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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-03-01 · 641 added, 469 removed, 1169 unchanged (49% of the section changed)

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Consolidated Balance Sheets as of December 31, 2023, and 2022

Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Redeemable Noncontrolling Interests and Shareholders’

Equity for the years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Redeemable Noncontrolling Interests and Shareholders’ Equity for the years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Bruker Corporation and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income and comprehensive income, of redeemable noncontrolling interests and shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Bruker Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of redeemable noncontrolling interests and shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Prolab Instruments GmbH, PreOmics GmbH, PepSep Holding ApS, Optimal Industrial Automation and Technologies, IonSense, Inc., Inscopix, Inc., and Neurescence, Inc.

from its assessment of internal control over financial reporting as of December 31, 2022 because they were acquired by the Company in purchase business combinations during 2022.

We have also excluded Prolab Instruments GmbH, PreOmics GmbH, PepSep Holding ApS, Optimal Industrial Automation and Technologies, IonSense, Inc., Inscopix, Inc., and Neurescence, Inc.

from our audit of internal control over financial reporting.

The total assets and total revenues of these acquired entities excluded from management’s assessment and our audit of internal control over financial reporting collectively represent 1.5% and 1.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Biognosys AG, Osthus Beteiligungs GmbH, MIRO Analytical AG, PhenomeX Inc.

(Bruker Cellular Analysis), Acquifer Imaging GmbH, Deltabyte GmbH, Pinpoint Testing LLC, Fasmatech Science and Technology SA, Interherence GmbH, and Signals GmbH & Co.

KG, from its assessment of internal control over financial reporting as of December 31, 2023 because they were acquired by the Company in purchase business combinations during 2023.

We have also excluded Biognosys AG, Osthus Beteiligungs GmbH, MIRO Analytical AG, PhenomeX Inc.

(Bruker Cellular Analysis), Acquifer Imaging GmbH, Deltabyte GmbH, Pinpoint Testing LLC, Fasmatech Science and Technology SA, Interherence GmbH, and Signals GmbH & Co.

KG, from our audit of internal control over financial reporting.

The total assets and total revenues of these acquired entities excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 9% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition –

Revenue Recognition – System Sales

As described in Note 2 to the consolidated financial statements, the Company recognizes revenue from systems sales upon transfer of control in an amount that reflects the consideration it expects to receive.

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For systems that include customer-specific acceptance criteria, management is required to assess when it can demonstrate the acceptance criteria has been met, which generally is upon successful factory acceptance testing or customer acceptance and evidence of installation.

The Company’s product revenue for the year ended December 31, 2022 was $2,109.9 million, of which a significant portion relates to system sales.

The principal consideration for our determination that performing procedures relating to revenue recognition for system sales is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s system sales revenue recognition.

The Company’s product revenue for the year ended December 31, 2023, was $2,457.6 million, of which a significant portion relates to system sales.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

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February 29, 2024

We have served as the Company’s auditor since 2016.

BRUKER CORPORATION

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Cash and cash equivalents

Short-term investments

Accounts receivable, net

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LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND

SHAREHOLDERS’

SHAREHOLDERS’ EQUITY

Current liabilities:

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Accounts payable

Customer advances

Deferred revenue and customer advances

Other current liabilities

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Long-term debt

Long-term deferred revenue

Long-term deferred revenue and customer advances

Deferred tax liabilities

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Other long-term liabilities

Total Liabilities

Commitments and contingencies (Note 18)

Redeemable noncontrolling interests

Shareholders’

Shareholders’ equity:

Preferred stock, $ 0.01 par value 5,000,000 shares authorized, none issued or

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Retained earnings

Accumulated other comprehensive income (loss), net of tax

Total shareholders’

equity attributable to Bruker Corporation

Accumulated other comprehensive income, net of tax

Total shareholders’ equity attributable to Bruker Corporation

Noncontrolling interests in consolidated subsidiaries

Total shareholders’

Total liabilities, redeemable noncontrolling interests and shareholders’

Total shareholders’ equity

Total liabilities, redeemable noncontrolling interests and shareholders’ equity

The accompanying notes are an integral part of these consolidated financial statements.

BRUKER CORPORATION

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

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Operating income

Bargain purchase gain

Interest and other income (expense), net

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Weighted average common shares outstanding:

The accompanying notes are an integral part of these consolidated financial statements.

BRUKER CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

Year Ended December 31,

Consolidated net income

Foreign currency translation adjustments (net of tax of $ 1.4 , $ 2.1

and $ 1.2 , respectively)

Derivatives designated as hedging instruments (net of tax of ($ 13.8 ),

$ 12.5 , respectively)

Pension liability adjustments (net of tax of ($ 11.8 ), ($ 3.9 )

Other comprehensive income (loss):

Foreign currency translation adjustments, net of tax benefit of ($ 3.2 ), ($ 1.4 )

and ($ 2.1 ), respectively)

Comprehensive income

Derivatives designated as hedging instruments net of tax expense (benefit)

of $ 23.8 , ($ 13.8 ), and $ 12.5 respectively)

Pension and other postretirement benefit liability adjustments:

Pension and other postretirement benefit liability adjustments arising during the period

Amortization of net loss and prior service benefit included in net periodic pension cost

Total pension and other postretirement benefit liability adjustments, net of

tax expense (benefit) of ($ 5.1 ), $ 11.8 and $ 3.9 , respectively

Total other comprehensive income (loss)

Total Comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive loss attributable to redeemable noncontrolling

Comprehensive income attributable to Bruker Corporation

Total Comprehensive income attributable to Bruker Corporation

The accompanying notes are an integral part of these consolidated financial statements.

BRUKER CORPORATION

CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’

CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY

(in millions, except share data)

Noncontrolling

Number of Common

Shares Outstanding

Number of Treasury

Comprehensive

(Loss) Income

Shareholders’

Income (loss)

Shareholders’

Attributable to

Noncontrolling

Shareholders’

Balance at December 31, 2020

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Distributions to noncontrolling interests

Acquired remaining 20 % interest

in Hain LifeScience GmbH

Cash dividends paid to common

shareholders ($ 0.16 per share)

Consolidated net income

Other comprehensive (loss) income

Balance at December 31, 2020

Stock options exercised

Restricted stock units vested

Stock-based compensation

Shares repurchased

Cash dividends paid to common

shareholders ($ 0.16 per share)

Formation of Acuity Spatial

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Balance at December 31, 2022

Stock options exercised

Restricted stock units vested

Stock-based compensation

Shares repurchased

Employee stock purchase plan

Shares repurchased

Cash dividends paid to common shareholders

($ 0.20 per share)

Proceeds from the sale of non-

controlling interests, net of loan

receivable of $ 0.3

Other shareholders of majority-owned acquisitions

Distributions to noncontrolling interest

Consolidated net (loss) income

Other comprehensive income (loss)

Balance at December 31, 2023

The accompanying notes are an integral part of these consolidated financial statements.

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Deferred income taxes

Bargain purchase gain on acquisition

Impairment of minority investments and other long-lived assets

Gain on sale of minority investment

Gain on sale of property, plant and equipment

Other non-cash expenses, net

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Income taxes payable

Deferred revenue

Customer advances

Deferred revenue and customer advances

Other changes in operating assets and liabilities

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Cash flows from investing activities:

Purchases of property, plant and equipment

Purchases of short-term investments

Maturity of short-term investments

Cash paid for strategic investments

Proceeds from sale of minority investment

Cash paid for minority investments

Cash paid for acquisitions, net of cash acquired

Purchases of property, plant and equipment

Proceeds from sales of property, plant and equipment

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Cash flows from financing activities:

Proceeds from issuance of long-term debt

Repayment of 2012 Note Purchase Agreement

Proceeds from issuance (repayment) of long-term debt

Repayment of 2012 Note Purchase Agreement

Repayments of revolving lines of credit

Proceeds from revolving lines of credit

Proceeds (repayment) of other debt, net

Repayment of 2019 Term Loan Agreement

Payment of deferred financing costs

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Repurchase of common stock

Purchase of minority interest

Proceeds from (payment for) the sale (purchase) of noncontrolling interests

Net cash (used in) provided by financing activities

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Bruker Corporation, together with its consolidated subsidiaries (Bruker or the Company), develops, manufactures and distributes high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels.

Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples.

The Company’s products address the rapidly evolving needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research.

Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples.

The Company has four reportable segments, Bruker Scientific Instruments (BSI) BioSpin, BSI CALID, BSI Nano and Bruker Energy & Supercon Technologies (BEST).

BSI BioSpin - The BSI BioSpin Segment designs, manufactures and distributes enabling life science tools based on magnetic resonance technology.

BioSpin Segment’s revenues are generated by academic and government research customers, pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

BSI CALID (Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection) - The BSI CALID Segment designs, manufactures and distributes life science mass spectrometry and ion mobility spectrometry solutions, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technologies and radiological/nuclear detectors for Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection.

The BSI BioSpin Segment designs, manufactures and distributes enabling life science tools based on magnetic resonance technology.

BSI BioSpin Segment’s revenues are generated by academic and government research customers, pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

The BSI CALID (Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection) Segment designs, manufactures and distributes life science mass spectrometry and ion mobility spectrometry solutions, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technologies and radiological/nuclear detectors for Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection.

Customers of the BSI CALID Segment include academic institutions and medical schools;

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hospitals and government departments and agencies.

BSI Nano Segment designs, manufactures and distributes advanced X-ray instruments;

The BSI Nano Segment designs, manufactures and distributes advanced X-ray instruments;

atomic force microscopy instrumentation;

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Customers of the BSI Nano Segment include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials research and life science research analysis.

BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and “big science”

The BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and “big science” research.

The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications.

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Noncontrolling Interests

Noncontrolling interests represents the minority shareholders’

proportionate share of the Company’s majority-owned subsidiaries.

The portion of net income or net loss attributable to non-controlling interests is presented as net income attributable to noncontrolling interests in consolidated subsidiaries in the consolidated statements of income and comprehensive income, and the portion of other comprehensive income of these subsidiaries is presented in the consolidated statements of shareholders’

Noncontrolling interests represents the minority shareholders’ proportionate share of the Company’s majority-owned subsidiaries.

Redeemable Noncontrolling Interests

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As the redemptions are contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities.

The redeemable noncontrolling interests are measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the

contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.

The redeemable noncontrolling interests are measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.

Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings.

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Accordingly, at the date of each acquisition, the Company measures the fair value of all identifiable assets acquired (including intangible assets), liabilities assumed and any remaining noncontrolling interests and allocates the amounts paid to all items measured.

The fair value of identifiable intangible assets acquired is based on valuations that use information and assumptions determined by management and which consider management’s best estimates of inputs and assumptions that a market participant would use.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

Significant estimates and judgments made by management in preparing these financial statements include revenue recognition, allowances for doubtful accounts, write-downs for excess and obsolete inventory, estimated fair values used to record impairment charges related to intangible assets, goodwill, and other long-lived assets, amortization periods, expected future cash flows used to evaluate the recoverability of long-lived assets and to record intangible assets in business combinations, stock-based compensation expense, warranty allowances, restructuring and other related charges, contingent liabilities and the recoverability of the Company’s net deferred tax assets.

Significant estimates and judgments made by management in preparing these financial statements include revenue recognition, write-downs for excess and obsolete inventory, estimated fair values used to record impairment charges related to intangible assets, goodwill, and other long-lived assets, amortization periods, expected future cash flows used to evaluate the recoverability of long-lived assets and to record intangible assets in business combinations, stock-based compensation expense, warranty allowances, restructuring and other related charges, contingent liabilities and the recoverability of the Company’s net deferred tax assets.

Changes in estimates are recorded in the period in which they become known.

The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.

Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions were reasonable when made.

Subsequent Events Considerations

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Short-term investments are classified as available-for-sale and are reported at fair value.

There were no unrealized gains (losses) recorded as of December 31, 2022, 2021 and 2020, as cost approximates current fair value.

Restricted Cash

Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company’s consolidated statement of cash flows.

The Company has certain subsidiaries that are required by local laws and regulations to maintain restricted cash balances to cover future employee benefit payments.

Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date.

current and non-current portion of restricted cash is recorded within other current assets and other long-term assets , respectively, in the accompanying consolidated balance sheets.

