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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2011	Feb. 06, 2012	Jul. 01, 2011
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	CFX
Entity Registrant Name	COLFAX CORP
Entity Central Index Key	0001420800
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		84,720,710
Entity Public Float			$ 627,956,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net sales	$ 693,392	$ 541,987	$ 525,024
Cost of sales	453,293	350,579	339,237
Gross profit	240,099	191,408	185,787
Selling, general and administrative expense	144,817	119,426	112,503
Research and development expense	5,707	6,205	5,930
Charter acquisition-related expense	31,052
Restructuring and other related charges	9,680	10,323	18,175
Asbestos liability and defense cost (income)	12,237	7,876	(2,193)
Asbestos coverage litigation expense	10,700	13,206	11,742
Operating income	25,906	34,372	39,630
Interest expense	5,919	6,684	7,212
Income before income taxes	19,987	27,688	32,418
Provision for income taxes	15,432	11,473	8,621
Net income	$ 4,555	$ 16,215	$ 23,797
Net income per share - basic and diluted	$ 0.10	$ 0.37	$ 0.55

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
CURRENT ASSETS:
Cash and cash equivalents	$ 75,108	$ 60,542
Trade receivables, less allowance for doubtful accounts of $2,578 and $2,562	117,475	98,070
Inventories, net	56,136	57,941
Deferred income taxes, net	9,407	6,108
Asbestos insurance asset	43,452	34,117
Asbestos insurance receivable	33,696	46,108
Prepaid expense	9,190	11,851
Other current assets	6,744	6,319
Total current assets	351,208	321,056
Deferred income taxes, net	43,989	52,385
Property, plant and equipment, net	90,939	89,246
Goodwill	204,844	172,338
Intangible assets, net	41,029	28,298
Long-term asbestos insurance asset	326,838	340,234
Long-term asbestos insurance receivable	14,034	5,736
Other assets	15,662	12,784
Total assets	1,088,543	1,022,077
CURRENT LIABILITIES:
Current portion of long-term debt	10,000	10,000
Accounts payable	54,035	50,896
Accrued asbestos liability	48,700	37,875
Accrued payroll	22,682	21,211
Advance payment from customers	14,704	17,250
Accrued taxes	4,911	6,173
Accrued restructuring liability	4,573	2,180
Other accrued liabilities	80,437	45,925
Total current liabilities	240,042	191,510
Long-term debt, less current portion	101,518	72,500
Long-term asbestos liability	382,394	391,776
Pension and accrued post-retirement benefits	140,429	112,257
Deferred income tax liability	13,145	13,529
Other liabilities	21,740	24,134
Total liabilities	899,268	805,706
Shareholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued or outstanding
Common stock, $0.001 par value; 200,000,000 shares authorized; 43,697,570 and 43,413,553 issued and outstanding	44	43
Additional paid-in capital	415,527	406,901
Accumulated deficit	(55,503)	(60,058)
Accumulated other comprehensive loss	(170,793)	(130,515)
Total shareholders' equity	189,275	216,371
Total liabilities and shareholders' equity	$ 1,088,543	$ 1,022,077

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Trade receivables, allowance for doubtful accounts	$ 2,578	$ 2,562
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, issued
Preferred stock, outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, issued	43,697,570	43,413,553
Common stock, outstanding	43,697,570	43,413,553

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2008	$ 181,375	$ 43	$ 400,259	$ (100,070)	$ (118,857)
Comprehensive income (loss):
Net income	23,797			23,797
Foreign currency translation	5,401				5,401
Unrealized loss on hedging activities	(866)				(866)
Changes in unrecognized pension and other postretirement benefit cost	(910)				(910)
Amounts reclassified to Net income:
Realized loss on hedging activities	2,881				2,881
Net pension and other postretirement benefit cost	2,554				2,554
Total comprehensive income (loss)	32,857			23,797	9,060
Stock-based award activity	2,593		2,593
Ending balance at Dec. 31, 2009	216,825	43	402,852	(76,273)	(109,797)
Comprehensive income (loss):
Net income	16,215			16,215
Foreign currency translation	(8,260)				(8,260)
Unrealized loss on hedging activities	(1,201)				(1,201)
Changes in unrecognized pension and other postretirement benefit cost	(18,690)				(18,690)
Amounts reclassified to Net income:
Realized loss on hedging activities	2,447				2,447
Net pension and other postretirement benefit cost	4,986				4,986
Total comprehensive income (loss)	(4,503)			16,215	(20,718)
Stock-based award activity	4,049		4,049
Ending balance at Dec. 31, 2010	216,371	43	406,901	(60,058)	(130,515)
Comprehensive income (loss):
Net income	4,555			4,555
Foreign currency translation	(11,465)				(11,465)
Unrealized loss on hedging activities	(161)				(161)
Changes in unrecognized pension and other postretirement benefit cost	(34,291)				(34,291)
Amounts reclassified to Net income:
Realized loss on hedging activities	1,479				1,479
Net pension and other postretirement benefit cost	4,160				4,160
Total comprehensive income (loss)	(35,723)			4,555	(40,278)
Stock-based award activity	8,627	1	8,626
Ending balance at Dec. 31, 2011	$ 189,275	$ 44	$ 415,527	$ (55,503)	$ (170,793)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Foreign currency translation, income taxes	$ (18)	$ (1,224)	$ (7)
Changes in unrecognized pension and other postretirement benefit cost, income taxes	(654)	(1,717)	(572)
Net pension and other postretirement benefit cost, income taxes	$ 114	$ 89	$ 1,438

- Definition

For each annual statement of income presented, the tax effect of the net gain (loss) recognized in other comprehensive income that is a reclassification adjustment of other comprehensive income as a result of being recognized as a component of net periodic benefit cost for the period.

+ References + Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities:
Net income	$ 4,555	$ 16,215	$ 23,797
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and fixed asset impairment charges	22,598	16,130	15,074
Stock-based compensation expense	4,908	3,137	2,593
Unrealized loss on acquisition-related foreign currency derivatives	21,146
Amortization of deferred loan costs	735	677	677
Loss (gain) on sale of fixed assets	679	90	(64)
Deferred income tax (benefit) expense	(1,722)	(296)	2,689
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net	(5,972)	(6,060)	16,280
Inventories, net	10,844	11,598	10,763
Accounts payable and accrued expenses, excluding asbestos-related accrued expenses	(10,902)	21,759	(20,899)
Other current assets	514	(934)	2,605
Asbestos liability and asbestos-related accrued expense, net of asbestos insurance asset and receivable	15,035	9,659	(10,166)
Changes in other operating assets and liabilities	(5,265)	(10,010)	(4,645)
Net cash provided by operating activities	57,153	61,965	38,704
Cash flows from investing activities:
Purchase of fixed assets	(14,786)	(12,527)	(11,006)
Acquisitions, net of cash received	(56,346)	(27,960)	(1,678)
Proceeds from sale of fixed assets	1,162	74	219
Net cash used in investing activities	(69,970)	(40,413)	(12,465)
Cash flows from financing activities:
Payments under term credit facility	(10,000)	(8,750)	(5,000)
Proceeds from borrowings on revolving credit facilities	141,203	5,500
Repayments of borrowings on revolving credit facilities	(102,180)	(5,500)
Payments on capital leases		(205)	(417)
Proceeds from stock-based awards	3,719	912
Net cash provided by (used in) financing activities	32,742	(8,043)	(5,417)
Effect of foreign exchange rates on Cash and cash equivalents	(5,359)	(2,930)	379
Increase in Cash and cash equivalents	14,566	10,579	21,201
Cash and cash equivalents, beginning of period	60,542	49,963	28,762
Cash and cash equivalents, end of period	75,108	60,542	49,963
Supplemental Disclosure of Cash Flow Information:
Interest payments	5,209	6,105	6,615
Income tax payments, net	$ 16,731	$ 5,819	$ 16,596

Organization and Nature of Operations

12 Months Ended

Dec. 31, 2011

Organization and Nature of Operations

1. Organization and Nature of Operations

Colfax Corporation (the “Company” or “Colfax”) is a global supplier of a broad range of fluid-handling products, including pumps, fluid-handling systems and controls, and specialty valves. The Company has a global manufacturing footprint, with production facilities in Europe, North America and Asia, as well as worldwide sales and distribution channels. The Company’s products serve a variety of applications in five strategic end markets: commercial marine, oil and gas, power generation, defense and general industrial. Colfax designs and engineers its products to high quality and reliability standards for use in critical fluid-handling applications where performance is paramount, and it offers customized fluid-handling solutions to meet individual customer needs based on its in-depth technical knowledge of the applications in which its products are used. The Company’s products are marketed principally under the Allweiler, Baric, Fairmount Automation, Houttuin, Imo, LSC, COT-Puritech, Portland Valve, Tushaco, Warren, and Zenith brand names.

On January 13, 2012, the Company completed an acquisition of Charter International plc (“Charter”) pursuant to which Charter became Colfax’s wholly owned subsidiary (the “Charter Acquisition”). The addition of Charter to the Company’s operations will significantly transform the Company’s organization and nature of operations. See Note 4, “Acquisitions” for additional information regarding the Charter Acquisition.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The Company uses the equity method to account for any equity investments in instances in which it owns Common stock or similar interests and has the ability to exercise significant influence, but does not have control over the investee.

Revenue Recognition

The Company generally recognizes revenues and costs from product sales when all of the following criteria are met: persuasive evidence of an arrangement exists, the price is fixed and determinable, product delivery has occurred or services have been rendered, there are no further obligations to customers, and collectibility 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.

In some cases, customer contracts may include multiple deliverables for product shipments and installation or maintenance labor. Deliverables are determined to be separate units of accounting if they have standalone value and there is a general right of return relative to the deliverable. Revenues from product shipments on this type of contract are recognized when title and risk of loss transfer to the customer, and the service revenue components are recognized as services are performed.

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.

Amounts billed for shipping and handling are recorded as revenue. Shipping and handling expenses are recorded as a component of Cost of sales. 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 Advance payment from customers in the Consolidated Balance Sheets.

Taxes Collected from Customers and Remitted to Governmental Authorities

The Company collects various taxes and fees as an agent in connection with the sale of products and remits these amounts to the respective taxing authorities. These taxes and fees have been presented on a net basis in the Consolidated Statements of Operations and are recorded as a component of Accrued taxes in the Consolidated Balance Sheet until remitted to the respective taxing authority.

Research and Development Expense

Research and development costs are expensed as incurred.

Advertising Costs

Advertising costs of $1.2 million, $0.5 million, and $0.5 million for the years ended December 31, 2011, 2010 and 2009, respectively, are expensed as incurred and are included in Selling, general and administrative expense in the Consolidated Statements of Operations.

Cash and Cash Equivalents

Cash and cash equivalents include all financial instruments purchased with an initial maturity of three months or less.

