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UsetheselinkstorapidlyreviewthedocumentTABLEOFCONTENTSITEM8FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA

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UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

Washington,D.C.20549

Form10-K

CommissionFileNumber000-30833

BRUKERCORPORATION(Exactnameofregistrantasspecifiedinitscharter)

Registrant'stelephonenumber,includingareacode:(978)663-3660

SecuritiesregisteredpursuanttoSection12(b)oftheAct:

SecuritiesregisteredpursuanttoSection12(g)oftheAct:None

Indicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesýNoo

IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesoNoý

Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesýNoo

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-Tduringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YesýNoo

IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-Kisnotcontainedherein,andwillnotbecontained,tothebestoftheregistrant'sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.o

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,smallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof"largeacceleratedfiler,""acceleratedfiler,""smallerreportingcompany,"and"emerginggrowthcompany"inRule12b-2oftheExchangeAct.

ýý ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTof1934

ForthefiscalyearendedDecember31,2017

oo TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

Delaware(StateorotherjurisdictionofIncorporationororganization)

04-3110160(I.R.S.EmployerIdentificationNo.)

40ManningRoad,Billerica,MA(Addressofprincipalexecutiveoffices)

01821(ZipCode)

TitleofEachClass NameofEachExchangeonWhichRegisteredCommonStock,$0.01parvaluepershare TheNasdaqGlobalSelectMarket

Largeacceleratedfilerý Acceleratedfilero Non-acceleratedfilero(Donotcheckifasmaller

reportingcompany)

SmallerreportingcompanyoEmerginggrowthcompanyo

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.o

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).YesoNoý

Theaggregatemarketvalueofthevotingandnon-votingstockheldbynon-affiliatesoftheregistrantasofJune30,2017(thelastbusinessdayoftheregistrant'smostrecentlycompletedsecondfiscalquarter)was$2,954,754,499,basedonthereportedlastsalepriceontheNasdaqGlobalSelectMarket.Thisamountexcludesanaggregateof56,475,932sharesofcommonstockheldbyofficersanddirectorsandeachpersonknownbytheregistranttoown10%ormoreoftheoutstandingcommonstockoftheregistrantasofJune30,2017.Exclusionofsharesheldbyanypersonshouldnotbeconstruedtoindicatethatsuchpersonpossessesthepower,directorindirect,todirectorcausethedirectionofmanagementorpoliciesoftheregistrant,orthatsuchpersoniscontrolledbyorundercommoncontrolwiththeregistrant.Thenumberofsharesoftheregistrant'scommonstockoutstandingasofMarch12,2018was156,006,589.

DOCUMENTSINCORPORATEDBYREFERENCE

PortionsoftheinformationrequiredbyPartIIIofthisreport(Items10,11,12,13and14)areincorporatedbyreferencefromtheregistrant'sdefinitiveProxyStatementforits2018AnnualMeetingofStockholderstobefiledwithin120daysofthecloseoftheregistrant'sfiscalyear.

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BRUKERCORPORATION

ANNUALREPORTONFORM10-K

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AnystatementscontainedinthisAnnualReportonForm10-Kthatarenotstatementsofhistoricalfactmaybedeemedtobeforward-lookingstatementswithinthemeaningofSection21EoftheSecuritiesExchangeActof1934.Withoutlimitingtheforegoing,thewords"believes,anticipates,plans,expects,seeks,estimates,should"andsimilarexpressionsareintendedtoidentifyforward-lookingstatements.Anyforward-lookingstatementscontainedhereinarebasedoncurrentexpectations,butaresubjecttoanumberofrisksanduncertainties.Thefactorsthatcouldcauseactualfutureresultstodiffermateriallyfromcurrentexpectationsinclude,butarenotlimitedto,risksanduncertaintiesrelatedtoadversechangesintheeconomicandpoliticalconditionsinthecountriesinwhichweoperate,theintegrationofbusinesseswehaveacquiredormayacquireinthefuture,ourrestructuringandcost-controlinitiatives,changingtechnologies,productdevelopmentandmarketacceptanceofourproducts,thecostandpricingofourproducts,manufacturingandoutsourcing,competition,dependenceoncollaborativepartners,keysuppliersandthirdpartydistributors,capitalspendingandgovernmentfundingpolicies,changesingovernmentalregulations,intellectualproperty

