BRUKER CORP

March 31, 2024

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 hasfour reportable segments, Bruker Scientific Instruments (BSI) BioSpin, BSI CALID (Chemicals, Applied Markets, Life Science, In Vitro Diagnostics, Detection), BSI NANO and Bruker Energy & Supercon Technologies (BEST).

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.

BSI CALID Segment designs, manufactures and distributes life science mass spectrometry, applied 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.

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; chip cytometry products and services for targeted spatial proteomics, multi-omic services; optofluidic and proteomic barcoding platforms; 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.

BEST 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.

The unaudited condensed consolidated financial statements represent the consolidated accounts of the Company. All intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements as of March 31, 2024 and December 31, 2023, and for the three months ended March 31, 2024 and 2023, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the financial information presented herein does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement have been included. The results for interim periods are not necessarily indicative of the results expected for any other interim period or the full year.

At March 31, 2024, the Company’s significant accounting policies, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, have not changed.

Risks and Uncertainties

The Company is subject to the same risks and uncertainties as disclosed in its Annual Report on Form 10-K filed with the SEC on February 29, 2024, however, as of January 1, 2024, the Company is subject to new risks related to its self-funded health insurance. Effective January 1, 2024, the Company is self-insured for health care claims for eligible participating U.S. employees subject to certain deductibles and limitations. The Company determines its liability for claims incurred but not reported for insurance liabilities onan actuarial basis. Since there are many estimates and assumptions involved in recording insurance liabilities, differences between actual future events and prior estimates and assumptions, could result in materially different amounts of expense and result in adjustments to these liabilities and materially different amounts of expense, which could harm our business and adversely affect our results of operations and financial condition.

Use of Estimates

The preparation of the unaudited condensed 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.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“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 beginning after December 15, 2024. The Company is evaluating the potential impact of ASU 2023-09 on the Company’s 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 ASU 2023-07 on the Company’s consolidated financial statements and related disclosures.

Revenue

The following table presents the Company’s revenue by Segment (in millions):

(a)

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

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

The following table presents the Company’s revenue by End Customer Geography (in millions):

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 March 31, 2024, remaining performance obligations were approximately$2,306.3 million.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, note receivables and unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s unaudited condensed 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 unaudited condensed consolidated balance sheets. The balance of contract assets as of March 31, 2024 and December 31, 2023 was$92.5 million and $85.8 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 unaudited condensed consolidated balance sheets based on the timing of when revenue recognition is expected. As of March 31, 2024 and December 31, 2023, the contract liabilities were$590.8 million and $491.4 million, respectively. The increase in the contract liability balance during the three months ended March 31, 2024 is primarily the result of new cash payments received, which was offset in part by satisfying performance obligations. Approximately$130.4 million of the contract liability balance on December 31, 2023 was recognized as revenue during the three months ended March 31, 2024.

Inventories

Inventories consisted of the following (in millions):

Finished goods include in-transit systems shipped to the Company’s customers for which control has not passed to the customers. As of March 31, 2024 and December 31, 2023, the value of finished goods inventory-in-transit was$57.6 million and $48.6 million, respectively.

Other Current Assets

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

Acquisitions

The Company does not expect the amounts allocated to goodwill to be deductible for tax purposes.

In the three months ending March 31, 2024, the Company completed various 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 2024 acquisitions (in millions):

Chemspeed Technologies, AG

On March 6, 2024, the Company acquired 100% of the outstanding share capital of Chemspeed Technologies AG and its wholly owned subsidiaries Chemspeed Technologies, Inc., Chemspeed Technologies, Ltd., and Chemspeed Technologies, GmbH, (collectively hereinafter “Chemspeed”) for cash consideration of $154.7 million CHF (approximately $175.4 million). Chemspeed provides automated laboratory research and development and quality control workflow solutions in a wide range of chemical research fields. Chemspeed is domiciled in Füllinsdorf, Switzerland and was integrated into the BSI BBIO Segment.

The Company has recorded 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. Accordingly, the values recognized are subject to change until the Company finalizes the allocation of the consideration transferred 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. The fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. The cash flow analysis is based on the 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 isten years for the trade name, eight years for the developed technology andfifteen years for the customer relationships. The Company expects to amortize backlog through the end of 2025.

Results of acquired operations of Chemspeed

The results of the acquired operations of Chemspeed have been included in the consolidated financial statements of the Company since its acquisition date of March 6, 2024. For the period from March 6, 2024 through March 31, 2024, Chemspeed had total revenues of $4.1 million and pre-tax net loss of $0.7 million. The tax effect on the Company of pre-tax net losses incurred by Chemspeed will be included in the related jurisdictional tax returns of its subsidiaries.