Trade Receivables

Accounts receivable are presented net of an allowance for doubtful accounts. The Company records an allowance for doubtful accounts based upon estimates of amounts deemed uncollectible and a specific review of significant delinquent accounts factoring in current and expected economic conditions. Estimated losses are based on historical collection experience, and are reviewed periodically by management.

Inventories

Inventories, net include the cost of material, labor and overhead and are stated at the lower of cost or market. Cost is primarily determined using the first-in, first-out method. 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.

Property, Plant and Equipment

Property, plant and equipment, net are stated at historical cost, which includes the fair values of such assets acquired. Depreciation of Property, plant and equipment is recorded on a straight-line basis over estimated useful lives and is included as a component of Selling, general and administrative expense in the Consolidated Statements of Operations. 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.

Impairment of Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the costs in excess of the fair value of net assets acquired associated with acquisitions by the Company. Indefinite-lived intangible assets consist of trade names.

The Company evaluates the recoverability of Goodwill and indefinite-lived intangible assets annually or more frequently if an event occurs or circumstances change in the interim that would more likely than not reduce the fair value of the asset below its carrying amount.

During the year ended December 31, 2010, the Company changed the date of its annual impairment test for Goodwill and indefinite-lived intangible assets from the last day of the fourth quarter to the first day of the fourth quarter. The Company adopted this change in timing in order to provide additional time to quantify the fair value of its reporting units and, if necessary, to determine the implied fair value of Goodwill. This change in timing will also reduce the likelihood that the annual impairment analysis would not be completed by the required filing date of the Company’s Consolidated Financial Statements. The revised date also better aligns with our strategic planning and budgeting process, which is an integral component of the impairment testing. In accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company will also perform interim impairment testing should circumstances requiring it arise. We believe this accounting change is preferable and does not result in the delay, acceleration, or avoidance of an impairment charge.

In the evaluation of Goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting entity is less than its carrying value. If the Company determines that it is not likely for a reporting unit’s fair value to be less than its carrying value, a calculation of the fair value is not performed. If the Company determines that it is likely for a reporting unit’s fair value to be less than its carrying value, a calculation of the reporting entity’s fair value is performed and compared to the carrying value of that entity. If the carrying value of a reporting unit exceeds its fair value, the Goodwill attributable to that reporting unit is potentially impaired and step two of the impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s Goodwill over its implied fair value should such a circumstance arise.

The Company measures fair value of reporting units based on a present value of future discounted cash flows or a market valuation approach. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that the reporting units are expected to generate in the future. Significant estimates in the discounted cash flows model include: the weighted-average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company against certain market information. Significant estimates in the market approach model include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization in estimating the fair value of the reporting units.

The Company tests its indefinite-lived intangible assets for impairment using the “relief from royalty” method. Significant estimates in this approach include royalty and discount rates for each trade name evaluated.

The analysis performed as of October 1, 2011, October 2, 2010 and December 31, 2009 indicated no impairment to be present.

Impairment of Long-Lived Assets Other than Goodwill and Indefinite-Lived Intangible Assets

Intangibles primarily represent acquired customer relationships, acquired order backlog, acquired technology and software license agreements. Acquired order backlog is amortized in the same period the corresponding revenue is recognized. A portion of the Company’s acquired customer relationships is being amortized over seven years based on the present value of the future cash flows expected to be generated from the acquired customers. All other intangibles are being amortized on a straight-line basis over their estimated useful lives, generally ranging from three to 20 years.

The Company assesses its long-lived assets other than Goodwill and indefinite-lived intangible assets for impairment whenever facts and circumstances indicate that the carrying amounts may not be fully recoverable. To analyze recoverability, the Company projects undiscounted net future cash flows over the remaining lives of such assets. If these projected cash flows are less than the carrying amounts, an impairment loss would be recognized, resulting in a write-down of the assets with a corresponding charge to earnings. The impairment loss is measured based upon the difference between the carrying amounts and the fair values of the assets. Assets to be disposed of are reported at the lower of the carrying amounts or fair value less cost to sell. Management determines fair value using the discounted cash flow method or other accepted valuation techniques. The Company recorded asset impairment losses totaling $0.1 million and $0.6 million during the years ended December 31, 2011 and 2009, respectively, in connection with facility closures as a component of Selling, general and administrative expense in the Consolidated Statements of Operations. No such impairments were recorded during the year ended December 31, 2010.

Derivatives

Derivative instruments are included in the Consolidated Balance Sheets in either Other current assets, Other assets, Other accrued liabilities or Other liabilities depending upon their respective fair value and maturity date.

The Company designates a portion of its derivative instruments as cash flow hedges for accounting purposes. For all derivatives designated as hedges, the Company formally documents the relationship between the hedging instrument and the hedged item, as well as the risk management objective and the strategy for using the hedging instrument. The Company assesses whether the hedging relationship between the derivative and the hedged item is highly effective at offsetting changes in the cash flows both at inception of the hedging relationship and on an ongoing basis. Unrealized gains and losses are recognized in Accumulated other comprehensive loss in the Consolidated Balance Sheets to the extent that it is effective at offsetting changes in the hedged cash flows. Realized gains and losses and any change in the fair value that is not effective at offsetting changes in the cash flows or fair values of the hedged item are reclassified to the Consolidated Statement of Operations, specifically to Interest expense in the case of interest rate swaps. Changes in the fair value of certain derivatives not designated as hedges, related to the Charter Acquisition are recognized in Charter acquisition-related expense in the Consolidated Statement of Operations, while the changes in the fair value of all other derivatives not designated as hedges are recognized as a component of Selling, general and administrative expense in the Consolidated Statements of Operations.

See Note 14, “Financial Instruments” for further information regarding the Company’s derivative instruments.

Self-Insurance

The 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,
	2011		2010
	(In thousands)
Medical insurance	$	1,086	$	702
Workers’ compensation		246		153
Total self-insurance reserves	$	1,332	$	855

Warranty Costs

Estimated expenses related to product warranties are accrued at the time products are sold to customers and included in Cost of sales in the Consolidated Statements of Operations. Estimates are established using historical information as to the nature, frequency, and average costs of warranty claims.

The activity in the Company’s warranty liability, which is included in Other accrued liabilities in the Company’s Consolidated Financial Statements consisted of the following:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Warranty liability, beginning of period	$	2,963		$	2,852		$	3,108
Accrued warranty expense		2,491			2,079			1,651
Changes in estimates related to pre-existing warranties		(368	)		(589	)		(798	)
Cost of warranty service work performed		(2,479	)		(1,264	)		(1,191	)
Acquisitions		477			—			—
Foreign exchange translation effect		(97	)		(115	)		82

Warranty liability, end of period	$	2,987		$	2,963		$	2,852

Income Taxes

Income taxes for the Company are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the Consolidated Financial Statements and their respective tax basis. Deferred income tax assets and liabilities are measured using enacted tax rates expected to be applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on Deferred income tax assets and liabilities of a change in tax rates is generally recognized in Provision for income taxes in the period that includes the enactment date.

Valuation allowances are recorded if it is more likely than not that some portion of the Deferred income taxes 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. If actual results differ from the assumptions made in the evaluation of the Company’s valuation allowance, it records a change in the valuation allowance through the Provision for income taxes or Accumulated other comprehensive loss in the period such determination is made.

Foreign Currency Exchange Gains and Losses

The Company’s financial statements are presented in U.S. dollars. The functional currencies of the Company’s operating subsidiaries are the local currencies of the countries in which each subsidiary is located. Assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the balance sheet date. Revenues and expenses are translated at average rates of exchange in effect during the year. The amounts recorded in each year are net of income taxes to the extent the underlying equity balances in the entities are not deemed to be permanently reinvested.

Transactions in foreign currencies are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated for inclusion in the Consolidated Balance Sheets are recognized in Selling, general and administrative expense in the Consolidated Statements of Operations for that period. The net foreign currency transaction gain (loss) was $0.2 million, $(0.4) million and $(1.4) million for the years ended December 31, 2011, 2010 and 2009, respectively.

Debt Issuance Costs

Costs directly related to the placement of debt are capitalized and amortized using the straight-line method, which approximates the effective interest method over the term of the related obligation. Deferred issuance costs of $4.3 million and $1.6 million, respectively, were included in Other assets in the Consolidated Balance Sheets as of December 31, 2011 and 2010 net of $2.5 million and $1.8 million, respectively, of accumulated amortization. Deferred issuance costs as of December 31, 2011 include $3.3 million of issuance costs incurred related to the Company’s Deutsche Bank Credit Agreement (as defined and further discussed in Note 10, “Debt”).

Use of Estimates

The Company makes certain estimates and assumptions in preparing its Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses for the period presented. Actual results may differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to current year presentations.

Recently Issued Accounting Pronouncements

12 Months Ended

Dec. 31, 2011

Recently Issued Accounting Pronouncements

3. Recently Issued Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-08, “Intangibles—Goodwill and Other” (“ASU No. 2011-08”). ASU No. 2011-08 was intended to reduce the complexity and cost by providing an option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company adopted ASU No. 2011-08 in conjunction with its October 1, 2011 Goodwill impairment analysis. The adoption of ASU No. 2011-08 did not have an impact on the Company’s Consolidated Financial Statements.

In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force”(“ASU No. 2009-13”). ASU No. 2009-13 addresses the unit of accounting for arrangements involving multiple deliverables and how arrangement consideration should be allocated to the separate units of accounting. The Company adopted the provisions of ASU No. 2009-13 prospectively beginning January 1, 2011. The adoption of ASU No. 2009-13 did not have a material impact on the Company’s Consolidated Financial Statements.

Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions

4. Acquisitions

Charter International plc

On January 13, 2012, Colfax Corporation completed the Charter Acquisition for a total purchase price of $2.6 billion. Under the terms of the Charter Acquisition, Charter shareholders received 730 pence in cash and 0.1241 newly issued shares of Colfax Corporation Common stock in exchange for each share of Charter’s ordinary stock. Charter is a global industrial manufacturing company focused on welding, cutting and automation and air and gas handling. The acquisition is expected to:

•

enhance the Company’s business profile by providing a meaningful recurring revenue stream and considerable exposure to emerging markets;

•

enable Colfax to benefit from strong secular growth drivers, with a balance of short- and long-cycle businesses; and

•

provide an additional growth platform in the fragmented fabrication technology industry.

See Note 10, “Debt” and Note 11, “Shareholders’ Equity” for discussion of the respective financing components of the Charter Acquisition.

During the year ended December 31, 2011, the Company incurred $31.1 million of advisory, legal, audit, valuation and other professional service fees and unrealized losses on acquisition-related foreign exchange derivatives in connection with the Charter Acquisition, which are included in Charter acquisition-related expense in the Consolidated Statement of Operations. As of December 31, 2011, $29.4 million and $2.0 million related to these expenses were included in Other accrued liabilities and Accounts payable, respectively, in the Consolidated Balance Sheet. See Note 14, “Financial Instruments” for additional information regarding the Company’s derivative instruments.

