BRUKER CORP 10-K

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index of Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 52 Consolidated Balance Sheets as of December 31, 2023, and 2022 54 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 55 56 Consolidated Statements of Redeemable Noncontrolling Interests and Shareholders’ Equity for the years ended December 31, 2023, 2022, and 2021 57 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 58 Notes to Consolidated Financial Statements 59 51 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Bruker Corporation 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, 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). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. 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. 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. 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 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. 52 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. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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 – 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. Transfer of control generally occurs upon shipment, or for certain systems, based upon customer acceptance for a system once delivered and installed at a customer facility. 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, 2023, was $2,457.6 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. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to system sales revenue recognition. These procedures also included, among others, evaluating the recognition of revenue for a sample of system sales transactions by obtaining and inspecting source documents, such as invoices, customer purchase orders, shipping or delivery documents, acceptance documents, and cash receipts, where applicable. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts February 29, 2024 We have served as the Company’s auditor since 2016. 53 BRUKER CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) December 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 488.3 $ 645.5 Accounts receivable, net 492.0 472.7 Inventories 968.3 800.1 Assets held for sale — 1.4 Other current assets 215.6 193.5 Total current assets 2,164.2 2,113.2 Property, plant and equipment, net 599.7 487.0 Goodwill 582.6 457.6 Intangible assets, net 330.5 270.9 Operating lease assets 91.7 51.2 Deferred tax assets 297.2 76.8 Other long-term assets 184.0 155.1 Total assets $ 4,249.9 $ 3,611.8 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 121.2 $ 18.7 Accounts payable 202.7 178.4 Deferred revenue and customer advances 400.0 370.2 Other current liabilities 478.2 347.0 Total current Liabilities 1,202.1 914.3 Long-term debt 1,160.3 1,200.5 Long-term deferred revenue and customer advances 91.5 101.6 Deferred tax liabilities 67.7 62.3 Operating lease liabilities 74.8 34.8 Accrued pension 76.6 45.7 Other long-term liabilities 163.6 120.8 Total Liabilities 2,836.6 2,480.0 Commitments and contingencies (Note 18) Redeemable noncontrolling interests 18.7 6.1 Shareholders’ equity: Preferred stock, $ 0.01 par value 5,000,000 shares authorized, none issued or outstanding at December 31, 2023 and 2022 — — Common stock, $ 0.01 par value 260,000,000 shares authorized, 175,943,705 and 175,389,586 shares issued, and 145,164,826 and 147,023,144 outstanding at December 31, 2023 and 2022, respectively 1.7 1.7 Treasury stock at cost, 30,778,879 and 28,366,442 shares at December 31, 2023 and 2022, respectively ( 1,237.2 ) ( 1,085.0 ) Additional paid-in capital 282.9 256.3 Retained earnings 2,323.8 1,926.0 Accumulated other comprehensive income, net of tax 6.0 14.8 Total shareholders’ equity attributable to Bruker Corporation 1,377.2 1,113.8 Noncontrolling interests in consolidated subsidiaries 17.4 11.9 Total shareholders’ equity 1,394.6 1,125.7 Total liabilities, redeemable noncontrolling interests and shareholders’ equity $ 4,249.9 $ 3,611.8 The accompanying notes are an integral part of these consolidated financial statements. 54 BRUKER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data) Year Ended December 31, 2023 2022 2021 Product revenue $ 2,457.6 $ 2,109.9 $ 2,017.3 Service revenue 493.8 414.6 393.2 Other revenue 13.1 6.2 7.4 Total revenue 2,964.5 2,530.7 2,417.9 Cost of product revenue 1,165.2 984.0 979.3 Cost of service revenue 285.9 240.8 228.2 Cost of other revenue 0.1 0.2 0.8 Total cost of revenue 1,451.2 1,225.0 1,208.3 Gross profit 1,513.3 1,305.7 1,209.6 Operating expenses: Selling, general and administrative 729.4 607.4 561.2 Research and development 294.8 235.9 220.8 Other charges, net 52.2 29.7 14.3 Total operating expenses 1,076.4 873.0 796.3 Operating income 436.9 432.7 413.3 Bargain purchase gain 144.1 — — Interest and other income (expense), net ( 36.8 ) ( 18.8 ) ( 19.7 ) Income before income taxes, equity in income of unconsolidated investees, net of tax, and noncontrolling interests in consolidated subsidiaries 544.2 413.9 393.6 Income tax provision 117.7 116.4 113.0 Equity in income of unconsolidated investees, net of tax 2.0 1.0 — Consolidated net income 428.5 298.5 280.6 Net income attributable to noncontrolling interests in consolidated subsidiaries 1.3 1.9 3.5 Net income attributable to Bruker Corporation $ 427.2 $ 296.6 $ 277.1 Net income per common share attributable to Bruker Corporation shareholders: Basic $ 2.92 $ 2.00 $ 1.83 Diluted $ 2.90 $ 1.99 $ 1.81 Weighted average common shares outstanding: Basic 146.4 148.6 151.4 Diluted 147.2 149.4 152.9 The accompanying notes are an integral part of these consolidated financial statements. 55 BRUKER CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Year Ended December 31, 2023 2022 2021 Consolidated net income $ 428.5 $ 298.5 $ 280.6 Other comprehensive income (loss): Foreign currency translation adjustments, net of tax benefit of ($ 3.2 ), ($ 1.4 ) and ($ 2.1 ), respectively) 93.3 ( 67.4 ) ( 77.8 ) Derivatives designated as hedging instruments net of tax expense (benefit) of $ 23.8 , ($ 13.8 ), and $ 12.5 respectively) ( 77.1 ) 44.2 51.4 Pension and other postretirement benefit liability adjustments: Pension and other postretirement benefit liability adjustments arising during the period ( 23.2 ) 43.8 11.6 Amortization of net loss and prior service benefit included in net periodic pension cost ( 0.7 ) 1.2 2.9 Total pension and other postretirement benefit liability adjustments, net of tax expense (benefit) of ($ 5.1 ), $ 11.8 and $ 3.9 , respectively ( 23.9 ) 45.0 14.5 Total other comprehensive income (loss) ( 7.7 ) 21.8 ( 11.9 ) Total Comprehensive income 420.8 320.3 268.7 Less: Comprehensive income attributable to noncontrolling interests 2.5 1.6 1.0 Less: Comprehensive loss attributable to redeemable noncontrolling interests ( 0.1 ) ( 0.9 ) ( 0.1 ) Total Comprehensive income attributable to Bruker Corporation $ 418.4 $ 319.6 $ 267.8 The accompanying notes are an integral part of these consolidated financial statements. 56 BRUKER CORPORATION CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY (in millions, except share data) Redeemable Noncontrolling Interests Number of Common Shares Outstanding Common Stock Amount Number of Treasury Shares Treasury Stock Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (loss) Total Shareholders’ Equity Attributable to Bruker Corporation Noncontrolling Interests in Consolidated Subsidiaries Total Shareholders’ Equity Balance at December 31, 2020 $ — 151,987,081 $ 1.7 22,058,529 $ ( 667.0 ) $ 216.3 $ 1,406.5 $ 3.7 $ 961.2 $ 13.1 $ 974.3 Stock options exercised — 580,656 — — — 11.7 — — 11.7 — 11.7 Restricted stock units vested — 278,769 — — — ( 4.7 ) — — ( 4.7 ) — ( 4.7 ) Stock-based compensation — — — — — 14.5 — — 14.5 — 14.5 Shares repurchased — ( 2,092,819 ) — 2,092,819 ( 153.3 ) — — — ( 153.3 ) — ( 153.3 ) Distributions to noncontrolling interests — — — — — — — — — — — Cash dividends paid to common shareholders ($ 0.16 per share) — — — — — — ( 24.1 ) — ( 24.1 ) — ( 24.1 ) Formation of Acuity Spatial Genomics, Inc. 0.3 — — — — Consolidated net (loss) income ( 0.1 ) 277.1 277.1 3.6 280.7 Other comprehensive loss — — — — — — — ( 11.9 ) ( 11.9 ) ( 2.6 ) ( 14.5 ) Balance at December 31, 2021 $ 0.2 150,753,687 $ 1.7 24,151,348 $ ( 820.3 ) $ 237.8 $ 1,659.5 $ ( 8.2 ) $ 1,070.5 $ 14.1 $ 1,084.6 Stock options exercised — 251,006 — — — 5.8 — — 5.8 — 5.8 Restricted stock units vested — 233,545 — — — ( 3.0 ) — — ( 3.0 ) — ( 3.0 ) Stock-based compensation — — — — — 15.7 — — 15.7 — 15.7 Shares repurchased — ( 4,215,094 ) — 4,215,094 ( 264.7 ) — — — ( 264.7 ) — ( 264.7 ) Distributions to noncontrolling interests — ( 1.2 ) ( 1.2 ) Cash dividends paid to common shareholders ($ 0.20 per share) — — — — — — ( 29.8 ) — ( 29.8 ) — ( 29.8 ) Consolidated net (loss) income ( 0.6 ) — — — — — 296.6 — 296.6 2.5 299.1 PreOmics Acquisition - other shareholders 6.8 — — — — — Acquisition of minority interest — — ( 0.3 ) ( 0.2 ) ( 0.5 ) ( 2.6 ) ( 3.1 ) Other comprehensive (loss) income ( 0.3 ) — — — — — — 23.2 23.2 ( 0.9 ) 22.3 Balance at December 31, 2022 $ 6.1 147,023,144 $ 1.7 28,366,442 $ ( 1,085.0 ) $ 256.3 $ 1,926.0 $ 14.8 $ 1,113.8 $ 11.9 $ 1,125.7 Stock options exercised — 285,030 — — — 9.7 — — 9.7 — 9.7 Restricted stock units vested — 215,959 — — — ( 3.4 ) — — ( 3.4 ) — ( 3.4 ) Stock-based compensation 0.1 — — — — 17.6 — — 17.6 — 17.6 Shares repurchased — ( 2,412,437 ) 2,412,437.0 ( 152.2 ) ( 1.2 ) — — ( 153.4 ) — ( 153.4 ) Employee stock purchase plan — 53,130 — — — 3.9 — — 3.9 — 3.9 Shares repurchased — — — — — — — — — — Cash dividends paid to common shareholders ($ 0.20 per share) — — — — — — ( 29.4 ) — ( 29.4 ) — ( 29.4 ) Proceeds from the sale of non- controlling interests, net of loan receivable of $ 0.3 5.0 5.0 Other shareholders of majority-owned acquisitions 12.6 — — — — — — — — - Distributions to noncontrolling interest — — — — — — — — — ( 2.0 ) ( 2.0 ) Consolidated net (loss) income ( 0.7 ) — — — — — 427.2 — 427.2 2.0 429.2 Other comprehensive income (loss) 0.6 — ( 8.8 ) ( 8.8 ) 0.5 ( 8.3 ) Balance at December 31, 2023 $ 18.7 145,164,826 $ 1.7 30,778,879 $ ( 1,237.2 ) $ 282.9 $ 2,323.8 $ 6.0 $ 1,377.2 $ 17.4 $ 1,394.6 The accompanying notes are an integral part of these consolidated financial statements. 57 BRUKER CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2023 2022 2021 Cash flows from operating activities: Consolidated net income $ 428.5 $ 298.5 $ 280.6 Adjustments to reconcile consolidated net income to cash flows from operating activities: Depreciation and amortization 114.9 88.8 89.1 Stock-based compensation expense 24.0 27.7 17.2 Deferred income taxes ( 24.4 ) ( 14.8 ) ( 5.8 ) Bargain purchase gain on acquisition ( 144.1 ) — — Impairment of minority investments and other long-lived assets 22.2 1.6 — Gain on sale of minority investment ( 6.8 ) — — Gain on sale of property, plant and equipment ( 8.5 ) ( 10.1 ) ( 1.1 ) Other non-cash expenses, net 32.1 26.8 28.0 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable ( 0.9 ) ( 67.9 ) ( 95.3 ) Inventories ( 125.0 ) ( 137.9 ) ( 67.0 ) Accounts payable and accrued expenses 23.1 13.2 61.4 Income taxes payable 43.7 ( 6.8 ) ( 44.3 ) Deferred revenue and customer advances ( 0.6 ) 52.7 38.8 Other changes in operating assets and liabilities ( 28.1 ) 2.6 ( 19.2 ) Net cash provided by operating activities 350.1 274.4 282.4 Cash flows from investing activities: Purchases of property, plant and equipment ( 106.9 ) ( 129.2 ) ( 92.0 ) Purchases of short-term investments — — ( 148.0 ) Maturity of short-term investments — 100.0 98.2 Proceeds from sale of minority investment 14.8 — — Cash paid for minority investments ( 24.8 ) ( 60.2 ) ( 0.5 ) Cash paid for acquisitions, net of cash acquired ( 226.6 ) ( 182.3 ) ( 65.0 ) Proceeds from sales of property, plant and equipment 11.1 13.9 4.9 Net proceeds from cross-currency swap agreements 6.4 6.2 10.0 Net cash used in investing activities ( 326.0 ) ( 251.6 ) ( 192.4 ) Cash flows from financing activities: Proceeds from issuance (repayment) of long-term debt ( 6.5 ) 0.3 490.5 Repayment of 2012 Note Purchase Agreement — ( 105.0 ) — Repayment of 2019 Term Loan Agreement ( 15.0 ) ( 6.0 ) ( 0.8 ) Payment of deferred financing costs — — ( 0.1 ) Proceeds from issuance of common stock, net 9.5 2.8 7.0 Payment of contingent consideration ( 2.7 ) ( 2.7 ) ( 0.4 ) Payment of dividends to common shareholders ( 29.4 ) ( 29.8 ) ( 24.2 ) Repurchase of common stock ( 152.3 ) ( 263.1 ) ( 153.3 ) Proceeds from (payment for) the sale (purchase) of noncontrolling interests 3.0 ( 11.8 ) — Net cash (used in) provided by financing activities ( 193.4 ) ( 415.3 ) 318.7 Effect of exchange rate changes on cash, cash equivalents and restricted cash 12.2 ( 30.5 ) ( 22.5 ) Net change in cash, cash equivalents and restricted cash ( 157.1 ) ( 423.0 ) 386.2 Cash, cash equivalents and restricted cash at beginning of year 648.7 1,071.7 685.5 Cash, cash equivalents and restricted cash at end of year $ 491.6 $ 648.7 $ 1,071.7 Supplemental cash flow information: Cash paid for interest $ 33.7 $ 24.3 $ 19.6 Cash paid for taxes $ 96.6 $ 147.4 $ 145.5 Restricted cash period beginning balance $ 3.2 $ 3.5 $ 3.7 Restricted cash period ending balance $ 3.3 $ 3.2 $ 3.5 The accompanying notes are an integral part of these consolidated financial statements. 