively. The increase in gross profit margin in both of our segments during 2014 reflects the positive impact of cost control activities. Additionally, our fabrication technology segment was positively impacted during 2014 by the higher gross margins of Victor, which were primarily duepartially offset by acquisition-related inventory step up expense. The increase in Gross profit in our gas- and fluid-handling segment during 2014 includes the impact of acquisitions, which also served to the Charter Acquisition.$48.7$154.1 million increase in Gross profit during 20112013 in comparison to 20102012 was attributable to increases of $20.0$59.6 million from existing businessesin our gas- and $20.8fluid-handling segment and $94.5 million in our fabrication technology segment. Gross profit increased during 2013 due to the acquisitionsnon-recurrence of Rosscor$21.6 million of acquisition-related inventory step-up expense incurred in 2012. The improvement in gross profit margin during the period was also due to the impact of our cost reduction efforts and Baric. Additionally, changesfavorable trends in sales price in comparison to raw material costs in our fabrication technology segment. Changes in foreign exchange rates during 2013 had a $7.9$14.7 million positivenegative impact on Gross profit for 2011 in comparison to 2010. Gross profit margin for 2011 decreased compared to 2010 primarily due to the lower gross profit margin associated with the foremarket sales of Rosscor and Baric during the period, partially offset by positive leverage of fixed costs given substantially higher sales volume in 2011. Year Ended December 31, 2012 2011 2010 (In millions) Selling, general and administrative expense $ 895.5 $ 162.8 $ 133.5 Selling, general and administrative expense as a percentage of Net sales 22.9 % 23.5 % 24.6 % Charter acquisition-related expense $ 43.6 $ 31.1 $ — Restructuring and other related charges 60.1 9.7 10.3 Asbestos coverage litigation expense 13.0 10.7 13.2 Year Ended December 31, 2014 2013 2012 (Dollars in millions) Selling, general and administrative expense $ 1,011.2 $ 864.3 $ 908.5 Selling, general and administrative expense as a percentage of Net sales 21.9 % 20.5 % 23.2 % Charter acquisition-related expense $ — $ — $ 43.6 Restructuring and other related charges 58.1 35.5 60.1 $732.7$146.9 million during 20122014 in comparison to 20112013 primarily due to an increase of $161.8 million attributable to the Charter Acquisition. The decrease inaddition of the operations associated with the Victor Acquisition and the gas- and fluid-handling acquisitions during 2013. Additionally, Selling, general and administrative expense for 2014 includes a $13.4 million impairment loss related to identifiable intangible assets, a $4.0 million loss on disposition of a small fluid-handling business line and a $6.3 million loss from the use of the SICAD II exchange rate at our Venezuelan businesses, partially offset by significant cost saving programs in both segments and an unrealized gain of $2.9 million related to the Clarus contingent payment liability, as a percentagethe performance criteria are no longer expected to be met. Restructuring and other related charges increased compared to 2013 primarily due to an increase in restructuring actions to reduce structural costs and integrate the acquisitions made during 2014 and the fourth quarter of Net sales2013.20122013 in comparison to 2011 resulted2012, primarily from the benefitdue to a decrease in acquisition-related amortization expense of higher sales volumes and efforts to reduce costs$56.6 million, partially offset by $77.3 millionthe increase in expenses resulting from the additional 12 days of higher intangible amortization expense.operations related to the entities acquired as part of the Charter Acquisition and the acquisitions of Soldex, Co-Vent, Clarus, ČKDK, GII, TLT-Babcock, Alphair and Sicelub. During 2012, we incurred $12.5$43.6 million of increased advisory, legal, valuation and other professional service fees and realized losses on acquisition-related foreign exchange derivatives in connection with the Charter Acquisition in comparison to 2011.increased significantly during 2012decreased in 2013 in comparison to the comparable period of 2011,2012 primarily as a result of the completion of several substantial cost reduction programs under way in the fabrication technology segment.Selling, general and administrative expense increased $29.3 million during 2011segment in comparison to 2010, $15.8 million of which resulted from the acquisitions of Rosscor, Baric and COT-Puritech. Selling, general and administrative expense from existing businesses increased primarily due to higher selling and commission costs and higher corporate overhead including the operation of two offices during the transition of our corporate headquarters to Maryland. Additionally, asbestos liability and defense costs increased by $4.3 million during 2011 compared to 2010 primarily due to a $2.1 million provision related to a court judgment received for one of our subsidiaries’ litigation against a number of its insurers and former parent, a $1.8 million pre-tax charge because of a statistically significant increase in mesothelioma claims had occurred and was expected to continue to occur related to one of our subsidiaries and a $0.7 million pre-tax charge resulting from higher settlement values per mesothelioma claim in a specific region related to another subsidiary. The decrease in Selling, general and administrative expense as a percentage of Net sales during 2011 in comparison to 2010 resulted primarily from higher sales volumes. Year Ended December 31, 2012 2011 2010 (In millions) Interest expense $ 91.6 $ 5.9 $ 6.7 Year Ended December 31, 2014 2013 2012 (Dollars in millions) Interest expense $ 51.3 $ 103.6 $ 91.6 20122013 in comparison to 20112012 was primarily attributable to interest on the financing relatedwrite-off of $29.4 million of certain deferred fees and original issue discount associated with the Second and Third Amendments to the Charter Acquisition. SeeDeutsche Bank Credit Agreement, as defined and further discussed under “—Liquidity and Capital Resources—Borrowing Arrangements” below, for additional discussion.During 2012, - Total Company$48.4$358.2 million and the Provision forBenefit from income taxes was $90.7 million.$62.0 million for 2014. The provisionBenefit from income taxes was impacted by two significant items. Upon completionthe reassessment of the Charter Acquisition,realizability of certain deferred tax assets existing at that date were reassessed in lightas a result of the impacteffect of the acquired businessesVictor Acquisition on expected future income or loss by country and future tax planning, including the impact of the post-acquisition capital structure.U.S. income. This assessmentreassessment resulted in an increasea decrease in ourthe Company’s valuation allowance to provide full valuation allowances against U.S. deferred tax assets. The increasedreduction in the valuation allowances resulted inallowance created a non-cash increaseincome tax benefit for 2014 of $145.4 million. Additionally, a tax benefit of $21.8 million was included in the Provision forBenefit from income taxes for 2012 of $50.3 million. In addition, $43.6 million of Charter acquisition-related expense and increased corporate overhead and Interest expense reflected in the Consolidated StatementStatements of Operations during 2014 associated with the resolution of a liability for unrecognized tax benefits. These items, as well as the impact of foreign earnings where international tax rates are either non-deductible or were incurred in jurisdictions where nolower than the U.S. tax benefit can be recognized. These two itemsrate, are the principal cause of the Provisionreasons for income taxes being significantly highera tax benefit rather than thea tax provision, which would result from the application of the U.S. federal statutory rate.The effectiverate to the reported Income before income tax ratetaxes for 2011 was 77.2% as compared to an effective tax rate of 41.4% for 2010. Our2014.20112013 was higher30.9%, which was lower than the U.S. federal statutory tax rate primarily due to a net increase in our valuation allowance that was partially offset by foreign earnings where international tax rates are lower than the U.S. tax rate, a discrete credit to income tax expense of $5.1 million from a reduction to deferred tax balances in certain territories associated with the enactment of lower corporate tax rates and the reduction of a net decrease in our liability for unrecognized tax benefits. The 77.2% effectivebenefits, which resulted in a gain of $2.3 million, all of which were offset in part by other discrete tax rate for 2011 was higher than the 41.4% effectiveitems and losses in certain jurisdictions where a tax rate for 2010 primarily duebenefit is not expected to a $16.7 million net increasebe recognized in our valuation allowance in 2011 compared to a net increase of $4.2 million in 2010 impacting the Provision for income taxes for those periods.and borrowings under our bank credit facilities (discussed below). Additionally, duringand the first quarterissuances of 2012, we were successful in our efforts to raise additional funds in the form of debt and equity, as further discussed below.equity. We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures, asbestos-related cash outflows and funding of our pension plans. If additional funds are needed for strategic acquisitions or other corporate purposes, we believe we could raise additional funds in the form of debt or equity.a securities purchase agreement (the “BDTthe BDT Purchase Agreement”)Agreement with the BDT Investor as well as BDT Capital Partners Fund I-A, L.P., and Mitchell P. Rales, Chairman of our Board of Directors, and his brother, Steven M. Pursuant to the BDT Purchase Agreement, under the terms of the Series A Preferred Stock, holders are entitled to receive cumulative cash dividends, payable quarterly, at a per annum rate of 6% of the liquidation preference (defined as $24.50, subject to customary antidilution adjustments), provided that the dividend rate shall be increased to a per annum rate of 8% if Colfax fails to pay the full amount of any dividend required to be paid on such shares until the date that full payment is made.The Series A Preferred Stock is convertible, in whole or in part, at the option of the holders at any time after the date the shares were issued into shares of Colfax Common stock at a conversion rate determined by dividing the liquidation preference by a number equal to 114% of the liquidation preference, subject to certain adjustments. The Series A Preferred Stock is also convertible, in whole or in part, at our option on or after the third anniversary of the issuance of the shares at the same conversion rate if, among other things: (i) for the preceding thirty trading days, the closing price of Colfax Common stock on the New York Stock Exchange exceeds 133% of the applicable conversion price and (ii) Colfax has declared and paid or set apart for payment all accrued but unpaid dividends on the Series A Preferred Stock.discussed above,issued in connection with the financing of the Charter Acquisition, the Company recognized $14.7 million in equity issuance costs which were recorded as a reduction to Additional paid-in capital during 2012.Bank of America Credit Agreement (defined and further discussed below)existing credit agreement as well as Charter’s outstanding indebtedness. The Deutsche Bank Credit Agreement has four tranches of term loans: (i)We entered into a $200 million term A-1 facility, (ii) a $500 million term A-2 facility, (iii) a €157.6 million term A-3 facility and (iv) a $900 million term B facility. In addition,Second Amendment to the Deutsche Bank Credit Agreement hason February 22, 2013 which, among other things, reallocated our borrowing capacities of the tranches of loans and reduced our interest rate margins when compared to the terms of the amended Deutsche Bank Credit Agreement on January 13, 2012.sub-facilitiessubfacilities which total $300$898 million in commitments, (the “Revolver”). The Revolver includes a $200 million letter of credit sub-facility and a $50 million swingline loan sub-facility. The(ii) provide for an interest rate margin on the term A-1 facility, the term A-2 facility and the revolving credit subfacilities ranging from 0.50% and 1.25% per annum for base rate loans and 1.50% to 2.25% per annum for Eurocurrency rate loans, in each case determined by the Company’s leverage ratio, (iii) provide for an interest margin on the term A-3 facility and the Revolver variable-rate borrowings are subject to interest payments of LIBOR or EURIBOR plus a marginterm A-4 facility ranging from 0.75% to 1.50% per annum for base rate loans and 1.75% and 2.50% to 3.25%,per annum for Eurocurrency loans, in each case, determined by ourthe Company’s leverage ratio. Borrowings underratio and (iv) reset the maturity date for the term A facilities and the two revolving credit subfacilities as well as the amortization schedule for the term A facilities to a five year term commencing on November 7, 2013. In connection with the Third Amendment, the prior term B facility are also variable rate and are subjectunder the credit agreement, held primarily by institutional lenders, was repaid in its entirety.interest paymentsInterest expense in the Consolidated Statement of LIBOR plus a margin of 3.5%. The Revolver is subject to a commitment fee ranging from 37.5 to 50 basis points, determined by our leverage ratio. Additionally, as ofOperations for the year ended December 31, 2012, there was2013 of $29.4 million to write-off certain deferred financing fees and original issue discount and expensed approximately $1.2 million of costs incurred in connection with the refinancing. The Company had an original issue discount of $55.4$12.6 million and deferred financing fees of $8.5$9.9 million included in its Consolidated Balance Sheet as of December 31, 2014, which will be accreted to Interest expense primarily using the effective interest method.method, over the life of the Deutsche Bank Credit Agreement. As of December 31, 2012,2014, the weighted-average interest rate of borrowings under the amended Deutsche Bank Credit Agreement was 1.94%, excluding accretion of original issue discount and deferred financing fees, and there was $674.9 million available on outstanding borrowingsthe revolving credit subfacilities, including $199.9 million available on a letter of credit subfacility.3.93% and there was $291.9increased by $150.0 million available underto an aggregate of $558.7 million, upon the Revolver, including $191.9 million available undersame terms as the existing Term A-1 facility.sub-facility.Asfacilities with total capacity of $699.1 million. Total letters of credit of $381.2 million were outstanding as of December 31, 2011,2014.were partyentered into a receivables financing facility, pursuant to which we established a credit agreement (the “Bankwholly owned, special purpose bankruptcy-remote subsidiary which purchases trade receivables from certain of America Credit Agreement”), ledour subsidiaries on an ongoing basis and administered by Bankpledges them to support its obligation as borrower under the receivables financing facility. This special purpose subsidiary has a separate legal existence from its parent and its assets are not available to satisfy the claims of America, which included a senior secured revolving credit facility and a term credit facility. Upon the early terminationcreditors of the Bankselling subsidiaries or any other member of America Credit Agreement, we incurred athe consolidated group. Availability of funds may fluctuate over time given changes in eligible receivable balances, but will not exceed the $80 million program limit. As of December 31, 2014, the total pre-tax charge of $1.5outstanding borrowings under the receivables financing facility were $80 million in 2012, which includes and the write-off of $1.0 million of deferred financing fees and $0.5 million of losses reclassified from Accumulated other comprehensive lossinterest rate was 0.9%. The scheduled termination date for the related interest rate swap.we havethe Company has pledged substantially all of ourits domestic subsidiaries’ assets, other than the transferred receivables discussed above, and 65% of the shares of certain first tier international subsidiaries as collateral against borrowings to ourits U.S. companies. In addition, subsidiaries in certain foreign jurisdictions have guaranteed ourthe Company’s obligations on borrowings of one of ourits European subsidiaries, as well as pledged substantially all of their assets for such borrowings ofto this European subsidiary under the Deutsche Bank Credit Agreement. The Deutsche Bank Credit Agreement contains customary covenants limiting ourthe Company’s ability to, among other things, pay dividends, incur debt or liens, redeem or repurchase equity, enter into transactions with affiliates, make investments, merge or consolidate with others or dispose of assets. In addition, the Deutsche Bank Credit Agreement contains financial covenants requiring usthe Company to maintain a total leverage ratio, as defined therein, of not more than 4.954.75 to 1.0 and a minimum interest coverage ratio, as defined therein, of 2.02.50 to 1.0, measured at the end of each quarter, through 2012.quarter. The minimum interest coverage ratio increases by 25 basis points each year beginning in 2013 until it reaches 3.0 to 1.0 for 2016.the year ending December 31, 2016 and each year thereafter. The maximum total leverage ratio decreases to 4.75 to 1.0 for 2014 and decreases by 25 basis points for the two subsequent fiscal yearseach year until it reaches 4.25 to 1.0 for 2016.the year ending December 31, 2016 and each year thereafter. The Deutsche Bank Credit Agreement contains various events of default, including failure to comply with the financial covenants referenced above, and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the term loans and the Revolverrevolving credit subfacilities and foreclose on the collateral. The Company is in compliance with all such covenants as of December 31, 2012.2014. We believe that our sources of liquidity, including the Deutsche Bank Credit Agreement, are adequate to fund our operations for the next twelve months.2012,2014, we had $482.4$305.4 million of Cash and cash equivalents, an increasea decrease of $407.3$5.9 million from $75.1$311.3 million as of December 31, 2011.2013. The following table summarizes the change in Cash and cash equivalents during the periods indicated: Year Ended December 31, 2012 2011 2010 (In millions) Net cash provided by operating activities $ 164.3 $ 57.2 $ 62.0 Purchases of fixed assets, net (83.2 ) (13.7 ) (12.4 ) Acquisitions, net of cash received (1,859.6 ) (56.3 ) (28.0 ) Other sources, net 1.8 — — Net cash used in investing activities (1,941.0 ) (70.0 ) (40.4 ) Proceeds from (repayments of) borrowings, net 1,159.8 29.0 (8.8 ) Proceeds from issuance of common stock, net 756.8 3.7 0.9 Proceeds from issuance of preferred stock, net 333.0 — — ESAB India repurchase of additional noncontrolling interest (29.3 ) — — Other sources (uses), net (27.4 ) — (0.1 ) Net cash provided by (used in) financing activities 2,192.9 32.7 (8.0 ) Effect of exchange rates on Cash and cash equivalents (8.9 ) (5.3 ) (3.0 ) Increase in Cash and cash equivalents $ 407.3 $ 14.6 $ 10.6 Year Ended December 31, 2014 2013 2012 (In millions) Net cash provided by operating activities $ 385.8 $ 362.2 $ 174.0 Purchases of fixed assets, net (81.3 ) (71.5 ) (83.2 ) Acquisitions, net of cash received (948.8 ) (372.5 ) (1,859.6 ) Loans to non-trade creditors — (31.0 ) — Other, net — — 1.8 Net cash used in investing activities (1,030.1 ) (475.0 ) (1,941.0 ) Proceeds from (repayments of) borrowings, net 90.9 (309.0 ) 1,159.8 Proceeds from issuance of common stock, net 613.9 324.2 756.8 Proceeds from issuance of preferred stock, net — — 333.0 Acquisition of shares held by noncontrolling interest (10.3 ) (14.9 ) (29.3 ) Preferred stock conversion inducement payment (19.6 ) — — Other uses (24.9 ) (45.4 ) (37.1 ) Net cash provided by (used in) financing activities 650.0 (45.1 ) 2,183.2 Effect of exchange rates on Cash and cash equivalents (11.6 ) (13.2 ) (8.9 ) (Decrease) increase in Cash and cash equivalents $ (5.9 ) $ (171.1 ) $ 407.3 ŸNet cash received or paid for asbestos-related costs, net of insurance proceeds, including the disposition of claims, defense costs and legal expenses related to litigation against our insurers, creates variability in our operating cash flows. We had net cash outflows of $24.7 million, $7.9 million and $11.4 million for asbestos-related costs paid, net of insurance settlements received during 2012, 2011 and 2010, respectively.ŸFunding requirements of our defined benefit plans, including pension plans and other post-retirement benefit plans, can vary significantly from period to period due to changes in the fair value of plan assets and actuarial assumptions. For 2012, 2011 and 2010, cash contributions for defined benefit and other post-employment benefit plans were $61.2 million, $9.3 million and $12.1 million, respectively. Contributions for 2012 include $18.9 million of supplemental contributions to pension plans in the United Kingdom as a result of the financing of the Charter Acquisition.ŸDuring 2012, 2011 and 2010, cash payments of $45.1 million, $6.8 million and $16.3 million, respectively were made related to our restructuring initiatives. Additionally, during 2012 and 2011 cash payments of approximately $46.1 million and $1.6 million, respectively, were made for advisory, legal, valuation and other professional service fees related to the Charter Acquisition.ŸChanges in net working capital also affected the operating cash flows for the periods presented. We define working capital as Trade receivables, net and Inventories, net reduced by Accounts payable. During 2012, net working capital decreased, primarily due to a decrease in inventory and an increase in payable levels, which increased our cash flows from operating activities by $78.3 million, a significant contributor to 2012 cash flows from operating activities. During 2011, net working capital increased, primarily due to an increase in receivables, which reduced our cash flows from operating activities. A decrease in net working capital, primarily as a result of a decrease in Inventories, net, positively impacted cash flows from operating activities during 2010.There cash outflows from investing activities associated with the Charter Acquisition in 2012.Acquisition. The cash cost of the Charter Acquisition was approximately $1.7 billion, net of cash acquired, was approximately $1.7 billion. During 2011, the acquisitions of Rosscor and COT-Puritech resulted in net cash outflows of $56.3 million. During 2010, we had cash outflows of $28.0 million related to the acquisition of Baric. Capital expenditures for 2012 of $83.6 million were significantly higher than $14.8 million and $12.5 million used in 2011 and 2010, respectively, due to the much larger scale of our operations in 2012. also significantly impacted by the Charter Acquisition. As discussed above under “—Equity Capital,” we raised $805.0 million of cash from sales of our equity securities to the BDT Investor, Steven and Mitchell Rales, and Markel in January 2012, and $293.4 million in a primary offering settled in March 2012. Also, as further discussed above under “—Borrowing Arrangements,” weMarkel. We borrowed approximately $1.7$1.8 billion of term loans, $70.3 million of which was repaid in 2012. The additional payment of borrowings under term loans of $455 million primarily represents the repayment of borrowings under our Bank of America Credit Agreement, in conjunction with the financing of the Charter Acquisition. WeAdditionally, financing activities for 2012 included $293 million raised in a primary offering of our Common stock settled in March 2012.made cash payments for preferred stock dividendsimpacted by acquisitions of $17.4 million.Ourshares of less than wholly owned subsidiaries. During 2014, cash flows from financing activities duringincluded the $10.3 million acquisition of the remaining ownership of Svel and Howden Middle East. During 2013, cash flows from financing activities included a $14.9 million acquisition of common and investment shares of Soldex resulting in an increase in our ownership of the subsidiary from approximately 91% to 99%. During 2012, were also impacted bycash flows from financing activities included a $29.3 million acquisition of shares in ESAB India Limited, a publicly traded, less than wholly owned subsidiary in which the Company acquired a controlling interest in the Charter Acquisition. This acquisition of shares was pursuant to a statutorily mandated tender offer triggered as a result of the Charter Acquisition.Cash flows from financing activities during 2011 included net borrowings of $29.0 million, which were primarily related to the acquisitions of Rosscor and COT-Puritech.See “—Borrowing Arrangements” above for additional information regarding our outstanding indebtedness as of December 31, 2012.2012 includes $396.52014 included $279.4 million held in jurisdictions outside the U.S., which may be subject to tax penalties and other restrictions if repatriated into the U.S.2012. 