10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the quarterly period ended September 30, 2018

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from                  to                 

Commission File Number 000-30833

BRUKER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	04-3110160
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

40 Manning Road, Billerica, MA 01821

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (978) 663-3660

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      x       No      o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      x      No      o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o    No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at November 5, 2018
Common Stock, $0.01 par value per share	156,567,873 shares

BRUKER CORPORATION

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2018

Index

		Page
Part I	FINANCIAL INFORMATION	1
Item 1:	Unaudited Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	1
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2018 and 2017	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4:	Controls and Procedures	46
Part II	OTHER INFORMATION	46
Item 1:	Legal Proceedings	46
Item 1A:	Risk Factors	46
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6:	Exhibits	47
	Signatures	48

PART I                FINANCIAL INFORMATION

ITEM 1.              UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

	September 30,			December 31,
	2018			2017
ASSETS
Current assets:
Cash and cash equivalents	$	270.1		$	325.0
Short-term investments	—			114.2
Accounts receivable, net	323.4			319.3
Inventories	518.6			486.2
Other current assets	149.4			114.1
Total current assets	1,261.5			1,358.8
Property, plant and equipment, net	260.9			266.5
Goodwill	199.9			169.8
Intangibles, net and other long-term assets	166.8			153.4
Total assets	$	1,889.1		$	1,948.5
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	15.4		$	—
Accounts payable	100.0			90.8
Customer advances	110.4			111.7
Other current liabilities	337.3			322.0
Total current liabilities	563.1			524.5
Long-term debt	225.2			415.6
Other long-term liabilities	275.6			274.9
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding	—			—
Common stock, $0.01 par value 260,000,000 shares authorized, 172,537,082 and 171,875,076 shares issued and 156,512,202 and 155,865,977 shares outstanding at September 30, 2018 and December 31, 2017, respectively	1.7			1.7
Treasury stock, at cost, 16,024,880 and 16,009,099 shares at September 30, 2018 and December 31, 2017, respectively	(401.5		)	(401.2		)
Accumulated other comprehensive income	12.7			27.0
Other shareholders’ equity	1,204.0			1,097.9
Total shareholders’ equity attributable to Bruker Corporation	816.9			725.4
Noncontrolling interest in consolidated subsidiaries	8.3			8.1
Total shareholders’ equity	825.2			733.5
Total liabilities and shareholders’ equity	$	1,889.1		$	1,948.5

The accompanying notes are an integral part of these statements.

1

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in millions, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Product revenue	$	385.5		$	364.4		$	1,105.8		$	1,029.2
Service revenue	79.6			70.0			230.8			200.4
Other revenue	1.5			1.2			5.4			5.8
Total revenue	466.6			435.6			1,342.0			1,235.4
Cost of product revenue	197.3			195.6			571.6			559.8
Cost of service revenue	46.6			40.5			142.2			114.9
Cost of other revenue	0.1			0.6			1.0			0.9
Total cost of revenue	244.0			236.7			714.8			675.6
Gross profit	222.6			198.9			627.2			559.8
Operating expenses:
Selling, general and administrative	106.5			102.7			327.4			303.3
Research and development	41.8			40.6			128.6			118.5
Other charges, net	5.2			4.3			15.2			13.8
Total operating expenses	153.5			147.6			471.2			435.6
Operating income	69.1			51.3			156.0			124.2
Interest and other income (expense), net	(3.7		)	(3.9		)	(11.5		)	(15.0		)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	65.4			47.4			144.5			109.2
Income tax provision	21.2			9.8			41.4			25.9
Consolidated net income	44.2			37.6			103.1			83.3
Net income attributable to noncontrolling interest in consolidated subsidiaries	0.8			0.6			1.5			1.3
Net income attributable to Bruker Corporation	$	43.4		$	37.0		$	101.6		$	82.0
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.28		$	0.23		$	0.65		$	0.52
Diluted	$	0.28		$	0.23		$	0.65		$	0.51
Weighted average common shares outstanding:
Basic	156.4			157.5			156.1			158.9
Diluted	157.4			158.7			157.2			159.9
Comprehensive income	$	41.9		$	61.2		$	88.3		$	170.3
Less: Comprehensive income attributable to noncontrolling interests	0.5			0.7			0.9			1.9
Comprehensive income attributable to Bruker Corporation	$	41.4		$	60.5		$	87.4		$	168.4
Dividend declared per common share	$	0.04		$	0.04		$	0.12		$	0.12

The accompanying notes are an integral part of these statements.

2

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Consolidated net income	$	103.1		$	83.3
Adjustments to reconcile consolidated net income to cash flows from operating activities:
Depreciation and amortization	48.3			48.2
Write-down of inventories to net realizable value	12.8			9.5
Stock-based compensation expense	8.2			8.4
Deferred income taxes	(8.6		)	(5.0		)
Other non-cash expenses, net	15.9			(3.4		)
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	(6.9		)	(8.4		)
Inventories	(55.3		)	(37.5		)
Accounts payable and accrued expenses	(1.2		)	(8.6		)
Income taxes payable, net	(8.5		)	(6.3		)
Deferred revenue	4.8			(0.2		)
Customer advances	2.1			(34.7		)
Other changes in operating assets and liabilities, net	(7.3		)	5.4
Net cash provided by operating activities	107.4			50.7
Cash flows from investing activities:
Purchases of short-term investments	—			(118.5		)
Maturities of short-term investments	117.0			134.0
Cash paid for acquisitions, net of cash acquired	(55.3		)	(65.8		)
Purchases of property, plant and equipment	(28.9		)	(31.3		)
Proceeds from sales of property, plant and equipment	0.1			6.9
Net cash provided by (used in) investing activities	32.9			(74.7		)
Cash flows from financing activities:
Repayments of Note Purchase Agreement	—			(20.0		)
Repayments of revolving lines of credit	(202.5		)	(65.0		)
Proceeds from revolving lines of credit	27.5			154.0
Repayment of other debt, net	(0.9		)	(1.0		)
Proceeds from issuance of common stock, net	8.9			15.3
Payment of contingent consideration	(2.3		)	(3.5		)
Repurchase of common stock	—			(129.7		)
Payment of dividends	(18.8		)	(19.1		)
Cash payments to noncontrolling interest	(0.9		)	(0.5		)
Net cash used in financing activities	(189.0		)	(69.5		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5.4		)	15.4
Net change in cash, cash equivalents and restricted cash	(54.1		)	(78.1		)
Cash, cash equivalents and restricted cash at beginning of period	328.9			345.9
Cash, cash equivalents and restricted cash at end of period	$	274.8		$	267.8

The accompanying notes are an integral part of these statements.

3

BRUKER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.Description of Business

Bruker Corporation, together with its consolidated subsidiaries (“Bruker” or the “Company”), develops, manufactures and distributes high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels. Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples. The Company’s products address the rapidly evolving needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research.

The Company has two reportable segments, Bruker Scientific Instruments (BSI), which represented approximately 89.4% and 89.9% of the Company’s revenues during the three and nine months ended September 30, 2018, respectively, and 89.7% and 89.0% of the Company’s revenues during the three and nine months ended September 30, 2017, respectively; and Bruker Energy & Supercon Technologies (BEST), which represented the remainder of the Company’s revenues. For financial reporting purposes, the Bruker BioSpin Group, Bruker CALID Group and Bruker Nano Group operating segments are aggregated into the BSI reportable segment, (the “BSI Segment”)  because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments.

Bruker BioSpin — The Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. The majority of the Bruker BioSpin Group’s revenues are generated by academic and government research customers. Other customers include pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

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

Bruker Nano — The Bruker Nano Group 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; and spark optical emission spectroscopy systems. Customers of the Bruker Nano Group include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials analysis.

The Company’s BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and “big science” research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications, as well as ceramic high temperature superconductors primarily for energy grid and magnet 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 September 30, 2018 and December 31, 2017, and for the three and nine months ended September 30, 2018 and 2017, have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and

4

Exchange Commission (SEC) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial information presented herein does not include all of the information and footnotes required by U.S. 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 September 30, 2018, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, have not changed other than for revenue recognition as detailed in Footnote 2.

2.Revenue

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance was effective as of January 1, 2018 and was applied on a modified retrospective basis. The Company elected the practical expedient and only evaluated contracts for which substantially all revenue had not been recognized under ASC 605 with the cumulative effect of the new guidance recorded as of the date of initial application.  The impact of adoption was an increase to beginning retained earnings of $8.2 million, offset in part by a $2.1 million impact related to taxes. As the adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, transitional disclosures were not provided.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The key elements of ASC 606 are: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations, most commonly due to providing additional goods or services along with a system, such as installation, accessories, parts and services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service being provided to the customer. The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis. Alternatively, when not sold separately, the Company may determine standalone selling price using an expected cost plus a margin approach.

The Company’s performance obligations are typically satisfied at a point in time, most commonly either on shipment or customer acceptance. Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period. In addition, certain arrangements to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion. Typically, progress is measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs upon completion as this best depicts the transfer of control to the customer. Application of the cost-to-cost method requires the Company to make reasonable estimates of the extent of progress toward completion and the total costs the Company expects to incur. Losses are recorded immediately when the Company estimates that contracts will ultimately result in a loss.

The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative costs. Amounts billed to customers in connection with these costs are included in total revenues. When control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer.

5

The Company requires an advance deposit based on the terms and conditions of contracts with customers for many of its contracts. Typically, revenue is recognized within one year of receiving an advance deposit. The Company does not have any material payment terms that extend beyond one year. For contracts where an advance payment is received greater than one year from expected revenue recognition, or a portion of the payment due extends beyond one year, the Company determined it does not constitute a significant financing component. There is minimal variable consideration included in the transaction price of the Company’s contracts.

The Company’s revenues and cash flows may be adversely impacted by unfavorable changes in economic or political conditions in the countries and markets in which they operate, including, among others, adverse changes in interest rates or tax rates, volatility in financial and commodity markets, contraction in the availability of credit in the marketplace, and changes in capital spending patterns.  Economic factors that could adversely influence demand for the Company’s products include uncertainty about global economic conditions leading to reduced levels of investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers’ and suppliers’ access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior. Slower economic growth or deterioration in economic conditions could result in a decrease in government funding for scientific research, a delay in orders from current or potential customers or a reduction in purchases of our products.  The Company cannot predict how changes in economic conditions or political instability will affect customers and suppliers or how any negative impact on customers and suppliers might adversely impact the Company’s business results or financial condition.

The following table presents the Company’s revenues by Group and end customer geographical location for the three and nine month periods ended September 30, 2018 (dollars in millions):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2018			2018
Revenue by Group:
Bruker BioSpin	$	139.5		$	411.2
Bruker CALID	134.6			393.9
Bruker Nano	143.0			401.4
BEST	50.9			139.2
Eliminations	(1.4		)	(3.7		)
Total revenue	$	466.6		$	1,342.0

	Three Months Ended September 30,		Nine Months Ended September 30,
	2018		2018
Revenue by End Customer Geography:
United States	$	134.1	$	347.3
Germany	44.9		135.3
Rest of Europe	114.6		346.4
Asia Pacific	134.4		396.8
Other	38.6		116.2
Total revenue	$	466.6	$	1,342.0

Revenue for the Company recognized at a point in time versus over time is as follows for the three and nine month periods ended September 30, 2018 (dollars in millions):

6

	Three Months Ended September 30,		Nine Months Ended September 30,
	2018		2018
Revenue recognized at a point in time	$	427.1	$	1,227.6
Revenue recognized over time	39.5		114.4
Total revenue	$	466.6	$	1,342.0

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 September 30, 2018, remaining performance obligations were approximately $1,044.1 million. The Company expects to recognize revenue on approximately 81.2% of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, 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 generally classified as other current assets in the unaudited condensed consolidated balance sheets. The balance of contract assets as of September 30, 2018 and January 1, 2018, the date of adoption of ASC 606, was $26.7 million and $12.8 million, respectively.  The increase in the contract asset balance during the nine month period ended September 30, 2018 is primarily a result of foreign currency translation and contracts that have been recognized as revenue during the nine month period ending September 30, 2018 for which billing cannot contractually occur as of September 30, 2018.

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 sheet based on the timing of when revenue recognition is expected.  As of September 30, 2018 and January 1, 2018, the date of adoption of ASC 606, contract liabilities were $285.6 million and $291.3 million, respectively.   The decrease in the contract liability balance during the nine month period ended September 30, 2018 is primarily a result of satisfying performance obligations and foreign currency translation which were offset in part by new cash payments received.  Approximately $145.8 million of the contract liability balance on January 1, 2018, the date of adoption of ASC 606, was recognized as revenue during the nine month period ended September 30, 2018.

3.Acquisitions

2018

On July 11, 2018, the Company acquired a 100% interest in JPK Instruments AG (“JPK”), a privately held company, for a purchase price of Euro 14.2 million (approximately $16.6 million), with the potential for additional consideration based on various operational achievements throughout 2019 and 2020. JPK adds in-depth expertise in live-cell imaging, cellular mechanics, adhesion, and molecular force measurements, optical trapping, and biological stimulus-response characterization to Bruker’s capabilities. JPK is located in Berlin, Germany and is being integrated into the Bruker Nano Group within the BSI Segment. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

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Consideration Transferred:
Cash paid	$	16.6
Cash acquired	(0.2		)
Contingent consideration	4.3
Total consideration transferred	$	20.7
Allocation of Consideration Transferred:
Inventories	$	3.0
Accounts receivable	1.8
Other current and non-current assets	0.7
Intangible assets:
Technology	7.0
Customer relationships	7.5
Backlog	1.1
Trade name	0.6
Goodwill	8.0
Deferred taxes, net	(4.9		)
Liabilities assumed	(4.1		)
Total consideration allocated	$	20.7

The preliminary fair value allocation included contingent consideration in the amount of $4.3 million, which represented the estimated fair value of future payments to the former shareholders of JPK based on JPK achieving various operational achievements for the years 2019 and 2020. The Company expects to complete the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with JPK is eight years, except for backlog which will be amortized over one year.

The results of JPK, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of JPK has not been presented because the impact on revenues, net income and total assets is not material.

On April 8, 2018, the Company acquired a 100% interest in Anasys Instruments Corp. (“Anasys”), a privately held company, for a purchase price of $27.0 million with the potential for additional consideration based on revenue achievements in 2019 and 2020. Anasys develops and manufactures nanoscale infrared spectroscopy and thermal measurement instruments. Anasys is being integrated into the Bruker Nano Group within the BSI Segment. The acquisition of Anasys was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

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Consideration Transferred:
Cash paid	$	27.0
Contingent consideration	5.3
Total consideration transferred	$	32.3
Allocation of Consideration Transferred:
Inventories	$	2.8
Accounts receivable	0.8
Other current and non-current assets	1.1
Intangible assets:
Technology	7.3
Customer relationships	8.0
Backlog	1.8
Trade name	0.6
Goodwill	16.6
Deferred taxes, net	(3.2		)
Liabilities assumed	(3.5		)
Total consideration allocated	$	32.3

The preliminary fair value allocation included contingent consideration in the amount of $5.3 million, which represented the estimated fair value of future payments to the former shareholders of Anasys based on Anasys achieving annual revenue targets for the years 2019 and 2020. The Company expects to complete the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with Anasys is eight years, except for backlog which will be amortized over one year.

The results of Anasys, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Anasys has not been presented because the impact on revenues, net income and total assets is not material.

2017

On May 5, 2017, the Company acquired 100% of the shares of Luxendo GmbH (“Luxendo”), a privately held spin-off of the European Molecular Biology Laboratory (EMBL), for a purchase price of Euro 17 million (approximately $18.8 million), with the potential for additional consideration based on Luxendo revenue achievements in 2018 through 2021. Luxendo is a developer and manufacturer of proprietary light-sheet fluorescence microscopy instruments and the Company believes the acquisition enhances the Company’s portfolio of swept-field confocal, super-resolution, and multiphoton fluorescence microscope product lines for small organism embryology, live-cell imaging, brain development and cleared brain tissue and optogenetics applications. Luxendo is located in Heidelberg, Germany and is being integrated into the Bruker Nano Group within the BSI Segment. The acquisition of Luxendo was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

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Consideration Transferred:
Cash paid	$	20.1
Cash acquired	(1.3		)
Contingent consideration	3.1
Total consideration transferred	$	21.9
Allocation of Consideration Transferred:
Inventories	$	1.1
Other current and non-current assets	0.4
Property, plant and equipment	0.3
Intangible assets:
Existing technology	10.9
Trade name	0.8
Goodwill	11.2
Deferred taxes, net	(2.4		)
Liabilities assumed	(0.4		)
Total consideration allocated	$	21.9

The amortization period for intangible assets acquired in connection with the acquisition of Luxendo is ten years for trade names and seven years for technology.

The results of Luxendo, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Luxendo has not been presented because the impact on revenues, net income and total assets is not material.

On January 23, 2017, the Company acquired 100% of the shares of Hysitron, Incorporated (“Hysitron”), a privately held company. The acquisition adds Hysitron’s nanomechanical testing instruments to the Company’s existing portfolio of atomic force microscopes, surface profilometers, and tribology and mechanical testing systems. Hysitron is included in the Bruker Nano Group within the BSI Segment. The acquisition of Hysitron was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition of Hysitron were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	27.9
Cash acquired	(0.7		)
Contingent consideration	1.6
Total consideration transferred	$	28.8
Allocation of Consideration Transferred:
Accounts receivable, net	$	3.0
Inventories	3.8
Other current assets	0.2
Property, plant and equipment	0.6
Intangible assets:
Customer relationships	5.8
Existing technology	4.7
Trade name	1.2
Other	0.6
Goodwill	16.6
Deferred taxes, net	(4.1		)
Capital lease	(0.2		)
Liabilities assumed	(3.4		)
Total consideration allocated	$	28.8

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The amortization period for intangible assets acquired in connection with Hysitron is seven years for customer relationships, trademarks and other intangibles and five years for existing technology.

The results of Hysitron, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Hysitron has not been presented because the impact on revenues, net income and total assets is not material.

4.Stock-Based Compensation

On May 14, 2010, the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”) was approved by the Company’s stockholders. The 2010 Plan provided for the issuance of up to 8,000,000 shares of the Company’s common stock. The 2010 Plan allowed a committee of the Board of Directors (the “Compensation Committee”) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee had the authority to determine which employees would receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted under the 2010 Plan typically were made subject to a vesting period of three to five years.

On May 20, 2016, the Bruker Corporation 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by the Company’s stockholders. With the approval of the 2016 Plan, no further grants will be made under the 2010 Plan. The 2016 Plan provides for the issuance of up to 9,500,000 shares of the Company’s common stock and permits the grant of awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares and performance units, as well as cash-based awards. The 2016 Plan is administered by the Compensation Committee. The Compensation Committee has the authority to determine which employees will receive awards, the amount of any awards, and other terms and conditions of such awards. Awards granted under the 2016 Plan typically vest over a period of one to four years.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock options	$	1.2	$	1.8	$	3.2	$	5.2
Restricted stock awards	0.3		0.4		0.7		1.1
Restricted stock units	1.8		0.9		4.3		2.1
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Costs of product revenue	$	0.5	$	0.5	$	1.2	$	1.3
Selling, general and administrative	2.3		2.1		5.8		5.8
Research and development	0.5		0.5		1.2		1.3
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

Stock-based compensation expense is recognized on a straight-line basis over the underlying requisite service period of the stock-based award.

Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions for the nine months ended September 30, 2018 and 2017 regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

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	2018		2017
Risk-free interest rates	2.80	%	1.78% - 2.09%
Expected life	5.38 years		5.56 years
Volatility	28.46	%	30.78% - 34.13%
Expected dividend yield	0.47	%	0.55% - 0.74%

Stock option activity for the nine months ended September 30, 2018 was as follows:

	Shares Subject to Options		Weighted Average Option Price		Weighted Average Remaining Contractual Term (Yrs)	Aggregate Intrinsic Value (in millions) (b)
Outstanding at December 31, 2017	3,235,673		$	20.16
Granted	126,260		35.86
Exercised	(529,357	)	18.03
Forfeited	(186,263	)	20.19
Outstanding at September 30, 2018	2,646,313		$	21.33	5.8	$	32.4
Exercisable at September 30, 2018	1,653,296		$	19.35	5.2	$	23.3
Exercisable and expected to vest at September 30, 2018 (a)	2,571,939		$	21.23	5.8	$	31.7

(a) In addition to the options that are vested at September 30, 2018, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2018.

(b)The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $33.45 on September 30, 2018 and the exercise price of the underlying stock options.

The weighted average fair value of options granted was $9.50 and $7.61 per share during the nine months ended September 30, 2018 and 2017, respectively.

The total intrinsic value of options exercised was $7.2 million and $10.9 million for the nine months ended September 30, 2018 and 2017, respectively.

Restricted stock award activity for the nine months ended September 30, 2018 was as follows:

	Shares Subject to Restriction		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017	85,529		$	20.39
Vested	(54,343	)	20.12
Forfeited	(6,553	)	24.80
Outstanding at September 30, 2018	24,633		$	19.82

The total fair value of restricted stock vested was $1.1 million and $1.5 million in the nine months ended September 30, 2018 and 2017, respectively.

Restricted stock unit activity for the nine months ended September 30, 2018 was as follows:

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	Shares Subject to Restriction		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017	652,123		$	25.47
Granted	412,097		33.86
Vested	(145,356	)	25.62
Forfeited	(55,357	)	26.44
Outstanding at September 30, 2018	863,507		$	29.39

The total fair value of restricted stock units vested was $3.7 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively.

At September 30, 2018, the Company expects to recognize pre-tax stock-based compensation expense of $5.3 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.21 years. The Company expects to recognize additional pre-tax stock-based compensation expense of $0.4 million associated with outstanding restricted stock awards granted under the Company’s stock plans over the weighted average remaining service period of 0.85 year. The Company also expects to recognize additional pre-tax stock-based compensation expense of $20.7 million associated with outstanding restricted stock units granted under the 2016 Plan over the weighted average remaining service period of 3.25 years.

5.Earnings Per Share

Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net income attributable to Bruker Corporation by the weighted-average shares outstanding during the period. The diluted net income per share computation includes the effect of shares that would be issuable upon the exercise of outstanding stock options and the vesting of restricted stock, reduced by the number of shares that are assumed to be purchased by the Company under the treasury stock method.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net income attributable to Bruker Corporation, as reported	$	43.4	$	37.0	$	101.6	$	82.0
Weighted average shares outstanding:
Weighted average shares outstanding-basic	156.4		157.5		156.1		158.9
Effect of dilutive securities:
Stock options and restricted stock awards and units	1.0		1.2		1.1		1.0
	157.4		158.7		157.2		159.9
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.28	$	0.23	$	0.65	$	0.52
Diluted	$	0.28	$	0.23	$	0.65	$	0.51

Stock options to purchase approximately 0.6 million shares and 1.0 million shares were excluded from the computation of diluted earnings per share in the three months ended September 30, 2018 and 2017, respectively, as their effect would have been anti-dilutive.  Approximately 0.6 million shares and 1.7 million shares were excluded from the computation of diluted earnings per share in the nine months ended September 30, 2018 and 2017, respectively, as their effect would have been anti-dilutive.

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6.Fair Value of Financial Instruments

The Company applies the following hierarchy to determine the fair value of financial instruments, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The levels in the hierarchy are defined as follows:

·Level 1:  Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·Level 2:  Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·Level 3:  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The valuation techniques that may be used by the Company to determine the fair value of Level 2 and Level 3 financial instruments are the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value based on current market expectations about those future amounts, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).

The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at September 30, 2018 and December 31, 2017 (dollars in millions):

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September 30, 2018	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Embedded derivatives in purchase and delivery contracts	$	0.6	$	—	$	0.6	$	—
Foreign exchange contracts	0.4		—		0.4		—
Total assets recorded at fair value	$	1.0	$	—	$	1.0	$	—
Liabilities:
Contingent consideration	$	16.9	$	—	$	—	$	16.9
Foreign exchange contracts	2.7		—		2.7		—
Embedded derivatives in purchase and delivery contracts	1.3		—		1.3		—
Fixed price commodity contracts	0.4		—		0.4		—
Total liabilities recorded at fair value	$	21.3	$	—	$	4.4	$	16.9

December 31, 2017	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Foreign exchange contracts	$	4.5	$	—	$	4.5	$	—
Embedded derivatives in purchase and delivery contracts	0.9		—		0.9		—
Fixed price commodity contracts	0.8		—		0.8		—
Total assets recorded at fair value	$	6.2	$	—	$	6.2	$	—
Liabilities:
Contingent consideration	$	12.7	$	—	$	—	$	12.7
Foreign exchange contracts	0.1		—		0.1		—
Embedded derivatives in purchase and delivery contracts	2.9		—		2.9		—
Total liabilities recorded at fair value	$	15.7	$	—	$	3.0	$	12.7

The Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and sale contracts, accounts receivable, borrowings under a revolving credit agreement, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, borrowings under a revolving credit agreement and accounts payable approximate fair value because of their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists principally of a private placement arrangement entered into in 2012 with various fixed interest rates based on the maturity date. The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was $228.9 million and $231.3 million at September 30, 2018 and December 31, 2017, respectively, based on the outstanding amount at September 30, 2018 and December 31, 2017, market prices and observable sources with similar maturity dates.

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

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liabilities and did not elect the fair value option for any financial assets or liabilities which originated during the three or nine months ended September 30, 2018 or 2017.

Excluded from the table above are restricted cash and short-term investments related to time and call deposits. The Company has a program to enter into time deposits with varying maturity dates ranging from one to twelve months, as well as call deposits for which the Company has the ability to redeem the invested amounts over a period of 95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the consolidated balance sheets based on call and maturity dates and these are not subject to fair value measurement. The following tables set forth the balances of restricted cash and short-term investments as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30,		December 31,
	2018		2017
Restricted Cash	$	4.7	$	3.9
Short-term Investments	—		114.2

As part of certain acquisitions, the Company recorded contingent consideration liabilities that have been classified as Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments to the former shareholders of certain acquired companies 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 considerations 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.

The following table sets forth the changes in contingent consideration liabilities for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	12.7
Current period additions	9.9
Current period adjustments	(0.1		)
Current period settlements	(5.5		)
Foreign currency effect	(0.1		)
Balance at September 30, 2018	$	16.9

7.Restricted Cash

Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company’s unaudited condensed consolidated statement of cash flows. The Company has certain subsidiaries that are required by local laws and regulations to maintain restricted cash balances to cover future employee benefit payments. Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date. The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets, respectively, in the accompanying consolidated balance sheets.

The inclusion of restricted cash increased the balances of the unaudited condensed consolidated statement of cash flows as follows (dollars in millions):

	Nine Months Ended September 30,
	2018		2017
Beginning Balance	$	3.9	$	3.5
Ending Balance	4.7		3.9

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8.Inventories

Inventories consisted of the following (in millions):

	September 30,		December 31,
	2018		2017
Raw materials	$	156.1	$	152.0
Work-in-process	208.7		183.1
Finished goods	89.5		96.6
Demonstration units	64.3		54.5
Inventories	$	518.6	$	486.2

Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. As of September 30, 2018 and December 31, 2017, the value of inventory-in-transit was $25.5 million and $41.4 million, respectively.

