Enovis (ENOV) 8-K Report of Independent Auditors

Exhibit 99.3

UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION OF THE COMPANY AND DJO GLOBAL, INC.

The following unaudited pro forma consolidated condensed financial information of Colfax Corporation (“Colfax”) is presented to illustrate the estimated income statement effects of the acquisition (“the Acquisition”) of DJO Global, Inc. (“DJO”) as such data may have appeared if the Acquisition had been completed on January 1, 2017. The unaudited pro forma consolidated condensed balance sheet is presented as if the Acquisition had been completed on September 28, 2018. The unaudited pro forma consolidated condensed financial information has been derived from and should be read in conjunction with:

• Colfax Corporation’s audited consolidated financial statements and related notes as of, and for the year ended, December 31, 2017, included in Colfax’s Annual Report on Form10-K for the year ended December 31, 2017;

• Colfax Corporation’s unaudited consolidated financial statements and related notes contained in Colfax’s Quarterly Report on Form10-Q, as of and for the nine months ended September 28, 2018;

• DJO Global, Inc’s audited consolidated financial statements and related notes as of, and for the year ended, December 31, 2017; and

• DJO Global, Inc’s unaudited consolidated financial statements and related notes as of and for the nine months ended September 29, 2018.

To prepare the unaudited pro forma consolidated condensed financial information, the historical financial statements of DJO have been adjusted to reflect certain reclassifications to conform to Colfax’s financial statement presentation as described in Note 3. Pro forma adjustments were made to Colfax’s historical consolidated financial information to reflect items that are (1) directly attributable to the Acquisition, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the consolidated operating results of Colfax.

The pro forma financial statements do not reflect the costs of any integration activities, possible or pending asset dispositions, the benefits that may result from realization of future cost savings from operating efficiencies or revenue synergies that may result from the Acquisition.

The pro forma financial statements are presented for informational purposes only and do not purport to represent what the results of operations or financial condition would have been had the Acquisition actually occurred on the dates indicated, nor do they purport to project the results of operations or financial condition of the consolidated company for any future period or as of any future date. The pro forma financial statements have been prepared in advance of the close of the Acquisition; the final amounts recorded upon the closing of the Acquisitions may differ materially from the information presented.

The unaudited pro forma consolidated condensed financial data has been prepared using the acquisition method of accounting under U.S. generally accepted accounting principles, which are subject to change and interpretation. The acquisition accounting is dependent upon certain valuations and other studies that have yet to be completed. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma consolidated condensed financial data. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the accompanying unaudited pro forma consolidated condensed financial data and the consolidated company’s future results of operations and financial position.

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UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET

COLFAX CORPORATION

	As of 9/28/2018			As of 9/29/2018
(in thousands)	Historical Colfax			Historical DJO			Equity- Related Adjustments			Debt- Related Adjustments			Merger- Related Adjustments			Pro Forma
				(Note 3)			(Note 5)			(Note 6)			(Note 7)
Assets
Cash and cash equivalents	$	285,900		$	27,619		$	436,500	(a)	$	2,684,719	(a)	$	(3,221,219	)(a)	$	213,519
Trade receivable, net		953,881			172,492			—			—			—			1,126,373
Inventories, net		484,242			183,837			—			—			—			668,079
Other current assets		227,249			31,329			—			—			(2,182	)(b)		256,396
Total current assets		1,951,272			415,277			436,500			2,684,719			(3,223,401	)		2,264,367
Property, plant, and equipment, net		494,377			143,041			—			—			—			637,418
Goodwill		2,524,134			878,689			—			—			459,169	(c)		3,861,992
Intangible assets, net		941,246			570,725			—			—			1,166,275	(d)		2,678,246
Other assets		535,200			4,523			—			628	(b)		(343	)(b)		540,008
Total assets	$	6,446,229		$	2,012,255		$	436,500		$	2,685,347		$	(1,598,300	)	$	9,982,031
Liabilities and Equity
Liabilities
Current portion of long-term debt	$	6,385		$	23,488		$	21,922	(b)	$	61,250	(c)	$	(23,488	)(e)	$	89,557
Accounts payable		563,730			102,009			—			—			—			665,739
Customer advances and billings in excess of costs incurred		148,635			—			—			—			—			148,635
Accrued liabilities		350,130			176,318			—			(92	)(d)		4,670	(f)		531,026
Total current liabilities		1,068,880			301,815			21,922			61,158			(18,818	)		1,434,957
Long-term debt, less current portion		1,135,624			2,397,975			45,692	(c)		2,628,849	(e)		(2,397,975	)(e)		3,810,165
Other liabilities		763,403			166,281			—			—			11,338	(g)		941,022
Total liabilities		2,967,907			2,866,071			67,614			2,690,007			(2,405,455	)		6,186,144
Equity
Common stock		117			496			—			—			(496	)(h)		117
Additionalpaid-in capital		3,051,695			846,615			368,886	(d)		—			(846,615	)(h)		3,420,581
Retained earnings		945,944			(1,676,347	)		—			(4,660	) (f)		1,628,077	(h)		893,014
Accumulated other comprehensive loss		(735,894	)		(26,189	)		—			—			26,189	(h)		(735,894	)
Total Colfax Corp. equity		3,261,862			(855,425	)		368,886			(4,660	)		807,155			3,577,818
Noncontrolling interest		216,460			1,609			—			—			—			218,069
Total equity		3,478,322			(853,816	)		368,886			(4,660	)		807,155			3,795,887
Total liabilities and equity	$	6,446,229		$	2,012,255		$	436,500		$	2,685,347		$	(1,598,300	)	$	9,982,031