The Charter Acquisition will be accounted for using the acquisition method of accounting and accordingly, the Consolidated Financial Statements will include the financial position and results of operations from the date of acquisition. The following unaudited proforma financial information presents Colfax’s consolidated financial information assuming the acquisition had taken place on January 1, 2010. These amounts are presented in accordance with U.S. GAAP, consistent with the Company’s accounting policies.

	Year Ended December 31,
	2011			2010
	(Unaudited, in thousands)
Net sales	$	3,776,774		$	3,204,619
Net (loss) income available to Colfax common shareholders		(16,124	)		4,864

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	$	671,914
Inventories		469,172
Property, plant and equipment		591,265
Goodwill		1,635,679
Intangible assets		715,643
Accounts payable		(511,481	)
Debt		(396,701	)
Other assets and liabilities, net		(387,183	)
		2,788,308
Less: net assets attributable to noncontrolling interest		(236,257	)
Net cash consideration	$	2,552,051

The following table summarizes Intangible asset acquired, excluding Goodwill:

	Intangible		Weighted-Average
	Asset		Amortization
	(In thousands)		Period (Years)

Trade names – indefinite life	$	363,628		n/a
Customer relationships		215,310		7.10
Acquired technology		77,485		10.33
Backlog		54,805		1.00
Trademarks		4,415		5.00
Intangible assets	$	715,643		6.84

The following acquisitions were accounted for using the acquisition method of accounting and, accordingly, the Consolidated Financial Statements include the financial position and results of operations from the respective date of acquisition:

COT-Puritech, Inc.

On December 6, 2011, the Company completed the acquisition of COT-Puritech, Inc. (“COT-Puritech”), a domestic supplier of oil flushing 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. The additional contingent cash payments will be paid over two years subject to the achievement of certain performance goals. As a result of this acquisition, the Company has expanded its lubrication services offerings in the oil and gas and power generation end markets to include oil flushing and remediation services. All Goodwill recognized related to this acquisition is expected to be deductible for income tax purposes.

The following table summarizes the aggregate estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

	December 6,
	2011
	(In thousands)
Trade receivables	$	4,495
Inventories		229
Property, plant and equipment		1,948
Goodwill		25,073
Intangible assets		10,070
Accounts payable		(1,001	)
Other assets and liabilities, net		(1,413	)
Total purchase price, net of cash acquired ⁽¹⁾	$	39,401

__________

⁽¹⁾

See Note 14, “Financial Instruments” for discussion regarding the Company’s $4.3 million liability for contingent payment associated with the acquisition of COT-Puritech, which is included in the total purchase price.

The following table summarizes the Intangible assets acquired, excluding Goodwill:

	Intangible		Weighted-Average
	Asset		Amortization
	(In thousands)		Period (Years)
Customer relationships	$	8,020		10.00
Trade names – Indefinite life		2,050		n/a
Intangible assets	$	10,070

Rosscor Holding, B.V.

On February 14, 2011, the Company completed the acquisition of Rosscor Holding, B.V. (“Rosscor”) 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, the Company has expanded its product offerings in the oil and gas end market to include multiphase pump systems that many of its customers already purchase. None of the Goodwill recognized is expected to be deductible for income tax purposes.

The following table summarizes the aggregate estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

	February 14,
	2011
	(In thousands)
Trade receivables	$	8,475
Inventories		11,439
Property, plant and equipment		1,121
Goodwill		10,212
Intangible assets		10,726
Accounts payable		(8,851	)
Customer advance payments		(7,466	)
Other assets and liabilities, net		(3,357	)
Net cash consideration	$	22,299

The following table summarizes the Intangible assets acquired, excluding Goodwill:

	Intangible		Weighted-Average
	Asset		Amortization
	(In thousands)		Period (Years)
Backlog	$	1,828		0.98
Acquired technology		8,898		20.00
Intangible assets	$	10,726		16.76

Baric Group

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 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. The Company recognized $12.9 million of Goodwill related to the Baric acquisition, none of which is expected to be deductible for income tax purposes.

The following table summarizes the Intangible assets acquired, excluding Goodwill:

	Intangible		Weighted-Average
	Asset		Amortization
	(In thousands)		Period (Years)
Acquired customer relationships	$	7,053		10.00
Acquired technology		6,492		9.60
Backlog		3,339		2.30
Trade names – indefinite life		2,770		n/a
Other amortizable intangible assets		395		8.60
Intangible assets⁽¹⁾	$	20,049

__________

⁽¹⁾

The weighted-average amortization period for total amortizable intangible assets related to the Baric acquisition is 8.3 years.

Fairmount Automation

On November 29, 2007, the Company acquired Fairmount Automation, Inc. (“Fairmount”), an original equipment manufacturer of mission critical programmable automation controllers in fluid-handling applications primarily for the U.S. Navy. During the year ended December 31, 2010, the final target under the purchase agreement was achieved, resulting in a contingent payment of $0.7 million, which was recorded as an increase in Goodwill.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
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-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Net Income Per Share

12 Months Ended

Dec. 31, 2011

Net Income Per Share

5. Net Income Per Share

Net income per share was computed as follows:

	Year Ended December 31,
	2011		2010		2009
	(In thousands, except share data)
Net income	$	4,555	$	16,215	$	23,797

Weighted-average shares of Common stock outstanding – basic		43,634,937		43,389,878		43,222,616
Net effect of potentially dilutive securities⁽¹⁾		633,173		277,347		103,088
Weighted-average shares of Common stock outstanding – diluted		44,268,110		43,667,225		43,325,704

Net income per share – basic and diluted	$	0.10	$	0.37	$	0.55

__________

⁽¹⁾

Potentially dilutive securities consist of stock options and restricted stock units.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the years ended December 31, 2011, 2010 and 2009 excludes approximately 0.5 million, 1.3 million and 0.6 million outstanding stock-based compensation awards, respectively, as their inclusion would be anti-dilutive.

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

Income before income taxes and Provision for income taxes consisted of the following:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
(Loss) income before income taxes:
Domestic operations	$	(27,645	)	$	(12,737	)	$	698
Foreign operations		47,632			40,425			31,720
	$	19,987		$	27,688		$	32,418

Provision for (benefit from) income taxes:
Current:
Federal	$	182		$	(30	)	$	(1,323	)
State		(94	)		261			344
Foreign		17,066			11,538			6,911
	$	17,154			11,769			5,932
Deferred:
Domestic operations		—			—			2,241
Foreign operations		(1,722	)		(296	)		448
		(1,722	)		(296	)		2,689
	$	15,432		$	11,473		$	8,621

The Company’s 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,
	2011			2010			2009
	(In thousands)
Taxes calculated at the U.S. federal statutory rate	$	6,995		$	9,691		$	11,346
State taxes		(421	)		(5	)		34
Effect of international tax rates		(2,988	)		(2,522	)		(2,260	)
Changes in valuation allowance and tax reserves		11,177			3,827			(710	)
Other		669			482			211
Provision for income taxes	$	15,432		$	11,473		$	8,621

Deferred income taxes, net reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities are as follows:

	December 31,
	2011						2010
	Current			Non-Current			Current			Non-Current
	(In thousands)
Deferred tax assets:
Post-retirement benefit obligation	$	861		$	38,311		$	1,076		$	28,688
Expenses currently not deductible		16,724			33,397			7,401			30,042
Net operating loss carryover		—			51,614			—			49,789
Tax credit carryover		—			5,882			—			5,728
Other		671			687			918			823
Total deferred tax assets		18,256			129,891			9,395			115,070
Valuation allowance		(8,062	)		(71,793	)		(2,987	)		(49,904	)
Deferred tax assets, net	$	10,194		$	58,098		$	6,408		$	65,166

Deferred tax liabilities:
Depreciation and amortization	$	—		$	13,437		$	—		$	14,901
Other		873			13,815			503			11,410
Total deferred tax liabilities	$	873		$	27,252		$	503		$	26,311

Total deferred tax assets, net	$	9,321		$	30,846		$	5,905		$	38,855

The Company presents net current and non-current tax assets and liabilities on the Consolidated Balance Sheet for each taxing jurisdiction. The above table is presented prior to the netting of the current and non-current deferred tax items. The Company evaluates the recoverability of its deferred tax assets on a jurisdictional basis by considering whether deferred tax assets will be realized on a more likely than not basis. To the extent a portion or all of the applicable deferred tax assets do not meet the more likely than not threshold, a valuation allowance is recorded. During the year ending December 31, 2011, the valuation allowance increased from $52.9 million to $79.9 million with $16.7 million and $10.3 million of the increase recognized in Provision for income taxes and Accumulated other comprehensive loss, respectively. During the year ended December 31, 2010, the valuation allowance increased by $7.8 million, with $4.2 million and $3.6 million of the increase recognized in Provision for income taxes and Other comprehensive income, respectively, primarily due to U.S. deferred tax assets that the Company believed that it is more likely than not that they would be realized. 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.

The Company has U.S. net operating loss carryforwards of $135.3 million expiring in years 2021 through 2031, and minimum tax credits of $1.9 million that may be carried forward indefinitely. Tax credit carryforwards include foreign tax credits that have been offset by a valuation allowance. A portion of the Company’s net operating loss carryforwards relate to prior to the Company’s initial public offering, which was considered to be an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended. As a result, 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.

For the years ended December 31, 2011, 2010 and 2009, all undistributed earnings of the Company’s controlled international subsidiaries is considered to be permanently reinvested 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 these international subsidiaries, subject to local statutory restrictions, as of December 31, 2011 is $194.8 million. The amount of deferred tax liability that would have been recognized had such earnings not been permanently reinvested is not reasonably determinable.

In accordance with GAAP, the Company records a liability for unrecognized income tax benefits for the amount of benefit included in its previously filed income tax returns and in its financial results expected to be included in income tax returns to be filed for periods through the date of its Consolidated Financial Statements for income tax positions for which it is more likely than not that a tax position will not be sustained upon examination by the respective taxing authority. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

		(In thousands)
Balance, December 31, 2009	$	8,746
Addition for tax positions taken in prior periods		590
Addition for tax positions taken in the current period		412
Reduction for tax positions taken in prior periods		(1,076	)
Other, including the impact of foreign currency translation		(81	)
Balance, December 31, 2010		8,591
Addition for tax positions taken in prior periods		685
Addition for tax positions taken in the current period		188
Reduction for tax positions taken in prior periods		(5,695	)
Other, including the impact of foreign currency translation		(60	)
Balance, December 31, 2011	$	3,709

The Company’s total unrecognized tax benefits were $4.1 million and $8.9 million as of December 31, 2011 and 2010, respectively, inclusive of $0.4 million and $0.3 million, respectively, of interest and penalties. These amounts were offset in part by tax benefits of $0.5 million and $0.6 million for the years ended December 31, 2011 and 2010, respectively. The net liabilities for uncertain tax positions for the years ended December 31, 2011 and 2010 were $3.6 million and $8.3 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 for income taxes, which amounted to $0.1 million, $0.1 million and $0.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.