1-3 Years 3-5 Years Total (In millions) Debt $ 34.8 $ 204.9 $ 673.3 $ 870.7 $ 1,783.7 Interest payments on debt(1) 69.8 131.7 153.3 50.8 405.6 Operating leases 30.2 37.5 17.1 40.9 125.7 Capital leases 31.6 2.3 — — 33.9 Purchase obligations(2) 359.8 20.1 0.3 0.4 380.6 Total $ 526.2 $ 396.5 $ 844.0 $ 962.8 $ 2,729.5 1-3 Years 3-5 Years Total (In millions) Debt $ 9.9 $ 10.0 $ 1,531.9 $ — $ 1,551.8 29.2 58.3 21.3 — 108.8 Mandatorily redeemable preferred stock of a subsidiary — 24.9 — — 24.9 Dividend payment on mandatorily redeemable preferred stock of a subsidiary — 2.7 — — 2.7 Operating leases 36.0 46.4 26.6 44.2 153.2 Capital leases 1.2 0.3 0.1 0.3 1.9 371.3 33.5 1.4 0.3 406.5 Total $ 447.6 $ 176.1 $ 1,581.3 $ 44.8 $ 2,249.8 Variable interest payments are estimated using a static rate of 3.93%1.89%.Excludes open purchase orders for goods or services that are provided on demand, the timing of which is not certain. cash funding requirements associated with our pension and other post-retirement benefit plans as of December 31, 2012,2014, which are estimated to be approximately $51.8$45.1 million for the year endedending December 31, 2013.2015. Other long-term liabilities, such as those for asbestos and other legal claims, employee benefit plan obligations, deferred income taxes and liabilities for unrecognized income tax benefits, are excluded from the above table since they are not contractually fixed as to timing and amount.$338.1$381.2 million, unconditional purchase obligations with suppliers of $406.5 million, and $59.7 million of bank guarantees at December 31, 2012 and $125.7$153.2 million of future operating lease payments.Disclosure under Section 13(r)(1)(D)(iii) of the Exchange ActDuring the fiscal year, a few of our independently operated foreign subsidiaries which we acquired in 2012 made the final shipments necessary to wind down four sales agreements involving parties identified in section 560.304 of title 31 of the Code of Federal Regulations. These foreign subsidiaries entered into the original sales agreements in the years before we acquired them. The shipments were made as part of our foreign subsidiaries’ voluntary withdrawal from the Iranian market, which was implemented as part of the foreign subsidiaries’ integration into our comprehensive international trade compliance program, which prohibits sales to Iran.The transactions were conducted in accordance with economic sanctions statutes and regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls, other U.S. statutes restricting trade with Iran, and with applicable local laws in Europe. As part of our effort to ensure our compliance with U.S. sanctions, the Company consulted with U.S. government personnel who administer certain Iranian sanctions prior to some of the shipments. The transactions did not involve U.S.-origin content and U.S. persons did not control, approve, facilitate or otherwise participate in the transactions. In addition, our foreign subsidiaries requested and obtained the required authorizations under local export control laws in Europe to complete the transactions. The gross revenue for each shipment was $653,718, $1,499,400, $2,527,797, and $5,524,525, with profit margins of 23.6% and 20.4% on the first two shipments and losses on the remaining two shipments. Colfax is committed to continuing to comply fully with all U.S. economic sanctions. As part of that commitment, all of the Company’s foreign subsidiaries have voluntarily withdrawn from selling into the Iranian market. As a result, neither Colfax nor any of its foreign subsidiaries intend to conduct any future shipments to Iran.assessesassess whether an alternative forecast period is appropriate. Taking these factors into account and the inherent uncertainties, we believe that we can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and have recorded that liability as our best estimate. While it is reasonably possible that the subsidiaries will incur costs after this period, we do not believe the reasonably possible loss or range of reasonably possible loss is estimable at the current time. Accordingly, no accrual has been recorded for any costs which may be paid after the next 15 years. Defense costs associated with asbestos-related liabilities as well as costs incurred related to litigation against the subsidiaries’ insurers are expensed as incurred.As of December 31, 2012, we had total asbestos liabilities, including current portion, of $434.0 million and total asbestos insurance assets, including current portion, of $394.8 million. 16,15, “Commitments and Contingencies” in the accompanying Notes to Consolidated Financial Statements for additional information regarding our asbestos liabilities and insurance assets.isand indefinite-lived intangible assets are considered to be impaired when the net book value of a reporting unit or asset exceeds its estimated fair value. October 1, 2011 and October 2, 2010 indicated no impairment to be present. However, actualpresent, except for $0.2 million of impairment loss related to an indefinite-lived intangible asset included in the gas- and fluid-handling segment for the year ended December 31, 2013. This impairment results from a decline in anticipated revenue related to this asset. The impairment loss is included in Selling, general and administrative expense in the accompanying Consolidated Statement of Operations and was calculated as the difference between the fair value of the asset under the relief from royalty method and its carrying value as of the date of the impairment test. See Note 2, “Summary of Significant Accounting Policies” in the accompanying Notes to Consolidated Financial Statements for further information.2012,2014, we have Goodwill of $2.1$2.9 billion and indefinite lived trade names of $410.6 million that isare subject to at least annual review offor impairment. See Note 7, “Goodwill and Intangible Assets” in the accompanying Notes to Consolidated Financial Statements for further information.2012,2014, the valuation allowance increaseddecreased from $79.9$360.9 million to $372.0 million. The acquired Charter businesses operate in certain territories which have not historically been profitable or profitability is not expected in the near term. As such, valuation allowances were established in the initial accounts where realization of deferred tax assets was not more likely than not. For Colfax, certain deferred tax assets existing at the date were reassessed in light of$159.7 million primarily due to the impact of the acquired businesses on expected future income or loss by country and future tax planning, including the impact of the post-acquisition capital structure. This assessment resulted in a $50.3 million increase in the Company’s valuation allowance to provide full valuation allowance against U.S. deferred tax assets.In 2012, additional losses were recorded in territories, including the U.S., where full valuation allowances were established at the time of the CharterVictor Acquisition. The more likely than not realization standard was applied to these additional deferred tax assets and a full valuation allowance was provided.effectaffect our estimates, such as the availability of new information, the lapsing of applicable statutes of limitations, the conclusion of tax audits and, if applicable, the conclusion of any court proceedings. To the extent we prevail in matters for which liabilities for unrecognized tax benefits have been established or are required to pay amounts in excess of our liabilities for unrecognized tax benefits, our effective income tax rate in a given period could be materially affected. The Company recognizes interest and penalties related to unrecognized tax benefits in the Provision(Benefit from) provision for income taxes in the Consolidated Statements of Operations. Net liabilities for unrecognized income tax benefits,$84.2$77.4 million as of December 31, 20122014 and are included in Other liabilities in the accompanying Consolidated Balance Sheet.underwhen title passes to the completed contract method whenbuyer and all of the following criteria are met: persuasive evidence of an arrangement exists, the price is fixed or determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectibility is probable. Product delivery occurs when title and risk of loss transfer to the customer. Our shipping terms vary based on the contract. If any significant obligations to the customer with respect to such sale remain to be fulfilled following shipment, typically involving obligations relating to installation and acceptance by the buyer, revenue recognition is deferred until such obligations have been fulfilled. Any customer allowances and discounts are recorded as a reduction in reported revenues at the time of sale because these allowances reflect a reduction in the sales price for the products sold. These allowances and discounts are estimated based on historical experience and known trends. Revenue related to service agreements is recognized as revenue over the term of the agreement.construction projectslong-term contracts using the “percentage of completion method” in accordance with U.S. GAAP. Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Any recognized revenues that have not been billed to a customer are recorded as a component of Trade receivables and any billings of customers in excess of recognized revenues are recorded as a component of Accounts payable. As of December 31, 2012,2014, there were $97.1$190.7 million of revenues in excess of billings and $178.3$175.3 million of billings in excess of revenues on constructionlong-term contracts in the Consolidated Balance Sheet.$16.5$27.3 million and $2.6$31.3 million as of December 31, 20122014 and 2011,2013, respectively. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances could be required.20122014 are variable-ratevariable rate facilities based on LIBOR or EURIBOR. In order to mitigate our interest rate risk, we periodically enter into interest rate swap or collar agreements. A hypothetical increase in the interest rate of 1.00% during 2014would have increased Interest expense by approximately $17.8 million during 2012.2012,2014, approximately 80%76% of our sales were derived from operations outside the U.S. We have significant manufacturing operations in European countries that are not part of the Eurozone. Sales revenues are more highly weighted toward the Euro and U.S. dollar. We also have significant contractual obligations as discussed above, in U.S. dollars that are met with cash flows in other currencies as well as U.S. dollars. To better match revenue and expense as well as cash needs from contractual liabilities, we regularly enter into cross currency swaps and forward contracts.€157.6 million term A-3 facilityEuro denominated borrowings under the Deutsche Bank Credit Agreement, (the “Term Loan A-3”), discussed above, providesprovide a natural hedge to a portion of our European net asset position. The effect of a change in currency exchange rates on our net investment in international subsidiaries, net of the translation effect of the Company’s Term Loan A-3,euro denominated borrowings, is reflected in the Accumulated other comprehensive loss component of Equity. A 10% depreciation in major currencies, relative to the U.S. dollar as of December 31, 20122014 (net of the translation effect of our Term Loan A-3)euro denominated borrowings) would result in a reduction in Equity of approximately $120$150 million.U.SU.S. dollar as our functional currency for reporting purposes, we have manufacturing sites throughout the world, and a substantial portion of our costs are incurred and sales are generated in foreign currencies. Costs incurred and sales recorded by subsidiaries operating outside of the U.S. are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. In particular, the Company has more sales in European currencies than it has expenses in those currencies. Although a significant portion of this difference is hedged, when European currencies strengthen or weaken against the U.S. dollar, operating profits are increased or decreased, respectively.2012,2014, we had no open commodity futures contracts.ourthe accompanying Notes to Consolidated Financial Statements included in this Form 10-K for additional information regarding our derivative instruments. Report of Independent Registered Public Accounting Firm – Internal Control Over Financial Reporting 44Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements 45Consolidated Statements of Operations 46Consolidated Statements of Comprehensive Loss(Loss) Income47Consolidated Balance Sheets 48Consolidated Statements of Equity 49Consolidated Statements of Cash Flows 50Notes to Consolidated Financial Statements 51Note 1. Organization and Nature of Operations 51Note 2. Summary of Significant Accounting Policies 51Note 3. Recently Issued Accounting Pronouncements 56Note 4. Acquisitions 56Note 5. Net Income (Loss) Income Per ShareNote 6. Income Taxes Note 7. Goodwill and Intangible Assets Note 8. Property, Plant and Equipment, Net Note 9. Inventories, Net Note 10. Debt 64Note 11. Equity Note 12. Accrued Liabilities 69Note 13. Defined Benefit Plans 71Note 14. Financial Instruments and Fair Value Measurements 78Note 15. Concentration of Credit RiskCommitments and Contingencies81Note 16. Commitments and ContingenciesSegment Information82Note 17. Segment Information85Note 18. Selected Quarterly Data—(unaudited)8743902012,2014, based on criteria established in Internal Control—IntegratedControl-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Colfax Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanyingItem 9A, Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, listed in the Index at Item 9A, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Charter and Soldex,Victor Technologies Holdings, Inc., which areis included in the 20122014 consolidated financial statements of Colfax Corporation and collectively constituted 81%17% and 86%27% of total and net assets, respectively, as of December 31, 20122014 and 83%8% and 10% of net sales and net income available to common shareholders, respectively, for the year then ended. Our audit of internal control over financial reporting of Colfax Corporation also did not include an evaluation of the internal control over financial reporting of Charter and Soldex.2012,2014, based on the COSO criteria.20122014 and 2011,2013, and the related consolidated statements of operations, and comprehensive loss,(loss) income, equity and cash flows for each of the three years in the period ended December 31, 20122014 of Colfax Corporation and our report dated February 18, 201317, 2015 expressed an unqualified opinion thereon.18, 201320122014 and 2011,2013, and the related consolidated statements of operations, and comprehensive loss,(loss) income, equity and cash flows for each of the three years in the period ended December 31, 2012.2014. Our audits also included the financial statement schedule listed in the Index at Item 15.15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.20122014 and 2011,2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012,2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.2012,2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 18, 201317, 2015 expressed an unqualified opinion thereon.18, 2013(Inamounts) Year Ended December 31, 2012 2011 2010 Net sales $ 3,913,856 $ 693,392 $ 541,987 Cost of sales 2,761,731 453,293 350,579 Gross profit 1,152,125 240,099 191,408 Selling, general and administrative expense 895,452 162,761 133,507 Charter acquisition-related expense 43,617 31,052 — Restructuring and other related charges 60,060 9,680 10,323 Asbestos coverage litigation expense 12,987 10,700 13,206 Operating income 140,009 25,906 34,372 Interest expense 91,570 5,919 6,684 Income before income taxes 48,439 19,987 27,688 Provision for income taxes 90,703 15,432 11,473 Net (loss) income (42,264 ) 4,555 16,215 Less: income attributable to noncontrolling interest, net of taxes 22,138 — — Net (loss) income attributable to Colfax Corporation (64,402 ) 4,555 16,215 Dividends on preferred stock 18,951 — — Net (loss) income available to Colfax Corporation common shareholders $ (83,353 ) $ 4,555 $ 16,215 Net (loss) income per share – basic and diluted $ (0.92 ) $ 0.10 $ 0.37 Year Ended December 31, 2014 2013 2012 Net sales $ 4,624,476 $ 4,207,209 $ 3,913,856 Cost of sales 3,145,631 2,900,987 2,761,731 Gross profit 1,478,845 1,306,222 1,152,125 Selling, general and administrative expense 1,011,171 864,328 908,439 Charter acquisition-related expense — — 43,617 Restructuring and other related charges 58,121 35,502 60,060 Operating income 409,553 406,392 140,009 Interest expense 51,305 103,597 91,570 Income before income taxes 358,248 302,795 48,439 (Benefit from) provision for income taxes (62,025 ) 93,652 90,703 Net income (loss) 420,273 209,143 (42,264 ) Less: income attributable to noncontrolling interest, net of taxes 28,175 30,515 22,138 Net income (loss) attributable to Colfax Corporation 392,098 178,628 (64,402 ) Dividends on preferred stock 2,348 20,396 18,951 Preferred stock conversion inducement payment 19,565 — — Net income (loss) available to Colfax Corporation common shareholders $ 370,185 $ 158,232 $ (83,353 ) Net income (loss) per share- basic $ 3.06 $ 1.56 $ (0.92 ) Net income (loss) per share- diluted $ 3.02 $ 1.54 $ (0.92 ) 46LOSS(In thousands) Year Ended December 31, 2012 2011 2010 Net (loss) income attributable to Colfax Corporation $ (64,402 ) $ 4,555 $ 16,215 Other comprehensive income (loss): Foreign currency translation, net of tax of $(304), $(18), and $(1,224) 117,703 (11,465 ) (8,260 ) Unrealized loss on hedging activities, net of tax of $632, $0, and $0 (4,008 ) (161 ) (1,201 ) Changes in unrecognized pension and other post-retirement benefits cost, net of tax of $(5,835), $(654), and $(1,717) (91,495 ) (34,291 ) (18,690 ) Amounts reclassified to net (loss) income: Realized loss on hedging activities, net of tax of $0, $0, and $0 471 1,479 2,447 Pension and other post-retirement benefit cost, net of tax of $256, $114, and $89 8,557 4,160 4,986 Other comprehensive income (loss) 31,228 (40,278 ) (20,718 ) Less: other comprehensive income attributable to noncontrolling interest, net of tax of $0, $0 and $0 4,385 — — Other comprehensive income (loss) attributable to Colfax Corporation 26,843 (40,278 ) (20,718 ) Comprehensive loss attributable to Colfax Corporation common shareholders $ (37,559 ) $ (35,723 ) $ (4,503 ) Year Ended December 31, 2014 2013 2012 Net income (loss) $ 420,273 $ 209,143 $ (42,264 ) Other comprehensive (loss) income: Foreign currency translation, net of tax of $1,885, $(3,634) and $(304) (356,243 ) 6,210 117,703 Unrealized gain (loss) on hedging activities, net of tax of $4,141, $404 and $632 30,404 (10,404 ) (4,008 ) Changes in unrecognized pension and other post-retirement benefits cost, net of tax of $(20,117), $575 and $(5,835) (89,920 ) 77,071 (91,495 ) Changes in deferred tax related to pension and other postretirement benefit cost 1,934 — — Amounts reclassified from Accumulated other comprehensive loss: Realized gain on hedging activities, net of tax of $0, $0 and $0 — — 471 Net pension and other postretirement benefit cost, net of tax of $2,063, $715 and $256 5,282 10,022 8,557 Other comprehensive (loss) income (408,543 ) 82,899 31,228 Comprehensive income (loss) 11,730 292,042 (11,036 ) Less: comprehensive income attributable to noncontrolling interest 15,781 13,039 26,523 Comprehensive (loss) income attributable to Colfax Corporation $ (4,051 ) $ 279,003 $ (37,559 ) 47(Indata) December 31, 2012 2011 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 482,449 $ 75,108 Trade receivables, less allowance for doubtful accounts of $16,464 and $2,578 873,382 117,475 Inventories, net 493,649 56,136 Other current assets 281,302 102,489 Total current assets 2,130,782 351,208 Property, plant and equipment, net 688,570 90,939 Goodwill 2,074,230 204,844 Intangible assets, net 779,049 41,029 Other assets 457,096 400,523 Total assets $ 6,129,727 $ 1,088,543 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 34,799 $ 10,000 Accounts payable 699,626 54,035 Accrued liabilities 441,033 176,007 Total current liabilities 1,175,458 240,042 Long-term debt, less current portion 1,693,512 101,518 Other liabilities 1,104,471 557,708 Total liabilities 3,973,441 899,268 Equity: Preferred stock, $0.001 par value; 20,000,000 and 10,000,000 shares authorized; 13,877,552 and none issued and outstanding 14 — Common stock, $0.001 par value; 400,000,000 and 200,000,000 shares authorized; 94,067,418 and 43,697,570 issued and outstanding 94 44 Additional paid-in capital 2,197,694 415,527 Accumulated deficit (138,856 ) (55,503 ) Accumulated other comprehensive loss (146,594 ) (170,793 ) Total Colfax Corporation equity 1,912,352 189,275 Noncontrolling interest 243,934 — Total equity 2,156,286 189,275 Total liabilities and equity $ 6,129,727 $ 1,088,543 December 31, 2014 2013 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 305,448 $ 311,301 Trade receivables, less allowance for doubtful accounts of $27,256 and $31,282 1,029,150 1,023,732 Inventories, net 442,732 443,536 Other current assets 322,133 353,589 Total current assets 2,099,463 2,132,158 Property, plant and equipment, net 729,728 754,261 Goodwill 2,872,903 2,409,699 Intangible assets, net 1,043,583 832,553 Other assets 499,421 472,513 Total assets $ 7,245,098 $ 6,601,184 LIABILITIES AND EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 9,855 $ 29,449 Accounts payable 780,287 862,125 Accrued liabilities 495,393 492,694 Total current liabilities 1,285,535 1,384,268 Long-term debt, less current portion 1,529,389 1,457,642 Other liabilities 1,077,730 1,018,151 Total liabilities 3,892,654 3,860,061 Equity: Preferred stock, $0.001 par value; 20,000,000 shares authorized; none and 13,877,552 issued and outstanding — 14 Common stock, $0.001 par value; 400,000,000 shares authorized; 123,730,578 and 101,921,613 issued and outstanding 124 102 Additional paid-in capital 3,200,832 2,541,005 Retained earnings 389,561 19,376 Accumulated other comprehensive loss (443,691 ) (46,600 ) Total Colfax Corporation equity 3,146,826 2,513,897 Noncontrolling interest 205,618 227,226 Total equity 3,352,444 2,741,123 Total liabilities and equity $ 7,245,098 $ 6,601,184 48(Innoted) Common Stock Preferred Stock Additional
Paid-In Accumulated Accumulated
Other