The accompanying notes are an integral part of these unaudited pro forma consolidated condensed financial statements.

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UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME

COLFAX CORPORATION

	For the year ended 12/31/2017			For the year ended 12/31/2017
(in thousands, except per share amounts)	Historical Colfax			Historical DJO			Equity- Related Adjustments			Debt- Related Adjustments			Merger- Related Adjustments			Pro Forma
				(Note 3)			(Note 5)			(Note 6)			(Note 8)
Net sales	$	3,300,184		$	1,186,206		$	—		$	—		$	—		$	4,486,390
Cost of sales		2,270,709			493,116			—			—			—			2,763,825
Gross profit		1,029,475			693,090			—			—			—			1,722,565
Selling, general and administrative expense		732,340			558,314			—			—			65,994	(a)		1,356,648
Restructuring and other related charges		68,351			58,775			—			—			—			127,126
Goodwill and intangible asset impairment charge		152,700			—			—			—			—			152,700
Pension settlement loss (gain)		46,933			—			—			—			—			46,933
Operating income		29,151			76,001			—			—			(65,994	)		39,158
Interest expense, net		41,137			172,125			4,643	(e)		144,955	(g)		(173,878	)(b)		188,982
Income (loss) from continued operations before income taxes		(11,986	)		(96,124	)		(4,643	)		(144,955	)		107,884			(149,824	)
Provision for income taxes		42,554			(60,720	)		(1,764	)(f)		(55,083	)(h)		(15,542	)(c)		(90,555	)
Net income (loss) from continuing operations		(54,540	)		(35,404	)		(2,879	)		(89,872	)		123,426			(59,269	)
Income from discontinued operations, net of taxes		224,047			309			—			—			—			224,356
Net income (loss)		169,507			(35,095	)		(2,879	)		(89,872	)		123,426			165,087
Less: income attributable to noncontrolling interest, net of taxes		18,417			799			—			—			—			19,216
Net income (loss) attributable to Colfax Corp.	$	151,090		$	(35,894	)	$	(2,879	)	$	(89,872	)	$	123,426		$	145,871
Net income (loss) per share – basic (Note 9)
Continuing operations	$	(0.59	)													$	(0.43	)
Discontinued operations	$	1.82														$	1.61
Consolidated operations	$	1.23														$	1.18
Net income (loss) per share – diluted (Note 9)
Continuing operations	$	(0.59	)													$	(0.43	)
Discontinued operations	$	1.81														$	1.61
Consolidated operations	$	1.22														$	1.18

The accompanying notes are an integral part of these unaudited pro forma consolidated condensed financial statements.

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UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF INCOME

