BRUKER CORP (BRKR) FY 2024 MD&A

ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, describes the principal factors affecting the results of our operations, financial condition and changes in financial condition, as well as our critical accounting policies and estimates. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and notes to those statements, appearing elsewhere in this report.

Any statements other than statements of historical fact contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Annual Report on Form 10-K may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “seek,” “may,” “will,” “intend,” “estimate,” “should” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements include, but are not limited to, statements regarding:

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the impact of supply chain challenges on our business and operations;

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our working capital requirements and the sufficiency of our cash, borrowings and proceeds of indebtedness to fund our operations and investment activities;

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our plans to make capital investments;

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the impact of changes to tax and accounting rules and changes in law;

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fluctuations in estimates impacting costs related to our self-funded health insurance plan;

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our expectations regarding backlog and revenue;

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our expectations and the impact of our restructuring initiatives;

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the impact of our global IT transformation activities;

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the impact of foreign currency exchange rates and changes in commodity prices; and

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any other statements that address events or developments that the Company intends or believes will or may occur in the future.

Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.

We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors, some of which are outside our control, such as:

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general economic conditions, including inflation, uncertainties caused by recent banking industry volatility, the threat of recession, financial liquidity, currency volatility or devaluation, supply chain or manufacturing capabilities, and uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed by the new presidential administration in the U.S.;

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geopolitical tensions, including those on our customers, such as the conflict between Russia and Ukraine and related economic sanctions, the conflict in the Middle East 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 chain operations, such as Taiwan and China;

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potential energy shortages in Europe where the Company has significant operations and overall higher energy and transportation costs;

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the impacts of climate change and certain weather-related disruptions;

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the timing of governmental stimulus programs and academic research budgets;

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the time it takes between the date customer orders and deposits are received, systems are shipped and accepted by our customers and full payment is received;

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foreign currency exchange rates;

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the worldwide shortage of semiconductor chips, components and raw materials, such as copper;

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changes in raw material, component and logistics costs;

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the time it takes for us to receive critical materials to manufacture our products;

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the time it takes to satisfy local customs requirements and other export/import requirements;

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the time it takes for customers to construct or prepare their facilities for our products;

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the time required to obtain governmental licenses;

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our ability to identify suitable acquisition targets and successfully integrate and manage acquired business; and

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costs related to acquisitions of technology or businesses.

Several of these factors have in the past affected and may continue to affect the amount and timing of revenue recognized on sales of our products and receipt of related payments and will likely continue to do so in the future. Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter’s operating performance.

OVERVIEW

We are a developer, manufacturer and distributor of high-performance scientific instruments and analytical and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular and cellular levels. Our corporate headquarters are located in Billerica, Massachusetts. We maintain major research and development and manufacturing centers in Europe, Asia and North America and we have commercial offices located throughout the world. Bruker is organized into four reportable segments: the Bruker Scientific Instruments (BSI) BioSpin Segment, the BSI CALID Segment, the BSI NANO Segment and the Bruker Energy & Supercon Technologies (BEST) Segment.

During the fiscal year ended December 31, 2024, Bruker made several acquisitions including ELITechGroup, NanoString and Chemspeed. These acquisitions enable Bruker to extend our capabilities in molecular diagnostics (ELITechGroup), life science analytical instruments (NanoString) and to provide new capabilities in lab automation (Chemspeed). Refer to Note 4, Acquisitions in the consolidated financial statements.

Consolidated Results

The following table presents a summary of our consolidated results as of the year ended December 31, 2024 and 2023 (dollars in millions):

Discussion of GAAP financial measures follows in the Results of Operations paragraphs.

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Non-GAAP Measures

Uses and definitions:

Although our consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue excluding the effects of foreign currency, and expenses excluding costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiatives, and other costs (“non-GAAP adjustments”), provides meaningful supplemental information regarding our performance. We rely internally on certain measures that are not calculated according to GAAP. These measures include constant exchange rate (“CER”) currency revenue growth, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and free cash flow.

Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance and are useful measures to evaluate our continuing business. Additionally, management believes free cash flow is a useful measure to evaluate our business as it indicates the amount of cash generated after additions to property, plant, and equipment which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends and repayment of debt.

We regularly use these non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP measures and use this information for our planning and forecasting activities. These measures may also be useful to investors in evaluating the underlying operating performance of our business. The presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and it may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies.