Comprehensive Noncontrolling Shares $ Amount Shares $ Amount Capital Deficit Loss Interest Total Balance at January 1, 2010 43,413,553 $ 43 — $ — $ 402,852 $ (76,273 ) $ (109,797 ) $ — $ 216,825 Net (loss) income — — — — — 16,215 — — 16,215 Other comprehensive income (loss) — — — — — — (20,718 ) — (20,718 ) Common stock-based award activity — — — — 4,049 — — — 4,049 Balance at December 31, 2010 43,413,553 $ 43 — $ — $ 406,901 $ (60,058 ) $ (130,515 ) $ — $ 216,371 Net (loss) income — — — — — 4,555 — — 4,555 Other comprehensive income (loss) — — — — — — (40,278 ) — (40,278 ) Common stock-based award activity 284,017 1 — — 8,626 — — — 8,627 Balance at December 31, 2011 43,697,570 $ 44 — $ — $ 415,527 $ (55,503 ) $ (170,793 ) $ — $ 189,275 Net (loss) income — — — — — (64,402 ) — 22,138 (42,264 ) Acquisitions — — — — — — — 259,229 259,229 Sale of stock of entity previously controlled — — — — — — — (4,414 ) (4,414 ) Distributions to noncontrolling owners — — — — — — — (9,721 ) (9,721 ) ESAB India repurchase of additional noncontrolling interest — — — — 1,035 — (2,644 ) (27,683 ) (29,292 ) Preferred stock dividend — — — — — (18,951 ) — — (18,951 ) Other comprehensive income, net of tax of $5.3 million — — — — — — 26,843 4,385 31,228 Common stock issuances, net of costs of $20.2 million 49,917,786 50 — — 1,432,921 — — — 1,432,971 Preferred stock issuance, net of costs of $7.0 million — — 13,877,552 14 332,958 — — — 332,972 Common stock-based award activity 452,062 — — — 15,253 — — — 15,253 Balance at December 31, 2012 94,067,418 $ 94 13,877,552 $ 14 $ 2,197,694 $ (138,856 ) $ (146,594 ) $ 243,934 $ 2,156,286 Common Stock Preferred Stock Additional Paid-In Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total Shares $ Amount Shares $ Amount Balance at January 1, 2012 43,697,570 $ 44 — $ — $ 415,527 $ (55,503 ) $ (170,793 ) $ — $ 189,275 Net (loss) income — — — — — (64,402 ) — 22,138 (42,264 ) Acquisitions — — — — — — — 259,229 259,229 Sale of stock of entity previously controlled — — — — — — — (4,414 ) (4,414 ) Distributions to noncontrolling owners — — — — — — — (9,721 ) (9,721 ) Acquisition of shares held by noncontrolling interest — — — — 1,035 — (2,644 ) (27,683 ) (29,292 ) Preferred stock dividend — — — — — (18,951 ) — — (18,951 ) Other comprehensive income, net of tax of $(5.3) million — — — — — — 26,843 4,385 31,228 Common stock issuances, net of costs of $20.2 million 49,917,786 50 — — 1,432,921 — — — 1,432,971 Preferred stock issuances, net of costs of $7.0 million — — 13,877,552 14 332,958 — — — 332,972 Common stock-based award activity 452,062 — — — 15,253 — — — 15,253 Balance at December 31, 2012 94,067,418 94 13,877,552 14 2,197,694 (138,856 ) (146,594 ) 243,934 2,156,286 Net income — — — — — 178,628 — 30,515 209,143 Distributions to noncontrolling owners — — — — — — — (14,260 ) (14,260 ) Acquisition of shares held by noncontrolling interest — — — — 955 — (381 ) (15,487 ) (14,913 ) Preferred stock dividend — — — — — (20,396 ) — — (20,396 ) Other comprehensive income (loss), net of tax of $(1.9) million — — — — — — 100,375 (17,476 ) 82,899 Common stock issuances, net of costs of $12.0 million 7,500,000 8 — — 319,890 — — — 319,898 Common stock-based award activity 265,995 — — — 17,589 — — — 17,589 Contribution to defined benefit pension plan 88,200 — — — 4,877 — — — 4,877 Balance at December 31, 2013 101,921,613 102 13,877,552 14 2,541,005 19,376 (46,600 ) 227,226 2,741,123 Net income — — — — — 392,098 — 28,175 420,273 Distributions to noncontrolling owners — — — — — — — (12,007 ) (12,007 ) Acquisition of shares held by noncontrolling interest — — — — 15,986 — (942 ) (25,382 ) (10,338 ) Preferred stock dividend — — — — — (2,348 ) — — (2,348 ) Preferred stock conversion 12,173,291 12 (13,877,552 ) (14 ) 2 (19,565 ) — — (19,565 ) Other comprehensive loss, net of tax of $(13.8) million and $(0.2) million — — — — — — (396,149 ) (12,394 ) (408,543 ) Common stock issuance, net of costs of $22.1 million 9,200,000 9 — — 610,354 — — — 610,363 Common stock-based award activity 252,674 — — — 21,636 — — — 21,636 Contribution to defined benefit pension plan 183,000 1 — — 11,849 — — — 11,850 Balance at December 31, 2014 123,730,578 $ 124 — $ — $ 3,200,832 $ 389,561 $ (443,691 ) $ 205,618 $ 3,352,444 49(In thousands) Year Ended December 31, 2012 2011 2010 Cash flows from operating activities: Net (loss) income $ (42,264 ) $ 4,555 $ 16,215 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation, amortization and fixed asset impairment charges 200,400 23,333 16,807 Stock-based compensation expense 9,373 4,908 3,137 Unrealized loss on acquisition-related foreign currency derivatives — 21,146 — Deferred income tax expense (benefit) 7,222 (1,722 ) (296 ) Changes in operating assets and liabilities, net of acquisitions: Trade receivables, net (37,338 ) (5,972 ) (6,060 ) Inventories, net 26,694 10,844 11,598 Accounts payable 88,927 (7,298 ) 12,615 Changes in other operating assets and liabilities (88,715 ) 7,359 7,949 Net cash provided by operating activities 164,299 57,153 61,965 Cash flows from investing activities: Purchase of fixed assets (83,586 ) (14,786 ) (12,527 ) Acquisitions, net of cash received (1,859,645 ) (56,346 ) (27,960 ) Proceeds from sale of stock of entity previously controlled 4,730 — — Cash contribution to unconsolidated entity (2,873 ) — — Proceeds from sale of fixed assets 399 1,162 74 Net cash used in investing activities (1,940,975 ) (69,970 ) (40,413 ) Cash flows from financing activities: Borrowings under term credit facility 1,731,523 — — Payments under term credit facility (531,415 ) (10,000 ) (8,750 ) Proceeds from borrowings on revolving credit facilities 13,149 141,203 5,500 Repayments of borrowings on revolving credit facilities (53,414 ) (102,180 ) (5,500 ) Payments of deferred loan costs (9,887 ) — — Proceeds from the issuance of common stock, net 756,762 3,719 912 Proceeds from the issuance of preferred stock, net 332,969 — — ESAB India repurchase of additional noncontrolling interest (29,292 ) — — Payments of dividends on preferred stock (17,446 ) — — Payments on capital leases — — (205 ) Net cash provided by (used in) financing activities 2,192,949 32,742 (8,043 ) Effect of foreign exchange rates on Cash and cash equivalents (8,932 ) (5,359 ) (2,930 ) Increase in Cash and cash equivalents 407,341 14,566 10,579 Cash and cash equivalents, beginning of period 75,108 60,542 49,963 Cash and cash equivalents, end of period $ 482,449 $ 75,108 $ 60,542 Supplemental Disclosure of Cash Flow Information: Interest payments $ 79,857 $ 5,209 $ 6,105 Income tax payments, net 70,677 16,731 5,819 Year Ended December 31, 2014 2013 2012 Cash flows from operating activities: Net income (loss) $ 420,273 $ 209,143 $ (42,264 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, amortization and impairment charges 174,724 119,258 183,403 Stock-based compensation expense 17,580 13,334 9,373 Non-cash interest expense 9,094 44,377 16,997 Gain on revaluation of Sicelub investment — (13,784 ) — Deferred income tax (benefit) provision (139,488 ) 9,946 7,222 Changes in operating assets and liabilities, net of acquisitions: Trade receivables, net (19,916 ) (98,912 ) (37,338 ) Inventories, net 57,847 79,987 26,694 Accounts payable (54,666 ) 128,889 88,927 Changes in other operating assets and liabilities (79,690 ) (130,069 ) (78,994 ) Net cash provided by operating activities 385,758 362,169 174,020 Cash flows from investing activities: Purchases of fixed assets, net (81,343 ) (71,482 ) (83,187 ) Acquisitions, net of cash received (948,800 ) (372,476 ) (1,859,645 ) Loans to non-trade creditors — (31,012 ) — Other, net — — 1,857 Net cash used in investing activities (1,030,143 ) (474,970 ) (1,940,975 ) Cash flows from financing activities: Borrowings under term credit facility 150,000 50,861 1,731,523 Payments under term credit facility (15,542 ) (679,755 ) (531,415 ) Proceeds from borrowings on revolving credit facilities and other 1,370,626 648,000 13,149 Repayments of borrowings on revolving credit facilities and other (1,414,146 ) (328,133 ) (53,414 ) Proceeds from issuance of common stock, net 613,927 324,153 756,762 Proceeds from issuance of preferred stock, net — — 332,969 Acquisition of shares held by noncontrolling interest (10,338 ) (14,913 ) (29,292 ) Preferred stock conversion inducement payment (19,565 ) — — Payments of dividend on preferred stock (3,853 ) (20,396 ) (17,446 ) Other (21,060 ) (24,870 ) (19,608 ) Net cash provided by (used in) financing activities 650,049 (45,053 ) 2,183,228 Effect of foreign exchange rates on Cash and cash equivalents (11,517 ) (13,294 ) (8,932 ) (Decrease) increase in Cash and cash equivalents (5,853 ) (171,148 ) 407,341 Cash and cash equivalents, beginning of period 311,301 482,449 75,108 Cash and cash equivalents, end of period $ 305,448 $ 311,301 $ 482,449 Supplemental Disclosure of Cash Flow Information: Interest payments $ 42,041 $ 58,970 $ 79,857 Income tax payments, net 82,694 93,856 70,677 With the closing of the acquisition of Charter International plc (“Charter”) by Colfax (the “Charter Acquisition”) during2012, Colfax has transformed from a fluid-handling business into a multi-platform enterprise with a global footprint.2014, adjustments were made retrospectively to provisional amounts recorded as of December 31, 2013, primarily due to the Company’s valuation of specific items related to acquisitions that occurred in the three months ended December 31, 2013. See Note 4, “Acquisitions” for additional information regarding the Charter Acquisition.the Charter Acquisition werea business combination are recognized in the opening balance sheet at fair value. See Note 4, “Acquisitions” for additional information regarding the assets acquired in the Charter Acquisition.andor determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectabilitycollectibility is reasonably assured. Product delivery occurs when title and risk of loss transfer to the customer. The Company’s shipping terms vary based on the contract. If any significant obligations to the customer with respect to such sale remain to be fulfilled following shipments, typically involving obligations relating to installation and acceptance by the buyer, revenue recognition is deferred until such obligations have been fulfilled. Any customer allowances and discounts are recorded as a reduction in reported revenues at the time of sale because these allowances reflect a reduction in the sales price for the products sold. These allowances and discounts are estimated based on historical experience and known trends. Revenue related to service agreements is recognized as revenue over the term of the agreement. Progress billings are generally shown as a reduction of Inventories, net unless such billings are in excess of accumulated costs, in which case such balances are included in Accrued liabilities in the Consolidated Balance Sheets.51COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)construction projectslong-term contracts using the “percentage of completion method” in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method, contract revenues are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Any recognized revenues that have not been billed to a customer are recorded as a component of Trade receivables and any billings of customers in excess of recognized revenues are recorded as a component of Accounts payable. As of December 31, 2012,2014, there were $97.1$190.7 million of revenues in excess of billings and $178.3$175.3 million of billings in excess of revenues on constructionlong-term contracts in the Consolidated Balance Sheet.17,16, “Segment Information” for sales by major product group.Customers may also request that the Company store products on their behalf until the product is needed. Under these arrangements, revenue is recognized when title and risk of loss have passed to the customer.$19.4$43.0 million, $5.7$27.4 million and $6.2$19.4 million for the years ended December 31, 2012, 20112014, 2013 and 2010, respectively, are expensed as incurred and are included in Selling, general and administrative expense in the Consolidated Statement of Operations.Advertising CostsAdvertising costs of $15.7 million, $1.2 million, and $0.5 million for the years ended December 31, 2012, 2011 and 2010, respectively, are expensed as incurred and are included in Selling, general and administrative expense in the Consolidated Statements of Operations.CostFor gas-handling long-term contracts, cost is primarily determined using the first-in, first-out method.based upon actual cost. The Company periodically reviews its quantities of inventories on hand and compares these amounts to the expected usage of each particular product. The Company records as a charge to Cost of sales any amounts required to reduce the carrying value of inventories to net realizable value.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Property,property, plant and equipment is recorded on a straight-line basis over estimated useful lives. Assets recorded under capital leases are amortized over the shorter of their estimated useful lives or the lease terms, which range from three to 15 years. Repair and maintenance expenditures are expensed as incurred unless the repair extends the useful life of the asset.October 1, 2011 and October 2, 2010 indicatedresulted in no impairment charges, except for $0.2 million of an impairment loss related to be present.threetwo to 20 years.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)yearyears ended December 31, 2014, 2013 and 2012, recorded inrespectively, as a component of Restructuring and other related charges in the Consolidated StatementStatements of Operations and $0.1 millionOperations.20112014 to evaluate certain long-lived intangible assets related to a specific operation within the gas- and fluid-handling segment due to the decision to substantially reduce its operations. The analysis determined the long-lived intangible assets, primarily consisting of acquired customer relationships and acquired technology, were no longer recoverable based upon projected undiscounted net cash flows. Further, as a result of management’s evaluation of projected cash flows related to another operation within the gas-and fluid-handling segment, an analysis was performed to evaluate the long-lived intangible assets related to that operation. The analysis determined certain long-lived intangible assets, primarily consisting of acquired customer relationships, were impaired. The impairment was calculated as the difference between the fair value of the remaining expected future cash flows to be generated from the asset group and its carrying value as of the measurement date. The Company recorded $10.5 million of intangible asset impairment losses related to these two operations as a component of Selling, general and administrative expense in the Consolidated Statement of Operations. No such impairments were recorded duringOperations for the year ended December 31, 2010. of America (“U.S.”) dollars on a periodic basis. The Company’s Deutsche Bank Credit Agreement (as defined and further discussed in Note 10, “Debt”) includes a €157.6€147.9 million term A-3 facility and a €98.8 million term A-4 facility, which hashave been designated as a net investment hedgehedges in order to mitigate a portion of this risk.Self-InsuranceThe Company is self-insured for a portion of its product liability, workers’ compensation, general liability, medical coverage and certain other liability exposures. The Company accrues loss reserves up to the retention amounts when such amounts are reasonably estimable and probable. The Company’s reserves, included in Other accrued liabilities in the Consolidated Balance Sheets, related to self-insurance are as follows: December 31, 2012 2011 (In thousands) Medical insurance $ 383 $ 1,086 Workers’ compensation 260 246 Total self-insurance reserves $ 643 $ 1,332 54COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) accrued liabilities in the Company’s Consolidated Financial Statements, consisted of the following: Year Ended December 31, 2012 2011 2010 (In thousands) Warranty liability, beginning of period $ 2,987 $ 2,963 $ 2,852 Accrued warranty expense 10,468 2,491 2,079 Changes in estimates related to pre-existing warranties 9 (368 ) (589 ) Cost of warranty service work performed (23,457 ) (2,479 ) (1,264 ) Acquisitions 51,367 477 — Foreign exchange translation effect (937 ) (97 ) (115 ) Warranty liability, end of period $ 40,437 $ 2,987 $ 2,963 Year Ended December 31, 2014 2013 (In thousands) Warranty liability, beginning of period $ 65,512 $ 40,437 Accrued warranty expense 23,019 25,013 Changes in estimates related to pre-existing warranties (9,966 ) (638 ) Cost of warranty service work performed (27,389 ) (21,082 ) 4,488 22,609 Foreign exchange translation effect (4,529 ) (827 ) Warranty liability, end of period $ 51,135 $ 65,512 Deferreddeferred income tax assets and liabilities of a change in tax rates is generally recognized in Provision(Benefit from) provision for income taxes in the period that includes the enactment date.Deferreddeferred income taxestax assets will not be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the expected level of future taxable income and available tax planning strategies. Any changes in judgment about the valuation allowance are recorded through Provision(Benefit from) provision for income taxes and are based on changes in facts and circumstances regarding realizability of deferred tax assets.Provision(Benefit from) provision for income taxes in the Consolidated Statements of Operations.Revenues and expenses are translated at average rates of exchange in effect during the year. The amounts recorded in each year in Foreign currency translation are net of income taxes to the extent the underlying equity balances in the entities are not deemed to be permanently reinvested.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)netCompany considers the Venezuelan bolivar fuerte (“bolivar”) a highly inflationary currency. Therefore, financial statements of the Company’s Venezuelan operations are remeasured into their parents’ reporting currency. During the year ended December 31, 2013, Venezuela devalued its currency to an official rate of 6.3 bolivar to the U.S. dollar, representing an approximate 32% devaluation of its currency relative to the U.S. dollar. In February 2014, the Venezuelan government introduced an additional auction-based foreign exchange system (“SICAD II”) which began operating on March 24, 2014. As there are multiple legal mechanisms in Venezuela to exchange currency, transaction (loss) gain was $(1.2) million, $0.2 million,the Company determined the SICAD II to be the most appropriate rate with which to remeasure the Company’s Venezuelan operations. The adoption of the SICAD II resulted in an 87% devaluation relative to the U.S. dollar from the previously used official rate of 6.3 bolivar to the U.S. dollar. Exchange gains and $(0.4) millionlosses from the re-measurement of monetary assets and liabilities are reflected in Selling, general and administrative expense in the Consolidated Statement of Operations. Future impacts to earnings of applying highly inflationary accounting for Venezuela on the Company’s Consolidated Financial Statements will be dependent upon movements in the applicable exchange rates between the bolivar and the parents’ reporting currency and the amount of monetary assets and liabilities included in the Company’s Venezuelan operations’ balance sheets. As of and for the years ended December 31, 2014 and 2013, the Company's Venezuelan operations represented less than 1% of the Company's Total assets and Net sales. The bolivar-denominated monetary net asset position, primarily related to cash and cash equivalents, was $0.7 million and $5.5 million in the Consolidated Balance Sheets as of December 31, 2014 and 2013, respectively. The change in exchange rates resulted in foreign currency transaction losses of $6.3 million and $2.9 million recognized in Selling, general and administrative expense in the Consolidated Statements of Operations for the years ended December 31, 2014 and 2013, respectively.2011the net foreign currency transaction loss recognized in Selling, general and 2010, respectively.$11.4$18.5 million and $4.3$18.2 million, respectively, were included in Other assets in the Consolidated Balance Sheets as of December 31, 20122014 and 20112013, net of $2.9$8.6 million and $2.5$4.7 million, respectively, of accumulated amortization. During the years ended December 31, 2014, 2013 and 2012, the Company deferred $0.3 million, $7.1 million and $9.9 million, respectively, of debt issuance costs. Further, the carrying value of Long-term debt is reduced by an original issue discount, which is accreted to Interest expense using the effective interest method over the term of the related obligation. See Note 10, “Debt” for additional discussion regarding the Company’s borrowing arrangements.Given the impact of the Charter Acquisition on the Consolidated Financial Statements, certain2012,2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, “Intangibles—Goodwill and Other”2013-11, “Income Taxes (Topic 740)” (“ASU No. 2012-02”2013-11”). ASU No. 2012-02 was2013-11 is intended to reduceclarify the cost and complexity of performing an impairment test for indefinite-lived intangible assets by permitting an entity first to assess qualitative factors to determine whether it is more likely than not that the fair valuepresentation of an indefinite-lived intangibleunrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except in certain circumstances. To the extent a carryforward is less than its carrying amount. The Company adopted ASU No. 2012-02not available at the reporting date or the tax law of the applicable jurisdiction does not require theconjunction with its September 29, 2012 impairment analysis.the financial statements as a liability. The adoption of ASU No. 2012-022013-11 during the year ended December 31, 2014 did not have ana material impact on the Company’s Consolidated Balance Sheet. As of December 31, 2014, $30.5 million of unrecognized tax benefit was presented as a reduction to the Company’s deferred tax asset, which is included in Other assets in the Consolidated Balance Sheet. As ASU No. 2013-11 was not adopted retrospectively, $9.2 million of unrecognized tax benefits are included in Other liabilities in the Consolidated Balance Sheet as of December 31, 2013. Acquisition for a total purchase price of approximately $2.6 billion. Under the terms$2.6 billion, comprised of the Charter Acquisition, Charter shareholders received 730 pence in$1.9 billion of cash consideration and 0.1241 newly issued shares$0.7 billion fair value of Colfax Common stock in exchange for each shareon the date of Charter’s ordinary stock.acquisition. Charter is a global industrial manufacturing company focused on welding, cutting and automation and air and gas handling. The acquisition is expected to:has:enhance•enable Colfax to benefit from strong secular growth drivers, with a balance of short- and long-cycle businesses; andprovideenabled Colfax to benefit from strong secular growth drivers, with a balance of short- and long-cycle businesses; andSee Note 10, “Debt” and Note 11, “Equity” for a discussion of the respective financing components of the Charter Acquisition.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)In connection with the Charter Acquisition, the Company incurred advisory, legal, valuation and other professional service fees, termination payments to Charter executives and realized losses on acquisition-related foreign exchange derivatives, which comprised Charter Acquisition-related expense in the Consolidated Statements of Operations. See Note 14, “Financial Instruments and Fair Value Measurements” for additional information regarding the Company’s derivative instruments. The following table summarizes the Company’s best estimate of the aggregate fair value of the assets acquired and liabilities assumed at the date of acquisition. These amounts are determined based upon certain valuations and studies that have yet to be finalized, and accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed. Substantially all of the Goodwill recognized is not expected to be deductible for income tax purposes. January 13, 2012 (In thousands) Trade receivables $ 683,976 Inventories 449,906 Property, plant and equipment 562,129 Goodwill 1,625,635 Intangible assets 715,643 Accounts payable (378,114 ) Debt (399,466 ) Other assets and liabilities, net (466,457 ) 2,793,252 Less: net assets attributable to noncontrolling interest (241,201 ) Net consideration $ 2,552,051 The following table summarizes Intangible assets acquired, excluding Goodwill, as of January 13, 2012: Intangible Weighted-Average Asset Amortization (In thousands) Period (Years) Customer relationships $ 215,310 7.10 Acquired technology 77,485 10.33 Backlog 54,805 1.00 Trademarks 4,415 5.00 Total amortizable intangible assets $ 352,015 6.84 Trade names – indefinite life $ 363,628 n/a SoldexOn October 31, 2012, the Company completed the acquisition of approximately 91% of the outstanding common and investment shares of Soldex S.A. (“Soldex”) for approximately $186.1 million (the “Soldex Acquisition”). Soldex is organized under the laws of Peru and complements the Company’s existing fabrication technology segment by supplying welding products from its plants in Colombia and Peru. The Soldex Acquisition was accounted for using the acquisition method of accounting and accordingly, the Consolidated Financial Statements include the financial position and results of operations from the date of acquisition.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The following table summarizes the Company’s best estimate of the aggregate fair value of the assets acquired and liabilities assumed at the date of acquisition. These amounts are determined based upon certain valuations and studies that have yet to be finalized, and accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed. Substantially all of the Goodwill recognized is not expected to be deductible for income tax purposes. October 31, 2012 (In thousands) Trade receivables $ 22,848 Inventories 32,985 Property, plant and equipment 28,921 Goodwill 115,571 Intangible assets 65,325 Accounts payable (6,682 ) Debt (36,734 ) Other assets and liabilities, net (33,654 ) 188,580 Less: net assets attributable to noncontrolling interest (18,028 ) Net consideration $ 170,552 The following table summarizes Intangible assets acquired, excluding Goodwill, as of October 31, 2012: Intangible Weighted-Average Asset Amortization (In thousands) Period (Years) Customer relationships $ 51,673 20.00 Acquired technology 3,261 10.00 Total amortizable intangible assets $ 54,934 19.41 Trade names – indefinite life $ 10,391 n/a December 6, 2011,July 1, 2014, the Company completed the $9.5 million acquisition of the remaining ownership of ESAB-SVEL (“Svel”), which resulted in an increase in the Company’s ownership from 51% to 100% and was accounted for as an equity transaction, as the Company increased its controlling interest. Intangible Asset