Item1 Business 3Item1A RiskFactors 17Item1B UnresolvedStaffComments 33Item2 Properties 33Item3 LegalProceedings 35Item4 MineSafetyDisclosure 35

PartII

Item5 MarketforRegistrant'sCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities 36Item6 SelectedFinancialData 39Item7 Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations 41Item7A QuantitativeandQualitativeDisclosuresAboutMarketRisk 66Item8 FinancialStatementsandSupplementaryData 69Item9 ChangesinandDisagreementswithAccountantsonAuditingandFinancialDisclosure 125Item9A ControlsandProcedures 125Item9B OtherInformation 127

PartIII

Item10 Directors,ExecutiveOfficersandCorporateGovernance 127Item11 ExecutiveCompensation 127Item12 SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters 127Item13 CertainRelationshipsandRelatedTransactionsandDirectorIndependence 128Item14 PrincipalAccountingFeesandServices 128

PartIV

Item15 Exhibits,FinancialStatementsandSchedules 129Item16 Form10-KSummary 132

Signatures 133

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rights,litigation,exposuretoforeigncurrencyfluctuations,ourabilitytoserviceourdebtobligationsandfundouranticipatedcashneedsandotherfactors.ManyofthesefactorsaredescribedinmoredetailinthisAnnualReportonForm10-KunderItem1A."RiskFactors"andfromtimetotimeinotherfilingswemaymakewiththeSecuritiesandExchangeCommission.WhiletheCompanymayelecttoupdateforward-lookingstatementsinthefuture,itspecificallydisclaimsanyobligationtodoso,eveniftheCompany'sestimateschange,andreadersshouldnotrelyonthoseforward-lookingstatementsasrepresentingtheCompany'sviewsasofanydatesubsequenttothedateofthefilingofthisreport.

Referencesto"we,""us,""our,""management"orthe"Company"refertoBrukerCorporationand,insomecases,itssubsidiaries,aswellasallpredecessorentities.

Ourprincipalexecutiveofficesarelocatedat40ManningRoad,Billerica,MA01821,andourtelephonenumberis(978)663-3660.InformationaboutBrukerCorporationisavailableatwww.bruker.com .Theinformationonourwebsiteisnotincorporatedbyreferenceintoanddoesnotformapartofthisreport.Alltrademarks,tradenamesorcopyrightsreferredtointhisreportarethepropertyoftheirrespectiveowners.

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ITEM1BUSINESS

OurBusiness

Weareadeveloper,manufactureranddistributorofhigh-performancescientificinstrumentsandanalyticalanddiagnosticsolutionsthatenableourcustomerstoexplorelifeandmaterialsatmicroscopic,molecularandcellularlevels.Manyofourproductsareusedtodetect,measureandvisualizestructuralcharacteristicsofchemical,biologicalandindustrialmaterialsamples.Ourproductsaddresstherapidlyevolvingneedsofadiversearrayofcustomersinlifescienceresearch,pharmaceuticals,biotechnology,appliedmarkets,cellbiology,clinicalresearch,microbiology,in-vitrodiagnostics,nanotechnologyandmaterialsscienceresearch.Ourtechnologyplatformsincludemagneticresonancetechnologies,massspectrometrytechnologies,gasandliquidchromatographytriplequadrupolemassspectrometrytechnologies,X-raytechnologies,spark-opticalemissionspectroscopy,atomicforcemicroscopy,stylusandopticalmetrologytechnology,fluorescenceopticalmicroscopyandinfraredandRamanmolecularspectroscopytechnologies.Wealsodevelop,manufactureanddistributeabroadrangeoffieldanalyticalsystemsforchemical,biological,radiological,nuclearandexplosives,orCBRNE,detection.Wealsodevelop,manufactureandmarkethighandlowtemperaturesuperconductingmaterialsanddevicesbasedprimarilyonmetalliclowtemperaturesuperconductors.OurcorporateheadquartersarelocatedinBillerica,Massachusetts.WemaintainmajortechnicalandmanufacturingcentersinEuropeandNorthAmerica,andwehavesalesofficeslocatedthroughouttheworld.