9.Goodwill and Intangible Assets

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	169.8
Current period additions	32.3
Current period adjustments	(0.3		)
Foreign currency effect	(1.9		)
Balance at September 30, 2018	$	199.9

The following is a summary of intangible assets, excluding goodwill (dollars in millions):

	September 30, 2018							December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Existing technology and related patents	$	215.3	$	(156.0	)	$	59.3	$	195.4	$	(138.9	)	$	56.5
Customer relationships	49.6		(16.2		)	33.4		34.6		(12.9		)	21.7
Non compete contracts	1.8		(1.8		)	—		1.8		(1.5		)	0.3
Trade names	5.4		(1.4		)	4.0		4.2		(0.9		)	3.3
Other	2.8		(1.4		)	1.4		—		—			—
Intangible assets subject to amortization	274.9		(176.8		)	98.1		236.0		(154.2		)	81.8
In-process research and development	0.6		—			0.6		0.6		—			0.6
Intangible assets	$	275.5	$	(176.8	)	$	98.7	$	236.6	$	(154.2	)	$	82.4

For the three months ended September 30, 2018 and 2017, the Company recorded amortization expense of $6.9 million and $8.2 million, respectively, related to intangible assets subject to amortization.  For the nine months ended September 30, 2018 and 2017, the Company recorded amortization expense of $21.5 million and $22.6 million, respectively, related to intangible assets subject to amortization.

The goodwill and intangible assets acquired in the nine months ended September 30, 2018 related primarily to the Anasys and JPK acquisitions.  Please see Note 3—Acquisitions, for additional details on the goodwill and intangibles acquired.

10.Debt

The Company’s debt obligations as of September 30, 2018 and December 31, 2017 consisted of the following (dollars in millions):

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	September 30,			December 31,
	2018			2017
US Dollar revolving loan under the 2015 Credit Agreement	$	20.0		$	195.0
US Dollar notes under the Note Purchase Agreement	220.0			220.0
Unamortized debt issuance costs under the Note Purchase Agreement	(0.6		)	(0.7		)
Capital lease obligations and other loans	1.2			1.3
Total debt	240.6			415.6
Current portion of long-term debt	(15.4		)	—
Total long-term debt, less current portion	$	225.2		$	415.6

On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit Agreement. The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of $500 million and a maturity date of October 2020. Borrowings under the revolving credit line of the 2015 Credit Agreement accrue interest, at the Company’s option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) adjusted LIBOR plus 1.00%, plus margins ranging from 0.00% to 0.30% or (b) LIBOR, plus margins ranging from 0.90% to 1.30%. There is also a facility fee ranging from 0.10% to 0.20%.

Borrowings under the 2015 Credit Agreement are secured by guarantees from certain material subsidiaries, as defined in the 2015 Credit Agreement. The 2015 Credit Agreement also requires the Company to maintain certain financial ratios related to maximum leverage and minimum interest coverage (as defined in the 2015 Credit Agreement). Specifically, the Company’s leverage ratio cannot exceed 3.5 and the Company’s interest coverage ratio cannot be less than 2.5. In addition to the financial ratios, the 2015 Credit Agreement contains negative covenants, including among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends and transactions with affiliates. Failure to comply with any of these restrictions or covenants may result in an event of default on the 2015 Credit Agreement, which could permit acceleration of the debt and require the Company to prepay the debt before its scheduled due date.

The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 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 September 30, 2018 (dollars in millions):

	Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Letters of Credit		Total Amount Available
2015 Credit Agreement	3.2	%	$	500.0	$	20.0	$	1.1	$	478.9
Other lines of credit	—		250.8		—		119.6		131.2
Total revolving lines of credit			$	750.8	$	20.0	$	120.7	$	610.1

In January 2012, the Company entered into a note purchase agreement, referred to as the Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the Note Purchase Agreement, the Company issued and sold $240.0 million of senior notes, referred to as the Senior Notes, which consisted of the following:

·$20.0 million 3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017;

·$15.0 million 3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019;

·$105.0 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022; and

·$100.0 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024.

On January 18, 2017, the outstanding $20.0 million principal amount of Tranche A of the Senior Notes was repaid in accordance with the terms of the Note Purchase Agreement.

Under the terms of the Note Purchase Agreement, the Company may issue and sell additional senior notes up to an aggregate principal amount of $600 million, subject to certain conditions. Interest on the Senior Notes is payable semi-annually

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on January 18 and July 18 of each year. The Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s direct and indirect subsidiaries. The Senior Notes rank pari passu in right of repayment with the Company’s other senior unsecured indebtedness. The Company may prepay some or all of the Senior Notes at any time in an amount not less than 10% of the original aggregate principal amount of the Senior Notes to be prepaid, at a price equal to the sum of (a) 100% of the principal amount thereof, plus accrued and unpaid interest, and (b) the applicable make-whole amount, upon not less than 30 and no more than 60 days written notice to the holders of the Senior Notes. In the event of a change in control of the Company, as defined in the Note Purchase Agreement, the Company may be required to prepay the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The Note Purchase Agreement contains affirmative covenants, including, without limitation, maintenance of corporate existence, compliance with laws, maintenance of insurance and properties, payment of taxes, addition of subsidiary guarantors and furnishing notices and other information. The Note Purchase Agreement also contains certain restrictive covenants that restrict the Company’s ability to, among other things, incur liens, transfer or sell assets, engage in certain mergers and consolidations and enter into transactions with affiliates. The Note Purchase Agreement also includes customary representations and warranties and events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable immediately without further action or notice. In the case of a payment events of defaults, any holder of Senior Notes affected thereby may declare all Senior Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the Senior Notes may declare all the Senior Notes to be due and payable immediately. Pursuant to the Note Purchase Agreement, so long as any Senior Notes are outstanding the Company will not permit (i) its leverage ratio, as determined pursuant to the Note Purchase Agreement, to exceed 3.50 to 1.00 as of the end of any fiscal quarter, (ii) its interest coverage ratio, as determined pursuant to the Note Purchase Agreement, to be less than 2.50 to 1 as of the end of any fiscal quarter for any period of four consecutive fiscal quarters or (iii) priority debt at any time to exceed 25% of consolidated net worth, as determined pursuant to the Note Purchase Agreement.

As of September 30, 2018, the Company was in compliance with the covenants of the Note Purchase Agreement and the 2015 Credit Agreement.  The Company’s leverage ratio (as defined in the respective agreements) was 0.68 and interest coverage ratio (as defined in the respective agreements) was 20.9.

11.Derivative Instruments and Hedging Activities

Interest Rate Risks

The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related short-term market rates. Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2015 Credit Agreement, which totaled $20.0 million at September 30, 2018. The Company currently has a higher level of fixed rate debt than variable rate debt, which limits the exposure to adverse movements in interest rates.

Foreign Exchange Rate Risk Management

The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union and Switzerland, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign currency contracts in order to minimize the volatility that fluctuations in currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months, with some agreements extending to longer periods. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the consolidated statements of income and comprehensive income. The Company had the following notional amounts outstanding under foreign exchange contracts at September 30, 2018 and December 31, 2017 (in millions):

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Buy	Notional Amount in Buy Currency	Sell	Maturity	Notional Amount in U.S. Dollars		Fair Value of Assets		Fair Value of Liabilities
September 30, 2018:
Chinese Renminbi	38.6	U.S. Dollars	October 2018	$	5.6	$	—	$	—
Euro	36.6	U.S. Dollars	October 2018 to January 2019	45.4		—		2.7
Great Britain Pound	19.3	Euro	October 2018	25.0		0.2		—
Swiss Francs	12.4	U.S. Dollars	October 2018	12.5		0.2		—
Euro	11.4	Great Britain Pound	October 2018 to October 2020	13.3		—		—
U.S. Dollars	8.3	Euro	October 2018	8.3		—		—
Singapore Dollar	2.2	U.S. Dollars	October 2018	1.6		—		—
U.S. Dollars	1.6	Swiss Francs	October 2018	1.6		—		—
				$	113.3	$	0.4	$	2.7
December 31, 2017:
Euro	59.5	U.S. Dollars	January 2018	$	67.0	$	4.5	$	—
Swiss Francs	11.0	U.S. Dollars	January 2018	11.3		—		—
Singapore Dollar	4.9	U.S. Dollars	January 2018	3.6		—		—
Euro	1.8	Polish Zloty	January 2018	2.3		—		0.1
				$	84.2	$	4.5	$	0.1

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the “embedded derivative” component of these contracts. The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $108.6 million for the delivery of products and $4.1 million for the purchase of products at September 30, 2018 and $98.3 million for the delivery of products and $3.6 million for the purchase of products at December 31, 2017. The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income.

Commodity Price Risk Management

The Company has arrangements with certain customers under which it has a firm commitment to deliver copper based superconductor wire 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.  At September 30, 2018 and December 31, 2017, the Company had fixed price commodity contracts with notional amounts aggregating $7.5 million and $3.0 million, respectively. The changes in the fair value of these commodity contracts are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income.

The fair value of the derivative instruments described above is recorded in the unaudited condensed consolidated balance sheets for the periods as follows (dollars in millions):

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		September 30,		December 31,
	Balance Sheet Location	2018		2017
Derivative assets:
Foreign exchange contracts	Other current assets	$	0.4	$	4.5
Embedded derivatives in purchase and delivery contracts	Other current assets	0.5		0.9
Fixed price commodity contracts	Other current assets	—		0.8
Embedded derivatives in purchase and delivery contracts	Other long-term assets	0.1		—
Derivative liabilities:
Foreign exchange contracts	Other current liabilities	$	2.7	$	0.1
Embedded derivatives in purchase and delivery contracts	Other current liabilities	0.6		1.5
Fixed price commodity contracts	Other current liabilities	0.4		—
Embedded derivatives in purchase and delivery contracts	Other long-term liabilities	0.7		1.4

The impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments are as follows (dollars in millions):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Foreign exchange contracts	$	1.4		$	(1.5	)	$	(6.7	)	$	5.5
Embedded derivatives in purchase and delivery contracts	—			(1.3		)	1.3			(5.0		)
Fixed price commodity contracts	(0.3		)	0.3			(1.2		)	0.5
Net impact to interest and other income (expense)	$	1.1		$	(2.5	)	$	(6.6	)	$	1.0

The amounts related to derivative instruments not designated as hedging instruments are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income.

12.Provision for Income Taxes

On December 22, 2017 (the “Enactment Date”), the President of the United States signed tax reform legislation (the “2017 Tax Act”), which enacted a wide range of changes to the U.S. corporate income tax system, many of which differ significantly from the provisions of the previous U.S. tax law.  Also on December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, which provides companies with additional guidance on how to implement the provisions of the 2017 Tax Act in their financial statements. The guidance provides for a measurement period, up to one year from the Enactment Date, in which provisional amounts may be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances that existed as of the Enactment Date, if known, which would have impacted the amounts that were initially recorded by the Company.

The Company has not yet completed the assessment of the tax effects associated with the enactment of the 2017 Tax Act; however, a reasonable estimate has been made of the effects on the existing deferred tax balances and the one-time transition tax. Changes in the tax rates and laws are accounted for in the period of enactment. The Company expects to finalize the provisional estimates before the end of 2018 after completing the review and analysis, including reviews and analyses of any interpretations issued during this measurement period.

The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of the Company’s foreign subsidiaries to U.S. taxation as global intangible low-taxed income (GILTI). These changes became effective beginning in 2018. The Company does not recognize deferred taxes for the basis differences expected to reverse as GILTI is incurred.  The Company instead accounts for any taxes assessed as period costs.

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The actual results of the implementation of the 2017 Tax Act may materially differ from the Company’s current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies including the SEC and the FASB to interpret the 2017 Tax Act. The Company will continue to analyze the 2017 Tax Act and any additional guidance that may be issued and finalize the full effects of applying the new legislation in the measurement period.

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 September 30, 2018 and 2017 was $21.2 million and $9.8 million, respectively, representing effective tax rates of 32.4% and 20.7%, respectively.  The income tax provision for the nine months ended September 30, 2018 and 2017 was $41.4 million and $25.9 million, respectively, representing effective tax rates of 28.7% and 23.7%, respectively.  The increase in the Company’s effective tax rate for the three and nine months ended September 30, 2018, compared to the same period in 2017, was primarily due to the recording of items related to the refinement of a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (the “toll charge”) assessed under the 2017 Tax Act during the measurement period.  The Company’s effective tax rate may change over time as the amount or mix of income and taxes changes among the jurisdictions in which the Company is subject to tax.

As of September 30, 2018 and December 31, 2017, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $4.4 million 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 September 30, 2018 and December 31, 2017, approximately $0.5 million and $0.2 million, respectively, of accrued interest and penalties related to uncertain tax positions was included in other long-term liabilities on the Company’s unaudited condensed consolidated balance sheets.  No penalties and interest were recorded in the provision for income taxes for unrecognized tax benefits during the three and nine months ended September 30, 2018 or September 30, 2017.

The Company files tax returns in the United States, which includes federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The majority of the Company’s earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2018 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 4.0% from the U.S. statutory rate of 21.0% in the nine months ended September 30, 2018. The Company has not been a party to any tax holiday agreements. The tax years 2013 to 2017 are open to examination in Germany and Switzerland. Tax years 2011 to 2017 remain open for examination in the United States.

13.Commitments and Contingencies

In accordance with ASC Topic 450, Contingencies, the Company accrues anticipated costs of settlement, damages or other costs to the extent specific losses are probable and estimable.

Litigation and Related Contingencies

Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure is also provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. The Company believes the outcome of pending proceedings, individually and in the aggregate, will not have a material impact on the Company’s financial statements. As of September 30, 2018 and December 31, 2017, no material accruals have been recorded for potential contingencies.

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Governmental Investigations

The Company is subject to regulation by national, state and local government agencies in the United States and other countries in which it operates. From time to time, the Company is the subject of governmental investigations often involving regulatory, marketing and other business practices. These governmental investigations may result in the commencement of civil and criminal proceedings, fines, penalties and administrative remedies which could have a material adverse effect on our financial position, results of operations and/or liquidity.

In August 2018, the Korea Fair Trade Commission (“KFTC”) informed the Company that it is conducting an investigation into the public tender bidding activities of a number of life science instrument companies operating in Korea, including Bruker Korea Co., Ltd.  The Company is cooperating fully with the KFTC regarding this matter and is unable to predict the timing or outcome of this investigation at this time. Revenues from Korea represent less than 3% of the Company’s consolidated revenue for the nine-month period ended September 30, 2018.

On October 19, 2017, the Company received a notice of investigation and subpoena to produce documents from the Division of Enforcement of the SEC. The subpoena seeks information related to an employee terminated as part of a restructuring and certain matters involving the Company’s policies and accounting practices related to revenue recognition and restructuring activities, as well as related financial reporting, disclosure and compliance matters, since January 1, 2013. The subpoena also seeks information concerning, among other things, the Company’s previously identified material weakness in internal controls over the accounting for income taxes, related financial reporting matters and certain payments for non-employee travel expenses. The Company is producing documents in response to the subpoena and intends to continue to cooperate fully with the SEC’s investigation. Additionally, the Audit Committee of the Company’s Board of Directors, with the assistance of outside counsel, is conducting an internal investigation into practices of certain business partners in China and into the conduct of former employees of the Bruker Optics division in China which raised questions of compliance with laws, including the U.S. Foreign Corrupt Practices Act, and/or compliance with the Company’s business policies and code of conduct. The Company has voluntarily disclosed this matter to the SEC and U.S. Department of Justice. At this time, the Company is unable to predict the duration, scope or outcome of these investigations.

As of September 30, 2018 and December 31, 2017, no material accruals have been recorded for potential contingencies related to these matters.

Letters of Credit and Guarantees

At September 30, 2018 and December 31, 2017, the Company had bank guarantees of $120.7 million and $138.8 million, respectively, related primarily to customer advances. These arrangements guarantee the refund of advance payments received from customers in the event that the merchandise is not delivered or warranty obligations are not fulfilled in compliance with the terms of the contract. These guarantees affect the availability of the Company’s lines of credit.

14. Shareholders’ Equity

Share Repurchase Program

In May 2017, the Company’s Board of Directors approved a share repurchase program under which repurchases of common stock up to $225.0 million may occur from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. No repurchases occurred in the three and nine months ended September 30, 2018.  Any future repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility.

Cash Dividends on Shares of Common Stock

On February 22, 2016, the Company announced the establishment of a dividend policy and the declaration by its Board of Directors of an initial quarterly cash dividend in the amount of $0.04 per share of the Company’s issued and outstanding common stock. Under the dividend policy, the Company will target a cash dividend to the Company’s shareholders in the amount of $0.16 per share per annum, payable in equal quarterly installments. The following is a summary of the dividends paid in the periods ended September 30, 2018 and 2017 (dollars in millions):

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	2018
Dividends Paid on	March 23		June 22		September 21
Shareholders of Record as of	March 6		June 4		September 4
Aggregate Cost	$	6.3	$	6.2	$	6.3
	2017
Dividends Paid on	March 24		June 23		September 22
Shareholders of Record as of	March 8		June 5		September 5
Aggregate Cost	$	6.4	$	6.4	$	6.3

Subsequent dividend declarations and the establishment of record and payment dates for such future dividend payments, if any, are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of the Company’s shareholders. The dividend policy may be suspended or cancelled at the discretion of the Board of Directors at any time.

Accumulated Other Comprehensive Income

Comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in other comprehensive income, but excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity, net of tax. The Company’s other comprehensive income is composed primarily of foreign currency translation adjustments and changes in the funded status of defined benefit pension plans. The following is a summary of comprehensive income (dollars in millions):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Consolidated net income	$	44.2		$	37.6	$	103.1		$	83.3
Foreign currency translation adjustments	(2.5		)	21.9		(17.1		)	87.0
Pension liability adjustments, net of tax	0.2			1.7		2.3			—
Net comprehensive income	41.9			61.2		88.3			170.3
Less: Comprehensive income attributable to noncontrolling interests	0.5			0.7		0.9			1.9
Comprehensive income attributable to Bruker Corporation	$	41.4		$	60.5	$	87.4		$	168.4

The following is a summary of the components of accumulated other comprehensive income, net of tax, at September 30, 2018 (dollars in millions):

	Foreign Currency Translation			Pension Liability Adjustment			Accumulated Other Comprehensive Income
Balance at December 31, 2017	$	72.2		$	(45.2	)	$	27.0
Other comprehensive income (loss) before reclassifications	(16.6		)	0.4			(16.2		)
Amounts reclassified from other comprehensive income (loss), net of tax of $0.3 million	—			1.9			1.9
Net current period other comprehensive income (loss)	(16.6		)	2.3			(14.3		)
Balance at September 30, 2018	$	55.6		$	(42.9	)	$	12.7

15.Noncontrolling Interests

Noncontrolling interests represent the minority shareholders’ proportionate share of the Company’s majority owned subsidiaries. The following table sets forth the changes in noncontrolling interests (dollars in millions):

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	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Balance at beginning of period	$	8.7		$	7.4	$	8.1		$	6.7
Net income	0.8			0.6		1.5			1.3
Foreign currency translation adjustments	(0.3		)	0.1		(0.6		)	0.6
Cash payments to noncontrolling interests	(0.9		)	—		(0.9		)	(0.5		)
Impact of ASC 606 adoption	—			—		0.2			—
Balance at end of period	$	8.3		$	8.1	$	8.3		$	8.1

16.Other Charges, Net

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Information technology transformation costs	$	1.1	$	0.8	$	3.5	$	2.9
Restructuring charges	2.0		3.0		5.9		6.9
Acquisition-related charges	1.2		0.5		2.3		3.8
Other	0.9		—		3.5		0.2
Other charges, net	$	5.2	$	4.3	$	15.2	$	13.8

Restructuring Initiatives

Restructuring charges for the three and nine month periods ended September 30, 2018 included charges for various programs that were recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income.  The charges for the three and nine month periods ended September 30, 2017 related primarily to the previously reported and completed 2016 and 2015 restructuring plans. The following table sets forth the restructuring charges for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Cost of revenues	$	0.5	$	1.6	$	0.8	$	1.6
Other charges, net	2.0		3.0		5.9		6.9
	$	2.5	$	4.6	$	6.7	$	8.5

The following table sets forth the changes in restructuring reserves for the nine months ended September 30, 2018 (dollars in millions):

	Total			Severance			Exit Costs			Provisions for Excess Inventory
Balance at December 31, 2017	$	10.8		$	2.0		$	2.1		$	6.7
Restructuring charges	6.7			2.5			4.2			—
Cash payments	(7.5		)	(3.9		)	(3.6		)	—
Other, non-cash adjustments and foreign currency effect	(2.7		)	0.3			(0.7		)	(2.3		)
Balance at September 30, 2018	$	7.3		$	0.9		$	2.0		$	4.4

17.Interest and Other Income (Expense), Net

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

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Interest expense, net	$	(2.3	)	$	(3.6	)	$	(8.3	)	$	(11.1	)
Exchange (losses) gains on foreign currency transactions	(0.6		)	0.3			(1.6		)	(3.9		)
Pension components	(0.9		)	(1.4		)	(2.2		)	(3.2		)
Other	0.1			0.8			0.6			3.2
Interest and other income (expense), net	$	(3.7	)	$	(3.9	)	$	(11.5	)	$	(15.0	)

Pension components represents the amortization of prior service costs and actuarial gains/losses, interest costs and the return on plan assets.   The current year service cost is included within cost of sales and operating expenses in the unaudited condensed consolidated statements of income and comprehensive income.

18.Business Segment Information

The Company has two reportable segments, BSI and BEST, as discussed in Note 1 to the unaudited condensed consolidated financial statements.

Revenue and operating income by reportable segment are presented below (dollars in millions):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenue:
BSI	$	417.1		$	390.6		$	1,206.5		$	1,099.5
BEST	50.9			46.1			139.2			140.2
Eliminations (a)	(1.4		)	(1.1		)	(3.7		)	(4.3		)
Total revenue	$	466.6		$	435.6		$	1,342.0		$	1,235.4
Operating Income (loss)
BSI	$	63.6		$	44.5		$	146.5		$	114.9
BEST	5.4			1.8			9.3			4.3
Corporate, eliminations and other (b)	0.1			5.0			0.2			5.0
Total operating income	$	69.1		$	51.3		$	156.0		$	124.2

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

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

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

	September 30,			December 31,
	2018			2017
Assets:
BSI	$	1,854.5		$	1,917.8
BEST	37.8			35.6
Eliminations and other (a)	(3.2		)	(4.9		)
Total assets	$	1,889.1		$	1,948.5

(a) Assets not allocated to the reportable segments and eliminations of intercompany transactions.

19.Recent Accounting Pronouncements

In March 2017, the FASB issued ASU No. 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This new standard intends to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new standard requires the service cost component of net periodic cost be reported in the same line item(s) as other employee compensation costs and all other components of the net periodic cost be reported in the condensed consolidated statements of income and comprehensive income below operating income. The Company adopted this guidance on January 1, 2018 on a retrospective basis.  The Company reclassified the non-service pension cost previously reported in operations of $1.4 million and $3.2 million for the

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three and nine months ended September 30, 2017, respectively.  The impact of this for the three and nine months ended September 30, 2018 was $0.9 million and $2.2 million, respectively. These amounts were previously reported in cost of sales, selling, general, and administrative, and research and development expenses in the unaudited condensed consolidated statements of income and comprehensive income.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or statements of cash flows upon adoption.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was adopted as of the effective date of January 1, 2018. The Company has evaluated the provisions of this standard and has determined that the impact of adoption of ASU No. 2017-01 was not material to the Company’s consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory. The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing U.S. GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. This new standard was adopted as of the effective date of January 1, 2018. The Company has evaluated the provisions of this standard and has determined that the impact of adoption of ASU No. 2016-16 was not material to the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard provides guidance on the recognition, measurement, presentation and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. Under ASU No. 2016-02, companies are required to transition to the new standard in the period of adoption at the beginning of the earliest period presented in the financial statements (January 1, 2017 for the Company). In July 2018, the FASB issued ASU No. 2018-11 as an update to ASU No. 2016-02, which in part provided companies the option of transitioning to the new standard as of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to adopt the new standard as of January 1, 2019 using the alternative transition method under ASU No. 2018-11. The Company is continuing to evaluate the provisions of the new standard, but currently expects that it will have a material impact on its consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities for substantially all leases currently accounted for as operating leases.

20.Subsequent Event

On October 15, 2018, the Company acquired an 80% interest in Hain Lifescience GmbH (“Hain”), a privately held Company, for a purchase price of EUR 66 million (approximately $76.4 million), with an option to acquire the remaining 20% equity interest, which is exercisable in or after 2022. Hain is an infectious disease specialist with a broad range of molecular diagnostics solutions for the detection of microbial and viral pathogens, as well as for molecular antibiotic resistance testing.   Hain is located in Nehren, Germany and will be integrated into the Bruker CALID Group within the BSI Segment. The purchase accounting for this acquisition will be finalized within the measurement period.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017.

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Statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, which express that we “believe,” “anticipate,” “plan,” “expect,” “seek,” “estimate,” or “should,” as well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from those set forth in forward-looking statements. Certain factors that might cause such a difference are discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2017.

Although our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), we believe describing revenue and expenses, excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net, provides meaningful supplemental information regarding our performance. Specifically, management believes that free cash flow and organic revenue, both non-GAAP financial measures, as well as non-GAAP gross profit margin and non-GAAP operating margin, 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.  We define the term organic revenue as GAAP revenue excluding the effect of foreign currency translation changes and the effect of acquisitions and divestitures.  We define the term non-GAAP gross profit margin as GAAP gross profit margin with certain non-GAAP measures excluded and non-GAAP operating margin as GAAP operating margin with certain non-GAAP measures excluded. These non-GAAP measures exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets, costs associated with our global information technology transition initiative, and other non-operational costs that are infrequent or non-recurring in nature and we believe these are useful measures to evaluate our continuing business. We define free cash flow as net cash provided by operating activities less additions to property, plant, and equipment. We believe 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 use these non-GAAP financial measures to evaluate our period-over-period operating performance because our management believes they provide more comparable measures of our continuing business because they adjust for certain items that are not reflective of the underlying performance of our business. These measures may also be useful to investors in evaluating the underlying operating performance of our business. 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.  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 may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies.

OVERVIEW

Bruker Corporation, together with its consolidated subsidiaries (“Bruker,” the “Company,” “we,” “us” or “our”), 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 our products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples. Our 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.

Revenue for the three month period ended September 30, 2018 was $466.6 million, an increase of $31.0 million, or 7.1%, from the three month period ended September 30, 2017. Revenue from companies acquired within the past twelve months represented $6.4 million, or 1.5%, of the increase, and the unfavorable foreign currency translation effect of a stronger U.S. dollar relative to the Euro and other currencies represented a $5.8 million, or 1.4%, decline. Excluding these effects, organic revenue, a non-GAAP measure, increased by $30.4 million, or 7.0%.  Revenues increased on an organic basis at all three groups within the BSI Segment (the Bruker BioSpin, Bruker CALID and Bruker Nano Groups), and at the BEST Segment. From a geographic perspective, revenues increased in the Americas and the Asia Pacific region, while revenues in Europe were below the prior year third quarter.