58 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business 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. The Company has four reportable segments, Bruker Scientific Instruments (BSI) BioSpin, BSI CALID, BSI Nano and Bruker Energy & Supercon Technologies (BEST). 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; pharmaceutical, biotechnology and diagnostics companies; contract research organizations; nonprofit and for-profit forensics laboratories; agriculture, food and beverage safety laboratories; environmental and clinical microbiology laboratories; hospitals and government departments and agencies. The BSI Nano Segment designs, manufactures and distributes advanced X-ray instruments; atomic force microscopy instrumentation; advanced fluorescence optical microscopy instruments; analytical tools for electron microscopes and X-ray metrology; defect-detection equipment for semiconductor process control; handheld, portable and mobile X-ray fluorescence spectrometry instruments; spark optical emission spectroscopy systems; chipcytometry products and services for targeted spatial proteomics, multi-omic services, and products and services for spatial genomics research. 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. 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. 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all majority and wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. 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’ equity. 59 Redeemable Noncontrolling Interests The Company has agreements with noncontrolling interest holders that provide the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, their remaining minority interest at a contractually defined redemption value. These rights can be accelerated in certain events. 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. Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings. During the years ended December 31, 2023, 2022 and 2021, carrying value adjustments were immaterial. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. 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, 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 The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that, other than as reported herein, there are no material recognized or unrecognized subsequent events. Cash and Cash Equivalents Cash and cash equivalents primarily include cash on hand, money market funds and time deposits with original maturities of three months or less at the date of acquisition. Time deposits represent amounts on deposit in banks and temporarily invested in instruments with maturities of three months or less at the time of purchase. Certain of these investments represent deposits which are not insured by the Federal Deposit Insurance Corporation or any other government agency. Cash equivalents are carried at cost, which approximates fair value. Short-term Investments Short-term investments represent time and call deposits maturing within twelve months and with original maturities of greater than three months at the date of acquisition. Short-term investments are classified as available-for-sale and are reported at fair value. 60 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. 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. Provisions for doubtful accounts are recorded in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Derivative Financial Instruments and Hedging Activities All derivatives, whether designated in a hedging relationship or not, are recorded on the consolidated balance sheets at fair value. The accounting for changes in fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based on the exposure being hedged, as a fair value hedge, cash flow hedge, foreign currency hedge or a hedge of a net investment in a foreign operation. If a derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Derivatives that are not designated as hedges are recorded at fair value through earnings. The Company presents the cross-currency swap periodic settlements in investing activities and the interest rate swap periodic settlements in operating activities in the consolidated statements of cash flows. The Company records derivative assets and liabilities on a gross basis in the consolidated balance sheets. Fair Value of Financial Instruments The Company applies the following hierarchy to determine the fair value of financial instruments, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The levels in the hierarchy are defined as follows: • Level 1: Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The valuation techniques that may be used by the Company to determine the fair value of Level 2 and Level 3 financial instruments are the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value based on current market expectations about those future amounts, including present value techniques, option-pricing models and the excess earnings method. 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, 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. Derivative assets and liabilities are measured at fair value on a recurring basis. 61 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, 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. Inventories 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. All inventories are stated at the lower of cost and net realizable value. Cost is determined principally by the first-in, first-out method for a majority of subsidiaries and by average-cost for certain other subsidiaries. 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 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. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Major improvements that extend the useful lives are capitalized while expenditures for maintenance, repairs and minor improvements are charged to expense as incurred. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in the consolidated statements of income and comprehensive income. Depreciation and amortization are calculated on a straight-line basis over the estimated useful lives of the assets as follows: Estimated Useful Life Buildings 25 to 40 years Machinery and equipment 3 to 10 years Computer and fixtures 3 to 5 years Furniture and fixtures 3 to 10 years Leasehold improvements Lesser of 15 years or the remaining lease term Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, the Company must make assumptions regarding the estimated future cash flows, including forecasted revenue growth, to determine the fair value of these assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges against these assets in the reporting period in which the impairment is determined. The Company tests goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. The Company has the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment. 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 62 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. The Company determines the fair value of reporting units using a weighting of both the market and the income methodologies. 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. 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. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment on an annual basis, or when indicators of impairment are identified. When the IPR&D project is complete, it is reclassified as a finite-lived intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned before completion or is otherwise determined to be impaired, the value of the asset or the amount of the impairment is charged to the consolidated statements of income and comprehensive income in the period the project is abandoned or impaired. Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful lives as follows: Estimated Useful Life Existing technology and related patents 3 to 15 years Customer relationships 5 to 15 years Trade names 5 to 15 years 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. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their fair values. Impairment losses are charged to the consolidated statements of income and comprehensive income for the difference between the fair value and carrying value of the asset. Warranty Costs and Deferred Revenue The Company typically provides a one-year parts and labor warranty with the purchase of equipment. 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 assesses the adequacy of the warranty reserve on a quarterly basis and adjusts the amount as necessary. If the historical data used to calculate the adequacy of the warranty reserve is not indicative of future requirements, additional or reduced warranty reserves may be required. The Company also offers to its customers extended warranty and service agreements extending beyond the initial warranty for a fee. These fees are recorded as deferred revenue and recognized ratably into income over the life of the extended warranty contract or service agreement. Income Taxes 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. 63 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. 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. The Company includes accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax provision. Customer Advances 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: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied. 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. 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. In addition, certain arrangements to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion. For performance obligations recognized over time, revenue is measured by progress toward completion of the performance obligation that reflects the transfer of control. Typically, progress is measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs upon completion as this best depicts the transfer of control to the customer. Application of the cost-to-cost method requires the Company to make reasonable estimates of the extent of progress toward completion and the total costs the Company expects to incur. Losses are recorded immediately when the Company estimates that contracts will ultimately result in a loss. Changes in the estimates could affect the timing of revenue recognition. The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative costs. 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. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer. The Company recognizes revenue from systems sales upon transfer of control in an amount that reflects the consideration it expects to receive. Transfer of control generally occurs upon shipment, or for certain systems, based upon customer acceptance for a system once delivered and installed at a customer facility. For systems that include customer-specific acceptance criteria, the Company 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. For systems that require installation and where system revenue is recognized upon shipment, the standalone selling price of installation is deferred until customer acceptance. Revenue from accessories and parts is generally recognized based on shipment. Service revenue is recognized as the services are performed or ratably over the contractual obligation and includes maintenance contracts, extended warranties, training, application support and on-demand services. 