BusinessSegments

Wehavetworeportablesegments,Bruker Scientific Instruments (BSI) ,whichrepresentedapproximately90%ofourrevenuesduringtheyearendedDecember31,2017,andBruker Energy & Supercon Technologies (BEST) ,whichrepresentedtheremainderofourrevenues.WithinBSI,weareorganizedintothreeoperatingsegments:theBrukerBioSpinGroup,theBrukerCALIDGroupandtheBrukerNanoGroup.Forfinancialreportingpurposes,theBrukerBioSpin,BrukerCALIDandBrukerNanooperatingsegmentsareaggregatedintotheBSIreportablesegmentbecauseeachhassimilareconomiccharacteristics,productionprocesses,serviceofferings,typesandclassesofcustomers,methodsofdistributionandregulatoryenvironments.

BSISegment

Bruker BioSpin Group

TheBrukerBioSpinGroupcomprisestheBrukerMagneticResonance,AppliedIndustrialandClinical,PreclinicalImagingandServiceandLifecycleSupportDivisionsanddesigns,manufacturesanddistributesenablinglifesciencetoolsbasedonmagneticresonancetechnology.Magneticresonanceisanaturalphenomenonoccurringwhenamoleculeplacedinamagneticfieldgivesoffasignatureradiofrequency.Thesignatureradiofrequencyischaracteristicoftheparticularmoleculeandprovidesamultitudeofprecisechemicalandstructuralinformation.Dependingontheintendedapplication,wemarketandselltoourcustomersaNMRsystemoranEPRsystem(eachasdefinedbelow).

BrukerBioSpinalsomanufacturesandsellssingleandmultiplemodalitysystemsusingMRI,PET,SPECT,CTandMPI(eachasdefinedbelow).BrukerBioSpin'sproducts,whichhaveparticularapplicationinstructuralproteomics,drugdiscovery,pharmaceuticalandbiotechnologyresearchandproduction,andfoodandmaterialssciencefields,providecustomerswiththeabilitytodeterminethestructure,dynamics,andfunctionofspecificmolecules,suchasproteins,andtocharacterizeanddeterminethecompositionofmixtures.

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ThemajorityofBrukerBioSpin'srevenuesaregeneratedbyacademicandgovernmentresearchcustomers.Othercustomersincludepharmaceuticalandbiotechnologycompanies;chemical,foodandbeverage,clinicalandpolymercompanies;andnonprofitlaboratories.

During2017,welaunchedanumberofnewproductsandtechnologies,includingthenextgenerationofNMRelectronicsconsoles,newsoftwareandhardwareforenhancedworkflowsolutionsforNMRspectroscopyresearchandanalysisandanewsolutionforthequantificationofmetabolitesinurineusingNMR.

BrukerBioSpinGroup'sinstrumentsarebasedonthefollowingtechnologyplatforms:

• NMR—Nuclearmagneticresonance;

• EPR—Electronparamagneticresonance;

• MRI—Magneticresonanceimaging;

• MPI—MagneticParticleImaging;

• PET—PositronEmissionTomography;

• SPECT—SinglePhotonEmissionTomography;and

• CT—ComputedTomography.

NMRisaqualitativeandquantitativeanalyticaltechniquethatisusedtodeterminethemolecularstructureandpurityofasample.Moleculesareplacedinamagneticfieldandgiveoffaradiofrequencysignaturethatisrecordedbyasensitivedetector.Analysissoftwarehelpstodeterminethemolecularstructureofthesample.TheNMRtechniqueisusedinacademia,pharmaceutical,biotechnology,foodandbeverageandclinicalcompanies,andbyotherindustrialusersinlifescienceandmaterialscienceresearch.