COLFAX CORPORATION

	For the nine months ended 9/28/2018			For the nine months ended 9/29/2018
(in thousands, except per share amounts)	Historical Colfax			Historical DJO			Equity- Related Adjustments			Debt- Related Adjustments			Merger- Related Adjustments			Pro Forma
				(Note 3)			(Note 5)			(Note 6)			(Note 8)
Net sales	$	2,681,586		$	891,517		$	—		$	—		$	—		$	3,573,103
Cost of sales		1,852,603			361,756			—			—			—			2,214,359
Gross profit		828,983			529,761			—			—			—			1,358,744
Selling, general and administrative expense		600,136			405,393			—			—			51,791	(a)		1,057,320
Restructuring and other related charges		40,791			35,222			—			—			—			76,013
Operating income		188,056			89,146			—			—			(51,791	)		225,411
Interest expense, net		29,153			137,339			2,384	(e)		111,221	(g)		(134,722	)(b)		145,375
Loss on short term investments		10,128			—			—			—			—			10,128
Income (loss) from continuing operations before income tax		148,775			(48,193	)		(2,384	)		(111,221	)		82,931			69,908
Provision (benefit) for income taxes		11,490			12,201			(596	)(f)		(27,805	)(h)		11,942	(c)		7,232
Net income (loss) from continuing operations		137,285			(60,394	)		(1,788	)		(83,416	)		70,989			62,676
Income (loss) from discontinued operations, net of taxes		(31,262	)		486			—			—			—			(30,776	)
Net income (loss)		106,023			(59,908	)		(1,788	)		(83,416	)		70,989			31,900
Less: income attributable to noncontrolling interest, net of taxes		11,721			846			—			—			—			12,567
Net income (loss) attributable to Colfax Corp.	$	94,302		$	(60,754	)	$	(1,788	)	$	(83,416	)	$	70,989		$	19,333
Net income (loss) per share – basic (Note 9)
Continuing operations	$	1.04														$	0.47
Discontinued operations	$	(0.26	)													$	(0.23	)
Consolidated operations	$	0.78														$	0.24
Net income (loss) per share – diluted (Note 9)
Continuing operations	$	1.03														$	0.45
Discontinued operations	$	(0.26	)													$	(0.22	)
Consolidated operations	$	0.77														$	0.23

The accompanying notes are an integral part of these unaudited pro forma consolidated condensed financial statements.

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Notes to Unaudited Pro Forma Consolidated Condensed Financial Statements

1. Description of Acquisition

On November 19, 2018, Colfax entered into an Agreement and Plan of Merger (the “Merger Agreement”) with, among others, DJO Global, Inc., a Delaware limited liability company, pursuant to which Colfax agreed to purchase DJO from private equity funds managed by The Blackstone Group L.P. and repay or redeem all existing indebtedness of DJO. The amount payable by Colfax in connection with the Acquisition is calculated as $3.15 billion in cash plus the aggregate amount of cash, cash equivalents and marketable securities of DJO on a consolidated basis, subject to certain adjustments set forth in the Merger Agreement. DJO develops, manufactures and distributes high-quality medical devices with a broad range of products used for rehabilitation, pain management and physical therapy.

Pursuant to the Merger Agreement, subject to the satisfaction or waiver of specified conditions, an indirect, wholly-owned subsidiary of Colfax will merge with and into DJO, with DJO continuing as the surviving company and an indirect, wholly-owned subsidiary of Colfax. The Acquisition is expected to close in the first quarter of 2019, subject to the satisfaction of customary closing conditions.

Colfax anticipates that approximately $3.2 billion will be required to pay the Acquisition consideration to the DJO shareholder, repay or redeem any indebtedness of DJO and to pay transaction fees and expenses relating to the Acquisition. Colfax intends to finance the Acquisition with the net proceeds from the offering of Tangible Equity Units (“TEUs”), the debt financings described below and $100.0 million of cash on hand.

Subsequent to this offering of TEUs, Colfax expects to offer approximately $1.0 billion aggregate principal amount of debt securities as additional financing for the Acquisition. This prospectus supplement is not an offer to sell or a solicitation of an offer to buy any debt securities being offered in the debt securities offering, which will be made by a separate offering document and is not part of the offering to which this prospectus supplement relates. The completion of this TEUs offering is not contingent on the completion of the debt securities offering, and the completion of the debt securities offering is not contingent on the completion of this TEUs offering. Neither this offering nor the debt securities offering is contingent on the completion of the Acquisition or any debt financing.

Colfax also expects to enter into a new term loan and revolving credit facility with a syndicate of banks to refinance Colfax’s historical financings (the “New Credit Facility”). The New Credit Facility will consist of a $1.3 billion five-year revolving credit facility (the “New Revolver”), a $500.0 milliontwo-year term loan facility (the “2 Year Term Facility”), and a $1.225 billion five-year term loan facility (the “5 Year Term Facility” and, together, the “Term Facilities”). Neither this offering nor the entry into, or amendment of, the credit facilities is contingent on the completion of the Acquisition or any debt financing.

In connection with entering into the Merger Agreement, we entered into a debt commitment letter (the “Commitment Letter”), dated as of November 18, 2018, with JPMorgan Chase Bank, N.A., Credit Suisse AG and Credit Suisse Loan Funding LLC, pursuant to which such financial institutions have committed to provide $3.29 billion of bridge financing for the Acquisition (the “Bridge Facility”). See “Summary—Recent Developments—Acquisition of DJO—Acquisition Financing.”