(In thousands) Weighted-Average Amortization Period (Years) Customer relationships $ 291,800 12.83 Acquired technology 18,600 10.00 Other intangible assets 26,000 9.28 Total amortizable intangible assets $ 336,400 12.40 Trade names – indefinite life $ 53,300 n/a COT-Puritech, Inc.approximately 91% of the outstanding common and investment shares of Soldex S.A. (“COT-Puritech”Soldex”), a domestic supplier for approximately $187.2 million (the “Soldex Acquisition”). Soldex is organized under the laws of oil flushingPeru and remediation services to power generation plants, refinery and petrochemical operators and other industrial manufacturing sites, with primary operations based in Canton, Ohio, for a total purchase price, net of cash acquired, of $39.4 million which includes the fair value of estimated additional contingent cash payments of $4.3 million at the acquisition date. The additional contingent cash payments will be paid over two years subject to the achievement of certain performance goals. See Note 14, “Financial Instruments and Fair Value Measurements” for discussion regardingcomplements the Company’s liability for contingent payment associated with the acquisition of COT-Puritech, which is includedexisting fabrication technology segment by supplying welding products from its plants in the total purchase price. As a result of this acquisition, the Company has expanded its lubrication services offerings in the oilColombia and gas and power generation end markets to include oil flushing and remediation services.February 14, 2011,August 5, 2013, the Company completed a acquisitionCompany’s ownership of Rosscor Holding, B.V. (“Rosscor”)the subsidiary from approximately 91% to 99% and was accounted for $22.3 million, net of cash acquired. Rosscor is a supplier of multiphase pumping technology and certain other highly engineered fluid-handling systems, with its primary operations based in Hengelo, The Netherlands. As a result of this acquisition,as an equity transaction, as the Company has expandedincreased its product offerings in the oil and gas end market to include multiphase pump systems that many of its customers already purchase.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)On August 19, 2010, the Company completed the acquisition of Baric Group (“Baric”) for $27.0 million, net of cash acquired. Additionally, during the year ended December 31, 2010, a final working capital settlement of $0.2 million was paid pursuant to terms of the Baric purchase agreements. Baric is a supplier of highly engineered fluid-handling systems primarily for lubrication applications, with its primary operations based in Blyth, United Kingdom.Fabrication TechnologyAcquisition.Unaudited Pro Forma Financial Informationunaudited proforma financialtable summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of the acquisition for all acquisitions accounted for under the acquisition method of accounting and consummated during the years ended December 31, 2014, 2013 and 2012. 2014 2013 2012 (In thousands) Trade receivables $ 76,678 $ 74,387 $ 714,486 Inventories 107,785 49,871 487,835 Property, plant and equipment 59,281 92,247 595,961 Goodwill 612,746 284,294 1,793,394 Intangible assets 389,700 104,272 794,333 Accounts payable (34,271 ) (70,122 ) (391,131 ) Debt — (10,942 ) (437,564 ) Other assets and liabilities, net (263,119 ) (99,205 ) (746,719 ) 948,800 424,802 2,810,595 Less: net assets attributable to noncontrolling interest — — (259,329 ) Consideration, net of cash acquired $ 948,800 $ 424,802 $ 2,551,266 presents Colfax’s consolidated financialobtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. The aggregate adjustments for the year ended December 31, 2014 of $25.4 million increased the Goodwill balance and are summarized below. Acquisition Date Fair Values
(Provisional) Measurement Period Acquisition Date Fair Values
(Final) 2013 Adjustments 2013 (In thousands) Trade receivables $ 80,258 $ (5,871 ) $ 74,387 Inventories 53,551 (3,680 ) 49,871 Property, plant and equipment 94,258 (2,011 ) 92,247 Goodwill 258,901 25,393 284,294 Intangible assets 104,272 — 104,272 Accounts payable (68,308 ) (1,814 ) (70,122 ) Debt (10,942 ) — (10,942 ) Other assets and liabilities, net (87,188 ) (12,017 ) (99,205 ) Consideration, net of cash acquired $ 424,802 $ — $ 424,802 Charter Soldex Other Total 2012 (In thousands) Trade receivables $ 683,976 $ 22,848 $ 7,662 $ 714,486 Inventories 449,906 32,985 4,944 487,835 Property, plant and equipment 562,129 28,921 4,911 595,961 Goodwill 1,649,159 116,696 27,539 1,793,394 Intangible assets 715,643 65,325 13,365 794,333 Accounts payable (378,114 ) (6,682 ) (6,335 ) (391,131 ) Debt (399,466 ) (36,734 ) (1,364 ) (437,564 ) Other assets and liabilities, net (706,052 ) (33,654 ) (7,013 ) (746,719 ) 2,577,181 189,705 43,709 2,810,595 Less: net assets attributable to noncontrolling interest (241,201 ) (18,128 ) — (259,329 ) Consideration, net of cash acquired $ 2,335,980 $ 171,577 $ 43,709 $ 2,551,266 assumingregarding the Company’s derivative instruments. Excluding Charter Acquisition-related expenses, the Company incurred advisory, legal, valuation and other professional service fees of $2.7 million, $4.3 million and $3.1 million, during the years ended December 31, 2014, 2013 and 2012, respectively, in connection with completed acquisitions which are included in Selling, general and administrative expense in the Consolidated Statements of Operations.had taken place on January 1, 2011. These amounts are presented in accordance with GAAP, consistent with the Company’s accounting policies. Year Ended December 31, 2012 2011 (Unaudited, in thousands) Net sales $ 4,096,401 $ 4,027,796 Net income (loss) available to Colfax common shareholders(1) 88,212 (116,862 ) __________(1) Proforma netrespectively. The Net loss availableattributable to Colfax Corporation common shareholders for the year ended December 31, 2011 reflects the impact of certain expensesSoldex included in the Consolidated Statements of Operations for the year ended December 31, 2012 but excluded fromwas $1.7 million. Due to the calculationrefinancing of proforma net income for that period. These expenses include increased acquisition-related amortization expensethe Company's borrowing arrangements, the restructuring of $79.9 million, $43.6 millionthe Corporate function of Charter acquisition-related expense,both entities into a single corporate office and a $50.3 million increasenumerous other shared resources given the scale of the Chartervaluation allowanceconsolidated income statement for the year ended December 31, 2012 related to the Company’s deferred tax assets in the U.S., discussed further in Note 6, “Income Taxes.” Income Per Share income per share available to Colfax Corporation common shareholders was computed as follows: Year Ended December 31, 2012 2011 2010 (In thousands, except share data) Net (loss) income available to Colfax Corporation common shareholders $ (83,353 ) $ 4,555 $ 16,215 Weighted-average shares of Common stock outstanding – basic 91,069,640 43,634,937 43,389,878 Net effect of potentially dilutive securities(1) — 633,173 277,347 Weighted-average shares of Common stock outstanding – diluted 91,069,640 44,268,110 43,667,225 Net (loss) income per share – basic and diluted $ (0.92 ) $ 0.10 $ 0.37 __________(1)Potentially dilutive securities consist of stock options and restricted stock units.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The Company calculates Year Ended December 31, 2014 2013 2012 (In thousands, except share data) Computation of Net income (loss) per share - basic: Net income (loss) available to Colfax Corporation common shareholders $ 370,185 $ 158,232 $ (83,353 ) — (3,740 ) — $ 370,185 $ 154,492 $ (83,353 ) Weighted-average shares of Common stock outstanding - basic 121,143,790 99,198,570 91,069,640 Net income (loss) per share - basic $ 3.06 $ 1.56 $ (0.92 ) Computation of Net income (loss) per share - diluted: Net income (loss) available to Colfax Corporation common shareholders $ 370,185 $ 158,232 $ (83,353 ) — (3,740 ) — $ 370,185 $ 154,492 $ (83,353 ) Weighted-average shares of Common stock outstanding - basic 121,143,790 99,198,570 91,069,640 Net effect of potentially dilutive securities - stock options and restricted stock units 1,522,502 1,167,885 — Weighted-average shares of Common stock outstanding - diluted 122,666,292 100,366,455 91,069,640 Net income (loss) per share - diluted $ 3.02 $ 1.54 $ (0.92 ) two-class method asCompany and BDT CF Acquisition Vehicle, LLC (the “BDT Investor”) amended the Certificate of Designations of Series A Perpetual Convertible Preferred Stock of Colfax Corporation to eliminate the right of the Series A Perpetual Convertible Preferred Stock to share proportionately in any dividends or distributions made in respect of the Company’s Common stock. On February 12, 2014, the Company entered into a Conversion Agreement with the BDT Investor pursuant to which the BDT Investor exercised its option to convert 13,877,552 shares of Series A Perpetual Convertible Preferred Stock into 12,173,291 shares of Common stock plus cash. The BDT Investor was the sole holder of all issued and outstanding shares of the Company’s Series A Perpetual Convertible Preferred Stock are considered participating securities. However, since there was a net lossStock. See Note 11, “Equity” for the year ended December 31, 2012 and losses are not allocated to the holdersfurther discussion of the Series A Perpetual Convertible Preferred Stock thereconversion. For periods from January 13, 2012 to April 23, 2013, Net income (loss) available to Colfax Corporation common shareholders was no impact ofallocated to participating securities, while any losses for those periods were not allocated to participating securities. Subsequent to April 23, 2013 and prior to February 12, 2014, the yearCompany’s Net income per share - dilutive was computed using the “if-converted” method. Under the “if-converted” method, Net income per share - dilutive was calculated under the assumption that the shares of Series A Perpetual Convertible Preferred Stock had been converted into shares of Common stock as of the beginning of the respective period. For the years ended December 31, 2012. 2014 and 2013, the weighted-average computation of the dilutive effect of potentially issuable shares of Common stock excluded 1.4 million and 12.2 million, respectively, of Common stock equivalents, as inclusion of such shares would be anti-dilutive.2012, 20112014, 2013 and 20102012 excludes approximately 2.80.8 million, 0.50.6 million and 1.32.8 million outstanding stock-based compensation awards, respectively, as their inclusion would be anti-dilutive.Provision(Benefit from) provision for income taxes consisted of the following: Year Ended December 31, 2012 2011 2010 (In thousands) (Loss) income before income taxes: Domestic operations $ (73,467 ) $ (27,645 ) $ (12,737 ) Foreign operations 121,906 47,632 40,425 $ 48,439 $ 19,987 $ 27,688 Provision for (benefit from) income taxes: Current: Federal $ — $ 182 $ (30 ) State 362 (94 ) 261 Foreign 83,119 17,066 11,538 83,481 17,154 11,769 Deferred: Domestic operations 50,340 — — Foreign operations (43,118 ) (1,722 ) (296 ) 7,222 (1,722 ) (296 ) $ 90,703 $ 15,432 $ 11,473 Year Ended December 31, 2014 2013 2012 (In thousands) Income (loss) before income taxes: Domestic operations $ 53,153 $ (7,899 ) $ (73,467 ) Foreign operations 305,095 310,694 121,906 $ 358,248 $ 302,795 $ 48,439 Provision for (benefit from) income taxes: Current: Federal $ 798 $ (464 ) $ — State 2,047 871 362 Foreign 74,618 83,299 83,119 77,463 83,706 83,481 Deferred: Domestic operations $ (127,114 ) $ 11,603 $ 50,340 Foreign operations (12,374 ) (1,657 ) (43,118 ) (139,488 ) 9,946 7,222 $ (62,025 ) $ 93,652 $ 90,703 Provision(Benefit from) provision for income taxes differs from the amount that would be computed by applying the U.S. federal statutory rate as follows: Year Ended December 31, 2012 2011 2010 (In thousands) Taxes calculated at the U.S. federal statutory rate $ 16,954 $ 6,995 $ 9,691 State taxes 362 (421 ) (5 ) Effect of international tax rates (24,070 ) (2,988 ) (2,522 ) Change in enacted international tax rates (12,305 ) — — Changes in valuation allowance and tax reserves 106,802 11,177 3,827 Other 2,960 669 482 Provision for income taxes $ 90,703 $ 15,432 $ 11,473 Year Ended December 31, 2014 2013 2012 (In thousands) Taxes calculated at the U.S. federal statutory rate $ 125,386 $ 105,978 $ 16,954 State taxes 2,323 871 362 Effect of tax rates on international operations (34,619 ) (42,972 ) (24,070 ) Change in enacted international tax rates (149 ) (5,217 ) (12,305 ) Changes in valuation allowance and tax reserves (156,071 ) 30,554 106,802 Other 1,105 4,438 2,960 (Benefit from) provision for income taxes $ (62,025 ) $ 93,652 $ 90,703 –- (Continued) December 31, 2012 2011 (In thousands) Deferred tax assets: Post-retirement benefit obligation $ 124,487 $ 39,172 Expenses currently not deductible 124,537 50,121 Net operating loss carryover 288,017 51,614 Tax credit carryover 11,706 5,882 Depreciation and amortization 17,010 — Other 7,228 1,358 Valuation allowance (372,039 ) (79,855 ) Deferred tax assets, net $ 200,946 $ 68,292 Deferred tax liabilities: Depreciation and amortization $ (286,173 ) $ (13,437 ) Post-retirement benefit obligation (4,843 ) — Inventory (4,400 ) — Other (29,620 ) (14,688 ) Total deferred tax liabilities $ (325,036 ) $ (28,125 ) Total deferred tax (liabilities) assets, net $ (124,090 ) $ 40,167 December 31, 2014 2013 (In thousands) Deferred tax assets: Post-retirement benefit obligation $ 93,080 $ 87,305 Expenses currently not deductible 116,648 155,488 Net operating loss carryforward 234,384 264,893 Tax credit carryforward 11,509 15,518 Depreciation and amortization 11,092 5,473 Other 22,291 6,596 Valuation allowance (159,686 ) (360,910 ) Deferred tax assets, net $ 329,318 $ 174,363 Deferred tax liabilities: Depreciation and amortization $ (360,602 ) $ (266,652 ) Post-retirement benefit obligation (12,122 ) (17,844 ) Inventory (16,696 ) (12,558 ) Other (193,618 ) (59,036 ) Total deferred tax liabilities $ (583,038 ) $ (356,090 ) Total deferred tax liabilities, net $ (253,720 ) $ (181,727 ) endingended December 31, 2012,2014, the valuation allowance increaseddecreased from $79.9$360.9 million to $372.0$159.7 million with $103.8a net decrease of $134.2 million recognized in Provision(Benefit from) provision for income taxes, $167.7 million recorded in the opening accountsa decrease of the Charter Acquisition and $20.6$66.0 million recognized in Other comprehensive income.(loss) income and reclassifications and a $2.8 million decrease related to changes in foreign currency rates, which were partially offset by an increase of $1.8 million attributable to the acquisition made during the year. As a result of the effect of the Victor Acquisition on expected future income in the United States, the realizability of certain deferred assets were reassessed. The reduction of valuation allowances associated with this reassessment resulted in a non-cash income tax benefit of $145.4 million for the year ended December 31, 2014. During the year ended December 31, 2011,2013, the valuation allowance increased by $27.0from $357.6 million to $360.9 million with $16.7an increase of $30.6 million and $10.3 million of the increase recognized in Provision(Benefit from) provision for income taxes and an increase of $4.9 million attributable to acquisitions made during the year, which were offset by a decrease of $27.2 million recognized in Other comprehensive (loss) income, respectively, primarily duea net $3.4 million decrease related to U.S. deferredinternational tax assets that the Company believed that it is more likely than not that they would be realized.rate changes and reclassifications and a $1.6 million decrease related to changes in foreign currency rates. Consideration was given to U.S. tax planning strategies and future U.S. taxable income as to how much of the relevant deferred tax asset could be realized on a more likely than not basis.approximately $293.9$346.8 million expiring in years 20212017 through 2032, and alternative minimum tax credits of $7.7$10.2 million that may be carried forward indefinitely. Tax credit carryforwards include foreign tax credits that have been offset by a valuation allowance. The Company’s ability to use these various carryforwards to offset any taxable income generated in future taxable periods may be limited under Section 382 and other federal tax provisions.2012, 20112014, 2013 and 2010,2012, all undistributed earnings of the Company’s controlled international subsidiaries are considered to be permanently reinvested outside the U.S. and no tax expense in the U.S. has been recognized under the applicable accounting standard for these reinvested earnings. The amount of unremitted earnings from the Company’s international subsidiaries, subject to local statutory restrictions, as of December 31, 20122014 is $251.1$723.0 million. The amount of deferred tax liability that would have been recognized had such earnings not been permanentlyindefinitely reinvested is not reasonably determinable.–- (Continued) (In thousands) Balance, December 31, 2010 $ 8,896 Addition for tax positions taken in prior periods 852 Addition for tax positions taken in the current period 191 Reduction for tax positions taken in prior periods (5,802 ) Other, including the impact of foreign currency translation (60 ) Balance, December 31, 2011 4,077 Aquisitions 73,249 Addition for tax positions taken in prior periods 1,391 Addition for tax positions taken in the current period 5,241 Reduction for tax positions taken in prior periods (3,695 ) Other, including the impact of foreign currency translation 4,393 Balance, December 31, 2012 $ 84,656 Prior year amounts were reclassified to be consistent with the current year presentation. (In thousands) Balance, December 31, 2012 $ 85,723 Acquisitions 2,683 Addition for tax positions taken in prior periods 6,988 Addition for tax positions taken in the current period 7,730 Reduction for tax positions taken in prior periods (31,156 ) Other, including the impact of foreign currency translation (373 ) Balance, December 31, 2013 71,595 Acquisition 37,328 Addition for tax positions taken in prior periods 3,752 Addition for tax positions taken in the current period 894 Reduction for tax positions taken in prior periods (27,601 ) Other, including the impact of foreign currency translation (8,443 ) Balance, December 31, 2014 $ 77,525 Hungary, Italy,Germany, Finland, Mexico, Brazil and various states. The Company files numerous group and separate tax returns in U.S. federal and state jurisdictions, as well as many international jurisdictions. In the U.S., tax years dating back to 2006 remain subject to examination, as well as the 2003 and 2005 tax yearyears due to tax attributes available to be carried forward to open or future tax years. With some exceptions, other major tax jurisdictions generally are not subject to tax examinations for years beginning before 2005.$84.7$77.5 million and $4.1$71.6 million as of December 31, 20122014 and 2011,2013, respectively, inclusive of $16.5$14.7 million and $0.4$13.4 million, respectively, of interest and penalties. These amounts were offset by tax benefits of $0.5$0.1 million as of both December 31, 20122014 and 2011.2013. The net liabilities for uncertain tax positions as of December 31, 20122014 and 20112013 were $84.2$77.4 million and $3.6$71.5 million, respectively, and, if recognized, would favorably impact the effective tax rate. The Company records interest and penalties on uncertain tax positions as a component of Provision(Benefit from) provision for income taxes, which was $1.3$2.5 million, $0.1$4.0 million and $0.1$1.3 million for the years ended December 31, 2014, 2013 and 2012, 2011 and 2010, respectively.$60$23.8 million.62–- (Continued)20122014 and 2011: Total (In thousands) Balance, January 1, 2011 $ 172,338 $ — $ 172,338 Goodwill attributable to Rosscor acquisition 10,212 — 10,212 Goodwill attributable to COT-Puritech acquisition 25,073 — 25,073 Impact of foreign currency translation (2,779 ) — (2,779 ) Balance, December 31, 2011 204,844 — 204,844 Goodwill attributable to Charter Acquisition 933,545 692,090 1,625,635 Goodwill attributable to Soldex Acquisition — 115,571 115,571 Goodwill attributable to other acquisitions 21,376 5,699 27,075 Impact of foreign currency translation 58,228 42,877 101,105 Balance, December 31, 2012 $ 1,217,993 $ 856,237 $ 2,074,230 Total (In thousands) Balance, January 1, 2013 $ 1,225,494 $ 873,342 $ 2,098,836 284,294 — 284,294 Impact of foreign currency translation and other 22,413 4,156 26,569 Balance, December 31, 2013 1,532,201 877,498 2,409,699 Goodwill attributable to Victor acquisition — 612,746 612,746 Impact of foreign currency translation and other (103,843 ) (45,699 ) (149,542 ) Balance, December 31, 2014 $ 1,428,358 $ 1,444,545 $ 2,872,903 December 31, 2012 2011 Accumulated