Acquisition-related expenses incurred in connection with the Chemspeed acquisition were not material. These expenses primarily include legal and professional services. These acquisition-related expenses were recorded within Other Charges, Net in the consolidated statement of operations.

Supplemental Pro Forma Information (unaudited)

The supplemental pro forma financial information presented below is for illustrative purposes only and does not include the pro forma adjustments that would be required under Article 11 of Regulation S-X for pro forma financial information. The following supplemental pro forma financial information, is not necessarily indicative of the financial position or results of operations that would have been realized if the Company's combination with Chemspeed had been completed on January 1, 2023 and January 1, 2024, does not reflect synergies that might have been achieved as a result of the combination, and is not 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.

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

•

A net increase in amortization 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.

Spectral Instruments Imaging, LLC

On February 1, 2024, the Company acquired 100% of the outstanding share capital of Spectral Instruments Imaging, LLC (“Spectral”) for cash consideration of $29.0 million, subject to a net working capital adjustment, and additional consideration of up to $10 million if certain revenue and EBITDA targets are met through 2025. Spectral manufactures preclinical optical systems for bioluminescent, fluorescent and x-ray imaging to fit the workflows of animal scientists. Spectral is domiciled in Tucson, Arizona and was integrated into the BSI BBIO Segment.

The Company completed its provisional fair value allocation subject to the final net working capital adjustment. The fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. The cash flow analysis is based on the 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 issix years for the technology andfourteen years for the customer relationships. The fair value of the trade name was not material and was expensed in full in the three months ended March 31, 2024. For the period from the date of acquisition through March 31, 2024, the revenues and results of operations included in the consolidated financial statements of the Company were not material. Additional pro forma information combining the results of operations of the Company and this acquisition have not been included as the revenues and expenses were not material.

Nion, LLC

On January 2, 2024, the Company acquired 100% of the outstanding share capital of Nion, LLC (“Nion”) for cash consideration of $37.4 million, subject to a net working capital adjustment and additional consideration of up to $23.0 million if certain revenue and non-revenue milestones are achieved through 2026. A portion of the contingent consideration is linked to the continued employment of selected employees which represents post combination services. As such, these amounts will be recognized as compensation expense in the consolidated statement of operations over the service period. Nion designs and manufacturers high-end electron-optical instruments with diverse application to the needs of its customers. Nion is domiciled in Kirkland, Washington and was integrated into the BSI NANO Segment.

The Company completed its provisional fair value allocation subject to the final net working capital adjustment. The fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis. The cash flow analysis is based on the 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 isseven years for the technology and the trade name, andfifteen years forthe customer relationships. Backlog will be amortized through the fourth quarter of 2027. For the period from the date of acquisition through March

31,2024, the revenues and results of operations included in the consolidated financial statements of the Company were not material. Additional pro forma information combining the results of operations of the Company and this acquisition have not been included as the revenues and expenses were not material.

Other 2024 Acquisitions

In the three months ended March 31, 2024, the Company acquired other businesses which were accounted for under the acquisition method that complemented the Company’s existing product offerings.

The Company completed its provisional fair value allocations of these other wholly owned acquisitions subject to the final net working capital adjustment for certain of these acquisitions. The fair values of these identifiable intangible assets have been estimated using the income approach through a discounted cash flow analysis. The cash flow analysis is based on the forecasts used by the Company to price the acquisitions, 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 issevento eleven years for the technology. The fair values of the trade name and customer relationships were not material and were expensed in full in the three months ended March 31, 2024. For the period from the date of acquisition through March 31, 2024, the revenues and results of operations included in the consolidated financial statements of the Company were not material. Additional pro forma information combining the results of operations of the Company and these acquisitions have not been included as the revenues and expenses were not material.

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

2024 Minority and Equity-method investments

During the three months ended March 31, 2024, the Company also completed a minority investment. The investment is accounted for under the alternative measurement, and as such, the investment value also represents the carrying value at March 31, 2024. The following table reflects the consideration transferred for the investments (in millions):

In the three months ended March 31, 2024, the Company did not record any realized gains or unrealized gains related to its minority investments and did not recognize any impairment charges related to its minority investments.

