Equity

Share Repurchase Program

On February 12, 2018, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. The Board of Directors increased the repurchase authorization by an additional $100 million on June 6, 2018. On July 19, 2018, the Board of Directors increased the repurchase authorization by an additional $100 million. The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors.

There were no repurchases made during the three months ended March 29, 2019. As of March 29, 2019, the remaining stock repurchase authorization provided by the Company’s Board of Directors was $100.0 million.

Accumulated Other Comprehensive Loss

The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the three months ended March 29, 2019 and March 30, 2018. All amounts are net of tax and noncontrolling interest, if any.



	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost			Foreign Currency Translation Adjustment			Unrealized Gain on Hedging Activities			Total
	(In thousands)
Balance at January 1, 2019	$	(80,794	)	$	(752,989	)	$	38,238		$	(795,545	)
Other comprehensive (loss) income before reclassifications:
Foreign currency translation adjustment	824			8,803			10			9,637
Gain on long-term intra-entity foreign currency transactions	—			12,621			—			12,621
Gain on net investment hedges	—			—			5,453			5,453
Unrealized loss on cash flow hedges	—			—			(76		)	(76		)
Other comprehensive (loss) income before reclassifications	824			21,424			5,387			27,635
Amounts reclassified from Accumulated other comprehensive loss ⁽¹⁾	(9,582		)	—			—			(9,582		)
Noncontrolling interest share repurchase	—			(21,372		)	—			(21,372		)
Net Other comprehensive (loss) income	(8,758		)	52			5,387			(3,319		)
Balance at March 29, 2019	$	(89,552	)	$	(752,937	)	$	43,625		$	(798,864	)



	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost			Foreign Currency Translation Adjustment			Unrealized Gain on Hedging Activities			Total
	(In thousands)
Balance at January 1, 2018	$	(84,338	)	$	(525,324	)	$	30,138		$	(579,524	)
Other comprehensive income (loss) before reclassifications:
Foreign currency translation adjustment	(322		)	60,658			32			60,368
Gain on long-term intra-entity foreign currency transactions	—			15,309			—			15,309
Loss on net investment hedges	—			—			(7,230		)	(7,230		)
Unrealized gain on cash flow hedges	—			—			2,043			2,043
Other comprehensive income (loss) before reclassifications	(322		)	75,967			(5,155		)	70,490
Amounts reclassified from Accumulated other comprehensive loss ⁽¹⁾	957			—			—			957
Net Other comprehensive income (loss)	635			75,967			(5,155		)	71,447
Balance at March 30, 2018	$	(83,703	)	$	(449,357	)	$	24,983		$	(508,077	)

⁽¹⁾Included in the computation of net periodic benefit cost. The 2019 amount includes a $(10.3) million impact due to a non-U.S. pension plan settlement. See Note 13, “Net Periodic Benefit Cost - Defined Benefit Plans” for additional details.

Tangible equity unit (“TEU”) offering

On January 11, 2019, the Company issued $460 million in tangible equity units. The Company offered 4 million of its 5.75% tangible equity units at the stated amount of $100 per unit. An option to purchase up to an additional 600,000 tangible equity units at the stated amount of $100 per unit was exercised in full at settlement. Total cash of $447.7 million was received upon closing.

The proceeds from the issuance of the TEUs were allocated to equity and debt based on the relative fair value of the respective components of each TEU as follows:



	TEU prepaid stock purchase contracts		TEU amortizing notes		Total
	(In millions, except per unit amounts)
Fair value per unit	$	84.39	$	15.61	$	100.00
Gross proceeds	388.2		71.8		460.0
Less: Issuance costs	10.4		1.9		12.3
Net proceeds	$	377.8	$	69.9	$	447.7

The $377.8 million fair value of the prepaid stock purchase contracts is recorded in Additional paid-in capital in the Condensed Consolidated Balance Sheets. The fair value of the $69.9 million of TEU amortizing notes due January 2022 has both a short-term and a long-term component. $47.3 million is recorded in Long-term debt, less current portion, while $22.6 million is recorded in Current portion of long-term debt in the Condensed Consolidated Balance Sheets. The Company deferred certain debt issuance costs associated with the debt component of the TEUs. These amounts offset the debt liability balance in the Condensed Consolidated Balance Sheets and are being amortized over its term.

TEU prepaid stock purchase contracts

Unless previously settled at the holder’s option, for each purchase contract the Company will deliver to holders on January 15, 2022 (subject to postponement in certain limited circumstances, the “mandatory settlement date”) a number of shares of common stock. The number of shares of common stock issuable upon settlement of each purchase contract (the “settlement rate”) will be determined using the arithmetic average of the volume average weighted price for the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding January 15, 2022 (“the Applicable Market Value”) with reference to the following settlement rates:


•	if the Applicable Market Value of the common stock is greater than the threshold appreciation price of $25.00, then the holder will receive 4.0000 shares of common stock for each purchase contract (the “minimum settlement rate”);


•	if the Applicable Market Value of the common stock is greater than or equal to the reference price of $20.81, but less than or equal to the threshold appreciation price of $25.00, then the holder will receive a number of shares of common stock for each purchase contract having a value, based on the Applicable Market Value, equal to $100; and


•	if the Applicable Market Value of the common stock is less than the reference price of $20.81, then the holder will receive 4.8054 shares of common stock for each purchase contract (the “maximum settlement rate”).

TEU amortizing notes

Each TEU amortizing note has an initial principal amount of $15.6099, bears interest at a rate of 6.50% per annum and has a final installment payment date of January 15, 2022. On each January 15, April 15, July 15 and October 15, commencing on April 15, 2019, the Company pays equal quarterly cash installments of $1.4375 per TEU amortizing note (except for the April 15, 2019 installment payment, which was $1.5014 per TEU amortizing note), which will constitute a payment of interest and a partial repayment of principal, and which cash payment in the aggregate per year will be equivalent to 5.75% per year with respect to the $100 stated amount per unit. The TEU amortizing notes are the direct, unsecured and unsubordinated obligations of the Company and rank equally with all of the existing and future other unsecured and unsubordinated indebtedness of the Company.

Earnings per share

Unless the 4.6 million stock purchase contracts are redeemed by the Company or settled earlier at the unit holder’s option, they are mandatorily convertible into shares of Colfax common stock at not less than 4.0 shares per purchase contract or more than 4.8054 shares per purchase contract on January 15, 2022. This corresponds to not less than 18.4 million shares and not more than 22.1 million shares at the maximum. The 18.4 million minimum shares are included in the calculation of weighted-average shares of Common stock outstanding - basic. The difference between the minimum and maximum shares represents potentially dilutive securities. The Company includes them in its calculation of weighted-average shares of Common stock outstanding - diluted on a pro rata basis to the extent the average Applicable Market Value is higher than the reference price but is less than the conversion price.

Repurchase of noncontrolling interest shares

During the three months ended March 29, 2019, a South Africa consolidated subsidiary of the Company completed the repurchase of nearly all the noncontrolling interest shares of one of its subsidiaries under a general offer. As of March 29, 2019, the Company owns 99.8% of this subsidiary. The amount paid to its noncontrolling shareholders was $92.7 million, which was financed by additional debt. See Note 11, “Debt” for more information. The difference between the cash paid and the book value of the noncontrolling interest repurchased was recorded in Additional paid-in capital on the Company’s Condensed Consolidated Balance Sheets.