The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets , respectively, in the accompanying consolidated balance sheets.

Accounts Receivable, net

Accounts receivable have been reduced by an allowance for doubtful accounts.

The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in our accounts receivable.

The Company’s allowance is based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivable, economic trends and historical experience.

The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in our accounts receivable.

The Company’s allowance is based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivable, economic trends and historical experience.

Provisions for doubtful accounts are recorded in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income.

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The cost approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).

The Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of forward foreign exchange contracts, cross-currency interest rate swap agreements, commodity contracts, derivatives embedded in certain purchase and sale contracts, derivatives embedded within noncontrolling interests, accounts receivable, accounts payable, contingent consideration and long-term debt.

The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, borrowings under a revolving credit agreement and accounts payable approximate fair value because of their short-term nature.

The Company’s financial instruments consist primarily of cash equivalents, restricted cash, derivative instruments consisting of forward foreign exchange contracts, cross-currency interest rate swap agreements, commodity contracts, derivatives embedded in certain purchase and sale contracts, derivatives embedded within noncontrolling interests, accounts receivable, accounts payable, contingent consideration and long-term debt.

Derivative assets and liabilities are measured at fair value on a recurring basis.

The Company has evaluated the estimated fair value of financial instruments using available market information and management’s estimates.

The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts.

Concentration of Credit Risk

Financial instruments that subject the Company to credit risk consist of cash, cash equivalents, short-term investments, derivative instruments, accounts receivables and restricted cash.

The risk with respect to cash, cash equivalents and short-term investments is minimized by the Company’s policy of investing in short-term financial instruments issued by highly rated financial institutions.

The risk with respect to derivative instruments is minimized by the Company’s policy of entering into arrangements with highly rated financial institutions.

The risk with respect to accounts receivables is minimized by the creditworthiness and diversity of the Company’s customers.

The Company performs periodic credit evaluations of its customers’

financial condition and generally requires an advanced deposit for a portion of the purchase price.

Credit losses have been within management’s expectations and the allowance for doubtful accounts totaled $ 5.3 million and $ 4.2 million at December 31, 2022 and 2021, respectively.

At December 31, 2022 and 2021, no single customer represented 10 % or more of the Company’s accounts receivable.

For the years ended December 31, 2022, 2021 and 2020, no single customer represented 10 % or more of the Company’s total revenue.

Financial instruments that subject the Company to credit risk consist of cash, cash equivalents, derivative instruments, accounts receivables and restricted cash.

The risk with respect to cash and cash equivalents is minimized by the Company’s policy of investing in short-term financial instruments issued by highly rated financial institutions.

The risk with respect to derivative instruments is minimized by the Company’s policy of entering into arrangements with highly rated financial institutions.

The risk with respect to accounts receivables is minimized by the creditworthiness and diversity of the Company’s customers.

The Company performs periodic credit evaluations of its customers’ financial condition and generally requires an advanced deposit for a portion of the purchase price.

Credit losses have been within management’s expectations and the allowance for doubtful accounts totaled $ 4.6 million and $ 5.3 million at December 31, 2023 and 2022, respectively.

At December 31, 2023, and 2022, no single customer represented 10 % or more of the Company’s accounts receivable.

For the years ended December 31, 2023, 2022, and 2021, no single customer represented 10 % or more of the Company’s total revenue.

Components of inventory include raw materials, work-in-process, demonstration units and finished goods.

Demonstration units include systems which are located in the Company’s demonstration laboratories or installed at the sites of potential customers and are considered available for sale.

Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer.

Demonstration units include systems which are located in the Company’s demonstration laboratories or installed at the sites of potential customers and are considered available for sale.

Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer.

All inventories are stated at the lower of cost and net realizable value.

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The Company reduces the carrying value of its inventories for differences between cost and estimated net realizable value, taking into consideration usage in the preceding twelve months , expected demand, technological obsolescence and other information including the physical condition of demonstration inventories.

The Company records a charge to cost of product revenue for the amount required to reduce the carrying value of inventory to net realizable value.

The Company records a charge to cost of revenue for the amount required to reduce the carrying value of inventory to net realizable value.

Costs associated with the procurement of inventories, such as inbound freight charges and purchasing and receiving costs, are capitalized as part of inventory and are also included in the cost of product revenue line item within the consolidated statements of income and comprehensive income.

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If as a result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required.

Otherwise, no further testing will be required.

Otherwise, no

further testing will be required.

If a quantitative impairment test is performed, the Company compares the fair values of the applicable reporting units with their aggregate carrying values, including goodwill.

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Estimating the fair value of the reporting units requires significant judgment by management.

If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an

impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit.

If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit.

In process research and development, or IPR&D, acquired as part of business combinations under the acquisition method represents ongoing development work associated with enhancements to existing products, as well as the development of next generation products.

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Impairment of Long-Lived Assets

Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the quoted market price, if available or the estimated fair value of those assets are less than the assets’

carrying value and are not recoverable.

Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.

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The anticipated cost for this warranty is accrued upon recognition of the sale and is included as a current liability on the accompanying consolidated balance sheets.

The Company’s warranty reserve reflects estimated material and labor costs for potential product issues for which the Company expects to incur an obligation.

The Company’s estimates of anticipated rates of warranty claims and costs are primarily based on historical information.

The Company’s warranty reserve reflects estimated material and labor costs for potential product issues for which the Company expects to incur an obligation.

The Company’s estimates of anticipated rates of warranty claims and costs are primarily based on historical information.

The Company assesses the adequacy of the warranty reserve on a quarterly basis and adjusts the amount as necessary.

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These fees are recorded as deferred revenue and recognized ratably into income over the life of the extended warranty contract or service agreement.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities.

A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company records liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in a Company’s financial statements.

The provision for income taxes includes federal, state, local and foreign taxes.

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled.

The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Based upon the level of historical taxable income and income tax liability and projections for future taxable income over the periods in which the deferred tax assets are utilizable, we believe it is more likely than not that we will realize the net benefits of the deferred tax assets of our wholly owned subsidiaries, net of the recorded valuation allowance.

In the event that actual results differ from our estimates, or we adjust our estimates in future periods, we may need to adjust or establish a valuation allowance, which could materially impact our consolidated financial position and results of operations.

This guidance prescribes a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

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The Company typically requires an advance deposit under the terms and conditions of contracts with customers.

These deposits are recorded as a current or long-term liability until revenue is recognized on the specific contract in accordance with the Company’s revenue recognition policy.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers .

The key elements of ASC 606 are:

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A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

Some of the Company’s contracts have multiple performance obligations, most commonly due to providing additional goods or services along with a system, such as installation, accessories, parts and services.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service being provided to the customer.

The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis.

A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis.

Alternatively, when not sold separately, the Company may determine standalone selling price using an expected cost plus a margin approach.

The Company’s performance obligations are typically satisfied at a point in time, most commonly either on shipment, or customer acceptance.

Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period.

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Amounts billed to customers in connection with these costs are included in total revenues.

When control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost.

The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial.

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When products are sold through an independent distributor or a strategic distribution partner, the Company recognizes the system sale upon transfer of control which is typically on shipment.

When the Company is responsible for installation, the standalone selling price of installation is deferred until customer acceptance.

The Company’s distributors do not have price protection rights or rights of return;

however, the Company’s products are typically warranted to be free from defect for a period of one year.

When the Company is responsible for installation, the standalone

selling price of installation is deferred until customer acceptance.

The Company’s distributors do not have price protection rights or rights of return;

however, the Company’s products are typically warranted to be free from defect for a period of one year.

The Company requires an advance deposit based on the terms and conditions of contracts with customers for many of its contracts.

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The Company does not have any material payment terms that extend beyond one year.

There is minimal variable consideration included in the transaction price of the Company’s contracts.

Other revenues are primarily comprised of development arrangements recognized on a cost-plus-fixed-fee basis and licensing arrangements recognized either when the licenses are provided or ratably over the contract term depending on the nature of the arrangement.

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Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

Deferred revenue previously included in other current liabilities on the consolidated balance sheets is currently presented together with customer advances.

The change in the prior period was made to conform to the current period presentation.

The Company accounts for leases in accordance with ASC 842, Leases .

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present.

Leases with a term greater than 12 months are recognized on the balance sheet as Right-of-use (“ROU”) assets with a corresponding lease liability.

The Company has elected not to recognize on the consolidated balance sheets leases with an initial term of 12 months or less.

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Leases are classified as either operating or finance depending on the specific terms of the arrangement.

The Company’s leases mainly consist of facilities, office equipment, and vehicles.

The majority of leases are classified as operating.

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Future rent increases dependent on an index or rate are initially measured at the index or rate at the commencement date.

The Company’s leases typically do not contain residual value guarantees.

At the commencement date, operating and finance lease liabilities, and their corresponding ROU assets, are recorded based on the present value of lease payments over the expected lease term.

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Purchased software is capitalized at cost and is amortized over the estimated useful life, which is generally three years .

Software developed for use in the Company’s products is expensed as incurred to research and development expense until technological feasibility is achieved.

Subsequent to the achievement of technological feasibility, amounts are capitalizable;

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The Company recognizes stock-based compensation expense in the consolidated statements of income and comprehensive income based on the fair value of the share-based award at the grant date.

The Company’s primary types of share-based compensation are stock options, restricted stock awards and restricted stock units.

Compensation expense is amortized on a straight-line basis over the underlying vesting terms of the share-based award.

Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years .

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model.

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Expected life is determined through a calculation based on historical experience.

Expected volatility is based the Company’s historical volatility results.

Expected dividend yield is based on the estimated annualized dividend yield on our stock based on our history of paying dividends.

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Other Comprehensive Income (Loss)

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’

equity, net of tax.

The Company’s other comprehensive income (loss) was composed of foreign currency translation adjustments, derivatives designated as hedging instruments and pension liability adjustments.

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that are excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity, net of tax.

The Company’s other comprehensive income (loss) was composed of foreign currency translation adjustments, derivatives designated as hedging instruments and pension liability adjustments.

Foreign Currency Translation

Assets and liabilities of the Company’s foreign subsidiaries, where the functional currency is the local currency, are translated into U.S.

Dollars using the current exchange rate as of the consolidated balance sheet date and shareholders’

equity is translated using historical rates.

Assets and liabilities of the Company’s foreign subsidiaries, where the functional currency is the local currency, are translated into U.S.

Dollars using the current exchange rate as of the consolidated balance sheet date and shareholders’ equity is translated using historical rates.

Revenues and expenses of foreign subsidiaries are translated at the average exchange rates in effect during the year.

Adjustments resulting from financial statement translations are included as a separate component of shareholders’

Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity.

Gains and losses resulting from translation of foreign currency monetary transactions are reported in interest and other income (expense), net in the consolidated statements of income and comprehensive income for all periods presented.

The Company has certain intercompany foreign currency transactions that are deemed to be of a long-term investment nature.

Exchange adjustments related to those transactions are made directly to a separate component of shareholders’

Exchange adjustments related to those transactions are made directly to a separate component of shareholders’ equity.

Equity-method investments

The Company accounts for investments in common stock under the equity method if the Company has the ability to exercise significant influence, but not control, over an investee.

Investments in equity-method investees are included within “Other long-term assets” in the consolidated balance sheets.

The Company ’ s proportional share of the earnings or losses as reported by equity-method investees are classified as “Equity in income of unconsolidated investees, net of tax” in the consolidated statements of income and comprehensive income.

The Company records investments, including incremental investments, of common shares in equity-method investees at cost.

In the event the Company no longer has the ability to exercise significant influence over an equity-method investee, the Company would discontinue accounting for the investment under the equity method.

The Company regularly evaluates these investments, which are not carried at fair value, for other-than-temporary impairment and records any impairment charge in earnings when the decline in value below the carrying amount of its equity method investment is determined to be other-than-temporary.

Minority investments

When the Company does not have control or the ability to exercise significant influence over an investee, it accounts for its minority investments in equity interests without a readily determinable fair value using the measurement alternative.

The equity interest is initially recorded at cost, less impairment.

The carrying amount is subsequently remeasured to its fair value when observable price changes occur or it is impaired.

Any adjustments to the carrying amount are recorded in earnings.

The Company accounts for its minority investments in debt securities classified as available-for-sale at fair value.