Amortization (In thousands) Trade names – indefinite life $ 401,123 $ — $ 6,803 $ — Acquired customer relationships 300,253 (24,763 ) 29,798 (12,987 ) Acquired technology 107,018 (12,466 ) 17,961 (2,791 ) Acquired backlog 63,984 (62,432 ) 3,451 (2,033 ) Other intangible assets 12,352 (6,020 ) 4,962 (4,135 ) $ 884,730 $ (105,681 ) $ 62,975 $ (21,946 ) See Note 4, “Acquisitions” for additional information regarding the activity in Goodwill and Intangible assets, net associated with acquisitions made by the Company during the years presented. December 31, 2014 2013 Gross
Carrying
Amount Accumulated
Amortization Gross
Carrying
Amount Accumulated
Amortization (In thousands) Trade names – indefinite life $ 410,600 $ — $ 414,275 $ — Acquired customer relationships 593,799 (85,171 ) 353,337 (51,675 ) Acquired technology 113,697 (27,681 ) 114,647 (22,757 ) Acquired backlog — — 73,476 (65,919 ) Other intangible assets 50,287 (11,948 ) 24,127 (6,958 ) $ 1,168,383 $ (124,800 ) $ 979,862 $ (147,309 ) Year Ended December 31, 2012 2011 2010 (In thousands) Selling, general and administrative expense $ 85,106 $ 7,821 $ 3,501 Year Ended December 31, 2014 2013 2012 (In thousands) Selling, general and administrative expense $ 67,052 $ 41,012 $ 85,106 2012,2014, total amortization expense for amortizable intangible assets is expected to be $40.3$64.9 million, $38.9$61.8 million, $37.3$58.1 million, $37.3$55.1 million and $33.5$51.9 million for the years endedending December 31, 2013, 2014, 2015, 2016, 2017, 2018 and 2017,2019, respectively.–- (Continued)8.Property, Plant and Equipment, Net December 31, Depreciable Life 2012 2011 (In years) (In thousands) Land n/a $ 40,319 $ 14,786 Buildings and improvements 5-40 314,216 38,642 Machinery and equipment 3-15 440,975 134,548 Software 3-5 70,092 16,948 865,602 204,924 Accumulated depreciation (177,032 ) (113,985 ) Property, plant and equipment, net $ 688,570 $ 90,939 December 31, Depreciable Life 2014 (In years) (In thousands) Land n/a $ 52,539 $ 48,353 Buildings and improvements 5-40 366,009 372,115 Machinery and equipment 3-15 524,723 501,387 Software 3-5 98,069 88,463 1,041,340 1,010,318 Accumulated depreciation (311,612 ) (256,057 ) Property, plant and equipment, net $ 729,728 $ 754,261 2011 and 2010, was $71.7$94.5 million, $13.1$78.1 million and $12.1$75.0 million, respectively. Depreciation expense for the years ended December 31, 2014, 2013 and 2012 includes $4.6 million, $1.9 million and $3.2 million of non-cash impairment of fixed assets, respectively. These amounts also include depreciation expense related to software for the years ended December 31, 2014, 2013 and 2012 2011of $15.7 million, $11.8 million and 2010 of $10.5 million, $1.7 million and $1.9 million, respectively.9.Inventories, Net December 31, 2012 2011 (In thousands) Raw materials $ 154,771 $ 25,241 Work in process 99,459 26,376 Finished goods 263,211 20,378 517,441 71,995 Less: customer progress billings (14,571 ) (9,124 ) Less: allowance for excess, slow-moving and obsolete inventory (9,221 ) (6,735 ) Inventories, net $ 493,649 $ 56,136 10.DebtLong-term debt consisted of the following: December 31, 2012 2011 (In thousands) Term loans $ 1,682,177 $ 72,500 Revolving credit facilities and other 46,134 39,018 Total Debt 1,728,311 111,518 Less: current portion (34,799 ) (10,000 ) Long-term debt $ 1,693,512 $ 101,518 As of December 31, 2011, the Company was party to a credit agreement (the “Bank of America Credit Agreement”), led and administered by Bank of America, which was a senior secured structure with a revolving credit facility and term credit facility. The term credit facility bore interest at the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.25% to 2.75% determined by the total leverage ratio calculated at the end of each quarter. As of December 31, 2011, the interest rate was 2.55% inclusive of a margin of 2.25%. Additionally, an annual commitment fee on the revolver ranged from 40 basis points to 50 basis points determined by the Company’s total leverage ratio calculated at the end of each quarter. As of December 31, 2011, the commitment fee was 40 basis points and there was $21.0 million outstanding on the letter of credit sub-facility.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) December 31, 2014 (In thousands) Raw materials $ 164,115 $ 145,335 Work in process 81,110 113,018 Finished goods 239,808 222,034 485,033 480,387 Less: customer progress payments (7,728 ) (4,078 ) Less: allowance for excess, slow-moving and obsolete inventory (34,573 ) (32,773 ) Inventories, net $ 442,732 $ 443,536 December 31, 2014 2013 (In thousands) Term loans $ 1,132,908 $ 1,115,238 Trade receivables financing arrangement 80,000 — Revolving credit facilities and other 326,336 371,853 Total Debt 1,539,244 1,487,091 Less: current portion (9,855 ) (29,449 ) Long-term debt $ 1,529,389 $ 1,457,642 of America Credit Agreement was entered into on February 22, 2013 which among other things, reallocated borrowing capacities of the tranches of loans and reduced interest rate margins when compared to the terms of the amended Deutsche Bank Credit Agreement on January 13, 2012.financing ofamendments to the Charter Acquisition. Upon the early termination of theDeutsche Bank of America Credit Agreement, the Company incurredrecorded a total pre-tax charge of $1.5 million, which included the write-off of $1.0 million of deferred financing fees and $0.5 million of losses reclassified from Accumulated other comprehensive loss in the Consolidated Balance Sheet for the related interest rate swap to Interest expense in the Consolidated Statement of Operations.On January 13, 2012 and January 25, 2012, Colfax incurred debt consisting of: (i) a $200 million term A-1 facility, (ii) a $500 million term A-2 facility, (iii) a €157.6 million term A-3 facility and (iv) a $900 million term B facility pursuant to a credit agreement (the “Deutsche Bank Credit Agreement”) with Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and certain other lender parties named therein. In addition,Operations for the Deutsche Bank Credit Agreement has two revolving credit sub-facilities which total $300 million in commitments (the “Revolver”). The Revolver includes a $200 million letter of credit sub-facility and a $50 million swingline loan sub-facility. The term A-1, term A-2, term A-3 and the Revolver variable-rate borrowings are subject to interest payments of LIBOR or the Euro Interbank Offered Rate (“EURIBOR”) plus a margin ranging from 2.50% to 3.25%, determined by our leverage ratio. Borrowings under the term B facility are also variable rate and are subject to interest payments of LIBOR plus a margin of 3.5%. The Revolver is subject to a commitment fee ranging from 37.5 to 50 basis points, determined by the Company’s leverage ratio. Additionally, as ofyear ended December 31, 20122013 of $29.4 million to write-off certain deferred financing fees and original issue discount and expensed approximately $1.2 million of costs incurred in connection with the refinancing. The Company had an original issue discount of $55.4$12.6 million and deferred financing fees of $8.5$9.9 million included in its Consolidated Balance Sheet as of December 31, 2014, which were recognized in connection withwill be accreted to Interest expense primarily using the effective interest method, over the life of the Deutsche Bank Credit Agreement. As of December 31, 2012,2014, the weighted-average interest rate of borrowings under the amended Deutsche Bank Credit Agreement was 3.93%1.94%, excluding accretion of original issue discount and deferred financing fees, and there was $291.9$674.9 million available underon the Revolver,revolving credit subfacilities, including $191.9$199.9 million available under theon a letter of credit sub-facility.borrowing capacity of $474.8$699.1 million. Total letters of credit of $381.2 million of which $330.0 million waswere outstanding as of December 31, 2012.20122014 are as follows(1): (In thousands) 2013 $ 34,799 2014 119,307 2015 190,557 2016 423,170 2017 145,167 Thereafter 870,667 Total contractual maturities 1,783,667 Debt discount (55,356 ) Total debt $ 1,728,311 __________ (In thousands) 2015 $ 9,855 2016 5,620 2017 4,452 2018 1,531,888 Total contractual maturities 1,551,815 Debt discount (12,571 ) Total debt $ 1,539,244 the respective final maturities of the term A facilities through January 13, 2017 and the term B facility through January 13, 2019,November 7, 2018, as well as the contractual maturities of other debt outstanding as of December 31, 2012.2014In March 2012,, and reflects management’s intention to repay scheduled maturities of the Company used a portion ofterm loans outstanding under the Deutsche Bank Credit Agreement and the trade receivables financing arrangement (if not extended) with proceeds from the sale of Common stock to pay off $35.0 million in borrowings under the term A facilities in advance of the scheduled payments. During the year ended December 31, 2012, the Company repaid an additional $26.3 million in borrowings under the term A facilities in advance of the scheduled payments. See Note 11, “Equity” for additional discussion regarding the Company’s stock issuances.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)4.954.75 to 1.0 and a minimum interest coverage ratio, as defined therein, of 2.02.50 to 1.0, measured at the end of each quarter, through the year ended December 31, 2012.quarter. The minimum interest coverage ratio increases by 25 basis points each year beginning in the year ending December 31, 2013 until it reaches 3.0 to 1.0 for the year ending December 31, 2016.2016 and each year thereafter. The maximum total leverage ratio decreases to 4.75 to 1.0 for the year ending December 31, 2014 and decreases by 25 basis points for the two subsequent fiscal yearseach year until it reaches 4.25 to 1.0 for the year ending December 31, 2016.2016 and each year thereafter. The Deutsche Bank Credit Agreement contains various events of default, including failure to comply with the financial covenants referenced above, and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the term loans and the Revolverrevolving credit subfacilities and foreclose on the collateral. The Company is in compliance with all such covenants as of December 31, 2012.11.Equity2011252,674, 265,995 and 2010, 452,062 248,017 and 194,999 shares of Common stock, respectively, were issued in connection with stock option exercises and employee share-based payment arrangements that vested during the year.CF Acquisition Vehicle, LLC (the “BDT Investor”)Investor as well as BDT Capital Partners Fund I-A, L.P., and Mitchell P. Rales, Chairman of Colfax’s Board of Directors,COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)componentsfollowing table presents the changes in the balances of each component of Accumulated other comprehensive loss netincluding reclassifications out of tax, are as follows: December 31, 2012 2011 (In thousands) Foreign currency translation adjustment $ 104,718 $ (5,537 ) Unrealized loss on hedging activities (3,980 ) (471 ) Net unrecognized pension and other post-retirement benefit cost (247,332 ) (164,785 ) Accumulated other comprehensive loss $ (146,594 ) $ (170,793 ) The activity in Accumulated other comprehensive loss for the yearyears ended December 31, 2012 excludes2014 and 2013. All amounts are net of tax and noncontrolling interest. Accumulated Other Comprehensive Loss Components Net Unrecognized Pension And Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized (Loss) Gain On Hedging Activities Total (In thousands) Balance at January 1, 2013 $ (247,332 ) $ 104,718 $ (3,980 ) $ (146,594 ) Acquisition of shares held by noncontrolling interest — (381 ) — (381 ) Other comprehensive income (loss) before reclassifications: Net actuarial gain 77,515 — — 77,515 Foreign currency translation adjustment — 21,091 — 21,091 Gain on long-term intra-entity foreign currency transactions — 2,176 — 2,176 Loss on net investment hedges — — (14,261 ) (14,261 ) Unrealized gain on cash flow hedges — — 3,832 3,832 Other comprehensive income (loss) before reclassifications 77,515 23,267 (10,429 ) 90,353 Amounts reclassified from Accumulated other comprehensive loss 10,022 — — 10,022 Net current period Other comprehensive income (loss) 87,537 23,267 (10,429 ) 100,375 Balance at December 31, 2013 $ (159,795 ) $ 127,604 $ (14,409 ) $ (46,600 ) Acquisition of shares held by noncontrolling interest — (942 ) — (942 ) Other comprehensive (loss) income before reclassifications: Net actuarial loss (89,379 ) — — (89,379 ) Foreign currency translation adjustment — (346,524 ) — (346,524 ) Gain on long-term intra-entity foreign currency transactions — 2,096 — 2,096 Gain on net investment hedges — — 39,374 39,374 Unrealized loss on cash flow hedges — — (8,932 ) (8,932 ) Other 1,934 — — 1,934 Other comprehensive (loss) income before reclassifications (87,445 ) (344,428 ) 30,442 (401,431 ) Amounts reclassified from Accumulated other comprehensive loss 5,282 — — 5,282 Net current period Other comprehensive (loss) income (82,163 ) (344,428 ) 30,442 (396,149 ) Balance at December 31, 2014 $ (241,958 ) $ (217,766 ) $ 16,033 $ (443,691 ) $4.4years ended December 31, 2014 and 2013 is as follows: Year Ended December 31, 2014 Year Ended December 31, 2013 Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total Amounts Reclassified From Accumulated Other Comprehensive Loss Tax Benefit Total (In thousands) (In thousands) Pension and other post-retirement benefit cost: $ 7,097 $ (2,063 ) $ 5,034 $ 10,489 $ (715 ) $ 9,774 248 — 248 248 — 248 $ 7,345 $ (2,063 ) $ 5,282 $ 10,737 $ (715 ) $ 10,022 income attributableloss, primarily due to Noncontrolling interest, comprised of $4.8 million of foreign currency translation partially offset by $0.4 million of changes in unrecognized pension and other post-retirement benefits cost. Year Ended December 31, 2012 2011 2010 (In thousands) Stock-based compensation expense $ 9,373 $ 4,908 $ 3,137 Deferred tax benefit 305 1,719 1,120 COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2014 2013 2012 (In thousands) Stock-based compensation expense $ 17,580 $ 13,334 $ 9,373 Deferred tax benefit 4,054 434 305 2012,2014, the Company had $23.5$34.5 million of unrecognized compensation expense related to stock-based awards that will be recognized over a weighted-average period of approximately 2.41.6 years. The intrinsic value of awards exercised or convertedissued upon vesting was $9.9$13.3 million, $3.8$9.2 million and $1.2$9.9 million during the years ended December 31, 2014, 2013 and 2012, 2011 and 2010, respectively. Year Ended December 31, 2012 2011 2010 Expected period that options will be outstanding (in years) 5.41 4.50 4.50 Interest rate (based on U.S. Treasury yields at the time of grant) 0.99 % 2.10 % 2.38 % Volatility 42.59 % 52.50 % 52.22 % Dividend yield — — — Weighted-average fair value of options granted $ 13.14 $ 9.68 $ 5.63 Year Ended December 31, 2014 2013 2012 Expected period that options will be outstanding (in years) 4.87 4.90 5.41 Interest rate (based on U.S. Treasury yields at the time of grant) 1.62 % 1.06 % 0.99 % Volatility 34.67 % 43.22 % 42.59 % Dividend yield — — — Weighted-average fair value of options granted $ 22.65 $ 18.07 $ 13.14
Average
Contractual Outstanding at January 1, 2012 1,461,157 $ 14.76 Granted 1,265,781 33.37 Exercised (425,782 ) 12.59 Forfeited (73,494 ) 29.27 Expired (17,546 ) 14.96 Outstanding at December 31, 2012 2,210,116 $ 25.35 5.63 $ 33,142 Vested or expected to vest at December 31, 2012 2,178,251 $ 25.28 5.62 $ 32,828 Exercisable at December 31, 2012 614,885 $ 14.40 4.20 $ 15,653 Number
of Options Weighted-
Average
Exercise
Price Weighted-
Average
Remaining
Contractual
Term
(In years)
Intrinsic
Value(1)(In thousands)Outstanding at January 1, 2014 2,431,790 $ 30.98 Granted 700,018 69.06 Exercised (154,830 ) 23.02 Forfeited (60,525 ) 49.34 Expired (6,344 ) 29.18 Outstanding at December 31, 2014 2,910,109 $ 40.19 4.55 $ 45,492 Vested or expected to vest at December 31, 2014 2,856,031 $ 39.81 4.52 $ 45,323 Exercisable at December 31, 2014 985,033 $ 23.96 3.13 $ 27,463 The aggregate intrinsic value is based upon the difference between the Company’s closing stock price at the date of the Consolidated Balance Sheet and the exercise price of the stock option for in-the-money stock options. The intrinsic value of outstanding stock options fluctuates based upon the trading value of the Company’s Common stock. 68COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) whose, the vesting of which is contingent upon meeting various performance goals. The vesting of the stock units is determined based on whether the Company achieves the applicable performance criteria established by the Compensation Committee of the Board of Directors. If the performance criteria are satisfied, the units are subject to additional time vesting requirements, by which units will vest fully in two equal installments on the fourth and fifth anniversary of the grant date, provided the individual remains an employee during this period. Under the 2008 Plan, the Compensation Committee of the Board of Directors may award non-performance-based restricted stock units (“RSUs”) to select executives, employees and outside directors. The Compensation Committee determines the terms and conditions of each award, including the restriction period and other criteria applicable to the awards. Directors may also elect to defer their annual board fees into RSUs with immediate vesting. Delivery of the shares underlying these director restricted stock units is deferred until termination of the director’s service on the Company’s Board of Directors.2011,2012, including PRSUs granted to the Company’s former Chief Executive Officer (“CEO”)CEO as part of his initial employment agreement in January 2010,April 2012, which were subject to a separate criterion. PRSUs RSUs Nonvested at January 1, 2012 324,447 $ 15.99 64,263 $ 14.71 Granted 283,804 33.48 38,511 33.30 Vested (17,942 ) 18.11 (44,140 ) 15.40 Forfeited (29,358 ) 23.12 (3,758 ) 28.94 Nonvested at December 31, 2012 560,951 $ 24.40 54,876 $ 26.23 PRSUs RSUs Number
of Units Weighted-
Average
Grant Date
Fair Value Number
of Units Weighted-
Average
Grant Date
Fair ValueNonvested at January 1, 2014 576,742 $ 27.86 121,789 $ 43.81 Granted 119,300 69.79 87,922 67.28 Vested (73,520 ) 12.17 (20,380 ) 35.61 Forfeited (40,586 ) 24.50 (20,420 ) 51.17 Nonvested at December 31, 2014 581,936 $ 38.67 168,911 $ 56.13 2011was $6.4 million, $2.5 million and 2010 was $1.9 million, $1.1 million and $1.0 million, respectively.12.Accrued Liabilities December 31, 2012 2011 (In thousands) Accrued payroll $ 99,583 $ 21,415 Advance payment from customers 61,431 14,704 Accrued taxes 39,919 4,911 Accrued asbestos-related liability 58,501 76,295 Warranty liability – current portion 35,678 2,987 Accrued restructuring liability – current portion 25,406 4,573 Accrued third-party commissions 12,320 5,884 Accrued Charter Acquisition-related liability — 29,430 Other 108,195 15,808 Accrued liabilities $ 441,033 $ 176,007 COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)Accrued Restructuring LiabilityThe Company initiated a series of restructuring actions beginning in 2009 in response to then current and expected future economic conditions. The Company also communicated initiatives to improve productivity and reduce structural costs by rationalizing and leveraging its existing assets and back office functions. These initiatives include the consolidation of the Company’s commercial marine end-market operations, reduction in the back office personnel at several distribution centers in Europe, the closure of a small facility that previously produced units sold to certain customers located in the Middle East that the Company ceased supplying to during the year ended December 31, 2010, and the closure of a Portland, Maine production facility and consolidation of the operations with a Warren, Massachusetts facility. December 31, 2014 (In thousands) Accrued payroll $ 120,068 $ 136,645 Advance payment from customers 58,049 53,280 Accrued taxes and deferred tax liability - current portion 58,009 71,533 Accrued asbestos-related liability 50,175 51,142 Warranty liability - current portion 47,966 59,017 Accrued restructuring liability - current portion 21,846 12,856 Accrued third-party commissions 11,026 13,095 Other 128,254 95,126 Accrued liabilities $ 495,393 $ 492,694 2010,2014, the Company participated in a German government-sponsored furlough program in whichretrospectively adjusted provisional amounts with respect to the government paidfour acquisitions completed during the wage-related costs for participating associates. Payroll taxes and other employee benefits related to employees’ furlough time are included in restructuring costs.During the yearthree months ended December 31, 2011, the Company relocated its Richmond, Virginia corporate headquarters2013 to Fulton, Marylandreflect new information obtained about facts and eliminated an executive position in its German operations.As a resultcircumstances that existed as of the Charter Acquisition in 2012,acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. See Note 4, “Acquisitions” for further discussion regarding these adjustments.expanded to include ongoing initiatives at the Company’s fabrication technology operations and effortsa series of restructuring actions to reduce the structural costs and rationalize the corporate overhead of the combined businesses. Initiatives at the Company’s fabrication technology operations include the transfer of European capacity, a reduction in fixed overhead in Europe and the replacement of an old factory in the U.S. with a modern, lower cost and higher capacity facility.The Company’s Consolidated Statements of Operations reflect the following amounts related to its restructuring activities: Year Ended December 31, 2012 2011 2010 (In thousands) Restructuring and other related charges $ 60,060 $ 9,680 $ 10,323 COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2012 Balance at
Beginning
of Year Acquisitions Provisions Payments Foreign
Currency
Translation Balance at
End of
Year(3) (In thousands) Restructuring and other related charges: Gas and Fluid Handling: Termination benefits(1) $ 3,868 $ — $ 7,062 $ (8,014 ) $ 144 $ 3,060 Facility closure costs(2) 633 — 1,301 (756 ) (1 ) 1,177 Other related charges 72 — 289 (363 ) 2 — 4,573 — 8,652 (9,133 ) 145 4,237 Fabrication Technology: Termination benefits(1) — 6,276 30,292 (22,277 ) 346 14,637 Facility closure costs(2) — 3,994 10,584 (7,800 ) 147 6,925 Other related charges — — 1,205 (1,174 ) 2 33 — 10,270 42,081 (31,251 ) 495 21,595 Non-cash impairment 3,155 45,236 Corporate and Other: Termination benefits(1) — — 3,020 (3,020 ) — — Facility closure costs(2) — — 1,899 (415 ) 38 1,522 Other related charges — — 1,253 (1,253 ) — — — — 6,172 (4,688 ) 38 1,522 $ 4,573 $ 10,270 56,905 $ (45,072 ) $ 678 $ 27,354 Non-cash impairment 3,155 $ 60,060 __________(1)Includes severance and other termination benefits, including outplacement services. The Company recognizes the cost of involuntary termination benefits at the communication date or ratably over any remaining expected future service period. Voluntary termination benefits are recognized as a liability and an expense when employees accept the offer and the amount can be reasonably estimated. Year Ended December 31, 2014 Balance at Beginning of Period Provisions Payments Foreign Currency Translation (In thousands) Restructuring and other related charges: Gas and Fluid Handling: $ 3,638 $ 18,179 $ (13,887 ) $ (379 ) $ 7,551 756 5,491 (4,714 ) (88 ) 1,445 4,394 23,670 (18,601 ) (467 ) 8,996 Non-cash impairment 2,863 26,533 Fabrication Technology: 7,033 26,790 (22,227 ) (441 ) 11,155 1,429 3,018 (2,355 ) (155 ) 1,937 8,462 29,808 (24,582 ) (596 ) 13,092 Non-cash impairment 1,780 31,588 Corporate and Other: 1,259 — (275 ) (62 ) 922 1,259 — (275 ) (62 ) 922 $ 14,115 53,478 $ (43,458 ) $ (1,125 ) $ 23,010 Non-cash impairment 4,643 $ 58,121 (2)Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities, discussed above.(3)As of December 31, 2012, $25.4 million and $1.9 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively. Year Ended December 31, 2013 Balance at Beginning of Period Provisions Payments Foreign Currency Translation (In thousands) Restructuring and other related charges: Gas and Fluid Handling: $ 3,060 $ 9,413 $ (8,680 ) $ (155 ) $ 3,638 1,177 683 (1,137 ) 33 756 Other related charges — 333 (520 ) 187 — 4,237 10,429 (10,337 ) 65 4,394 Fabrication Technology: 14,637 22,775 (30,056 ) (323 ) 7,033 6,925 280 (5,736 ) (40 ) 1,429 Other related charges 33 124 (432 ) 275 — 21,595 23,179 (36,224 ) (88 ) 8,462 Non-cash impairment 1,894 25,073 Corporate and Other: — — — — — 1,522 — (718 ) 455 1,259 Other related charges — — — — — 1,522 — (718 ) 455 1,259 $ 27,354 33,608 $ (47,279 ) $ 432 $ 14,115 Non-cash impairment 1,894 $ 35,502 an additional $30.0Restructuring and other related charges of approximately $50 million of employee termination benefits, facility closure costs, relocation expense and operating lease exit costs during the year ending December 31, 20132015 related to these restructuring activities.13.Defined Benefit Plans–- (Continued)Pensionpension and accrued post-retirement benefits and plan assets and includes a statement of the plans’ funded status: Pension Benefits Other Post-Retirement