Revenue for the nine month period ended September 30, 2018 was $1,342.0 million, an increase of $106.6 million, or 8.6%, from the nine month period ended September 30, 2017. Revenue from companies acquired within the past twelve months represented $11.2 million, or 0.9%, of the increase, and the favorable foreign currency translation effect of a weaker U.S. dollar relative primarily to the Euro represented $37.6 million, or 3.0%, of the increase. Excluding these effects, organic revenue, a non-GAAP measure, increased by $57.8 million, or 4.7%.  Continued growth at our Bruker CALID and the Bruker Nano Group within the BSI Segment, and more modest growth at the Bruker BioSpin Group within the BSI Segment, were

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offset in part by an organic revenue decline at our BEST Segment. Strong demand for mass spectrometry products in clinical microbiology markets as well as for academic and biopharmaceutical research applications, and continued demand for infrared and Raman molecular spectroscopy products, drove the Bruker CALID Group results. The primary drivers of growth within the Bruker Nano Group were strong demand for advanced X-ray and nano analysis products in industrial research and academic research markets.  From a geographic perspective, for the nine months ended September 30, 2018, organic revenue showed positive growth in the Americas and Asia Pacific regions and a more modest increase in Europe.

Our gross profit margin increased to 47.7% during the three months ended September 30, 2018 compared to 45.7% for the three months ended September 30, 2017.  Our gross profit margin increased to 46.7% during the nine months ended September 30, 2018 from 45.3% during the nine months ended September 30, 2017.  The increase in gross profit margin in both periods resulted primarily from strong operating leverage, favorable product mix and the impact of operational improvements. For the first nine months of 2018, these positive effects were partially offset by unfavorable foreign currency translation.

Our operating margin increased to 14.8% for the three months ended September 30, 2018 compared to 11.8% during the three months ended September 30, 2017.  Our operating margin increased to 11.6% for the nine months ended September 30, 2018 from 10.1% during the nine months ended September 30, 2017.  The operating margin expansion was primarily due to the favorable impact of higher volumes and operational improvements. For the first nine months of 2018, these positive effects were partially offset by unfavorable foreign currency translation.

The income tax provision in the three month periods ended September 30, 2018 and 2017 was $21.2 million and $9.8 million, respectively, representing effective tax rates of 32.4% and 20.7%, respectively. The income tax provision in the nine month periods ended September 30, 2018 and 2017 was $41.4 million and $25.9 million, respectively, representing effective tax rates of 28.7% and 23.7%, respectively.  The increase in our effective tax rate was primarily due to the recording of items related to the refinement of a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (the “toll charge”) assessed under the 2017 Tax Act during the measurement period.

Diluted earnings per share for the three month period ended September 30, 2018 were $0.28, an increase of $0.05 compared to $0.23 per share in the three month period ended September 30, 2017.  Earnings per share increased from $0.51 to $0.65 per diluted share for the nine months ended September 30, 2018 compared to the same period in 2017. The increase was primarily due to revenue growth, higher gross and operating profit and a lower number of shares outstanding resulting from our share repurchase activity in 2017.

Operating cash flow for the nine month period ended September 30, 2018 was a source of cash of $107.4 million.  For the nine month period ended September 30, 2018, our free cash flow, a non-GAAP measure, was $78.5 million, calculated as follows (dollars in millions):

	Nine Months Ended September 30,
	2018		2017
Net cash provided by operating activities	$	107.4	$	50.7
Less: Purchases of property, plant and equipment	28.9		31.3
Free Cash Flow	$	78.5	$	19.4

In July 2018, China responded to new and proposed U.S. tariffs on certain Chinese products imported into the U.S by announcing retaliatory tariffs on certain U.S. products imported into China. One round of Chinese tariffs went into effect in July 2018 and other tariffs on additional U.S. products have also been proposed by the Chinese government. While we do not expect the first round of Chinese tariffs to materially impact our operations, we are taking supply chain and other operating actions to mitigate the potential impact on our operating results should additional tariffs be imposed by China on our products. Additional Chinese tariffs could potentially increase the cost of our products or adversely impact the competitiveness of our products and our operating results in the future.

In May 2017, our Board of Directors approved a share repurchase program (the “Repurchase Program”) that authorized repurchases of up to $225.0 million of common stock. No repurchases occurred in the three and nine months ended September 30, 2018.  The remaining authorization under the Repurchase Program is $72.8 million as of September 30, 2018.

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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·the timing of governmental stimulus programs and academic research budgets;

·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;

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

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

·the time required to obtain governmental licenses.

These factors have in the past affected the amount and timing of revenue recognized on sales of our products and receipt of related payments and will 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires that we 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 base our estimates and judgments on our historical experience, current market and economic conditions, industry trends, and other assumptions that we believe are reasonable and form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

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:

·Revenue recognition;

·Income taxes;

·Inventories; and

·Goodwill, other intangible assets and other long-lived assets.

For a further discussion of our critical accounting policies, please refer to our Annual Report on Form 10-K for the year ended December 31, 2017.  There were no significant changes to our critical accounting policies for the three and nine months ended September 30, 2018, except as discussed below related to the adoption of ASC 606 (as defined below) as of January 1, 2018.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606). The key elements of ASC 606 are: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied.

We recognize revenue from systems sales upon transfer of control in an amount that reflects the consideration we expect to receive. Transfer of control generally occurs upon shipment, or for certain systems, based upon customer acceptance for a system once delivered and installed at a customer facility. For systems that include customer-specific acceptance criteria, we are required to assess when it can demonstrate the acceptance criteria has been met, which generally is upon successful factory acceptance testing or customer acceptance and evidence of installation. For systems that require installation and where system revenue is recognized upon shipment, the fair value of installation is deferred until customer acceptance.

When products are sold through an independent distributor or a strategic distribution partner, we recognize the system sale upon transfer of control which is typically on shipment. When we are responsible for installation, the fair value of installation is deferred until customer acceptance. Our distributors do not have price protection rights or rights of return; however, our products are typically warranted to be free from defect for a period of one year.

For contracts that include multiple performance obligations, the transaction price is allocated to each distinct performance obligation based on the relative standalone selling prices of the goods and services being provided to the customer. Our best

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evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis. Alternatively, we may determine standalone selling price using an expected cost plus a margin approach.

We analyze our selling prices used in the allocation of the transaction price, at a minimum, on an annual basis. Selling prices will be analyzed more frequently if a significant change in our business or other factors necessitate more frequent analysis or we experience significant variances in our selling prices.

Revenue from accessories and parts is generally recognized based on shipment. Service revenue is recognized as the services are performed or ratably over the contractual obligation and includes maintenance contracts, extended warranties, training, application support and on-demand services.

For performance obligations recognized over time, revenue is measured by progress toward completion of the performance obligation that reflects the transfer of control.  In particular, we have certain contracts recognized over time for which we apply the cost-to-cost method based on costs incurred to date relative to the total estimated costs for the contract upon completion. Application of the cost-to-cost method requires us to make reasonable estimates of the extent of progress toward completion and the total costs we will incur. Losses are recorded immediately when we estimate that contracts will ultimately result in a loss. Changes in the estimates could affect the timing of revenue recognition.

All taxes assessed by a governmental authority related to revenue producing transactions and collected by us from a customer are excluded from the determination of the transaction price.

Contract Assets and Liabilities

Contract assets represent unbilled receivables when revenue recognized exceeds the amount billed to the customer, and the right to payment is not just subject to the passage of time.  Contract assets typically result from system revenue recorded where a portion of the transaction price is not billable until a future event, such as customer acceptance, or from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis as revenue exceeds the amount billed to the customer. Amounts may not exceed their net realizable value. Contract assets are generally classified as current.

Contract liabilities consist of customer advances, deferred revenue and billings in excess of revenue from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis. Contract liabilities are classified as current or long-term based on the timing of when the Company expects to recognize revenue. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2018 compared to the Three Months Ended September 30, 2017

Consolidated Results

The following table presents our results for the three months ended September 30, 2018 and 2017 (dollars in millions, except per share data):

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	Three Months Ended September 30,
	2018			2017
Product revenue	$	385.5		$	364.4
Service revenue	79.6			70.0
Other revenue	1.5			1.2
Total revenue	466.6			435.6
Cost of product revenue	197.3			195.6
Cost of service revenue	46.6			40.5
Cost of other revenue	0.1			0.6
Total cost of revenue	244.0			236.7
Gross profit	222.6			198.9
Operating expenses:
Selling, general and administrative	106.5			102.7
Research and development	41.8			40.6
Other charges, net	5.2			4.3
Total operating expenses	153.5			147.6
Operating income	69.1			51.3
Interest and other income (expense), net	(3.7		)	(3.9		)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	65.4			47.4
Income tax provision	21.2			9.8
Consolidated net income	44.2			37.6
Net income attributable to noncontrolling interest in consolidated subsidiaries	0.8			0.6
Net income attributable to Bruker Corporation	$	43.4		$	37.0
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.28		$	0.23
Diluted	$	0.28		$	0.23
Weighted average common shares outstanding:
Basic	156.4			157.5
Diluted	157.4			158.7

Revenue

For the three months ended September 30, 2018, our revenue increased $31.0 million, or 7.1%, to $466.6 million, compared to $435.6 million for the comparable period in 2017. Included in revenue was an increase of approximately $6.4 million from acquisitions and a decrease of $5.8 million from foreign currency translation. Excluding the effects of foreign currency translation and our recent acquisitions, our organic revenue, a non-GAAP measure, increased by $30.4 million, or 7.0%.

BSI Segment revenue increased by $26.5 million, or 6.8%, to $417.1 million for the three months ended September 30, 2018, compared to $390.6 million for the three months ended September 30, 2017. BEST Segment revenue increased by $4.8 million, or 10.4%, to $50.9 million for the three months ended September 30, 2018, compared to $46.1 million for the three months ended September 30, 2017.

Please see the Segment Results section later in this section for additional discussion of our financial results by segment.

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Gross Profit

Gross profit for the three months ended September 30, 2018 was $222.6 million, or 47.7% of revenue, compared to $198.9 million, or 45.7% of revenue, for the three months ended September 30, 2017. Included in gross profit were various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling $7.2 million and $9.4 million for the three months ended September 30, 2018 and 2017, respectively. Excluding these charges, our non-GAAP gross profit margins for the three months ended September 30, 2018 and 2017 were 49.2% and 47.8%, respectively. The increase in gross profit margin resulted primarily from growth in revenue, favorable product mix and the impact of operational improvements.

Selling, General and Administrative

Our selling, general and administrative expenses for the three months ended September 30, 2018 increased to $106.5 million, or 22.8% of total revenue, from $102.7 million, or 23.6% of total revenue, for the comparable period in 2017.  The decrease as a percentage of revenue was a result of growth in revenue and disciplined expense management even after the assumption of expenses associated with acquisitions.

Research and Development

Our research and development expenses for the three months ended September 30, 2018 increased to $41.8 million, or 9.0% of total revenue, from $40.6 million, or 9.3% of total revenue, for the comparable period in 2017.  The decrease as a percentage of revenue was a result of the increase in revenue.

Other Charges, Net

Other charges, net of $5.2 million recorded for the three months ended September 30, 2018 were primarily related to the BSI Segment and consisted of $2.0 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, $0.9 million related to professional fees, $1.1 million of costs associated with our global information technology (IT) transformation initiative and $1.2 million of acquisition-related charges related to acquisitions completed in 2018 and 2017. The IT transformation initiative is a multi-year project aimed at updating and integrating our global enterprise resource planning and human resource information systems.

Other charges, net of $4.3 million for the three months ended September 30, 2017 were primarily related to the BSI Segment and consisted primarily of $3.0 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, $0.8 million of costs associated with our global IT transformation initiative and $0.5 million of acquisition-related charges related to acquisitions completed in 2016 and 2017.

Operating Income

Operating income for the three months ended September 30, 2018 was $69.1 million, resulting in an operating margin of 14.8%, compared to operating income of $51.3 million, and an operating margin of 11.8%, for the three months ended September 30, 2017. Included in operating income were various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling $14.2 million and $14.5 million for the three months ended September 30, 2018 and 2017, respectively. Excluding these charges, our non-GAAP operating margins for the three months ended September 30, 2018 and 2017 were 17.9% and 15.1%, respectively. The operating margin expansion was primarily due to increased revenue and a favorable product mix at the BSI and BEST Segments, as well as ongoing operational improvements.

Interest and Other Income (Expense), Net

Interest and other income (expense), net during the three months ended September 30, 2018 was an expense of $3.7 million compared to an expense of $3.9 million for the comparable period of 2017.

During the three months ended September 30, 2018, the primary components within interest and other income (expense), net were net interest expense of $2.3 million, realized and unrealized losses on foreign currency denominated transactions of $0.6 million and $0.9 million related to pension plan expenses.  During the three months ended September 30, 2017, the primary components within interest and other income (expense), net were net interest expense of $3.6 million and $1.4 million related to pension plan expenses offset in part by realized and unrealized gains on foreign currency denominated transactions of $0.3 million and the gain on an acquisition of $1.1 million within the BSI Segment.

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Income Tax Provision

The 2018 and 2017 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances and the effect of jurisdictional differences in statutory tax rates were also considered in the calculation.

The income tax provision for the three months ended September 30, 2018 and 2017 was $21.2 million and $9.8 million, respectively, representing effective tax rates of 32.4% and 20.7%, respectively.  The increase in our third quarter 2018 effective tax rate was primarily due to the recording of items related to the refinement of the toll charge assessed under the 2017 Tax Act during the measurement period.

The majority of our earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2018 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 4.0% from the U.S. statutory rate of 21.0% in the three months ended September 30, 2018. We have not been a party to any tax holiday agreements.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the three months ended September 30, 2018 and 2017 was $0.8 million and $0.6 million, respectively. The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

Net Income Attributable to Bruker Corporation

Our net income attributable to Bruker for the three months ended September 30, 2018 was $43.4 million, or $0.28 per diluted share, compared to $37.0 million, or $0.23 per diluted share, for the comparable period in 2017. The increase in net income and earnings per diluted share was primarily driven by the increase in revenue and significant year-over-year margin improvements.

Segment Results

For financial reporting purposes, we aggregate the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments into the BSI reportable segment, which represented approximately 89.4% of our revenues during the three months ended September 30, 2018. This aggregation reflects these operating segments’ similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Our BEST Segment is our other reportable segment and represents the remainder of our revenues.

Reportable Segment Revenue

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

	Three Months Ended September 30,									Percentage
	2018			2017			Dollar Change			Change
BSI	$	417.1		$	390.6		$	26.5		6.8	%
BEST	50.9			46.1			4.8			10.4	%
Eliminations (a)	(1.4		)	(1.1		)	(0.3		)
	$	466.6		$	435.6		$	31.0		7.1	%

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

BSI Segment Revenue

BSI Segment revenue increased by $26.5 million, or 6.8%, to $417.1 million for the three months ended September 30, 2018, compared to $390.6 million for the three months ended September 30, 2017. Revenue includes approximately $6.4 million attributable to recent acquisitions and approximately $5.3 million from the unfavorable impact of foreign currency translation. Excluding the effects of foreign currency translation and our recent acquisitions, organic revenue, a non-GAAP measure, increased by $25.4 million, or 6.5%.

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The Bruker BioSpin Group revenue increased modestly during the three months ended September 30, 2018 compared to the three months ended September 30, 2017 due to slightly higher shipments of nuclear magnetic resonance products and growth in the service business.

The Bruker CALID Group revenue increased during the three months ended September 30, 2018 compared to the three months ended September 30, 2017, as a result of continued demand for mass spectrometry instruments from academic and biopharmaceutical customers, strong growth of mass spectrometry products, consumables and services in clinical microbiology markets and continued demand for infrared and Raman molecular spectroscopy products. This was slightly offset by lower revenue from radiological/nuclear detectors for CBRNE detection.

The Bruker Nano Group revenue increased during the three months ended September 30, 2018 compared to the three months ended September 30, 2017 primarily as a result of higher revenues from advanced X-Ray and surface analysis products in academic research and industrial research markets and contributions from 2018 acquisitions.

System revenue and aftermarket revenue as a percentage of total BSI Segment revenue were as follows (dollars in millions):

	Three Months Ended September 30,
	2018				2017
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System revenue	$	296.3	71.0	%	$	281.9	72.2	%
Aftermarket revenue	120.8		29.0	%	108.7		27.8	%
Total revenue	$	417.1	100.0	%	$	390.6	100.0	%

BEST Segment Revenue

BEST Segment revenue increased $4.8 million, or 10.4%, to $50.9 million for the three months ended September 30, 2018, compared to $46.1 million for the comparable period in 2017. The increase in revenue resulted primarily from the timing of shipments of superconductors and project completion.

System and wire revenue and aftermarket revenue as a percentage of total BEST Segment revenue were as follows (dollars in millions):

	Three Months Ended September 30,
	2018				2017
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System and wire revenue	$	50.2	98.6	%	$	45.2	98.0	%
Aftermarket revenue	0.7		1.4	%	0.9		2.0	%
Total revenue	$	50.9	100.0	%	$	46.1	100.0	%

Gross Profit and Operating Expenses

For the three months ended September 30, 2018, gross profit margin in the BSI Segment increased to 51.0% from 47.8% compared to the three months ended September 30, 2017.  BEST Segment gross margin increased to 19.4% from 15.6% for the three months ended September 30, 2018 and 2017, respectively.

In the three months ended September 30, 2018, selling, general and administrative expenses and research and development expenses in the BSI Segment increased to $143.8 million, or 34.5% of segment revenue, from $138.2 million, or 35.4% of segment revenue.  The decrease as a percentage of revenue was a result of higher revenue and disciplined expense management even after the assumption of expenses associated with acquisitions.

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Selling, general and administrative expenses and research and development expenses in the BEST Segment were $4.5 million, or 8.8% of segment revenue, compared to $5.1 million, or 11.1% of segment revenue, for the comparable period in 2017.  The decrease was a result of operational improvements.

Operating Income

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

	Three Months Ended September 30,
	2018				2017
	Operating Income		Percentage of Segment Revenue		Operating Income		Percentage of Segment Revenue
BSI	$	63.6	15.2	%	$	44.5	11.4	%
BEST	5.4		10.6	%	1.8		3.9	%
Corporate, eliminations and other (a)	0.1				5.0
Total operating income	$	69.1	14.8	%	$	51.3	11.8	%

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

BSI Segment operating income for the three months ended September 30, 2018 was $63.6 million, resulting in an operating margin of 15.2%, compared to operating income of $44.5 million, resulting in an operating margin of 11.4%, for the comparable period in 2017. Operating income included $14.1 million and $14.0 million in the three months ended September 30, 2018 and 2017, respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs, restructuring costs and costs associated with our global IT transformation initiative.  Excluding these charges, non-GAAP operating margins were 18.6% and 15.0% for the three months ended September 30, 2018 and 2017, respectively. GAAP and non-GAAP operating margin increases were primarily a result of increased revenue, favorable product mix and ongoing operational improvements.

BEST Segment operating income increased for the three months ended September 30, 2018 to $5.4 million, resulting in an operating margin of 10.6%, compared to operating income of $1.8 million, resulting in an operating margin of 3.9%, for the comparable period in 2017.  Operating income included $0.1 million and $0.4 million for the three months ended September 30, 2018 and 2017, respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs.  Excluding these charges, non-GAAP operating margins were 10.8% and 4.8% for the three months ended September 30, 2018 and 2017, respectively. GAAP and non-GAAP operating margins increased primarily due to product mix and operational improvements.

Nine Months Ended September 30, 2018 compared to the Nine Months Ended September 30, 2017

Consolidated Results

The following table presents our results for the nine months ended September 30, 2018 and 2017 (dollars in millions, except per share data):

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	Nine Months Ended September 30,
	2018			2017
Product revenue	$	1,105.8		$	1,029.2
Service revenue	230.8			200.4
Other revenue	5.4			5.8
Total revenue	1,342.0			1,235.4
Cost of product revenue	571.6			559.8
Cost of service revenue	142.2			114.9
Cost of other revenue	1.0			0.9
Total cost of revenue	714.8			675.6
Gross profit	627.2			559.8
Operating expenses:
Selling, general and administrative	327.4			303.3
Research and development	128.6			118.5
Other charges, net	15.2			13.8
Total operating expenses	471.2			435.6
Operating income	156.0			124.2
Interest and other income (expense), net	(11.5		)	(15.0		)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	144.5			109.2
Income tax provision	41.4			25.9
Consolidated net income	103.1			83.3
Net income attributable to noncontrolling interest in consolidated subsidiaries	1.5			1.3
Net income attributable to Bruker Corporation	$	101.6		$	82.0
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.65		$	0.52
Diluted	$	0.65		$	0.51
Weighted average common shares outstanding:
Basic	156.1			158.9
Diluted	157.2			159.9

Revenue

For the nine months ended September 30, 2018, our revenue increased $106.6 million, or 8.6%, to $1,342.0 million, compared to $1,235.4 million for the comparable period in 2017. Included in revenue was an increase of approximately $11.2 million from acquisitions and a $37.6 million increase caused by foreign currency translation. Excluding the effects of foreign currency translation and our recent acquisitions, our organic revenue, a non-GAAP measure, increased by $57.8 million, or 4.7%.

BSI Segment revenue increased by $107.0 million, or 9.7%, to $1,206.5 million for the nine months ended September 30, 2018, compared to $1,099.5 million for the nine months ended September 30, 2017. BEST Segment revenue decreased by $1.0 million, or 0.7%, to $139.2 million for the nine months ended September 30, 2018, compared to $140.2 million for the nine months ended September 30, 2017.

Please see the Segment Results section later in this section for additional discussion of our financial results by segment.

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Gross Profit

Gross profit for the nine months ended September 30, 2018 was $627.2 million, or 46.7% of revenue, compared to $559.8 million, or 45.3% of revenue, for the nine months ended September 30, 2017. Included in gross profit were various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling $19.0 million and $26.3 million for the nine months ended September 30, 2018 and 2017, respectively. Excluding these charges, our non-GAAP gross profit margins for the nine months ended September 30, 2018 and 2017 were 48.2% and 47.4%, respectively. The increase in gross profit margin resulted primarily from growth in revenue, favorable product mix and the impact of operational improvements, partially offset by a negative impact from foreign currency translation.

Selling, General and Administrative

Our selling, general and administrative expenses for the nine months ended September 30, 2018 increased to $327.4 million, or 24.4% of total revenue, from $303.3 million, or 24.6% of total revenue, for the comparable period in 2017.  The increase was primarily the result of foreign currency translation earlier in the year.

Research and Development

Our research and development expenses for the nine months ended September 30, 2018 increased to $128.6 million, or 9.6% of total revenue, from $118.5 million, or 9.6% of total revenue, for the comparable period in 2017.  The increase was primarily the result of foreign currency translation earlier in the year.

Other Charges, Net

Other charges, net of $15.2 million recorded for the nine months ended September 30, 2018 were primarily related to the BSI Segment and consisted of $5.9 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, $3.5 million related to professional fees, $3.5 million of costs associated with our global IT transformation initiative and $2.3 million of acquisition-related charges related to acquisitions completed in 2018 and 2017.

Other charges, net of $13.8 million recorded for the nine months ended September 30, 2017 were primarily related to the BSI Segment and consisted of $6.9 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, $3.8 million of acquisition-related charges related to acquisitions completed in 2016 and 2017 and $2.9 million of costs associated with our global IT transformation initiative.

Operating Income

Operating income for the nine months ended September 30, 2018 was $156.0 million, resulting in an operating margin of 11.6%, compared to operating income of $124.2 million, and an operating margin of 10.1%, for the nine months ended September 30, 2017. Included in operating income were various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling $39.1 million and $44.3 million for the nine months ended September 30, 2018 and 2017, respectively. Excluding these charges, our non-GAAP operating margins in the nine months ended September 30, 2018 and 2017 were 14.5% and 13.6%, respectively. The increase in our GAAP and non-GAAP operating margin resulted primarily from higher revenue and operational improvements, which more than offset the negative impact of foreign currency translation.

Interest and Other Income (Expense), Net

Interest and other income (expense), net during the nine months ended September 30, 2018 was an expense of $11.5 million compared to an expense of $15.0 million for the comparable period of 2017.

During the nine months ended September 30, 2018, the primary components within interest and other income (expense), net were net interest expense of $8.3 million, realized and unrealized losses on foreign currency denominated transactions of $1.6 million and $2.2 million related to pension plan expenses.  During the nine months ended September 30, 2017, the primary components within interest and other income (expense), net were net interest expense of $11.1 million, and realized  and unrealized losses on foreign currency denominated transactions of $3.9 million and $3.2 million, respectively, related to pension plan expenses, offset in part by proceeds from an insurance claim and other miscellaneous income of $3.2 million.

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Income Tax Provision

The 2018 and 2017 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances and the effect of jurisdictional differences in statutory tax rates were also considered in the calculation.

The income tax provision for the nine months ended September 30, 2018 and 2017 was $41.4 million and $25.9 million, respectively, representing effective tax rates of 28.7% and 23.7% respectively.  The increase in our effective tax rate for the nine months ended September 30, 2018 was primarily due to the recording of items related to the refinement of the toll charge assessed under the 2017 Tax Act during the measurement period.

The majority of our earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2018 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 4.0% from the U.S. statutory rate of 21.0% in the nine months ended September 30, 2018. We have not been a party to any tax holiday agreements.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests in each of the nine months ended September 30, 2018 and 2017 was $1.5 million and $1.3 million, respectively. The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

Net Income Attributable to Bruker Corporation

Our net income attributable to Bruker for the nine months ended September 30, 2018 was $101.6 million, or $0.65 per diluted share, compared to $82.0 million, or $0.51 per diluted share, for the comparable period in 2017. The increase in net income and earnings per diluted share was primarily the result of strong revenue growth, margin expansion and a lower year-over-year share count.

Segment Results

For financial reporting purposes, we aggregate the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments into the reportable BSI Segment, which represented approximately 89.9% of our revenues during the nine months ended September 30, 2018. This aggregation reflects these operating segments’ similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Our BEST Segment is our other reportable segment and represents the remainder of our revenues.

Reportable Segment Revenue

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

	Nine Months Ended September 30,									Percentage
	2018			2017			Dollar Change			Change
BSI	$	1,206.5		$	1,099.5		$	107.0		9.7	%
BEST	139.2			140.2			(1.0		)	(0.7	)%
Eliminations (a)	(3.7		)	(4.3		)	0.6
	$	1,342.0		$	1,235.4		$	106.6		8.6	%

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

BSI Segment Revenue

BSI Segment revenue increased by $107.0 million, or 9.7%, to $1,206.5 million for the nine months ended September 30, 2018, compared to $1,099.5 million for the nine months ended September 30, 2017. Revenue includes approximately $11.2 million attributable to recent acquisitions and approximately $31.5 million from the favorable impact of foreign currency translation. Excluding the effects of foreign currency translation and our recent acquisitions, organic revenue, a non-GAAP measure, increased by $64.3 million, or 5.8%.

The Bruker BioSpin Group revenue increased during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 due to slightly higher shipments of nuclear magnetic resonance and preclinical imaging products and growth in the service

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business.

The Bruker CALID Group revenue increased during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 as a result of increased demand for mass spectrometry instruments in academic and biopharmaceutical research, strong growth of mass spectrometry products, consumables and services in clinical microbiology markets and continued demand for infrared and Raman molecular spectroscopy products. These increases were slightly offset by lower revenue from radiological/nuclear detectors for CBRNE detection.