Subsequent Events - Acquisitions

On April 30, 2024, the Company completed the acquisition of 100% of the issued and outstanding securities of Tecfin S.à r.l. which does business as ELITechGroup (“ELITechGroup”) for a base purchase price of EUR 864 million(approximately $923 million). ELITechGroup’s subsidiaries are active in the molecular diagnostics, microbiology and biomedical testing equipment fields.

On May 6, 2024, the Company acquired for approximately $392.6 million in cash substantially all of the assets and rights associated with the business of NanoString Technology, Inc. (“NanoString”), and assumed certain of its liabilities, including the liabilities associated with the U.S. litigation related to NanoString’s GeoMx Digital Spatial Profiler products. In this matter, a jury verdict was previously entered in favor of plaintiffs, 10x Genomics, Inc. and Prognosys Biosciences, Inc. (the “Plaintiffs”) awarding approximately $31.6 millionin damages. NanoString has filed post-trial motions asking the Court to overturn the jury’s verdict and/or amendthe judgment. The Plaintiffs have asked the Court in their post-trial motions to enhance the damages award. The Court has not yet ruled on the post-trial motions.

In the three months ended March 31, 2023, the Company completed the following acquisition that complemented the Company’s existing product offerings. The following table reflects the consideration transferred and the reportable segment for acquisition (in millions):

Biognosys, AG

On January 3, 2023, the Company acquired 97.15% of the outstanding stock of Biognosys, AG (“Biognosys”), a privately held company, for 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 the 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) in a value above the minimum redemption value and (2) the minimum redemption value or floor value that is subject to post combination employment (the hybrid instrument) services.

The rights (embedded derivative) to the option shares can be sold at a minimum redemption value provided certain post combination employment services are met or at fair value, if above the floor, on the purchase or sell date. Therefore, the portion assigned to the minimum redemption value of option value of the hybrid instrument, which is tied to continued employment of the noncontrolling interest holders, was classified as a long-term liability on the consolidated balance sheet. The hybrid instrument was initially measured at fair value on the acquisition date and shall be accreted over the post combination service period. The acquisition date fair value of the hybrid instrument which is an embedded derivative was not material.

The rights associated with the portion of the noncontrolling interest above the minimum redemption value are contingently redeemable at the option of the Company or the noncontrolling interest holders. As redemption of the rights is contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of these rights in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities. The redeemable noncontrolling interest is initially measured at fair value on the 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 (loss) income 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.

Other 2023 Acquisitions

In the three months ended March 31, 2023, the Company acquired various other businesses which were accounted for under the acquisition method that complemented the Company’s existing product offerings. The following table reflects the consideration transferred and the respective reporting segment for the acquisitions (in millions):

2023 Minority and Equity-method investments

During the three months ended March 31, 2023, the Company also completed minority investments that complemented the Company's existing product offerings. The following table reflects the consideration transferred and the respective reporting segment for the investments (in millions):

In the three months ended March 31, 2023, the Company recognized$6.9 million of impairment charge in “Interest and other income (expense), net” in the consolidated statement of operations, to write-off the costs of certain minority investments. The Company didnot record any realized gains or unrealized gains related to its minority investments in the three months ended March 31, 2023.

Goodwill and Intangible Assets

Goodwill

The following table sets forth the changes in the carrying amount of goodwill (in millions):

Intangible Assets

The following is a summary of intangible assets (in millions):

For the three months ended March 31, 2024, and 2023, the Company recorded amortization expense of$16.2 million and$10.7 million, respectively, related to intangible assets subject to amortization.

On a quarterly basis, the Company reviews its goodwill and intangible assets to determine if there have been any triggering events that could indicate an impairment. There wereno events noted for the three months ended March 31, 2024 or 2023. See Note 14, Other Charges, Netfor discussion related to impairment of other long-lived assets in connection with the BCA restructuring plan.

Debt

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

The following is a summary of the maximum commitments and the net amounts available to the Company under the 2024 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, at March 31, 2024 (in millions):

As of March 31, 2024, the Company was in compliance with the financial covenants of all debt agreements.

As of March 31, 2024, the Company had several cross-currency and interest rate swap agreements with a notional value of$137.3 million of U.S. dollar to Swiss Franc and a notional value of$137.3 million of U.S. dollar 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 (loss) income 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), net in the consolidated statements of income and comprehensive income. As a result of entering into these agreements, the Company lowered net interest expense by$4.2 million and$4.3 million during the three months ended March 31, 2024, and March 31, 2023. We anticipate these swap agreements will lower net interest expense in future years. 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 flows.