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 64 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. Typically, revenue is recognized within one year of receiving an advance deposit. 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. Contract Assets and Liabilities Contract assets represent unbilled receivables when revenue recognized exceeds the amount billed to the customer, and the right to payment is not just subject to the passage of time. Contract assets typically result from system revenue recorded where a portion of the transaction price is not billable until a future event, such as customer acceptance, or from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis as revenue exceeds the amount billed to the customer. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. Contract liabilities consist of customer advances, deferred revenue and billings in excess of revenue from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis. Contract liabilities are classified as current or long-term based on the timing of when the Company expects to recognize revenue. 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. Leases 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. Leases with an initial term of 12 months or less are directly expensed as incurred. 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. The remaining lease term ranges from 2024 to 2039, with some leases including an option to extend the lease for varying periods of time or to terminate prior to the end of the lease term. Certain lease agreements contain provisions for future rent increases. Lease payments included in the measurement of the lease liability comprise fixed payments, future rent increases tied to an index or rate, and the exercise price of a Company option to purchase the underlying asset if the Company is reasonably certain to exercise the option. 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. The lease term includes the non-cancelable period of the lease, plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. The interest rate implicit in lease contracts is typically not readily determinable, therefore an incremental borrowing rate is used to calculate the lease liability. The incremental borrowing rate is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as prepayments, lease incentives received, or initial direct costs paid. Shipping and Handling Costs The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Shipping and handling costs were $ 40.3 million, $ 39.4 million and $ 36.3 million in the years ended December 31, 2023, 2022 and 2021, respectively. Amounts billed to customers in connection with these costs are included in total revenues. 65 Research and Development The Company commits substantial capital and resources to internal and collaborative research and development projects in order to provide innovative products and solutions to its customers. The Company conducts research primarily to enhance system performance and improve the reliability of existing products, and to develop revolutionary new products and solutions. Research and development costs are expensed as incurred and include salaries, wages and other personnel related costs, material costs and depreciation, consulting costs and facility costs. Capitalized Software 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; however, to date such amounts have not been material. Advertising The Company expenses advertising costs as incurred. Advertising expenses were $ 23.7 million, $ 19.3 million and $ 13.8 million during the years ended December 31, 2023, 2022 and 2021, respectively. Stock-Based Compensation 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. The determination of the fair value of stock-based payment awards using the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rates and expected dividends. Risk-free interest rates are based on the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected life assumption. 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. The Company utilizes an estimated forfeiture rate derived from an analysis of historical data. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below: 2023 2022 2021 Risk-free interest rates 4.28 % 3.03 % 0.62 % Expected life 4.5 years 4.4 years 4.4 years Volatility 37 % 36 % 34 % Expected dividend yield 0.30 % 0.32 % 0.20 % Weighted-average fair value per share $ 23.02 $ 19.68 $ 21.69 Stock-based compensation for restricted stock awards and restricted stock units is expensed ratably over the vesting period based on the grant date fair value. Earnings Per Share Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net income attributable to Bruker Corporation, adjusted to reflect changes in the redemption value of the redeemable noncontrolling interest, by the weighted-average shares outstanding during the period. The diluted net income per share computation includes the effect of shares which would be issuable upon the exercise of outstanding stock options and the vesting of restricted stock, reduced by the number of shares which are assumed to be purchased by the Company under the treasury stock method. There was no redemption value adjustment of the redeemable noncontrolling interest for the years ended December 31, 2023, 2022 and 2021. 66 Post Retirement Benefit Plans The Company recognizes the over-funded or under-funded status of defined benefit pension and other post retirement defined benefit plans as an asset or liability, respectively, in its consolidated balance sheets and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income. 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. 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. 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’ 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’ 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. 67 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, 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. Supply shortages and longer lead teams for components used in the Company's products, including limited source components, has resulted and may continue to cause disruptions to the Company’s production activities, which has had and may continue to have an adverse effect on the Company’s financial condition or result of operations. 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, 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. On an ongoing basis the Company evaluates estimates, judgments and methodologies. Changes in estimates are recorded in the period in which they become known. 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. 68 3. 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. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify that certain optional expedients and exceptions under the reference rate reform guidance for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in the reference rate reform guidance, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. This temporary guidance is effective for all entities as of March 12, 2020, through December 31, 2023. The Company elected to apply this guidance for all contract modifications or eligible hedging relationships during that time period subject to certain criteria. 4. Revenue The following table presents the Company’s revenues by Segment for the years ended December 31 (in millions): 2023 2022 2021 Revenue by Segment: BSI BioSpin $ 798.5 $ 696.7 $ 691.0 BSI CALID 960.4 822.2 819.6 BSI Nano 941.9 787.0 697.5 BEST 280.7 237.1 223.8 Eliminations (a) ( 17.0 ) ( 12.3 ) ( 14.0 ) Total revenue $ 2,964.5 $ 2,530.7 $ 2,417.9 (a) Represents corporate costs and eliminations not allocated to the reportable segments. 69 Revenue for the Company recognized at a point in time versus over time is as follows for the years ended December 31 (in millions): 2023 2022 2021 Revenue recognized at a point in time $ 2,575.3 $ 2,204.7 $ 2,104.7 Revenue recognized over time 389.2 326.0 313.2 Total revenue $ 2,964.5 $ 2,530.7 $ 2,417.9 Remaining Performance Obligations Remaining performance obligations represent the aggregate transaction price allocated to a promise to transfer a good or service that is fully or partially unsatisfied at the end of the period. As of December 31, 2023, remaining performance obligations were approximately $ 2,226.7 million. 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. Billing often occurs subsequent to revenue recognition, resulting in contract assets. 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. 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. The balance of contract liabilities as of December 31, 2023, and December 31, 2022, was $ 491.4 million and $ 471.7 million, respectively. The increase in the contract liability balance during the year ended December 31, 2023, is primarily a result of new performance obligations entered into during the period and delays in certain system installations due to supply chain and logistics challenges. Approximately $ 342.9 million of the contract liability balance on December 31, 2022, was recognized as revenue during the year ended December 31, 2023. 5. Other Current Assets Other current assets consisted of the following (in millions): December 31, 2023 December 31, 2022 Unbilled and notes receivable $ 83.9 $ 60.8 Income and other taxes receivable 45.9 61.8 Prepaid expenses 26.7 24.3 Deposits with vendors 28.8 19.0 Interest rate cross-currency swap agreements 12.0 14.8 Other assets 18.3 12.8 Other current assets $ 215.6 $ 193.5 70 6. Acquisitions 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. 2023 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. Segment BSI NANO Consideration Transferred: Cash paid $ 121.2 Cash acquired ( 11.8 ) Total consideration transferred $ 109.4 Allocation of Consideration Transferred: Accounts receivable $ 5.6 Inventories 42.1 Other current assets 7.6 Property, plant and equipment 33.5 Deferred tax assets 182.7 Other assets 24.3 Intangible assets: Technology 24.0 Customer relationships 8.0 Liabilities assumed ( 74.3 ) Total consideration allocated $ 253.5 Bargain purchase gain $ 144.1 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. 71 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 Pro forma Adjustments After Adjustments Revenue $ 3,005.9 $ — $ 3,005.9 Net income (loss) $ 285.0 $ ( 2.9 ) $ 282.1 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. 72 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 Zontal Inc. Miro Analytical AG Segment BSI CALID BSI BioSpin BSI CALID Consideration Transferred: Cash paid $ 73.6 $ 14.8 $ 8.6 Cash acquired ( 9.5 ) ( 0.3 ) ( 0.5 ) Holdback 0.2 — 1.0 Fair value of hybrid financial instruments - founders — 18.5 9.3 Fair value of redeemable noncontrolling interest - other shareholders 2.5 — 0.5 Fair value of contingent consideration — 0.5 — Total consideration transferred $ 66.8 $ 33.5 $ 18.9 Allocation of Consideration Transferred: Accounts receivable $ 3.6 $ 0.7 $ — Inventories 0.4 — 0.8 Other current assets 0.9 0.3 — Property, plant and equipment 8.0 — 0.1 Other assets 4.3 2.5 — Intangible assets: Technology 10.2 5.8 8.9 Customer relationships 13.8 4.0 0.3 Backlog 0.8 0.2 — Trade name 2.7 1.1 0.2 Goodwill 47.5 25.9 11.1 Liabilities assumed (a) ( 25.4 ) ( 7.0 ) ( 2.5 ) Total consideration allocated $ 66.8 $ 33.5 $ 18.9 (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. 73 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. Zontal, Inc. 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. 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 founder’s 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. 