The Company regularly evaluates these investments for impairment.

An available-for-sale debt security is impaired if its fair value is below its amortized cost basis.

For available-for-sale debt securities with unrealized losses, management performs an analysis to assess whether the Company intends to sell or whether the Company would more likely than not be required to sell the security before the expected recovery of the amortized cost basis.

Where the Company intends to sell a security, or may be required to do so, the security ’ s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected in earnings as an impairment loss.

Regardless of the Company's intent to sell a security, additional analysis is performed on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security.

Credit losses are identified where the Company does not expect to receive cash flows sufficient to recover the amortized cost basis of a security.

If the Company does not intend to sell the security or is not more likely than not to sell the security and the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive income.

Any impairment charges are included in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income.

Risks and Uncertainties

The Company is subject to risks common to its industry including, but not limited to, global economic conditions, (including increasing inflation), rapid technological change, government and academic funding levels, the impact of the COVID-19 coronavirus, geopolitical uncertainties, changes in commodity prices, spending patterns of its customers, protection of its intellectual property, availability of key raw materials and components and other supply chain challenges, compliance with existing and future regulation by government agencies and fluctuations in foreign currency exchange rates and interest rates.

The impact of the COVID-19 worldwide pandemic has been and will likely continue to be extensive in certain geographies and aspects of society.

The pandemic has resulted in and will likely continue to result in significant disruptions to the global economy, global supply chains, as well as businesses and capital markets around the world.

Impacts to the Company’s business since the beginning of the pandemic have included temporary closures of many of the Company’s government and university customers and suppliers, disruptions or restrictions on employees’

and customers’

ability to travel, and delays in product installations or shipments to and from affected countries.

In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, implemented and some continue to implement, significant restrictions on travel, shelter in place or stay at home orders, and business closures.

While many of these restrictions have loosened in certain jurisdictions, including the United States and Europe, some markets have returned and others may return to restrictions in the face of increases in new COVID-19 cases, particularly if additional or more contagious variants or subvariants of the virus emerge or spread.

Many of the Company’s employees in jurisdictions in which it has significant operations continue to work remotely.

Much of the commercial activity in sales and marketing, and customer demonstrations and applications training, is still either being conducted remotely or postponed.

Even where customers have re-opened their sites, some still operate at productivity levels that are below pre-pandemic levels in an effort to accommodate safety protocols and as a result of pandemic-related supply chain disruptions.

Any resurgence of the virus or the emergence of new variants or subvariants of the virus, particularly any variants or subvariants which are more easily transmitted or which are resistant to existing vaccines, may require the Company or its customers to close or partially close operations once again.

These travel restrictions, business closures and operating reductions at Bruker, customers, distributors, and/or suppliers have in the past adversely impacted and may continue to adversely impact the Company’s operations worldwide, including the ability to manufacture, sell or distribute products, as well as cause temporary closures of foreign distributors, or the facilities of suppliers or customers.

Global supply chains, including for semiconductor chips, components and raw materials such as copper, have been disrupted, causing shortages, which has impacted the Company’s ability to manufacture or supply its products.

The Company could also experience increased compensation expenses associated with employee recruiting and employee retention to the extent that employment opportunities continue to multiply post-pandemic, causing the search for and retention of talent to become more competitive.

This disruption of the Company’s employees, distributors, suppliers and customers has impacted and is continuing to impact the Company’s global sales and operating results.

Further, while the Company is not currently subject to any vaccine mandate, any requirement to mandate COVID-19 vaccination of its workforce or require the Company's unvaccinated employees to be tested weekly could result in employee attrition and difficulty securing future labor needs and may have an adverse effect on future operations.

The Company’s policy continues to encourage its employees to be fully vaccinated against COVID-19.

The Company is continuing to monitor and assess the effects of the COVID-19 pandemic on its commercial operations in 2023.

However, the Company cannot at this time accurately predict what effects these conditions will ultimately have on future operations due to uncertainties relating to the duration of the outbreak, including the impact of any resurgence of the virus or the continued emergence or spread of certain variants or subvariants, the effectiveness and availability of vaccines, (including to protect against any new variants or subvariants), the willingness of individuals to receive vaccines and boosters, and the length or severity of the travel restrictions, business closures, and other safety and precautionary measures imposed by the governments of impacted countries.

The pandemic has also adversely affected the economies and financial markets of many countries, which has affected and likely will continue to affect demand for the Company’s products and its operating results.

The Company may experience supply chain interruptions as a result of the COVID-19 pandemic, general global economic conditions, including inflation and the threat of a potential recession, a tighter labor market and other factors including natural events and disasters.

The Company is subject to risks common to its industry including, but not limited to, global economic conditions, such as increasing inflation, uncertainties caused by recent banking industry volatility, rapid technological change, government and academic funding levels, geopolitical uncertainties, changes in commodity prices, spending patterns of its customers, protection of its intellectual property, availability of key raw materials and components and other supply chain challenges, compliance with existing and future regulation by government agencies and fluctuations in foreign currency exchange rates and interest rates.

The Company has experienced supply chain interruptions as a result of general global economic conditions, including inflation and the threat of a potential recession, a tighter labor market and other factors including natural events and disasters.

Various factors, including increased demand for certain components and production delays, are contributing to shortages of certain components used in the Company’s products and increased difficulties in the Company’s ability to obtain a consistent supply of materials at stable pricing levels.

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These factors have impacted and may continue to impact the timing of the Company’s revenue, and have also resulted, and may result in a delay of revenue, and an increase in manufacturing costs, all of which have adversely impacted and may continue to adversely impact the Company's operating results.

Additionally, geopolitical tensions, such as Russia's incursion into and ongoing war in Ukraine, ongoing conflicts between the United States and China, tariff and trade policy changes, economic sanctions, and increasing potential of conflict involving countries

in Asia that are critical to the Company's supply chain operations, such as Taiwan and China, have resulted in increasing global instability and create uncertainty for global commerce.

In addition to experiencing adverse economic impacts resulting from economic sanctions on Russia, as well as the prospect of a reduction in natural gas exports from Russia and resulting market disruptions, such as higher prices for and reduced availability of key metals used in our products, the Company has ceased its Russian operations.

Sustained or worsening global economic conditions and increasing inflation and geopolitical tensions have increased the Company's cost of doing business, impacted the Company's supply chain operations, caused certain of the Company's customers to reduce or delay spending and further intensified pricing pressures.

Combined with increased inflation, potential energy shortages in Europe where we have significant operations and overall higher energy and transportation costs, these factors have affected and may continue to affect the Company's financial condition and result of operations.

Additionally, world events, such as the conflict between Russia and Ukraine and related economic sanctions, the conflict in Israel, Palestine and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences, the ongoing tensions between the United States and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are significant to the Company’s supply network operations, such as Taiwan and China, have resulted in increasing global instability and have created uncertainty for global commerce.

As a result of the adverse economic impacts resulting from the conflict between Russia and Ukraine, such as increased prices for and a reduced supply of key metals used in our products, the Company has ceased its Russian operations.

Sustained or worsening global economic conditions and increasing inflation and geopolitical tensions have increased the Company's cost of doing business, impacted the Company's supply chain operations, caused some of the Company's customers to reduce or delay spending and further intensified pricing pressures.

Combined with increased inflation, potential energy shortages in Europe where we have significant operations, and overall higher energy and transportation costs, these factors have affected and may continue to affect the Company's financial condition and results of operations.

The preparation of the consolidated financial statements requires the Company to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities.

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Changes in estimates are recorded in the period in which they become known.

The Company bases estimates on historical experience and on various other assumptions that they believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.

The full extent to which the COVID-19 pandemic, global supply chain interruptions, higher energy costs and shortages, the global economy, including inflation and the threat of recession, and geopolitical instability will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new developments concerning the COVID-19 pandemic, global supply chain and various global conflicts.

The Company has made estimates of the impact of COVID-19 within the financial statements and there may be changes to those estimates in future periods.

Actual results may differ from management’s estimates if these results differ from historical experience.

The Company bases its estimates on historical experience and on various other assumptions that it believes are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses.

The full extent to which the global supply chain interruptions, higher energy costs and shortages, the global economy, including inflation and the threat of recession, and geopolitical instability will directly or indirectly impact future business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee cost related amounts, will depend on future developments that are highly uncertain, including as a result of new developments concerning global supply chain and various global conflicts.

The Company has made estimates of the impact of these disruptions within the financial statements and there may be changes to those estimates in future periods.

Actual results may differ from management’s estimates if these results differ from historical experience.

Loss Contingencies

Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding related to patents, products and other matters, is considered probable and the amount can be reasonably estimated, or a range of loss can be determined.

These accruals represent management’s best estimate of probable loss.

Disclosure is provided when a loss is considered probable but the loss is not reasonably estimable and when a material loss is reasonably possible but not probable.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09 – Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregation of information related to income taxes paid as presented on the Cash Flow Statement.

This guidance is effective for annual reporting periods ending after December 15, 2024.

The Company is evaluating the potential impact of this adoption on the consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segments Disclosures (“ASU 2023-07”).

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”).

These significant segment expenses are included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

All disclosure requirements under ASC 2023-07 are also required for public entities with a single reportable segment.

This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company is evaluating the potential impact of this adoption on the consolidated financial statements and related disclosures.

In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-01, Leases (Topic 842):

Common Control Arrangements (“ASU 2023-01”), which provides additional guidance concerning related party leasing arrangements between entities under common control.

Specifically, ASU 2023-01 provides a practical expedient for private companies in determining whether a related party arrangement qualifies as a lease and provides new guidance for all entities on the amortization period of leasehold improvements for common control arrangements.

As the Company is a public company, the practical expedient for related party arrangements is not applicable to Bruker.

This guidance is effective for annual and interim reporting periods beginning after December 15, 2023.

Additionally, the Company evaluated the impact of adopting this new guidance regarding the amortization period of leasehold improvements for common control arrangements and concluded it is not expected to have a material impact on the consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform.

The guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met.

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The Company elected to apply this guidance for all contract modifications or eligible hedging relationships during that time period subject to certain criteria.

The adoption of this standard has not and is not expected to have a material impact on the Company's consolidated financial statements.

In October 2021, the FASB issued Accounting Standards Update (“ASU”) No.

2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to improve the accounting for acquired revenue contracts with customers in a business combination.

The amendments require an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606.

Previous guidance required an entity to recognize contract assets and contract liabilities at fair value as of the acquisition date.

The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The Company elected to early adopt ASU No.

2021-08 in the fourth quarter of 2021, and in accordance with the early adoption requirements in an interim period, has applied the provisions retrospectively to all acquisitions completed on or after January 1, 2021.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12—

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

The guidance simplifies the accounting for income taxes by removing certain exceptions within the current guidance;

including the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

The amendment also improves consistent application by clarifying and amending existing guidance related to aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step up in the tax basis of goodwill.

This guidance is effective for annual and interim periods beginning after December 15, 2020 and early adoption is permitted.

The adoption of this ASU in 2021 did not have a material impact on the Company’s consolidated financial statements.

The following table presents the Company’s revenues by Segment for the years ended December 31 (in millions):

Revenue by Segment:

Eliminations (a)

Total revenue

(a) Represents corporate costs and eliminations not allocated to the reportable segments.

Revenue for the Company recognized at a point in time versus over time is as follows for the years ended December 31 (in millions):

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Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, notes receivables and unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s consolidated balance sheets.

Contract assets—

Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones.

Contract assets— Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones.

Billing often occurs subsequent to revenue recognition, resulting in contract assets.

Contract assets are generally classified as other current assets in the consolidated balance sheets.

Contract assets are classified as either other current assets or other long-term assets in the condensed consolidated balance sheets.

The balance of contract assets as of December 31, 2023, and December 31, 2022, was $ 85.8 million and $ 61.3 million, respectively.

Contract liabilities—

The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities.

Contract liabilities— The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities.

These contract liabilities are classified as either current or long-term in the consolidated balance sheet based on the timing of when revenue recognition is expected.

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Approximately $ 342.9 million of the contract liability balance on December 31, 2022, was recognized as revenue during the year ended December 31, 2023.

Pro forma financial information reflecting all acquisitions has not been presented because the impact, individually and collectively, on revenues and net income is not material.