2. Basis of Presentation

The acquisition will be accounted for as a business combination by Colfax using the acquisition method of accounting under the provisions of Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, under GAAP. Under the acquisition method of accounting, the total estimated purchase price of

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an acquisition is allocated to the net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Such valuations are based on available information and certain assumptions that management believes are reasonable. The preliminary allocation of the estimated purchase price to the net tangible and intangible assets acquired and liabilities assumed is based on various preliminary estimates. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing these pro forma financial statements. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could be material. The differences, if any, could have a material impact on the accompanying pro forma financial statements and Colfax’s future results of operations and financial position.

Colfax performed a review of DJO’s accounting policies for the purpose of identifying any material differences in significant accounting policies and any accounting adjustments that would be required in connection with adopting uniform policies. Management is not aware of any differences in the accounting policies that will result in material adjustments to the consolidated financial statements as a result of conforming the accounting policies except for the presentation of certain financial statement line items as discussed below.

The final structure and terms of the DJO acquisition financing will be subject to market conditions and may change materially from the assumptions described above. Changes in the assumptions described above would result in changes to various components of the unaudited pro forma condensed consolidated balance sheet, including cash and cash equivalents, long-term debt and additionalpaid-in capital, and various components of the unaudited pro forma condensed consolidated statements of income, including interest expense, earnings per share and weighted-average shares outstanding. Depending upon the nature of the changes, the impact on the pro forma financial information could be material.

The unaudited pro forma consolidated financial information is presented for informational purposes only and does not purport to represent what our results of operations or financial condition would have been had the Acquisition actually occurred on the dates indicated, nor do they purport to project our results of operations or financial condition for any future period or as of any future date.

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3. Reclassifications

Certain reclassifications were made to the historical financial statements of DJO to conform DJO’s financial statement line item presentation to Colfax’s presentation, which include the following:

DJO reclassifications in the unaudited pro forma condensed consolidated balance sheet

as of September 29, 2018

(in thousands)	Before Reclassification			Reclassification			After Reclassification
Prepaid expenses and other current assets		30,818			(30,818	))(a)		—
Current assets of discontinued operations		511			(511	)(a)		—
Other current assets		—			31,329	(a)		31,329
Accrued interest		47,329			(47,329	)(b)		—
Other current liabilities		128, 989			(128,989	)(b)		—
Accrued liabilities		—			176,318	(b)		176,318
Deferred tax liabilities, net		145,606			(145,606	)(c)		—
Other long-term liabilities		20,675			(20,675	)(c)		—
Other liabilities		—			166,281	(c)		166,281
Treasury stock at cost		(3,600	)		3,600	(d)		—
Additionalpaid-in capital		850,215			(850,215	)(d)		—
Additionalpaid-in capital		—			846,615	(d)		846,615
Accumulated deficit		(1,676,347	)		1,676,347	(e)		—
Retained earnings		—			(1,676,347	)(e)		(1,676,347	)

(a) Represents the reclassification of Prepaid expenses and other current assets and Current assets of discontinued operations on DJO’s balance sheet into Other current assets to conform to Colfax’s balance sheet presentation.

(b) Represents the reclassification of Accrued interest and Other current liabilities on DJO’s balance sheet into Accrued liabilities to conform to Colfax’s balance sheet presentation.

(c) Represents the reclassification of Deferred tax liabilities and Other long-term liabilities on DJO’s balance sheet into Other liabilities to conform to Colfax’s balance sheet presentation.

(d) Represents the reclassification of Treasury stock at cost and Additionalpaid-in capital on DJO’s balance sheet into Additionalpaid-in capital to conform to Colfax’s balance sheet presentation.

(e) Represents the reclassification of Accumulated deficit on DJO’s balance sheet into Retained earnings to conform to Colfax’s balance sheet presentation.

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DJO reclassifications in the unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2017

(in thousands)	Before Reclassification			Reclassification			After Reclassification
Selling, general, and administrative		456,739			(456,739	)(f)		—
Research and development		35,429			(35,429	)(f)		—
Amortization of intangible assets		66,146			(66,148	)(f)		—
Selling, general, and administrative expense		—			558,314	(f)		558,314
Cost of sales		4,991			(4,991	)(g)		—
Selling, general and administrative		53,784			(53,784	)(g)		—
Restructuring and other related charges		—			58,775	(g)		58,775
Interest expense, net		174,238			(174,238	)(h)		—
Other (income) expense, net		(2,113	)		2,113	(h)		—
Interest expense, net		—			172,125	(h)		172,125

(f) Represents the reclassification of Research and development, Amortization of intangible assets, and a portion of Selling, general, and administrative on DJO’s statement of income into Selling, general, and administrative expense to conform to Colfax’s statement of income presentation.