We define our non-GAAP financial measures as follows:

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CER currency revenue growth as GAAP revenue excluding the effect of changes in foreign currency translation rates.

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Non-GAAP gross profit as GAAP gross profit excluding non-GAAP adjustments.

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Non-GAAP gross profit margin as GAAP gross profit margin excluding the impact of non-GAAP adjustments.

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Non-GAAP operating income as GAAP operating income excluding non-GAAP adjustments.

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Non-GAAP operating income margin as GAAP operating income margin excluding the impact of non-GAAP adjustments.

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Free cash flow as GAAP net cash provided by operating activities less additions to property, plant, and equipment.

Reconciliations of GAAP to Non-GAAP financial measures:

The amounts listed below are in millions of dollars. Where relevant, we have also included the associated percentage margins.

GAAP revenue to non-GAAP CER currency revenue:

The decrease in non-GAAP CER revenue growth was driven primarily by lower growth in our academic, government, and industrial markets against difficult high growth comparables in 2023. China was also a significant contributor to our slower growth in 2024 compared to the prior year. These markets were offset by revenue from acquisitions and organic growth.

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GAAP Gross Profit to non-GAAP Gross Profit:

The decrease in non-GAAP gross margin was primarily due to the mix impact of our 2024 acquisitions combined with a modest headwind from foreign currency.

GAAP Operating income to non-GAAP Operating income:

The decrease in our non-GAAP operating margins in 2024 was primarily due to lower margin mix and increased costs related to 2024 acquisitions.

GAAP Net operating cash flow to non-GAAP Free cash flow:

For the year ended December 31, 2024, our free cash flow was $107.2 million lower than the same period in 2023, primarily due to lower net income and significant acquisition-related expenses.

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RESULTS OF OPERATIONS

A discussion regarding our results of operations for the fiscal year ended December 31, 2023 compared to 2022 can be found under Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at https://.ir.bruker.com under the “Financial Info” section.

Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023

Consolidated Results

The following table presents our results for the periods presented (dollars in millions):

Revenue

The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods presented (dollars in millions):

(a)
Represents product and service revenue between reportable segments.

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Revenue increases were driven by strong demand for our differentiated instruments and solutions and revenue growth from acquisitions. The BSI BioSpin Segment revenue increase was primarily due to demand for our instruments across academia, government and biopharma markets. The BSI BioSpin Segment also saw increased revenue from the Chemspeed acquisition. We had revenue from four gigahertz-class NMR systems each in fiscal 2024 and fiscal 2023. The BSI CALID Segment revenue increase reflected strong demand for our differentiated instruments, primarily, in our Microbiology & Infection Diagnostics, driven by the MALDI BioTyper and the ELITechGroup molecular diagnostics business, which was acquired in 2024, as well as our Optics IR/NIR/Raman businesses. This was partially offset by softness in academia and government markets as well as our China market. The BSI NANO Segment revenue increase was driven by strong demand in its semiconductor metrology market as well as revenue increases from the NanoString and Bruker Cellular acquisitions offset by soft demand from biopharma. BEST revenue increased slightly by growth in accelerator and fusion technologies at our Research Instruments (“RI”) business which is gaining traction in extreme ultraviolet lithography technologies for next-gen semiconductors, and was mostly offset by softness in clinical MRI superconductors.

For more detail on our revenue by geography, see “Foreign Currency Risk” in Item 7A Quantitative And Qualitative Disclosures About Market Risk on page 49 of this Annual Report on Form 10-K.

Gross Profit

The following table presents gross profit and gross profit margins by reportable segment for the years ended December 31, 2024 and 2023 (dollars in millions):

The increase in gross profit was a result of pricing and volume leverage, marginally offset by net unfavorable impact of foreign exchange rate movements compared to 2023. The decrease in gross profit margin was primarily due to mix impact of our 2024 acquisitions combined, and unfavorable foreign exchange rate movements.

Selling, General and Administrative

Our selling, general and administrative expenses for the year ended December 31, 2024, increased to 26.6% of total revenue from 24.6% of total revenue for the comparable period in 2023. The year over year increase as a percentage of revenue was a result of increased mix of sales and marketing costs from 2024 acquisitions, increased spending related to additional headcount and personnel expenses, as well as increased consulting and professional fees related to acquisitions, tax, audit and audit-related fees.