Other Current Assets

Other current assets consisted of the following (in millions):

Unbilled and notes receivable

Income and other taxes receivable

Prepaid expenses

Deposits with vendors

Interest rate cross-currency swap agreements

Other current assets

Pro forma financial information has been presented for the PhenomeX acquisition and not for others because the impact, individually and collectively from the other acquisitions, on revenues and net income is not material.

Amounts allocated to goodwill that are attributable to expected synergies are not expected to be deductible for tax purposes.

In the year ended December 31, 2022, the Company completed various acquisitions that collectively complemented its existing product offerings of to the Company’s existing businesses.

On October 2, 2023, the Company acquired 100 % of the outstanding stock of PhenomeX Inc.

(“PhenomeX”), a publicly traded company, for a purchase price of $ 109.4 million, net of $ 11.8 million in cash acquired.

Total cash consideration of $ 121.2 million consisted of $ 107.2 million for the acquisition of the outstanding stock including an $ 8.0 million payment to settle an employee award, and settlement of a $ 14.0 million note previously issued by the Company to PhenomeX during 2023.

PhenomeX is a life science tools company with a focus on functional cell biology.

Their products and services provide customers with, among other offerings, Optofluidic platforms such as the Beacon, Beacon Select and Beacon Quest as well as Proteomic Barcoding Platforms, such as the IsoLight System and the IsoSpark System.

PhenomeX is domiciled in Emeryville, California and was integrated into the BSI Nano Segment.

The Company renamed PhenomeX to Bruker Cellular Analytics (“BCA”) following acquisition.

The fair value of the identifiable intangible assets has been estimated by using the income approach through a discounted cash flow analysis of certain cash flow projections.

The cash flow projections are based on forecasts used by the Company to price the acquisition, and the discount rates applied were benchmarked by referencing the implied rate of return of the Company’s pricing model and the weighted average cost of capital.

The amortization period for the intangible assets acquired ranges from eight to twelve years for the technology and fifteen years for the customer relationships.

The components and fair value allocation of the consideration transferred in connection with the acquisition are as follows (in millions).

PhenomeX Inc.

Consideration Transferred:

Cash acquired

Total consideration transferred

Allocation of Consideration Transferred:

Accounts receivable

Other current assets

Property, plant and equipment

Deferred tax assets

Intangible assets:

Customer relationships

Liabilities assumed

Total consideration allocated

Bargain purchase gain

The financial data presented above represents the provisional determination of the fair value of the identifiable assets acquired and liabilities assumed based on the information available to us as of the time of the issuance of these financial statements.

The Company is in the process of reviewing and identifying acquisition accounting adjustments for several acquired tax positions including the final calculation of the acquired federal and state net operating loss carryforwards “NOLs”.

Section 382(h) of the Tax Reform Act of 1986 imposed highly complex rules for the annual base limitation for NOL utilization, including the determination of built-in gains and losses.

PhenomeX incurred significant losses prior to its acquisition by the Company and has undergone several ownership changes.

Accordingly, the values recognized related to the deferred tax assets are based on provisional amounts and are subject to change until the Company finalizes its Section 382(h) study during the measurement period which is no later than one year from acquisition date.

The final determination may result in asset and liability values that are different than the preliminary estimates and may result in an adjustment to the bargain purchase gain recorded in earnings.

ASC 805, Business Combinations , requires that any excess of fair value of acquired net assets, including identifiable intangible assets over the acquisition consideration, results in a gain from bargain purchase.

The PhenomeX acquisition resulted in a gain on bargain purchase due to the estimated fair value of the identifiable net assets acquired exceeding the purchase consideration transferred by $ 144.1 million and is shown as a gain on bargain purchase on our consolidated statement of income.

Prior to recognizing the gain, the Company reassessed the measurement and recognition of identifiable assets acquired, and liabilities assumed and concluded that the valuation procedures and resulting measures were appropriate.

The acquisition resulted in a bargain purchase gain due to the following factors:

(i) the sellers were motivated and were looking for new management to lead the strategic direction of the company, create economies of scale and return the company to profitable operations, (ii) recurring operating losses resulted in a valuation of PhenomeX that significantly affected its market capitalization that resulted in a sustained decrease in stock price and fair value and (iii) PhenomeX has accumulated significant NOL’s that can be utilized by the Company, subject to annual limitations, to reduce its US taxable income which could not be benefited by PhenomeX.

Results of acquired operations of BCA

The results of the acquired operations of BCA have been included in the consolidated financial statements of the Company since its acquisition date of October 2, 2023.

For the period from October 2, 2023, through December 31, 2023, BCA had total revenues of $ 7.0 million and pre-tax net loss of $ 43.4 mil lion.

The tax effect on pre-tax net loss of BCA is included in the consolidated US tax return of Bruker Corporation.

In connection with the acquisition of PhenomeX, the Company incurred $ 10 million of acquisition-related expenses.

These expenses primarily include legal and professional services.

These acquisition-related expenses were recorde d within Other Charges, Net in the consolidated statement of operations.

Shortly after acquiring PhenomeX, the Company initiated a restructuring plan.

See Note 21, Other Charges, Net .

Supplemental Pro Forma Information (unaudited)

The supplemental pro forma financial information presented below is for illustrative purposes only, does not include the pro forma adjustments that would be required under Article 11 of Regulation S-X for pro forma financial information, is not necessarily indicative of the financial position or results of operations that would have been realized if the combination with PhenomeX had been completed on January 1, 2023, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.

The pro forma adjustments are based upon currently available information and certain assumptions that the Company believes are reasonable under the circumstances.

On March 21, 2023, pursuant to a merger agreement (“IsoPlexis Merger”), Berkeley Lights, Inc.

(“BLI”) acquired and merged with IsoPlexis Corporation (“IsoPlexis”) with IsoPlexis surviving the merger as a wholly owned subsidiary of BLI.

The newly merged company was renamed PhenomeX Inc.

Historical financial statements of PhenomeX for periods prior to the IsoPlexis Merger are the historical financial statements of BLI.

As a result, it would not be meaningful and would be impracticable to present comparative pro forma financial information as though the acquisition of PhenomeX had occurred as of the beginning of the comparable prior annual reporting period as if the business combination with PhenomeX had been completed on January 1, 2022.

Year Ended December 31, 2023

Before Adjustments

After Adjustments

Net income (loss)

The supplemental pro forma financial information reflects pro forma adjustments which primarily include:

• A net increase in amortization and depreciation expense of tangible and intangible assets which are assumed to be recorded at their assigned fair values as of January 1, 2023.

• The related income tax effects of the adjustments noted above were not material.

In the year ended December 31, 2023, the Company completed various other acquisitions that collectively complemented its existing product offerings of the Company’s existing businesses.

The following table reflects the consideration transferred and the respective reportable segment for certain of the 2023 acquisitions (in millions):

Biognosys, AG

Miro Analytical AG

Consideration Transferred:

Cash acquired

Fair value of hybrid financial instruments - founders

Fair value of redeemable noncontrolling interest - other shareholders

Fair value of contingent consideration

Total consideration transferred

Allocation of Consideration Transferred:

Accounts receivable

Other current assets

Property, plant and equipment

Intangible assets:

Customer relationships

Liabilities assumed (a)

Total consideration allocated

(a) This amount includes an assumed liability for vested employee awards of $ 6.3 million on the acquisition date which was settled in the post-closing period ended March 31, 2023, for Biognosys, AG.

Biognosys, AG

On January 3, 2023, the Company acquired 97.15 % of the outstanding stock of Biognosys, AG (“Biognosys”), a privately held company, for a cash consideration of CHF 75 million (approximately $ 80.1 million) less assumed liability for employee awards of CHF 5.9 million (approximately $ 6.3 million).

Biognosys offers mass spectrometry based next-generation proteomics contract research services as well as proprietary proteomics software and laboratory consumables to support academic, pharma and biotech research and clinical development.

Biognosys is domiciled in Zurich, Switzerland, and was integrated into the BSI CALID Segment.

Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 2.85 % of Biognosys for cash to the founders at a contractually defined redemption value exercisable beginning in 2028.

The option price to acquire the remaining 2.85 % equity interest will have a minimum redemption, or floor, value at each purchase or sell date, subject to post combination employment.

The fair value at acquisition date of these put option rights has been bifurcated into two financial instruments to separately account for the amounts attributable to the put option rights to sell the non-controlling interests on exercise dates at (1) above the minimum redemption value and (2) the minimum redemption value or floor value that is subject to post combination employment (the hybrid instrument) services.

The rights (embedded derivative) to the option shares can be sold at a minimum redemption value provided certain post combination employment services are met or at fair value, if above the floor, on the purchase or sell date.

Therefore, the portion assigned to the minimum redemption value of option value of the hybrid instrument, which is tied to continued employment of the noncontrolling interest holders, was classified as a long-term liability on the consolidated balance sheet.

The hybrid instrument was initially measured at fair value on the acquisition date and shall be accreted over the post combination service period.

The acquisition date fair value of the hybrid instrument which is an embedded derivative was not material.

The rights associated with the portion of the noncontrolling interest above the minimum redemption value are contingently redeemable at the option of the Company or the noncontrolling interest holders.

As redemption of the rights is contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of these rights in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities.

The redeemable noncontrolling interest is initially measured at fair value on acquisition date and subsequently at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on fair value as defined in the purchase agreement and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.

Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings.

The amortization period for the intangible assets acquired is seven years for the technology and nine years for the customer relationships.

The trade name was determined to have an indefinite life.

The Company expects to amortize backlog through the end of 2025.

On May 4, 2023, the Company acquired 60 % of the outstanding share capital of OSTHUS Beteiligungs GmbH and its wholly owned subsidiaries:

OSTHUS Group GmbH, Zontal Inc., Zontal GmbH, and Zontal Data Information Technology (Dalian) co., Ltd, (hereinafter, the “Zontal Companies”) for cash consideration of EUR 13.4 million (approximately $ 14.8 million) with the potential for additional consideration of up to $ 14.4 million if certain revenue and EBITDA targets are met through 2025.

Zontal, Inc, is the main operating company.

The Zontal Companies offer various software applications and integrations including data management (Informatics and SDMS), which enables customers to harmonize, preserve and reuse their data to generate efficiencies and automate workflows.

The Zontal Companies are domiciled in Aachen, Germany, and are integrated into the BSI BioSpin Segment.

Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 40 % of the Zontal Companies at a contractually defined redemption value exercisable beginning in 2027 and in 2031.

The rights (embedded derivative) to the option shares can be exercised at a discounted redemption value upon certain events related to post combination employment services.

As the options are tied to continued employment, the Company classified the hybrid instrument (noncontrolling interest with an embedded derivative) as a long-term liability on the consolidated balance sheet.

The hybrid instrument associated with the options is initially measured at fair value on the acquisition date.

Subsequent to the acquisition, the carrying value of the hybrid instrument is remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the requisite service period vested.

The amortization period for the intangible assets acquired is eight years for technology, ten years for the trade name, and thirteen years for the customer relationships.

The Company expects to amortize backlog through 2028.

MIRO Analytical AG

On October 2, 2023, the Company acquired 58.26 % of the outstanding share capital of MIRO Analytical AG, (hereinafter, “MIRO”) for cash consideration of CHF 8.8 million (approximately $ 9.6 million).

MIRO operates in the development, production, and distribution of equipment for gas analysis and related components.

MIRO provides companies with tools to monitor and report on air pollution and greenhouse gases and therefore, empower them to act against air pollution and climate change.

MIRO is domiciled in Switzerland and is integrated into the BSI CALID segment.

Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 41.74 % of MIRO at a contractually defined redemption value exercisable beginning in 2028 and in 2031.

The redemption value and rights related to the noncontrolling interest vary for the founders and the other shareholder.

The fair value of these rights has been bifurcated into two financial instruments to separately account for the amounts attributable to the founders and the amount attributable to other shareholders.

The rights (embedded derivative) associated with the founders shared may be exercised at a discounted redemption value upon certain events related to post combination employment services.

The hybrid instrument associated with the founder’s options is initially measured at fair value on the acquisition date.

The rights associated with the other noncontrolling interest holders are contingently redeemable at the option of the Company or the noncontrolling interest holders.

The redeemable noncontrolling interest is initially measured at fair value and subsequently at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.

Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings.