The Bruker Nano Group revenue increased during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 primarily as a result of higher industrial research and academic research revenues as well as contributions from 2018 acquisitions.

System revenue and aftermarket revenue as a percentage of total BSI Segment revenue were as follows (dollars in millions):

	Nine Months Ended September 30,
	2018				2017
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System revenue	$	858.1	71.1	%	$	787.5	71.6	%
Aftermarket revenue	348.4		28.9	%	312.0		28.4	%
Total revenue	$	1,206.5	100.0	%	$	1,099.5	100.0	%

BEST Segment Revenue

BEST Segment revenue decreased $1.0 million, or 0.7%, to $139.2 million for the nine months ended September 30, 2018, compared to $140.2 million for the comparable period in 2017. The decrease in revenue resulted primarily from lower product deliveries and the timing and mix of projects, partially offset by favorable changes in foreign currency translation, compared to the nine months ended September 30, 2017.

System and wire revenue and aftermarket revenue as a percentage of total BEST Segment revenue were as follows (dollars in millions):

	Nine Months Ended September 30,
	2018				2017
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System and wire revenue	$	136.4	98.0	%	$	137.6	98.1	%
Aftermarket revenue	2.8		2.0	%	2.6		1.9	%
Total revenue	$	139.2	100.0	%	$	140.2	100.0	%

Gross Profit and Operating Expenses

For the nine months ended September 30, 2018, gross profit margin in the BSI Segment increased to 50.0% from 48.6% compared to the nine months ended September 30, 2017 due to increased revenue, favorable mix and operational improvements.  BEST Segment gross margin increased to 17.4% from 14.8% for the comparable period in 2017 due to certain operational improvements.

In the nine months ended September 30, 2018, selling, general and administrative expenses and research and development expenses in the BSI Segment were $441.2 million, or 36.6% of segment revenue, compared to $406.5 million, or 37.0% of segment revenue.  The decrease as a percentage of revenue is primarily due to increased revenue and operational improvements.

Selling, general and administrative expenses and research and development expenses in the BEST Segment decreased to $14.8 million, or 10.6% of segment revenue, from $15.3 million, or 10.9% of segment revenue, for the comparable period in

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2017.   The decrease is primarily due to operational improvements.

Operating Income

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

	Nine Months Ended September 30,
	2018				2017
	Operating Income		Percentage of Segment Revenue		Operating Income		Percentage of Segment Revenue
BSI	$	146.5	12.1	%	$	114.9	10.5	%
BEST	9.3		6.7	%	4.3		3.1	%
Corporate, eliminations and other (a)	0.2				5.0
Total operating income	$	156.0	11.6	%	$	124.2	10.1	%

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

BSI Segment operating income for the nine months ended September 30, 2018 was $146.5 million, resulting in an operating margin of 12.1%, compared to operating income of $114.9 million, resulting in an operating margin of 10.5%, for the comparable period in 2017.  Operating income included $38.7 million and $39.7 million for the nine months ended September 30, 2018 and 2017, respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs, restructuring costs and costs associated with our global IT transformation initiative.  Excluding these charges, non-GAAP operating margins were 15.4% and 14.1% in the nine months ended September 30, 2018 and 2017, respectively. The increase in our GAAP and non-GAAP operating margins was primarily due to the favorable impact of higher revenue and operational improvements, partially offset by unfavorable foreign currency translation.

BEST Segment operating income increased for the nine months ended September 30, 2018 to $9.3 million, resulting in an operating margin of 6.7%, compared to an operating income of $4.3 million, resulting in an operating margin of 3.1%, for the comparable period in 2017.  Operating income included $0.4 million and $4.6 million for the nine months ended September 30, 2018 and 2017, respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs.  Excluding these charges, non-GAAP operating margins were 7.0% and 6.3% for the nine months ended September 30, 2018 and 2017, respectively. GAAP and non-GAAP operating margins increased primarily due to reduced production and operating costs.

LIQUIDITY AND CAPITAL RESOURCES

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, repurchases 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 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.

During the nine months ended September 30, 2018, net cash provided by operating activities was $107.4 million, resulting from consolidated net income adjusted for non-cash items of $179.7 million, partially offset by an increase in operating assets and liabilities, net of acquisitions and divestitures of $72.3 million. The increase in operating assets and liabilities, net of acquisitions and divestitures for the nine months ended September 30, 2018 was primarily caused by an increase in inventory for orders in 2018.

During the nine months ended September 30, 2017, net cash provided by operating activities was $50.7 million, resulting from consolidated net income adjusted for non-cash items of $141.0 million, including fewer write-downs of demonstration units, partially offset by an increase in operating assets and liabilities, net of acquisitions and divestitures of $90.3 million. The increase in operating assets and liabilities, net of acquisitions and divestitures for the nine months ended September 30, 2017

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was primarily caused by an increase in inventory for orders in 2017, offset in part by inventory reductions as part of our factory consolidations and an increase in customer advances based on the timing of receipts.

During the nine months ended September 30, 2018, net cash provided by investing activities was $32.9 million, compared to net cash used in investing activities of $74.7 million during the nine months ended September 30, 2017. Cash provided by investing activities during the nine months ended September 30, 2018 was primarily caused by the maturities of short-term investments of $117.0 million, offset by the cash paid for acquisitions of $55.3 million and purchases of property, plant and equipment, net of proceeds from the sale of property, plant and equipment, of $28.8 million.  Cash used in investing activities during the nine months ended September 30, 2017 was primarily caused by the cash paid for acquisitions, net of cash acquired, of $65.8 million and the purchases of property, plant and equipment, net of proceeds from the sale of property, plant and equipment, of $24.4 million, offset in part, by net purchases and maturities of short-term investments of $15.5 million.

During the nine months ended September 30, 2018, net cash used in financing activities was $189.0 million, compared to net cash used in financing activities of $69.5 million during the nine months ended September 30, 2017. Net cash used in financing activities during the nine months ended September 30, 2018 was primarily attributable to repayment of $202.5 million of borrowings under the 2015 Credit Agreement and $18.8 million used for the payment of dividends.  This was offset by $27.5 million in proceeds from borrowings under the 2015 Credit Agreement and $8.9 million of proceeds from the issuance of common stock, net.   Net cash used in financing activities during the nine months ended September 30, 2017 was primarily attributable to repayment of $65.0 million of borrowings under the 2015 Credit Agreement; repayment of $20.0 million of Senior Notes; $129.7 million for the repurchase of our common stock; and $19.1 million used for the payment of dividends.  These effects were funded in part by borrowings of $154.0 million under the 2015 Credit Agreement and $15.3 million proceeds from the issuance of common stock, net.

In May 2017, our Board of Directors approved the Repurchase Program under which repurchases of common stock in the amount of up to $225.0 million were authorized to occur from time to time, in amounts, at prices, and at such times as we deem appropriate, subject to market conditions, legal requirements and other considerations. No repurchases occurred under this Repurchase Program in the nine months ended September 30, 2018. The remaining authorization as of November 5, 2018 is $72.8 million. We intend to fund any additional repurchases from cash on hand, future cash flows from operations and available borrowings under our revolving credit facility.

The repurchased shares are reflected within Treasury stock in the accompanying consolidated balance sheet at September 30, 2018.

Cash, cash equivalents and short-term investments at September 30, 2018 and December 31, 2017 totaled $270.1 million and $439.2 million, respectively, of which $236.0 million and $405.8 million, respectively, related to foreign cash and short-term investments, most significantly in the Netherlands and Switzerland.

At December 31, 2017 and in accordance with the 2017 Tax Act, 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 $740.0 million 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, 2017. We expect to finalize this analysis and accounting related to the toll charge and any remaining outside basis differences in our foreign subsidiaries during the measurement period provided under the 2017 Tax Act. We estimate the amount of unrecognized deferred withholding taxes on the undistributed E&P to be approximately $27.0 million at December 31, 2017.

As of September 30, 2018, we had approximately $1.5 million of net operating loss carryforwards available to reduce state taxable income; approximately $79.1 million of net operating losses available to reduce German federal income and trade taxes that are carried forward indefinitely; $3.9 million of other foreign net operating losses available that are carried forward indefinitely and $10.2 million of other foreign net operating losses that are expected to expire at various times beginning in 2019. We also had U.S. state research and development tax credits of $7.4 million. Utilization of these credits and state net operating losses may be subject to annual limitations due to the ownership percentage change limitations provided by the Internal Revenue Code Section 382 and similar state provisions. In the event of a deemed change in control under Internal Revenue Code Section 382, an annual limitation on the utilization of net operating losses and credits may result in the expiration of all or a portion of the net operating loss and credit carryforwards.

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At September 30, 2018, we had outstanding debt totaling $240.6 million, consisting of $220.0 million outstanding under the Note Purchase Agreement; $20.0 million outstanding under the 2015 Credit Agreement; and $1.2 million under capital lease obligations and other loans.  These amounts were offset by unamortized debt issuance costs under the Note Purchase Agreement of $0.6 million.  At December 31, 2017, we had outstanding debt totaling $415.6 million, consisting of $220.0 million outstanding under the Note Purchase Agreement; $195.0 million outstanding under the 2015 Credit Agreement; and $1.3 million under capital lease obligations and other loans.  These amounts were offset by unamortized debt issuance costs under the Note Purchase Agreement of $0.7 million.

The following is a summary of the maximum commitments and the net amounts available to us under the 2015 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 September 30, 2018 (dollars in millions):

	Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Letters of Credit		Total Amount Available
2015 Credit Agreement	3.2	%	$	500.0	$	20.0	$	1.1	$	478.9
Other lines of credit	—		250.8		—		119.6		131.2
Total revolving lines of credit			$	750.8	$	20.0	$	120.7	$	610.1

On October 27, 2015, we entered into the 2015 Credit Agreement, and terminated the prior credit agreement.  The 2015 Credit Agreement provides a maximum commitment on the revolving credit line of $500.0 million and a maturity date of October 2020.  Borrowings under the revolving credit line accrue interest, at our option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50%, and (iii) adjusted LIBOR plus 1.00%, plus margins ranging from 0.00% to 0.30% or (b) LIBOR, plus margins ranging from 0.90% to 1.30%. There is also a facility fee ranging from 0.10% to 0.20%.

Borrowings under the 2015 Credit Agreement are secured by guarantees from certain material subsidiaries, as defined in the 2015 Credit Agreement. The 2015 Credit Agreement also requires us to maintain certain financial ratios related to maximum leverage and minimum interest coverage. Specifically, our leverage ratio cannot exceed 3.5 and our interest coverage ratio cannot be less than 2.5.  In addition to the financial ratios, the 2015 Credit Agreement contains negative covenants, including among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends and transactions with affiliates.  Failure to comply with any of these restrictions or covenants may result in an event of default on the 2015 Credit Agreement, which could permit acceleration of the debt and require us to prepay the debt before its scheduled due date.

As of September 30, 2018, we were in compliance with the covenants, as defined by both the 2015 Credit Agreement and the Note Purchase Agreement, as our leverage ratio was 0.68 and our interest coverage ratio was 20.9.

In January 2012, we entered into the Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the Note Purchase Agreement, we issued and sold $240.0 million of Senior Notes, which consist of the following:

·$20.0 million 3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017;

·$15.0 million 3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019;

·$105.0 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022; and

·$100.0 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024.

On January 18, 2017, the outstanding $20.0 million principal amount of Tranche A of the Senior Notes was repaid in accordance with the terms of the Note Purchase Agreement.

RECENT ACCOUNTING PRONOUNCEMENTS

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This new standard intends to improve the presentation of net periodic pension cost and

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net periodic postretirement benefit cost. The new standard requires the service cost component of net periodic cost be reported in the same line item(s) as other employee compensation costs and all other components of the net periodic cost be reported in the condensed consolidated statements of income and comprehensive income below operating income. We adopted this guidance on January 1, 2018 on a retrospective basis.  We reclassified the non-service pension cost previously reported in operations of $1.4 million and $3.2 million for the three and nine months ended September 30, 2017, respectively.  The impact of this for the three and nine months ended September 30, 2018 was $0.9 million and $2.2 million, respectively. These amounts were previously reported in cost of sales, selling, general, and administrative, and research and development expenses in the unaudited condensed consolidated statements of income and comprehensive income.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on our financial position, results of operations or statements of cash flows upon adoption.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was adopted as of the effective date of January 1, 2018. We have evaluated the provisions of this standard and have determined that the impact of adoption of ASU No. 2017-01 was not material to our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory. The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing U.S. GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. This new standard was adopted as of the effective date of January 1, 2018. We have evaluated the provisions of this standard and have determined that the impact of adoption of ASU No. 2016-16 was not material to our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard provides guidance on the recognition, measurement, presentation and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. Under ASU No. 2016-02, companies are required to transition to the new standard in the period of adoption at the beginning of the earliest period presented in the financial statements (January 1, 2017 for Bruker). In July 2018, the FASB issued ASU No. 2018-11 as an update to ASU No. 2016-02, which in part provided companies the option of transitioning to the new standard as of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We expect to adopt the new standard as of January 1, 2019 using the alternative transition method under ASU No. 2018-11. We are continuing to evaluate the provisions of the new standard, but currently expect that it will have a material impact on our consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities for substantially all leases currently accounted for as operating leases.

ITEM 3.            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are potentially exposed to market risks associated with changes in foreign currency, interest rates and commodity prices. We selectively use financial instruments to reduce these risks. All transactions related to risk management techniques are authorized and executed pursuant to our policies and procedures. Analytical techniques used to manage and monitor foreign currency and interest rate risk include market valuations and sensitivity analysis.

Impact of Foreign Currencies

We generate a substantial portion of our revenues in international markets, principally Germany and other countries in the European Union, Switzerland and Japan, which exposes our operations to the risk of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. Our costs related to sales in foreign currencies are largely denominated in the same respective currencies, reducing our transaction risk exposure. However, for foreign currency denominated sales in certain regions, such as Japan, where we do not incur significant costs denominated in that foreign

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currency, we are more exposed to the impact of foreign currency fluctuations.

For sales not denominated in U.S. Dollars, if there is an increase in the rate at which a foreign currency is exchanged for U.S. Dollars, it will require more of the foreign currency to equal a specified amount of U.S. Dollars than before the rate increase. In such cases, if we price our products in the foreign currency, we will receive less in U.S. Dollars than we would have received before the rate increase went into effect. If we price our products in U.S. Dollars and competitors price their products in local currency, an increase in the relative strength of the U.S. Dollar could result in our prices not being competitive in a market where business is transacted in the local currency. For example, if the U.S. Dollar strengthened against the Japanese Yen, our Japanese-based competitors would have a greater pricing advantage over us.

Changes in foreign currency translation rates increased our revenue by 3.0% for the nine months ended September 30, 2018 and decreased our revenue by approximately 0.4% for the nine months ended September 30, 2017.

Assets and liabilities of our foreign subsidiaries, where the functional currency is the local currency, are translated into U.S. dollars using period-end exchange rates. Revenues and expenses of foreign subsidiaries are translated at the average exchange rates in effect during the year. Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity.  For the nine months ended September 30, 2018 and 2017, we recorded net (losses) gains from currency translation adjustments of $(17.1) million and $87.0 million, respectively. Gains and losses resulting from foreign currency transactions are reported in interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income. Our foreign exchange losses, net were $1.6 million and $3.9 million, for the nine month periods ended September 30, 2018 and 2017, respectively.

From time to time, we have entered into foreign exchange contracts designed to minimize the volatility that fluctuations in foreign currency have on our cash flows related to purchases and sales denominated in foreign currencies. Under these arrangements, we agree to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates typically with maturities of less than twelve months with some agreements extending to longer periods. These transactions are recorded at fair value with the corresponding gains and losses recorded in interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income. At September 30, 2018 and December 31, 2017, we had foreign exchange contracts with notional amounts aggregating $113.3 million and $84.2 million, respectively. We will continue to evaluate our currency risks and in the future may utilize foreign currency contracts more frequently.

Impact of Interest Rates

We regularly invest excess cash in short-term investments that are subject to changes in interest rates. We believe that the market risk arising from holding these financial instruments is minimal because of our policy of investing in short-term financial instruments issued by highly rated financial institutions.

Our exposure related to adverse movements in interest rates is derived primarily from outstanding floating rate debt instruments that are indexed to short-term market rates. We currently have a higher level of fixed rate debt, which limits our exposure to adverse movements in interest rates.

Impact of Commodity Prices

We are exposed to certain commodity risks associated with prices for various raw materials. The prices of copper and certain other raw materials, particularly niobium tin, used to manufacture superconductors have increased significantly over the last decade. Copper and niobium tin are the main components of low temperature superconductors and continued commodity price increases for copper and niobium as well as other raw materials may negatively affect our profitability. Periodically, we enter into commodity forward purchase contracts to minimize the volatility that fluctuations in the price of copper have on our sales of these products. At September 30, 2018 and December 31, 2017, we had fixed price commodity contracts with notional amounts aggregating $7.5 million and $3.0 million, respectively. We will continue to evaluate our commodity risks and may utilize commodity forward purchase contracts more frequently in the future.

Inflation

We do not believe inflation had a material impact on our business or operating results during any of the periods presented.

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ITEM 4.                CONTROLS AND PROCEDURES

We have established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer and principal accounting officer) by others within our organization. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2018. Based on this evaluation our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2018 to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II                OTHER INFORMATION

ITEM 1.                LEGAL PROCEEDINGS

We are involved in lawsuits, claims, and proceedings, including, but not limited to, patent and commercial matters, which arise in the ordinary course of business. There are no such matters pending that we currently believe are reasonably possible of having a material impact on our business or to our consolidated financial statements.

In addition, we are subject to regulation by national, state and local government agencies in the United States and other countries in which it operates. From time to time, we are 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 our financial position, results of operations and/or liquidity.

In August 2018, the Korea Fair Trade Commission (“KFTC”) informed us that it is conducting an investigation into the public tender bidding activities of a number of life science instrument companies operating in Korea, including Bruker Korea Co., Ltd.  We are cooperating fully with the KFTC regarding this matter and are unable to predict the timing or outcome of this investigation at this time. Revenues from Korea represent less than 3% of our consolidated revenue for the nine month period ended September 30, 2018.

On October 19, 2017, we received a notice of investigation and subpoena to produce documents from the Division of Enforcement of the SEC. The subpoena seeks information related to an employee terminated as part of a restructuring and certain matters involving our policies and accounting practices related to revenue recognition and restructuring activities, as well as related financial reporting, disclosure and compliance matters, since January 1, 2013. The subpoena also seeks information concerning, among other things, our previously identified material weakness in internal controls over the accounting for income taxes, related financial reporting matters and certain payments for non-employee travel expenses. We are producing documents in response to the subpoena and intends to continue to cooperate fully with the SEC’s investigation. Additionally, the Audit Committee of the Company’s Board of Directors, with the assistance of outside counsel, is conducting an internal investigation into practices of certain business partners in China and into the conduct of former employees of the Bruker Optics division in China which raised questions of compliance with laws, including the U.S. Foreign Corrupt Practices Act, and/or compliance with our business policies and code of conduct. The Company has voluntarily disclosed this matter to the SEC and U.S. Department of Justice. At this time, we are unable to predict the duration, scope or outcome of these investigations.

ITEM IA.              RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report

46

on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

ITEM 2.                UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In May 2017, our Board of Directors approved and we announced the Repurchase Program under which repurchases of our common stock of up to $225.0 million may occur from time to time, in amounts, at prices, and at such times as we deem appropriate, subject to market conditions, legal requirements and other considerations. No repurchases under this program occurred in the three and nine months ended September 30, 2018.  As of September 30, 2018, shares of common stock with an aggregate cost of approximately $152.2 million have been repurchased. Any future repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility. The remaining authorization under the Repurchase Program is $72.8 million as of November 5, 2018. The Repurchase Program expires May 11, 2019 and can be suspended, modified or terminated at any time without prior notice.

The following table sets forth all purchases made by or on behalf of us or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the third quarter of 2018.

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares (or approximate dollar value) that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2018	—	$	—	—	$	72,828,939
August 1 - August 31, 2018	4,666	34.74		—	72,828,939
September 1 - September 30, 2018	—	—		—	72,828,939
	4,666	$	34.74	—

(1)Includes 4,666 shares surrendered by participants under our long-term incentive plans to pay taxes upon vesting of restricted stock awards.

(2)There was no share repurchase activity under the Repurchase Program, as described above, during the three months ended September 30, 2018.

ITEM 6.                EXHIBITS

Exhibit No.	Description
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
31.2	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
32.1	Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2)
101	The following materials from the Bruker Corporation Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018 formatted in Extensible Business Reporting Language (XBRL): (i) the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income, (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flows and (iv) Notes to the Unaudited Condensed Consolidated Financial Statements(1)

(1)Filed herewith.

(2)Furnished herewith.

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BRUKER CORPORATION
Date: November 9, 2018	By:	/s/ FRANK H. LAUKIEN, PH.D.
		Frank H. Laukien, Ph.D. President, Chief Executive Officer and Chairman (Principal Executive Officer)
Date: November 9, 2018	By:	/s/ GERALD N. HERMAN
		Gerald N. Herman Chief Financial Officer and Vice President (Principal Financial Officer and Principal Accounting Officer)

48

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Frank H. Laukien, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Bruker Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018	By:	/s/ FRANK H. LAUKIEN, PH.D.
		Frank H. Laukien, Ph.D.
		President, Chief Executive Officer and Chairman
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Gerald N. Herman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Bruker Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018	By:	/s/ GERALD N. HERMAN
		Gerald N. Herman Chief Financial Officer and Vice President (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Bruker Corporation (the “Company”) on Form 10-Q for the three and nine months ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Frank H. Laukien, President, Chief Executive Officer and Chairman of the Board of Directors of the Company, and Gerald N. Herman, Chief Financial Officer and Vice President of the Company, certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2018	By:	/s/ FRANK H. LAUKIEN, PH.D.
		Frank H. Laukien, Ph.D. President, Chief Executive Officer and Chairman (Principal Executive Officer)
Date: November 9, 2018	By:	/s/ GERALD N. HERMAN
		Gerald N. Herman Chief Financial Officer and Vice President (Principal Financial Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 05, 2018
Document and Entity Information
Entity Registrant Name	BRUKER CORP
Entity Central Index Key	0001109354
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		156,567,873
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 270.1	$ 325.0
Short-term investments		114.2
Accounts receivable, net	323.4	319.3
Inventories	518.6	486.2
Other current assets	149.4	114.1
Total current assets	1,261.5	1,358.8
Property, plant and equipment, net	260.9	266.5
Goodwill	199.9	169.8
Intangibles, net and other long-term assets	166.8	153.4
Total assets	1,889.1	1,948.5
Current liabilities:
Current portion of long-term debt	15.4
Accounts payable	100.0	90.8
Customer advances	110.4	111.7
Other current liabilities	337.3	322.0
Total current liabilities	563.1	524.5
Long-term debt	225.2	415.6
Other long-term liabilities	275.6	274.9
Commitments and contingencies (Note 13)
Shareholders' equity:
Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding
Common stock, $0.01 par value 260,000,000 shares authorized, 172,537,082 and 171,875,076 shares issued and 156,512,202 and 155,865,977 shares outstanding at September 30, 2018 and December 31, 2017, respectively	1.7	1.7
Treasury stock, at cost, 16,024,880 and 16,009,099 shares at September 30, 2018 and December 31, 2017, respectively	(401.5)	(401.2)
Accumulated other comprehensive income	12.7	27.0
Other shareholders' equity	1,204.0	1,097.9
Total shareholders' equity attributable to Bruker Corporation	816.9	725.4
Noncontrolling interest in consolidated subsidiaries	8.3	8.1
Total shareholders' equity	825.2	733.5
Total liabilities and shareholders' equity	$ 1,889.1	$ 1,948.5

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	260,000,000	260,000,000
Common stock, shares issued	172,537,082	171,875,076
Common stock, shares outstanding	156,512,202	155,865,977
Treasury stock, shares	16,024,880	16,009,099

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue	$ 466.6	$ 435.6	$ 1,342.0	$ 1,235.4
Cost of revenue	244.0	236.7	714.8	675.6
Gross profit	222.6	198.9	627.2	559.8
Operating expenses:
Selling, general and administrative	106.5	102.7	327.4	303.3
Research and development	41.8	40.6	128.6	118.5
Other charges, net	5.2	4.3	15.2	13.8
Total operating expenses	153.5	147.6	471.2	435.6
Operating income	69.1	51.3	156.0	124.2
Interest and other income (expense), net	(3.7)	(3.9)	(11.5)	(15.0)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	65.4	47.4	144.5	109.2
Income tax provision	21.2	9.8	41.4	25.9
Consolidated net income	44.2	37.6	103.1	83.3
Net income attributable to noncontrolling interest in consolidated subsidiaries	0.8	0.6	1.5	1.3
Net income attributable to Bruker Corporation	$ 43.4	$ 37.0	$ 101.6	$ 82.0
Net income per common share attributable to Bruker Corporation shareholders:
Basic (in dollars per share)	$ 0.28	$ 0.23	$ 0.65	$ 0.52
Diluted (in dollars per share)	$ 0.28	$ 0.23	$ 0.65	$ 0.51
Weighted average common shares outstanding:
Basic (in shares)	156.4	157.5	156.1	158.9
Diluted (in shares)	157.4	158.7	157.2	159.9
Comprehensive income	$ 41.9	$ 61.2	$ 88.3	$ 170.3
Less: Comprehensive income attributable to noncontrolling interests	0.5	0.7	0.9	1.9
Comprehensive income attributable to Bruker Corporation	$ 41.4	$ 60.5	$ 87.4	$ 168.4
Dividend declared per common share (in dollars per share)	$ 0.04	$ 0.04	$ 0.12	$ 0.12
Product
Revenue	$ 385.5	$ 364.4	$ 1,105.8	$ 1,029.2
Cost of revenue	197.3	195.6	571.6	559.8
Service
Revenue	79.6	70.0	230.8	200.4
Cost of revenue	46.6	40.5	142.2	114.9
Other
Revenue	1.5	1.2	5.4	5.8
Cost of revenue	$ 0.1	$ 0.6	$ 1.0	$ 0.9

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Consolidated net income	$ 103.1	$ 83.3
Adjustments to reconcile consolidated net income to cash flows from operating activities:
Depreciation and amortization	48.3	48.2
Write-down of inventories to net realizable value	12.8	9.5
Stock-based compensation expense	8.2	8.4
Deferred income taxes	(8.6)	(5.0)
Other non-cash expenses, net	15.9	(3.4)
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	(6.9)	(8.4)
Inventories	(55.3)	(37.5)
Accounts payable and accrued expenses	(1.2)	(8.6)
Income taxes payable, net	(8.5)	(6.3)
Deferred revenue	4.8	(0.2)
Customer advances	2.1	(34.7)
Other changes in operating assets and liabilities, net	(7.3)	5.4
Net cash provided by operating activities	107.4	50.7
Cash flows from investing activities:
Purchases of short-term investments		(118.5)
Maturities of short-term investments	117.0	134.0
Cash paid for acquisitions, net of cash acquired	(55.3)	(65.8)
Purchases of property, plant and equipment	(28.9)	(31.3)
Proceeds from sales of property, plant and equipment	0.1	6.9
Net cash provided by (used in) investing activities	32.9	(74.7)
Cash flows from financing activities:
Repayments of Note Purchase Agreement		(20.0)
Repayments of revolving lines of credit	(202.5)	(65.0)
Proceeds from revolving lines of credit	27.5	154.0
Repayment of other debt, net	(0.9)	(1.0)
Proceeds from issuance of common stock, net	8.9	15.3
Payment of contingent consideration	(2.3)	(3.5)
Repurchase of common stock		(129.7)
Payment of dividends	(18.8)	(19.1)
Cash payments to noncontrolling interest	(0.9)	(0.5)
Net cash used in financing activities	(189.0)	(69.5)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5.4)	15.4
Net change in cash, cash equivalents and restricted cash	(54.1)	(78.1)
Cash, cash equivalents and restricted cash at beginning of period	328.9	345.9
Cash, cash equivalents and restricted cash at end of period	$ 274.8	$ 267.8

XML

Description of Business

9 Months Ended

Sep. 30, 2018

Description of Business

Description of Business

1.Description of Business

Bruker Corporation, together with its consolidated subsidiaries ("Bruker" or the "Company"), develops, manufactures and distributes high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels. Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples. The Company’s products address the rapidly evolving needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research.