Benefits Year Ended December 31, Year Ended December 31, 2012 2011 2012 2011 (In thousands) Change in benefit obligation: Projected benefit obligation, beginning of year $ 347,911 $ 331,288 $ 15,397 $ 13,803 Acquisitions 1,148,906 — 22,629 — Service cost 3,381 1,383 110 — Interest cost 67,745 16,408 1,507 690 Actuarial (gain) loss 135,715 25,764 (1,449 ) 1,507 Settlement(1) — (2,857 ) — — Foreign exchange effect 45,458 (1,921 ) — — Benefits paid (84,333 ) (22,154 ) (2,675 ) (603 ) Other 355 — — — Projected benefit obligation, end of year $ 1,665,138 $ 347,911 $ 35,519 $ 15,397 Accumulated benefit obligation, end of year $ 1,641,252 $ 343,767 $ 33,405 $ — Change in plan assets: Fair value of plan assets, beginning of year $ 221,004 $ 231,240 $ — $ — Acquisitions 954,919 — — — Actual return on plan assets 100,153 6,864 — — Employer contribution(2) 58,494 8,684 2,675 603 Settlement(1) — (3,388 ) — — Foreign exchange effect 37,359 (242 ) — — Benefits paid (84,333 ) (22,154 ) (2,675 ) (603 ) Other 248 — — — Fair value of plan assets, end of year $ 1,287,844 $ 221,004 $ — $ — Funded status, end of year $ (377,294 ) $ (126,907 ) $ (35,519 ) $ (15,397 ) Amounts recognized on the Consolidated Balance Sheet at December 31: Non-current assets $ 31,826 $ — $ — $ — Current liabilities (5,639 ) (1,079 ) (3,076 ) (795 ) Non-current liabilities (403,481 ) (125,828 ) (32,443 ) (14,602 ) Total $ (377,294 ) $ (126,907 ) $ (35,519 ) $ (15,397 ) Pension Benefits Other Post-Retirement Benefits Year Ended December 31, Year Ended December 31, 2014 2013 2014 2013 (In thousands) Change in benefit obligation: Projected benefit obligation, beginning of year $ 1,640,418 $ 1,665,138 $ 28,823 $ 35,519 Acquisitions 48,938 6,356 1,011 — Service cost 4,883 3,985 155 179 Interest cost 70,469 63,132 1,304 1,090 Actuarial loss (gain) 211,170 (28,831 ) 5,553 (6,072 ) Foreign exchange effect (97,525 ) 17,919 — — Benefits paid (111,971 ) (83,060 ) (1,761 ) (2,018 ) Settlements (1,387 ) (4,189 ) — — Other 498 (32 ) — 125 Projected benefit obligation, end of year $ 1,765,493 $ 1,640,418 $ 35,085 $ 28,823 Accumulated benefit obligation, end of year $ 1,739,642 $ 1,617,651 $ 35,085 $ 28,823 Change in plan assets: Fair value of plan assets, beginning of year $ 1,367,315 $ 1,287,844 $ — $ — Acquisitions 42,051 2,787 — — Actual return on plan assets 174,065 100,300 — — 69,714 49,772 1,761 2,018 Foreign exchange effect (70,851 ) 13,076 — — Benefits paid (111,971 ) (83,060 ) (1,761 ) (2,018 ) Settlements (1,387 ) (3,565 ) — — Other 167 161 — — Fair value of plan assets, end of year $ 1,469,103 $ 1,367,315 $ — $ — Funded status, end of year $ (296,390 ) $ (273,103 ) $ (35,085 ) $ (28,823 ) Amounts recognized on the Consolidated Balance Sheet at December 31: Non-current assets $ 58,997 $ 38,177 $ — $ — Current liabilities (5,328 ) (6,048 ) (2,749 ) (2,747 ) Non-current liabilities (350,059 ) (305,232 ) (32,336 ) (26,076 ) Total $ (296,390 ) $ (273,103 ) $ (35,085 ) $ (28,823 ) Represents the change in benefit obligation and plan assets related to the termination of a frozen pension plan of one of the Company’s non-U.S. subsidiaries.(2)Contributions during the yearyears ended December 31, 2012 included $18.92014 and 2013 include contributions of 183,000 and 88,200 shares of Colfax Common stock, respectively, with values on the contribution dates of approximately $11.9 million of supplemental contributions to pension plans in the United Kingdom as a result of financing the Charter Acquisition.and $4.9 million, respectively.$864.6 million,$1.0 billion, respectively, as of December 31, 20122014 and $343.8 million$1.2 billion and $221.0 million,$0.9 billion, respectively, as of December 31, 2011.$1.3$1.4 billion and $868.2 million,$1.1 billion, respectively, as of December 31, 20122014 and $347.9 million$1.2 billion and $221.0 million,$0.9 billion, respectively, as of December 31, 2011.–- (Continued)Pensionpension benefit obligation, which is determined based upon an employee’s expected date of separation, and plan assets, included in the table above, and includes a statement of the plans’ funded status: Foreign Pension Benefits Year Ended December 31, 2012 2011 (In thousands) Change in benefit obligation: Projected benefit obligation, beginning of year $ 97,108 $ 95,136 Acquisitions 957,080 — Service cost 3,381 1,383 Interest cost 49,291 5,132 Actuarial loss 85,167 5,704 Settlement(1) — (2,857 ) Foreign exchange effect 45,458 (1,921 ) Benefits paid (56,816 ) (5,469 ) Other 355 — Projected benefit obligation, end of year $ 1,181,024 $ 97,108 Accumulated benefit obligation, end of year $ 1,157,140 $ 92,964 Change in plan assets: Fair value of plan assets, beginning of year $ 32,339 $ 34,071 Acquisitions 817,258 — Actual return on plan assets 58,139 3,039 Employer contribution(2) 49,640 4,328 Settlement(1) — (3,388 ) Foreign exchange effect 37,359 (242 ) Benefits paid (56,816 ) (5,469 ) Other 248 — Fair value of plan assets, end of year $ 938,167 $ 32,339 Funded status, end of year $ (242,857 ) $ (64,769 ) __________(1)Represents the change in benefit obligation and plan assets related to the termination of a frozen pension plan of one of the Company’s non-U.S. subsidiaries.(2)Contributions during the year ended December 31, 2012 included $18.9 million of supplemental contributions to pension plans in the United Kingdom as a result of financing the Charter Acquisition. Foreign Pension Benefits Year Ended December 31, 2014 2013 (In thousands) Change in benefit obligation: Projected benefit obligation, beginning of year $ 1,205,554 $ 1,181,024 Acquisitions 21,578 3,952 Service cost 4,883 3,985 Interest cost 51,658 46,775 Actuarial loss 144,232 11,093 Foreign exchange effect (97,525 ) 17,919 Benefits paid (64,347 ) (54,978 ) Settlements (1,387 ) (4,189 ) Other 497 (27 ) Projected benefit obligation, end of year $ 1,265,143 $ 1,205,554 Accumulated benefit obligation, end of year $ 1,239,292 $ 1,182,786 Change in plan assets: Fair value of plan assets, beginning of year $ 999,197 $ 938,167 Acquisitions 20,873 651 Actual return on plan assets 139,460 62,914 Employer contribution 56,384 42,769 Foreign exchange effect (70,851 ) 13,076 Benefits paid (64,347 ) (54,978 ) Settlements (1,387 ) (3,565 ) Other 168 163 Fair value of plan assets, end of year $ 1,079,497 $ 999,197 Funded status, end of year $ (185,646 ) $ (206,357 ) endedending December 31, 2013,2015, related to plans as of December 31, 2012,2014, are $51.8 million.The$45.1 million. The following benefit payments are expected to be paid during each respective fiscal year: Pension Benefits Other Post- All Plans Foreign Plans Retirement
Benefits (In thousands) 2013 $ 88,543 $ 58,090 $ 3,076 2014 89,878 59,343 2,965 2015 89,937 59,450 2,821 2016 90,498 59,941 2,783 2017 93,000 62,654 2,676 Thereafter 469,090 321,728 9,899 Pension Benefits Other Post-Retirement Benefits All Plans Foreign Plans (In thousands) 2015 $ 89,811 $ 57,027 $ 2,749 2016 89,908 57,222 2,758 2017 90,842 58,244 2,681 2018 91,140 58,780 2,539 2019 91,464 59,322 2,327 Thereafter 465,508 309,824 9,350 COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) 2012 2011 Allocation U.S. Plans: Equity securities: U.S. 36 % 32 % 30% - 45% International 15 % 16 % 10% - 20% Fixed income 37 % 33 % 30% - 50% Hedge funds 11 % 19 % 0% - 20% Cash and cash equivalents 1 % — 0% - 5% Foreign Plans: Equity securities 37 % 22 % 20% - 45% Fixed income securities 58 % 54 % 50% - 80% Cash and cash equivalents 2 % 23 % 0% - 25% Other 3 % 1 % 0% -5% Actual Asset Allocation
December 31,
Target 2014 2013 Allocation U.S. Plans: Equity securities: U.S. 43 % 41 % 30% - 45% International 15 % 16 % 10% - 20% Fixed income 41 % 39 % 30% - 50% Other 1 % 3 % 0% - 20% Cash and cash equivalents — % 1 % 0% - 5% Foreign Plans: Equity securities 30 % 30 % 10% - 50% Fixed income securities 66 % 65 % 50% - 90% Cash and cash equivalents 1 % 2 % 0% - 25% Other 3 % 3 % 0% - 5% December 31, 2012 (In thousands) U.S. Plans: Cash and cash equivalents $ 2,645 $ — $ — $ 2,645 Equity securities: U.S. large cap 89,293 — — 89,293 U.S. small/mid cap — 37,671 — 37,671 International 15,579 37,323 — 52,902 Fixed income mutual funds: U.S. government and corporate 128,334 — — 128,334 Multi-strategy hedge funds — — 38,832 38,832 Foreign Plans: Cash and cash equivalents 19,594 — — 19,594 Equity securities 234,228 108,598 — 342,826 Non-U.S. government and corporate bonds 250,891 298,160 — 549,051 Other(1) 2,108 24,588 — 26,696 $ 742,672 $ 506,340 $ 38,832 $ 1,287,844 December 31, 2014 Level
One Level
Two Level
Three
Total (In thousands) U.S. Plans: Equity securities: U.S. large cap $ 3,901 $ 100,263 $ — $ 104,164 U.S. small/mid cap 19,540 43,670 — 63,210 International 2,461 56,252 — 58,713 Fixed income mutual funds: U.S. government and corporate 10,508 147,364 — 157,872 Structured loan fund — — 1,226 1,226 1,623 2,798 — 4,421 Foreign Plans: Cash and cash equivalents 12,951 — — 12,951 Equity securities 286,797 39,310 — 326,107 Non-U.S. government and corporate bonds 308,705 399,285 — 707,990 2,040 30,409 — 32,449 $ 648,526 $ 819,351 $ 1,226 $ 1,469,103 Represents diversified portfolio funds, real estate and reinsurance contracts and money market funds. December 31, 2013 Level
One Level
Two Level
Three
Total (In thousands) U.S. Plans: Cash and cash equivalents $ 2,854 $ — $ — $ 2,854 Equity securities: U.S. large cap 101,702 — — 101,702 U.S. small/mid cap 6,714 43,199 — 49,913 International 16,458 41,646 — 58,104 Fixed income mutual funds: U.S. government and corporate 143,903 — — 143,903 Structured loan fund — — 11,642 11,642 Foreign Plans: Cash and cash equivalents 22,421 — — 22,421 Equity securities 266,021 38,485 — 304,506 Non-U.S. government and corporate bonds 277,565 372,191 — 649,756 2,107 20,407 — 22,514 $ 839,745 $ 515,928 $ 11,642 $ 1,367,315 Represents diversified portfolio funds and reinsurance contracts maintained for certain foreign plans. 74COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) December 31, 2011 (In thousands) U.S. Plans: Equity securities: U.S. large cap $ 50,572 $ — $ — $ 50,572 U.S. small/mid cap 10,633 — — 10,633 International 29,400 — — 29,400 Fixed income mutual funds: U.S. government and corporate 40,561 — — 40,561 High-yield bonds 15,258 — — 15,258 Emerging markets debt 5,920 — — 5,920 Multi-strategy hedge funds — — 36,321 36,321 Foreign Plans: Cash and cash equivalents 7,595 — — 7,595 Equity securities 6,953 — — 6,953 Non-U.S. government bonds — 17,576 — 17,576 Other(1) — 215 — 215 $ 166,892 $ 17,791 $ 36,321 $ 221,004 __________(1)Represents diversified portfolio funds and reinsurance contracts maintained for certain foreign plans.One, Two or Three during the years ended December 31, 20122014 or 2011.2013. A summary of changes in the fair value of the Company’s pension assets included in Level Three of the fair value hierarchy is as follows: (In thousands) Balance, January 1, 2010 $ 26,769 Net purchases and sales 9,036 Realized loss (316 ) Unrealized gain 853 Balance, December 31, 2010 36,342 Unrealized loss (21 ) Balance, December 31, 2011 36,321 Realized loss 152 Unrealized gain 2,359 Balance, December 31, 2012 $ 38,832 (In thousands) Balance, January 1, 2012 $ 36,321 Realized gain 152 Unrealized gain 2,359 Balance, December 31, 2012 38,832 Sale proceeds (28,440 ) Realized gain 338 Unrealized gain 912 Balance, December 31, 2013 11,642 Sale proceeds (11,030 ) Realized gain 614 Balance, December 31, 2014 $ 1,226 –- (Continued)loss (income)(loss) income of the non-contributoryCompany’s defined benefit pension plans and the Company’s other post-retirement employee benefit plans: Pension Benefits Other Post-Retirement Benefits Year Ended December 31, Year Ended December 31, 2012 2011 2010 2012 2011 2010 (In thousands) Components of Net Periodic Benefit Cost: Service cost $ 3,381 $ 1,383 $ 1,168 $ 110 $ — $ — Interest cost 67,743 16,408 16,514 1,507 690 553 Amortization 8,091 5,839 4,593 801 852 482 Plan combinations(1) — — 2,877 — — — Settlement loss — 1,499 — — — — Other 28 — — — — — Expected return on plan assets (61,094 ) (18,101 ) (19,331 ) — — — Net periodic benefit cost $ 18,149 $ 7,028 $ 5,821 $ 2,418 $ 1,542 $ 1,035 Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income): Current year net actuarial loss (gain) $ 98,784 $ 37,037 $ 16,736 $ (1,449 ) $ 1,507 $ 3,671 Less amounts included in net periodic benefit cost: Amortization of net loss (8,012 ) (5,839 ) (4,593 ) (553 ) (604 ) (234 ) Settlement loss — (835 ) — — — — Amortization of prior service cost (79 ) — — (248 ) (248 ) (248 ) Total recognized in Other comprehensive loss (income) $ 90,693 $ 30,363 $ 12,143 $ (2,250 ) $ 655 $ 3,189 __________(1)Represents the transfer of assets associated with the pension obligation assumed by the Company for a group of former employees. Pension Benefits Other Post-Retirement Benefits Year Ended December 31, Year Ended December 31, 2014 2013 2012 2014 2013 2012 (In thousands) Components of Net Periodic Benefit Cost: Service cost $ 4,883 $ 3,985 $ 3,381 $ 155 $ 179 $ 110 Interest cost 70,469 63,132 67,745 1,304 1,090 1,507 Amortization 6,608 9,672 8,091 468 609 801 Settlement loss (gain) 190 (592 ) — — — — Other 328 (154 ) 26 — 125 — Expected return on plan assets (69,055 ) (58,511 ) (61,094 ) — — — Net periodic benefit cost $ 13,423 $ 17,532 $ 18,149 $ 1,927 $ 2,003 $ 2,418 Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Current year net actuarial loss (gain) $ 96,005 $ (69,463 ) $ 98,784 $ 5,553 $ (6,072 ) $ (1,449 ) Less amounts included in net periodic benefit cost: Amortization of net loss (6,608 ) (9,672 ) (8,012 ) (220 ) (361 ) (553 ) Settlement loss (190 ) (32 ) — — — — Amortization of prior service cost — — (79 ) (248 ) (248 ) (248 ) Total recognized in Other comprehensive (loss) income $ 89,207 $ (79,167 ) $ 90,693 $ 5,085 $ (6,681 ) $ (2,250 ) loss(loss) income of the foreign non-contributory defined benefit pension plans, included in the table above: Foreign Pension Benefits Year Ended December 31, 2012 2011 2010 (In thousands) Components of Net Periodic Benefit Cost: Service cost $ 3,381 $ 1,383 $ 1,168 Interest cost 49,291 5,132 4,138 Amortization 944 588 385 Plan combinations(1) — — 2,877 Settlement loss — 1,499 — Other 28 — — Expected return on plan assets (36,535 ) (1,400 ) (1,259 ) Net periodic benefit cost $ 17,109 $ 7,202 $ 7,309 Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss: Current year net actuarial loss $ 65,689 $ 4,101 $ 5,062 Less amounts included in net periodic benefit cost: Amortization of net loss (865 ) (588 ) (385 ) Settlement loss — (835 ) — Amortization of prior service cost (79 ) — — Total recognized in Other comprehensive loss $ 64,745 $ 2,678 $ 4,677 __________(1)Represents the transfer of assets associated with the pension obligation assumed by the Company for a group of former employees. Foreign Pension Benefits Year Ended December 31, 2014 2013 2012 (In thousands) Components of Net Periodic Benefit Cost: Service cost $ 4,883 $ 3,985 $ 3,381 Interest cost 51,658 46,775 49,291 Amortization 1,669 2,305 944 Settlement loss (gain) 190 (592 ) — Other 328 (154 ) 28 Expected return on plan assets (44,287 ) (34,541 ) (36,535 ) Net periodic benefit cost $ 14,441 $ 17,778 $ 17,109 Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Loss) Income: Current year net actuarial loss (gain) $ 38,904 $ (16,121 ) $ 65,689 Less amounts included in net periodic benefit cost: Amortization of net loss (1,669 ) (2,305 ) (865 ) Settlement loss (190 ) (32 ) — Amortization of prior service cost — — (79 ) Total recognized in Other comprehensive (loss) income $ 37,045 $ (18,458 ) $ 64,745 –- (Continued) Pension Benefits Other Post-Retirement
Benefits December 31, December 31, 2012 2011 2012 2011 (In thousands) Net actuarial loss $ 275,211 $ 184,532 $ 5,676 $ 7,677 Prior service cost — — 1,303 1,552 Total $ 275,211 $ 184,532 $ 6,979 $ 9,229 Pension Benefits Other Post-Retirement
Benefits December 31, December 31, 2014 2013 2014 2013 (In thousands) Net actuarial loss (gain) $ 285,250 $ 196,044 $ 4,576 $ (757 ) Prior service cost — — 807 1,055 Total $ 285,250 $ 196,044 $ 5,383 $ 298 SheetsSheet that are expected to be recognized as a component of net periodic benefit cost during the year endedending December 31, 20132015 are as follows: Pension Benefits (In thousands) Net actuarial loss $ 10,151 $ 465 Prior service cost — 248 Total $ 10,151 $ 713 Pension Benefits Other Post-
Retirement
Benefits (In thousands) Net actuarial loss $ 12,139 $ 450 Prior service cost — 248 Total $ 12,139 $ 698 Pension Benefits Other Post-Retirement
Benefits December 31, December 31, 2012 2011 2012 2011 Weighted-average discount rate: All plans 4.0 % 4.2 % 3.4 % 4.2 % Foreign plans 4.2 % 4.9 % — — Weighted-average rate of increase in compensation levels for active foreign plans 1.5 % 2.6 % — — Pension Benefits Other Post-Retirement
Benefits December 31, December 31, 2014 2013 2014 2013 Weighted-average discount rate: All plans 3.3 % 4.4 % 3.6 % 4.4 % Foreign plans 3.3 % 4.4 % — — Weighted-average rate of increase in compensation levels for active foreign plans 1.6 % 1.6 % — — Pension Benefits Other Post-Retirement Benefits Year Ended December 31, Year Ended December 31, 2012 2011 2010 2012 2011 2010 Weighted-average discount rate: All plans 4.6 % 5.0 % 5.7 % 4.3 % 5.2 % 5.6 % Foreign plans 4.7 % 5.1 % 5.6 % — — — Weighted-average expected return on plan assets: All plans 5.3 % 7.7 % 8.3 % — — — Foreign plans 4.5 % 4.7 % 5.4 % — — — Weighted-average rate of increase in compensation levels for active foreign plans 1.3 % 2.6 % 2.2 % — — — Pension Benefits Other Post-Retirement Benefits Year Ended December 31, Year Ended December 31, 2014 2013 2012 2014 2013 2012 Weighted-average discount rate: All plans 4.4 % 4.0 % 4.6 % 4.4 % 3.5 % 4.3 % Foreign plans 4.4 % 4.2 % 4.7 % — — — Weighted-average expected return on plan assets: All plans 5.4 % 5.1 % 5.3 % — — — Foreign plans 4.9 % 4.3 % 4.5 % — — — Weighted-average rate of increase in compensation levels for active foreign plans 1.7 % 1.5 % 1.3 % — — — –- (Continued)10.7%6.5% was assumed. The rate was assumed to decrease gradually to 4.5% by 2027 for threefour of the Company’s plans and to 5.0%5% by 20192021 for another plan and remain at those levels thereafter for benefits covered under the plans. 1% Increase 1% Decrease (in thousands) Effect on total service and interest cost components for the year ended December 31, 2012 $ 165 $ (142 ) Effect on post-retirement benefit obligation at December 31, 2012 3,149 (2,659 ) 1% Increase 1% Decrease (in thousands) Effect on total service and interest cost components for the year ended December 31, 2014 $ 148 $ (118 ) Effect on post-retirement benefit obligation at December 31, 2014 3,502 (2,803 ) substantially all of its non-union and certain union domesticand non-union employees. The Company’s expense for the years ended December 31, 2014, 2013 and 2012 2011was $25.3 million, $21.5 million and 2010 was $19.3 million, $2.4 millionrespectively.$2.4 million, respectively.14.Financial Instruments and Fair Value Measurements$1.7$1.5 billion and $110.9 million as of both December 31, 20122014 and 2011, respectively,2013 was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date of the Consolidated Balance Sheets or that will be realized in the future.–- (Continued)on a recurring basis for each fair value hierarchy level for the periods presented is as follows: December 31, 2012 Total (In thousands) Assets: Cash equivalents $ 133,878 $ — $ — $ 133,878 Foreign currency contracts related to sales – designated as hedges — 6,832 — 6,832 Foreign currency contracts related to sales – not designated as hedges — 2,249 — 2,249 Foreign currency contracts related to purchases – designated as hedges — 213 — 213 Foreign currency contracts related to purchases – not designated as hedges — 1,077 — 1,077 Deferred compensation plans — 2,542 — 2,542 $ 133,878 $ 12,913 $ — $ 146,791 Liabilities: Foreign currency contracts related to sales – designated as hedges $ — $ 1,024 $ — $ 1,024 Foreign currency contracts related to sales – not designated as hedges — 1,693 — 1,693 Foreign currency contracts related to purchases – designated as hedges — 896 — 896 Foreign currency contracts related to purchases – not designated as hedges — 1,062 — 1,062 Deferred compensation plans — 2,542 — 2,542 Liability for contingent payments — — 6,517 6,517 $ — $ 7,217 $ 6,517 $ 13,734 December 31, 2011 Total (In thousands) Assets: Cash equivalents $ 15,540 $ — $ — $ 15,540 Foreign currency contracts – primarily related to customer sales contracts — 5 — 5 $ 15,540 $ 5 $ — $ 15,545 Liabilities: Interest rate swap $ — $ 471 $ — $ 471 Foreign currency contracts – acquisition-related — 14,986 — 14,986 Foreign currency contracts – primarily related to customer sales contracts — 371 — 371 Liability for contingent payments — — 4,359 4,359 $ — $ 15,828 $ 4,359 $ 20,187 December 31, 2014 Level
One Level
Two Level
Three Total (In thousands) Assets: Cash equivalents $ 23,143 $ — $ — $ 23,143 Foreign currency contracts related to sales - designated as hedges — 4,524 — 4,524 Foreign currency contracts related to sales - not designated as hedges — 1,007 — 1,007 Foreign currency contracts related to purchases - designated as hedges — 1,980 — 1,980 Foreign currency contracts related to purchases - not designated as hedges — 478 — 478 Deferred compensation plans — 2,941 — 2,941 $ 23,143 $ 10,930 $ — $ 34,073 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 7,163 $ — $ 7,163 Foreign currency contracts related to sales - not designated as hedges — 2,793 — 2,793 Foreign currency contracts related to purchases - designated as hedges — 695 — 695 Foreign currency contracts related to purchases - not designated as hedges — 661 — 661 Deferred compensation plans — 2,941 — 2,941 Liability for contingent payments — — — — $ — $ 14,253 $ — $ 14,253 December 31, 2013 Level
One Level
Two Level
Three Total (In thousands) Assets: Cash equivalents $ 22,032 $ — $ — $ 22,032 Foreign currency contracts related to sales - designated as hedges — 11,241 — 11,241 Foreign currency contracts related to sales - not designated as hedges — 3,642 — 3,642 Foreign currency contracts related to purchases - designated as hedges — 428 — 428 Foreign currency contracts related to purchases - not designated as hedges — 2,543 — 2,543 Deferred compensation plans — 2,414 — 2,414 $ 22,032 $ 20,268 $ — $ 42,300 Liabilities: Foreign currency contracts related to sales - designated as hedges $ — $ 1,126 $ — $ 1,126 Foreign currency contracts related to sales - not designated as hedges — 3,625 — 3,625 Foreign currency contracts related to purchases - designated as hedges — 742 — 742 Foreign currency contracts related to purchases - not designated as hedges — 846 — 846 Deferred compensation plans — 2,414 — 2,414 Liability for contingent payments — — 6,176 6,176 $ — $ 8,753 $ 6,176 $ 14,929 yearsyear ended December 31, 2012 or 2011.