2024 Term Loans

On March 29, 2024, the Company, as borrower, entered into (i) a term loan agreement (the “Three- and Five-Year Term Loan Agreement”) with Bank of America, N.A., as administrative agent, BofA Securities, Inc., JPMorgan Chase Bank, N.A., TD Bank, N.A. and Wells Fargo Bank, N.A. acting as joint lead arrangers and joint bookrunners, the other agents party thereto and the other banks or other financial institutions or entities from time to time party thereto as lenders and (ii) a term loan agreement with Bank of America, N.A., as administrative agent, BofA Securities, Inc., acting as sole arranger and bookrunner (the “Seven-Year Term Loan Agreement” and together with the Three- and Five-Year Term Loan Agreement, the “Term Loan Agreements”), and the other banks or other financial institutions or entities from time to time party thereto as lenders.

The Three- and Five-Year Term Loan Agreement provides for a (i) CHF 150 million three-year term loan facility and (ii) CHF 150 million five-year term loan facility. The Seven-Year Term Loan Agreement provides for a CHF 150 million seven-year term loan facility. Each term loan facility has a delayed draw component allowing for up to two borrowings under the relevant loan facility during the period from and including the effective date to the earlier of (i) September 30, 2024 and (ii) the date of termination of the commitments by the Administrative Agent during the continuance of an Event of Default as defined in the applicable Term Loan Agreement. The Company did not request any borrowings in connection with signing the Term Loan Agreements. Amounts outstanding under the Term Loan Agreements bear interest at a rate equal to (a) the Swiss Average Rate Overnight (SARON), plus a margin ranging from (i)1.000% to 1.500% in the case of the three- and five-year term loan facilities and (ii)1.250% to 1.750% in the case of the seven-year term loan facilities, in each case, based on the Company’s leverage ratio, provided, however, that ifthe loans are required to bear interest determined by reference to an Alternate Base Rate (“ABR Loans”), then such ABR Loans shall bear interest equal to (i)the federal funds effective rate plus ½ of 1%, (ii) theprime rate announced by Bank of America, N.A., and (iii)1%, plus a margin ranging from 0.100% to 0.200%, based on the Company’s leverage ratio.

Loans under the Term Loan Agreements will be repayable in full at maturity, subject to scheduled quarterly amortization payments on (i) the three-year and five-year term loan facilities beginning in June 2024 and (ii) the seven-year term loan facility beginning in June 2026, and, in each case, may also be prepaid at the Company’s option in whole or in part without premium or penalty. The Term Loan Agreements contain representations and warranties, affirmative and negative covenants, and events of default, which the Company believes are usual and customary for an agreement of this type. The obligations under the Term Loan Agreements are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries.

The other terms of the Term Loan Agreements are substantially similar to the terms of the 2024 Revolving Credit Agreement, including representations and warranties, affirmative, negative and financial covenants, and events of default.

On April 29, 2024, the Company borrowed a total of CHF 300 million (approximately $330 million) consisting of the aggregate principal amounts of CHF 150 million (approximately $165 million) under the seven-year term loan facility and CHF 75 million (approximately $82 million) under each of the three-year and five-year term loan facilities.

2024 Note 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, on April 15, 2024, the Company issued and sold CHF 431.0 million (approximately $472 million) of senior notes, referred to as the 2024 Senior Notes. Under the terms of the 2024 Note Purchase Agreements, interest on the 2024 Senior Notes is payable semi-annually on April 15 and October 15 of each year, commencing April 15, 2024, or October 15, 2024. The 2024 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries. On April 15, 2024, part of the proceeds received on the issuance of the 2024 Senior Notes were used to pay off CHF 230 million (approximately $252 million) of debt outstanding under the revolving credit facility.

2024 Amended and Restated Credit Agreement

On January 18, 2024, the Company entered into the First Amendment to the 2019 Revolving Credit Agreement (the “Amended and Restated Credit Agreement” or “RCA”) to modify certain definitions within the agreement. The Amended and Restated Credit Agreement increased the aggregate principal amount from $600 million to $900 million and extended 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 increased the uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million.