The Company has two reportable segments, Bruker Scientific Instruments (BSI), which represented approximately 89.4% and 89.9% of the Company’s revenues during the three and nine months ended September 30, 2018, respectively, and 89.7% and 89.0% of the Company’s revenues during the three and nine months ended September 30, 2017, respectively; and Bruker Energy & Supercon Technologies (BEST), which represented the remainder of the Company’s revenues. For financial reporting purposes, the Bruker BioSpin Group, Bruker CALID Group and Bruker Nano Group operating segments are aggregated into the BSI reportable segment, (the “BSI Segment”) because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments.

Bruker BioSpin — The Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. The majority of the Bruker BioSpin Group’s revenues are generated by academic and government research customers. Other customers include pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies.

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

Bruker Nano — The Bruker Nano Group 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; and spark optical emission spectroscopy systems. Customers of the Bruker Nano Group include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials analysis.

The Company's BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and "big science" research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications, as well as ceramic high temperature superconductors primarily for energy grid and magnet 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 September 30, 2018 and December 31, 2017, and for the three and nine months ended September 30, 2018 and 2017, have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial information presented herein does not include all of the information and footnotes required by U.S. 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 September 30, 2018, the Company's significant accounting policies and estimates, which are detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, have not changed other than for revenue recognition as detailed in Footnote 2.

XML

Revenue

9 Months Ended

Sep. 30, 2018

Revenue

Revenue

2.    Revenue

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance was effective as of January 1, 2018 and was applied on a modified retrospective basis. The Company elected the practical expedient and only evaluated contracts for which substantially all revenue had not been recognized under ASC 605 with the cumulative effect of the new guidance recorded as of the date of initial application. The impact of adoption was an increase to beginning retained earnings of $8.2 million, offset in part by a $2.1 million impact related to taxes. As the adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements, transitional disclosures were not provided.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The key elements of ASC 606 are: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations, most commonly due to providing additional goods or services along with a system, such as installation, accessories, parts and services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service being provided to the customer. The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis. Alternatively, when not sold separately, the Company may determine standalone selling price using an expected cost plus a margin approach.

The Company’s performance obligations are typically satisfied at a point in time, most commonly either on shipment or customer acceptance. Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period. In addition, certain arrangements to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion. Typically, progress is measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs upon completion as this best depicts the transfer of control to the customer. Application of the cost-to-cost method requires the Company to make reasonable estimates of the extent of progress toward completion and the total costs the Company expects to incur. Losses are recorded immediately when the Company estimates that contracts will ultimately result in a loss.

The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative costs. Amounts billed to customers in connection with these costs are included in total revenues. When control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer.

The Company requires an advance deposit based on the terms and conditions of contracts with customers for many of its contracts. Typically, revenue is recognized within one year of receiving an advance deposit. The Company does not have any material payment terms that extend beyond one year. For contracts where an advance payment is received greater than one year from expected revenue recognition, or a portion of the payment due extends beyond one year, the Company determined it does not constitute a significant financing component. There is minimal variable consideration included in the transaction price of the Company’s contracts.  

The Company’s revenues and cash flows may be adversely impacted by unfavorable changes in economic or political conditions in the countries and markets in which they operate, including, among others, adverse changes in interest rates or tax rates, volatility in financial and commodity markets, contraction in the availability of credit in the marketplace, and changes in capital spending patterns.  Economic factors that could adversely influence demand for the Company's products include uncertainty about global economic conditions leading to reduced levels of investment, changes in government spending levels and/or priorities, the size and availability of government budgets, customers' and suppliers' access to credit and other macroeconomic factors affecting government, academic or industrial spending behavior. Slower economic growth or deterioration in economic conditions could result in a decrease in government funding for scientific research, a delay in orders from current or potential customers or a reduction in purchases of our products.  The Company cannot predict how changes in economic conditions or political instability will affect customers and suppliers or how any negative impact on customers and suppliers might adversely impact the Company’s business results or financial condition.

The following table presents the Company’s revenues by Group and end customer geographical location for the three and nine month periods ended September 30, 2018 (dollars in millions):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018		2018
Revenue by Group:
Bruker BioSpin	$	139.5	$	411.2
Bruker CALID		134.6		393.9
Bruker Nano		143.0		401.4
BEST		50.9		139.2
Eliminations		(1.4)		(3.7)
Total revenue	$	466.6	$	1,342.0

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018		2018
Revenue by End Customer Geography:
United States	$	134.1	$	347.3
Germany		44.9		135.3
Rest of Europe		114.6		346.4
Asia Pacific		134.4		396.8
Other		38.6		116.2
Total revenue	$	466.6	$	1,342.0

Revenue for the Company recognized at a point in time versus over time is as follows for the three and nine month periods ended September 30, 2018 (dollars in millions):

	Three Months  Ended		Nine Months  Ended
	September 30,		September 30,
	2018		2018
Revenue recognized at a point in time	$	427.1	$	1,227.6
Revenue recognized over time		39.5		114.4
Total revenue	$	466.6	$	1,342.0

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 September 30, 2018, remaining performance obligations were approximately $1,044.1 million. The Company expects to recognize revenue on approximately 81.2% of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, 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 generally classified as other current assets in the unaudited condensed consolidated balance sheets. The balance of contract assets as of September 30, 2018 and January 1, 2018, the date of adoption of ASC 606, was $26.7 million and $12.8 million, respectively.  The increase in the contract asset balance during the nine month period ended September 30, 2018 is primarily a result of foreign currency translation and contracts that have been recognized as revenue during the nine month period ending September 30, 2018 for which billing cannot contractually occur as of September 30, 2018.

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 sheet based on the timing of when revenue recognition is expected.  As of September 30, 2018 and January 1, 2018, the date of adoption of ASC 606, contract liabilities were $285.6 million and $291.3 million, respectively.   The decrease in the contract liability balance during the nine month period ended September 30, 2018 is primarily a result of satisfying performance obligations and foreign currency translation which were offset in part by new cash payments received. Approximately $145.8 million of the contract liability balance on January 1, 2018, the date of adoption of ASC 606, was recognized as revenue during the nine month period ended September 30, 2018.

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Acquisitions

9 Months Ended

Sep. 30, 2018

Acquisitions

Acquisitions

3.    Acquisitions

2018

On July 11, 2018, the Company acquired a 100% interest in JPK Instruments AG (“JPK”), a privately held company, for a purchase price of Euro 14.2 million (approximately $16.6 million), with the potential for additional consideration based on various operational achievements throughout 2019 and 2020. JPK adds in-depth expertise in live-cell imaging, cellular mechanics, adhesion, and molecular force measurements, optical trapping, and biological stimulus-response characterization to Bruker’s capabilities. JPK is located in Berlin, Germany and is being integrated into the Bruker Nano Group within the BSI Segment. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	16.6
Cash acquired		(0.2)
Contingent consideration		4.3
Total consideration transferred	$	20.7
Allocation of Consideration Transferred:
Inventories	$	3.0
Accounts receivable		1.8
Other current and non-current assets		0.7
Intangible assets:
Technology		7.0
Customer relationships		7.5
Backlog		1.1
Trade name		0.6
Goodwill		8.0
Deferred taxes, net		(4.9)
Liabilities assumed		(4.1)
Total consideration allocated	$	20.7

The preliminary fair value allocation included contingent consideration in the amount of $4.3 million, which represented the estimated fair value of future payments to the former shareholders of JPK based on JPK achieving various operational achievements for the years 2019 and 2020. The Company expects to complete the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with JPK is eight years, except for backlog which will be amortized over one year.

The results of JPK, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of JPK has not been presented because the impact on revenues, net income and total assets is not material.

On April 8, 2018, the Company acquired a 100% interest in Anasys Instruments Corp. ("Anasys"), a privately held company, for a purchase price of $27.0 million with the potential for additional consideration based on revenue achievements in 2019 and 2020. Anasys develops and manufactures nanoscale infrared spectroscopy and thermal measurement instruments. Anasys is being integrated into the Bruker Nano Group within the BSI Segment. The acquisition of Anasys was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	27.0
Contingent consideration		5.3
Total consideration transferred	$	32.3
Allocation of Consideration Transferred:
Inventories	$	2.8
Accounts receivable		0.8
Other current and non-current assets		1.1
Intangible assets:
Technology		7.3
Customer relationships		8.0
Backlog		1.8
Trade name		0.6
Goodwill		16.6
Deferred taxes, net		(3.2)
Liabilities assumed		(3.5)
Total consideration allocated	$	32.3

The preliminary fair value allocation included contingent consideration in the amount of $5.3 million, which represented the estimated fair value of future payments to the former shareholders of Anasys based on Anasys achieving annual revenue targets for the years 2019 and 2020. The Company expects to complete the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with Anasys is eight years, except for backlog which will be amortized over one year.

The results of Anasys, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Anasys has not been presented because the impact on revenues, net income and total assets is not material.

2017

On May 5, 2017, the Company acquired 100% of the shares of Luxendo GmbH (“Luxendo”), a privately held spin-off of the European Molecular Biology Laboratory (EMBL), for a purchase price of Euro 17 million (approximately $18.8 million), with the potential for additional consideration based on Luxendo revenue achievements in 2018 through 2021. Luxendo is a developer and manufacturer of proprietary light-sheet fluorescence microscopy instruments and the Company believes the acquisition enhances the Company’s portfolio of swept-field confocal, super-resolution, and multiphoton fluorescence microscope product lines for small organism embryology, live-cell imaging, brain development and cleared brain tissue and optogenetics applications. Luxendo is located in Heidelberg, Germany and is being integrated into the Bruker Nano Group within the BSI Segment. The acquisition of Luxendo was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	20.1
Cash acquired		(1.3)
Contingent consideration		3.1
Total consideration transferred	$	21.9
Allocation of Consideration Transferred:
Inventories	$	1.1
Other current and non-current assets		0.4
Property, plant and equipment		0.3
Intangible assets:
Existing technology		10.9
Trade name		0.8
Goodwill		11.2
Deferred taxes, net		(2.4)
Liabilities assumed		(0.4)
Total consideration allocated	$	21.9

The amortization period for intangible assets acquired in connection with the acquisition of Luxendo is ten years for trade names and seven years for technology.

The results of Luxendo, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Luxendo has not been presented because the impact on revenues, net income and total assets is not material.

On January 23, 2017, the Company acquired 100% of the shares of Hysitron, Incorporated ("Hysitron"), a privately held company. The acquisition adds Hysitron's nanomechanical testing instruments to the Company's existing portfolio of atomic force microscopes, surface profilometers, and tribology and mechanical testing systems. Hysitron is included in the Bruker Nano Group within the BSI Segment. The acquisition of Hysitron was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition of Hysitron were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	27.9
Cash acquired		(0.7)
Contingent consideration		1.6
Total consideration transferred	$	28.8
Allocation of Consideration Transferred:
Accounts receivable, net	$	3.0
Inventories		3.8
Other current assets		0.2
Property, plant and equipment		0.6
Intangible assets:
Customer relationships		5.8
Existing technology		4.7
Trade name		1.2
Other		0.6
Goodwill		16.6
Deferred taxes, net		(4.1)
Capital lease		(0.2)
Liabilities assumed		(3.4)
Total consideration allocated	$	28.8

The amortization period for intangible assets acquired in connection with Hysitron is seven years for customer relationships, trademarks and other intangibles and five years for existing technology.

The results of Hysitron, including the amount allocated to goodwill that is attributable to expected synergies and not expected to be deductible for tax purposes, have been included in the BSI Segment from the date of acquisition. Pro forma financial information reflecting the acquisition of Hysitron has not been presented because the impact on revenues, net income and total assets is not material.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Stock-Based Compensation

4.    Stock-Based Compensation

On May 14, 2010, the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”) was approved by the Company's stockholders. The 2010 Plan provided for the issuance of up to 8,000,000 shares of the Company's common stock. The 2010 Plan allowed a committee of the Board of Directors (the “Compensation Committee”) to grant incentive stock options, non-qualified stock options and restricted stock awards. The Compensation Committee had the authority to determine which employees would receive the awards, the amount of the awards and other terms and conditions of any awards. Awards granted under the 2010 Plan typically were made subject to a vesting period of three to five years.

On May 20, 2016, the Bruker Corporation 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by the Company's stockholders.  With the approval of the 2016 Plan, no further grants will be made under the 2010 Plan.   The 2016 Plan provides for the issuance of up to 9,500,000 shares of the Company's common stock and permits the grant of awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares and performance units, as well as cash-based awards.  The 2016 Plan is administered by the Compensation Committee.  The Compensation Committee has the authority to determine which employees will receive awards, the amount of any awards, and other terms and conditions of such awards. Awards granted under the 2016 Plan typically vest over a period of one to four years.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock options	$	1.2	$	1.8	$	3.2	$	5.2
Restricted stock awards		0.3		0.4		0.7		1.1
Restricted stock units		1.8		0.9		4.3		2.1
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Costs of product revenue	$	0.5	$	0.5	$	1.2	$	1.3
Selling, general and administrative		2.3		2.1		5.8		5.8
Research and development		0.5		0.5		1.2		1.3
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

Stock-based compensation expense is recognized on a straight-line basis over the underlying requisite service period of the stock-based award.

Stock options to purchase the Company's common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions for the nine months ended September 30, 2018 and 2017 regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

	2018		2017
Risk-free interest rates	2.80	%	1.78% - 2.09%
Expected life	5.38	years	5.56 years
Volatility	28.46	%	30.78% - 34.13%
Expected dividend yield	0.47	%	0.55% - 0.74%

Stock option activity for the nine months ended September 30, 2018 was as follows:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Shares Subject	Average		Contractual	Intrinsic Value
	to Options	Option Price		Term (Yrs)	(in millions) (b)
Outstanding at December 31, 2017	3,235,673	$	20.16
Granted	126,260		35.86
Exercised	(529,357)		18.03
Forfeited	(186,263)		20.19
Outstanding at September 30, 2018	2,646,313	$	21.33	5.8	$	32.4
Exercisable at September 30, 2018	1,653,296	$	19.35	5.2	$	23.3
Exercisable and expected to vest at  September 30, 2018 (a)	2,571,939	$	21.23	5.8	$	31.7

(a) In addition to the options that are vested at September 30, 2018, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2018.

(b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $33.45 on September 30, 2018 and the exercise price of the underlying stock options.

The weighted average fair value of options granted was $9.50 and $7.61 per share during the nine months ended September 30, 2018 and 2017, respectively.

The total intrinsic value of options exercised was $7.2 million and $10.9 million for the nine months ended September 30, 2018 and 2017, respectively.

Restricted stock award activity for the nine months ended September 30, 2018 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2017	85,529	$	20.39
Vested	(54,343)		20.12
Forfeited	(6,553)		24.80
Outstanding at September 30, 2018	24,633	$	19.82

The total fair value of restricted stock vested was $1.1 million and $1.5 million in the nine months ended September 30, 2018 and 2017, respectively.

Restricted stock unit activity for the nine months ended September 30, 2018 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2017	652,123	$	25.47
Granted	412,097		33.86
Vested	(145,356)		25.62
Forfeited	(55,357)		26.44
Outstanding at September 30, 2018	863,507	$	29.39

The total fair value of restricted stock units vested was $3.7 million and $0.2 million for the nine months ended September 30, 2018 and 2017, respectively.

At September 30, 2018, the Company expects to recognize pre-tax stock-based compensation expense of $5.3 million associated with outstanding stock option awards granted under the Company's stock plans over the weighted average remaining service period of 2.21 years. The Company expects to recognize additional pre-tax stock-based compensation expense of $0.4 million associated with outstanding restricted stock awards granted under the Company's stock plans over the weighted average remaining service period of 0.85 year. The Company also expects to recognize additional pre-tax stock-based compensation expense of $20.7 million associated with outstanding restricted stock units granted under the 2016 Plan over the weighted average remaining service period of 3.25 years.

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Earnings Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share

Earnings Per Share

5.    Earnings Per Share

Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net income attributable to Bruker Corporation by the weighted-average shares outstanding during the period. The diluted net income per share computation includes the effect of shares that would be issuable upon the exercise of outstanding stock options and the vesting of restricted stock, reduced by the number of shares that are assumed to be purchased by the Company under the treasury stock method.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net income attributable to Bruker Corporation, as reported	$	43.4	$	37.0	$	101.6	$	82.0
Weighted average shares outstanding:
Weighted average shares outstanding-basic		156.4		157.5		156.1		158.9
Effect of dilutive securities:
Stock options and restricted stock awards and units		1.0		1.2		1.1		1.0
		157.4		158.7		157.2		159.9
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.28	$	0.23	$	0.65	$	0.52
Diluted	$	0.28	$	0.23	$	0.65	$	0.51

Stock options to purchase approximately 0.6 million shares and 1.0 million shares were excluded from the computation of diluted earnings per share in the three months ended September 30, 2018 and 2017, respectively, as their effect would have been anti-dilutive.  Approximately 0.6 million shares and 1.7 million shares were excluded from the computation of diluted earnings per share in the nine months ended September 30, 2018 and 2017, respectively, as their effect would have been anti-dilutive.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Instruments

Fair Value of Financial Instruments

6.    Fair Value of Financial Instruments

The Company applies the following hierarchy to determine the fair value of financial instruments, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The levels in the hierarchy are defined as follows:

· Level 1:  Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2:  Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3:  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The valuation techniques that may be used by the Company to determine the fair value of Level 2 and Level 3 financial instruments are the market approach, the income approach and the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value based on current market expectations about those future amounts, including present value techniques, option-pricing models and the excess earnings method. The cost approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).

The following tables set forth the Company's financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at September 30, 2018 and December 31, 2017 (dollars in millions):

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets		Observable		Unobservable
			Available		Inputs		Inputs
September 30, 2018	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Embedded derivatives in purchase and delivery contracts	$	0.6	$	—	$	0.6	$	—
Foreign exchange contracts		0.4		—		0.4		—
Total assets recorded at fair value	$	1.0	$	—	$	1.0	$	—
Liabilities:
Contingent consideration	$	16.9	$	—	$	—	$	16.9
Foreign exchange contracts		2.7		—		2.7		—
Embedded derivatives in purchase and delivery contracts		1.3		—		1.3		—
Fixed price commodity contracts		0.4		—		0.4		—
Total liabilities recorded at fair value	$	21.3	$	—	$	4.4	$	16.9

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets		Observable		Unobservable
			Available		Inputs		Inputs
December 31, 2017	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Foreign exchange contracts	$	4.5	$	—	$	4.5	$	—
Embedded derivatives in purchase and delivery contracts		0.9		—		0.9		—
Fixed price commodity contracts		0.8		—		0.8		—
Total assets recorded at fair value	$	6.2	$	—	$	6.2	$	—
Liabilities:
Contingent consideration	$	12.7	$	—	$	—	$	12.7
Foreign exchange contracts		0.1		—		0.1		—
Embedded derivatives in purchase and delivery contracts		2.9		—		2.9		—
Total liabilities recorded at fair value	$	15.7	$	—	$	3.0	$	12.7

The Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and sale contracts, accounts receivable, borrowings under a revolving credit agreement, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, borrowings under a revolving credit agreement and accounts payable approximate fair value because of their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists principally of a private placement arrangement entered into in 2012 with various fixed interest rates based on the maturity date.  The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was $228.9 million and $231.3 million at September 30, 2018 and December 31, 2017, respectively, based on the outstanding amount at September 30, 2018 and December 31, 2017, market prices and observable sources with similar maturity dates.

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 or nine months ended September 30, 2018 or 2017. 

Excluded from the table above are restricted cash and short-term investments related to time and call deposits. The Company has a program to enter into time deposits with varying maturity dates ranging from one to twelve months, as well as call deposits for which the Company has the ability to redeem the invested amounts over a period of  95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the consolidated balance sheets based on call and maturity dates and these are not subject to fair value measurement. The following tables set forth the balances of restricted cash and short-term investments as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30,		December 31,
	2018		2017
Restricted Cash	$	4.7	$	3.9
Short-term Investments		—		114.2

As part of certain acquisitions, the Company recorded contingent consideration liabilities that have been classified as Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments to the former shareholders of certain acquired companies 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 considerations 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.

The following table sets forth the changes in contingent consideration liabilities for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	12.7
Current period additions		9.9
Current period adjustments		(0.1)
Current period settlements		(5.5)
Foreign currency effect		(0.1)
Balance at September 30, 2018	$	16.9

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Restricted Cash

9 Months Ended

Sep. 30, 2018

Restricted Cash

Restricted Cash

7.    Restricted Cash

Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company's unaudited condensed consolidated statement of cash flows. The Company has certain subsidiaries that are required by local laws and regulations to maintain restricted cash balances to cover future employee benefit payments. Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date. The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets, respectively, in the accompanying consolidated balance sheets.

The inclusion of restricted cash increased the balances of the unaudited condensed consolidated statement of cash flows as follows (dollars in millions):

	Nine Months Ended September 30,
	2018		2017
Beginning Balance	$	3.9	$	3.5
Ending Balance		4.7		3.9

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Inventories

9 Months Ended

Sep. 30, 2018

Inventories

Inventories

8.    Inventories

Inventories consisted of the following (in millions):

	September 30,		December 31,
	2018		2017
Raw materials	$	156.1	$	152.0
Work-in-process		208.7		183.1
Finished goods		89.5		96.6
Demonstration units		64.3		54.5
Inventories	$	518.6	$	486.2

Finished goods include in-transit systems that have been shipped to the Company's customers, but not yet installed and accepted by the customer. As of September 30, 2018 and December 31, 2017, the value of inventory-in-transit was $25.5 million and $41.4 million, respectively.

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets

Goodwill and Intangible Assets

9.    Goodwill and Intangible Assets

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	169.8
Current period additions		32.3
Current period adjustments		(0.3)
Foreign currency effect		(1.9)
Balance at September 30, 2018	$	199.9

The following is a summary of intangible assets, excluding goodwill (dollars in millions):

	September 30, 2018						December 31, 2017
	Gross						Gross
	Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Existing technology and related patents	$	215.3	$	(156.0)	$	59.3	$	195.4	$	(138.9)	$	56.5
Customer relationships		49.6		(16.2)		33.4		34.6		(12.9)		21.7
Non compete contracts		1.8		(1.8)		—		1.8		(1.5)		0.3
Trade names		5.4		(1.4)		4.0		4.2		(0.9)		3.3
Other		2.8		(1.4)		1.4		—		—		—
Intangible assets subject to amortization		274.9		(176.8)		98.1		236.0		(154.2)		81.8
In-process research and development		0.6		—		0.6		0.6		—		0.6
Intangible assets	$	275.5	$	(176.8)	$	98.7	$	236.6	$	(154.2)	$	82.4

For the three months ended September 30, 2018 and 2017, the Company recorded amortization expense of $6.9 million and $8.2 million, respectively, related to intangible assets subject to amortization. For the nine months ended September 30, 2018 and 2017, the Company recorded amortization expense of $21.5 million and $22.6 million, respectively, related to intangible assets subject to amortization.

The goodwill and intangible assets acquired in the nine months ended September 30, 2018 related primarily to the Anasys and JPK acquisitions.  Please see Note 3—Acquisitions, for additional details on the goodwill and intangibles acquired.

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Debt

9 Months Ended

Sep. 30, 2018

Debt

Debt

10.  Debt

The Company’s debt obligations as of September 30, 2018 and December 31, 2017 consisted of the following (dollars in millions):

	September 30,		December 31,
	2018		2017
US Dollar revolving loan under the 2015 Credit Agreement	$	20.0	$	195.0
US Dollar notes under the Note Purchase Agreement		220.0		220.0
Unamortized debt issuance costs under the Note Purchase Agreement		(0.6)		(0.7)
Capital lease obligations and other loans		1.2		1.3
Total debt		240.6		415.6
Current portion of long-term debt		(15.4)		—
Total long-term debt, less current portion	$	225.2	$	415.6

On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit Agreement.  The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of $500 million and a maturity date of October 2020. Borrowings under the revolving credit line of the 2015 Credit Agreement accrue interest, at the Company’s option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) adjusted LIBOR plus 1.00%, plus margins ranging from 0.00% to 0.30% or (b) LIBOR, plus margins ranging from 0.90% to 1.30%.  There is also a facility fee ranging from 0.10% to 0.20%.

Borrowings under the 2015 Credit Agreement are secured by guarantees from certain material subsidiaries, as defined in the 2015 Credit Agreement. The 2015 Credit Agreement also requires the Company to maintain certain financial ratios related to maximum leverage and minimum interest coverage (as defined in the 2015 Credit Agreement). Specifically, the Company’s leverage ratio cannot exceed 3.5 and the Company’s interest coverage ratio cannot be less than 2.5.  In addition to the financial ratios, the 2015 Credit Agreement contains negative covenants, including among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends and transactions with affiliates.  Failure to comply with any of these restrictions or covenants may result in an event of default on the 2015 Credit Agreement, which could permit acceleration of the debt and require the Company to prepay the debt before its scheduled due date.

The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 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 September 30, 2018 (dollars in millions):

	Weighted		Total Amount				Outstanding
	Average		Committed by		Outstanding		Letters of		Total Amount
	Interest Rate		Lenders		Borrowings		Credit		Available
2015 Credit Agreement	3.2	%	$	500.0	$	20.0	$	1.1	$	478.9
Other lines of credit	—			250.8		—		119.6		131.2
Total revolving lines of credit			$	750.8	$	20.0	$	120.7	$	610.1

In January 2012, the Company entered into a note purchase agreement, referred to as the Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the Note Purchase Agreement, the Company issued and sold $240.0 million of senior notes, referred to as the Senior Notes, which consisted of the following:

· $20.0 million 3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017;

· $15.0 million 3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019;

· $105.0 million 4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022; and

· $100.0 million 4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024.

On January 18, 2017, the outstanding $20.0 million principal amount of Tranche A of the Senior Notes was repaid in accordance with the terms of the Note Purchase Agreement.