2014.79COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)iswas valued based on forward curves observable in the market. The notional value of the Company’s interest rate swap was $25 million as of December 31, 2011, which exchanged its LIBOR-based variable-rate interest for a fixed rate of 4.1375%. On January 11, 2012, the Company terminated its interest rate swap in conjunction with the repayment of the Bank of America Credit Agreement and reclassified $0.5 million of net losses from Accumulated other comprehensive loss to Interest expense in the Consolidated Statement of Operations.The December 31, 2012 2011 (In thousands) Foreign currency contracts sold – not designated as hedges $ 301,185 $ — Foreign currency contracts sold – designated as hedges 238,537 5,116 Foreign currency contracts purchased – not designated as hedges 121,741 — Foreign currency contracts purchased – designated as hedges 37,065 — Foreign currency contracts – acquisition related — 4,249,954 Total foreign currency derivatives $ 698,528 $ 4,255,070 December 31, 2014 2013 (In thousands) Foreign currency contracts sold - not designated as hedges $ 124,838 $ 244,755 Foreign currency contracts sold - designated as hedges 250,743 206,220 Foreign currency contracts purchased - not designated as hedges 36,080 273,714 Foreign currency contracts purchased - designated as hedges 53,944 46,728 Total foreign currency derivatives $ 465,605 $ 771,417 –- (Continued) Year Ended December 31, 2012 2011 2010 (In thousands) Contracts Designated as Hedges: Interest Rate Swap: Unrealized loss $ — $ (161 ) $ (1,201 ) Realized loss (471 ) (1,479 ) (2,447 ) Foreign Currency Contracts – related to customer sales contracts: Unrealized gain 2,120 — — Realized gain 2,297 — — Foreign Currency Contracts – related to supplier purchases contracts: Unrealized loss (374 ) — — Realized loss (475 ) — — Unrealized loss on net investment hedge (7,783 ) — — Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts – acquisition-related: Unrealized loss, net — (21,013 ) — Realized loss, net (7,177 ) — — Foreign Currency Contracts – primarily related to customer sales contracts: Unrealized gain (loss) 778 (204 ) 93 Realized gain (loss) 712 152 (838 ) ) 868 ) Year Ended December 31, 2014 2013 2012 (In thousands) Contracts Designated as Hedges: Interest Rate Swap: Realized loss — — (471 ) Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain (4,706 ) 3,801 2,120 Realized (loss) gain (5,776 ) 654 2,297 Foreign Currency Contracts - related to supplier purchase contracts: Unrealized (loss) gain (1,719 ) 397 (374 ) Realized gain (loss) 3,386 (298 ) (475 ) Unrealized gain (loss) on net investment hedges 39,374 (14,261 ) (7,783 ) Contracts Not Designated in a Hedge Relationship: Foreign Currency Contracts - acquisition-related: Realized loss — — (7,177 ) Foreign Currency Contracts - related to customer sales contracts: Unrealized (loss) gain (1,389 ) (762 ) 778 Realized (loss) gain (4,342 ) 1,112 712 Foreign Currency Contracts - related to supplier purchases contracts: Unrealized (loss) gain (1,304 ) 1,687 (560 ) Realized gain 1,355 1,359 868 acquisitionacquisitions of COT-Puritech, Inc. (“COT-Puritech”) in December of 2011 and Clarus in July 2013, which are subject to the achievement of certain performance goals, and isare included in Other liabilities in the Consolidated Balance Sheets. The fair value of the liability for contingent payments represents the present value of probability weighted expected cash flows based upon the Company’s internal model and projections and is included in Level Three of the fair value hierarchy. Accretion is recognized in Interest expense in the Consolidated Statements of Operations and realized or unrealized gains or losses are recognized in Selling, general and administrative expense in the Consolidated Statements of Operations.during the years ended December 31, 2011 and 2012 is as follows: (In thousands) Balance, January 1, 2011 $ — Additions 4,300 Interest accretion 59 Balance, December 31, 2011 4,359 Interest accretion 712 Unrealized loss (1,446 ) Balance, December 31, 2012 $ 6,517 15.Concentration of Credit RiskThe Company is (In thousands) Balance, January 1, 2012 $ 4,359 Interest accretion 712 Unrealized loss 1,446 Balance, December 31, 2012 6,517 Additions for Clarus acquisition 2,494 Interest accretion 665 Cash payment (3,500 ) Balance, December 31, 2013 6,176 Cash payment (3,500 ) Interest accretion 272 Unrealized gain (2,948 ) Balance, December 31, 2014 $ — a concentrationconcentrations of credit risk consist primarily of trade accounts receivable. Concentrations of credit risk are considered to exist when there are amounts collectible from multiple counterparties with respectsimilar characteristics, which could cause their ability to its Trade receivables, net.meet contractual obligations to be similarly impacted by economic or other conditions. The Company performs credit evaluations of its customers prior to delivery or commencement of services and normally does not require collateral. Letters of credit are occasionally required for international customers when the Company deems necessary. The Company maintains an allowance for potential credit losses and losses have historically been within management’s expectations. The Company does not believe that accounts receivable represent significant concentrations of credit risk becauseCustomers purchasing from our operations in China represented 18% of the diversified portfolioCompany’s Accounts receivable, net as of individual customersDecember 31, 2014.geographical areas.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)The Company may be exposed to credit-related losses in the event of non-performance by counterparties to financial instruments. The Company enters into derivative contracts with financial institutions of good standing, and the total credit exposure related to non-performance by those institutions is not material to the operations of the Company. The Company does not enter into derivative contracts for trading purposes.16.Commitments and Contingencies Year Ended December 31, 2012 2011 2010 (Number of Claims) Claims unresolved, beginning of period 23,682 24,764 25,295 Acquisitions 1,599 — — Claims filed(2) 4,335 4,927 3,692 Claims resolved(3) (6,093 ) (6,009 ) (4,223 ) Claims unresolved, end of period 23,523 23,682 24,764 (In dollars) Average cost of resolved claims(4) $ 6,606 $ 15,397 $ 12,037 __________(1)Excludes claims filed by one legal firm that have been “administratively dismissed.” Year Ended December 31, 2014 2013 2012 (Number of claims) Claims unresolved, beginning of period 22,393 23,523 25,269 4,850 6,299 4,347 (5,562 ) (7,429 ) (6,093 ) Claims unresolved, end of period 21,681 22,393 23,523 (In dollars) $ 7,513 $ 5,979 $ 6,585 (2)Claims filed include all asbestos claims for which notification has been received or a file has been opened.(3)Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.
Excludes claims filed by one legal firm that have been “administratively dismissed.”(4)Excludes claims settled in Mississippi for which the majority of claims have historically been resolved for no payment and insurance recoveries.–- (Continued)language ofDelaware Superior Court concerning the underlying insurance policies andsubsidiary’s coverage rights, the assertion and beliefCompany currently estimates that defense costs are outside policy limits, the Company’ssubsidiary’s future expected recovery percentage is 90%approximately 93% of asbestos-related costs followingwith the exhaustion of its primary and umbrella layers of insurance and expectssubsidiary expected to be responsible for approximately 10%7% of its future asbestos-related costs.For this subsidiary, during Depending on the year ended December 31, 2010, an insolvent carrier that had written approximately $1.4 million in limits for whichoutcome of the subsidiary had assumed noappeal discussed below, the expected insurance recovery made a cash settlement offer of approximately $0.7 million. As such, the subsidiary recorded a gain for this amount.withand the Superior Court issued a final ruling pending.judgment during the third quarter of 2014. Appeals have been entered. The subsidiary continues to work with its excess insurers to obtainhas been largely unsuccessful in obtaining defense and indemnity payments while the litigation is proceeding. Given the uncertainties of litigation, there is a variety of possible outcomes, including but not limited to the subsidiary being required to fund all or a portion of the subsidiary’s defense and indemnity payments until such time a final ruling orders payment by thefrom its excess insurers. While not impacting the results of operations, the Company has funded $60.3 million that it expects its excess insurers to ultimately reimburse through December 31, 2014, and until the final rulings ordering payment by the insurers are issued, cash funding requirement could range up to $10 million per quarter until final resolution. In addition, becauseDue to a statistically significant increase in mesothelioma and lung cancer claims hadand higher settlement values per claim that have occurred and wasare expected to continue to occur in certain regions, this subsidiaryjurisdictions, partially offset by lower claims and lower settlement values per claim in other jurisdictions, the Company recorded a $1.8$0.6 million pre-tax charge during year ended December 31, 2013, which was included in Selling, general and administrative expense in the Consolidated Statements of Operations. The pre-tax charge was comprised of an increase in its asbestos-related liabilities of $18.1$10.8 million partially offset by an increase in expected insurance recoveries of $16.3$10.2 million. Due to a higher number of asbestos claims settlements and a decline in the insurance recovery rate that have occurred, the Company recorded a $6.9 million pre-tax charge during the fourth quarter of the year ended December 31, 2011.the otheranother subsidiary filed a lawsuit against a large number of its insurers and its former parent to resolve a variety of disputes concerning insurance for asbestos-related bodily injury claims asserted against it. Although none of these insurance companies contested coverage, they disputed the timing, reasonableness and allocation of payments.As a result, during the year ended December 31, 2010, the Company reduced the current asbestos receivable by $2.8 million, decreased the long-term asbestos asset by $1.2 million and recorded a net charge to asbestos liability and defense costs of $4.0 million. In May 2011, the court accepted the recommendation with modifications. A final judgment at the trial court level in this litigation was rendered during the year ended December 31, 2011, but appeals have been entered. As a result of this judgment,2011. The Appellate Division confirmed the Company recorded a provision for $2.1 milliontrial court rulings during the year ended December 31, 2011, which is reflected in the Consolidated Balance Sheet as an increase of $1.4 million in Other accrued liabilities and a reduction of $0.7 million in Asbestos insurance asset. The Company made a payment of $5.0 million, which was previously accrued for, to return certain overpayments to the insurers. In addition, because of the higher settlement values per mesothelioma claim in 2011 in a specific region, this subsidiary recorded a $0.7 million pre-tax charge, which was comprised of an increase to its asbestos-related liabilities of $4.7 million partially offset by an increase in expected insurance recoveries of $4.0 million, during the fourth quarter of the year ended December 31, 2011.2014, but appeals have been entered. The subsidiary expects to be responsible for approximately 17%19.5% of all future asbestos-related costs.–- (Continued)forrelated to asbestos-related litigation: December 31, 2012 2011 (In thousands) Current asbestos insurance asset(1) $ 35,566 $ 43,452 Current asbestos insurance receivable(1) 36,778 33,696 Long-term asbestos insurance asset(2) 315,363 326,838 Long-term asbestos insurance receivable(2) 7,063 14,034 Accrued asbestos liability(3) 58,501 76,295 Long-term asbestos liability(4) 375,493 382,394 __________(1)Included in Other current assets in the Consolidated Balance Sheets. December 31, 2014 2013 (In thousands) $ 34,540 $ 32,872 — 41,943 282,679 299,057 82,340 21,411 50,175 51,142 346,099 358,288 (2)Included in Other assets in the Consolidated Balance Sheets.
Included in Other current assets in the Consolidated Balance Sheets.(3)Represents current reserves for probable and reasonably estimable asbestos-related liability cost that the Company believes the subsidiaries will pay through the next 15 years, overpayments by certain insurers and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Consolidated Balance Sheets.
