Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

10.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.

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):

	June 30, 2024					December 31, 2023
	Notional (in USD)		Fair Value			Notional (in USD)		Fair Value
Financial instruments designated as hedging instruments:
Interest rate cross-currency swap agreements
Other current assets			$	12.7				$	12.0
Other assets				11.4					8.3
Other long-term liabilities				(18.7	)				(26.8	)
	$	270.8	$	5.4		$	378.3	$	(6.5	)
Long-term debt
Long-term debt		1,472.0		(27.5	)		876.0		(85.3	)
Total financial instruments designated as hedging instruments	$	1,742.8	$	(22.1	)	$	1,254.3	$	(91.8	)
Financial instruments not designated as hedging instruments:
Forward currency contracts
Other current assets	$	544.0	$	2.5		$	177.8	$	1.3
Other current liabilities		268.6		(0.5	)		311.7		(0.6	)
Embedded derivatives in purchase and delivery contracts
Other current assets		5.1		0.1			25.6		1.2
Other current liabilities		4.3		—			0.1		—
Fixed price commodity contracts
Other current assets		3.4		0.5			8.4		0.3
Total financial instruments not designated as hedging instruments	$	825.4	$	2.6		$	523.6	$	2.2
Total financial instruments	$	2,568.2	$	(19.5	)	$	1,777.9	$	(89.6	)

As of June 30, 2024, the Company had several cross-currency interest rate swap agreements 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), net in the consolidated statements of income and comprehensive income. 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.

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the Company’s subsidiaries that are party to 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 $9.4 million and $25.7 million for the purchase of products

at June 30, 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):

		Three Months Ended June 30,						Six Months Ended June 30,
	Financial Statement Classification	2024			2023			2024			2023
Financial instruments not designated as hedging instruments
Forward currency contracts	Interest and other income (expense), net	$	(7.1	)	$	1.4		$	(5.1	)	$	1.3
Embedded derivatives in purchase and delivery contracts	Interest and other income (expense), net		0.2			0.4			(1.1	)		0.7
			(6.9	)		1.8			(6.2	)		2.0
Financial instruments designated as cash flow hedging instruments
Interest rate swap agreements	Interest and other income (expense), net	$	2.6		$	2.6		$	5.3		$	4.9
Financial instruments designated as net investment hedging instruments
Interest rate cross-currency swap agreements	Interest and other income (expense), net		1.4			2.0			2.9			4.0
			4.0			4.6			8.2			8.9
Total		$	(2.9	)	$	6.4		$	2.0		$	10.9
		Three Months Ended June 30,						Six Months Ended June 30,
	Financial Statement Classification	2024			2023			2024			2023
Financial instruments designated as cash flow hedging instruments
Interest rate swap agreements	Accumulated other comprehensive income, net of tax	$	(0.9	)	$	3.0		$	0.5		$	(0.4	)
			(0.9	)		3.0			0.5			(0.4	)
Financial instruments designated as net investment hedging instruments
Interest rate cross-currency swap agreements	Accumulated other comprehensive income, net of tax	$	(0.3	)	$	(7.1	)	$	9.9		$	(8.3	)
Long-term debt	Accumulated other comprehensive income, net of tax		(6.3	)		(11.8	)		44.2			(17.9	)
			(6.6	)		(18.9	)		54.1			(26.2	)
Total		$	(7.5	)	$	(15.9	)	$	54.6		$	(26.6	)