Research and Development

Our research and development expenses for the year ended December 31, 2024, increased to 11.2% of total revenue from 9.9% of total revenue for the comparable period in 2023. The increase as a percentage of revenue is a result of our increased investment in research and development capabilities, and the mix of research and developments costs from 2024 acquisitions. Investments are primarily related to additional headcount and personnel expenses as well as increased consulting and professional fees related to research and development activities.

Other Charges, Net

Other charges, net for the year ended December 31, 2024, increased to $126.1 million compared to $52.2 million for the comparable period in 2023. The year over year increase was primarily due to $44.9 million of acquisition-related litigation charges primarily related to the acquisitions of BCA and NanoString as well as an increase of $38.1 million in acquisition-related expenses due to costs from 2024 acquisitions. Please refer to Note 11, Other Charges, net for more details on our other charges, net costs.

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Operating Income

The following table presents operating income and operating margins on revenue by reportable segment for the periods presented (dollars in millions):

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

The decrease in operating income and operating income margin was primarily due to unfavorable margin mix and increased costs related to 2024 acquisitions, and unfavorable foreign exchange rate movements.

Bargain purchase gain and associated measurement period adjustments

In 2023, the Company recorded a gain of $144.1 million, in connection with the PhenomeX acquisition, which closed on October 2, 2023. This bargain purchase gain reflected the excess of identifiable net assets acquired, including deferred tax assets related to acquired tax NOLs, over the purchase consideration paid.

In 2024, following the finalization of a review of income tax positions related to change in ownership limitations assessments on NOL/R&D credits at the end of the business combination measurement period in connection with the PhenomeX acquisition, the Company recorded a charge of $8.0 million

Interest and Other Income (Expense), Net

The increase in interest and other income (expense), net during the year ended December 31, 2024, as compared to the same period in 2023 was primarily due to higher interest expense of $47.9 million due to increased borrowings, and impairment of certain minority investments of $24.6 million, offset by higher foreign currency exchange gains of 23.7 million driven by strengthening of the U.S. dollar against other currencies.

Income Tax Provision

The effective tax rates for years ended 2024 and 2023, were 44.2% and 21.6%, respectively. The increase in the Company's effective tax rate was primarily due to changes in jurisdictional mix, an increase in tax reserves, and unfavorable return to provision adjustments.

Net Income Attributable to Bruker Corporation

The decrease in net income and earnings per diluted share was primarily driven by lower gross and operating margins, higher tax rate, as well as the bargain purchase gain recognized in 2023 in connection with the PhenomeX acquisition.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows

We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve months. Our future cash requirements could be affected by acquisitions that we may complete, purchases of our common stock or the payment of dividends in the future. Historically, we have financed our growth and liquidity needs through cash flow generation from operations and a combination of debt financings and issuances of common stock. In the future, there are no assurances that we will continue to generate cash flow from operations or that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us.

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Effective in the quarter ended June 30, 2024, the Company entered into a multi-currency notional cash pooling agreement with a financial institution to manage cash flow more efficiently and optimize liquidity. Refer to Note 2, Summary of Significant Accounting policies for more information on our notional cash pooling agreement.

Cash and cash equivalents at December 31, 2024, and 2023 totaled $183.4 million and $488.3 million, respectively, of which $419.3 million and $398.4 million, respectively, related to cash, cash equivalents and short-term investments is held outside of the United States in our foreign subsidiaries, most significantly in the Netherlands, Switzerland, and Hong Kong. These balances include positive positions under our cash pooling arrangements.

The following table presents our cash flows from operating activities, investing activities and financing activities for the periods presented (in millions):

Net cash provided by operating activities during the year ended December 31, 2024, resulted primarily from consolidated net income adjusted for non-cash items of $329.5 million, partially offset by a change in operating assets and liabilities, net of acquisitions of $78.2 million. Net Cash provided by operating activities during the year ended December 31, 2023, resulted from consolidated net income adjusted for non-cash items of $437.9 million, including the non-cash bargain purchase gain from the acquisition of PhenomeX, partially offset by a change in operating assets and liabilities, net of acquisitions and divestitures of $87.8 million.

The decrease in consolidated net income adjusted for non-cash items was primarily due to lower income as result of unfavorable margin mix and increased costs related to 2024 acquisitions. The decrease in the change in operating assets and liabilities, net of acquisitions was due to higher inventory balances to handle supply chain challenges, higher accounts receivable and lower deferred revenue and customer advances, partially offset by increases in accounts payable and accrued expenses

Net cash used in investing activities during the year ended December 31, 2024, resulted primarily from the acquisitions of $1,599.6 million, purchases of property, plant and equipment of $115.3 million, and cash paid for minority investments of $48.3 million. Net cash used in investing activities during the year ended December 31, 2023, resulted primarily from acquisitions of $226.6 million, purchases of property, plant and equipment of $106.9 million, and cash paid for minority investments of $24.8 million, partially offset by net proceeds from sales of property, plant and equipment of $11.1 million.