The Company is subject to income tax in the U.S. (including state jurisdictions) and international locations. The Company’s significant operations outside the U.S. are located in Germany and Sweden. In Sweden, Germany and the U.S. tax years 2006 to 2011 remain subject to examination, and in the U.S. the tax year ending in 2003 that has U.S. tax attributes available that have been carried forward to open tax years or are available to be carried forward to future tax years also remains open for examination by federal and state tax authorities.

Due to the difficulty in predicting with reasonable certainty when tax audits will be fully resolved and closed, the range of reasonably possible significant increases or decreases in the liability for unrecognized tax benefits that may occur within the next 12 months is difficult to ascertain. Currently, the Company estimates that it is reasonably possible that the expiration of various statutes of limitations and resolution of tax audits may reduce its tax expense in the next 12 months in amounts ranging from zero to $0.5 million.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.4-08.(h))
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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets

Goodwill and Intangible Assets

The following table summarizes the activity in Goodwill during the years ended December 31, 2011 and 2010:

	(In thousands)
Balance, January 1, 2010	$	163,418
Contingent purchase price payment for Fairmount acquisition		736
Goodwill attributable to Baric acquisition		12,940
Impact of foreign currency translation		(4,756	)
Balance, December 31, 2010		172,338
Goodwill attributable to Rosscor acquisition		10,212
Goodwill attributable to COT-Puritech acquisition		25,073
Impact of foreign currency translation		(2,779	)
Balance, December 31, 2011	$	204,844

The following table summarizes the Intangible assets, excluding Goodwill:

	December 31,
	2011					2010
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Acquired customer relationships	$	29,798	$	(12,987	)	$	22,084	$	(10,719	)
Trade names – indefinite life		6,803		—			4,819		—
Acquired technology		17,961		(2,791	)		12,231		(3,331	)
Acquired backlog		3,451		(2,033	)		3,311		(474	)
Other intangible assets		4,962		(4,135	)		591		(214	)
	$	62,975	$	(21,946	)	$	43,036	$	(14,738	)

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 periods presented.

Amortization expense related to amortizable intangible assets was included in the Consolidated Statements of Operations as follows:

	Year Ended December 31,
	2011		2010		2009
	(In thousands)
Selling, general and administrative expense	$	7,821	$	3,501	$	2,578

Total amortization expense for amortizable intangible assets as of December 31, 2011 is expected to be $6.6 million, $4.0 million, $3.7 million, $3.3 million and $3.2 million for the years ended December 31, 2012, 2013, 2014, 2015 and 2016, respectively.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Property, Plant and Equipment, Net

12 Months Ended

Dec. 31, 2011

Property, Plant and Equipment, Net

Property, Plant and Equipment, Net

			December 31,
	Depreciable Life		2011			2010
	(In years)		(In thousands)
Land		n/a	$	14,786		$	15,106
Buildings and improvements		5-40		38,642			39,666
Machinery and equipment		3-15		134,548			121,933
Software		3-5		16,948			17,063
				204,924			193,768
Accumulated depreciation				(113,985	)		(104,522	)
Property, plant and equipment, net			$	90,939		$	89,246

Depreciation expense, including the amortization of assets recorded under capital leases, for the years ended December 31, 2011, 2010 and 2009, was $13.1 million, $12.1 million and $11.8 million, respectively. These amounts include depreciation expense related to software for the years ended December 31, 2011, 2010 and 2009 of $1.7 million, $1.9 million and $1.7 million, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Inventories, Net

12 Months Ended

Dec. 31, 2011

Inventories, Net

Inventories, Net

Inventories, net consisted of the following:

	December 31,
	2011			2010
	(In thousands)
Raw materials	$	25,241		$	23,758
Work in process		26,376			32,224
Finished goods		20,378			20,121
		71,995			76,103
Less: customer progress billings		(9,124	)		(10,385	)
Less: allowance for excess, slow-moving and obsolete inventory		(6,735	)		(7,777	)
Inventories, net	$	56,136		$	57,941

Debt

12 Months Ended

Dec. 31, 2011

Debt

10.

Debt

Long-term debt consisted of the following:

	December 31,
	2011			2010
	(In thousands)
Term credit facility	$	72,500		$	82,500
Revolving credit facility		39,018			—
Total Debt		111,518			82,500
Less: current portion		(10,000	)		(10,000	)
Long-term debt	$	101,518		$	72,500

As of December 31, 2011 and 2010, the Company was party to a credit agreement (the “Bank of America Credit Agreement”), led and administered by Bank of America, which is a senior secured structure with a revolving credit facility and term credit facility. During the year ended December 31, 2011, the Credit Agreement was amended to, among other items, eliminate the $6.0 million commitment of a defaulted lender, which resulted in a reduction of the revolving credit facility’s total capacity from $150.0 million to $144.0 million.

The term credit facility bears interest at the London Interbank Offered Rate 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 and 2010, the interest rate was 2.55% and 2.76%, respectively, inclusive of a margin of 2.25% and 2.50%, respectively.

The revolving credit facility contains a $50.0 million letter of credit sub-facility, a $25.0 million swing line loan sub-facility and permits borrowings in dollars, Euros and sterling, subject to certain limits. The annual commitment fee on the revolver ranges from 0.4% to 0.5% determined by the Company’s total leverage ratio calculated at the end of each quarter. As of December 31, 2011 and 2010, the commitment fee was 0.4% and 0.5%, respectively, and there was $12.9 million and $14.1 million outstanding on the letter of credit sub-facility, respectively. As of December 31, 2011, the Company’s availability under the revolving credit facility was $92.1 million.

The Company is also party to additional letter of credit facilities with total capacity of $48.8 million and $21.0 million outstanding as of December 31, 2011.

The contractual maturities of the Company’s debt as of December 31, 2011 are as follows⁽¹⁾:

	(In thousands)
2012	$	10,000
2013		101,518
Total	$	111,518

__________

⁽¹⁾

The Company’s contractual maturities as of December 31, 2011 represent amounts payable under the Bank of America Credit Facility, which was terminated on January 13, 2012.

On January 13, 2012, the Company terminated the Bank of America Credit Facility in conjunction with the financing of the Charter Acquisition. Upon the early termination of the Bank of America Credit Agreement, the Company incurred a total pre-tax charge of $1.5 million, which includes the write-off of $1.0 million of deferred financing fees and $0.5 million of losses reclassified from Accumulated other comprehensive loss for the related interest rate swap.

On January 13, 2012 and January 25, 2012, Colfax issued four tranches of term loans: (i) a $200 million term A-1 facility, (ii) a $500 million term A-2 facility, (iii) a $200 million term A-3 facility to be borrowed in Euros 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, the Deutsche Bank Credit Agreement has two revolving credit 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. As of December 31, 2011, the Company had $3.3 million of deferred financing fees related to the Deutsche Bank Credit Agreement included in Other assets in the Consolidated Balance sheet, which will be accreted to Interest expense using the effective interest method.

In connection with the Deutsche Bank Credit Agreement, the Company has pledged substantially all of its domestic subsidiaries’ assets and 65% of the shares of certain first tier international subsidiaries as collateral against borrowings to its U.S. companies. In addition, subsidiaries in certain foreign jurisdictions have guaranteed the Company’s obligations on borrowings of one of its European subsidiaries, as well as pledged substantially all of the assets for such borrowings to this European subsidiary under the Deutsche Bank Credit Agreement. The Deutsche Bank Credit Agreement contains customary covenants limiting the 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 the Company to maintain a total leverage ratio of not more than 4.95 to 1.0 and a minimum interest coverage ratio of 2.0 to 1.0, measured at the end of each quarter, through the year ended December 31, 2012. The minimum interest coverage ratio increases by 25 basis points each year beginning in the year ended December 31, 2012 until it reaches 3.0 to 1.0 for the year ended December 31, 2016. The maximum total leverage ratio decreases to 4.75 to 1.0 for the year ended December 31, 2014 and decreases by 25 basis points for the two subsequent fiscal years until it reaches 4.25 to 1.0 for the year ended December 31, 2016. The Deutsche Bank Credit Agreement contains various events of default, including failure to comply with such financial covenants, 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 Revolver and foreclose on the collateral. In addition, the Bank of America Credit Agreement contained financial covenants requiring the Company to maintain a total leverage ratio of not more than 3.25 to 1.0 and a fixed charge coverage ratio of not less than 1.50 to 1.0, measured at the end of each quarter. If the Company was not in compliance with the various covenants under the Bank of America Credit Agreement and related agreements, the lenders could have, subject to various customary cure rights, required the immediate payment of all amounts outstanding under the term credit facility and revolving credit facility.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Shareholders' Equity

12 Months Ended

Dec. 31, 2011

Shareholders' Equity

11.

Shareholders’ Equity

Common and Preferred Stock

During the years ended December 31, 2011 and 2010, 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.

On January 24, 2012, following approval by the Company’s stockholders, the Company’s Certificate of Incorporation was amended to increase the number of authorized shares from 210,000,000 shares to 420,000,000 shares, comprised of an increase in Common stock from 200,000,000 shares to 400,000,000 shares and an increase in Preferred stock from 10,000,000 shares to 20,000,000 shares.

In connection with the financing of the Charter Acquisition, on January 24, 2012, the Company sold (i) 14,756,945 newly issued shares of Colfax Common stock and (ii) 13,877,552 shares of newly created Series A perpetual convertible preferred stock, referred to as the Series A Preferred Stock, for an aggregate of $680 million (representing $24.50 per share of Series A Preferred Stock and $23.04 per share of Common stock) pursuant to a securities purchase agreement (the “BDT Purchase Agreement”) with BDT CF Acquisition Vehicle, LLC (the “BDT Investor”) as well as BDT Capital Partners Fund I-A, L.P., and Mitchell P. Rales, Chairman of Colfax’s Board of Directors, and his brother, Steven M. Rales (for the limited purpose of tag-along sales rights provided to the BDT Investor in the event of a sale or transfer of shares of Colfax Common stock by either or both of Mitchell P. Rales and Steven M. Rales). 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 the option of Colfax 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.

On January 24, 2012, Colfax sold 2,170,139 to each of Mitchell P. Rales, Chairman of Colfax’s Board of Directors, and his brother Steven M. Rales and 1,085,070 to Markel Corporation, a Virginia corporation (“Markel”) of newly issued Colfax Common stock at $23.04 per share, for a total aggregate of $125 million, pursuant to separate securities purchase agreements with Mitchell P. Rales and Steven M. Rales, each of whom were beneficial owners of 20.9% of Colfax’s Common stock, and Markel. Thomas S. Gayner, a member of Colfax’s Board of Directors, is President and Chief Investment Officer of Markel.

Consideration paid to Charter shareholders included 0.1241 shares of newly issued Colfax Common stock in exchange for each share of Charter’s ordinary stock, which resulted in the issuance of 20,735,493 shares of Common stock on January 24, 2012.