EPRisaprocessofabsorptionofmicrowaveradiationbyparamagneticionsormoleculeswithatleastoneunpairedelectronthatspinsinthepresenceofastaticmagneticfield.EPRdetectsunpairedelectronsunambiguously,whereasothertechniquescanonlyprovideindirectevidenceoftheirpresence.Inaddition,EPRcanidentifytheparamagneticspeciesthataredetected,whichpresentinformationonthemolecularstructureneartheunpairedelectronandgiveinsightintodynamicprocessessuchasmolecularmotionsorfluidity.OurEPRinstrumentsareusedforawiderangeofapplications,includingadvancedmaterialsresearch,materialsanalysisandqualitycontrol.

MRIisaprocessofcreatinganimagefromthemanipulationofhydrogenatomsinamagneticfield.Inthepresenceofanexternalmagneticfield,atomswillalignwithoragainsttheexternalmagneticfield.Applicationofaradiofrequencycausestheatomstojumpbetweenhighandlowenergystates.MRIandmagneticresonancespectroscopy,orMRS,includemanymethodsincludingdiffusion-weighted,perfusion-weighted,molecularimagingandcontrast-enhance.MRIoffershighresolutionmorphologicinformation,aswellasfunctional,metabolicormolecularinformation.CustomersuseourMRIsystemsinpharmaceuticalresearch,includingmetabolomics,tostudyanumberofdiseases,includingdiabetes,neurology,oncologyandcardiovasculardisorders.

MPIisaprocessofcreatinganimagefrommagneticparticlesadministeredtothebodyofananimal.Themagneticparticlesaremanipulatedinacombinationofoscillatingmagneticfieldsexhibitingafieldfreezone.Theresponseoftheparticlesallowsarealtime3Ddatasetacquisitionofthewholebodyofananimal,showingthecontrastagentdistributinginandflowingthroughthebody.Thisimagingmodalityisusedtodetectcardiovasculardisorders.

PETisaprocessofcreatinganimagefrompositronsafteradministrationofapositronemittingradionuclidetothebodyofananimal.Annihilationofthepositronproducestwophotonswhichshowanangleof180°betweenthem,distinguishingthesephotonsfromphotonsoriginatingfromother

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sources.ThePETtracerenrichesincertainregionsofinterestwithinthebodyandgainsmolecularinformationfromtheanimalin vivo .Thishaswidespreadapplications,mostimportantlyforoncology,inflammation,neurologyandcardiovasculardisorders,aswellasmetabolicdisease,drugdiscoveryandbonedisease.

SPECTusesacontrastagentcontainingradionuclideswhichdirectlyemitsinglephotons.Thecontrastagentenrichesincertainpartsofthebodyofananimalandgeneratesimagesoftheradionuclidedistributioninthebody.SPECThaswidespreadapplicationinanimalinvestigationsin vivo ,mostimportantlyinoncology,neurologyandcardiovasculardisorders.

CTisatechnologybasedonX-rayswhichareusedtogenerateacomplete3Ddataset.Themostimportantapplicationsaretissuesampleanalysisornon-invasivein vivo animalimaging.CToffersthehighestspatialresolutionofallpreclinicalimagingmodalitiesandisespeciallyusefultogeneratemorphologicalinformationabouttheobjectoranimalunderinvestigation.CTisbeingusedinawiderangeofpreclinicalinvestigationssuchasbone-orthopedics,cardiovascular,pulmonary,oncology,metabolismandothers.