Under the terms of the Note Purchase Agreement, the Company may issue and sell additional senior notes up to an aggregate principal amount of $600 million, subject to certain conditions. Interest on the Senior Notes is payable semi-annually on January 18 and July 18 of each year. The Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s direct and indirect subsidiaries. The Senior Notes rank pari passu in right of repayment with the Company’s other senior unsecured indebtedness. The Company may prepay some or all of the Senior Notes at any time in an amount not less than 10% of the original aggregate principal amount of the Senior Notes to be prepaid, at a price equal to the sum of (a) 100% of the principal amount thereof, plus accrued and unpaid interest, and (b) the applicable make-whole amount, upon not less than 30 and no more than 60 days written notice to the holders of the Senior Notes. In the event of a change in control of the Company, as defined in the Note Purchase Agreement, the Company may be required to prepay the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

The Note Purchase Agreement contains affirmative covenants, including, without limitation, maintenance of corporate existence, compliance with laws, maintenance of insurance and properties, payment of taxes, addition of subsidiary guarantors and furnishing notices and other information. The Note Purchase Agreement also contains certain restrictive covenants that restrict the Company’s ability to, among other things, incur liens, transfer or sell assets, engage in certain mergers and consolidations and enter into transactions with affiliates. The Note Purchase Agreement also includes customary representations and warranties and events of default. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Senior Notes will become due and payable immediately without further action or notice. In the case of a  payment events of defaults, any holder of Senior Notes affected thereby may declare all Senior Notes held by it due and payable immediately. In the case of any other event of default, a majority of the holders of the Senior Notes may declare all the Senior Notes to be due and payable immediately. Pursuant to the Note Purchase Agreement, so long as any Senior Notes are outstanding the Company will not permit (i) its leverage ratio, as determined pursuant to the Note Purchase Agreement, to exceed 3.50 to 1.00 as of the end of any fiscal quarter, (ii) its interest coverage ratio, as determined pursuant to the Note Purchase Agreement, to be less than 2.50 to 1 as of the end of any fiscal quarter for any period of  four consecutive fiscal quarters  or (iii) priority debt at any time to exceed 25% of consolidated net worth, as determined pursuant to the Note Purchase Agreement.

As of September 30, 2018, the Company was in compliance with the covenants of the Note Purchase Agreement and the 2015 Credit Agreement.  The Company’s leverage ratio (as defined in the respective agreements) was 0.68 and interest coverage ratio (as defined in the respective agreements) was 20.9.

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

11.  Derivative Instruments and Hedging Activities

Interest Rate Risks

The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related short-term market rates. Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2015 Credit Agreement, which totaled $20.0 million at September 30, 2018. The Company currently has a higher level of fixed rate debt than variable rate debt, which limits the exposure to adverse movements in interest rates.

Foreign Exchange Rate Risk Management

The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union and Switzerland, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign currency contracts in order to minimize the volatility that fluctuations in currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months, with some agreements extending to longer periods. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the consolidated statements of income and comprehensive income. The Company had the following notional amounts outstanding under foreign exchange contracts at September 30, 2018 and December 31, 2017 (in millions):

	Notional			Notional
	Amount in Buy			Amount in U.S.		Fair Value of		Fair Value of
Buy	Currency	Sell	Maturity	Dollars		Assets		Liabilities
September 30, 2018:
Chinese Renminbi	38.6	U.S. Dollars	October 2018	$	5.6	$	—	$	—
Euro	36.6	U.S. Dollars	October 2018 to January 2019		45.4		—		2.7
Great Britain Pound	19.3	Euro	October 2018		25.0		0.2		—
Swiss Francs	12.4	U.S. Dollars	October 2018		12.5		0.2		—
Euro	11.4	Great Britain Pound	October 2018 to October 2020		13.3		—		—
U.S. Dollars	8.3	Euro	October 2018		8.3		—		—
Singapore Dollar	2.2	U.S. Dollars	October 2018		1.6		—		—
U.S. Dollars	1.6	Swiss Francs	October 2018		1.6		—		—
				$	113.3	$	0.4	$	2.7
December 31, 2017:
Euro	59.5	U.S. Dollars	January 2018	$	67.0	$	4.5	$	—
Swiss Francs	11.0	U.S. Dollars	January 2018		11.3		—		—
Singapore Dollar	4.9	U.S. Dollars	January 2018		3.6		—		—
Euro	1.8	Polish Zloty	January 2018		2.3		—		0.1
				$	84.2	$	4.5	$	0.1

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the ”embedded derivative” component of these contracts. The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $108.6 million for the delivery of products and $4.1 million for the purchase of products at September 30, 2018 and $98.3 million for the delivery of products and $3.6 million for the purchase of products at December 31, 2017. The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income.

Commodity Price Risk Management

The Company has arrangements with certain customers under which it has a firm commitment to deliver copper based superconductor wire 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. At September 30, 2018 and December 31, 2017, the Company had fixed price commodity contracts with notional amounts aggregating $7.5 million and $3.0 million, respectively. The changes in the fair value of these commodity contracts are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income.

The fair value of the derivative instruments described above is recorded in the unaudited condensed consolidated balance sheets for the periods as follows (dollars in millions):

		September 30,		December 31,
	BalanceSheetLocation	2018		2017
Derivative assets:
Foreign exchange contracts	Other current assets	$	0.4	$	4.5
Embedded derivatives in purchase and delivery contracts	Other current assets		0.5		0.9
Fixed price commodity contracts	Other current assets		—		0.8
Embedded derivatives in purchase and delivery contracts	Other long-term assets		0.1		—
Derivative liabilities:
Foreign exchange contracts	Other current liabilities	$	2.7	$	0.1
Embedded derivatives in purchase and delivery contracts	Other current liabilities		0.6		1.5
Fixed price commodity contracts	Other current liabilities		0.4		—
Embedded derivatives in purchase and delivery contracts	Other long-term liabilities		0.7		1.4

The impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments are as follows (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Foreign exchange contracts	$	1.4	$	(1.5)	$	(6.7)	$	5.5
Embedded derivatives in purchase and delivery contracts		—		(1.3)		1.3		(5.0)
Fixed price commodity contracts		(0.3)		0.3		(1.2)		0.5
Net impact to interest and other income (expense)	$	1.1	$	(2.5)	$	(6.6)	$	1.0

The amounts related to derivative instruments not designated as hedging instruments are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income.

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Provision for Income Taxes

9 Months Ended

Sep. 30, 2018

Provision for Income Taxes

Provision for Income Taxes

12.  Provision for Income Taxes

On December 22, 2017 (the “Enactment Date”), the President of the United States signed tax reform legislation (the “2017 Tax Act”), which enacted a wide range of changes to the U.S. corporate income tax system, many of which differ significantly from the provisions of the previous U.S. tax law.  Also on December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118, which provides companies with additional guidance on how to implement the provisions of the 2017 Tax Act in their financial statements. The guidance provides for a measurement period, up to one year from the Enactment Date, in which provisional amounts may be adjusted when additional information is obtained, prepared or analyzed about facts and circumstances that existed as of the Enactment Date, if known, which would have impacted the amounts that were initially recorded by the Company.

The Company has not yet completed the assessment of the tax effects associated with the enactment of the 2017 Tax Act; however, a reasonable estimate has been made of the effects on the existing deferred tax balances and the one-time transition tax. Changes in the tax rates and laws are accounted for in the period of enactment. The Company expects to finalize the provisional estimates before the end of 2018 after completing the review and analysis, including reviews and analyses of any interpretations issued during this measurement period.

The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of the Company’s foreign subsidiaries to U.S. taxation as global intangible low-taxed income (GILTI). These changes became effective beginning in 2018. The Company does not recognize deferred taxes for the basis differences expected to reverse as GILTI is incurred. The Company instead accounts for any taxes assessed as period costs.

The actual results of the implementation of the 2017 Tax Act may materially differ from the Company's current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies including the SEC and the FASB to interpret the 2017 Tax Act. The Company will continue to analyze the 2017 Tax Act and any additional guidance that may be issued and finalize the full effects of applying the new legislation in the measurement period.

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 September 30, 2018 and 2017 was $21.2 million and $9.8 million, respectively, representing effective tax rates of 32.4% and 20.7%, respectively. The income tax provision for the nine months ended September 30, 2018 and 2017 was $41.4 million and $25.9 million, respectively, representing effective tax rates of 28.7% and 23.7%, respectively. The increase in the Company’s effective tax rate for the three and nine months ended September 30, 2018, compared to the same period in 2017, was primarily due to the recording of items related to the refinement of a one-time tax on the mandatory deemed repatriation of post-1986 untaxed foreign earnings and profits (the “toll charge”) assessed under the 2017 Tax Act during the measurement period.  The Company's effective tax rate may change over time as the amount or mix of income and taxes changes among the jurisdictions in which the Company is subject to tax.

As of September 30, 2018 and December 31, 2017, the Company had unrecognized tax benefits, excluding penalties and interest, of approximately $4.4 million 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 September 30, 2018 and December 31, 2017, approximately $0.5 million and $0.2 million, respectively, of accrued interest and penalties related to uncertain tax positions was included in other long-term liabilities on the Company’s unaudited condensed consolidated balance sheets. No penalties and interest were recorded in the provision for income taxes for unrecognized tax benefits during the three and nine months ended September 30, 2018 or September 30, 2017.

The Company files tax returns in the United States, which includes federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The majority of the Company’s earnings are derived in Germany and Switzerland.  Accounting for the various federal and local taxing authorities, the statutory rates for 2018 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 4.0% from the U.S. statutory rate of 21.0% in the nine months ended September 30, 2018. The Company has not been a party to any tax holiday agreements. The tax years 2013 to 2017 are open to examination in Germany and Switzerland. Tax years 2011 to 2017 remain open for examination in the United States.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies

Commitments and Contingencies

13.  Commitments and Contingencies

In accordance with ASC Topic 450, Contingencies, the Company accrues anticipated costs of settlement, damages or other costs to the extent specific losses are probable and estimable.

Litigation and Related Contingencies

Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management's best estimate of probable loss. Disclosure is also provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. The Company believes the outcome of pending proceedings, individually and in the aggregate, will not have a material impact on the Company's financial statements. As of September 30, 2018 and December 31, 2017, no material accruals have been recorded for potential contingencies.

Governmental Investigations

The Company is subject to regulation by national, state and local government agencies in the United States and other countries in which it operates. From time to time, the Company is the subject of governmental investigations often involving regulatory, marketing and other business practices. These governmental investigations may result in the commencement of civil and criminal proceedings, fines, penalties and administrative remedies which could have a material adverse effect on our financial position, results of operations and/or liquidity.

In August 2018, the Korea Fair Trade Commission ("KFTC") informed the Company that it is conducting an investigation into the public tender bidding activities of a number of life science instrument companies operating in Korea, including Bruker Korea Co., Ltd.  The Company is cooperating fully with the KFTC regarding this matter and is unable to predict the timing or outcome of this investigation at this time. Revenues from Korea represent less than 3% of the Company’s consolidated revenue for the nine-month period ended September 30, 2018.

On October 19, 2017, the Company received a notice of investigation and subpoena to produce documents from the Division of Enforcement of the SEC. The subpoena seeks information related to an employee terminated as part of a restructuring and certain matters involving the Company’s policies and accounting practices related to revenue recognition and restructuring activities, as well as related financial reporting, disclosure and compliance matters, since January 1, 2013. The subpoena also seeks information concerning, among other things, the Company’s previously identified material weakness in internal controls over the accounting for income taxes, related financial reporting matters and certain payments for non-employee travel expenses. The Company is producing documents in response to the subpoena and intends to continue to cooperate fully with the SEC’s investigation. Additionally, the Audit Committee of the Company’s Board of Directors, with the assistance of outside counsel, is conducting an internal investigation into practices of certain business partners in China and into the conduct of former employees of the Bruker Optics division in China which raised questions of compliance with laws, including the U.S. Foreign Corrupt Practices Act, and/or compliance with the Company’s business policies and code of conduct. The Company has voluntarily disclosed this matter to the SEC and U.S. Department of Justice. At this time, the Company is unable to predict the duration, scope or outcome of these investigations.

As of September 30, 2018 and December 31, 2017, no material accruals have been recorded for potential contingencies related to these matters.

Letters of Credit and Guarantees

At September 30, 2018 and December 31, 2017, the Company had bank guarantees of $120.7 million and $138.8 million, respectively, related primarily to customer advances. These arrangements guarantee the refund of advance payments received from customers in the event that the merchandise is not delivered or warranty obligations are not fulfilled in compliance with the terms of the contract. These guarantees affect the availability of the Company’s lines of credit.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2018

Shareholders' Equity

Shareholders' Equity

14.  Shareholders’ Equity

Share Repurchase Program

In May 2017, the Company's Board of Directors approved a share repurchase program under which repurchases of common stock up to $225.0 million may occur from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. No repurchases occurred in the three and nine months ended September 30, 2018. Any future repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility.

Cash Dividends on Shares of Common Stock

On February 22, 2016, the Company announced the establishment of a dividend policy and the declaration by its Board of Directors of an initial quarterly cash dividend in the amount of $0.04 per share of the Company's issued and outstanding common stock. Under the dividend policy, the Company will target a cash dividend to the Company's shareholders in the amount of $0.16 per share per annum, payable in equal quarterly installments. The following is a summary of the dividends paid in the periods ended September 30, 2018 and 2017 (dollars in millions):

	2018
Dividends Paid on		March 23		June 22		September 21
Shareholders of Record as of		March 6		June 4		September 4
Aggregate Cost	$	6.3	$	6.2	$	6.3

	2017
Dividends Paid on		March 24		June 23		September 22
Shareholders of Record as of		March 8		June 5		September 5
Aggregate Cost	$	6.4	$	6.4	$	6.3

Subsequent dividend declarations and the establishment of record and payment dates for such future dividend payments, if any, are subject to the Board of Directors' continuing determination that the dividend policy is in the best interests of the Company's shareholders. The dividend policy may be suspended or cancelled at the discretion of the Board of Directors at any time.

Accumulated Other Comprehensive Income

Comprehensive income refers to revenues, expenses, gains and losses that under U.S. GAAP are included in other comprehensive income, but excluded from net income as these amounts are recorded directly as an adjustment to shareholders’ equity, net of tax. The Company’s other comprehensive income is composed primarily of foreign currency translation adjustments and changes in the funded status of defined benefit pension plans. The following is a summary of comprehensive income (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Consolidated net income	$	44.2	$	37.6	$	103.1	$	83.3
Foreign currency translation adjustments		(2.5)		21.9		(17.1)		87.0
Pension liability adjustments, net of tax		0.2		1.7		2.3		—
Net comprehensive income		41.9		61.2		88.3		170.3
Less: Comprehensive income attributable to noncontrolling interests		0.5		0.7		0.9		1.9
Comprehensive income attributable to Bruker Corporation	$	41.4	$	60.5	$	87.4	$	168.4

The following is a summary of the components of accumulated other comprehensive income, net of tax, at September 30, 2018 (dollars in millions):

					Accumulated
	Foreign		Pension		Other
	Currency		Liability		Comprehensive
	Translation		Adjustment		Income
Balance at December 31, 2017	$	72.2	$	(45.2)	$	27.0
Other comprehensive income (loss) before reclassifications		(16.6)		0.4		(16.2)
Amounts reclassified from other comprehensive income (loss), net of tax of $0.3 million		—		1.9		1.9
Net current period other comprehensive income (loss)		(16.6)		2.3		(14.3)
Balance at September 30, 2018	$	55.6	$	(42.9)	$	12.7

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Noncontrolling Interests

9 Months Ended

Sep. 30, 2018

Noncontrolling Interests

Noncontrolling Interests

15.  Noncontrolling Interests

Noncontrolling interests represent the minority shareholders' proportionate share of the Company's majority owned subsidiaries. The following table sets forth the changes in noncontrolling interests (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Balance at beginning of period	$	8.7	$	7.4	$	8.1	$	6.7
Net income		0.8		0.6		1.5		1.3
Foreign currency translation adjustments		(0.3)		0.1		(0.6)		0.6
Cash payments to noncontrolling interests		(0.9)		—		(0.9)		(0.5)
Impact of ASC 606 adoption		—		—		0.2		—
Balance at end of period	$	8.3	$	8.1	$	8.3	$	8.1

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Other Charges, Net

9 Months Ended

Sep. 30, 2018

Other Charges, Net

Other Charges, Net

16.  Other Charges, Net

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Information technology transformation costs	$	1.1	$	0.8	$	3.5	$	2.9
Restructuring charges		2.0		3.0		5.9		6.9
Acquisition-related charges		1.2		0.5		2.3		3.8
Other		0.9		—		3.5		0.2
Other charges, net	$	5.2	$	4.3	$	15.2	$	13.8

Restructuring Initiatives

Restructuring charges for the three and nine month periods ended September 30, 2018 included charges for various programs that were recorded in the accompanying unaudited condensed consolidated statements of income and comprehensive income.  The charges for the three and nine month periods ended September 30, 2017 related primarily to the previously reported and completed 2016 and 2015 restructuring plans. The following table sets forth the restructuring charges for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Cost of revenues	$	0.5	$	1.6	$	0.8	$	1.6
Other charges, net		2.0		3.0		5.9		6.9
	$	2.5	$	4.6	$	6.7	$	8.5

The following table sets forth the changes in restructuring reserves for the nine months ended September 30, 2018 (dollars in millions):

							Provisions
							for Excess
	Total		Severance		Exit Costs		Inventory
Balance at December 31, 2017	$	10.8	$	2.0	$	2.1	$	6.7
Restructuring charges		6.7		2.5		4.2		—
Cash payments		(7.5)		(3.9)		(3.6)		—
Other, non-cash adjustments and foreign currency effect		(2.7)		0.3		(0.7)		(2.3)
Balance at September 30, 2018	$	7.3	$	0.9	$	2.0	$	4.4

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Interest and Other Income (Expense), Net

9 Months Ended

Sep. 30, 2018

Interest and Other Income (Expense), Net

Interest and Other Income (Expense), Net

17.  Interest and Other Income (Expense), Net

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Interest expense, net	$	(2.3)	$	(3.6)	$	(8.3)	$	(11.1)
Exchange (losses) gains on foreign currency transactions		(0.6)		0.3		(1.6)		(3.9)
Pension components		(0.9)		(1.4)		(2.2)		(3.2)
Other		0.1		0.8		0.6		3.2
Interest and other income (expense), net	$	(3.7)	$	(3.9)	$	(11.5)	$	(15.0)

Pension components represents the amortization of prior service costs and actuarial gains/losses, interest costs and the return on plan assets. The current year service cost is included within cost of sales and operating expenses in the unaudited condensed consolidated statements of income and comprehensive income.

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Business Segment Information

9 Months Ended

Sep. 30, 2018

Business Segment Information

Business Segment Information

18.  Business Segment Information

The Company has two reportable segments, BSI and BEST, as discussed in Note 1 to the unaudited condensed consolidated financial statements.

Revenue and operating income by reportable segment are presented below (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue:
BSI	$	417.1	$	390.6	$	1,206.5	$	1,099.5
BEST		50.9		46.1		139.2		140.2
Eliminations (a)		(1.4)		(1.1)		(3.7)		(4.3)
Total revenue	$	466.6	$	435.6	$	1,342.0	$	1,235.4
Operating Income (loss)
BSI	$	63.6	$	44.5	$	146.5	$	114.9
BEST		5.4		1.8		9.3		4.3
Corporate, eliminations and other (b)		0.1		5.0		0.2		5.0
Total operating income	$	69.1	$	51.3	$	156.0	$	124.2

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

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

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

	September 30,		December 31,
	2018		2017
Assets:
BSI	$	1,854.5	$	1,917.8
BEST		37.8		35.6
Eliminations and other (a)		(3.2)		(4.9)
Total assets	$	1,889.1	$	1,948.5

(a)   Assets not allocated to the reportable segments and eliminations of intercompany transactions.

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2018

Recent Accounting Pronouncements

Recent Accounting Pronouncements

19.  Recent Accounting Pronouncements

In March 2017, the FASB issued ASU No. 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This new standard intends to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new standard requires the service cost component of net periodic cost be reported in the same line item(s) as other employee compensation costs and all other components of the net periodic cost be reported in the condensed consolidated statements of income and comprehensive income below operating income. The Company adopted this guidance on January 1, 2018 on a retrospective basis. The Company reclassified the non-service pension cost previously reported in operations of $1.4 million and $3.2 million for the three and nine months ended September 30, 2017, respectively. The impact of this for the three and nine months ended September 30, 2018 was $0.9 million and $2.2 million, respectively.  These amounts were previously reported in cost of sales, selling, general, and administrative, and research and development expenses in the unaudited condensed consolidated statements of income and comprehensive income.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact on the Company’s financial position, results of operations or statements of cash flows upon adoption.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This new standard was adopted as of the effective date of January 1, 2018. The Company has evaluated the provisions of this standard and has determined that the impact of adoption of ASU No. 2017-01 was not material to the Company’s consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory. The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing U.S. GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. This new standard was adopted as of the effective date of January 1, 2018. The Company has evaluated the provisions of this standard and has determined that the impact of adoption of ASU No. 2016-16 was not material to the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard provides guidance on the recognition, measurement, presentation and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. Under ASU No. 2016-02, companies are required to transition to the new standard in the period of adoption at the beginning of the earliest period presented in the financial statements (January 1, 2017 for the Company). In July 2018, the FASB issued ASU No. 2018-11 as an update to ASU No. 2016-02, which in part provided companies the option of transitioning to the new standard as of the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to adopt the new standard as of January 1, 2019 using the alternative transition method under ASU No. 2018-11. The Company is continuing to evaluate the provisions of the new standard, but currently expects that it will have a material impact on its consolidated balance sheet due to the recognition of right-of-use assets and lease liabilities for substantially all leases currently accounted for as operating leases.

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Subsequent Event

9 Months Ended

Sep. 30, 2018

Subsequent Event

Subsequent Event

20.  Subsequent Event

On October 15, 2018, the Company acquired an 80% interest in Hain Lifescience GmbH (“Hain”), a privately held Company, for a purchase price of EUR 66 million (approximately $76.4 million), with an option to acquire the remaining 20% equity interest, which is exercisable in or after 2022. Hain is an infectious disease specialist with a broad range of molecular diagnostics solutions for the detection of microbial and viral pathogens, as well as for molecular antibiotic resistance testing.   Hain is located in Nehren, Germany and will be integrated into the Bruker CALID Group within the BSI Segment. The purchase accounting for this acquisition will be finalized within the measurement period.

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Revenue (Tables)

9 Months Ended

Sep. 30, 2018

Revenue

Schedule of revenues disaggregated by Group, end customer geographical location and timing of recognition

The following table presents the Company’s revenues by Group and end customer geographical location for the three and nine month periods ended September 30, 2018 (dollars in millions):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018		2018
Revenue by Group:
Bruker BioSpin	$	139.5	$	411.2
Bruker CALID		134.6		393.9
Bruker Nano		143.0		401.4
BEST		50.9		139.2
Eliminations		(1.4)		(3.7)
Total revenue	$	466.6	$	1,342.0

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018		2018
Revenue by End Customer Geography:
United States	$	134.1	$	347.3
Germany		44.9		135.3
Rest of Europe		114.6		346.4
Asia Pacific		134.4		396.8
Other		38.6		116.2
Total revenue	$	466.6	$	1,342.0

Revenue for the Company recognized at a point in time versus over time is as follows for the three and nine month periods ended September 30, 2018 (dollars in millions):

	Three Months  Ended		Nine Months  Ended
	September 30,		September 30,
	2018		2018
Revenue recognized at a point in time	$	427.1	$	1,227.6
Revenue recognized over time		39.5		114.4
Total revenue	$	466.6	$	1,342.0

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

JPK Instruments AG

Acquisitions

Components and fair value allocation of the consideration transferred in connection with acquisitions

The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	16.6
Cash acquired		(0.2)
Contingent consideration		4.3
Total consideration transferred	$	20.7
Allocation of Consideration Transferred:
Inventories	$	3.0
Accounts receivable		1.8
Other current and non-current assets		0.7
Intangible assets:
Technology		7.0
Customer relationships		7.5
Backlog		1.1
Trade name		0.6
Goodwill		8.0
Deferred taxes, net		(4.9)
Liabilities assumed		(4.1)
Total consideration allocated	$	20.7

Anasys Instruments Corp

Acquisitions

Components and fair value allocation of the consideration transferred in connection with acquisitions

The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	27.0
Contingent consideration		5.3
Total consideration transferred	$	32.3
Allocation of Consideration Transferred:
Inventories	$	2.8
Accounts receivable		0.8
Other current and non-current assets		1.1
Intangible assets:
Technology		7.3
Customer relationships		8.0
Backlog		1.8
Trade name		0.6
Goodwill		16.6
Deferred taxes, net		(3.2)
Liabilities assumed		(3.5)
Total consideration allocated	$	32.3

Luxendo GmbH

Acquisitions

Components and fair value allocation of the consideration transferred in connection with acquisitions

The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	20.1
Cash acquired		(1.3)
Contingent consideration		3.1
Total consideration transferred	$	21.9
Allocation of Consideration Transferred:
Inventories	$	1.1
Other current and non-current assets		0.4
Property, plant and equipment		0.3
Intangible assets:
Existing technology		10.9
Trade name		0.8
Goodwill		11.2
Deferred taxes, net		(2.4)
Liabilities assumed		(0.4)
Total consideration allocated	$	21.9

Hysitron, Incorporated

Acquisitions

Components and fair value allocation of the consideration transferred in connection with acquisitions

The components and fair value allocation of the consideration transferred in connection with the acquisition of Hysitron were as follows (dollars in millions):

Consideration Transferred:
Cash paid	$	27.9
Cash acquired		(0.7)
Contingent consideration		1.6
Total consideration transferred	$	28.8
Allocation of Consideration Transferred:
Accounts receivable, net	$	3.0
Inventories		3.8
Other current assets		0.2
Property, plant and equipment		0.6
Intangible assets:
Customer relationships		5.8
Existing technology		4.7
Trade name		1.2
Other		0.6
Goodwill		16.6
Deferred taxes, net		(4.1)
Capital lease		(0.2)
Liabilities assumed		(3.4)
Total consideration allocated	$	28.8

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Stock-based compensation expense, by award

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock options	$	1.2	$	1.8	$	3.2	$	5.2
Restricted stock awards		0.3		0.4		0.7		1.1
Restricted stock units		1.8		0.9		4.3		2.1
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

Stock-based compensation expense, cost allocation

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Costs of product revenue	$	0.5	$	0.5	$	1.2	$	1.3
Selling, general and administrative		2.3		2.1		5.8		5.8
Research and development		0.5		0.5		1.2		1.3
Total stock-based compensation	$	3.3	$	3.1	$	8.2	$	8.4

Assumptions regarding volatility, expected life, dividend yield and risk-free interest rates

Assumptions for the nine months ended September 30, 2018 and 2017 regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

	2018		2017
Risk-free interest rates	2.80	%	1.78% - 2.09%
Expected life	5.38	years	5.56 years
Volatility	28.46	%	30.78% - 34.13%
Expected dividend yield	0.47	%	0.55% - 0.74%

Schedule of stock option activity

Stock option activity for the nine months ended September 30, 2018 was as follows:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Shares Subject	Average		Contractual	Intrinsic Value
	to Options	Option Price		Term (Yrs)	(in millions) (b)
Outstanding at December 31, 2017	3,235,673	$	20.16
Granted	126,260		35.86
Exercised	(529,357)		18.03
Forfeited	(186,263)		20.19
Outstanding at September 30, 2018	2,646,313	$	21.33	5.8	$	32.4
Exercisable at September 30, 2018	1,653,296	$	19.35	5.2	$	23.3
Exercisable and expected to vest at  September 30, 2018 (a)	2,571,939	$	21.23	5.8	$	31.7

(a) In addition to the options that are vested at September 30, 2018, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of September 30, 2018.