The RCA 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 require the Company to maintain a maximum leverage ratio of 3.50 to 1.00 (the “Stated Leverage Ratio” or “SLR”) and a minimum interest coverage of 2:50 to 1.00. In accordance with the terms of the RCA, the Company can elect to increase the maximum leverage ratio to 4.00 to 1.00, the “Adjusted Leverage Ratio” or “ALR” provided that it shall (1) step down the ALR by 0.25 x after two full fiscal quarters following the date of a Material Acquisition, and (2) return to the otherwise SLR after four full fiscal quarters following the date of such Material Acquisition, provided, that the Company may not elect to increase the maximum leverage ratio to the ALR unless there shall be at least one full fiscal quarter immediately prior to such election during which the SLR is in effect. 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. Proceeds of the Amended and Restated Credit Agreement may be used by the Company and its subsidiaries to finance working capital needs, refinance or reduce existing indebtedness and for general corporate purposes, including acquisitions.

Following the quarter ended March 31, 2024, the Company borrowed additional amounts of approximately $804 million in aggregate under the revolving facility.

On January 18, 2024, the Company paid off the $100 million of outstanding Series 2012A Senior Notes, Tranche D with the proceeds of the CHF 230 million (approximately $269 million) of debt outstanding under the revolving credit facility.

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 measured at fair value on a recurring basis and present them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement (in millions):

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 three months ended March 31, 2024, or the year ended December 31, 2023.

The fair value of the Company's long-term fixed interest rate debt was$747.4 million and$883.3 million as of March 31, 2024, and December 31, 2023, 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 carrying value of the Company's variable rate debt approximates its fair value at March 31, 2024 and December 31, 2023.

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.

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

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 adjusted 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 embedded derivatives) as long-term liabilities on the consolidated balance sheet. Subsequent to the acquisitions, the carrying value of the hybrid instruments are remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the respective requisite service period vested. 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):

Derivative Instruments and Hedging Activities

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 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 financial instruments recorded in the consolidated balance sheets as follows (in millions):

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 approximately$10.8 million and$25.7 million for the purchase of products at March 31. 2024 and December 31, 2023 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 following is a summary of the gain (loss) included in the consolidated statements of income and comprehensive income related to the financial instruments described above (in millions):

Provision for Income Taxes

The Company accounts for income taxes using the asset and liability approach by recognizing deferred tax assets and liabilities for the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. The Company records a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. In addition, the Company accounts for uncertain tax positions that have reached a minimum recognition threshold.

The income tax provision for the three months ended March 31, 2024, and 2023 was $19.8 million and $29.9 million, respectively representing effective tax rates of 27.7% and 28.0%, respectively. The decrease in the Company's effective tax rate was primarily due to change in jurisdictional mix, and the impact of discrete items. 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. The Company will continue to monitor developments in implementation as more countries enact the legislation.

As of March 31, 2024, and December 31, 2023, the Company had gross unrecognized tax benefits, excluding penalties and interest, of approximately$60.2 millionand $58.5 million, respectively, which, if recognized, would result in a reduction of the Company’s effective tax rate. The Company recognizes penalties and interest related to unrecognized tax benefits in the provision for income taxes. As of March 31, 2024, and December 31, 2023, approximately$6.9 million and $5.8 million, respectively, of accrued interest and penalties related to uncertain tax positions were included in other long-term liabilities on the Company’s unaudited condensed consolidated balance sheets. Penalties andinterest of$1.2 million and$0.5 million were recorded in the provision for income taxes for unrecognized tax benefits during the three months ended March 31, 2024 and 2023, respectively.

The Company files tax returns in the United States, which include 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 2024 are approximately 30.0% and 20.0% for Germany and Switzerland, respectively. The mix of earnings in those two jurisdictions resulted in an increase of approximately 4.3% from the U.S. statutory rate of 21.0% in the three months ended March 31, 2024.

Earnings Per Share

The following table sets forth the computation of basic and diluted weighted average common shares outstanding and net income per common share attributable to Bruker shareholders (in millions, except per share amounts):

The following common share equivalents have been excluded from the computation of diluted weighted average common shares outstanding, as their effect would have been anti-dilutive (amounts in millions of shares):

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. 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”) authori zing 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. At March 31, 2024,$369.9 million remains available for future purchase under the 2023 Repurchase Program.

During the three months ended March 31, 2024, the Company didnot purchase any shares under the 2023 Repurchase Program.

During the three months ended March 31, 2023, the Company purchased a total of 315,318 shares at an aggregate cost of$22.2 million under the 2021 Repurchase Program.

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 is not material and is recorded in other current liabilities and additional paid in capital. No additional accrual for estimated excise tax was recorded for the three months ended March 31, 2024.