We currently expect capital expenditures in 2025 to be approximately $100.0 million.

Net cash provided by financing activities during the year ended December 31, 2024, was primarily from proceeds from long-term debt of $973.7 million (refer to Note 21, Debt), proceeds from our public offering of common stock of $403.0 million (refer to Note 27, Shareholders’ Equity), and net proceeds from our revolving line of credit of $37.6 million (refer to Note 21, Debt). These inflows were primarily offset by the repayment of our 2012 Note Purchase Agreement of $100.0 million and the payment of dividends to common shareholders of $30.2 million. The increase in equity financing and the net increase in debt financing was primarily due to acquisition activity. Net cash used in financing activities during the year ended December 31, 2023, was primarily attributable to cash payments made for shares of common stock under our repurchase program of $152.3 million, and $29.4 million for the payment of dividends.

Share Repurchase Program

During the year ended December 31, 2024, we did not purchase any shares under the 2023 Repurchase Program. Please refer to Note 27, Shareholder's Equity, in the Notes to our Consolidated Financial Statements for more information on our share repurchase program. Subsequent to December 31, 2024 and prior to the date of filing this annual report on From 10K, the Company purchased 200,731 shares at an aggregate cost of $10 million.

Public Offering

In May 2024, we completed an underwritten public offering. Please refer to Note 27, Shareholder's Equity, in the Notes to our Consolidated Financial Statements for more information on this public offering.

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Income Taxes

At December 31, 2024 and in accordance with the U.S. tax laws we recorded state and foreign withholding taxes, as well as subsequent foreign currency translations on these withholding taxes as they are an obligation of the parent company, on the cash and liquid assets portion of the unremitted earnings and profits (E&P) of foreign subsidiaries expected to be repatriated from our foreign subsidiaries to the United States. We continue to be indefinitely reinvested in the amount of $1.8 billion of non-cash E&P that is subject to the 2017 Tax Act deemed repatriation. If this E&P is ultimately distributed to the United States in the form of dividends or otherwise, we would likely be subject to additional withholding tax. We will continue to evaluate our assertions on the cumulative historical outside basis differences in our foreign subsidiaries as of December 31, 2024. The amount of unrecognized deferred withholding taxes on the undistributed E&P was $104.2 million at December 31, 2024.

As of December 31, 2024, the Company has approximately $593.5 million of U.S. federal net operating loss carryforwards, of which $33.8 million begin to expire at various dates beginning in 2033 and the remainder $559.7 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 $184.6 million of state net operating loss carryforwards available to reduce state taxable income that are expected to expire at various times beginning in 2024 to the extent that they cannot be utilized. The Company also has approximately $107.3 million of German Trade Tax and Corporate Income Tax net operating losses that are carried forward indefinitely.

In December 2021, the Organization for Economic Co-operation and Development (OECD) introduced its Pillar Two Framework Model Rules (“Pillar 2”) and provided 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 has evaluated the potential impact of Pillar 2 on its business and as a result, the Company has recorded a tax provision of $1.3 million for the period ended December 31, 2024. The Company continues to monitor the countries in which it operates as they enact legislation implementing Pillar 2.

Refer to Note 14, Income taxes for additional details of our loss carryforwards.

Debt and Credit Facilities

We have a total outstanding debt of $2.1 billion as of December 31, 2024, and a revolving credit facility that provides for up to $900.0 million of additional liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use of which $872.2 million is undrawn. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400 million. As of December 31, 2024, we were in compliance with all covenants of our debt agreements.

Refer to Note 21, Debt in this annual report for additional information on our outstanding debt and credit facility as well as a summary of the fair and carrying values of our outstanding debt as of December 31, 2024.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP, and are disclosed in Note 2, Summary of Significant Accounting Policies in the notes the consolidated financial statements. U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.

We consider our accounting estimates to be critical to the consolidated financial statements if (i) the estimate requires significant judgment or is complex in nature and (ii) if different estimates and assumptions were used, the results could have a material impact on our consolidated financial statements. We evaluate our estimates and the application of our policies on an ongoing basis.