The amortization period for the intangible assets acquired is eleven years for technology.

The Company has fully amortized the trade name and customer relationships as of December 31, 2023.

Other 2023 Acquisitions

In the year ended December 31, 2023, the Company completed various other acquisitions that complemented the Company's existing product offerings and are accounted for under the acquisition method.

The following table reflects the consideration transferred and the respective reportable segment for these acquisitions (in millions):

Name of Acquisition

Date Acquired

Consideration

Acquifer Imaging GmbH and Deltabyte GmbH

January 4, 2023

Pinpoint Testing LLC

March 28, 2023

Fasmatech Science SA

March 3, 2023

Interherence GmbH

Other majority owned acquisitions

Minority and Equity-method investments

In the year ended December 31, 2023, the Company also made several minority investments.

For these investments accounted for under the alternative measurement, these values also represent the carrying value at December 31, 2023.

No impairments have been recognized on these investments.

The following table reflects the consideration transferred and the respective reporting segment for the investments (in millions):

Acquisition /

Classification

Date Acquired

Consideration

Tome Biosciences

Other long-term assets

July 26, 2023

Other Investments

Other long-term assets

During the year ended December 31, 2023, the Company recorded a realized gain of $ 6.8 million from the sale of a minority investment.

In the year ended December 31, 2022, the Company recorded an unrealized gain of $ 1.7 million from the remeasurement of a minority investment upon the occurrence of an observable transaction.

The realized and unrealized gain is included in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income.

For the year ended December 31, 2023, the Company recognized $ 18.2 million in impairment charges to write down the carrying value of certain minority investments.

The Company did no t recognize any impairment charges related to its minority investments for the year ended December 31, 2022.

The impairment charges are included in “Interest and other income (expense), net” in the Consolidated Statements of Income and Comprehensive Income.

2024—Subsequent Event Acquisitions

On February 22, 2024, the Company acquired a minority equity interest in a privately held biotechnology company located in California for $ 10.0 million.

The company utilizes precision proteomics to enable early detection of diseases.

On February 5, 2024, the Company acquired 100 % of the outstanding stock of Nanophoton Corporation for a purchase price of $ 12.25 million, with potential for additional consideration of up to $ 5.25 million if certain revenue targets and non-revenue milestones are met through 2027.

On February 1, 2024, the Company acquired 100 % of the outstanding stock of Spectral Instruments Imaging for a purchase price of $ 27.5 million, with potential for additional consideration of up to $ 10 million if certain revenue and EBITDA targets are met through 2025.

On January 2, 2024, the Company acquired 100 % of the outstanding stock of Nion, LLC for a purchase price of $ 35 million, subject to a net working capital adjustment.

The transaction also has the potential for additional contingent consideration of up to $ 23 million if certain revenue targets and non-revenue milestones are met.

On January 1, 2024, the Company acquired 100 % of the outstanding stock of Tornado Spectral Systems for a purchase price of CAD 30 million ($ 23 million).

In December 2023, the Company entered into a binding put option agreement (the “Put Option Letter”) with Tecfin S.à r.l., a controlled affiliate of PAI Partners acting for itself and on behalf of the shareholders ( “the Sellers”) owning directly or indirectly 100 % of the issued and outstanding securities of TecInvest S.à r.l, which does business as ELITechGroup.

ELITechGroup’s subsidiaries are active in the molecular diagnostics, microbiology and biomedical testing equipment fields.

Following completion of required works council consultation processes in France and the Netherlands, on February 27, 2024, the Company entered into a Securities Purchase Agreement (the “Share Purchase Agreement”) with the Sellers to acquire all the outstanding securities of Tecfin S.a.r.l., Eliman S.A.S.

and Eliman 2 S.A.S., which entities collectively, own a 100 % interest in TecInvest S.a.r.l.

Under the terms of the Share Purchase Agreement, the Company will acquire all issued and outstanding securities of ELITechGroup and their subsidiaries for a cash purchase price of EUR 870 million (approximately $ 962 million), subject to certain adjustments.

The Share Purchase Agreement provides that closing of the acquisition is subject to the satisfaction or waiver of certain conditions, including certain regulatory approvals and notices.

The Put Option Letter terminated upon execution of the Share Purchase Agreement.

In the year ended December 31, 2022, the Company completed various acquisitions that collectively complemented its existing product offerings of to the Company’s existing businesses.

The following table reflects the consideration transferred and the respective reportable segment for each of the 2022 acquisitions (in millions):

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PreOmics GmbH

On January 18, 2022, the Company acquired a 74.15 % interest in PreOmics GmbH, (“PreOmics”), a privately held company, for a purchase price of EUR 46.1 million (approximately $ 52.1 million).

PreOmics is a provider of sample preparation and automation solutions for proteomic analysis by mass spectrometry systems.

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The purchase price for the outstanding shares of Optimal was approximately GBP 30.7 million (approximately $ 40.3 million) with the potential for additional contingent consideration of up to GBP 3.4 million (approximately $ 4.5 million).

OIA and OIT, provide industrial automation solutions and Process Analytical Technology (“PAT”) software and services to Life Sciences, Pharmaceutical, Chemical, Fast-Moving Consumer Goods, Power Generation and Food & Beverage customers around the globe.

The Optimal Industrial Companies are closely related as OIA is a PAT software company, which develops and sells “turn-key industrial solution”, and OIT is a services company, which provides PAT expertise related to the software in addition to 24/7 integration support.

Optimal is located in Bristol, England, and was integrated into the BSI BioSpin Segment.

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The preliminary fair value allocation for Optimal included contingent consideration in the amount of GBP 0.3 million (approximately $ 0.4 million), which represented the estimated fair value of future payments to the former shareholders of Optimal based on achieving revenue targets in 2022.

The Company expects to complete the fair value allocation during the measurement period.

The Company completed the fair value allocation during the measurement period.

The amortization period for the intangible assets acquired is ten years for the technology, between twelve years and fourteen years for the customer relationships, and thirteen years for the trade names.

The Company expects to amortize backlog through the second quarter of 2023.

The Company amortized backlog through the second quarter of 2023.

Inscopix, Inc.

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The Company accounted for the purchase of Inscopix under the acquisition method.

The Company expects to complete the fair value allocation during the measurement period.

The Company completed the fair value allocation during the measurement period.

The amortization period for the intangible assets acquired is ten years for the technology and customer relationships, and twelve years for the trade name.

In addition to the PreOmics, Optimal and Inscopix acquisitions in 2022, the Company completed various other acquisitions accounted for under the acquisition method that complemented the Company’s existing product offerings.

In addition to the PreOmics, Optimal and Inscopix acquisitions, in 2022 the Company completed various other acquisitions accounted for under the acquisition method that complemented the Company’s existing product offerings.

The following table reflects the consideration transferred and the respective reportable segment for these acquisitions (in millions):

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November 30, 2022

In addition to the acquisitions noted above, in 2022 the Company completed minority strategic investments that complemented the Company’s existing product offerings.

The following table (in millions) reflects the consideration transferred and the respective reportable segment for the investments.

For those investments accounted for under the alternative measurement these values also represent the carrying value at December 31, 2022.

No impairments have been recognized on these investments.

In addition to the acquisitions noted above, in 2022 the Company also made several minority investments.

The following table reflects the consideration transferred and the respective reportable segment for the acquisitions (in millions):

Acquisition /

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Other long-term assets

Equity-method investments

The Company's investments in Tofwerk, AG and Eliptica Limited amount to an equity investment in common stock of 40 % and 20 %, respectively, and are accounted for using the equity-method of accounting.

The Company accounts for the investments under the equity method if the Company has the ability to exercise significant influence, but not control, over an investee.

Investments in equity-method investees are included within "Other long-term assets" in the consolidated balance sheets.

The Company's proportional share of the earnings or losses as reported by equity-method investees are classified as "Equity in income of unconsolidated investees, net of tax" in the consolidated statements of income and comprehensive income.

The Company regularly evaluates these investments, which are not carried at fair value, for other-than-temporary impairment.

The Company records investments, including incremental investments, of shares in equity-method investees at cost.

2023—Subsequent Event Acquisitions

On January 3, 2023, the Company acquired 100 % of Biognosys, AG ("Biognosys") for CHF 75 million (approximately $ 80.1 million).

In connection with the acquisition, the Company issued and sold stock in Biognosys to the two founding shareholders representing a 2.8 % ownership interest in Biognosys.

The Company and the founding shareholders each have put/call rights associated with the minority interest.

On January 4, 2023, the Company acquired Acquifer Imaging GmbH and Deltabyte GmbH for EUR 7.2 million (approximately $ 7.7 million).

SCI Instruments

On August 24, 2021, the Company acquired SCI Instruments (“SCI”), a privately held company, for a purchase price of $ 28.0 million with the potential for additional consideration of up to $ 4.0 million based on revenue and gross margin achievements in the calendar years 2022 and 2023.

SCI is a manufacturer of advanced metrology systems and analysis software and serves major companies in the semiconductor, optoelectronics, data storage, display, MEMS, and optical coating industries.

SCI will be integrated into the BSI Nano Segment.

The acquisition was accounted for under the acquisition method.

The fair value allocation included contingent consideration in the amount of $ 1.0 million, which represented the estimated fair value of future payments to the former shareholders of SCI based on achieving revenue and gross margin targets for the calendar years 2022 and 2023.

The Company completed the fair value allocation during 2022.

The amortization period for the intangible assets acquired is ten years for the trade name and technology, and nine years for the customer relationships.

The backlog intangible asset was fully amortized.

On November 17, 2021, the Company acquired Molecubes NV (“Molecubes”), a privately held company, for a purchase price of EUR 18.7 million (approximately $ 21.1 million) with the potential for additional consideration of up to EUR 3.0 million (approximately $ 3.4 million) based on revenue and gross margin achievements.

Molecubes manufactures and sells preclinical imaging CUBES that enable researchers to perform high-performance SPECT/CT and PET/CT studies without the need for complex system handling.

The acquisition was accounted for under the acquisition method.

The fair value allocation included contingent consideration in the amount of EUR 0.4 million (approximately $ 0.4 million), which represented the estimated fair value of future payments to the former shareholders of Molecubes based on achieving revenue and gross margin targets in 2021 and 2022.

The Company completed the fair value allocation during 2022.

The amortization period for the intangible assets acquired is ten years for the trade name, technology, and customer relationships.

The backlog intangible asset was fully amortized.

SCI Instruments

Consideration Transferred:

Fair value of contingent consideration

Working capital adjustment

Total consideration transferred

Allocation of Consideration Transferred:

Accounts receivable

Other current assets

Property, plant and equipment

Intangible assets:

Customer relationships

Deferred taxes

Liabilities assumed

Total consideration allocated

In addition to the SCI and Molecubes acquisitions, in 2021 the Company completed various other acquisitions accounted for under the acquisition method that complemented the Company’s existing product offerings.

The following table reflects the consideration transferred and the respective reportable segment for these acquisitions (in millions):

Name of Acquisition

Date Acquired

Consideration

Creative Instruments

September 9, 2021

In addition to the acquisitions noted above, in 2021 the Company completed minority strategic investments that complemented the Company’s existing product offerings.

The following table reflects the consideration transferred and the respective reportable segment for the acquisitions (in millions):

Acquisition /

Classification

Date Acquired

Consideration

Glycopath Inc.

Other long-term assets

February 18, 2021

Other long-term assets

March 18, 2021

Other long-term assets

September 23, 2021

Allowance for Doubtful Accounts

Accounts receivable on the consolidated balance sheets are presented net of allowance for doubtful accounts.

The following is a summary of the components for allowance for doubtful accounts (in millions):

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Total Inventories

Finished goods include in-transit systems that have been shipped to the Company’s customers but not yet installed and accepted by the customer.

At December 31, 2022 and 2021, inventory-in-transit was $ 41.1 million and $ 49.5 million, respectively.

Finished goods include in-transit systems that have been shipped to the Company’s customers but not yet installed and accepted by the customer.

At December 31, 2023, and 2022, finished goods inventory-in-transit was $ 48.6 million and $ 41.1 million, respectively.

Property, Plant and Equipment, Net

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Balance at December 31, 2023

In the fourth quarter of 2022, the Company changed the date of its annual assessment of goodwill to October 1st for all reporting units.