Bruker CALID Group

TheBrukerCALIDGroupcomprisestheBrukerDaltonics,BrukerDetectionandBrukerOpticsDivisions.TheBrukerDaltonicsDivisionprimarilydesigns,manufacturesanddistributeslifesciencemassspectrometry,orMS,instrumentsthatcanbeintegratedandusedalongwithothersamplepreparationorchromatographyinstruments.Theseproductsareusedinresearch,pharmaceuticalandbiotechnologydevelopmentandclinicaldiagnosticsettings.Massspectrometersaresophisticateddevicesthatmeasurethemassorweightofamoleculeandcanprovideaccurateinformationontheidentity,quantityandprimarystructureofmolecules.Massspectrometrybasedsolutionsoftencombineadvancedmassspectrometryinstrumentation,automatedsamplingandsamplepreparationrobots,reagentkitsandotherdisposableproductsusedinconductingtests,orassays,andbioinformaticssoftware.Weoffermassspectrometrysystemsandintegratedsolutionsforapplicationsinmultipleexistingandemerginglifesciencemarketsandchemicalandappliedmarkets,includingexpressionproteomics,clinicalproteomics,metabolicandpeptidebiomarkerprofiling,drugdiscoveryanddevelopment,moleculardiagnosticsresearchandmolecularandsystemsbiology,aswellasbasicmolecularmedicineresearchandclinicalmicrobiology(forinvitrodiagnostic(IVD)useonlyincertaincountriesandcertainconfigurations).

TheBrukerDetectionDivisionsuppliesvarioussystemsbasedonmassspectrometry,ionmobilityspectrometry,infraredspectroscopyandradiological/nucleardetectorsforChemical,Biological,Radiological,NuclearandExplosive(CBRNE)detectioninemergencyresponse,homelandsecurityanddefenseapplications.

TheBrukerOpticsDivisionmanufacturesanddistributesresearch,analyticalandprocessanalysisinstrumentsandsolutionsbasedoninfraredandRamanmolecularspectroscopytechnologies.Theseproductsareutilizedinindustry,governmentandacademiaforawiderangeofapplicationsandsolutionsforlifescience,pharmaceutical,foodandagriculturalanalysis,qualitycontrolandprocessanalysisapplications.InfraredandRamanspectroscopyarewidelyusedinbothresearchandindustryassimple,rapid,nondestructiveandreliabletechniquesforapplicationsrangingfrombasicsampleidentificationandqualitycontroltoadvancedresearch.TheBrukerOpticsDivisionalsoutilizesFouriertransformanddispersiveRamanmeasurementtechniquesonanextensiverangeoflaboratoryandprocessspectrometers.TheBrukerOpticsDivision'sproductsarecomplementedbyawiderangeofsamplingaccessoriesandtechniques,whichinclude,amongothers,microanalysisandhigh-throughputscreeningtohelpusersfindsuitablesolutionstoanalyzetheirsampleseffectively.

CustomersofourBrukerCALIDGroupincludepharmaceutical,biotechnologyanddiagnosticscompanies,contractresearchorganizations,academicinstitutions,medicalschools,nonprofitor

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for-profitforensics,agriculture,foodandbeveragesafety,environmentalandclinicalmicrobiologylaboratories,hospitalsandgovernmentdepartmentsandagencies.

During2017,welaunchedanumberofnewmassspectrometrybasedproductsolutions,includingthetimsTOFProTMforPASEFmassspectrometry,whichusesproprietarytrappedionmobilityspectrometry.Weintroducedmajorinnovationsforstraintyping,hospitalhygieneandinfectioncontrolwiththeIRBiotyperTM.WealsoexpandedtheassayandconsumablekitsweoffertofurtherenhancetheMALDIBiotyperTMplatform.Softwarereleasesaccompaniedourinstrumentsolutionslaunchesin2017.

TheBrukerCALIDGroup'sinstrumentsarebasedonthefollowingtechnologyplatforms:

• MALDI-TOF—Matrix-assistedlaserdesorptionionizationtime-of-flightmassspectrometry,includingtandemtime-of-flightsystems(MALDI-TOF/TOF);

• ESI-TOF—Electrosprayionizationtime-of-flightspectrometry,includingtandemmassspectrometrysystemsbasedonESI-quadrupole-TOFmassspectrometry(ESI-Q-q-TOF);

• FTMS—Fouriertransformmassspectrometry,includinghybridsystemswithaquadrupolefrontend(Q-q-FTMS);

• ITMS—Iontrapmassspectrometry;

• GC-MS—Gaschromatography-massspectrometrysystemsutilizingtriple-quadrupoletime-of-flightmassspectrometry;

• LC-MS—Liquidchromatography-massspectrometrysystemsutilizingtriple-quadrupoletime-offlightmassspectrometry;

• FT-IR—Fouriertransform-infraredspectroscopy;

• NIR—Near-infraredspectroscopy;and

• Raman—Ramanspectroscopy.