(g) Represents the reclassification of a portion of Cost of sales, and a portion of Selling general and administrative on DJO’s statement of income into Restructuring and other related charges to conform to Colfax’s statement of income presentation.

(h) Represents the reclassification of Interest expense and Other (income) expense on DJO’s statement of income into Interest expense to conform to Colfax’s statement of income presentation.

DJO reclassifications in the unaudited pro forma condensed consolidated statement of income for the nine months ended September 29, 2018

(in thousands)	Before Reclassification		Reclassification			After Reclassification
Selling, general, and administrative		330,261		(330,261	)(i)		—
Research and development		30,687		(30,687	)(i)		—
Amortization of intangible assets		44,445		(44,445	)(i)		—
Selling, general, and administrative expense		—		405,393	(i)		405,393
Cost of sales		14,024		(14,024	)(j)		—
Selling, general and administrative		21,198		(21,198	)(j)		—
Restructuring and other related charges		—		35,222	(j)		35,222
Interest expense, net		136,299		(136,299	)(k)		—
Other (income) expense, net		1,040		(1,040	)(k)		—
Interest expense, net		—		137,339	(k)		137,339

(i) Represents the reclassification of Research and development, Amortization of intangible assets, and a portion of Selling, general, and administrative on DJO’s statement of income into Selling, general, and administrative expense to conform to Colfax’s statement of income presentation.

(j) Represents the reclassification of a portion of Cost of sales, and a portion of Selling general and administrative on DJO’s statement of income into Restructuring and other related charges to conform to Colfax’s statement of income presentation.

(k) Represents the reclassification of Interest expense and Other (income) expense on DJO’s statement of income into Interest expense to conform to Colfax’s statement of income presentation.

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4. Preliminary Purchase Price Allocation

The pro forma adjustments include a preliminary allocation of the estimated purchase price of DJO to the estimated fair values of assets acquired and liabilities assumed at the acquisition date, with the excess recorded as Goodwill. The final allocation of the purchase price could differ materially from the preliminary allocation primarily because market prices, interest rates and other valuation variables will fluctuate over time and be different at the time of completion of the Acquisition compared to the amounts assumed for the pro forma adjustments.

The following is a summary of the preliminary purchase price allocation giving effect to the Acquisition as if it had been completed on September 28, 2018:

(in thousands)
Cash	$	27,619
Trade receivables, net		172,492
Inventories, net		183,837
Other current assets		29,147
Property, plant and equipment, net		143,041
Goodwill		1,337,858
Intangible assets, net		1,737,000
Other assets		4,180
Total assets acquired		3,635,174
Accounts payable, accrued expenses and other current liabilities		(278,327	)
Deferred tax liability, including current portion		(156,944	)
Other long-term liabilities		(20,675	)
Noncontrolling interest		(1,609	)
Fair value of net assets acquired	$	3,177,619

5. Equity Related Pro Forma Adjustments

The following summarizes the pro forma adjustments in connection with the TEUs financing of the Acquisition as if it had occurred on January 1, 2017 for the purposes of the pro forma consolidated statement of income, and as if it had occurred on September 28, 2018 for the purposes of the unaudited pro forma consolidated balance sheet.

a) Adjustment to cash consists of the following:

(in thousands)	As of Sept. 28, 2018
Gross proceeds raised from the TEUs	$	450,000
Cash paid for financing fees related to TEUs		(13,500	)
Net Proceeds from TEUs	$	436,500

b) Adjustment to record the current portion of the detachable debt component of TEUs.

c) Adjustment to record thenon-current portion of the detachable debt component of TEUs.

d) Adjustment to record the detachable equity component of TEUs. Based on the expected structure of the TEUs, Colfax expects the purchase contract component of the TEUs to meet equity classification. The classification of the TEU will be subject to detailed assessment once finalized and a different conclusion may result in a material impact on these unaudited pro forma condensed consolidated financial information.

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e) Adjustment to interest expense consists of the following:

(in thousands)	Year ended December 31, 2017		Nine months ended Sept. 28, 2018
Interest expense related to the debt component of TEUs	$	3,541	$	1,815
Amortization of deferred financing fees related to the debt component of TEUs(1)		1,102		569
Pro forma adjustment to interest expense	$	4,643	$	2,384

(1) Represents fees paid to the initial purchasers for their services in arranging and structuring the financing as well as other debt issuance costs. The fees were allocated between the debt and equity component on apro-rata basis. Only the deferred financing fees related to the debt component of the TEUs will be amortized. These fees will be amortized using the effective interest method.

f) Adjustment to record the income tax impacts of the pro forma adjustments using a statutory tax rate of 38.0% for the year ended December 31, 2017 and 25.0% for the nine months ended September 28, 2018. These rates do not reflect Colfax’s effective tax rate, which includes other items and may differ from the rates assumed for purposes of preparing these statements.