In conjunction with the issuance of the Common and Preferred stock discussed above, the Company recognized $0.5 million in deferred equity issuance costs as of December 31, 2011 which are included in Other current assets and will be reclassified to Additional paid-in capital upon issuance of the related shares.

Dividend Restrictions

The Company’s Bank of America Credit Agreement limits the amount of cash dividends and Common stock repurchases the Company may make to a total of $10 million annually. Beginning on January 13, 2012, the Company is subject to dividend restrictions under the Deutsche Bank Credit Agreement, which increases the Company’s limit on the total amount of cash dividends and Common stock repurchases to $50 million annually.

Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss are as follows:

	December 31,
	2011			2010
	(In thousands)
Foreign currency translation adjustment	$	(5,537	)	$	5,928
Unrealized loss on hedging activities		(471	)		(1,789	)
Net unrecognized pension and other post-retirement benefit cost		(164,785	)		(134,654	)
Accumulated other comprehensive loss	$	(170,793	)	$	(130,515	)

Share-Based Payments

The Company adopted the Colfax Corporation 2008 Omnibus Incentive Plan (the “2008 Plan”) on April 21, 2008. The 2008 Plan provides the Compensation Committee of the Company’s Board of Directors discretion in creating employee equity incentives. Awards under the 2008 Plan may be made in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, and other stock-based awards.

The Company measures and recognizes compensation expense related to share-based payments based on the fair value of the instruments issued. Stock-based compensation expense is generally recognized as a component of Selling, general and administrative expense in the Consolidated Statements of Operations, as payroll costs of the employees receiving the awards are recorded in the same line item.

The Company’s Consolidated Statements of Operations reflect the following amounts related to stock-based compensation:

	Year Ended December 31,
		2011⁽¹⁾		2010⁽²⁾		2009
	(In thousands)
Stock-based compensation expense	$	4,908	$	3,137	$	2,593
Deferred tax benefit		1,719		1,120		907

⁽¹⁾

Includes $0.2 million of stock-based compensation expense included in Restructuring and other related charges in the Company’s Consolidated Statement of Operations related to the accelerated vesting of certain awards as part of the termination benefits of one employee.

⁽²⁾

Includes $0.6 million of stock-based compensation expense included in Restructuring and other related charges in the Company’s Consolidated Statement of Operations related to the accelerated vesting of certain awards due to the departure of the Company’s former Chief Executive Officer. Additionally, $0.4 million of stock-based compensation included in Selling, general and administrative expense in the Company’s Consolidated Statement of Operations related to the accelerated vesting and extended exercise terms related to the departures of the Company’s Former Chief Financial Officer and General Counsel.

As of December 31, 2011, the Company had $7.9 million of unrecognized compensation expense related to stock-based awards that will be recognized over a weighted-average period of approximately 1.9 years. The intrinsic value of awards exercised or converted was $3.8 million, $1.2 million and $0.1 million during the years ended December 31, 2011, 2010 and 2009, respectively.

Stock Options

Under the 2008 Plan, the Company may grant options to purchase Common stock, with a maximum term of 10 years at a purchase price equal to the market value of the Company’s Common stock on the date of grant. In the case of an incentive stock option granted to a holder of 10% of the Company’s outstanding Common stock, the Company may grant options to purchase Common stock with a maximum term of 5 years, at a purchase price equal to 110% of the market value of the Company’s Common stock on the date of grant. One-third of the options granted pursuant to the 2008 Plan vest on each anniversary of the grant date and the options expire seven years from the date of grant.

Stock-based compensation expense for stock option awards is based upon the grant-date fair value using the Black-Scholes option pricing model. The Company recognizes compensation expense for stock option awards on a ratable basis over the requisite service period of the entire award. The following table shows the weighted-average assumptions used to calculate the fair value of stock option awards using the Black-Scholes option pricing model, as well as the weighted-average fair value of options granted:

	Year Ended December 31,
	2011			2010			2009

Expected period that options will be outstanding (in years)		4.50			4.50			4.50
Interest rate (based on U.S. Treasury yields at the time of grant)		2.10	%		2.38	%		1.87	%
Volatility		52.50	%		52.22	%		32.50	%
Dividend yield		—			—			—
Weighted-average fair value of options granted	$	9.68		$	5.63		$	2.24

Expected volatility is estimated based on the historical volatility of comparable public companies. The Company considers historical data to estimate employee termination within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. Since the Company has limited option exercise history, it has elected to estimate the expected life of an award based upon the Securities and Exchange Commission-approved “simplified method” noted under the provisions of Staff Accounting Bulletin No. 107 with the continued use of this method extended under the provisions of Staff Accounting Bulletin No. 110.

Stock option activity is as follows:

						Weighted-
						Average
				Weighted-		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Number			Exercise		Term		Value⁽¹⁾
	of Options			Price		(In years)		(In thousands)
Outstanding at January 1, 2009		514,991		$	17.93
Granted		844,165			7.44
Forfeited		(91,523	)		11.70
Outstanding at December 31, 2009		1,267,633			11.40
Granted		756,471			12.48
Exercised		(152,490	)		7.48
Forfeited		(295,125	)		10.71
Expired		(35,833	)		15.94
Outstanding at December 31, 2010		1,540,656			12.34
Granted		385,682			21.55
Exercised		(282,108	)		12.09
Forfeited		(175,295	)		12.53
Expired		(7,778	)		19.82
Outstanding at December 31, 2011		1,461,157		$	14.76		5.03	$	20,047
Vested or expected to vest at December 31, 2011		1,329,511		$	15.50		4.98	$	17,255
Exercisable at December 31, 2011		632,434		$	13.30		4.18	$	9,603

⁽¹⁾

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.

Restricted Stock Units

Under the 2008 Plan, the Compensation Committee may award performance-based restricted stock units (“PRSUs”) whose vesting 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 may award non-performance-based restricted stock units (“RSUs”) to select executives, key 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. The employee RSUs vest either 100% at the 1st anniversary of the grant date or 50% at the 1st anniversary and 50% at the 2nd anniversary of the grant date. Director RSUs generally vest in three equal installments on each anniversary of the grant date over a 3-year period. 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.

The fair value of PRSUs and RSUs are equal to the market value of a share of Common stock on the date of grant and the related compensation expense is recognized ratably over the requisite service period and, for PRSUs when it is expected that any of the performance criterion will be achieved. The performance criterion for PRSUs granted during the years ended December 31, 2011 and 2010 was met, including PRSUs granted to the Company’s Chief Executive Officer (“CEO”) during 2010 as part of his initial employment agreement in January 2010 and are subject to separate criterion that was achieved during the year ended December 31, 2011.

The activity in the Company’s PRSUs and RSUs is as follows:

	PRSUs					RSUs
				Weighted-					Weighted-
				Average					Average
	Number			Grant Date		Number			Grant Date
	of Units			Fair Value		of Units			Fair Value
Nonvested at January 1, 2009		124,347		$	17.89		72,189		$	18.00
Granted		337,716			7.44		69,610			8.35
Vested		—			—		(48,871	)		15.72
Forfeited		(31,566	)		10.69		—			—
Nonvested at December 31, 2009		430,497			10.22		92,928			11.97
Granted		263,454			12.10		44,693			12.88
Vested		(25,000	)		18.00		(53,828	)		13.69
Forfeited		(385,456	)		8.72		—			—
Nonvested at December 31, 2010		283,495			13.33		83,793			11.35
Granted		115,922			21.78		30,154			22.77
Vested		—			—		(49,684	)		13.94
Forfeited		(74,970	)		14.84		—			—
Nonvested at December 31, 2011		324,447		$	15.99		64,263		$	14.71

The fair value of shares vested during the years ended December 31, 2011, 2010 and 2009 was $1.1 million, $1.0 million and $0.4 million, respectively.

Restructuring and Other Related Charges

12 Months Ended

Dec. 31, 2011

Restructuring and Other Related Charges

12.

Restructuring and Other Related Charges

The Company initiated a series of restructuring actions beginning in 2009 in response to then current and expected future economic conditions. During the year ended December 31, 2011, the Company relocated its Richmond, Virginia corporate headquarters to Fulton, Maryland in order to provide improved access to international travel and to its key advisors and eliminated an executive position in its German operations. 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.

During the year ended December 31, 2010, the Company participated in a German government-sponsored furlough program in which the government paid 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 year ended December 31, 2009, the Company closed a repair facility in Aberdeen, North Carolina and a manufacturing facility in Sanford, North Carolina and moved its production to the Company’s facilities in Monroe, North Carolina and Columbia, Kentucky.

The Company’s Consolidated Statements of Operations reflect the following amounts related to its restructuring activities:

	Year Ended December 31,
	2011⁽¹⁾		2010⁽²⁾		2009⁽³⁾
	(In thousands)
Restructuring and other related charges	$	9,680	$	10,323	$	18,175

⁽¹⁾

Includes $0.2 million of non-cash stock-based compensation expense.

⁽²⁾

Includes $0.6 million of non-cash stock-based compensation expense related to the departure of the Company’s former CEO in January 2010.

⁽³⁾

Includes $0.6 million of non-cash impairment charges to reduce the carrying value of real estate and equipment to their estimated fair values.

A summary of the activity in the Company’s restructuring liability included in Accrued restructuring liability in the Consolidated Balance Sheets is as follows:

	Year Ended December 31, 2011
	Balance at							Foreign			Balance at
	Beginning							Currency			End of
	of Period		Provisions		Payments			Translation			Period
	(In thousands)

Restructuring and other related charges:
Termination benefits⁽¹⁾	$	2,180	$	7,032	$	(5,062	)	$	(282	)	$	3,868
Facility closure costs⁽²⁾		—		1,503		(861	)		(9	)		633
Other related charges		—		966		(889	)		(5	)		72
	$	2,180		9,501	$	(6,812	)	$	(296	)	$	4,573
Non-cash termination benefits⁽³⁾				179
			$	9,680

⁽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.

⁽²⁾

Includes the cost of relocating and training associates, relocating equipment and lease termination expense in connection with the closure of facilities, discussed above.

⁽³⁾

Represents non-cash stock-based compensation expense.

The Company expects to incur an additional $0.8 million of employee termination benefits, facility closure costs, relocation expense and operating lease exit costs during the year ended December 31, 2012 related to these restructuring activities.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

Defined Benefit Plans

12 Months Ended

Dec. 31, 2011

Defined Benefit Plans

13.

Defined Benefit Plans

The Company sponsors various defined benefit plans, defined contribution plans and other post-retirement benefits plans, including health and life insurance, for certain eligible employees or former employees. The Company uses December 31^st as the measurement date for all of its employee benefit plans.