(b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of $33.45 on September 30, 2018 and the exercise price of the underlying stock options.

Restricted stock awards

Stock-Based Compensation

Schedule of restricted stock award and restricted stock unit activity

Restricted stock award activity for the nine months ended September 30, 2018 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2017	85,529	$	20.39
Vested	(54,343)		20.12
Forfeited	(6,553)		24.80
Outstanding at September 30, 2018	24,633	$	19.82

Restricted stock units

Stock-Based Compensation

Schedule of restricted stock award and restricted stock unit activity

Restricted stock unit activity for the nine months ended September 30, 2018 was as follows:

		Weighted
		Average Grant
	Shares Subject	Date Fair
	to Restriction	Value
Outstanding at December 31, 2017	652,123	$	25.47
Granted	412,097		33.86
Vested	(145,356)		25.62
Forfeited	(55,357)		26.44
Outstanding at September 30, 2018	863,507	$	29.39

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share

Computation of basic and diluted weighted average shares outstanding and net income per common share

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net income attributable to Bruker Corporation, as reported	$	43.4	$	37.0	$	101.6	$	82.0
Weighted average shares outstanding:
Weighted average shares outstanding-basic		156.4		157.5		156.1		158.9
Effect of dilutive securities:
Stock options and restricted stock awards and units		1.0		1.2		1.1		1.0
		157.4		158.7		157.2		159.9
Net income per common share attributable to Bruker Corporation shareholders:
Basic	$	0.28	$	0.23	$	0.65	$	0.52
Diluted	$	0.28	$	0.23	$	0.65	$	0.51

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Instruments

Schedule of financial instruments measured at fair value on a recurring basis

The following tables set forth the Company's financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at September 30, 2018 and December 31, 2017 (dollars in millions):

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets		Observable		Unobservable
			Available		Inputs		Inputs
September 30, 2018	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Embedded derivatives in purchase and delivery contracts	$	0.6	$	—	$	0.6	$	—
Foreign exchange contracts		0.4		—		0.4		—
Total assets recorded at fair value	$	1.0	$	—	$	1.0	$	—
Liabilities:
Contingent consideration	$	16.9	$	—	$	—	$	16.9
Foreign exchange contracts		2.7		—		2.7		—
Embedded derivatives in purchase and delivery contracts		1.3		—		1.3		—
Fixed price commodity contracts		0.4		—		0.4		—
Total liabilities recorded at fair value	$	21.3	$	—	$	4.4	$	16.9

			Quoted Prices		Significant
			in Active		Other		Significant
			Markets		Observable		Unobservable
			Available		Inputs		Inputs
December 31, 2017	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Foreign exchange contracts	$	4.5	$	—	$	4.5	$	—
Embedded derivatives in purchase and delivery contracts		0.9		—		0.9		—
Fixed price commodity contracts		0.8		—		0.8		—
Total assets recorded at fair value	$	6.2	$	—	$	6.2	$	—
Liabilities:
Contingent consideration	$	12.7	$	—	$	—	$	12.7
Foreign exchange contracts		0.1		—		0.1		—
Embedded derivatives in purchase and delivery contracts		2.9		—		2.9		—
Total liabilities recorded at fair value	$	15.7	$	—	$	3.0	$	12.7

Schedule of balances of cash equivalents, restricted cash and short-term investments

The following tables set forth the balances of restricted cash and short-term investments as of September 30, 2018 and December 31, 2017 (dollars in millions):

	September 30,		December 31,
	2018		2017
Restricted Cash	$	4.7	$	3.9
Short-term Investments		—		114.2

Schedule of changes in contingent consideration liabilities

The following table sets forth the changes in contingent consideration liabilities for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	12.7
Current period additions		9.9
Current period adjustments		(0.1)
Current period settlements		(5.5)
Foreign currency effect		(0.1)
Balance at September 30, 2018	$	16.9

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Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2018

Restricted Cash

Schedule of increase in cash flow statement balances due to inclusion of restricted cash

The inclusion of restricted cash increased the balances of the unaudited condensed consolidated statement of cash flows as follows (dollars in millions):

	Nine Months Ended September 30,
	2018		2017
Beginning Balance	$	3.9	$	3.5
Ending Balance		4.7		3.9

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Inventories (Tables)

9 Months Ended

Sep. 30, 2018

Inventories

Schedule of inventories

Inventories consisted of the following (in millions):

	September 30,		December 31,
	2018		2017
Raw materials	$	156.1	$	152.0
Work-in-process		208.7		183.1
Finished goods		89.5		96.6
Demonstration units		64.3		54.5
Inventories	$	518.6	$	486.2

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets

Schedule of changes in the carrying amount of goodwill

The following table sets forth the changes in the carrying amount of goodwill for the nine months ended September 30, 2018 (dollars in millions):

Balance at December 31, 2017	$	169.8
Current period additions		32.3
Current period adjustments		(0.3)
Foreign currency effect		(1.9)
Balance at September 30, 2018	$	199.9

Summary of intangible assets - subject to amortization

The following is a summary of intangible assets, excluding goodwill (dollars in millions):

	September 30, 2018						December 31, 2017
	Gross						Gross
	Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Existing technology and related patents	$	215.3	$	(156.0)	$	59.3	$	195.4	$	(138.9)	$	56.5
Customer relationships		49.6		(16.2)		33.4		34.6		(12.9)		21.7
Non compete contracts		1.8		(1.8)		—		1.8		(1.5)		0.3
Trade names		5.4		(1.4)		4.0		4.2		(0.9)		3.3
Other		2.8		(1.4)		1.4		—		—		—
Intangible assets subject to amortization		274.9		(176.8)		98.1		236.0		(154.2)		81.8
In-process research and development		0.6		—		0.6		0.6		—		0.6
Intangible assets	$	275.5	$	(176.8)	$	98.7	$	236.6	$	(154.2)	$	82.4

Summary of intangible assets - in-process research and development

The following is a summary of intangible assets, excluding goodwill (dollars in millions):

	September 30, 2018						December 31, 2017
	Gross						Gross
	Carrying		Accumulated		Net Carrying		Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Existing technology and related patents	$	215.3	$	(156.0)	$	59.3	$	195.4	$	(138.9)	$	56.5
Customer relationships		49.6		(16.2)		33.4		34.6		(12.9)		21.7
Non compete contracts		1.8		(1.8)		—		1.8		(1.5)		0.3
Trade names		5.4		(1.4)		4.0		4.2		(0.9)		3.3
Other		2.8		(1.4)		1.4		—		—		—
Intangible assets subject to amortization		274.9		(176.8)		98.1		236.0		(154.2)		81.8
In-process research and development		0.6		—		0.6		0.6		—		0.6
Intangible assets	$	275.5	$	(176.8)	$	98.7	$	236.6	$	(154.2)	$	82.4

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Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt

Components of debt obligations

The Company’s debt obligations as of September 30, 2018 and December 31, 2017 consisted of the following (dollars in millions):

	September 30,		December 31,
	2018		2017
US Dollar revolving loan under the 2015 Credit Agreement	$	20.0	$	195.0
US Dollar notes under the Note Purchase Agreement		220.0		220.0
Unamortized debt issuance costs under the Note Purchase Agreement		(0.6)		(0.7)
Capital lease obligations and other loans		1.2		1.3
Total debt		240.6		415.6
Current portion of long-term debt		(15.4)		—
Total long-term debt, less current portion	$	225.2	$	415.6

Summary of maximum commitments and net amounts available under the 2015 Credit Agreement and other lines of credit

The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 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 September 30, 2018 (dollars in millions):

	Weighted		Total Amount				Outstanding
	Average		Committed by		Outstanding		Letters of		Total Amount
	Interest Rate		Lenders		Borrowings		Credit		Available
2015 Credit Agreement	3.2	%	$	500.0	$	20.0	$	1.1	$	478.9
Other lines of credit	—			250.8		—		119.6		131.2
Total revolving lines of credit			$	750.8	$	20.0	$	120.7	$	610.1

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities

Schedule of notional amounts outstanding under foreign currency contracts

The Company had the following notional amounts outstanding under foreign exchange contracts at September 30, 2018 and December 31, 2017 (in millions):

	Notional			Notional
	Amount in Buy			Amount in U.S.		Fair Value of		Fair Value of
Buy	Currency	Sell	Maturity	Dollars		Assets		Liabilities
September 30, 2018:
Chinese Renminbi	38.6	U.S. Dollars	October 2018	$	5.6	$	—	$	—
Euro	36.6	U.S. Dollars	October 2018 to January 2019		45.4		—		2.7
Great Britain Pound	19.3	Euro	October 2018		25.0		0.2		—
Swiss Francs	12.4	U.S. Dollars	October 2018		12.5		0.2		—
Euro	11.4	Great Britain Pound	October 2018 to October 2020		13.3		—		—
U.S. Dollars	8.3	Euro	October 2018		8.3		—		—
Singapore Dollar	2.2	U.S. Dollars	October 2018		1.6		—		—
U.S. Dollars	1.6	Swiss Francs	October 2018		1.6		—		—
				$	113.3	$	0.4	$	2.7
December 31, 2017:
Euro	59.5	U.S. Dollars	January 2018	$	67.0	$	4.5	$	—
Swiss Francs	11.0	U.S. Dollars	January 2018		11.3		—		—
Singapore Dollar	4.9	U.S. Dollars	January 2018		3.6		—		—
Euro	1.8	Polish Zloty	January 2018		2.3		—		0.1
				$	84.2	$	4.5	$	0.1

Schedule of fair value and balance sheet location of derivative instruments

The fair value of the derivative instruments described above is recorded in the unaudited condensed consolidated balance sheets for the periods as follows (dollars in millions):

		September 30,		December 31,
	BalanceSheetLocation	2018		2017
Derivative assets:
Foreign exchange contracts	Other current assets	$	0.4	$	4.5
Embedded derivatives in purchase and delivery contracts	Other current assets		0.5		0.9
Fixed price commodity contracts	Other current assets		—		0.8
Embedded derivatives in purchase and delivery contracts	Other long-term assets		0.1		—
Derivative liabilities:
Foreign exchange contracts	Other current liabilities	$	2.7	$	0.1
Embedded derivatives in purchase and delivery contracts	Other current liabilities		0.6		1.5
Fixed price commodity contracts	Other current liabilities		0.4		—
Embedded derivatives in purchase and delivery contracts	Other long-term liabilities		0.7		1.4

Schedule of impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments

The impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments not designated as hedging instruments are as follows (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Foreign exchange contracts	$	1.4	$	(1.5)	$	(6.7)	$	5.5
Embedded derivatives in purchase and delivery contracts		—		(1.3)		1.3		(5.0)
Fixed price commodity contracts		(0.3)		0.3		(1.2)		0.5
Net impact to interest and other income (expense)	$	1.1	$	(2.5)	$	(6.6)	$	1.0

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Shareholders' Equity

Summary of dividends paid

The following is a summary of the dividends paid in the periods ended September 30, 2018 and 2017 (dollars in millions):

	2018
Dividends Paid on		March 23		June 22		September 21
Shareholders of Record as of		March 6		June 4		September 4
Aggregate Cost	$	6.3	$	6.2	$	6.3

	2017
Dividends Paid on		March 24		June 23		September 22
Shareholders of Record as of		March 8		June 5		September 5
Aggregate Cost	$	6.4	$	6.4	$	6.3

Summary of comprehensive income (loss)

The following is a summary of comprehensive income (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Consolidated net income	$	44.2	$	37.6	$	103.1	$	83.3
Foreign currency translation adjustments		(2.5)		21.9		(17.1)		87.0
Pension liability adjustments, net of tax		0.2		1.7		2.3		—
Net comprehensive income		41.9		61.2		88.3		170.3
Less: Comprehensive income attributable to noncontrolling interests		0.5		0.7		0.9		1.9
Comprehensive income attributable to Bruker Corporation	$	41.4	$	60.5	$	87.4	$	168.4

Summary of the components of accumulated other comprehensive income (loss), net of tax

The following is a summary of the components of accumulated other comprehensive income, net of tax, at September 30, 2018 (dollars in millions):

					Accumulated
	Foreign		Pension		Other
	Currency		Liability		Comprehensive
	Translation		Adjustment		Income
Balance at December 31, 2017	$	72.2	$	(45.2)	$	27.0
Other comprehensive income (loss) before reclassifications		(16.6)		0.4		(16.2)
Amounts reclassified from other comprehensive income (loss), net of tax of $0.3 million		—		1.9		1.9
Net current period other comprehensive income (loss)		(16.6)		2.3		(14.3)
Balance at September 30, 2018	$	55.6	$	(42.9)	$	12.7

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Noncontrolling Interests (Tables)

9 Months Ended

Sep. 30, 2018

Noncontrolling Interests

Schedule of changes in noncontrolling interests

Noncontrolling interests represent the minority shareholders' proportionate share of the Company's majority owned subsidiaries. The following table sets forth the changes in noncontrolling interests (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Balance at beginning of period	$	8.7	$	7.4	$	8.1	$	6.7
Net income		0.8		0.6		1.5		1.3
Foreign currency translation adjustments		(0.3)		0.1		(0.6)		0.6
Cash payments to noncontrolling interests		(0.9)		—		(0.9)		(0.5)
Impact of ASC 606 adoption		—		—		0.2		—
Balance at end of period	$	8.3	$	8.1	$	8.3	$	8.1

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Other Charges, Net (Tables)

9 Months Ended

Sep. 30, 2018

Other Charges, Net

Components of other charges, net

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Information technology transformation costs	$	1.1	$	0.8	$	3.5	$	2.9
Restructuring charges		2.0		3.0		5.9		6.9
Acquisition-related charges		1.2		0.5		2.3		3.8
Other		0.9		—		3.5		0.2
Other charges, net	$	5.2	$	4.3	$	15.2	$	13.8

Summary of restructuring expenses

The following table sets forth the restructuring charges for the three and nine months ended September 30, 2018 and 2017 (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Cost of revenues	$	0.5	$	1.6	$	0.8	$	1.6
Other charges, net		2.0		3.0		5.9		6.9
	$	2.5	$	4.6	$	6.7	$	8.5

Schedule of changes in the restructuring reserves

The following table sets forth the changes in restructuring reserves for the nine months ended September 30, 2018 (dollars in millions):

							Provisions
							for Excess
	Total		Severance		Exit Costs		Inventory
Balance at December 31, 2017	$	10.8	$	2.0	$	2.1	$	6.7
Restructuring charges		6.7		2.5		4.2		—
Cash payments		(7.5)		(3.9)		(3.6)		—
Other, non-cash adjustments and foreign currency effect		(2.7)		0.3		(0.7)		(2.3)
Balance at September 30, 2018	$	7.3	$	0.9	$	2.0	$	4.4

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Interest and Other Income (Expense), Net (Tables)

9 Months Ended

Sep. 30, 2018

Interest and Other Income (Expense), Net

Components of interest and other income (expense), net

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Interest expense, net	$	(2.3)	$	(3.6)	$	(8.3)	$	(11.1)
Exchange (losses) gains on foreign currency transactions		(0.6)		0.3		(1.6)		(3.9)
Pension components		(0.9)		(1.4)		(2.2)		(3.2)
Other		0.1		0.8		0.6		3.2
Interest and other income (expense), net	$	(3.7)	$	(3.9)	$	(11.5)	$	(15.0)

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Business Segment Information

Schedule of revenue, operating income and total assets by reportable segment

Revenue and operating income by reportable segment are presented below (dollars in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenue:
BSI	$	417.1	$	390.6	$	1,206.5	$	1,099.5
BEST		50.9		46.1		139.2		140.2
Eliminations (a)		(1.4)		(1.1)		(3.7)		(4.3)
Total revenue	$	466.6	$	435.6	$	1,342.0	$	1,235.4
Operating Income (loss)
BSI	$	63.6	$	44.5	$	146.5	$	114.9
BEST		5.4		1.8		9.3		4.3
Corporate, eliminations and other (b)		0.1		5.0		0.2		5.0
Total operating income	$	69.1	$	51.3	$	156.0	$	124.2

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

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

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

	September 30,		December 31,
	2018		2017
Assets:
BSI	$	1,854.5	$	1,917.8
BEST		37.8		35.6
Eliminations and other (a)		(3.2)		(4.9)
Total assets	$	1,889.1	$	1,948.5

(a)   Assets not allocated to the reportable segments and eliminations of intercompany transactions.

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Description of Business (Details) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Description of Business
Number of reportable segments			2
BSI
Description of Business
Segment revenue (as a percent)	89.40%	89.70%	89.90%	89.00%

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Revenue - Impact of ASU Adoption (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Impact of ASU adoption
Income tax expense (benefit)	$ 21.2	$ 9.8	$ 41.4	$ 25.9
Practical expedient, incremental costs of obtaining a contract			true
ASU No. 2014-09 | Adjustments
Impact of ASU adoption
Retained earnings	$ 8.2		$ 8.2
Income tax expense (benefit)			$ (2.1)

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Revenue - Disaggregation (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Revenues disaggregated by Group and end customer geographical location
Revenue	$ 466.6	$ 1,342.0
Revenue recognized at a point in time
Revenues disaggregated by Group and end customer geographical location
Revenue	427.1	1,227.6
Revenue recognized over time
Revenues disaggregated by Group and end customer geographical location
Revenue	39.5	114.4
United States
Revenues disaggregated by Group and end customer geographical location
Revenue	134.1	347.3
Germany
Revenues disaggregated by Group and end customer geographical location
Revenue	44.9	135.3
Rest of Europe
Revenues disaggregated by Group and end customer geographical location
Revenue	114.6	346.4
Asia Pacific
Revenues disaggregated by Group and end customer geographical location
Revenue	134.4	396.8
Other
Revenues disaggregated by Group and end customer geographical location
Revenue	38.6	116.2
Operating segments | BSI | Bruker BioSpin
Revenues disaggregated by Group and end customer geographical location
Revenue	139.5	411.2
Operating segments | BSI | Bruker CALID
Revenues disaggregated by Group and end customer geographical location
Revenue	134.6	393.9
Operating segments | BSI | Bruker Nano
Revenues disaggregated by Group and end customer geographical location
Revenue	143.0	401.4
Operating segments | BEST
Revenues disaggregated by Group and end customer geographical location
Revenue	50.9	139.2
Eliminations
Revenues disaggregated by Group and end customer geographical location
Revenue	$ (1.4)	$ (3.7)

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Revenue - Remaining Performance Obligations (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Remaining Performance Obligations
Amount of remaining performance obligations	$ 1,044.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Remaining Performance Obligations
Remaining performance obligation expected to be recognized in the given period (as a percent)	81.20%
Duration of expected recognition period for remaining performance obligation	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Minimum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | Maximum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	3 years

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Revenue - Contract Balances (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Jan. 01, 2018
Revenue
Contract assets	$ 26.7	$ 12.8
Contract liabilities	285.6	$ 291.3
Revenue recognition during the period	$ 145.8

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Acquisitions - JPK (Details) € in Millions, $ in Millions			9 Months Ended
	Jul. 11, 2018 EUR (€)	Jul. 11, 2018 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Acquisitions
Purchase price			$ 55.3	$ 65.8
Allocation of Consideration Transferred:
Goodwill			$ 199.9		$ 169.8
JPK Instruments AG
Acquisitions
Ownership percentage acquired		100.00%
Purchase price	€ 14.2	$ 16.6
Consideration Transferred:
Cash paid		16.6
Cash acquired		(0.2)
Contingent consideration		4.3
Total consideration transferred		20.7
Allocation of Consideration Transferred:
Inventories		3.0
Accounts receivable		1.8
Other current and non-current assets		0.7
Goodwill		8.0
Deferred taxes, net		(4.9)
Liabilities assumed		(4.1)
Total consideration allocated		20.7
JPK Instruments AG | Existing technology and related patents
Allocation of Consideration Transferred:
Intangible assets		7.0
JPK Instruments AG | Customer relationships
Allocation of Consideration Transferred:
Intangible assets		$ 7.5
JPK Instruments AG | Technology, Customer Relationships and Trade Names
Allocation of Consideration Transferred:
Amortization period for intangible assets acquired	8 years	8 years
JPK Instruments AG | Backlog
Allocation of Consideration Transferred:
Intangible assets		$ 1.1
Amortization period for intangible assets acquired	1 year	1 year
JPK Instruments AG | Trade names
Allocation of Consideration Transferred:
Intangible assets		$ 0.6

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Acquisitions - Anasys (Details) - USD ($) $ in Millions		9 Months Ended
	Apr. 08, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Acquisitions
Purchase price		$ 55.3	$ 65.8
Allocation of Consideration Transferred:
Goodwill		$ 199.9		$ 169.8
Anasys Instruments Corp
Acquisitions
Ownership percentage acquired	100.00%
Purchase price	$ 27.0
Consideration Transferred:
Cash paid	27.0
Contingent consideration	5.3
Total consideration transferred	32.3
Allocation of Consideration Transferred:
Inventories	2.8
Accounts receivable	0.8
Other current and non-current assets	1.1
Goodwill	16.6
Deferred taxes, net	(3.2)
Liabilities assumed	(3.5)
Total consideration allocated	32.3
Anasys Instruments Corp | Existing technology and related patents
Allocation of Consideration Transferred:
Intangible assets	7.3
Anasys Instruments Corp | Customer relationships
Allocation of Consideration Transferred:
Intangible assets	$ 8.0
Anasys Instruments Corp | Technology, Customer Relationships and Trade Names
Allocation of Consideration Transferred:
Amortization period for intangible assets acquired	8 years
Anasys Instruments Corp | Backlog
Allocation of Consideration Transferred:
Intangible assets	$ 1.8
Amortization period for intangible assets acquired	1 year
Anasys Instruments Corp | Trade names
Allocation of Consideration Transferred:
Intangible assets	$ 0.6

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Acquisitions - Luxendo (Details) € in Millions, $ in Millions			9 Months Ended
	May 05, 2017 EUR (€)	May 05, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Acquisitions
Purchase price			$ 55.3	$ 65.8
Allocation of Consideration Transferred:
Goodwill			$ 199.9		$ 169.8
Luxendo GmbH
Acquisitions
Ownership percentage acquired		100.00%
Purchase price	€ 17	$ 18.8
Consideration Transferred:
Cash paid		20.1
Cash acquired		(1.3)
Contingent consideration		3.1
Total consideration transferred		21.9
Allocation of Consideration Transferred:
Inventories		1.1
Other current and non-current assets		0.4
Property, plant and equipment		0.3
Goodwill		11.2
Deferred taxes, net		(2.4)
Liabilities assumed		(0.4)
Total consideration allocated		21.9
Existing technology | Luxendo GmbH
Allocation of Consideration Transferred:
Intangible assets		$ 10.9
Amortization period for intangible assets acquired	7 years	7 years
Trade names | Luxendo GmbH
Allocation of Consideration Transferred:
Intangible assets		$ 0.8
Amortization period for intangible assets acquired	10 years	10 years

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Acquisitions - Hysitron (Details) - USD ($) $ in Millions	Jan. 23, 2017	Sep. 30, 2018	Dec. 31, 2017
Allocation of Consideration Transferred:
Goodwill		$ 199.9	$ 169.8
Hysitron, Incorporated
Acquisitions
Ownership percentage acquired	100.00%
Consideration Transferred:
Cash paid	$ 27.9
Cash acquired	(0.7)
Contingent consideration	1.6
Total consideration transferred	28.8
Allocation of Consideration Transferred:
Accounts receivable, net	3.0
Inventories	3.8
Other current assets	0.2
Property, plant and equipment	0.6
Goodwill	16.6
Deferred taxes, net	(4.1)
Capital lease	(0.2)
Liabilities assumed	(3.4)
Total consideration allocated	28.8
Customer relationships | Hysitron, Incorporated
Allocation of Consideration Transferred:
Intangible assets	$ 5.8
Amortization period for intangible assets acquired	7 years
Existing technology | Hysitron, Incorporated
Allocation of Consideration Transferred:
Intangible assets	$ 4.7
Amortization period for intangible assets acquired	5 years
Trade names | Hysitron, Incorporated
Allocation of Consideration Transferred:
Intangible assets	$ 1.2
Amortization period for intangible assets acquired	7 years
Other | Hysitron, Incorporated
Allocation of Consideration Transferred:
Intangible assets	$ 0.6
Amortization period for intangible assets acquired	7 years

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Stock-Based Compensation - Plan Information (Details) - shares		9 Months Ended
	May 14, 2010	Sep. 30, 2018
2010 Plan
Stock-Based Compensation
Common stock authorized for issuance (in shares)	8,000,000	0
2010 Plan | Minimum
Stock-Based Compensation
Vesting period	3 years
2010 Plan | Maximum
Stock-Based Compensation
Vesting period	5 years
2016 Plan
Stock-Based Compensation
Common stock authorized for issuance (in shares)		9,500,000
2016 Plan | Minimum
Stock-Based Compensation
Vesting period		1 year
2016 Plan | Maximum
Stock-Based Compensation
Vesting period		4 years

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Stock-Based Compensation - Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Stock-Based Compensation
Total stock-based compensation	$ 3.3	$ 3.1	$ 8.2	$ 8.4
Costs of product revenue
Stock-Based Compensation
Total stock-based compensation	0.5	0.5	1.2	1.3
Selling, general and administrative
Stock-Based Compensation
Total stock-based compensation	2.3	2.1	5.8	5.8
Research and development
Stock-Based Compensation
Total stock-based compensation	0.5	0.5	1.2	1.3
Stock options
Stock-Based Compensation
Total stock-based compensation	1.2	1.8	3.2	5.2
Restricted stock awards
Stock-Based Compensation
Total stock-based compensation	0.3	0.4	0.7	1.1
Restricted stock units
Stock-Based Compensation
Total stock-based compensation	$ 1.8	$ 0.9	$ 4.3	$ 2.1

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Stock-Based Compensation - Assumptions (Details) - Stock options - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Stock-Based Compensation
Awarded during the period (in shares)	126,260
Risk-free interest rates (as a percent)	2.80%
Risk-free interest rates, minimum (as a percent)		1.78%
Risk-free interest rates, maximum (as a percent)		2.09%
Expected life	5 years 4 months 17 days	5 years 6 months 22 days
Volatility (as a percent)	28.46%
Volatility, minimum (as a percent)		30.78%
Volatility, maximum (as a percent)		34.13%
Expected dividend yield (as a percent)	0.47%
Minimum
Stock-Based Compensation
Vesting period	3 years
Expected dividend yield (as a percent)		0.55%
Maximum
Stock-Based Compensation
Vesting period	4 years
Expected dividend yield (as a percent)		0.74%