The change in testing date for goodwill is a change in accounting principle, which management believes is preferable as the new date of the assessment better aligns with the Company’s budgeting process and will create a more efficient and timely process surrounding the impairment tests.

The Company has historically evaluated its goodwill for impairment annually as of December 31 or more frequently if impairment indicators arose in accordance with Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other.” In the fourth quarter of 2022, the Company changed the date of its annual assessment of goodwill to October 1st for all reporting units.

The change in the assessment date does not delay, accelerate or avoid a potential impairment charge.

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No impairment was recognized during the years ended December 31, 2023, 2022, or 2021.

As a result of the impact of the COVID-19 pandemic, the Company performed an interim impairment assessment of the goodwill balance as of March 31, 2020 using a combination of both quantitative and qualitative approaches.

Based on this interim assessment, the Company concluded the fair values of each of the reporting units were significantly greater than their carrying amounts, and therefore, no impairment is required.

The goodwill assessment was based on management’s estimates and assumptions, certain of which are dependent on external factors.

No further triggering events were identified subsequent to March 31, 2020.

The Company has recorded $ 3.1 million of accumulated impairment losses of goodwill as of December 31, 2022.

Intangible Assets

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For the years ended December 31, 2023, 2022 and 2021, the Company recorded amortization expense of approximately $ 47.1 million, $ 37.1 million and $ 37.4 million, respectively, in the consolidated statements of income and comprehensive income.

At December 31, 2023, the net carrying amount of trade names includes $ 3.0 million related to indefinite-lived intangible assets which are not amortized but are evaluated for impairment.

The estimated future amortization expense related to amortizable intangible assets is as follows (in millions):

On a quarterly basis, the Company reviews its intangible assets to determine if there have been any triggering events that could indicate an impairment.

In connection with certain restructuring programs initiated in 2023, the Company performed impairment assessments of its long-lived assets comparing the carrying values to the sum of their undiscounted future cash flows.

Based on the results of these analyses, the Compa ny determined there were no impairments to its long-lived assets, including intangible assets and goodwill.

No other triggering events were identified for the years ended December 31, 2023, and 2022.

See Note 21, Other Charges, Net for discussion related to impairment of other long-lived assets in connection with the BCA restructuring plan.

Other Current Liabilities

The following is a summary of other current liabilities (in millions):

Deferred revenue

Accrued compensation

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Derivative liabilities

Operating leases

Operating lease liabilities

Legal and professional fees

Hybrid instruments liability

Restructuring liabilities

Other accrued expenses

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Balance at December 31, 2023

The Company’s debt obligations consist of the following (in millions):

EUR notes (in U.S.

Dollars) under the 2021 Note Purchase Agreement

Dollars) under the 2021 Note Purchase Agreement due 2031

CHF notes (in U.S.

Dollars) under the 2021 Note Purchase Agreement

Dollars) under the 2021 Note Purchase Agreement due 2031

CHF notes (in U.S.

Dollars) under the 2019 Note Purchase Agreement

Dollar notes under the 2019 Term Loan Agreement

Dollar notes under the 2012 Note Purchase Agreement

Dollars) under the 2019 Note Purchase Agreement due 2029

Dollar notes under the 2019 Term Loan Agreement annual payments of

$ 15.0 and balloon payment due 2026

Dollar notes under the 2012 Note Purchase Agreement due 2024

Unamortized debt issuance costs

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On December 7, 2021, the Company entered into a note purchase agreement, referred to as the 2021 Note Purchase Agreement, with a group of institutional accredited investors.

Pursuant to the 2021 Note Purchase Agreement, the Company issued and sold CHF 300 million aggregate principal amount of 0.88 % series A senior notes and EUR 150 million aggregate principal amount of 1.03 %

series B senior notes due December 8, 2031 , referred to as the 2021 Senior Notes.

The obligations under the Note Purchase Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

Interest on the 2021 Senior Notes is payable semi-annually on June 7 and December 7 of each year , commencing June 7, 2022 .

The Company may prepay some or all of the 2021 Senior Notes at any time in an amount not less than 10 % of the aggregate principal amount of the 2021 Senior Notes then outstanding at a price equal to the sum of (a) the principal amount to be prepaid, plus accrued and unpaid interest, (b) any applicable “make-whole”

amount, and (c) certain other fees and expenses.

In the event of a change in control (as defined in the 2021 Note Purchase Agreement) of the Company, the Company may be required to prepay the 2021 Senior Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest and certain other fees and expenses.

The 2021 Note Purchase Agreement contains customary affirmative and negative covenants, including, among others, restrictions on the Company’s ability to incur liens, transfer or sell equity or assets, engage in certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to engage in certain lines of business.

The 2021 Note Purchase Agreement also includes customary representations and warranties and events of default.

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and (3) a note purchase agreement to issue and sell CHF 297 million aggregate principal amount of 1.01 % senior notes due December 11, 2029.

The existing $ 105 million 4.31 % Series 2012A Senior Notes, Tranche C, was paid in January 2022, and the existing $ 100 million 4.46 % Series 2012A Senior Notes, Tranche D, due January 18, 2024, which the Company issued pursuant to a note purchase agreement dated January 18, 2012, remain in full force and effect.

Each of the revolving credit agreements, term loan agreement and note purchase agreements are described below.

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Dollar equivalent amount of $ 600 million, comprised of sub-facilities for revolving loans, swing-line loans, letters of credit and foreign borrowings.

The 2019 Revolving Credit Agreement also provides for an uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $ 250 million.

Loans under the 2019 Revolving Credit Agreement will be repayable in full at maturity and may also be prepaid at the Company’s option in whole or in part without premium or penalty.

(See 2024 Amended and Restated Credit Agreement below.) The 2019 Revolving Credit Agreement also provides for an uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $ 250 million.

Loans under the 2019 Revolving Credit Agreement will be repayable in full at maturity and may also be prepaid at the Company’s option in whole or in part without premium or penalty.

Amounts borrowed under the 2019 Revolving Credit Agreement may be repaid and reborrowed from time to time prior to the maturity date.

The obligations under the 2019 Revolving Credit Agreement are unsecured and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries.

2 of 1%, (ii) the prime rate announced by Bank of America, N.A., and (iii) LIBOR, as adjusted , plus 1 %, plus, in each case, a margin rate ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio.

The Company has also agreed to pay a quarterly facility fee based on the aggregate unused amount available under the 2019 Revolving Credit Agreement ranging from 0.100 % to 0.200 %, based on the Company’s leverage ratio.

Borrowings under the 2019 Revolving Credit Agreement bear interest at a rate equal to, at the Company’s option, (a) the London Interbank Offered Rate ( LIBOR ) applicable to the relevant currency, plus a margin ranging from 1.000% to 1.500%, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus 1 ⁄ 2 of 1%, (ii) the prime rate announced by Bank of America, N.A., and (iii) LIBOR, as adjusted , plus 1 %, plus, in each case, a margin rate ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio.

The 2019 Revolving Credit Agreement includes affirmative, negative and financial covenants and events of default customary for financings of this type.

The negative covenants include, among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset and equity sales, dividends, and transactions with affiliates.

The financial covenants include maximum leverage ratio and minimum interest coverage ratios of the Company, specifically, the Company’s leverage ratio cannot exceed 3.5 and the interest coverage ratio cannot be less than 2.5 .

The events of default include, among others, payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations and warranties, bankruptcy and insolvency related events, certain ERISA events, material judgments, and the occurrence of a change of control.

1 unchanged sentence

Interest Rate

2019 Credit Agreement

2019 Credit Agreement (a)

Bank guarantees and working capital line

Total revolving lines of credit

(a) On January 12, 2024, the Company borrowed CHF 230 million under the Company’s 2019 Revolving Credit Agreement.

2019 Term Loan Agreement

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The Term Loan Agreement provides for a $ 300 million seven-year term loan facility subject to terms and conditions substantially consistent with those provisions contained in the 2019 Revolving Credit Agreement.

Loans under the Term Loan Agreement will be repayable in full at maturity, subject to scheduled amortization beginning in 2022, and may also be prepaid at the Company’s option in whole or in part without premium or penalty.

The obligations under the Term Loan Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

Amounts outstanding under the Term Loan Agreement bear interest at a rate equal to, at the Company’s option, (a) the U.S.

2 of 1 %, (ii) the prime rate announced by Bank of America, N.A., and (iii) USD LIBOR , as adjusted, plus 1 %, plus a margin ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio.

The obligations under the Term Loan Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

Amounts outstanding under the Term Loan Agreement bear interest at a rate equal to, at the Company’s option, (a) the U.S.

Dollar London Interbank Offered Rate ( USD LIBOR ), plus a margin ranging from 1.000 % to 1.500 %, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus 1 ⁄ 2 of 1 %, (ii) the prime rate announced by Bank of America, N.A., and (iii) USD LIBOR , as adjusted, plus 1 %, plus a margin ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio.

The other terms of the Term Loan Agreement are substantially similar to the terms of the 2019 Revolving Credit Agreement, including representations and warranties, affirmative, negative and financial covenants, and events of default.

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Pursuant to the 2019 Note Purchase Agreement, the Company issued and sold CHF 297 million aggregate principal amount of 1.01 % senior notes due December 11, 2029, referred to as the 2019 Senior Notes.

The obligations under the Note Purchase Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

Interest on the 2019 Senior Notes is payable semi-annually on June 11 and December 11 of each year, commencing June 11, 2020.

The 2019 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

The Company may prepay some or all of the 2019 Senior Notes at any time in an amount not less than 10 % of the aggregate principal amount of the 2019 Senior Notes then outstanding at a price equal to the sum of (a) the principal amount to be prepaid, plus accrued and unpaid interest, (b) any applicable “make-whole”

amount, and (c) certain other fees and expenses.

The 2019 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

In the event of a change in control (as defined in the 2019 Note Purchase Agreement) of the Company, the Company may be required to prepay the 2019 Senior Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest and certain other fees and expenses.

The 2019 Note Purchase Agreement contains customary affirmative and negative covenants, including, among others, restrictions on the Company’s ability to incur liens, transfer or sell equity or assets, engage in certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to engage in certain lines of business.

The 2019 Note Purchase Agreement also includes customary representations and warranties and events of default.

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Under the terms of the 2012 Note Purchase Agreement, interest is payable semi-annually on January 18 and July 18 of each year.

The 2012 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s direct and indirect subsidiaries.

The 2012 Senior Notes rank pari passu in right of repayment with the Company’s other senior unsecured indebtedness.

The Company may prepay some or all of the 2012 Senior Notes at any time in an amount not less than 10 % of the original aggregate principal amount of the 2012 Senior Notes to be prepaid, at a price equal to the sum of (a) 100 % of the principal amount thereof, plus accrued and unpaid interest, and (b) the applicable make-whole amount, upon not less than 30 and no more than 60 days’

written notice to the holders of the 2012 Senior Notes.

The 2012 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s direct and indirect subsidiaries.

The 2012 Senior Notes rank pari passu in right of repayment with the Company’s other senior unsecured indebtedness.

In the event of a change in control of the Company, as defined in the Note Purchase Agreement, the Company may be required to prepay the Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest.

The 2012 Note Purchase Agreement contains affirmative covenants, including, without limitation, maintenance of corporate existence, compliance with laws, maintenance of insurance and properties, payment of taxes, addition of subsidiary guarantors and furnishing notices and other information.

The 2012 Note Purchase Agreement also contains certain restrictive covenants that restrict the Company’s ability to, among other things, incur liens, transfer or sell assets, engage in certain mergers and consolidations and enter into transactions with affiliates.

The 2012 Note Purchase Agreement also includes customary representations and warranties and events of default.

In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding 2012 Senior Notes will become due and payable immediately without further action or notice.

In the case of payment events of defaults, any holder of 2012 Senior Notes affected thereby may declare all 2012 Senior Notes held by it due and payable immediately.

In the case of payment events of defaults, any

holder of 2012 Senior Notes affected thereby may declare all 2012 Senior Notes held by it due and payable immediately.

In the case of any other event of default, a majority of the holders of the 2012 Senior Notes may declare all the 2012 Senior Notes to be due and payable immediately.