74 The rights associated with the other noncontrolling interest holders 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 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 Segment Total Consideration Cash Consideration Acquifer Imaging GmbH and Deltabyte GmbH January 4, 2023 BSI NANO $ 7.6 $ 7.6 Pinpoint Testing LLC March 28, 2023 BSI CALID 8.6 3.6 Fasmatech Science SA March 3, 2023 BSI CALID 10.3 8.4 Interherence GmbH July 3, 2023 BSI CALID 17.3 3.9 Other majority owned acquisitions Various Various 0.9 0.9 $ 44.7 $ 24.4 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): Name Acquisition / Investment Financial Statement Classification Date Acquired Segment Total Consideration Cash Consideration Tome Biosciences Investment Other long-term assets July 26, 2023 Corporate $ 10.0 $ 10.0 Other Investments Investment Other long-term assets Various Various 14.8 14.8 $ 24.8 $ 24.8 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. 75 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. 76 2022 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): PreOmics GmbH Optimal Industrial Automation and Technologies Inscopix, Inc. Segment BSI CALID BSI BioSpin BSI Nano Consideration Transferred: Cash paid $ 52.1 $ 40.3 $ 101.5 Cash acquired ( 16.0 ) ( 6.2 ) ( 12.1 ) Fair value of hybrid financial instruments - founders 20.9 — — Fair value of redeemable noncontrolling interest - other shareholders 6.8 — — Fair value of contingent consideration — 0.4 — Working capital adjustment — — 0.6 Total consideration transferred $ 63.8 $ 34.5 $ 90.0 Allocation of Consideration Transferred: Accounts receivable $ 0.4 $ 1.9 $ 3.2 Inventories 0.6 — 2.5 Other current assets 0.7 0.8 0.9 Property, plant and equipment 1.3 0.1 0.5 Other assets 0.4 0.8 4.7 Intangible assets: Technology 12.5 5.9 26.6 Customer relationships 6.9 12.9 20.8 Backlog — 1.1 — Trade name 1.9 1.2 3.2 Goodwill 47.0 18.6 52.2 Liabilities assumed ( 7.9 ) ( 8.8 ) ( 24.6 ) Total consideration allocated $ 63.8 $ 34.5 $ 90.0 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. PreOmics is located in Munich, Germany and was integrated into 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 25.85 % of PreOmics for cash at a contractually defined redemption value for both the original founders and other shareholders of PreOmics, exercisable beginning in 2026. 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 can be accelerated, 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 founders 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 rights associated with the other noncontrolling interest shareholders are contingently redeemable at the option. As redemption of the rights is 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 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. 77 The Company completed the fair value allocation during 2022. The amortization period for the intangible assets acquired is nine years for technology, and twelve years for the trade name and customer relationships. Optimal Industrial Automation and Technologies On April 1, 2022, the Company completed a share purchase agreement to acquire 100 % of the outstanding stock of Optimal Industrial Technologies Limited (“OIT”) and Optimal Industrial Automation Limited (“OIA”), collectively, “Optimal”. 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. The Company accounted for the purchase of Optimal under the acquisition method. 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 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 amortized backlog through the second quarter of 2023. Inscopix, Inc. On November 7, 2022, the Company completed a share purchase agreement to acquire 100 % of the outstanding stock of Inscopix, Inc. (“Inscopix”). The purchase price for the outstanding shares of Inscopix was $ 101.5 million. Inscopix is a private company founded in 2011 from Stanford University research that led to the invention of the miniscope. The innovation at the core of the Inscopix brain-mapping platform is the integration and miniaturization of the benchtop fluorescence microscope into a 2-gram device that can be mounted onto the head of a freely behaving animal to observe its brain activity. These miniscopes are empowering advances in neuroscience research and preclinical research for the development of transformational therapeutics. Inscopix is located in Mountain View, California and will be integrated into the BSI Nano Segment. The Company accounted for the purchase of Inscopix under the acquisition method. 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. The following table reflects the consideration transferred and the respective reportable segment for these acquisitions (in millions): Name of Acquisition Date Acquired Segment Total Consideration Cash Consideration Prolab Instruments GmbH January 17, 2022 BSI CALID $ 5.7 $ 5.5 PepSep Holding ApS February 1, 2022 BSI CALID 4.1 2.8 IonSense, Inc April 5, 2022 BSI CALID 9.5 8.1 Neurescence, Inc. November 30, 2022 BSI Nano 7.5 7.1 $ 26.8 $ 23.5 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): Name Acquisition / Investment Financial Statement Classification Date Acquired Segment Total Consideration Cash Consideration PrognomiQ, Inc Investment Other long-term assets February 16, 2022 BSI CALID $ 12.0 $ 12.0 Tofwerk, AG Investment Other long-term assets April 28, 2022 BSI CALID 18.6 18.6 Kiyatec, Inc Investment Other long-term assets November 23, 2022 BSI CALID 9.3 9.3 Other Investments Investment Other long-term assets Various BSI CALID 20.3 20.3 $ 60.2 $ 60.2 78 7. 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): Balance at December 31, 2020 $ 3.0 Additions 2.2 Deductions ( 1.0 ) Balance at December 31, 2021 4.2 Additions 1.9 Deductions ( 0.8 ) Balance at December 31, 2022 5.3 Additions 1.3 Deductions ( 2.0 ) Balance at December 31, 2023 $ 4.6 8. Inventories Inventories consisted of the following (in millions): 2023 2022 Raw materials $ 371.2 $ 300.9 Work-in-process 314.9 278.7 Finished goods 183.9 128.2 Demonstration units 98.3 92.3 Total Inventories $ 968.3 $ 800.1 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. 9. Property, Plant and Equipment, Net The following is a summary of property, plant and equipment, net by major asset class (in millions): 2023 2022 Land $ 38.9 $ 36.6 Building and leasehold improvements 498.1 434.5 Machinery, equipment, software and furniture and fixtures 586.9 462.6 1,123.9 933.7 Less accumulated depreciation and amortization ( 524.2 ) ( 446.7 ) Property, plant and equipment, net $ 599.7 $ 487.0 Depreciation expense, which includes the amortization of leasehold improvements, for the years ended December 31, 2023, 2022 and 2021 was $ 67.8 million, $ 51.6 million and $ 51.8 million, respectively. 79 10. Goodwill and Intangible Assets Goodwill The following table sets forth the changes in the carrying amount of goodwill by segment (in millions): BSI BioSpin BSI CALID BSI Nano BEST Total Balance at December 31, 2020 $ 30.8 $ 61.3 $ 228.0 $ 0.3 $ 320.4 Current period additions/adjustments 12.8 0.6 16.6 — 30.0 Foreign currency impact ( 1.2 ) ( 4.0 ) ( 5.7 ) — ( 10.9 ) Balance at December 31, 2021 42.4 57.9 238.9 0.3 339.5 Current period additions/adjustments 18.6 55.3 58.0 — 131.9 Foreign currency impact ( 3.2 ) ( 5.8 ) ( 4.8 ) — ( 13.8 ) Balance at December 31, 2022 57.8 107.4 292.1 0.3 457.6 Current period additions/adjustments 25.8 83.8 ( 0.5 ) — 109.1 Foreign currency impact 2.9 10.3 2.7 — 15.9 Balance at December 31, 2023 $ 86.5 $ 201.5 $ 294.3 $ 0.3 $ 582.6 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 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 change in the assessment date does not delay, accelerate or avoid a potential impairment charge. The Company has determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been used as of each October 1st of prior reporting periods without the use of hindsight. As such, the Company prospectively applied the change in annual goodwill impairment testing date from October 1, 2022. No impairment was recognized during the years ended December 31, 2023, 2022, or 2021. Intangible Assets The following is a summary of intangible assets (in millions): 2023 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Existing technology and related patents $ 428.3 $ ( 250.4 ) $ 177.9 $ 354.7 $ ( 219.0 ) $ 135.7 Customer relationships 227.4 ( 93.5 ) 133.9 192.3 ( 72.1 ) 120.2 Trade names 28.4 ( 10.1 ) 18.3 22.3 ( 7.4 ) 14.9 Other 2.2 ( 1.8 ) 0.4 1.0 ( 0.9 ) 0.1 Intangible assets $ 686.3 $ ( 355.8 ) $ 330.5 $ 570.3 $ ( 299.4 ) $ 270.9 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): 2024 $ 46.9 2025 46.4 2026 43.7 2027 36.6 2028 35.9 2029 31.6 Thereafter 86.4 Total $ 327.5 80 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. 11. Other Current Liabilities The following is a summary of other current liabilities (in millions): 2023 2022 Accrued compensation 166.5 136.1 Accrued warranty 30.0 24.7 Contingent consideration 7.2 8.1 Income taxes payable 138.7 85.5 Other taxes payable 18.7 18.5 Derivative liabilities 0.9 0.9 Operating lease liabilities 23.3 16.4 Legal and professional fees 17.1 14.2 Hybrid instruments liability 14.1 — Restructuring liabilities 12.5 0.6 Other accrued expenses 49.2 42.0 Other current liabilities $ 478.2 $ 347.0 The following table sets forth the changes in accrued warranty (in millions): Balance at December 31, 2020 $ 20.3 Accruals for warranties issued during the year 23.4 Settlements of warranty claims ( 19.0 ) Foreign currency impact ( 0.9 ) Balance at December 31, 2021 23.8 Accruals for warranties issued during the year 12.9 Settlements of warranty claims ( 10.9 ) Foreign currency impact ( 1.1 ) Balance at December 31, 2022 24.7 Accruals for warranties issued during the year 16.8 Settlements of warranty claims ( 12.4 ) Foreign currency impact 0.9 Balance at December 31, 2023 $ 30.0 81 12. Debt The Company’s debt obligations consist of the following (in millions): 2023 2022 EUR notes (in U.S. Dollars) under the 2021 Note Purchase Agreement due 2031 $ 165.8 $ 160.6 CHF notes (in U.S. Dollars) under the 2021 Note Purchase Agreement due 2031 356.9 325.1 CHF notes (in U.S. Dollars) under the 2019 Note Purchase Agreement due 2029 353.3 321.9 U.S. Dollar notes under the 2019 Term Loan Agreement annual payments of $ 15.0 and balloon payment due 2026 278.3 293.3 U.S. Dollar notes under the 2012 Note Purchase Agreement due 2024 100.0 100.0 Unamortized debt issuance costs ( 1.3 ) ( 1.7 ) Other loans 7.6 5.9 Total notes and loans outstanding 1,260.6 1,205.1 Finance lease obligations 20.9 14.1 Total debt 1,281.5 1,219.2 Current portion of long-term debt and finance lease obligations ( 121.2 ) ( 18.7 ) Total long-term debt, less current portion $ 1,160.3 $ 1,200.5 2021 Note Purchase Agreement 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. Additionally, so long as any 2021 Senior Notes are outstanding, the Company may not permit (i) its leverage ratio (as determined pursuant to the 2021 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 2021 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2021 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 2021 Note Purchase Agreement). 2019 Transactions On December 11, 2019, the Company entered into (1) a revolving credit agreement to establish a new revolving credit facility in the aggregate principal amount of $ 600 million; (2) a term loan agreement to establish a new term loan facility in the aggregate principal amount of $ 300 million; 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. Each of the revolving credit agreements, term loan agreement and note purchase agreements are described below. 82 2019 Revolving Credit Agreement On December 11, 2019, the Company entered into a new credit agreement, referred to as the 2019 Revolving Credit Agreement. The 2019 Revolving Credit Agreement provides for a five-year revolving credit facility in the U.S. Dollar equivalent amount of $ 600 million, comprised of sub-facilities for revolving loans, swing-line loans, letters of credit and foreign borrowings. (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. 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 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. 