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Stock-Based Compensation - Stock Option Activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Stock options, Shares Subject to Options
Outstanding at the beginning of the period (in shares)	3,235,673
Granted (in shares)	126,260
Exercised (in shares)	(529,357)
Forfeited (in shares)	(186,263)
Outstanding at the end of the period (in shares)	2,646,313
Exercisable at the end of the period (in shares)	1,653,296
Exercisable and expected to vest at the end of the period (in shares)	2,571,939
Stock options, Weighted Average Option Price
Outstanding at the beginning of the period (in dollars per share)	$ 20.16
Granted (in dollars per share)	35.86
Exercised (in dollars per share)	18.03
Forfeited (in dollars per share)	20.19
Outstanding at the end of the period (in dollars per share)	21.33
Exercisable at the end of the period (in dollars per share)	19.35
Exercisable and expected to vest at the end of the period (in dollars per share)	$ 21.23
Stock options, additional information
Weighted Average Remaining Contractual Term, Outstanding	5 years 9 months 18 days
Weighted Average Remaining Contractual Term, Exercisable	5 years 2 months 12 days
Weighted Average Remaining Contractual Term, Exercisable and expected to vest	5 years 9 months 18 days
Aggregate Intrinsic Value, Outstanding	$ 32.4
Aggregate Intrinsic Value, Exercisable	23.3
Aggregate Intrinsic Value, Exercisable and expected to vest	$ 31.7
Fair value of the Company's common stock price (in dollars per share)	$ 33.45
Weighted average fair values of options granted (in dollars per share)	$ 9.50	$ 7.61
Intrinsic value of options exercised	$ 7.2	$ 10.9

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Stock-Based Compensation - Restricted Stock Award and RSU Activity (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Restricted stock awards
Restricted stock, Shares Subject to Restriction
Outstanding at the beginning of the period (in shares)	85,529
Vested (in shares)	(54,343)
Forfeited (in shares)	(6,553)
Outstanding at the end of the period (in shares)	24,633
Restricted stock, Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 20.39
Vested (in dollars per share)	20.12
Forfeited (in dollars per share)	24.80
Outstanding at the end of the period (in dollars per share)	$ 19.82
Additional share-based compensation disclosures
Total fair value of shares vested	$ 1.1	$ 1.5
Restricted stock units
Restricted stock, Shares Subject to Restriction
Outstanding at the beginning of the period (in shares)	652,123
Granted (in shares)	412,097
Vested (in shares)	(145,356)
Forfeited (in shares)	(55,357)
Outstanding at the end of the period (in shares)	863,507
Restricted stock, Weighted Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 25.47
Granted (in dollars per share)	33.86
Vested (in dollars per share)	25.62
Forfeited (in dollars per share)	26.44
Outstanding at the end of the period (in dollars per share)	$ 29.39
Additional share-based compensation disclosures
Total fair value of shares vested	$ 3.7	$ 0.2

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Stock-Based Compensation - Unrecognized Compensation Expense (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Stock options
Stock-Based Compensation
Expected pre-tax stock-based compensation expense	$ 5.3
Weighted average remaining service period	2 years 2 months 16 days
Restricted stock awards
Stock-Based Compensation
Expected pre-tax stock-based compensation expense	$ 0.4
Weighted average remaining service period	10 months 6 days
Restricted stock units
Stock-Based Compensation
Expected pre-tax stock-based compensation expense	$ 20.7
Weighted average remaining service period	3 years 3 months

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Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Earnings Per Share
Net income attributable to Bruker Corporation, as reported -basic	$ 43.4	$ 37.0	$ 101.6	$ 82.0
Weighted average shares outstanding:
Weighted average shares outstanding-basic	156.4	157.5	156.1	158.9
Effect of dilutive securities:
Stock options and restricted stock awards and units (in shares)	1.0	1.2	1.1	1.0
Weighted average shares outstanding-diluted	157.4	158.7	157.2	159.9
Net income per common share attributable to Bruker Corporation shareholders:
Basic (in dollars per share)	$ 0.28	$ 0.23	$ 0.65	$ 0.52
Diluted (in dollars per share)	$ 0.28	$ 0.23	$ 0.65	$ 0.51

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Earnings Per Share - Anti-dilutive Stock Options (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Stock options
Anti-dilutive securities
Number of shares excluded from the computation of diluted earnings per share	0.6	1.0	0.6	1.7

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Fair Value of Financial Instruments - Hierarchy (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Significant Other Observable Inputs (Level 2)
Liabilities:
Fair value of long-term fixed interest rate debt	$ 228.9	$ 231.3
Recurring basis
Assets:
Embedded derivatives in purchase and delivery contracts	0.6	0.9
Foreign exchange contracts	0.4	4.5
Fixed price commodity contracts		0.8
Total assets recorded at fair value	1.0	6.2
Liabilities:
Contingent consideration	16.9	12.7
Foreign exchange contracts	2.7	0.1
Embedded derivatives in purchase and delivery contracts	1.3	2.9
Fixed price commodity contracts	0.4
Total liabilities recorded at fair value	21.3	15.7
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets:
Embedded derivatives in purchase and delivery contracts	0.6	0.9
Foreign exchange contracts	0.4	4.5
Fixed price commodity contracts		0.8
Total assets recorded at fair value	1.0	6.2
Liabilities:
Foreign exchange contracts	2.7	0.1
Embedded derivatives in purchase and delivery contracts	1.3	2.9
Fixed price commodity contracts	0.4
Total liabilities recorded at fair value	4.4	3.0
Recurring basis | Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent consideration	16.9	12.7
Total liabilities recorded at fair value	$ 16.9	$ 12.7

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Fair Value of Financial Instruments - Time and Call Deposits (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Investments in time and call deposits
Restricted Cash	$ 4.7	$ 3.9
Short-term Investments		$ 114.2
Minimum
Investments in time and call deposits
Maturity of time deposits	1 month
Maximum
Investments in time and call deposits
Maturity of time deposits	12 months
Period of ability to redeem invested amounts on call deposits	95 days

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Fair Value of Financial Instruments - Contingent Consideration (Details) - Contingent consideration $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Changes in contingent consideration liabilities
Balance at the beginning of the period	$ 12.7
Current period additions	9.9
Current period adjustments	(0.1)
Current period settlements	(5.5)
Foreign currency effect	(0.1)
Balance at the end of the period	$ 16.9

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Restricted Cash (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Restricted Cash
Current portion of restricted cash, balance sheet location	us-gaap:OtherAssetsCurrent
Non-current portion of restricted cash, balance sheet location	us-gaap:OtherAssetsNoncurrent
Cash and cash equivalents, including restricted cash	$ 274.8	$ 328.9	$ 267.8	$ 345.9
ASU 2016-18 - Restricted Cash
Restricted Cash
Cash and cash equivalents, including restricted cash	$ 4.7	$ 3.9	$ 3.9	$ 3.5

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Inventories
Raw materials	$ 156.1	$ 152.0
Work-in-process	208.7	183.1
Finished goods	89.5	96.6
Demonstration units	64.3	54.5
Inventories	518.6	486.2
Inventory-in-transit	$ 25.5	$ 41.4

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Goodwill and Intangible Assets - Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Goodwill
Balance at the beginning of the period	$ 169.8
Current period additions	32.3
Current period adjustments	(0.3)
Foreign currency effect	(1.9)
Balance at the end of the period	$ 199.9

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Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	$ 274.9		$ 274.9		$ 236.0
Accumulated Amortization, intangible assets subject to amortization	(176.8)		(176.8)		(154.2)
Net Carrying Amount, intangible assets subject to amortization	98.1		98.1		81.8
Gross Carrying Amount, total intangible assets	275.5		275.5		236.6
Net Carrying Amount, total intangible assets	98.7		98.7		82.4
Amortization expense related to intangible assets subject to amortization	6.9	$ 8.2	21.5	$ 22.6
In-process research and development
Intangible assets
Gross Carrying Amount, intangible assets not subject to amortization	0.6		0.6		0.6
Net Carrying Amount, intangible assets not subject to amortization	0.6		0.6		0.6
Existing technology and related patents
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	215.3		215.3		195.4
Accumulated Amortization, intangible assets subject to amortization	(156.0)		(156.0)		(138.9)
Net Carrying Amount, intangible assets subject to amortization	59.3		59.3		56.5
Customer relationships
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	49.6		49.6		34.6
Accumulated Amortization, intangible assets subject to amortization	(16.2)		(16.2)		(12.9)
Net Carrying Amount, intangible assets subject to amortization	33.4		33.4		21.7
Non compete contracts
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	1.8		1.8		1.8
Accumulated Amortization, intangible assets subject to amortization	(1.8)		(1.8)		(1.5)
Net Carrying Amount, intangible assets subject to amortization					0.3
Trade names
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	5.4		5.4		4.2
Accumulated Amortization, intangible assets subject to amortization	(1.4)		(1.4)		(0.9)
Net Carrying Amount, intangible assets subject to amortization	4.0		4.0		$ 3.3
Other
Intangible assets
Gross Carrying Amount, intangible assets subject to amortization	2.8		2.8
Accumulated Amortization, intangible assets subject to amortization	(1.4)		(1.4)
Net Carrying Amount, intangible assets subject to amortization	$ 1.4		$ 1.4

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Debt - Components (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Debt
Total debt	$ 240.6	$ 415.6
Current portion of long-term debt	(15.4)
Total long-term debt, less current portion	225.2	415.6
US Dollar notes under the Note Purchase Agreement
Debt
Debt, before unamortized debt issuance costs	220.0	220.0
Unamortized debt issuance costs	(0.6)	(0.7)
Capital lease obligations and other loans
Debt
Total debt	1.2	1.3
2015 Credit Agreement | US Dollar revolving loan
Debt
Total debt	$ 20.0	$ 195.0

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Debt - Credit Agreements (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Revolving lines of credit
Maximum commitment	$ 750.8
Long-term debt	225.2	$ 415.6
2015 Credit Agreement | US Dollar revolving loan
Revolving lines of credit
Maximum commitment	$ 500.0
Maximum leverage ratio allowed	3.5
Minimum interest coverage ratio required	2.5
2015 Credit Agreement | US Dollar revolving loan | Minimum
Revolving lines of credit
Facility fee (as a percent)	0.10%
2015 Credit Agreement | US Dollar revolving loan | Maximum
Revolving lines of credit
Facility fee (as a percent)	0.20%
2015 Credit Agreement | US Dollar revolving loan | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Minimum
Revolving lines of credit
Interest rate added to base rate (as a percent)	0.00%
2015 Credit Agreement | US Dollar revolving loan | Greatest of prime rate, federal funds rate plus spread and adjusted LIBOR plus spread | Maximum
Revolving lines of credit
Interest rate added to base rate (as a percent)	0.30%
2015 Credit Agreement | US Dollar revolving loan | Prime rate
Revolving lines of credit
Variable interest rate base	prime rate
2015 Credit Agreement | US Dollar revolving loan | Federal funds rate
Revolving lines of credit
Variable interest rate base	federal funds rate
Interest rate added to base rate (as a percent)	0.50%
2015 Credit Agreement | US Dollar revolving loan | Adjusted LIBOR
Revolving lines of credit
Variable interest rate base	adjusted LIBOR
Interest rate added to base rate (as a percent)	1.00%
2015 Credit Agreement | US Dollar revolving loan | LIBOR
Revolving lines of credit
Variable interest rate base	LIBOR
2015 Credit Agreement | US Dollar revolving loan | LIBOR | Minimum
Revolving lines of credit
Interest rate added to base rate (as a percent)	0.90%
2015 Credit Agreement | US Dollar revolving loan | LIBOR | Maximum
Revolving lines of credit
Interest rate added to base rate (as a percent)	1.30%

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Debt - Revolving Loan Arrangements (Details) $ in Millions	Sep. 30, 2018 USD ($)
Revolving lines of credit
Total Amount Committed by Lenders	$ 750.8
Outstanding Borrowings	20.0
Outstanding Letters of Credit	120.7
Total Amount Available	610.1
Other lines of credit
Revolving lines of credit
Total Amount Committed by Lenders	250.8
Outstanding Letters of Credit	119.6
Total Amount Available	$ 131.2
2015 Credit Agreement | US Dollar revolving loan
Revolving lines of credit
Weighted Average Interest Rate (as a percent)	3.20%
Total Amount Committed by Lenders	$ 500.0
Outstanding Borrowings	20.0
Outstanding Letters of Credit	1.1
Total Amount Available	$ 478.9

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Debt - Senior Notes (Details) $ in Millions		9 Months Ended
	Jan. 18, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jan. 31, 2012 USD ($)
Debt
Principal repayment of Senior Notes			$ 20.0
US Dollar notes under the Note Purchase Agreement
Debt
Senior notes				$ 240.0
Additional aggregate principal amount that may be issued		$ 600.0
Minimum percentage of original aggregate principal that may be prepaid		10.00%
Prepayment price as percentage of principal amount		100.00%
Prepayment price as percentage of principal amount, in the event of a change in control		100.00%
Maximum leverage ratio allowed		3.50
Period for interest coverage ratio		1 year
Minimum interest coverage ratio required		2.50
Priority debt as a percentage of consolidated net worth		25.00%
US Dollar notes under the Note Purchase Agreement | Minimum
Debt
Written notice period to holders of the Notes		30 days
US Dollar notes under the Note Purchase Agreement | Maximum
Debt
Written notice period to holders of the Notes		60 days
3.16% Series 2012A Senior Notes, Tranche A, due January 18, 2017 | US Dollar notes under the Note Purchase Agreement
Debt
Senior notes				$ 20.0
Interest rate, stated percentage				3.16%
Principal repayment of Senior Notes	$ 20.0
3.74% Series 2012A Senior Notes, Tranche B, due January 18, 2019 | US Dollar notes under the Note Purchase Agreement
Debt
Senior notes				$ 15.0
Interest rate, stated percentage				3.74%
4.31% Series 2012A Senior Notes, Tranche C, due January 18, 2022 | US Dollar notes under the Note Purchase Agreement
Debt
Senior notes				$ 105.0
Interest rate, stated percentage				4.31%
4.46% Series 2012A Senior Notes, Tranche D, due January 18, 2024 | US Dollar notes under the Note Purchase Agreement
Debt
Senior notes				$ 100.0
Interest rate, stated percentage				4.46%

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Debt - Covenant Compliance (Details)	9 Months Ended
	Sep. 30, 2018
Debt
Actual leverage ratio	0.68
Actual interest coverage ratio	20.9

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Derivative Instruments and Hedging Activities - Risk Management (Details) € in Millions, ¥ in Millions, £ in Millions, SFr in Millions, $ in Millions, $ in Millions	Sep. 30, 2018 GBP (£)	Sep. 30, 2018 CNY (¥)	Sep. 30, 2018 CHF (SFr)	Sep. 30, 2018 SGD ($)	Sep. 30, 2018 EUR (€)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 CHF (SFr)	Dec. 31, 2017 SGD ($)	Dec. 31, 2017 EUR (€)	Dec. 31, 2017 USD ($)
Derivative instruments and hedging activities
Credit agreement, amount outstanding						$ 20.0
CHF:USD
Derivative instruments and hedging activities
Notional Amount						1.6
Notional Amount in U.S. Dollars						1.6
Embedded derivatives in purchase and delivery contracts
Derivative instruments and hedging activities
Notional amount of derivative sale contracts						108.6				$ 98.3
Notional amount of derivative purchase contracts						4.1				3.6
Fixed price commodity contracts
Derivative instruments and hedging activities
Notional Amount						7.5				3.0
US Dollar revolving loan | 2015 Credit Agreement
Derivative instruments and hedging activities
Credit agreement, amount outstanding						20.0
Not designated as hedging instruments | Foreign exchange contracts
Derivative instruments and hedging activities
Notional Amount						113.3				84.2
Fair Value of Assets						0.4				4.5
Fair Value of Liabilities						2.7				0.1
Not designated as hedging instruments | USD:CNY
Derivative instruments and hedging activities
Notional Amount		¥ 38.6				5.6
Not designated as hedging instruments | USD:EUR
Derivative instruments and hedging activities
Notional Amount					€ 36.6	45.4			€ 59.5	67.0
Fair Value of Assets										4.5
Fair Value of Liabilities						2.7
Not designated as hedging instruments | EUR:GBP
Derivative instruments and hedging activities
Notional Amount	£ 19.3					25.0
Fair Value of Assets						0.2
Not designated as hedging instruments | USD:CHF
Derivative instruments and hedging activities
Notional Amount			SFr 12.4			12.5	SFr 11.0			11.3
Fair Value of Assets						0.2
Not designated as hedging instruments | GBP:EUR
Derivative instruments and hedging activities
Notional Amount					€ 11.4	13.3
Not designated as hedging instruments | EUR:USD
Derivative instruments and hedging activities
Notional Amount						8.3
Notional Amount in U.S. Dollars						8.3
Not designated as hedging instruments | USD:SGD
Derivative instruments and hedging activities
Notional Amount				$ 2.2		$ 1.6		$ 4.9		3.6
Not designated as hedging instruments | PLN:EUR
Derivative instruments and hedging activities
Notional Amount									€ 1.8	2.3
Fair Value of Liabilities										$ 0.1

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Derivative Instruments and Hedging Activities - Fair Values (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Foreign exchange contracts | Other current assets
Derivative instruments and hedging activities
Derivative assets	$ 0.4	$ 4.5
Foreign exchange contracts | Other current liabilities
Derivative instruments and hedging activities
Derivative liabilities	2.7	0.1
Embedded derivatives in purchase and delivery contracts | Other current assets
Derivative instruments and hedging activities
Derivative assets	0.5	0.9
Embedded derivatives in purchase and delivery contracts | Other long-term assets
Derivative instruments and hedging activities
Derivative assets	0.1
Embedded derivatives in purchase and delivery contracts | Other current liabilities
Derivative instruments and hedging activities
Derivative liabilities	0.6	1.5
Embedded derivatives in purchase and delivery contracts | Other long-term liabilities
Derivative instruments and hedging activities
Derivative liabilities	0.7	1.4
Fixed price commodity contracts | Other current assets
Derivative instruments and hedging activities
Derivative assets		$ 0.8
Fixed price commodity contracts | Other current liabilities
Derivative instruments and hedging activities
Derivative liabilities	$ 0.4

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Derivative Instruments and Hedging Activities - Gains and Losses (Details) - Not designated as hedging instruments - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative instruments and hedging activities
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments	$ 1.1	$ (2.5)	$ (6.6)	$ 1.0
Foreign exchange contracts
Derivative instruments and hedging activities
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments	1.4	(1.5)	(6.7)	5.5
Embedded derivatives in purchase and delivery contracts
Derivative instruments and hedging activities
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments		(1.3)	1.3	(5.0)
Fixed price commodity contracts
Derivative instruments and hedging activities
Impact on net income of unrealized gains and losses resulting from changes in fair value of derivative instruments	$ (0.3)	$ 0.3	$ (1.2)	$ 0.5

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Provision for Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Provision for Income Taxes
Income tax expense (benefit)	$ 21.2	$ 9.8	$ 41.4	$ 25.9
Effective tax rates (as a percent)	32.40%	20.70%	28.70%	23.70%
Unrecognized tax benefits, excluding penalties and interest	$ 4.4		$ 4.4		$ 4.4
Accrued interest and penalties related to uncertain tax positions	0.5		0.5		$ 0.2
Penalties and interest (benefit) expense relating to unrecognized tax benefits	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Statutory tax rate (as a percent)			21.00%
Germany and Switzerland
Provision for Income Taxes
Increase in effective tax rate from impact of foreign statutory rates (as a percent)			4.00%
Germany | Foreign
Provision for Income Taxes
Foreign statutory tax rate for 2017 (as a percent)			30.00%
Switzerland | Foreign
Provision for Income Taxes
Foreign statutory tax rate for 2017 (as a percent)			20.00%

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Commitments and Contingencies - Litigation and Related Contingencies (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Governmental Investigations
Litigation and Related Contingencies
Accruals for potential contingencies	$ 0.0	$ 0.0
Korea | Maximum
Litigation and Related Contingencies
Revenue percentage of total revenue	3.00%
Legal
Litigation and Related Contingencies
Accruals for potential contingencies	$ 0.0	$ 0.0

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Commitments and Contingencies - Guarantees (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Letters of Credit and Guarantees
Bank guarantees primarily for customer advances	$ 120.7
Revolving Loans
Letters of Credit and Guarantees
Bank guarantees primarily for customer advances	$ 120.7	$ 138.8

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Shareholders' Equity - Share Repurchase and Dividends (Details) - USD ($) $ / shares in Units, $ in Millions								3 Months Ended		9 Months Ended
	Sep. 21, 2018	Jun. 22, 2018	Mar. 23, 2018	Sep. 22, 2017	Jun. 23, 2017	Mar. 24, 2017	Feb. 22, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Shareholders' Equity
Dividend declared per common share (in dollars per share)							$ 0.04	$ 0.04	$ 0.04	$ 0.12	$ 0.12
Target dividend per annum (in dollars per share)										$ 0.16
Dividends paid, Aggregate Cost	$ 6.3	$ 6.2	$ 6.3	$ 6.3	$ 6.4	$ 6.4				$ 18.8	$ 19.1
May 2017 Repurchase Program
Shareholders' Equity
Amount approved for repurchase of common stock								$ 225.0		$ 225.0
Common stock repurchased during the period (in shares)								0		0

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Shareholders' Equity - Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Summary of comprehensive income (loss)
Consolidated net income	$ 44.2	$ 37.6	$ 103.1	$ 83.3
Foreign currency translation adjustments	(2.5)	21.9	(17.1)	87.0
Pension liability adjustments, net of tax	0.2	1.7	2.3
Net comprehensive income	41.9	61.2	88.3	170.3
Less: Comprehensive income attributable to noncontrolling interests	0.5	0.7	0.9	1.9
Comprehensive income attributable to Bruker Corporation	$ 41.4	$ 60.5	$ 87.4	$ 168.4

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Shareholders' Equity - Accumulated Other Comprehensive Income (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Summary of the components of accumulated other comprehensive income, net of tax
Balance at beginning of period	$ 733.5
Balance at end of period	825.2
Accumulated Other Comprehensive Income
Summary of the components of accumulated other comprehensive income, net of tax
Balance at beginning of period	27.0
Other comprehensive income (loss) before reclassifications	(16.2)
Amount reclassified from other comprehensive income (loss), net of tax of $0.3 million	1.9
Net current period other comprehensive income (loss)	(14.3)
Balance at end of period	12.7
Amount from reclassification, tax	0.3
Foreign Currency Translation
Summary of the components of accumulated other comprehensive income, net of tax
Balance at beginning of period	72.2
Other comprehensive income (loss) before reclassifications	(16.6)
Net current period other comprehensive income (loss)	(16.6)
Balance at end of period	55.6
Pension Liability Adjustment
Summary of the components of accumulated other comprehensive income, net of tax
Balance at beginning of period	(45.2)
Other comprehensive income (loss) before reclassifications	0.4
Amount reclassified from other comprehensive income (loss), net of tax of $0.3 million	1.9
Net current period other comprehensive income (loss)	2.3
Balance at end of period	$ (42.9)

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Noncontrolling Interests (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Noncontrolling interests
Balance at beginning of period	$ 8.7	$ 7.4	$ 8.1	$ 6.7
Net income	0.8	0.6	1.5	1.3
Foreign currency translation adjustments	(0.3)	0.1	(0.6)	0.6
Cash payments to noncontrolling interest	(0.9)		(0.9)	(0.5)
Balance at end of period	$ 8.3	$ 8.1	8.3	$ 8.1
ASU No. 2014-09
Noncontrolling interests
Impact of ASC 606 adoption			$ 0.2

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Other Charges, Net - Components (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Other Charges, Net
Information technology transformation costs	$ 1.1	$ 0.8	$ 3.5	$ 2.9
Restructuring charges	2.0	3.0	5.9	6.9
Acquisition-related charges	1.2	0.5	2.3	3.8
Other	0.9		3.5	0.2
Other charges, net	$ 5.2	$ 4.3	$ 15.2	$ 13.8

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Other Charges, Net - Restructuring Plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Restructuring charges
Restructuring expenses	$ 2.5	$ 4.6	$ 6.7	$ 8.5
Costs of product revenue
Restructuring charges
Restructuring expenses	0.5	1.6	0.8	1.6
Other charges, net
Restructuring charges
Restructuring expenses	$ 2.0	$ 3.0	$ 5.9	$ 6.9

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Other Charges, Net - Restructuring Reserves (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Changes in the restructuring reserves
Balance at the beginning of the period			$ 10.8
Restructuring charges	$ 2.5	$ 4.6	6.7	$ 8.5
Cash payments			(7.5)
Other, non-cash adjustments and foreign currency effect			(2.7)
Balance at the end of the period	7.3		7.3
Severance
Changes in the restructuring reserves
Balance at the beginning of the period			2.0
Restructuring charges			2.5
Cash payments			(3.9)
Other, non-cash adjustments and foreign currency effect			0.3
Balance at the end of the period	0.9		0.9
Exit Costs
Changes in the restructuring reserves
Balance at the beginning of the period			2.1
Restructuring charges			4.2
Cash payments			(3.6)
Other, non-cash adjustments and foreign currency effect			(0.7)
Balance at the end of the period	2.0		2.0
Provisions for Excess Inventory
Changes in the restructuring reserves
Balance at the beginning of the period			6.7
Other, non-cash adjustments and foreign currency effect			(2.3)
Balance at the end of the period	$ 4.4		$ 4.4

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Interest and Other Income (Expense), Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Interest and Other Income (Expense), Net
Interest expense, net	$ (2.3)	$ (3.6)	$ (8.3)	$ (11.1)
Exchange (losses) gains on foreign currency transactions	(0.6)	0.3	(1.6)	(3.9)
Pension components	(0.9)	(1.4)	(2.2)	(3.2)
Other	0.1	0.8	0.6	3.2
Interest and other income (expense), net	$ (3.7)	$ (3.9)	$ (11.5)	$ (15.0)

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Business Segment Information (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) segment	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Business segment information
Number of reportable segments | segment			2
Revenue	$ 466.6	$ 435.6	$ 1,342.0	$ 1,235.4
Operating Income (loss)	69.1	51.3	156.0	124.2
Assets	1,889.1		1,889.1		$ 1,948.5
Eliminations
Business segment information
Revenue	(1.4)	(1.1)	(3.7)	(4.3)
Corporate, eliminations and other
Business segment information
Operating Income (loss)	0.1	5.0	0.2	5.0
Assets	(3.2)		(3.2)		(4.9)
BSI | Operating segments
Business segment information
Revenue	417.1	390.6	1,206.5	1,099.5
Operating Income (loss)	63.6	44.5	146.5	114.9
Assets	1,854.5		1,854.5		1,917.8
BEST | Operating segments
Business segment information
Revenue	50.9	46.1	139.2	140.2
Operating Income (loss)	5.4	$ 1.8	9.3	$ 4.3
Assets	$ 37.8		$ 37.8		$ 35.6

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Recent Accounting Pronouncements (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Recent Accounting Pronouncements
Interest and other income (expense), net	$ (3.7)	$ (3.9)	$ (11.5)	$ (15.0)
Pension components included in interest and other income (expense) under new guidance	$ 0.9	1.4	$ 2.2	3.2
ASU 2017-07, Compensation-Retirement Benefits | Reclassification for retrospective adoption
Recent Accounting Pronouncements
Cost of sales, selling, general and administrative, and research and development expense		(1.4)		3.2
Interest and other income (expense), net		$ 1.4		$ 3.2

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Subsequent Events (Details) - Oct. 15, 2018 - Subsequent Event - Hain € in Millions, $ in Millions	EUR (€)	USD ($)
Subsequent Event
Ownership percentage acquired	80.00%	80.00%
Purchase price	€ 66.0	$ 76.4
The percentage of shares remaining that were included in the options provided to the non-controlling shareholders.	20.00%	20.00%