Pursuant to the 2012 Note Purchase Agreement, so long as any 2012 Senior Notes are outstanding, the Company will not permit (i) its leverage ratio, as determined pursuant to the 2012 Note Purchase Agreement, as of the end of any fiscal quarter to exceed 3.50 to 1.00, (ii) its interest coverage ratio as determined pursuant to the 2012 Note Purchase Agreement as of the end of any fiscal quarter for any period of four consecutive fiscal quarters to be less than 2.50 to 1 or (iii) priority debt at any time to exceed 25 % of consolidated net worth, as determined pursuant to the 2012 Note Purchase Agreement.

As of December 31, 2022, the Company was in compliance with the covenants of all debt agreements.

The existing $ 105 million 4.31 % Series 2012A Senior Notes, Tranche C, was paid in January 2022, and the existing $ 100 million 4.46 % Series 2012A Senior Notes, Tranche D, was paid on January 18, 2024.

Annual maturities of notes and loans outstanding are as follows (in millions):

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to Euro to hedge the variability in the movement of foreign currency exchange rates on portions of our Euro and Swiss Franc denominated net asset investments.

These agreements qualify for hedge accounting and accordingly the changes in fair value of the derivative are recorded in other comprehensive income and remain in accumulated comprehensive income (loss) attributable to Bruker Corporation in shareholders’

equity until the sale or substantial liquidation of the foreign operation.

The difference between the interest rate received and paid under the interest rate and cross-currency swap agreements is recorded in interest and other income (expense) in the consolidated statements of income and comprehensive income.

As a result of entering into these agreements, the Company lowered net interest expense by $ 18.3 million and $ 8.6 million during 2023 and 2022, respectively.

The gains related to hedges of net asset investments in international operations that

were recorded within the cumulative translation adjustment section of other comprehensive income were $ 58.0 million and $ 36.4 million for the years ended December 31, 2022 and 2021, respectively.

The losses related to hedges of net asset investments in international operations that were recorded within the cumulative translation adjustment section of other comprehensive income were $ 47.1 million for the year ended December 31, 2020.

The gains related to hedges of net asset investments in international operations that were recorded within the cumulative translation adjustment section of other comprehensive income were $ 76.8 million, $ 58.0 million and $ 36.4 million for the years ended December 31, 2023, 2022, and 2021 respectively.

The Company presents the cross-currency swap periodic settlements in investing activities and the interest rate swap periodic settlements in operating activities in the statement of cash flow.

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Interest expense for the years ended December 31, 2023, 2022 and 2021 was $ 16.4 million, $ 16.1 million and $ 14.3 million, respectively.

As of December 31, 2023, the Company was in compliance with the covenants of all debt agreements.

2024 Notes Purchase Agreement

On February 1, 2024, and February 8, 2024, the Company entered into two note purchase agreements, referred to as the 2024 Note Purchase Agreements, with a group of accredited institutional investors.

Pursuant to the 2024 Note Purchase Agreements, the Company will issue and sell CHF 431.0 million (approximately $ 513 million) of senior notes, referred to as the 2024 Senior Notes, which consist of the following:

• CHF 50 million 2.56 % Series 2024A Senior Notes, due April 15, 2034;

• CHF 146 million 2.62 % Series 2024B Senior Notes, due April 15, 2036;

• CHF 135 million 2.71 % Series 2024C Senior Notes, due April 15, 2039;

• CHF 50 million 2.60 % Series 2024A Senior Notes, due April 15, 2036;

• CHF 50 million 2.62 % Series 2024B Senior Notes, due April 15, 2039.

Under the terms of the 2024 Note Purchase Agreements, interest on the Notes is payable semi-annually on April 15 and October 15 of each year , commencing April 15 or October 15, 2024 .

The Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

The Company may prepay some or all of the Notes at any time in an amount not less than 10 % of the aggregate principal amount of the Notes then outstanding at a price equal to the sum of (a) the principal amount to be prepaid, plus accrued and unpaid interest, (b) any applicable “make-whole” amount, and (c) certain other fees and expenses.

In the event of a change in control (as defined in the Note Purchase Agreement) of the Company, the Company may be required to prepay the Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest and certain other fees and expenses.

The Note Purchase Agreements contain customary affirmative and negative covenants, including, among others, a most favored lender covenant, restrictions on the Company’s ability to incur liens, transfer or sell assets, engage in certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to engage in certain lines of business.

The Note Purchase Agreement also includes customary representations and warranties and events of default.

Additionally, commencing with the first full fiscal quarter ending following the closing of the offering, so long as any Notes are outstanding, the Company may not permit (i) its leverage ratio (as determined pursuant to the Note Purchase Agreement) as of the end of any fiscal quarter to exceed 3.50 to 1.00 unless a material acquisition causes an adjusted leverage ratio to apply pursuant to the Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the Note Purchase Agreement) as of the end of any fiscal quarter for any period of four consecutive fiscal quarters to be less than 2.50 to 1.00, or (iii) Priority Debt at any time to exceed 15 % of consolidated total assets (as determined pursuant to the Note Purchase Agreement).

Commencing with the first full fiscal quarter ending following the closing of the offering, if the Leverage Ratio exceeds 3.50 to 1.00 an incremental leverage fee shall be due on the Notes in an aggregate amount equal to 0.50 % of the aggregate outstanding principal amount of the Notes per annum, which shall be due and payable on the Notes.

The issuance and sale of the Notes is subject to satisfaction of a variety of customary closing conditions and is expected to occur on or about April 15, 2024.

2024 Amended and Restated Credit Agreement

On January 18, 2024, the Company, together with certain of its subsidiaries, as borrowers and guarantors, entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A., TD Bank, N.A., and Wells Fargo Bank, National Association, as Co-Syndication Agents, BofA Securities, Inc., Deutsche Bank Securities Inc., JPMorgan Chase Bank, N.A., TD Bank, N.A.

and Wells Fargo Securities, LLC, as Joint Bookrunners and Joint Lead Arrangers, Citizens Bank, N.A., Credit Suisse (Switzerland) Ltd., and U.S.

Bank, N.A., as Co-Documentation Agents, ING Bank B.V.

and PNC Bank, N.A., as Managing Agents, Bank of America, N.A., as Administrative Agent, Swing Line Lender and Issuing Bank, and the several banks or other financial institutions or entities from time to time party thereto as lenders.

The Amended and Restated Credit Agreement amends and restates the 2019 Revolving Credit Agreement entered into by the Company and certain of its subsidiaries on December 11, 2019 with the other parties thereto.

The Amended and Restated Credit Agreement increases the aggregate principal amount from $ 600 million to $ 900 million and extends the maturity date to January 18, 2029, as may be further extended by the Company for the periods and on the terms set forth in the Amended and Restated Credit Agreement.

In addition, the Amended and Restated Credit Agreement increases the uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option, increase the amount of the revolving facility

or incur term loans in an aggregate amount not to exceed $ 400 million.

Amounts outstanding under the Amended and Restated Credit Agreement bear interest at a rate equal to, at the Company’s option, (a) the Secured Overnight Financing Rate (“SOFR”) applicable to the relevant currency, plus a margin ranging from 1.000 % to 1.500 %, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus 0.5 %, (ii) the prime rate announced by Bank of America, N.A., and (iii) SOFR, as adjusted, plus 1.00 %, plus a margin rate ranging from 0.000 % to 0.500 %, based on the Company’s leverage ratio.

The Company has also agreed to pay a quarterly facility fee based on the aggregate amount available under the 2019 Revolving Credit Agreement ranging from 0.100 % to 0.200 %, based on the Company’s leverage ratio.

The Amended and Restated Credit Agreement includes affirmative, negative and financial covenants and events of default customary for financings of this type.

The negative covenants include, among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends, and transactions with affiliates.

The financial covenants include maximum leverage ratio and minimum interest coverage ratios of the Company.

Fair Value of Financial Instruments

The Company measures the following financial assets and liabilities at fair value on a recurring basis.

The following tables set forth the Company’s financial instruments and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement (in millions):

December 31, 2023

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Contingent consideration

Hybrid instruments liability

Hybrid instruments liabilities

Liability awards

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Forward currency contracts

Long-term fixed interest rate debt

Total liabilities recorded at fair value

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Time deposits and money market funds

Short-term investments

Interest rate and cross-currency swap agreements

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Contingent consideration

Hybrid instruments liability

Hybrid instruments liabilities

Liability awards

Interest rate and cross-currency swap agreements

Forward currency contracts

Long-term fixed interest rate debt

Total liabilities recorded at fair value

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The Company did not elect to remeasure any of its existing financial assets or liabilities and did not elect the fair value option for any financial assets or liabilities which originated during the year ended December 31, 2023 or 2022.

The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was based on market and observable sources with similar maturity dates.

The fair value of the Company's long-term fixed interest rate debt was $ 883.3 million and $ 767.8 million as of December 31, 2023, and December 31, 2022, respectively.

The fair value was based on market and observable sources with similar maturity dates and classified as Level 2 within the fair value hierarchy.

The remaining long-term debt has variable interest rates and the carrying value approximates fair value accordingly.

On a quarterly basis, the Company reviews its short-term investments to determine if there have been any events that could create an impairment.

None were noted for the years ended December 31, 2022, 2021 and 2020.

Debt securities consist of investments in redeemable preferred stock.

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The contingent consideration is primarily based on the applicable acquired company achieving annual revenue and gross margin targets in certain years as specified in the relevant purchase and sale agreement.

The Company initially values the contingent consideration on acquisition date by using a Monte Carlo simulation or an income approach method.

The Company initially values the contingent consideration on the acquisition date by using a Monte Carlo simulation or an income approach method.

The Monte Carlo method models future revenue and costs of goods sold projections and discounts the average results to present value.

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The counterparty risk considers the risk of the buyer having the cash to make the earnout payments and is commensurate with a cost of debt over an appropriate term.

Changes in fair value subsequent to acquisition are recognized in “Acquisition-related expenses, net” included in Other Charges, net, in the Consolidated Statements of Income and Comprehensive Income.

The following table sets forth the changes in contingent consideration liabilities (in millions):

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Balance at December 31, 2023

As part of the 2018 Mestrelab and 2022 PreOmics GmbH acquisitions, the Company entered into agreements with the noncontrolling interest holders that provide the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining ownerships for cash at contractually defined redemption values.

As part of the 2018 Mestrelab Research, S.L.

(“Mestrelab”), 2022 PreOmics, 2023 Biognosys, Zontal and MIRO acquisitions and certain other majority owned acquisitions, the Company entered into agreements with the noncontrolling interest holders that provide the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining ownerships for cash at contractually defined redemption values.

These rights (embedded derivatives) can be accelerated, at discounted redemption values, upon certain events related to post combination employment services.

As the options are tied to continued employment, the Company classified the hybrid instruments (noncontrolling interests with an embedded derivatives) as liabilities on the consolidated balance sheet.

Subsequent to the acquisitions, the carrying value of the hybrid instruments are remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the respective requisite service period vested.

During the year ended December 31, 2022, the Company acquired an additional 30 % interest in Mestrelab for a purchase price of Euro 11.0 million (approximately $ 11.6 million).

Subsequent to the acquisition dates, the carrying value of each hybrid instrument is remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the respective requisite service period vested.

The Company classified the hybrid instruments as Level 3 in the fair value hierarchy.

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Current period additions

Current period adjustments

Current period settlements

Foreign currency effect

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Current period adjustments

Current period settlements

Foreign currency effect

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Interest Rate Risk

The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related market rates.

Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2019 Revolving Credit Agreement, the 2019 Term Loan and the 2021 Senior Notes.

The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related market rates.

Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2019 Revolving Credit Agreement, the 2019 Term Loan and the 2021 Senior Notes.

Commodity Price Risk Management

The Company has arrangements with certain customers under which it has a firm commitment to deliver copper-based superconductors at a fixed price.

In order to minimize the volatility that fluctuations in the price of copper have on the Company’s sales of these commodities, the Company enters into commodity hedge contracts.

As commodity contracts settle, gains (losses) as a result of changes in fair values are adjusted to the contracts with the customers through revenues.

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These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the consolidated statements of income and comprehensive income.

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction.

The Company accounts for these transactions separately valuing the “embedded derivative”

component of these contracts.

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the Company's subsidiaries in the transaction.

The Company accounts for these transactions separately valuing the “embedded derivative” component of these contracts.