Included in Other assets in the Consolidated Balance Sheets.(4)Included in Other liabilities in the Consolidated Balance Sheets.On June 3, 1997, oneCompany’s subsidiaries was served with a complaint in a case brought by Litton Industries, Inc.Company filed derivative complaints against our directors, the BDT Investor and BDT Capital Partners, LLC in the Superior Court of New Jersey which alleges damagesChancery of the State of Delaware alleging that the individual defendants engaged in excess of $10.0 million incurred as a result of losses under a government contract bid transferredwaste and breached their fiduciary duties in connection with the salecash payment and conversion pursuant to the Conversion Agreement. The complaints also allege claims against the BDT Investor and BDT Capital Partners, LLC for unjust enrichment and aiding and abetting the individual defendants’ alleged breaches of its former Electro-Optical Systems business. In 2004, this case was triedfiduciary duty. The complaints, which have been consolidated, seek compensatory damages plus interest, and the jury rendered a verdictan award of $2.1 million forattorneys’ fees and expenses to the plaintiffs. After appeals by both parties,defendants answered the Supreme Courtconsolidated complaint, denying all material allegations of New Jersey upheldwrongdoing, the plaintiffs’ rightplaintiffs amended it to a refunddismiss certain of their attorney’s feesclaims relating to breach of fiduciary duties. Defendants have moved to dismiss the new consolidated complaint. The litigation is in an early stage and costsis not currently expected to have a material adverse effect on the financial condition, results of trial, but remanded the issue to the trial court to reconsider the amount of fees using a proportionality analysisoperations or cash flow of the relationship between the fee requestedCompany and the damages recovered. In June 2012,defendants intend to continue to vigorously defend against the subsidiary entered into a settlement agreement for and made a payment of $8.5 million. The settlement did not have a significant impact on the Consolidated Statement of Operations for the year ended December 31, 2012.reservesaccruals to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company.84–- (Continued)GuaranteesAs of December 31, 2012, the Company has $59.7 million of bank guarantees securing primarily customer prepayments, performance and product warranties. See Note 10, “Debt” for discussion regarding the Company’s letters of credit outstanding as of December 31, 2012. rental obligations under non-cancelable operating leases are as follows: December 31, 2012 (In thousands) 2013 $ 30,166 2014 21,324 2015 16,235 2016 10,440 2017 6,639 Thereafter 40,885 Total $ 125,689 December 31, 2014 (In thousands) 2015 $ 36,017 2016 28,697 2017 17,691 2018 14,483 2019 12,153 Thereafter 44,202 Total $ 153,243 2012, 20112014, 2013 and 2010,2012, the Company’s net rental expense related to operating leases was $39.8 million, $35.4 million and $39.5 million, $4.9 million and $4.6 million, respectively.17.Segment InformationUpon the closingthe Charter Acquisition,December 31, 2014, the Company changed the compositionhad $406.5 million of its reportable segmentsunconditional purchase obligations with suppliers, substantially all of which is expected to reflect the changes in its internal organization resulting from the integration of the acquired businesses. be paid by December 31, 2015.now reportsconducts its operations through three operating segments: gas handling, fluid handling and fabrication technology. The gas-handling and fluid-handling operating segments are aggregated into a single reportable segment. A description of the followingCompany’s reportable segments:segments is as follows:·▪ &and Fluid Handling – - a global supplier of a broad range of gas- and fluid-handling products, including pumps, fluid-handling systems and controls, specialty valves, heavy-duty centrifugal and axial fans, rotary heat exchangers, and gas compressors, pumps, fluid-handling systems, controls and specialty valves, which serves customers in the power generation, oil, gas and petrochemical, mining, marine (including defense) and general industrial and other end markets; and·▪ –-a global supplier of welding equipment and consumables, cutting equipment and consumables and automated welding and cutting systems.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Year Ended December 31, 2012 2011 2010 (In thousands) Net Sales: Gas and fluid handling $ 1,901,132 $ 693,392 $ 541,987 Fabrication technology 2,012,724 — — Total Net sales $ 3,913,856 $ 693,392 $ 541,987 Segment operating income (loss)(1): Gas and fluid handling $ 141,524 $ 86,664 $ 65,357 Fabrication technology 140,184 — — Corporate and other (81,639 ) (51,078 ) (20,662 ) Total segment operating income $ 200,069 $ 35,586 $ 44,695 Depreciation and Amortization: Gas and fluid handling $ 112,389 $ 22,375 $ 15,823 Fabrication technology 69,708 — — Corporate and other 18,303 958 984 Total depreciation and amortization $ 200,400 $ 23,333 $ 16,807 Capital Expenditures: Gas and fluid handling $ 42,343 $ 14,420 $ 12,118 Fabrication technology 41,146 — — Corporate and other 97 366 409 Total capital expenditures $ 83,586 $ 14,786 $ 12,527 ________(1)The following is a reconciliation of Income before income taxes to segment operating income: Year Ended December 31, 2012 2011 2010 (In thousands) Income before income taxes $ 48,439 $ 19,987 $ 27,688 Interest expense 91,570 5,919 6,684 Restructuring and other related charges 60,060 9,680 10,323 Segment operating income $ 200,069 $ 35,586 $ 44,695 Year Ended December 31, 2012 2011 (In thousands) Investment in Equity Method Investees: Gas and fluid handling $ 11,451 $ 7,680 Fabrication technology 44,106 — $ 55,557 $ 7,680 Total Assets: Gas and fluid handling $ 3,329,948 $ 947,773 Fabrication technology 2,565,582 — Corporate and other 234,197 140,770 $ 6,129,727 $ 1,088,543 Year Ended December 31, 2014 2013 2012 (In thousands) Net sales: Gas and fluid handling $ 2,329,598 $ 2,104,048 $ 1,901,132 Fabrication technology 2,294,878 2,103,161 2,012,724 Total Net sales $ 4,624,476 $ 4,207,209 $ 3,913,856 Gas and fluid handling $ 254,240 $ 270,708 $ 141,524 Fabrication technology 265,813 219,634 140,184 Corporate and other (52,379 ) (48,448 ) (81,639 ) Total segment operating income $ 467,674 $ 441,894 $ 200,069 Depreciation, amortization and impairment charges: Gas and fluid handling $ 96,763 $ 62,792 $ 112,389 Fabrication technology 76,406 55,339 69,708 Corporate and other 1,555 1,127 1,306 Total depreciation, amortization and impairment charges $ 174,724 $ 119,258 $ 183,403 Capital expenditures: Gas and fluid handling $ 32,558 $ 37,995 $ 42,343 Fabrication technology 47,955 33,437 41,146 Corporate and other 3,966 50 97 Total capital expenditures $ 84,479 $ 71,482 $ 83,586 –- (Continued) Year Ended December 31, 2014 2013 2012 Income before income taxes $ 358,248 $ 302,795 $ 48,439 Interest expense 51,305 103,597 91,570 Restructuring and other related charges 58,121 35,502 60,060 Segment operating income $ 467,674 $ 441,894 $ 200,069 December 31, 2014 2013 (In thousands) Investments in Equity Method Investees: Gas and fluid handling $ 7,085 $ 7,097 Fabrication technology 45,411 43,698 $ 52,496 $ 50,795 Total Assets: Gas and fluid handling $ 3,660,361 $ 4,028,675 Fabrication technology 3,489,388 2,477,534 Corporate and other 95,349 94,975 Total Assets $ 7,245,098 $ 6,601,184 geographyproduct type and product typegeography is as follows: Year Ended December 31, 2012 2011 2010 (In thousands) Net Sales by Origin: United States $ 789,259 $ 207,459 $ 183,803 Foreign locations 3,124,597 485,933 358,184 Total Net sales $ 3,913,856 $ 693,392 $ 541,987 Net Sales by Major Product: Gas handling $ 1,242,371 $ — $ — Fluid handling 658,761 693,392 541,987 Welding and cutting 2,012,724 — — Total Net sales $ 3,913,856 $ 693,392 $ 541,987 December 31, 2012 2011 (In thousands) Property, Plant and Equipment, Net: United States $ 127,719 $ 28,699 Foreign locations 560,851 62,240 Property, plant and equipment, net $ 688,570 $ 90,939 18.Selected Quarterly Data–(unaudited) Year Ended December 31, 2014 2013 2012 (In thousands) Net Sales by Major Product: Gas handling $ 1,676,180 $ 1,440,731 $ 1,242,371 Fluid handling 653,418 663,317 658,761 Welding and cutting 2,294,878 2,103,161 2,012,724 Total Net sales $ 4,624,476 $ 4,207,209 $ 3,913,856 United States $ 1,097,864 $ 836,636 $ 789,259 Foreign locations 3,526,612 3,370,573 3,124,597 Total Net sales $ 4,624,476 $ 4,207,209 $ 3,913,856 December 31, 2014 2013 (In thousands) United States $ 180,154 $ 145,829 Czech Republic 79,430 91,611 China 76,959 82,771 Other Foreign Locations 393,185 434,050 Property, plant and equipment, net $ 729,728 $ 754,261 20122014 and 2011. Quarter Ended March 30,
2012(1)(2) (In thousands, except per share data) Net sales $ 886,366 $ 1,045,653 $ 954,440 $ 1,027,397 Gross profit 241,706 314,862 287,987 307,570 Net (loss) income (100,461 ) 18,632 14,499 25,066 Net (loss) income attributable to Colfax Corporation common shareholders (109,332 ) 7,293 4,022 14,664 Net (loss) income per share – basic $ (1.33 ) $ 0.07 $ 0.04 $ 0.14 Net (loss) income per share – diluted $ (1.33 ) $ 0.07 $ 0.04 $ 0.13 Quarter Ended
2014(3) (In thousands, except per share data) Net sales $ 1,054,331 $ 1,199,336 $ 1,164,453 $ 1,206,356 Gross profit 325,632 388,171 373,195 391,847 Net income 54,837 198,344 81,303 85,789 Net income attributable to Colfax Corporation common shareholders 24,877 191,785 73,389 80,134 Net income per share – basic $ 0.22 $ 1.55 $ 0.59 $ 0.65 Net income per share – diluted $ 0.22 $ 1.53 $ 0.59 $ 0.64 Quarter Ended March 29,
2013 June 28,
2013 September 27,
2013
2013(4) (In thousands, except per share data) Net sales $ 947,143 $ 1,074,118 $ 1,014,570 $ 1,171,378 Gross profit 290,725 337,822 320,294 357,381 Net income 32,275 67,200 65,475 44,193 Net income attributable to Colfax Corporation common shareholders 22,553 53,306 50,389 31,984 Net income per share – basic $ 0.21 $ 0.53 $ 0.49 $ 0.31 Net income per share – diluted $ 0.21 $ 0.52 $ 0.48 $ 0.31 (1)Net (loss) income and Net (loss) income per share for the three months ended March 30, 2012 and June 29 2012, include $42.9 million and $0.8 million of pre-tax Charter acquisition-related expense. See Note 4, “Acquisitions” for additional information regarding the Company’s acquisition of Charter.(2)Gross profit for the three months ended March 30, 2012 and June 29, 2012 reflects the reclassification of $13.7 million and $13.0 million, respectively, of additional Cost of sales, which was included in Selling, general and administrative expense in the Condensed Consolidated Statements of Operations included in the respective quarterly report on Form 10-Q. These amounts were reclassified in order to comply with current period presentation.COLFAX CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) Quarter Ended April 1,
2011 (In thousands, except per share data) Net sales $ 158,558 $ 186,749 $ 170,294 $ 177,791 Gross profit 53,254 64,674 60,627 61,544 Net income (loss) 6,555 10,390 3,690 (16,080 ) Net income (loss) per share – basic $ 0.15 $ 0.24 $ 0.08 $ (0.37 ) Net income (loss) per share – diluted $ 0.15 $ 0.23 $ 0.08 $ (0.37 ) __________(1)Net income (loss) and Net income (loss) per share for the three months ended September 30, 2011 and December 31, 2011 include $5.7 million and $25.3 million, respectively, of pre-tax Charter acquisition-related expense. See Note 4, “Acquisitions” for additional information regarding the Company’s acquisition of Charter.the end of the period covered by this report on this Annual Report on Form 10-K.December 31, 2014. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that ourthe Company’s disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed in this report on Form 10-K has been recorded, processed, summarized and reported as of the end of the period covered by this report on Form 10-K.(the “SEC’s”) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.Overover Financial ReportingThe Company completed the Charter Acquisition and the Soldex Acquisition on January 13, 2012 and October 31, 2012, respectively. Management considers these transactions to be material to the Company’s Consolidated Financial Statements and believes that the internal controls and procedures of Charter and Soldex have a material effect on the Company’s internal control over financial reporting. We are currently in the process of incorporating the internal controls and procedures of Charter and Soldex into our internal controls over financial reporting and extending our compliance program under the Sarbanes-Oxley Act of 2002 to include Charter and Soldex. The Company has elected to exclude Charter and Soldex from the scope of its 2012 annual assessment of internal control over financial reporting as provided by the Act and the applicable SEC rules and regulations concerning business combinations.Other than the Charter Acquisition and the Soldex Acquisition noted above, thereperiod covered by this reportmost recently completed fiscal quarter that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with the authorization of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. 20122014 based on the criteria established inInternal Control –- Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (2013 framework). Based on this assessment, our management has concluded that our internal control over financial reporting was effective as of December 31, 2012.2012,2014, management excluded Charter and SoldexVictor from its assessment, as provided by the Exchange Act and the applicable SECSecurities and Exchange Commission’s rules and regulations concerning business combinations, because these entities werethis entity was acquired by Colfax Corporation in January and October 2012, respectively,April 2014, and the Company has not yet fully incorporated the internal control procedures of these businessesthis business into the Company’s internal control over financial reporting. DuringVictor represented 17% and 27% of the Company’s total and net assets, respectively, as of December 31, 2014 and 8% and 10% of Net sales and Net income available to Colfax Corporation common shareholders, respectively, for the year ended December 31, 2012, Charter and Soldex represented 83% of the Company’s Net sales. See Note 4, “Acquisitions” in the accompanying Notes to Consolidated Financial Statements for further discussion regarding these acquisitions.Firm—Firm—Internal Control Over Financial Reporting.”On February 18, 2013, the Company entered into an amendment to the registration rights agreement, dated May 30, 2003, by the Company and each of Mitchell P. Rales and Steven M. Rales.The amendment extends the duration of the registration rights period for 18,271,832 shares of Colfax Common stock subject to the agreement until May 8, 2016. In consideration for entering into the amendment, each of Mitchell P. Rales and Steven M. Rales agreed to refrain from exercising their registration rights prior to May 8, 2013, the original expiration date of the registration rights period under the agreement.20132015 annual meeting to be filed with the SEC within 120 days after the end of the fiscal year covered by this Form 10-K (the “2013“2015 Proxy Statement”) under the captions “Election of Directors”, “Board of Directors and its Committees –- Audit Committee” and “Section 16(a) Beneficial Ownership Reporting Compliance”.20132015 Proxy Statement under the captions “Executive Compensation”, “Director Compensation”, “Compensation Discussion and Analysis”, “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation.”20132015 Proxy Statement under the captions “Beneficial Ownership of Our Common Stock” and “Equity Compensation Plan Information.”20132015 Proxy Statement under the captions “Certain Relationships and Related Person Transactions” and “Director Independence.”20132015 Proxy Statement under the captions “Independent Registered Public AccountantAccounting Firm Fees and Services” and “Audit Committee’s Pre-Approval Policies and Procedures”.(a)(1)Financial Statements. The financial statements are set forth under “Item 8. Financial Statements and Supplementary Data” of this report on Form 10-K. (2)Schedules. An index of Exhibits and Schedules is on page 92 of this report. Schedules other than those listed below have been omitted from this Annual Report because they are not required, are not applicable or the required information is included in the financial statements or the notes thereto.(b)(B)Exhibits. The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this report. (c)Not applicable.18, 2013.COLFAX CORPORATIONBy: /s/ STEVEN E. SIMMS Steven E. Simms President and Chief Executive OfficerDate: February 18, 2013Steven E. Simms President and Chief Executive Officer and Director(Principal Executive Officer) C. Scott Brannan Senior Vice President, Finance, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) Mitchell P. Rales Chairman of the Board Patrick W. Allender Director DirectorThomas S. Gayner Director DirectorRhonda L. Jordan Director DirectorClay H. Kiefaber Director /s/ SAN W. ORR, III San W. Orr, III Director DirectorA. Clayton Perfall Director DirectorRajiv Vinnakota Director 92Page Number inForm 10-KSchedules: Page Number in Form 10-K Valuation and Qualifying Accounts 9993101EXHIBIT INDEX 3.1 Amended and Restated Certificate of Incorporation of Colfax Corporation Incorporated by reference to Exhibit 3.01 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 30, 2012. 3.2 Colfax Corporation Amended and Restated Bylaws Incorporated by reference to Exhibit 3.2 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on May 13, 2008 3.3Certificate of Designations of Series A Perpetual Convertible Preferred Stock of Colfax CorporationIncorporated by reference to Exhibit 3.02 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the Commission on January 30, 20124.1 Specimen Common Stock Certificate 10.1 Conversion Agreement, dated February 12, 2014, between Colfax Corporation and BDT CF Acquisition Vehicle, LLC Incorporated by reference to Exhibit 10.01 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on February 12, 2014 10.2 Colfax Corporation 2008 Omnibus Incentive Plan** 10.210.3 Colfax Corporation 2008 Omnibus Incentive Plan, as amended and restated April 2, 2012** Incorporated by reference to Exhibit 10.07 to Colfax Corporation’s Form 10-Q (File No. 001-34045) as filed with the SEC on August 7, 2012 10.310.4 Form of Non-Qualified Stock Option Agreement ** 10.410.5 Form of Performance Stock Unit Agreement** 10.510.6 Form of Outside Director Restricted Stock Unit Agreement (Three Year Vesting)** 10.610.7 Form of Outside Director Deferred Stock Unit Agreement** 10.710.8 Form of Outside Director Deferred Stock Unit Agreement for deferral of grants of restricted stock (Three Year Vesting)** 10.810.9 Form of Outside Director Deferred Stock Unit Agreement for deferral of director fees** 10.910.10 Incorporated by reference to Exhibit 10.08 to Colfax Corporation’s Form 10-Q (File No. 001-34045) filed with the SEC on August 7,20127, 2012 10.1010.11 Form of Outside Director Restricted Stock Unit Agreement (One Year Vesting)** Incorporated by reference to Exhibit 10.09 to Colfax Corporation’s Form 10-Q (File No. 001-34045) filed with the SEC on August 7,20127, 2012 10.1110.12 Incorporated by reference to Exhibit 10.10 to Colfax Corporation’s Form 10-Q (File No. 001-34045) filed with the SEC on August 7,20127, 2012 10.1210.13 unitsunits** 10.1310.14 Colfax Corporation Amended and Restated Excess Benefit Plan, effective as of January 1, 2013** Incorporated by reference to Exhibit 10.13 to Colfax Corporation’s Form 10-K (File No. 001-34045) as filed with the SEC on February 19, 2013 10.1410.15 Employment Agreement between Colfax Corporation and Steven E. Simms** Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on April 23, 2012 10.1510.16Amendment No. 1 to the Employment Agreement between Colfax Corporation and Steven E. Simms** Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on April 28, 2014 10.17 Employment Agreement between Colfax Corporation and Clay H. Kiefaber** Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on March 28, 2011 10.1610.18 Amendment No. 1 to the Employment Agreement between Colfax Corporation and Clay H. Kiefaber** Incorporated by reference to Exhibit 10.2 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on April 23, 2012 10.1710.19 Employment Agreement between Colfax Corporation and C. Scott Brannan** Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 22, 2010 10.1810.20 Employment Agreement between Colfax Corporation and Daniel A. Pryor** Incorporated by reference to Exhibit 10.04 to Colfax Corporation’s Form 10-Q (File No. 001-34045) as filed with the SEC on August 7, 2012 10.1910.21 EmploymentService Agreement between Colfax CorporationHowden Group Ltd. and A. Lynne Puckett*Ian Brander dated December 3, 2010** Incorporated by reference to Exhibit 10.0510.01 to Colfax Corporation’s Form 10-Q (File No. 001-34045) as filed with the SEC on August 7, 201210.20Employment Agreement between Colfax Corporation and William E. Roller**Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 10-Q (File No. 001-34045) as filed with the Commission on May 8, 200910.21Amendment to the Employment Agreement between Colfax Corporation and William E. Roller**Incorporated by reference to Exhibit 10.2 to Colfax Corporation’s Form 10-Q (File No. 001-34045) as filed with the Commission on May 8, 2009July 25, 2013 10.22 Letter to William E. Roller**Incorporated by reference to Exhibit 10.07 to Colfax Corporation’s Form 10-Q (File No. 001-345045), as filed with the Commission on October 27, 2011ExhibitNo.DescriptionLocation*10.23Consulting Agreement between Colfax Corporation and Joseph O. Bunting III**Incorporated by reference to Exhibit 10.3 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the Commission on April 23, 201210.24 Colfax Corporation Annual Incentive Plan, as amended and restated April 2, 2012** Filed herewithIncorporated by reference to Exhibit 10.24 to Colfax Corporation’s Form 10-K (File No. 001-34045) as filed with the SEC on February 19, 2013 10.2510.23 Credit Agreement, dated September 12, 2011, by and among the Colfax Corporation, certain subsidiaries of Colfax Corporation identified therein, Deutsche Bank AG New York Branch and the lenders identified therein Incorporated by reference to Exhibit 99.6 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 15, 2011 10.2610.24 Amendment No. 1 to the Credit Agreement, dated January 13, 2012, by and among the Colfax Corporation, certain subsidiaries of Colfax Corporation identified therein, Deutsche Bank AG New York Branch and the lenders identified therein Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 17, 2012 10.2710.25 Share PurchaseSecond Amendment to the Credit Agreement, dated February 22, 2013, by and among Inversiones Breca S.A. andthe Colfax Corporation, dated ascertain subsidiaries of May 26, 2012Colfax Corporation identified therein, Deutsche Bank AG New York Branch and the lenders identified therein Incorporated by reference to Exhibit 2.110.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on February 25, 201310.26 Third Amendment to the Credit Agreement, dated November 7, 2013 by and among the Colfax Corporation, certain subsidiaries of Colfax Corporation identified therein, Deutsche Bank AG New York Branch and the lenders identified therein Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on November 14, 2013 10.27 Incremental Amendment, dated May 14, 2014, by and among certain subsidiaries of Colfax Corporation identified therein, Deutsche Bank AG New York Branch and the lenders identified therein Incorporated by reference to Exhibit 10.1 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on May 31, 201214, 2014 10.28 Technical Amendment, No. 1 to the Share Purchase Agreementdated December 10, 2014, by and among Inversiones Breca S.A. andcertain subsidiaries of Colfax Corporation dated October 25, 2012identified therein and Deutsche Bank AG New York Branch Filed herewith 10.29 Registration Rights Agreement, dated May 30, 2003, by and among Colfax Corporation, Colfax Capital Corporation, Janalia Corporation, Equity Group Holdings, L.L.C., and Mitchell P. Rales and Steven M. Rales 10.30 Amendment No. 1 to the Registration Rights Agreement, by and among Colfax Corporation and Mitchell P. Rales and Steven M. Rales, dated February 18, 2013 Filed herewithIncorporated by reference to Exhibit 10.30 to Colfax Corporation’s Form 10-K (File No. 001-34045) as filed with the SEC on February 19, 2013 10.31 Securities Purchase Agreement, dated September 12, 2011, between BDT CF Acquisition Vehicle, LLC and Colfax Corporation Incorporated by reference to Exhibit 99.2 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 15, 2011 10.32 Securities Purchase Agreement, dated September 12, 2011, between Mitchell P. Rales and Colfax Corporation Incorporated by reference to Exhibit 99.3 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 15, 2011 10.33 Securities Purchase Agreement, dated September 12, 2011, between Steven M. Rales and Colfax Corporation Incorporated by reference to Exhibit 99.4 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 15, 2011 10.34 Securities Purchase Agreement, dated September 12, 2011, between Markel Corporation and Colfax Corporation Incorporated by reference to Exhibit 99.5 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on September 15, 2011 10.35 Registration Rights Agreement, dated as of January 24, 2012, between Colfax Corporation and BDT CF Acquisition Vehicle, LLC Incorporated by reference to Exhibit 10.01 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 30, 2012 10.36 Registration Rights Agreement, dated as of January 24, 2012, between Colfax Corporation and Mitchell P. Rales Incorporated by reference to Exhibit 10.02 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 30, 2012 10.37 Registration Rights Agreement, dated as of January 24, 2012, between Colfax Corporation and Steven M. Rales Incorporated by reference to Exhibit 10.03 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 30, 2012 10.38 Registration Rights Agreement, dated as of January 24, 2012, between Colfax Corporation and Markel Corporation Incorporated by reference to Exhibit 10.04 to Colfax Corporation’s Form 8-K (File No. 001-34045) as filed with the CommissionSEC on January 30, 2012 12.1 Computation of Ratio of Earnings to Fixed Charges Filed herewith 21.1 Subsidiaries of registrant Filed herewith 23.1 Consent of Independent Registered Public Accounting Firm Filed herewith 31.1 Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith 31.2 Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith 32.1 Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.2 Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith 101.INS***101.INS XBRL Instance Document Filed herewith 101.SCH***101.SCH XBRL Taxonomy Extension Schema Document Filed herewith 101.CAL***101.CAL XBRL Extension Calculation Linkbase Document Filed herewith 101.DEF***101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB***101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE***101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith *** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. Balance at
Beginning
of Period
Cost and Write-Offs Write-Downs and
Deductions Acquisitions Foreign
Currency
Translation Balance at
End of
Period (In thousands) Year Ended December 31, 2012: Allowance for doubtful accounts $ 2,578 $ 13,917 $ — $ (192 ) $ — $ 161 $ 16,464 Allowance for excess slow-moving and obsolete inventory 6,735 3,341 — (1,001 ) — 146 9,221 Valuation allowance for deferred tax assets 79,855 — — Year Ended December 31, 2011: Allowance for doubtful accounts $ 2,562 $ 112 $ — $ (70 ) $ — $ (26 ) $ 2,578 Allowance for excess slow-moving and obsolete inventory 7,777 181 — (1,258 ) — 35 6,735 Valuation allowance for deferred tax assets 52,891 16,621 10,346 — — (3 ) 79,855 Year Ended December 31, 2010: Allowance for doubtful accounts $ 2,837 $ 218 $ — $ (405 ) $ — $ (88 ) $ 2,562 Allowance for excess slow-moving and obsolete inventory 8,025 1,942 — (1,849 ) — (341 ) 7,777 Valuation allowance for deferred tax assets 45,053 4,407 3,666 (180 ) — (55 ) 52,891 __________ Balance at
Beginning
of Period
Expense (1)
Accounts (2) Write-Offs Write-Downs and
Deductions Foreign
Currency
Translation Balance at
End of
Period (In thousands) Year Ended December 31, 2014: Allowance for doubtful accounts $ 31,282 $ 2,950 $ — $ (4,100 ) $ — $ (2,876 ) $ 27,256 Allowance for excess slow-moving and obsolete inventory 32,773 8,748 — (5,098 ) — (1,850 ) 34,573 Valuation allowance for deferred tax assets 360,910 11,933 (65,999 ) (146,177 ) 1,790 (2,771 ) 159,686 Year Ended December 31, 2013: Allowance for doubtful accounts $ 16,464 $ 12,707 $ — $ — $ 2,753 $ (642 ) $ 31,282 Allowance for excess slow-moving and obsolete inventory 9,221 21,629 — (2,026 ) 4,207 (258 ) 32,773 Valuation allowance for deferred tax assets 357,638 30,554 (27,233 ) (3,373 ) 4,925 (1,601 ) 360,910 Year Ended December 31, 2012: Allowance for doubtful accounts $ 2,578 $ 13,917 $ — $ (192 ) $ — $ 161 $ 16,464 Allowance for excess slow-moving and obsolete inventory 6,735 3,341 — (1,001 ) — 146 9,221 Valuation allowance for deferred tax assets 79,855 103,785 20,676 — 153,322 — 357,638 Amounts charged to other accounts isexpense are net of recoveries for the respective period.Represents amount chargedcharge to Accumulated other comprehensive loss.loss and, for the year ended December 31, 2014, includes reclassifications to deferred tax asset accounts.99Includes reclassifications related to the Charter Acquisition during the year ended December 31, 2013. The valuation allowance for deferred tax assets during the year ended December 31, 2013 reflects the impact of retrospective adjustments recorded during the year ended December 31, 2014. See Note 4, "Acquisitions" for further discussion.