6. Debt Related Pro Forma Adjustments

The following summarizes the pro forma adjustments in connection with the new debt financing of the Acquisition and the refinancing of certain historical financings of Colfax as if each had occurred on January 1, 2017 for the purposes of the pro forma consolidated statement of income, and as if each had occurred on September 28, 2018 for the purposes of the unaudited pro forma consolidated balance sheet.

(a) Adjustment to cash consists of the following:

(in thousands)	As of Sept. 28, 2018
Amounts borrowed under the debt securities	$	1,000,000
Amounts borrowed under the 2 Year Term Facility		500,000
Amounts borrowed under the 5 Year Term Facility		1,225,000
Amounts drawn down on New Revolver		634,499
Cash paid for financing fees related to the debt securities		(12,500	)
Cash paid for financing fees related to the 2 Year Term Facility		(3,750	)
Cash paid for financing fees related to the 5 Year Term Facility		(9,188	)
Cash paid for financing fees related to the New Revolver		(3,250	)
Cash paid in connection with repayment of historical financing		(646,092	)
Net amount of cash from debt financing	$	2,684,719

(b) Adjustment to other assets consists of the following:

(in thousands)	As of Sept. 28, 2018
Record deferred financing fees related to the New Revolver(1)	$	3,250
Eliminate deferred financing fees related to the repayment of historical financing		(2,622	)
Total adjustment to other assets	$	628

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(1) The capitalized costs will be amortized over the term of the New Revolver on a straight-line basis.

(c) Adjustment to record the current portion of long-term debt related to 5 Year Term Facility.

(d) Adjustment to eliminate the accrued interest associated with repayment of historical financing

(e) Adjustment to long-term debt consists of the following:

(in thousands)	As of Sept. 28, 2018
Record aggregate amount of the debt securities	$	1,000,000
Record aggregate amount of the 2 Year Term Facility		500,000
Record aggregate amount of the 5 Year Term Facility, less current portion		1,163,750
Record amount drawn down on New Revolver		634,499
Less: Cash paid for financing fees related to the debt securities		(12,500	)
Less: Cash paid for financing fees related to the 2 Year Term Facility		(3,750	)
Less: Cash paid for financing fees related to the 5 Year Term Facility		(9,188	)
Less: Repayment of historical financing, net of deferred financing fees		(643,962	)
Total adjustment to debt, net of current portion	$	2,628,849

(f) Adjustment to retained earnings consists for the following:

(in thousands)	As of Sept. 28, 2018
Eliminate deferred financing fees related to the repayment of historical financing, classified as other assets	$	(2,622	)
Eliminate deferred financing fees related to the repayment of historical financing, classified as contra liability		(2,038	)
Total adjustment to retained earnings	$	(4,660	)

(g) Adjustment to interest expense consists of the following:

(in thousands)	Year ended December 31, 2017			Nine months ended Sept. 28, 2018
Interest expense related to new debt borrowings(1)	$	138,401		$	101,713
Interest expense related to draw down from New Revolver		31,167			23,375
Amortization of deferred financing fees(2)		6,232			4,601
Add back: interest expense related to historical financing(3)		(30,845	)		(18,468	)
Pro forma adjustment to interest expense	$	144,955		$	111,221

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(1) Comprised of interest expense related to the debt securities and Term Facilities.

(2) Represents fees paid to the initial purchasers for their services in arranging and structuring the financing as well as other debt issuance costs. Deferred financing fees related to the debt securities and Term Facilities are amortized using the effective interest method. Deferred financing fees related to the New Revolver are amortized on a straight-line basis.

(3) Represents interest expense related to the debt that will be paid off in connection with the new debt financing of the Acquisition and the refinancing of certain historical financings of Colfax.

The adjustment to interest expense assumes the principal, stated amount, assumed rates on the New Revolver and Term Facilities do not change from those assumed, however, a 0.125% change in the respective variable interest rate of the New Revolver and Term Facilities would result in an increase or decrease in pro forma interest expense of approximately $2.9 million for the year ended December 31, 2017 and $2.2 million for the nine months ended September 28, 2018.

(h) Adjustment to record the income tax impacts of the pro forma adjustments using a statutory tax rate of 38.0% for the year ended December 31, 2017 and 25.0% for the nine months ended September 28, 2018. These rates do not reflect Colfax’s effective tax rate, which includes other items and may differ from the rates assumed for purposes of preparing these statements.