The following table summarizes the total changes in the Company’s Pension and accrued post-retirement benefits and plan assets and includes a statement of the plans’ funded status:

							Other Post-Retirement
	Pension Benefits						Benefits
	Year Ended December 31,						Year Ended December 31,
	2011			2010			2011			2010
	(In thousands)
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	331,288		$	306,571		$	13,803		$	10,859
Service cost		1,383			1,168			—			—
Interest cost		16,408			16,514			690			553
Actuarial loss		25,764			20,344			1,507			3,671
Settlement⁽¹⁾		(2,857	)		—			—			—
Plan combinations⁽²⁾		—			12,639			—			—
Foreign exchange effect		(1,921	)		(4,827	)		—			—
Benefits paid		(22,154	)		(21,121	)		(603	)		(1,280	)
Projected benefit obligation, end of year	$	347,911		$	331,288			15,397			13,803
Accumulated benefit obligation, end of year	$	343,767		$	327,498		$	—		$	—
Change in plan assets:
Fair value of plan assets, beginning of year	$	231,240		$	209,921		$	—		$	—
Actual return on plan assets		6,864			22,886			—			—
Employer contribution		8,684			10,797			603			1,280
Settlement⁽¹⁾		(3,388	)		—			—			—
Plan combinations⁽²⁾		—			9,762			—			—
Foreign exchange effect		(242	)		(1,005	)		—			—
Benefits paid		(22,154	)		(21,121	)		(603	)		(1,280	)
Fair value of plan assets, end of year	$	221,004		$	231,240		$	—		$	—
Funded status, end of year	$	(126,907	)	$	(100,048	)	$	(15,397	)	$	(13,803	)

Amounts recognized on the Consolidated Balance Sheet at December 31:
Non-current assets	$	—		$	290		$	—		$	—
Current liabilities		(1,079	)		(1,050	)		(795	)		(834	)
Non-current liabilities		(125,828	)		(99,288	)		(14,602	)		(12,969	)
Total	$	(126,907	)	$	(100,048	)	$	(15,397	)	$	(13,803	)

⁽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⁾

In October 2010, the Company assumed directly the pension obligation for a group of former employees of a divested subsidiary in place of an obligation to indemnify the purchaser of the subsidiary for all pension-related costs of the former employees. The pension plan covering those employees transferred the rights to the assets and liabilities to one of the Company’s foreign pension plans. The net underfunded position of $2.9 million was recorded as pension expense during the year ended December 31, 2010, which was substantially offset within Selling, general and administrative expense by the reversal of an accrual established in previous periods related to this matter.

The accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $343.8 million and $221.0 million, respectively, as of December 31, 2011 and $324.8 million and $228.1 million, respectively, as of December 31, 2010.

The projected benefit obligation and fair value of plan assets for the pension plans with projected benefit obligations in excess of plan assets were $347.9 million and $221.0 million, respectively, as of December 31, 2011 and $328.5 million and $228.1 million, respectively, as of December 31, 2010.

The following table summarizes the changes in the Company’s foreign Pension and accrued post-retirement benefits and plan assets, included in the table above, and includes a statement of the plans’ funded status:

	Foreign Pension Benefits
	Year Ended December 31,
	2011			2010
	(In thousands)
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	95,136		$	80,960
Service cost		1,383			1,168
Interest cost		5,132			4,138
Actuarial loss		5,704			5,494
Settlement⁽¹⁾		(2,857	)		—
Plan combinations⁽²⁾		—			12,639
Foreign exchange effect		(1,921	)		(4,827	)
Benefits paid		(5,469	)		(4,436	)
Projected benefit obligation, end of year	$	97,108		$	95,136
Accumulated benefit obligation, end of year	$	92,964		$	91,346
Change in plan assets:
Fair value of plan assets, beginning of year	$	34,071		$	24,841
Actual return on plan assets		3,039			1,638
Employer contribution		4,328			3,271
Settlement⁽¹⁾		(3,388	)		—
Plan combinations⁽²⁾		—			9,762
Foreign exchange effect		(242	)		(1,005	)
Benefits paid		(5,469	)		(4,436	)
Fair value of plan assets, end of year	$	32,339		$	34,071
Funded status, end of year	$	(64,769	)	$	(61,065	)

⁽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⁾

As discussed further above, this amount represents the pension obligation assumed by the Company for a group of former employees of a divested subsidiary in place of an obligation to indemnify the purchaser of the subsidiary for all pension-related costs of the former employees.

Expected contributions to the Company’s pension and other post-employment benefit plans for the year ended December 31, 2012, related to plans as of December 31, 2011, are $3.0 million. The following benefit payments are expected to be paid during each respective fiscal year:

					Other Post-
	Pension Benefits⁽¹⁾				Retirement
	All Plans		Foreign Plans		Benefits⁽¹⁾
	(In thousands)
2012	$	22,664	$	5,175	$	795
2013		22,694		5,379		839
2014		22,682		5,435		864
2015		22,710		5,525		875
2016		22,661		5,597		899
Thereafter		110,787		28,964		4,307

	⁽¹⁾	Represents pension and other post-retirement benefits expected to be paid as of December 31, 2011 and does not include payments that may be required for obligations assumed in connection with the Company’s subsequent Charter Acquisition. See Note 4, “Acquisitions” for further discussion of the Charter Acquisition.

The Company’s primary investment objective for its pension plan assets is to provide a source of retirement income for the plans’ participants and beneficiaries. The assets are invested with the goal of preserving principal while providing a reasonable real rate of return over the long term. Diversification of assets is achieved through strategic allocations to various asset classes. Actual allocations to each asset class vary due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions, and the timing of benefit payments and contributions. The asset allocation is monitored and rebalanced as required, as frequently as on a quarterly basis in some instances. The following are the actual and target allocation percentages for the Company’s pension plan assets:

	Actual Asset Allocation
	December 31,						Target
	2011			2010			Allocation
U.S. Plans:
Equity securities:
U.S.		32	%		34	%	30% - 40%
International		16	%		16	%	15% - 30%
Fixed income mutual funds		33	%		32	%	20% - 35%
Hedge funds		19	%		18	%	15% - 20%
Foreign Plans:
Large cap equity securities		22	%		11	%	0% - 25%
Fixed income securities		54	%		57	%	80% - 100%
Cash and cash equivalents		23	%		32	%	0% - 25%
Other		1	%		—		0% -5%

A summary of the Company’s pension plan assets for each fair value hierarchy level for the periods presented follows (See Note 14, “Financial Instruments” for further description of the levels within the fair value hierarchy):

	December 31, 2011
	Level		Level		Level
	One		Two		Three		Total
	(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
Large cap 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.

	December 31, 2010
	Level One		Level Two		Level Three		Total
	(In thousands)
U.S. Plans:
Cash and cash equivalents	$	3	$	—	$	—	$	3
Equity securities:
U.S. large cap		54,086		—		—		54,086
U.S. small/mid cap		12,339		—		—		12,339
International		32,271		—		—		32,271
Fixed income mutual funds:
U.S. government and corporate		39,923		—		—		39,923
High-yield bonds		16,011		—		—		16,011
Emerging markets debt		6,194		—		—		6,194
Multi-strategy hedge funds		—		—		36,342		36,342
Foreign Plans:
Cash and cash equivalents		10,638		—		—		10,638
Large cap equity securities		3,885		—		—		3,885
Non-U.S. government bonds		—		13,520		—		13,520
Other⁽¹⁾		—		6,028		—		6,028
	$	175,350	$	19,548	$	36,342	$	231,240

⁽¹⁾

Represents diversified portfolio funds maintained for certain foreign plans.

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 Three during the years ended December 31, 2011 or 2010. 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, 2009	$	25,983
Unrealized gain		786
Balance, December 31, 2009		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

The following table sets forth the components of net periodic benefit cost and Other comprehensive loss (income) of the non-contributory 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,
	2011			2010			2009			2011			2010			2009
	(In thousands)
Components of Net Periodic Benefit Cost:
Service cost	$	1,383		$	1,168		$	1,381		$	—		$	—		$	—
Interest cost		16,408			16,514			17,577			690			553			525
Amortization		5,839			4,593			3,639			852			482			353
Plan combinations⁽¹⁾		—			2,877			—			—			—			—
Settlement loss		1,499			—			—			—			—			—
Expected return on plan assets		(18,101	)		(19,331	)		(19,570	)		—			—			—
Net periodic benefit cost	$	7,028		$	5,821		$	3,027		$	1,542		$	1,035		$	878
Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income):
Current year net actuarial loss	$	37,037		$	16,736		$	710		$	1,507		$	3,671		$	772
Less amounts included in net periodic benefit cost:
Amortization of net loss		(5,839	)		(4,593	)		(3,639	)		(604	)		(234	)		(104	)
Settlement loss		(835	)		—			—			—			—			—
Amortization of prior service cost		—			—			—			(248	)		(248	)		(249	)
Total recognized in Other comprehensive loss (income)	$	30,363		$	12,143		$	(2,929	)	$	655		$	3,189		$	419

__________

⁽¹⁾

Represents the transfer of assets associated with the pension obligation assumed by the Company for a group of former employees, discussed in more detail above.

The following table sets forth the components of net periodic benefit cost and Other comprehensive loss (income) of the foreign non-contributory defined benefit pension plans and the Company’s other post-retirement employee benefit plans, included in the table above:

	Foreign Pension Benefits
	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Components of Net Periodic Benefit Cost:
Service cost	$	1,383		$	1,168		$	1,381
Interest cost		5,132			4,138			4,668
Amortization		588			385			808
Plan combinations⁽¹⁾		—			2,877			—
Settlement loss		1,499			—			—
Expected return on plan assets		(1,400	)		(1,259	)		(1,204	)
Net periodic benefit cost	$	7,202		$	7,309		$	5,653
Change in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income):
Current year net actuarial loss (gain)	$	4,101		$	5,062		$	(6,464	)
Less amounts included in net periodic benefit cost:
Amortization of net loss		(588	)		(385	)		(808	)
Settlement loss		(835	)		—			—
Total recognized in Other comprehensive loss (income)	$	2,678		$	4,677		$	(7,272	)

__________

⁽¹⁾

Represents the transfer of assets associated with the pension obligation assumed by the Company for a group of former employees, discussed in more detail above.