The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $ 25.7 million and $ 15.3 million for the purchase of products as of December 31, 2023, and 2022, respectively.

There were no contracts denominated in currencies other than the functional currency of the transacting parties for the delivery of products as of December 31, 2023, and 2022, respectively.

The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income.

The Company records the changes in the fair value of these embedded derivatives in interest and other income (expense), net in the consolidated statements of income and comprehensive income.

The Company had the following notional amounts outstanding under foreign exchange contracts, cross-currency interest rate swap agreements and long-term debt designated as net investment hedges and the respective fair value of the instruments recorded in the consolidated balance sheets as follows (in millions):

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Other current assets

Other current liabilities

Other long-term liabilities

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Other current assets

Other current liabilities

Fixed price commodity contracts

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Stock compensation

Mandatory repatriation

Tax contingencies

Change in tax rates

Withholding taxes

Repatriation of foreign earnings

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Research and development credits

Tax impact on bargain purchase gain

Change in valuation allowance for unbenefited losses

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Hedge unrealized FX gain/loss

Lease obligations

Lease liabilities

Gross deferred tax assets

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A valuation allowance is established when necessary to reduce deferred tax assets to the expected realizable amounts.

The Company can only recognize a deferred tax asset to the extent this it is “more likely than not”

that these assets will be realized.

The Company can only recognize a deferred tax asset to the extent this it is “more likely than not” that these assets will be realized.

Judgments around realizability depend on the availability and weight of both positive and negative evidence.

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Balance at December 31, 2020

Increases recorded as part of acquisition purchase accounting

Balance at December 31, 2020

Increases recorded as an expense to income tax provision

Balance at December 31, 2021

Decrease recorded for state valuation allowance release

Decreases recorded for valuation allowance release

Balance at December 31, 2022

As of December 31, 2022, the Company had approximately $ 65.8 million net operating loss carryforwards available to reduce state taxable income that are expected to expire at various times beginning in 2023.

Increases recorded as an expense to income tax provision

Balance at December 31, 2023

As of December 31, 2023, the Company has approximately $ 588.9 million of U.S.

federal net operating loss carryforwards, of which $ 36.4 million begin to expire at various dates beginning in 2031 and the remainder $ 552.5 million will be carried forward indefinitely.

The Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017, limits a taxpayer’s ability to utilize NOL deduction in a year to 80% taxable income for federal NOL arising in tax years beginning after 2017 .

The Company has approximately $ 676.6 million of state net operating loss carryforwards available to reduce state taxable income that are expected to expire at various times beginning in 2024.

The Company also has approximately $ 97.9 million of German Trade Tax and Corporate Income Tax net operating losses that are carried forward indefinitely.

Additionally, the Company has $ 28.7 million of other foreign net operating losses that are expected to expire at various times in the future.

The Company has U.S.

federal foreign tax credit carried forwards in the amount of $ 3.3 million.

We also had U.S.

The Company also has U.S.

federal and state research and development tax credit of $ 1.2 million and $ 10.3 million respectively.

Utilization of these credits and state net operating losses may be subject to annual limitations due to the ownership percentage change limitations provided by the Code Section 382 and similar state provisions.

In the event of a deemed change in control under Code Section 382, an annual limitation on the utilization of net operating losses and

credits may result in the expiration of all or a portion of the net operating loss and credit carryforwards.

Utilization of these credits and net operating losses may be subject to annual limitations due to the ownership percentage change limitations provided by the Code Section 382 and similar state provisions.

In the event of a deemed change in control under Code Section 382, an annual limitation on the utilization of net operating losses and credits may result in the expiration of all or a portion of the net operating loss and credit carryforwards.

The Company is in the process of finalizing the impact of Section 382 related to the PhenomeX acquisition but believes the provisions will limit the availability of losses to offset future income.

Additionally, the Company has $ 91.4 million of gross interest expense carryforward as provided by Code Section 163(j) that can be carried forward indefinitely.

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Specifically, the Company asserts that a total of $ 3.4 billion of unremitted foreign earnings is indefinitely reinvested.

This figure is comprised of $ 1.7 billion in unremitted earnings as well as $ 851 million of non-cash E&P in all jurisdictions not indefinitely reinvested.

This figure is comprised of $ 2.0 billion in unremitted earnings as well as $ 1.4 billion of non-cash E&P in all jurisdictions not indefinitely reinvested.

If this E&P is ultimately distributed to the United States in the form of dividends the Company would likely be subject to additional withholding tax.

The Company estimates the amount of unrecognized deferred withholding taxes on the undistributed E&P to be approximately $ 95.6 million at December 31, 2023.

The Company had gross unrecognized tax benefits, excluding interest, of approximately $ 54.9 million as of December 31, 2022, that if recognized, would reduce the Company’s effective tax rate.

The Company had gross unrecognized tax benefits, excluding interest, of approximately $ 58.5 million as of December 31, 2023, that if recognized, would reduce the Company’s effective tax rate.

In the next twelve months it is reasonably possible that the Company will reduce its unrecognized tax benefits by an immaterial amount due to the expiration of statutes of limitations.

A tabular reconciliation of the Company’s gross unrecognized tax benefits is as follows (in millions):

Gross unrecognized tax benefits at December 31, 2020

Gross increases—tax positions in prior periods

Gross increases—current period tax positions

Gross increases—tax positions in prior periods

Gross increases—current period tax positions

Gross unrecognized tax benefits at December 31, 2021

Gross increases—tax positions in prior periods

Gross increases—current period tax positions

Gross decreases—tax positions in prior periods

Gross increases—current period tax positions

Gross unrecognized tax benefits at December 31, 2022

Gross decreases—tax positions in prior periods

Gross increases—current period tax positions

Gross decreases—tax positions in prior periods

Gross increases—current period tax positions

Gross unrecognized tax benefits at December 31, 2023

The Company’s policy is to include accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax expense.

At December 31, 2022 and 2021, the Company had approximately $ 4.2 million and $ 3.1 million, respectively, of accrued interest and penalties related to uncertain tax positions included in other long-term liabilities in the consolidated balance sheets.

The Company’s policy is to include accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax expense.

At December 31, 2023 and 2022, the Company had approxi mately $ 5.8 million and $ 4.2 million, respectively, of accrued interest and penalties related to uncertain tax positions included in other long-term liabilities in the consolidated balance sheets.

The Company recorded expense of $ 1.3 million and $ 1.1 million for penalties and interest related to unrecognized tax benefits in the provision for income taxes during the years ended December 31, 2023 and 2022 , respectively.

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The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions.

The majority of the Company’s earnings are derived in Germany and Switzerland.

Accounting for the various federal and local taxing authorities, the statutory rates for 2023 were approximately 30.0 % and 20.0 % for Germany and Switzerland, respectively.

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statutory rate of 21 % in 2023.

The Company has been subject to tax examinations in Germany for the years 2009 through 2012 whereby the German tax authorities had imposed additional tax assessments for those years.

Due to the nature of the additional tax assessments, the Company filed for competent authority relief from those assessments and reached a final resolution during the first quarter of 2022.

In addition, the Company has been subject to tax examinations for the years 2013-2017 with Germany taxing authorities and 2013-2022 in various taxing authorities.

In 2020, the Company was granted an income tax holiday for our manufacturing facility in Malaysia.

The tax holiday allows for tax-free operations through February 28, 2023, with the option to apply for a 5 year extension if certain conditions are met.

This tax holiday had an immaterial impact to earnings per share for the year ended December 31, 2022.

In connection with the Tax Cuts and Jobs Act (“TCJA”) of 2017, the Company recorded a toll charge liability of $ 35.4 million.

The Company has been subject to tax examinations for the years 2013-2017 with Germany taxing authorities and for the years 2013-2023 in various taxing authorities.

In 2020, the Company was granted an income tax holiday for the manufacturing facility in Malaysia.

The tax holiday allows for tax-free operations through February 28, 2024, and with the option to apply for a 5 year extension if certain conditions are met.

The company has applied for an extension of the tax holiday for another 5 years , which is currently under review by the local authorities.

The effect of the tax holiday in Malaysia increased the Company's net income by $ 7.6 million, $ 2.5 million and $ 0.0 million and increased the Company's net income per diluted share by $ 0.05 , $ 0.01 and $ 0.00 for the years ended December 31, 2023, 2022 and 2021, respectively.

In connection with the Tax Cuts and Jobs Act (“TCJA”) of 2017, the Company recorded a toll charge liability of $ 35.4 million and the liability decreased to $ 20.5 million due to its amended 2017 tax return filed in 2023.

Of that amount, approximately $ 19.4 million has already been paid as of December 31, 2023.

In July and August 2022, the CHIPS and Science Act, of CHIPS, and the Inflation Reduction Act, or IRA were signed into law.

The IRA introduced tax provisions primarily focused on implementing a 15 % corporate alternative minimum tax on global adjusted financial statement income of certain large corporations and 1 % excise tax on share repurchases, which are both effective January 1, 2023.

While we are still evaluating the impact of the provisions in the Inflation Reduction Act, we do not believe this legislation will have a material impact on our consolidated financial statements.

Under the Tax Cuts and Jobs Act of 2017, research and development costs are no longer fully deductible and are required to be capitalized and amortized for U.S.

tax purposes effective January 1, 2022.

The mandatory capitalization did not result in a material impact in the overall effective tax rate for the year ended December 31, 2022.

In August 2022, the President of the United States signed into law the Inflation Reduction Act of 2022 (the “IRA”), a tax and spending package that introduced several tax provisions, including a 15 % corporate alternative minimum tax (“CAMT”) on certain large corporations and a 1 % excise tax on certain corporate stock repurchases.

The IRA provisions, which became effective for the Company beginning on January 1, 2023, did not have a material impact on the Company during the year ended December 31, 2023.

While the full impact of these provisions in the future depends on several factors, including interpretive regulatory guidance, which has not yet been released, we do not believe this legislation will have a material impact on our consolidated financial statements.

We will continue to monitor the potential impact of this new legislation as new information and guidance becomes available.

The Organization for Economic Co-operation and Development (OECD) introduced its Pillar Two Framework Model Rules (“Pillar 2”), provides guidance for a global minimum tax.

Certain aspects of Pillar 2 took effect on January 1, 2024, while other aspects go into effect on January 1, 2025.

The Company is evaluating the potential impact of Pillar 2 on its business, as the countries in which it operates are enacting legislation implementing Pillar 2.

While many aspects of the application of Pillar 2 remain to be clarified, the Company does not expect Pillar 2 to materially impact its tax liability.

Operating lease cost is recognized over the lease term on a straight-line basis, while finance lease cost is amortized over the expected term on a straight-line basis.

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Variable lease cost

Impairment expense (a)

Sublease income

Total lease cost

(a) Impairment charge recognized in 2023 is associated with the restructuring of PhenomeX.

See Note, 21 Other Charges, Net

Supplemental balance sheet information related to leases was as follows (dollars in millions):

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Other current liabilities

Operating lease liability—long term

Weighted average remaining lease term

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Defined Benefit Plans

Substantially all of the Company’s employees in Switzerland, France, Japan and Thailand, as well as certain employees in Germany, are covered by Company-sponsored defined benefit pension plans.

Retirement benefits are generally earned based on years of service and compensation during active employment.

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Net under-funded status

Plan amendments relate to further reductions in the mandatory and the supplementary conversion rates for the pension plan in Switzerland that will be effective in 2023 and in 2024, respectively.

Plan amendments relate to further reductions in the mandatory conversion rates for the pension plan in Switzerland that will be effective from 2025 onwards.

The accumulated benefit obligation for the defined benefit pension plans is $ 226.4 million and $ 168.6 million at December 31, 2023 and 2022, respectively.

All defined benefit pension plans have an accumulated benefit obligation and projected benefit obligation in excess of plan assets at December 31, 2023, and 2022.

The following amounts were recognized in the accompanying consolidated balance sheets for the Company’s defined benefit plans (in millions):

Current liabilities

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Net benefit obligation

The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions):

Reconciliation of amounts recognized in the consolidated balance sheets:

Prior service cost (credit)

Prior service cost

Net actuarial gain (loss)

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The assumptions used to determine the net periodic benefit costs and the projected benefit obligations are as follows:

Annual discount rate—defined benefit obligation