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. The following is a summary of the maximum commitments and the net amounts available to the Company under the 2019 Revolving Credit Agreement and other lines of credit with various financial institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly (dollars in millions): Weighted Average Interest Rate Total Amount Committed by Lenders Outstanding Borrowings Outstanding Letters of Credit Total Committed Amounts Available 2019 Credit Agreement (a) 0.15 % $ 600.0 $ — $ 0.4 $ 599.6 Bank guarantees and working capital line varies 153.6 — 153.6 — Total revolving lines of credit $ 753.6 $ — $ 154.0 $ 599.6 (a) On January 12, 2024, the Company borrowed CHF 230 million under the Company’s 2019 Revolving Credit Agreement. 2019 Term Loan Agreement On December 11, 2019, the Company, together with certain of its subsidiaries, as borrowers, entered into a term loan agreement, referred to as Term Loan Agreement with a bank consortium. 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. 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. 83 2019 Note Purchase Agreement On December 11, 2019, the Company entered into a note purchase agreement, referred to as the 2019 Note Purchase Agreement, with a group of institutional accredited investors. 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. 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. Additionally, so long as any 2019 Senior Notes are outstanding, the Company may not permit (i) its leverage ratio (as determined pursuant to the 2019 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 2019 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2019 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 2019 Note Purchase Agreement). 2012 Note Purchase Agreement In January 2012, the Company entered into a note purchase agreement, referred to as the 2012 Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the 2012 Note Purchase Agreement, the Company issued and sold $ 240.0 million of senior notes, referred to as the 2012 Senior Notes, which consist of the following: • $ 20 million 3.16 % Series 2012A Senior Notes, Tranche A, due January 18, 2017; • $ 15 million 3.74 % Series 2012A Senior Notes, Tranche B, due January 18, 2019; • $ 105 million 4.31 % Series 2012A Senior Notes, Tranche C, due January 18, 2022; and • $ 100 million 4.46 % Series 2012A Senior Notes, Tranche D, due January 18, 2024. Principal amounts of Tranches A, B and C together with any accrued interest thereon were paid on their respective due dates in accordance with the 2012 Note Purchase Agreement. 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. 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 84 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. 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): 2024 $ 116.4 2025 16.9 2026 249.5 2027 1.6 2028 0.9 Thereafter 876.6 Total $ 1,261.9 As of December 31, 2023, the Company has several cross-currency and interest rate swap agreements with a notional value of $ 139.1 million of U.S. to Swiss Franc and a notional value of $ 239.1 million of U.S. 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 $ 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. In June 2022, the Company entered into the First Amendment to the 2019 Credit Agreement to modify certain contract definitions within the agreement. Primarily, the current London Interbank Offered Rate (“LIBOR”) rates were changed to new alternative base rates for the respective currencies. As part of the change any related items, such as fall back rates and day conventions were also changed. No other material terms were modified with this agreement. In September 2022, the Company entered into the Second Amendment to the 2019 Term Loan Agreement and the Second Amendment to the 2019 Credit Agreement (collectively, the "Amendments"), to modify certain aspects of the 2019 Term Loan Agreement and 2019 Credit Agreement, respectively. The Amendments modify the reference rate thereunder from LIBOR to Secured Overnight Financing Rate (“SOFR”). There were no other changes to the 2019 Term Loan Agreement or 2019 Credit Agreement as a result of the Amendments. During 2022, the Company adopted the practical expedient for Reference Rate Reform related to its debt arrangements and as such, these amendments are treated as a continuation of the existing debt agreement and no gain or loss on the modification was recorded. The Company did not record any gains or losses on the conversion of the reference rate for Borrowings under the Term Loan Agreement from LIBOR to SOFR. 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. 85 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; and • 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 86 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. 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. 13. 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 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Time deposits and money market funds $ 226.9 $ — $ 226.9 $ — Interest rate and cross-currency swap agreements 20.3 — 20.3 — Forward currency contracts 1.3 — 1.3 — Embedded derivatives in purchase and delivery contracts 1.2 — 1.2 — Fixed price commodity contracts 0.3 — 0.3 — Debt securities available for sale 1.2 — — 1.2 Total assets recorded at fair value $ 251.2 $ — $ 250.0 $ 1.2 Liabilities: Contingent consideration $ 12.3 $ — $ — $ 12.3 Hybrid instruments liabilities 70.5 — — 70.5 Liability awards 0.7 — — 0.7 Interest rate and cross-currency swap agreements 26.8 — 26.8 — Forward currency contracts 0.6 — 0.6 — Total liabilities recorded at fair value $ 110.9 $ — $ 27.4 $ 83.5 87 December 31, 2022 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Time deposits and money market funds $ 198.7 $ 34.0 $ 164.7 $ — Interest rate and cross-currency swap agreements 37.8 — 37.8 — Forward currency contracts 0.6 — 0.6 — Embedded derivatives in purchase and delivery contracts 0.1 — 0.1 — Fixed price commodity contracts 0.6 — 0.6 — Debt securities available for sale 10.5 — — 10.5 Total assets recorded at fair value $ 248.3 $ 34.0 $ 203.8 $ 10.5 Liabilities: Contingent consideration $ 9.6 $ — $ — $ 9.6 Hybrid instruments liabilities 34.2 — — 34.2 Liability awards 1.1 — — 1.1 Interest rate and cross-currency swap agreements 12.2 — 12.2 — Forward currency contracts 0.3 — 0.3 — Total liabilities recorded at fair value $ 57.4 $ — $ 12.5 $ 44.9 Derivative financial instruments are classified within level 2 because there is not an active market for each derivative contract. However, the inputs used to calculate the value of the instruments are obtained from active markets. The Company measures certain assets and liabilities at fair value with changes in fair value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. 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 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. Debt securities consist of investments in redeemable preferred stock. Debt securities are classified as either current or long-term investments based on their contractual maturities unless the Company intends to sell an investment within the next twelve months, in which case it is classified as current on the consolidated balance sheets. Debt securities are classified as available for sale and are carried at fair value. Contingent consideration recorded within other current and other long-term liabilities represents the estimated fair value of future payments to the former shareholders as part of certain acquisitions. 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 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. The income approach method involves calculating the earnout payment based on the forecasted cash flows, adjusting the future earnout payment for the risk of reaching the projected financials, and then discounting the future payments to present value by the counterparty risk. 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. 88 The following table sets forth the changes in contingent consideration liabilities (in millions): Balance at December 31, 2021 $ 6.6 Current period additions 3.6 Current period adjustments 5.6 Current period settlements ( 5.9 ) Foreign currency effect ( 0.3 ) Balance at December 31, 2022 9.6 Current period additions 2.8 Current period adjustments 7.6 Current period settlements ( 8.1 ) Foreign currency effect 0.4 Balance at December 31, 2023 $ 12.3 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 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. The following table sets forth the changes in hybrid instruments liability (in millions): Balance at December 31, 2021 $ 15.6 Current period additions 20.9 Current period adjustments 11.6 Current period settlements ( 11.6 ) Foreign currency effect ( 2.3 ) Balance at December 31, 2022 34.2 Current period additions 36.1 Current period adjustments ( 2.1 ) Foreign currency effect 2.3 Balance at December 31, 2023 $ 70.5 14. Derivative Instruments and Hedging Activities 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. 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. Foreign Exchange Rate Risk Management The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union and Switzerland, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign currency contracts in order to minimize the volatility that fluctuations in currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange 89 for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months, with some agreements extending to longer periods. 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 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 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): December 31, 2023 December 31, 2022 Notional (in USD) Fair Value Notional (in USD) Fair Value Derivatives designated as hedging instruments Interest rate cross-currency swap agreements Other current assets $ 12.0 $ 14.8 Other assets 8.3 23.0 Other long-term liabilities ( 26.8 ) ( 12.2 ) $ 378.3 $ ( 6.5 ) $ 393.3 $ 25.6 Long-term debt Long-term debt 876.0 ( 85.3 ) 807.6 ( 17.0 ) Total derivatives designated as hedging instruments $ 1,254.3 $ ( 91.8 ) $ 1,200.9 $ 8.6 Derivatives not designated as hedging instruments Forward currency contracts Other current assets $ 177.8 $ 1.3 $ 89.8 $ 0.6 Other current liabilities 311.7 ( 0.6 ) 97.4 ( 0.3 ) Embedded derivatives in purchase and delivery contracts Other current assets 25.6 1.2 15.3 0.1 Other current liabilities 0.1 — — — Fixed price commodity contracts Other current assets 8.4 0.3 8.9 0.6 Total derivatives not designated as hedging instruments $ 523.6 $ 2.2 $ 211.4 $ 1.0 Total derivatives $ 1,777.9 $ ( 89.6 ) $ 1,412.3 $ 9.6 90 The following is a summary of the gain (loss) included in the consolidated statements of income and comprehensive income related to the derivative instruments described above (in millions): Year Ended December 31, Financial Statement Classification 2023 2022 2021 Derivatives not designated as hedging instruments Forward currency contracts Interest and other income (expense), net $ 12.4 $ ( 3.2 ) $ ( 5.5 ) Embedded derivatives in purchase and delivery contracts Interest and other income (expense), net 1.1 ( 0.1 ) 0.1 13.5 ( 3.3 ) ( 5.4 ) Derivatives designated as cash flow hedging instruments Interest rate cross-currency swap agreements Interest and other income (expense), net 10.4 0.1 ( 4.7 ) Derivatives designated as net investment hedging instruments Interest rate cross-currency swap agreements Interest and other income (expense), net 7.9 8.5 10.2 Total $ 31.8 $ 5.3 $ 0.1 Year Ended December 31, Financial Statement Classification 2023 2022 2021 Derivatives designated as cash flow hedging instruments Interest rate cross-currency swap agreements Accumulated other comprehensive income, net of tax $ ( 5.5 ) $ 21.2 $ 15.0 Derivatives designated as net investment hedging instruments Interest rate cross-currency swap agreements Accumulated other comprehensive income, net of tax ( 19.5 ) 9.1 25.6 Long-term debt Accumulated other comprehensive income, net of tax ( 52.1 ) 13.9 10.8 ( 71.6 ) 23.0 36.4 Total $ ( 77.1 ) $ 44.2 $ 51.4 91 15. Income Taxes The domestic and foreign components of income before income taxes for the years ended December 31 (in millions): 2023 2022 2021 Domestic $ 0.7 $ ( 13.3 ) $ ( 15.4 ) Foreign 543.5 427.2 409.0 Total income before provision for income taxes $ 544.2 $ 413.9 $ 393.6 The components of the income tax provision for the years ended December 31 (in millions): 2023 2022 2021 Current income tax expense (benefit): Federal $ 2.3 $ ( 10.4 ) $ 1.0 State 2.4 2.5 1.2 Foreign 138.7 135.3 118.0 Total current income tax expense 143.4 127.4 120.2 Deferred income tax expense (benefit): Federal ( 18.1 ) ( 3.1 ) ( 7.8 ) State ( 4.8 ) ( 1.7 ) ( 2.5 ) Foreign ( 2.8 ) ( 6.2 ) 3.1 Total deferred income tax benefit ( 25.7 ) ( 11.0 ) ( 7.2 ) Income tax provision $ 117.7 $ 116.4 $ 113.0 The income tax provision differs from the tax provision computed at the U.S. federal statutory rate due to the following significant components: 2023 2022 2021 Statutory tax rate 21.0 % 21.0 % 21.0 % Foreign tax rate differential 3.5 % 5.2 % 5.2 % Permanent differences 2.8 % 1.1 % 1.2 % U.S. tax on foreign earnings 1.0 % ( 0.1 )% 1.6 % Stock compensation ( 0.3 )% ( 0.6 )% ( 2.5 )% Tax contingencies — 3.3 % 2.6 % Change in tax rates 0.1 % 0.1 % ( 0.1 )% Repatriation of foreign earnings 0.3 % 0.2 % ( 0.4 )% State income taxes, net of federal benefits ( 0.6 )% 0.2 % ( 0.4 )% Research and development credits ( 2.0 )% ( 2.1 )% ( 0.9 )% Tax impact on bargain purchase gain ( 5.6 )% Other 0.1 % ( 0.1 )% 1.2 % Change in valuation allowance for unbenefited losses 1.3 % ( 0.1 )% 0.2 % Effective tax rate 21.6 % 28.1 % 28.7 % 92 The tax effect of temporary items that give rise to significant portions of the deferred tax assets and liabilities are as follows (in millions): 2023 2022 Deferred tax assets: Accrued expenses $ 5.8 $ 4.4 Compensation 20.5 15.3 Section 174 capitalization 50.5 15.8 Disallowed interest carryforwards 20.7 9.1 Net operating loss carryforwards 180.5 21.9 Foreign tax and other tax credit carryforwards 16.7 20.3 Unrealized currency gain/loss 18.6 13.1 Inventory 5.5 1.9 Hedge unrealized FX gain/loss 22.5 — Lease liabilities 22.8 10.5 Other 7.5 4.8 Gross deferred tax assets 371.6 117.1 Less valuation allowance ( 13.8 ) ( 6.6 ) Total deferred tax assets 357.8 110.5 Deferred tax liabilities: Accounts payable 6.6 7.7 Hedge unrealized FX gain/loss — 1.3 Deferred revenue 2.6 0.9 Fixed assets 17.2 10.1 Foreign patent reserves 1.8 2.9 Intangibles 64.1 53.8 Accrued expenses 3.1 1.3 Accrued withholding tax 10.2 7.9 Right-of-use asset 21.5 10.5 Other 1.1 — Total deferred tax liabilities 128.2 96.4 Net deferred tax assets $ 229.6 $ 14.1 The Company uses the liability method to account for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the period in which these differences are expected to affect taxable income. 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. Judgments around realizability depend on the availability and weight of both positive and negative evidence. Changes in the valuation allowance for deferred tax assets were as follows (in millions): Balance at December 31, 2020 $ 6.6 Increases recorded as an expense to income tax provision 0.5 Balance at December 31, 2021 7.1 Decreases recorded for valuation allowance release ( 0.5 ) Balance at December 31, 2022 6.6 Increases recorded as an expense to income tax provision 7.2 Balance at December 31, 2023 $ 13.8 93 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. 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 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. At December 31, 2023 the Company recorded state income and foreign withholding taxes on the cash and liquid assets portion of the unremitted earnings and profits (E&P) of foreign subsidiaries expected to be repatriated from its foreign subsidiaries to the United States, except for amounts from certain subsidiaries, which the Company has asserted to be indefinitely reinvested. Specifically, the Company asserts that a total of $ 3.4 billion of unremitted foreign earnings is 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 $ 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 $ 22.7 Gross increases—tax positions in prior periods 17.8 Gross increases—current period tax positions 10.9 Gross unrecognized tax benefits at December 31, 2021 51.4 Gross decreases—tax positions in prior periods ( 8.2 ) Gross increases—current period tax positions 11.7 Gross unrecognized tax benefits at December 31, 2022 54.9 Gross decreases—tax positions in prior periods ( 3.8 ) Gross increases—current period tax positions 7.4 Gross unrecognized tax benefits at December 31, 2023 $ 58.5 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. The Company files tax returns in the United States, which includes federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. 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. The mix of earnings in those two jurisdictions resulted in an increase of 4.2 % from the U.S. statutory rate of 21 % in 2023. 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. 94 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 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. 95 16. Leases 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. Variable lease cost not dependent on an index or rate is recognized when incurred and typically consists of amounts owed by the Company to a lessor that are not fixed, such as reimbursement for common area maintenance and utilities cost. The components of lease expense were as follows (in millions): 2023 2022 2021 Amortization of right-of-use assets $ 4.1 $ 3.3 $ 1.5 Interest on lease liabilities 1.0 0.6 0.1 Total finance lease cost 5.1 3.9 1.6 Operating lease cost 31.4 20.4 24.0 Short term lease cost 4.4 5.6 4.2 Variable lease cost 6.2 5.0 3.0 Impairment expense (a) 3.2 — — Sublease income ( 2.0 ) ( 1.7 ) ( 2.0 ) Total lease cost $ 48.3 $ 33.2 $ 30.8 (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): December 31, 2023 2022 Operating leases Operating lease assets, net $ 91.7 $ 51.2 Other current liabilities 23.3 16.4 Operating lease liability—long term 74.8 34.8 December 31, 2023 2022 2021 Weighted average remaining lease term 5.54 years 4.6 years 5.1 years Weighted average discount rate 5.3 % 1.8 % 1.6 % December 31, 2023 2022 Finance leases Property, plant and equipment, net $ 21.9 $ 14.2 Current portion of long-term debt 5.1 2.4 Long-term debt 15.8 11.7 December 31, 2023 2022 2021 Weighted average remaining lease term 7.4 years 10.2 years 2.9 years Weighted average discount rate 4.6 % 3.0 % 1.6 % Supplemental cash flow information related to leases was as follows (in millions): 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 0.9 $ 0.6 $ 0.1 Operating cash flows from operating leases 24.0 20.1 21.2 Financing cash flows from finance leases 5.0 3.3 1.6 Right-of-use assets obtained in exchange for lease liabilities Operating leases $ 73.5 $ 22.8 $ 21.2 Finance leases 11.3 13.6 2.7 96 Future lease payments under operating leases and finance leases as follows (in millions): Operating Leases Finance Leases Twelve months ending December 31: 2024 $ 27.0 $ 5.4 2025 23.8 4.2 2026 17.8 2.9 2027 13.3 1.5 2028 11.2 1.0 Thereafter 18.5 7.0 Total undiscounted lease payments 111.6 22.0 Less: imputed interest ( 13.5 ) ( 1.1 ) Total lease liabilities $ 98.1 $ 20.9 17. Post Retirement Benefit Plans Defined Contribution Plans The Company sponsors various defined contribution plans that cover certain domestic and international employees. The Company may make contributions to these plans at its discretion. The Company contributed $ 13.7 million, $ 11.0 million and $ 9.4 million to such plans in the years ended December 31, 2023, 2022 and 2021, respectively. 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. Eligibility is generally determined in accordance with local statutory requirements; however, the level of benefits and terms of vesting varies among plans. The Company records pension service cost within cost of sales, selling, general and administrative, and research and development expenses while non-service related pension costs are recorded within interest and other income (expense), net in the consolidated statements of income and comprehensive income. The components of net periodic benefit costs included in the accompanying consolidated statements of income were as follows (in millions): 2023 2022 2021 Components of net periodic benefit costs: Service cost $ 5.5 $ 6.5 $ 8.1 Interest cost 5.2 1.0 0.5 Expected return on plan assets ( 4.4 ) ( 1.7 ) ( 1.8 ) Settlement (gain) loss recognized — ( 0.3 ) 0.1 Amortization of prior service (credit) cost ( 0.8 ) ( 0.2 ) 0.9 Amortization of actuarial losses 0.1 2.2 2.6 Net periodic benefit costs $ 5.6 $ 7.5 $ 10.4 97 The Company measures its benefit obligation and the fair value of plan assets as of December 31st each year. The changes in benefit obligations and plan assets under the defined benefit pension plans, projected benefit obligation and funded status of the plans were as follows (in millions): 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 197.8 $ 253.9 Service cost 5.5 6.5 Interest cost 5.2 1.0 Plan participant contributions 6.4 5.1 Plan amendments ( 2.4 ) ( 2.9 ) Plan settlements — ( 6.8 ) Benefits paid ( 6.8 ) ( 2.1 ) Actuarial gain 27.5 ( 48.8 ) Premiums paid ( 2.3 ) ( 1.7 ) Plan combinations / acquisitions 6.1 0.8 Impact of foreign currency exchange rates 19.1 ( 7.2 ) Benefit obligation at end of year 256.1 197.8 Change in plan assets: Fair value of plan assets at beginning of year 150.3 147.8 Return on plan assets 1.5 2.5 Plan participant and employer contributions 14.4 11.9 Benefits paid ( 6.8 ) ( 2.1 ) Plan settlements — ( 6.8 ) Premiums paid ( 2.3 ) ( 1.7 ) Plan combinations / acquisitions 4.8 0.4 Impact of foreign currency exchange rates 15.5 ( 1.7 ) Fair value of plan assets at end of year 177.4 150.3 Net under-funded status $ ( 78.7 ) $ ( 47.5 ) 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): 2023 2022 Current liabilities $ ( 2.1 ) $ ( 1.8 ) Non-current liabilities ( 76.6 ) ( 45.7 ) Net benefit obligation $ ( 78.7 ) $ ( 47.5 ) The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions): 2023 2022 2021 Reconciliation of amounts recognized in the consolidated balance sheets: Prior service cost $ 14.6 $ 12.0 $ 9.4 Net actuarial gain (loss) ( 27.4 ) 4.2 ( 50.1 ) Accumulated other comprehensive gain (loss) ( 12.8 ) 16.2 ( 40.7 ) Accumulated contributions in excess of net periodic benefit cost ( 65.9 ) ( 63.7 ) ( 65.4 ) Net amount recognized $ ( 78.7 ) $ ( 47.5 ) $ ( 106.1 ) The amount in accumulated other comprehensive income at December 31, 2023, expected to be recognized as amortization of net loss within net periodic benefit cost in 2024 is $( 0.5 ) million. 98 For the defined benefit pension plans, the Company uses a corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of ten percent of the larger of the projected benefit obligation or the fair value of plan assets are amortized over the average remaining service of active participants who are expected to receive benefits under the plans. The following assumptions were used for defined benefit pension plans reflects the different economic environments within the various countries. The assumptions used to determine the net periodic benefit costs and the projected benefit obligations are as follows: 2023 Japan France Switzerland Germany Thailand Annual discount rate—defined benefit obligation 1.1 % 3.2 % 1.4 % 3.6 % 3.5 % Annual discount rate—defined benefit cost 0.9 % 3.8 % 2.4 % 3.9 % 3.7 % Expected return on plan assets — % 3.0 % 2.7 % — % — % Expected rate of compensation increase 3.0 % 3.0 % 2.2 % 2.6 % 5.6 % 2022 Japan France Switzerland Germany Thailand Annual discount rate—defined benefit obligation 0.9 % 3.8 % 2.4 % 3.9 % 3.7 % Annual discount rate—defined benefit cost 0.4 % 1.0 % 0.4 % 0.8 % 2.5 % Expected return on plan assets — % 3.0 % 1.2 % — % — % Expected rate of compensation increase 3.0 % 3.0 % 2.3 % 2.6 % 5.6 % 2021 Japan France Switzerland Germany Thailand Annual discount rate—defined benefit obligation 0.4 % 1.0 % 0.4 % 0.8 % — % Annual discount rate—defined benefit cost 0.4 % 0.6 % 0.1 % 0.5 % — % Expected return on plan assets — % 3.0 % 1.2 % — % — % Expected rate of compensation increase 3.0 % 2.0 % 1.0 % 2.6 % — % To determine the expected long-term rate of return on pension plan assets, the Company considers current asset allocations, as well as historical and expected returns on various asset categories of plan assets. For the defined benefit pension plans, the Company applies the expected rate of return to a market-related value of assets, which stabilizes variability in assets to which the expected return is applied. Asset Allocations by Asset Category The fair value of the Company’s pension plan assets by asset category and by level in the fair value hierarchy, is as follows (in millions): December 31, 2023 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Plan Assets: Group BPCE Life (a) $ — $ — $ — $ — Swiss Life Collective BVG Foundation (b) 177.4 — — 177.4 Total plan assets $ 177.4 $ — $ — $ 177.4 December 31, 2022 Total Quoted Prices in Active Markets Available (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Plan Assets: Group BPCE Life (a) $ 0.1 $ — $ — $ 0.1 Swiss Life Collective BVG Foundation (b) 150.2 — — 150.2 Total plan assets $ 150.3 $ — $ — $ 150.3 (a) The Company’s pension plan in France is invested in a larger fund that invests in a variety of instruments. The assets are not directly dedicated to the French pension plan. The Group BPCE Life fund invests in debt securities of foreign corporations and governments, equity securities of foreign government funds and private real estate funds . The French Plan Assets are expected to be fully utilized by the end of 2024 and the Company will fund the benefit payments as they become due and payable. 