The components of net unrecognized pension and other post-retirement benefit cost included in Accumulated other comprehensive loss in the Consolidated Balance Sheets that have not been recognized as a component of net periodic benefit cost are as follows:

					Other Post-Retirement
	Pension Benefits				Benefits
	December 31,				December 31,
	2011		2010		2011		2010
	(In thousands)
Net actuarial loss	$	184,532	$	153,757	$	7,677	$	6,774
Prior service cost		—		—		1,552		1,800
Total	$	184,532	$	153,757	$	9,229	$	8,574

The components of net unrecognized pension and other post-retirement benefit cost included in Accumulated other comprehensive loss in the Consolidated Balance Sheets that are expected to be recognized as a component of net periodic benefit cost during the year ended December 31, 2012 are as follows:

			Other Post-
			Retirement
	Pension Benefits		Benefits
	(In thousands)
Net actuarial loss	$	7,744	$	682
Prior service cost		—		248
Total	$	7,744	$	930

The key economic assumptions used in the measurement of the Company’s pension and other post-retirement benefit obligations are as follows:

							Other Post-Retirement
	Pension Benefits						Benefits
	December 31,						December 31,
	2011			2010			2011			2010
Weighted-average discount rate:
All plans		4.2	%		5.1	%		4.2	%		5.2	%
Foreign plans		4.9	%		5.4	%		—			—

Weighted-average rate of increase in compensation levels for active foreign plans		2.6	%		2.6	%		—			—

The key economic assumptions used in the computation of net periodic benefit cost are as follows:

	Pension Benefits									Other Post-Retirement Benefits
	Year Ended December 31,									Year Ended December 31,
	2011			2010			2009			2011			2010			2009
Weighted-average discount rate:
All plans		5.0	%		5.7	%		6.1	%		5.2	%		5.6	%		6.0	%
Foreign plans		5.1	%		5.6	%		5.8	%		—			—			—
Weighted-average expected return on plan assets:
All plans		7.7	%		8.3	%		8.3	%		—			—			—
Foreign plans		4.7	%		5.4	%		5.0	%		—			—			—
Weighted-average rate of increase in compensation levels for active foreign plans		2.6	%		2.2	%		2.1	%		—			—			—

In determining discount rates, the Company utilizes the single discount rate equivalent to discounting the expected future cash flows from each plan using the yields at each duration from a published yield curve as of the measurement date.

For measurement purposes, an annual rate of increase in the per capita cost of covered health care benefits of approximately 16.0% was assumed. The rate was assumed to decrease gradually to 5.0% by 2022 and remain at that level thereafter for benefits covered under the plans.

The expected long-term rate of return on plan assets was based on the Company’s investment policy target allocation of the asset portfolio between various asset classes and the expected real returns of each asset class over various periods of time that are consistent with the long-term nature of the underlying obligations of these plans.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage point change in assumed health care cost trend rates would have the following pre-tax effects:

	1% Increase		1% Decrease
	(in thousands)
Effect on total service and interest cost components for the year ended December 31, 2011	$	85	$	(70	)
Effect on post-retirement benefit obligation at December 31, 2011		2,124		(1,697	)

The Company maintains defined contribution plans covering substantially all of their non-union and certain union domestic employees. Under the terms of the plans, eligible employees may generally contribute from 1% to 50% of their compensation on a pre-tax basis. The Company’s contributions are based on 50% of the first 6% of each participant’s pre-tax contribution. Additionally, the Company makes a unilateral contribution of 3% of all employees’ salary (including non-contributing participants) to the defined contribution plans. The Company’s expense for each of the years ended December 31, 2011, 2010 and 2009 was $2.4 million.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph q
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 8
-Subparagraph m
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 106
-Paragraph 518
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 87
-Paragraph 264
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-2
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 30
-Paragraph 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS106-2
-Paragraph 20, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 158
-Paragraph 7, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Implementation Guide (Q and A)
-Number FAS88
-Paragraph 63
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

+ Details

Financial Instruments

12 Months Ended

Dec. 31, 2011

Financial Instruments

14.

Financial Instruments

The carrying values of financial instruments, including Trade receivables, Accounts payable and Other accrued liabilities approximate their fair values due to their short-term maturities. The estimated fair value of the Company’s debt of $110.9 million and $81.6 million as of December 31, 2011 and 2010, respectively, was based on current interest rates for similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the date of the Consolidated Balance Sheets or that will be realized in the future.

	December 31, 2011
	Level		Level		Level
	One		Two		Three		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, 2010
	Level		Level		Level
	One		Two		Three		Total
	(In thousands)
Assets:
Cash equivalents	$	24,925	$	—	$	—	$	24,925
	$	24,925	$	—	$	—	$	24,925

Liabilities:
Interest rate swap	$	—	$	1,789	$	—	$	1,789
Foreign currency contracts		—		257		—		257
	$	—	$	2,046	$	—	$	2,046

There were no transfers in or out of Level One, Two or Three during the years ended December 31, 2011 or 2010.

Cash Equivalents

The Company’s cash equivalents consist of investments in interest-bearing deposit accounts and money market mutual funds which are valued based on quoted market prices. The fair value of these investments approximate cost due to their short-term maturities and the high credit quality of the issuers of the underlying securities.

Derivatives

The Company periodically enters into foreign currency, interest rate swap and commodity derivative contracts. The Company uses interest rate swaps to manage exposure to interest rate fluctuations. Foreign currency contracts are used to manage exchange rate fluctuations and generally hedge transactions between the Euro and the U.S. dollar. Commodity futures contracts are used to manage costs of raw materials used in the Company’s production processes.

The Company’s derivative instruments are measured at fair value on a recurring basis using significant observable inputs and are included in Level Two of the fair value hierarchy.

Interest Rate Swap. The Company’s interest rate swap is valued based on forward curves observable in the market. The notional value of the Company’s interest rate swap was $25 million and $50 million as of December 31, 2011 and 2010, respectively, whereby it exchanged its LIBOR-based variable-rate interest for a fixed rate of 4.1375%. On June 30, 2011, the notional value decreased from $50 million to $25 million, and it expires on June 29, 2012. The interest rate swap agreement was designated as a cash flow hedge. There has been no significant ineffectiveness related to this arrangement since its inception. On January 11, 2012, the Company terminated its interest rate swap in conjunction with the repayment of the Bank of America Credit Facility and reclassified $0.5 million of net losses from Accumulated other comprehensive loss to Interest expense. See Note 10, “Debt” for additional discussion regarding the termination of the Company’s Bank of America Credit Facility.

Foreign Currency Contracts. Foreign currency contracts are measured using broker quotations or observable market transactions in either listed or over-the-counter markets. The Company primarily uses foreign currency contracts to mitigate the risk associated with customer forward sale agreements denominated in currencies other than the applicable local currency. As of December 31, 2011 and 2010, the Company had foreign currency contracts used primarily to mitigate the risk associated with forward sale agreements with notional values of $5.1 million and $13.1 million, respectively. During the year ended December 31, 2011, the Company entered into foreign exchange contracts to mitigate the potential foreign exchange risk through the closing date of the Charter Acquisition. The total notional amount of these contracts was a total of 2.7 billion GBP, or $4.4 billion as of December 31, 2011. As of December 31, 2011, approximately $6.0 million was included in Other accrued liabilities related to amounts payable related to an acquisition-related foreign exchange derivative contract. During the three months ended March 30, 2012, the Company realized $28.2 million of losses related to foreign exchange contracts used to mitigate the foreign exchange risk related to the Charter Acquisition and recognized an additional loss of $7.1 million. See Note 4, “Acquisitions” for additional discussion regarding the Company’s agreement to acquire Charter International plc. The Company has not elected hedge accounting for these contracts.

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.

The Company recognized the following in its Consolidated Financial Statements related to its derivative instruments:

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
Contract Designated as a Cash Flow Hedge:
Interest Rate Swap:
Unrealized loss	$	(161	)	$	(1,201	)	$	(866	)
Realized loss		(1,479	)		(2,447	)		(2,881	)
Contracts Not Designated in a Hedge Relationship:
Foreign Currency Contracts – Acquisition-Related:
Unrealized loss, net		(21,013	)		—			—
Foreign Currency Contracts – Primarily Related to Customer Sales Contracts:
Unrealized (loss) gain, net		(123	)		93			(730	)
Realized gain (loss), net		132			(838	)		886
Commodity Futures Contracts – Primarily Related to the Purchase of Copper and Nickel:
Unrealized gain		—			—			1,991
Realized loss		—			—			(977	)

Liability for Contingent Payments

The Company’s liability for contingent payments represents the fair value of estimated additional cash payments related to its acquisition of COT-Puritech in December of 2011, which are subject to the achievement of certain performance goals, and is included in Other liabilities in the Consolidated Balance Sheet. 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. During the year ended December 31, 2011, an insignificant amount of accretion was recognized in Interest expense in the Consolidated Statement of Operations related to the Company’s liability for contingent payments. Realized or unrealized gains or losses in future periods will be recognized in Interest expense in the Consolidated Statement of Operations.

Concentration of Credit Risk

12 Months Ended

Dec. 31, 2011

Concentration of Credit Risk

15.

Concentration of Credit Risk

The Company is potentially subject to a concentration of risk with respect to its Trade receivables, net. 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. For the years ended December 31, 2011, 2010 and 2009, the Company did not have any significant customer concentrations as no single customer represented more than 8% of the Company’s sales.

The Company may be exposed to credit-related losses in the event of non-performance by counterparties to financial instruments. Counterparties to the Company’s financial instruments represent, in general, international financial institutions or well-established financial institutions.

Operations by Geographic Area

12 Months Ended

Dec. 31, 2011

Operations by Geographic Area

16.

Operations by Geographic Area

The Company’s operations during the years ended December 31, 2011, 2010 and 2009 have been aggregated into a single reportable operating segment for the design, production and distribution of fluid-handling products.

The detail of the Company’s operations by geography and product type are as follows:

	Year Ended December 31,
	2011		2010		2009
	(In thousands)
Net Sales by Origin:
United States	$	207,459	$	183,803	$	177,373
Foreign locations:
Germany		208,594		196,399		180,917
Other		277,339		161,785		166,734
Total foreign locations		485,933		358,184		347,651
Total Net sales	$	693,392	$	541,987	$	525,024
Net Sales by Product:
Pumps, including aftermarket parts and services	$	522,477	$	444,907	$	443,073
Systems, including installation services		150,803		78,598		69,339
Valves		14,153		14,568		10,081
Other		5,959		3,914		2,531
Total Net sales	$	693,392	$	541,987	$	525,024

	December 31,
	2011		2010
	(In thousands)
Property, Plant and Equipment, Net:
United States	$	28,699	$	27,757
Foreign locations:
Germany		40,822		42,619
Other		21,418		18,870
Total foreign locations		62,240		61,489
Property, plant and equipment, net	$	90,939	$	89,246

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

17.

Commitments and Contingencies

Asbestos Liabilities and Insurance Assets

Two of the Company’s subsidiaries are each one of many defendants in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured with components that are alleged to have contained asbestos. Such components were acquired from third-party suppliers, and were not manufactured by any of the Company’s subsidiaries nor were the subsidiaries producers or direct suppliers of asbestos. The manufactured products that are alleged to have contained asbestos generally were provided to meet the specifications of the subsidiaries’ customers, including the U.S. Navy.

The subsidiaries settle asbestos claims for amounts the Company considers reasonable given the facts and circumstances of each claim. The annual average settlement payment per asbestos claimant has fluctuated during the past several years. The Company expects such fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise. To date, the majority of settled claims have been dismissed for no payment.

Of the 23,682 pending claims as of December 31, 2011, approximately 3,700 of such claims have been brought in the Supreme Court of New York County, New York; approximately 550 of such claims have been brought in the U.S. District Court, Eastern and Western Districts of Michigan; approximately 200 of such claims have been brought in the Superior Court, Middlesex County, New Jersey; and approximately 50 claims have been brought in various federal and state courts in Mississippi. The remaining pending claims have been filed in various other state and federal courts.