7. Merger Related Pro Forma Consolidated Condensed Balance Sheet Adjustments

The following summarizes the pro forma adjustments in connection with the Acquisition (including associated repayment or redemption of all existing indebtedness of DJO) to give effect as if it had been completed on September 28, 2018 for the purposes of pro forma consolidated balance sheet:

(a) Adjustment to cash consists of the following:

(in thousands)	As of Sept. 28, 2018
Base Merger Cash Consideration	$	3,150,000
Plus: DJO Cash		27,619
Aggregate Estimated Merger Consideration	$	3,177,619
Plus: Other estimated transaction fees and expenses incurred by Colfax		43,600
Total merger related adjustment to cash	$	3,221,219

Aggregate Estimated Merger Consideration does not give effect to all adjustments to the total amount payable by Colfax under the Merger Agreement. Such amounts may differ from the estimates presented herein based on movements in DJO working capital and cash balances, among other reasons.

(b) Adjustment to eliminate amounts related to derivative instruments associated with DJO’s historical indebtedness, eliminates certain existing deferred financing fees and establishes deferred financing fees associated with financing the acquisition.

(c) Adjustment to eliminate DJO’s historical goodwill of $878.7 million and to recognize goodwill of the proposed DJO acquisition of $1,337.9 million. Goodwill is calculated as the difference between the estimated purchase price and the fair value of identifiable tangible and intangible assets acquired, net of liabilities assumed. The adjustment is preliminary and subject to change based upon final determination of the fair value of assets acquired and liabilities assumed and finalization of the purchase price.

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(d) Adjustment to eliminate DJO’s historical intangible assets, net of $570.7 million and to recognize the estimatedstep-up in fair value of intangible assets acquired consisting of trade names, technology, and customer relationships. The fair value of the intangible assets acquired is as follows:

(in thousands)	As of Sept. 28, 2018
Trade names	$	479,000
Technology		304,000
Customer relationships		954,000
Fair value of intangible assets acquired	$	1,737,000

The fair value of acquired tradenames and technology were determined using the “relief from royalty method,” which is a variation of the income approach. It is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The fair value of customer relationships was determined using the “excess earnings method” which is a variation of the income approach based on expected future revenues derived from the customers acquired. The above fair value estimates are preliminary and subject to change and could vary materially from the actual adjustment on the consummation date.

(e) Adjustment to eliminate $23.5 million of DJO’s current portion of long-term debt and $2,398.0 million of DJO’snon-current portion of long-term debt that will be repaid, or caused to be repaid, by Colfax as part of the Acquisition from the $3.15 billion merger consideration.

(f) Adjustment to accrue for transaction fees and expenses to be incurred by DJO.

(g) Adjustment to other liabilities is related to changes in deferred tax liabilities and is as follows:

(in thousands)	As of Sept. 28, 2018
Incremental increase to intangible assets that do not have tax basis	$	288,590
Reversal of U.S. valuation allowance		(234,383	)
Reset of deferred tax liabilities associated with DJO historical goodwill		(42,870	)
Total adjustment to other liabilities	$	11,338

(h) Adjustment to total equity consists of the following:

	As of Sept. 28, 2019
Eliminate DJO’s historical equity	$	855,425
Adjustment to accrue for transaction fees and expenses to be incurred by DJO		(4,670	)
Adjustment to accrue for other estimated transaction fees and expenses to be incurred by Colfax		(43,600	)
Total adjustment to equity	$	807,155

8. Merger Related Pro Forma Consolidated Condensed Statement of Income Adjustments

The following summarizes the pro forma adjustments in connection with the Acquisition to give effect as if it had been completed on January 1, 2017 for the purposes of pro forma consolidated statements of income:

(a) Adjustment represents the increase in the amortization of intangible assets associated with the respectivestep-up in the fair value of acquired identifiable intangible assets, and the adjustment to

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removenon-recurring transaction costs to be incurred by DJO. For purposes of the pro forma consolidated statements of income, amortization expense was recorded on a straight-line basis over the life of the acquired intangible assets.

(b) Adjustment to eliminate interest expense related to historical DJO indebtedness and related derivatives that will not be assumed by Colfax.

(c) Adjustment to record the income tax impacts of the pro forma adjustments using a statutory tax rate of 38.0% for the year ended December 31, 2017 and 25.0% for the nine months ended September 28, 2018.

These rates do not reflect Colfax’s effective tax rate, which includes foreign taxes and other items and may differ from the rates assumed for purposes of preparing these statements.