99 (b) The Company’s pension plan in Switzerland is outsourced to Swiss Life AG, an outside insurance provider. Under the insurance contract, the plan assets are invested in Swiss Life Collective BVG Foundation (the Foundation), which is an umbrella fund for which the retirement savings and interest rates are guaranteed a minimum of 1.25 % on the mandatory withdrawal portion, as defined by Swiss law, and 0.50 % on the non-mandatory portion starting 2024. The Foundation utilizes plan administrators and investment managers to oversee the investment allocation process, set long-term strategic targets and monitor asset allocations. The target allocations are 65 % bonds, 2.5 % cash, 7.5 % equity investments and 25 % real estate and mortgages. Should the Foundation yield a return greater than the guaranteed amounts, the Company, according to Swiss law, shall receive 90 % of the additional return with Swiss Life AG retaining 10 %. All investments and insurance risks are fully covered and there is a 100 % capital and interest rate guarantee provided by Swiss Life. The withdrawal benefits and interest allocations are secured at all times by Swiss Life AG. Contributions and Estimated Future Benefit Payments For all of our plans except Switzerland, we do not have plan assets to payout benefit payments. Contributions are expected to be consistent with estimated benefit payments for the next fiscal year. The estimated future benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2023. The following benefit payments reflect future employee service as appropriate (in millions): 2024 9.5 2025 9.8 2026 10.0 2027 11.2 2028 12.1 2029-2033 63.0 18. Commitments and Contingencies Litigation and Related Contingencies Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. The Company believes the outcome of pending proceedings, individually and in the aggregate, will not have a material impact on the Company’s business or its consolidated financial statements. In September 2019, Luxendo GmbH (“Luxendo”), a subsidiary of Bruker Corporation, was sued in Germany by Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (“Zeiss”), for infringement of a registered German utility model. After the utility model was canceled by the German Patent and Trademark Office in 2021, Zeiss withdrew its infringement action at the end of 2022 and the proceedings were terminated. However, a parallel European patent application, a family member of the utility model, is still pending in the European Patent Office (“EPO”). The Company is closely monitoring progress in the granting procedure and does not believe that a grant is imminent. The Company is presently unable to predict the EPO’s final decision on the patent application. At December 31, 2023 and 2022, no material accruals have been recorded for potential contingencies. Governmental Investigations The Company is subject to regulation by national, state and local government agencies in the United States and other countries in which it operates. From time to time, the Company is the subject of governmental investigations often involving regulatory, marketing and other business practices. These governmental investigations may result in the commencement of civil and criminal proceedings, fines, penalties and administrative remedies which could have a material adverse effect on the Company’s financial position, results of operations and/or liquidity. At December 31, 2023, and 2022, no material accruals have been recorded for potential contingencies related to these matters. The Company does not expect additional losses to be incurred in excess of the amounts accrued. 100 Unconditional Purchase Commitments The Company has entered into unconditional purchase commitments, in the ordinary course of business, that include agreements to purchase goods, services or fixed assets and to pay royalties that are enforceable and legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase commitments exclude agreements that are cancelable at any time without penalty. The majority of these commitments are expected to be settled during 2024. Unconditional purchase commitments that are fixed and determinable are as follows (in millions): 2024 $ 375.1 2025 25.7 2026 0.7 2027 — 2028 — Thereafter 9.4 Total $ 410.9 License Agreements The Company has entered into license agreements allowing it to utilize certain patents. If these patents are used in connection with a commercial product sale, the Company pays royalties on the related product revenues. Licensing fees for the years ended December 31, 2023, 2022, and 2021, were $ 7.5 million, $ 6.4 million and $ 5.8 million, respectively, and are recorded in cost of product revenue in the consolidated statements of income and comprehensive income. Letters of Credit and Guarantees At December 31, 2023, and 2022, the Company had bank guarantees of $ 153.6 million and $ 130.7 million, respectively, related primarily to customer advances. These arrangements guarantee the refund of advance payments received from customers in the event that the merchandise is not delivered, or warranty obligations are not fulfilled in compliance with the terms of the contract. These guarantees affect the availability of the Company’s lines of credit. Indemnifications The Company enters into standard indemnification arrangements in the Company’s ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. These parties are generally the Company’s directors, officers, business partners or customers, in connection with any patent, or any copyright or other intellectual property infringement claim by any third party with respect to its products. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is unlimited. The Company believes the estimated fair value of these agreements is minimal based on historical experiences. 19. Earnings Per Share The following table sets forth the computation of basic and diluted weighted average shares outstanding and net income per common share attributable to Bruker shareholders (in millions, except per share amounts): 2023 2022 2021 Net income attributable to Bruker Corporation $ 427.2 $ 296.6 $ 277.1 Weighted average common shares outstanding: Weighted average common shares outstanding - basic 146.4 148.6 151.4 Effect of dilutive securities: Stock options, restricted stock awards, restricted stock units and ESPP 0.8 0.8 1.5 Weighted average common shares outstanding - diluted 147.2 149.4 152.9 Net income per common share attributable to Bruker Corporation shareholders: Basic $ 2.92 $ 2.00 $ 1.83 Diluted $ 2.90 $ 1.99 $ 1.81 101 Diluted earnings per share is calculated using the treasury stock method on a weighted average basis. The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive (in millions of shares): 2023 2022 2021 Stock options and ESPP purchase rights 0.2 0.1 — Unvested restricted stock units — — 0.1 20. Shareholders’ Equity Share Repurchase Program In May 2021, the Company’s Board of Directors approved a share repurchase program (the “2021 Repurchase Program”) authorizing the purchase of up to $ 500.0 million of the Company’s common stock over a two-year period, in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations. During the year ended December 31, 2023, the Company purchased a total of 315,318 shares at an aggregate cost of $ 22.2 million under the 2021 Repurchase Program. During the year ended December 31, 2022, the Company purchased a total of 4,215,094 shares at an aggregate cost of $ 264.7 million under the 2021 Repurchase Program. Authorization for the remaining $ 94.4 million on the 2021 Repurchase Program expired in May 2023 . In May 2023, the Company’s Board of Directors approved a share repurchase program (the “2023 Repurchase Program”) authorizing the purchase of up to $ 500.0 million of the Company’s common stock over a two-year period, in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations. During the year ended December 31, 2023, the Company purchased a total of 2,097,119 shares at an aggregate cost of $ 130.1 million under the 2023 Repurchase Program. At December 31, 2023, $ 369.9 million remains available for future purchase under the 2023 Repurchase Program. We intend to fund any additional purchases from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility. In August 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. The IRA introduced new tax provisions, including a 1.0 % excise tax on stock repurchases. The Company expects additional guidance and regulations to be issued in future periods and will continue to assess its potential impact on its business as further information becomes available. The estimated excise tax on our stock repurchases was not material and was recorded in other current liabilities and additional paid in capital for the year ended December 31, 2023. Shelf Registration On June 2, 2023, the Company filed a registration statement on Form S-3ASR with the SEC (“2023 Shelf Registration”) for the issuance of common stock, preferred stock, debt securities, warrants, units, subscription rights and purchase contracts, which became effective immediately upon filing. At the time any of the securities covered by the 2023 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of any such offering. Cash Dividends on Common Stock Dividends are declared by the Company’s Board of Directors (“Board”) in accordance with the Company’s dividend policy. Under the policy, the Company targeted a $ 0.20 per share cash dividend per annum to the Company’s shareholders payable in equal quarterly installments. Subsequent dividend declarations and the establishment of record and payment dates for such future dividend payments, if any, are subject to the Board's continuing determination that the dividend policy is in the best interests of the Company’s shareholders. The dividend policy may be suspended or canceled at the discretion of the Board at any time. In February 2024, the Company announced that our Board had declared a quarterly dividend of $ 0.05 per share that will be payable in March 2024. 