Claims activity related to asbestos is as follows⁽¹⁾:

	Year Ended December 31,
	2011			2010			2009
	(Number of Claims)
Claims unresolved, beginning of period		24,764			25,295			35,357
Claims filed⁽²⁾		4,927			3,692			3,323
Claims resolved⁽³⁾		(6,009	)		(4,223	)		(13,385	)
Claims unresolved, end of period		23,682			24,764			25,295

		(In Dollars)
Average cost of resolved claims⁽⁴⁾	$	15,397		$	12,037		$	11,106

__________

⁽¹⁾

Excludes claims filed by one legal firm that have been “administratively dismissed.”

⁽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.

⁽⁴⁾

Excludes claims settled in Mississippi for which the majority of claims have historically been resolved for no payment and insurance recoveries.

The Company has projected each subsidiary’s future asbestos-related liability costs with regard to pending and future unasserted claims based upon the Nicholson methodology. The Nicholson methodology is a standard approach used by experts and has been accepted by numerous courts. It is the Company’s policy to record a liability for asbestos-related liability costs for the longest period of time that it can reasonably estimate.

The Company believes that it can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and has recorded that liability as its best estimate. While it is reasonably possible that the subsidiaries will incur costs after this period, the Company does 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.

During the year ended December 31, 2009, an analysis of claims data including filing and dismissal rates, alleged disease mix, filing jurisdiction, as well as settlement values resulted in the determination that the Company should revise its rolling 15-year estimate of asbestos-related liability for pending and future claims. The analysis reflected that a statistically significant increase in mesothelioma filings had occurred and was expected to continue for both subsidiaries. As a result, the Company recorded an $11.6 million pretax charge, which was comprised of an increase to its asbestos-related liabilities of $111.3 million offset by expected insurance recoveries of $99.7 million, during the year ended December 31, 2009.

Each subsidiary has separate insurance coverage acquired prior to Company ownership of each independent entity. In its evaluation of the insurance asset, the Company used differing insurance allocation methodologies for each subsidiary based upon the applicable law pertaining to the affected subsidiary.

For one of the subsidiaries, the Delaware Court of Chancery ruled on October 14, 2009 that asbestos-related costs should be allocated among excess insurers using an “all sums” allocation (which allows an insured to collect all sums paid in connection with a claim from any insurer whose policy is triggered, up to the policy’s applicable limits) and that the subsidiary has rights to excess insurance policies purchased by a former owner of the business. Based upon this ruling mandating an “all sums” allocation, as well as the language of the underlying insurance policies and the assertion and belief that defense costs are outside policy limits, during the year ended December 31, 2009, the Company increased its future expected recovery percentage from 67% to 90% of asbestos-related costs following the exhaustion of its primary and umbrella layers of insurance and recorded a pretax gain of $17.3 million. The subsidiary expects to be responsible for approximately 10% of its future asbestos-related costs.

For this subsidiary, during the year ended December 31, 2010, an insolvent carrier that had written approximately $1.4 million in limits for which the subsidiary had assumed no recovery made a cash settlement offer of approximately $0.7 million. As such, the subsidiary recorded a gain for this amount.

The subsidiary was notified in 2010 by the primary and umbrella carrier who had been fully defending and indemnifying the subsidiary for 20 years that the limits of liability of its primary and umbrella layer policies had been exhausted. Since then, the subsidiary has sought coverage from certain excess layer insurers whose terms and conditions follow form to the umbrella carrier. Certain first-layer excess insurers have defended and/or indemnified the subsidiary, subject to their reservations of rights and their applicable policy limits. Litigation between this subsidiary and its excess insurers is continuing and a trial date has been set for the fourth quarter of 2012. The subsidiary continues to work with its excess insurers to obtain 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 the insurers. While not impacting the results of operations, the funding requirement could range up to $10 million per quarter until final resolution. In addition, because a statistically significant increase in mesothelioma claims had occurred and was expected to continue to occur in certain regions, this subsidiary recorded a $1.8 million pre-tax charge, which was comprised of an increase in its asbestos-related liabilities of $18.1 million partially offset by an increase in expected insurance recoveries of $16.3 million, during the fourth quarter of the year ended December 31, 2011.

In 2003, the other 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.

For this subsidiary it was determined by court ruling in 2007, that the allocation methodology mandated by the New Jersey courts will apply. Further court rulings in December of 2009, clarified the allocation calculation related to amounts currently due from insurers as well as amounts the Company expects to be reimbursed for asbestos-related costs incurred in future periods. As a result, during the year ended December 31, 2009, the Company increased its receivable for past costs by $11.9 million and decreased its insurance asset for future costs by $9.8 million and recorded a pretax gain of $2.1 million.

In connection with this litigation, the court engaged a special master to review the appropriate information and recommend an allocation formula in accordance with applicable law and the facts of the case. During 2010, the court-appointed special allocation master made its recommendation. 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, the Company recorded a provision for $2.1 million during the year ended December 31, 2011, which is reflected in the 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. This trend is not expected to continue for this subsidiary. The subsidiary expects to be responsible for approximately 16% of all future asbestos-related costs.

The Company has established reserves of $431.1 million and $429.7 million as of December 31, 2011 and 2010, respectively, for the probable and reasonably estimable asbestos-related liability cost it believes the subsidiaries will pay through the next 15 years. It has also established recoverables of $370.3 million and $374.4 million as of December 31, 2011 and 2010, respectively, for the insurance recoveries that are deemed probable during the same time period. Net of these recoverables, the expected cash outlay on a non-discounted basis for asbestos-related bodily injury claims over the next 15 years was $60.8 million and $55.3 million as of December 31, 2011 and 2010, respectively. In addition, the Company has recorded a receivable for liability and defense costs previously paid in the amount of $47.7 million and $51.8 million as of December 31, 2011 and 2010, respectively, for which insurance recovery is deemed probable. The Company has included the reserves for the asbestos liabilities in Accrued asbestos liability and Long-term asbestos liability and the related insurance recoveries in Asbestos insurance asset and Long-term asbestos insurance asset in the Consolidated Balance Sheets. The receivable for previously paid liability and defense costs is recorded in Asbestos insurance receivable and Long-term asbestos insurance receivable in the Consolidated Balance Sheets. The Company also has reflected in Other accrued liabilities $27.6 million and $23.3 million as of December 31, 2011 and 2010, respectively, for overpayments by certain insurers and unpaid legal costs related to defending itself against asbestos-related liability claims and legal action against the Company’s insurers.

Management’s analyses are based on currently known facts and a number of assumptions. However, projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded which could materially affect the Company’s financial condition, results of operations or cash flow.

General Litigation

On June 3, 1997, one of the Company’s subsidiaries was served with a complaint in a case brought by Litton Industries, Inc. in the Superior Court of New Jersey which alleges damages in excess of $10.0 million incurred as a result of losses under a government contract bid transferred in connection with the sale of its former Electro-Optical Systems business. In 2004, this case was tried and the jury rendered a verdict of $2.1 million for the plaintiffs. After appeals by both parties, the Supreme Court of New Jersey upheld the plaintiffs’ right to a refund of their attorney’s fees and costs of trial, but remanded the issue to the trial court to reconsider the amount of fees using a proportionality analysis of the relationship between the fee requested and the damages recovered. The date for the new trial on additional claims allowed by the Appellate Division of the New Jersey Superior Court and the recalculation of attorney’s fees has not been set. The court issued a schedule for summary judgment motions. After the summary judgment motions have been briefed, the court is expected to issue a ruling. The subsidiary intends to continue to defend this matter vigorously. As of both December 31, 2011 and 2010, $9.5 million was included in Other liabilities in the Company’s Consolidated Balance Sheets related to this matter.

The Company is also involved in various other pending legal proceedings arising out of the ordinary course of the Company’s business. None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. With respect to these proceedings and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate reserves 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.

Guarantees

As of December 31, 2011, the Company issued $25.4 million of bank guarantees securing primarily customer prepayments, performance and product warranties in its European and Asian operations. Additionally, see Note 10, “Debt” for discussion regarding the Company’s letters of credit outstanding as of December 31, 2011.

Minimum Lease Obligations

The Company’s minimum rental obligations under non-cancelable operating leases are as follows:

	December 31, 2011⁽¹⁾
	(In thousands)
2012	$	3,941
2013		3,312
2014		2,751
2015		1,670
2016		1,345
Thereafter		1,875
Total	$	14,894

__________

⁽¹⁾

Represents expected payments for minimum lease obligations as of December 31, 2011 and does not include payments that may be required for obligations assumed in connection with the Company’s subsequent Charter Acquisition. See Note 4, “Acquisitions” for further discussion of the Charter Acquisition.

The remaining lease terms for the Company’s operating leases range from 1 to 7 years. During the years ended December 31, 2011, 2010 and 2009, the Company’s net rental expense related to operating leases was $4.9 million, $4.6 million and $4.8 million, respectively.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Selected Quarterly Data-(unaudited)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Data-(unaudited)

18.

Selected Quarterly Data–(unaudited)

Provided below is selected unaudited quarterly financial data for the years ended December 31, 2011 and 2010.

	Quarter Ended
	April 1,		July 1,		September 30,		December 31,
	2011		2011		2011		2011⁽¹⁾
	(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	)

	Quarter Ended
	April 2,			July 2,		October 1,		December 31,
	2010			2010		2010		2010
	(In thousands, except per share data)
Net sales	$	119,971		$	122,968	$	132,397	$	166,651
Gross profit		41,756			42,981		47,097		59,574
Net (loss) income		(374	)		2,088		5,851		8,650
Net (loss) income per share – basic and diluted	$	(0.01	)	$	0.05	$	0.13	$	0.20

⁽¹⁾

Net loss and Net 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.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

19.

Subsequent Events

On January 13, 2012, the Company completed the Charter Acquisition. See Note 4, “Acquisitions,” Note 10, “Debt,” Note 11, “Shareholders’ Equity,” and Note 14, “Financial Instruments” for further discussion regarding events that occurred subsequent to December 31, 2011 related to the Charter Acquisition.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2011

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

COLFAX CORPORATION AND SUBSIDIARIES

SCHEDULE II–VALUATION AND QUALIFYING ACCOUNTS

	Balance at Beginning of Period		Charged to Cost and Expense⁽¹⁾			Charged to Other Accounts⁽²⁾		Write-Offs Write- Downs and Deductions			Foreign Currency Translation			Balance at End of Period
	(In thousands)
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
Year Ended December 31, 2009:
Allowance for doubtful accounts	$	2,486	$	405		$	—	$	(178	)	$	124		$	2,837
Allowance for excess slow-moving and obsolete inventory		6,923		1,368			—		(413	)		147			8,025
Valuation allowance for deferred tax assets		45,206		(82	)		—		—			(71	)		45,053

⁽¹⁾

Amounts charged to other accounts is net of recoveries for the respective period.

⁽²⁾

Represents amount charged to Accumulated other comprehensive loss.