In addition to recording the income tax impacts of the pro forma adjustments using the aforementioned statutory rates, there are separate adjustments to (1) record the income tax benefit due to changes in U.S. valuation allowance of $56.5 million for the year ended December 31, 2017 and $17.8 million for the nine months ended September 28, 2018 and (2) record the income tax expense due to tax reform of $9.1 million for the nine months ended September 28, 2018.

No pro forma adjustment was made to eliminate the $(118.4)M income tax benefit related to there-measurement of valuation allowance due to the reduction in the U.S. corporate income tax rate from 35% to 21%. There-measurement of deferred taxes is not an event directly attributable to the transaction and will not have continuing impact.

9. Earnings Per Share

The unaudited pro forma consolidated basic and diluted earnings per share (‘‘EPS’’) for the year ended December 31, 2017 and the nine months ended September 28, 2018 are based on pro forma income reflecting the adjustments discussed above divided by the basic and diluted pro forma weighted-average number of common shares outstanding.

In connection with the TEU issuance, prepaid stock purchase contracts were issued, which give the holder the mandatory option to redeem the stock contracts for a variable number of common shares, subject to a minimum share settlement rate, for no additional consideration. The unaudited pro forma basic EPS calculation gives effect to the assumed TEU issuance by including the minimum number of shares issuable in its weighted average shares outstanding, as if they were issued and outstanding as of January 1, 2017, such that the total average of weighted shares outstanding would 139.5 million and 134.0 million for the year ended December 31, 2017 and the nine months ended September 28, 2018, respectively, on a pro forma consolidated basis.

The unaudited pro forma diluted EPS calculation should give effect to all potentially dilutive shares following the close of the Transactions, including the shares issuable pursuant to the prepaid stock purchase contracts as part of the TEU issuance. For purposes of calculating unaudited pro forma diluted EPS, the incremental amount of shares that would be exercisable based on the Company’s assumed share price at issuance of $23.00 are included. The exercise of the prepaid stock purchase contracts is assumed to have occurred on January 1, 2017. The shares issuable pursuant to the exercise of the stock purchase contracts and stock-based compensation awards have been excluded from the calculation of unaudited pro forma diluted EPS for the year ended December 31, 2017 because the effect would have been anti-dilutive.

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The unaudited pro forma basic EPS are calculated as follows:

(in thousands, except per share amounts)	Year ended December 31, 2017			Nine months ended Sept. 28, 2018
Pro forma net (loss) income attributable to continuing operations	$	(59,269	)	$	62,676
Pro forma basic weighted-average common shares outstanding		139,534			134,014
Pro forma basic EPS - continuing operations	$	(0.43	)	$	0.47
Pro forma net income (loss) attributable to discontinued operations	$	224,356		$	(30,776	)
Pro forma basic weighted-average common shares outstanding		139,534			134,014
Pro forma basic EPS - discontinued operations	$	1.61		$	(0.23	)
Pro forma net (loss) income	$	165,087		$	31,900
Pro forma basic weighted-average common shares outstanding		139,534			134,014
Pro forma basic EPS - consolidated operations	$	1.18		$	0.24

Should the underwriters fully exercise their option to purchase additional shares of common stock, which is limited to a maximum 2.9 million additional shares, our pro forma weighted-average shares outstanding would increase by such amount, and would increase pro forma basic earnings per share from continuing operations by $0.01 per share for the year ended December 31, 2017 and decrease by $0.01 per share for the nine months ended September 28, 2018, respectively.

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The unaudited pro forma diluted EPS are calculated as follows:

(in thousands, except per share amounts)	Year ended December 31, 2017			Nine months ended Sept. 28, 2018
Pro forma net (loss) income attributable to continuing operations	$	(59,269	)	$	62,676
Pro forma diluted weighted-average common shares outstanding		139,534			137,793
Pro forma diluted EPS - continuing operations	$	(0.43	)	$	0.45
Pro forma net income (loss) attributable to discontinued operations	$	224,356		$	(30,776	)
Pro forma diluted weighted-average common shares outstanding		139,534			137,793
Pro forma diluted EPS - discontinued operations	$	1.61		$	(0.22	)
Pro forma net (loss) income	$	165,087		$	31,900
Pro forma diluted weighted-average common shares outstanding		139,534			137,793
Pro forma diluted EPS - consolidated operations	$	1.18		$	0.23

Should the underwriters fully exercise their option to purchase additional shares of common stock, which is limited to a maximum 2.9 million additional shares, our pro forma weighted-average shares outstanding would increase by such amount, and would increase pro forma diluted earnings per share from continuing operations by $0.01 per share for the year ended December 31, 2017 and decrease by $0.01 per share for the nine months ended September 28, 2018, respectively.

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