Stock-Based Compensation

The Company recorded stock-based compensation expense as follows in the unaudited condensed consolidated statements of income and comprehensive income (in millions):

In addition to the awards above, the Company recorded stock-based compensation expense within other charges, net of$0.5 million and$2.2 million in the three months ended March 31, 2024 and 2023, respectively, related to the fair value changes of hybrid instruments associated with the option rights of certain minority shareholders of the Company’s majority owned acquisitions.

At March 31, 2024, the Company expected to recognize pre-tax stock-based compensation expense of$3.1 million associated with outstanding stock option awards granted under the Company's stock plans over the weighted average remaining service period of 2.2 years. The Company also expects to recognize additional pre-tax stock-based compensation expense of$34.5 million associated with outstanding restricted stock units granted under the Company's 2016 Incentive Compensation Plan over the weighted average remaining service period of 2.5 years.

Other Charges, Net

The components of other charges, net were as follows (in millions):

Restructuring Initiatives

Restructuring charges include charges for various programs that were recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income. The following table sets forth the restructuring charges (in millions):

The following table sets forth the changes in restructuring reserves (in millions):

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 recorded and accrued severance and termination charges of $14.9 million in the year ended December 31, 2023, and an additional charge of $3.9 million in the three months ended March 31, 2024. The company paid $9.8 million and $7.0 million of these charges in the three months ended December 31, 2023 and March 31, 2024, respectively. 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 and $1.2 millionin the three months ended December 31, 2023 and March 31, 2024, respectively. on termination of a facility. As of March 31, 2024, no other modification of operating leases connected to the restructuring plan had occurred. 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 March 31, 2024. Due to delays in consolidating facilities, certain inventories that are expiring or have expired will no longer be usable for the manufacture of products. The cost of these inventories was charged to product restructuring costs and scrapped in the three months ended March 31, 2024.



Certain other restructuring programs relating to in reductions in force recorded by the BSI NANO, BSI Biospin, BSI CALID and Corporate segments in 2024 were not material. In April 2024, the Company announced a global restructuring program to reduce personnel costs affecting the BBIO and CALID Segments. The Company expects to incur additional restructuring charges of $7.4 million for this program through the remainder of 2024.

Interest and Other Income (Expense), Net

The components of interest and other income (expenses), net were as follows (in millions):

For the three months ended March 31, 2024, the Company had $8.9 million in exchange gain in foreign currency transactions. This foreign exchange gain includes an unrealized gain recognized on a forward contract taken to minimize risks from fluctuations in the Euro currency in anticipation of the closing of our acquisition of ELITechGroup in the quarter ending June 30, 2024, the purchase price of which is denominated in Euro.

Commitments and Contingencies

In accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies, the Company accrues anticipated costs of settlement, damages or other costs to the extent specific losses are probable and reasonably estimable. These accruals are adjusted periodically as assessments change or additional information becomes available.

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. The outcome of any of these proceedings cannot be accurately predicted, and the ultimate resolution of any of these existing matters, net of amounts accrued in the Company's balance sheet, may have a material adverse effect on the Company's business or financial condition.

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. An adverse outcome in any of these proceedings could result in one of more of the following and have material impact on our business or consolidated results of operations and financial position: (i) loss of patent protection; (ii) inability to continue to engage in certain activities; (iii) payment of significant damages, royalties, penalties and/or license fees to third parties; and, (iv) with respect to products acquired through acquisitions accounted for as business combinations, potentially significant intangible asset impairment charges.

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.

In addition, the Company is subject to regulation by national, state and local government agencies in the United States and other countries in which the Company 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.

As of March 31, 2024 and December 31, 2023, the Company hasnot recorded any material accruals for potential contingencies. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period.

Effective January 1, 2024, the Company is self-insured for health care claims for eligible participating U.S. employees subject to certain deductibles and limitations. The Company determines its liability for claims incurred but not reported for the insurance liabilities on an actuarial basis and as of March 31, 2024, the Company had $1.8 million recorded for these health care insurance liabilities in other accrued liabilities.

Business Segment Information

The Company has four reportable segments, BSI BioSpin, BSI CALID, BSI NANO and BEST, as discussed in Note 1 to the unaudited condensed consolidated financial statements. See Note 3 for revenue by reportable segment.

Operating income by reportable segment are presented below (in millions):

(a)

Represents corporate costs and eliminations not allocated to the reportable segments. Unallocated costs include general and administrative expenses not directly incurred by the segments such as professional fees incurred for the quarterly reviews and annual audit of the consolidated financial statements, personnel costs of corporate accounting, finance, legal and IT resources, and other expense items.

Total assets by reportable segment are as follows (in millions):

(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 held by each of its 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.