We base our estimates and judgments on our historical experience, current market and economic conditions, industry trends, and other assumptions that we believe are reasonable. Actual results could differ from these estimates. Changes in estimates are recorded in the period in which they become known.

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We believe the following critical accounting policies and estimates to be both those most important to the portrayal of our financial position and results of operations and those that require the most estimation and subjective judgment. The full accounting policies are disclosed in Note 2, Summary of Significant Accounting Policies in the notes the consolidated financial statements.

Revenue Recognition:

We recognize revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. The standard results in significant management judgment and estimates as a result of inherent uncertainties in the following areas:

Multiple Performance Obligations: Many of our contracts include multiple performance obligations, such as systems, installation, accessories, parts, and services. Allocating the transaction price to these obligations requires us to estimate the standalone selling price for each distinct good or service. While we primarily rely on observable prices from standalone sales, in cases where such evidence is unavailable, we use an expected cost-plus-margin approach, and this estimate requires judgments and is subject to potential variability if our assumptions about cost or margin change.

Timing of Revenue Recognition: We recognize revenue when control transfers to the customer in an amount that reflects the consideration we expect to receive. For most of our performance obligations, this occurs at a point in time, such as upon shipment or customer acceptance. However, for certain customized systems or services, revenue is recognized over time based on progress toward completion, typically measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs. This method requires us to make reasonable estimates of total contract costs and assess progress. Revisions to cost estimates could significantly affect the timing and amount of revenue recognized, particularly for complex, long-term arrangements. Losses are recorded immediately when we estimate that contracts will ultimately result in a loss.

For systems with customer-specific acceptance criteria, management evaluates whether the customer assessment criteria have been satisfied, which may involve judgment in determining whether successful factory acceptance testing or customer sign-off has been achieved. Changes in customer requirements or delays in acceptance can impact the timing of revenue recognition.

Collectability assessment: Differing assessments of the probability of collection could impact the amount and timing of revenue recognition. However, based on our customer profile combined with an established practice of requiring advances for certain larger product sales, we have not historically experienced significant adjustments to revenue.

Income taxes

Deferred tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts and their respective tax bases, measured using enacted tax rates expected to apply when these differences reverse. The realizability of deferred tax assets is evaluated based on historical taxable income, current tax liabilities, and projected future taxable income, with the latter involving inherent uncertainty. A valuation allowance is established if it is more likely than not that some or all of the deferred tax assets will not be realized. Changes in estimates or assumptions regarding taxable income may require adjustments to the valuation allowance, which could materially impact our financial position and results of operations.

Liabilities for uncertain tax positions are recorded based on a minimum recognition threshold, requiring significant judgment to determine if it is more likely than not that a tax position will be sustained.

Business Combinations

We account for business combinations under the acquisition method of accounting. Accordingly, at the date of each acquisition, we measure the fair value of all identifiable assets acquired (including intangible assets), liabilities assumed and any remaining noncontrolling interests and allocate the amounts paid to all items measured. Any excess of fair value of acquired net assets, including identifiable intangible assets over the acquisition consideration, results in a bargain purchase gain.

The determination of the fair value of identifiable assets and liabilities is based on valuations that reflect management’s best estimates of inputs and assumptions, consistent with those a market participant would utilize. These valuations rely significantly on estimated future cash flows, which are critical inputs in the valuation models. The preparation of these estimates involves substantial judgment and incorporates information from multiple sources, including historical data of the acquired entity, insights obtained through due diligence, and industry publications available to us and all of which are subject to their own inherent limitations when estimating future outcomes.

Impairment

Goodwill and indefinite-lived intangible assets arising from our acquisitions, 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

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not be recoverable. We typically identify other amortizing intangible assets as part of the acquisition accounting, and the amount and amortization period are determined at the time of the acquisition. In assessing the recoverability of goodwill and other indefinite-lived or amortizing intangible assets, we must make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the discount rate to determine the fair value of these assets. If these estimates or their related assumptions adversely change after the acquisition date, we may be required to record impairment charges against these assets in the reporting period in which the impairment is determined. Refer to Note 6, Goodwill and Intangible Assets, for more information on goodwill and indefinite-lived intangible assets impairment assessment for current year acquisitions.

RECENT ACCOUNTING PRONOUNCEMENTS

Information regarding recently issued accounting pronouncements may be found in Note 3, Recent Accounting Pronouncements to our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.