102 Stock Compensation Plans On March 9, 2010, the Company’s Board of Directors unanimously approved and adopted the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”), and on May 14, 2010, the 2010 Plan was approved by the Company’s shareholders. The 2010 Plan provided for the issuance of up to 8,000,000 shares of the Company’s common stock. The 2010 Plan allowed a committee of the Board of Directors determined to be the Compensation Committee, to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee had the authority to determine which employees would receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted under the 2010 Plan typically were made subject to a vesting period of three to five years . As of December 31, 2023, 5,545,090 options and 570,011 restricted stock awards have been granted under the 2010 Plan. At December 31, 2023, 304,098 options were outstanding under the 2010 Plan. In May 2016, the Bruker Corporation 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by the Company’s shareholders. With the approval of the 2016 Plan, no further grants will be made under the 2010 Plan. The 2016 Plan provides for the issuance of up to 9,500,000 shares of the Company’s common stock and permits the grant of awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares and performance units, as well as cash-based awards. The 2016 Plan is administered by the Compensation Committee. The Compensation Committee has the authority to determine which employees will receive awards, the amount of any awards, and other terms and conditions of such awards. Stock option awards granted under the 2016 Plan typically vest over a period of one to four years . As of December 31, 2023, 1,636,907 options and 2,745,861 restricted stock units have been granted under the 2016 Plan. At December 31, 2023, 663,462 options and 702,047 restricted stock units were outstanding under the 2016 Plan. In June 2022, the Company's shareholders approved the 2022 Employee Stock Purchase Plan, under which eligible employees may contribute up to 10 % of their earnings toward the semi-annual purchase of the Company's stock. The plan makes available 2,500,000 shares. Each plan enrollment period covers six months beginning June 1 and December 1 of each year . The purchase price per share of the Company's stock is equal to 90 % of the lower of (1) the fair market value per share of the Company's stock on the first day of the applicable purchase period or (2) the fair market value per share of the Company's stock on the applicable purchase date, unless otherwise specified by the Plan Administrator before the start of any purchase period. Members of the Company’s Board of Directors receive an annual award of restricted stock units which vest over a one-year service period. 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 . Restricted shares of the Company’s common stock were periodically awarded to executive officers, directors and certain key employees of the Company, subject to service restrictions, which vested ratably over periods of one to four years . The restricted shares of common stock may not be sold or transferred during the restriction period. Restricted stock units of the Company’s common stock are periodically awarded to executive officers, directors and certain employees of the Company which vest ratably over service periods of one to four years . 103 Stock-based Compensation The following presents the impact of stock-based compensation expense on our consolidated statements of income (in millions): 2023 2022 2021 Stock options $ 1.6 $ 1.5 $ 1.3 Restricted stock units 16.0 14.1 13.2 Employee Stock Purchase Plan 0.8 0.1 — Total stock-based compensation $ 18.4 $ 15.7 $ 14.5 2023 2022 2021 Cost of product revenue $ 1.4 $ 1.1 $ 2.2 Selling, general and administrative 15.1 13.3 10.1 Research and development 1.9 1.3 2.2 Total stock-based compensation $ 18.4 $ 15.7 $ 14.5 In addition to the awards above, the Company recorded stock-based compensation within other charges, net of $ 5.6 million, $ 12.0 million and $ 2.7 million at December 31, 2023, 2022, and 2021, respectively, related to the Mestrelab, PreOmics, Biognosys, Zontal, and other majority owned acquisitions. At December 31, 2023, the Company expects to recognize pre-tax stock-based compensation expense of $ 3.5 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.5 years. The Company also expects to recognize additional pre-tax stock-based compensation expense of $ 37.5 million associated with outstanding restricted stock units granted under the Company’s 2016 Incentive Compensation Plan over the weighted average remaining service period of 2.7 years. Stock Option Awards Stock option activity for the year ended December 31, 2023, is as follows: Number of Options Weighted- Average Price Per Share Weighted - Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in millions) (a) Outstanding at December 31, 2022 1,173,625 $ 34.81 3.7 $ 40.8 Granted 77,719 69.37 Exercised ( 285,030 ) 34.05 Forfeited/Expired 1,246 — Outstanding at December 31, 2023 967,560 $ 37.78 3.7 $ 35.5 Exercisable at December 31, 2023 763,544 $ 29.78 3.0 $ 33.8 Exercisable and expected to vest at December 31, 2023 (b) 965,990 $ 37.77 3.7 $ 35.4 a) Represents the number of vested options at December 31, 2023, plus the number of unvested options at December 31, 2023, that are ultimately expected to vest based on our estimated forfeiture rate. b) The aggregate intrinsic value is calculated as the positive difference between the exercise price of the underlying options and the quoted price of our common stock on December 31, 2023. The total intrinsic value of options exercised was $ 9.4 million, 10.7 million and $ 35.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. 104 Restricted Stock Units Restricted stock unit activity is presented below: Shares Subject to Restriction Weighted- Average Grant Date Fair Value Per Share Outstanding at December 31, 2022 635,868 $ 60.23 Granted 354,265 66.20 Vested ( 266,395 ) 56.14 Forfeited ( 21,691 ) 63.54 Outstanding at December 31, 2023 702,047 $ 64.68 The total fair value of restricted stock vested for the years ended December 31, 2023, 2022 and 2021was $ 17.8 million, $ 17.7 million and $ 27.1 million, respectively. 21. Other Charges, Net The components of other charges, net, were as follows (in millions): 2023 2022 2021 Acquisition-related expenses, net $ 16.8 $ 19.3 $ 6.1 Professional fees incurred in connection with investigation matters and other legal matters 0.6 2.4 1.1 Information technology transformation costs 5.0 3.0 2.8 Restructuring 18.8 3.9 4.8 Long -lived asset impairments 5.7 0.3 ( 0.5 ) Other 5.3 0.8 — Other charges, net $ 52.2 $ 29.7 $ 14.3 Restructuring Initiatives Restructuring charges for the years ended December 31, 2023, 2022 and 2021 included charges for various other programs which were recorded in the accompanying consolidated statements of income and comprehensive income as follows (in millions): 2023 2022 2021 Cost of revenues $ 3.5 $ 0.9 $ 3.4 Other charges, net 18.8 3.9 4.8 $ 22.3 $ 4.8 $ 8.2 105 The following table sets forth the changes in the restructuring reserves (in millions): Total Severance Exit Costs Provisions for Excess Inventory Balance at December 31, 2020 $ 9.8 $ 7.6 $ 0.8 $ 1.4 Restructuring charges 8.2 5.3 1.5 1.4 Cash payments ( 10.3 ) ( 9.3 ) ( 1.0 ) — Non-cash adjustments ( 1.1 ) — ( 1.0 ) ( 0.1 ) Foreign currency impact ( 0.2 ) ( 0.1 ) — ( 0.1 ) Balance at December 31, 2021 $ 6.4 $ 3.5 $ 0.3 $ 2.6 Restructuring charges 4.8 2.4 2.3 0.1 Cash payments ( 7.8 ) ( 5.4 ) ( 2.4 ) — Non-cash adjustments ( 1.4 ) — — ( 1.4 ) Foreign currency impact ( 0.2 ) ( 0.1 ) — ( 0.1 ) Balance at December 31, 2022 $ 1.8 $ 0.4 $ 0.2 $ 1.2 Restructuring charges 22.3 20.5 0.8 1.0 Cash payments ( 13.1 ) ( 12.3 ) ( 0.8 ) — Non-cash adjustments ( 1.6 ) — — ( 1.6 ) Acquired 3.6 0.9 2.7 — Foreign currency impact 0.1 0.1 — — Balance at December 31, 2023 $ 13.1 $ 9.6 $ 2.9 $ 0.6 In October 2023, the Company announced a restructuring plan associated with BCA (formerly PhenomeX), a component of the Nano reportable segment, to optimize costs and to facilitate integration efforts. The restructuring plan includes a reduction in headcount, consolidation of leased facilities, and a planned change in future product offerings. The restructuring plan is expected to be completed during 2024. In connection with the BCA restructuring plan, the Company accrued severance and termination charges of $ 14.9 million. As of December 31, 2023, $ 9.8 million of these charges have been paid. The unpaid severance charges noted above will be paid in 2024 and 2025. As it relates to the consolidation of leased facilities, the Company recorded an impairment charge against operating lease right of use assets of $ 3.2 million, as detailed in Note 16, Leases , and expensed a negligible amount of associated leasehold improvements. As of December 31, 2023, no modification of operating leases connected to the restructuring plan had occurred. Finally, in connection with the planned change of future product offerings, the Company recorded an impairment charge against various equipment of $ 2.3 million. The Company anticipates additional severance charges in 2024, which are not expected to be material. The Company is also likely to terminate additional leases as operations are consolidated and arrangements for early terminations with the landlord are reached. The Company does not expect termination payments to be significantly different from amounts recorded as outstanding lease liabilities as of December 31, 2023. Certain other restructuring programs relating to in reductions in force recorded by the BSI NANO, BSI Biospin, BSI CALID and Corporate segments in 2023 were not material and substantially complete at the end of the year. 22. Interest and Other Income (Expense), Net The components of interest and other income (expense), net, were as follows (in millions): 2023 2022 2021 Interest income $ 7.5 $ 2.8 $ 0.9 Interest expense ( 16.4 ) ( 16.1 ) ( 14.3 ) Impairment of minority investments ( 18.2 ) — — Exchange losses on foreign currency transactions ( 13.3 ) ( 5.8 ) ( 4.1 ) Pension components ( 0.1 ) ( 1.0 ) ( 2.2 ) Other income (expense) 3.7 1.3 — Interest and other income (expense), net $ ( 36.8 ) $ ( 18.8 ) $ ( 19.7 ) 106 23. Business Segment Information The Company has four reportable segments, BSI BioSpin, BSI CALID, BSI Nano and BEST, as discussed in Note 1 to the consolidated financial statements. The Company's CEO is the chief operating decision maker. Selected reportable segment information is presented below (in millions): 2023 2022 2021 Revenue: BSI BioSpin $ 798.5 $ 696.7 $ 691.0 BSI CALID 960.4 822.2 819.6 BSI Nano 941.9 787.0 697.5 BEST 280.7 237.1 223.8 Eliminations (a) ( 17.0 ) ( 12.3 ) ( 14.0 ) Total revenue $ 2,964.5 $ 2,530.7 $ 2,417.9 Operating Income: BSI BioSpin $ 195.9 $ 167.1 $ 158.2 BSI CALID 209.3 196.0 227.2 BSI Nano 109.1 113.0 73.4 BEST 32.3 31.3 22.2 Corporate, eliminations and other (b) ( 109.7 ) ( 74.7 ) ( 67.7 ) Total operating income $ 436.9 $ 432.7 $ 413.3 (a) Represents product and service revenue between reportable segments. (b) Represents corporate costs and eliminations not allocated to the reportable segments. Total assets by segment are as follows (in millions): 2023 2022 Assets: BSI BioSpin, BSI CALID, BSI Nano & Corporate $ 4,110.6 $ 3,508.4 BEST 186.0 111.1 Eliminations and other (a) ( 46.7 ) ( 7.7 ) Total assets $ 4,249.9 $ 3,611.8 (a) Assets not allocated to the reportable segments and eliminations of intercompany transactions. The Company is unable, without unreasonable effort or expense to disclose the amount of total assets by the BSI BioSpin, BSI CALID and BSI Nano Segments as well as the Corporate function and further, the Company’s chief operating decision maker does not receive any asset information by operating segment. Total capital expenditures and depreciation and amortization by segment are presented below (in millions): 2023 2022 2021 Capital Expenditures: BSI BioSpin $ 23.9 $ 14.5 $ 36.6 BSI CALID 31.4 33.9 24.7 BSI Nano 13.9 20.2 16.8 Corporate 10.2 9.1 4.7 BEST 27.5 51.5 9.2 Total capital expenditures $ 106.9 $ 129.2 $ 92.0 Depreciation and Amortization: BSI BioSpin $ 25.7 $ 22.6 $ 21.3 BSI CALID 29.3 20.7 19.8 BSI Nano 48.0 35.6 37.4 Corporate 4.7 3.9 4.3 BEST 7.2 6.0 6.3 Total depreciation and amortization $ 114.9 $ 88.8 $ 89.1 107 Revenue and long-lived assets (including property, plant and equipment, net and operating lease right of use assets) by geographical area are as follows (in millions): 2023 2022 2021 Revenue: United States $ 777.7 $ 696.1 $ 601.0 Germany 281.5 247.4 262.6 Rest of Europe 699.7 591.9 658.1 China 528.1 396.5 357.6 Rest of Asia Pacific 460.9 408.4 371.5 Other 216.6 190.4 167.1 Total revenue $ 2,964.5 $ 2,530.7 $ 2,417.9 2023 2022 2021 Long-lived assets: Germany $ 350.2 $ 309.6 $ 244.0 Switzerland 127.0 98.5 96.3 United States 124.9 58.8 51.3 Rest of Europe 57.4 42.5 45.2 Asia Pacific 22.1 22.1 22.6 Other 9.9 6.7 6.6 Total long-lived assets $ 691.5 $ 538.2 $ 466.0 108 ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.