MALDI-TOFmassspectrometersutilizeanionizationprocesstoanalyzesolidsamplesusingalaserthatcombineshighsamplethroughputwithhighmassrangeandsensitivity.OurMALDI-TOFmassspectrometersareparticularlyusefulforapplicationsinclinicaldiagnostics,environmentalandtaxonomicalresearchandfoodprocessingandqualitycontrol.Specificapplicationsinclude:oligonucleotideandsyntheticpolymeranalysis;proteinidentificationandquantification;peptidedenovosequencing;determinationofpost-translationalmodificationsofproteins;interactionproteomicsandproteinfunctionanalysis;drugdiscoveryanddevelopment;andfastbodyfluidandtissuepeptideorproteinbiomarkerdetection.MALDImassspectrometryallowsuserstoclassifyandidentifymicroorganismsquicklyandreliablywithminimalsamplepreparationeffortsandlifecyclecosts.OurMALDIBiotypersolution,whichservestheclinicalmicrobiologymarket,enablesidentification,taxonomicalclassificationordereplicationofmicroorganismslikebacteria,yeastsandfungi.

ESI-TOFmassspectrometersutilizeanelectrosprayionizationprocesstoanalyzeliquidsamples.Thisionizationprocess,whichdoesnotdissociatethemolecules,allowsforrapiddataacquisitionandanalysisoflargebiologicalmolecules.ESI-TOFmassspectrometersareparticularlyusefulfor:identification,proteinanalysisandfunctionalcomplexanalysisinproteomicsandproteinfunction;molecularidentificationinmetabolomics,naturalproductanddrugmetaboliteanalysis;combinatorialchemistryhighthroughputscreening;andfastliquidchromatographymassspectrometry,orliquidchromatographymassspectrometry(LC-MS),indrugdiscoveryanddevelopment.

FTMSsystemsutilizehigh-fieldsuperconductingmagnetstoofferthehighestresolution,selectivity,andmassaccuracycurrentlyachievableinmassspectrometry.Oursystemsbasedonthistechnologyofteneliminatetheneedfortime-consumingseparationtechniquesincomplexmixtureanalyses.In

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addition,oursystemscanfragmentmolecularionstoperformexactmassanalysisonallfragmentstodeterminemolecularstructure.FTMSsystemsareparticularlyusefulfor:thestudyofstructureandfunctionofbiomolecules,includingproteins,DNAandnaturalproducts;complexmixtureanalysisincludingbodyfluidsorcombinatoriallibraries;high-throughputproteomicsandmetabolomics;andtop-downproteomicsofintactproteinswithouttheneedforenzymaticdigestionoftheproteinspriortoanalysis.Weoffernext-generationhybridFTMSsystemsthatcombineatraditionalexternalquadrupolemassselectorandhexapolecollisioncellwithahigh-performanceFTMSforfurtheriondissociation,top-downproteomicstoolsandultra-highresolutiondetection.

ITMSsystemscollectallionssimultaneously,whichimprovessensitivityrelativetopreviousquadrupolemassspectrometers.Iontrapmassspectrometersareparticularlyusefulforsequencingandidentificationbasedonpeptidestructuralanalysis,quantitativeliquidchromatographymassspectrometry,identificationofcombinatoriallibrariesandgenerallyenhancingthespeedandefficiencyofthedrugdiscoveryanddevelopmentprocess.

GC-MSsystemscombinethefeaturesofgaschromatographyandmassspectrometrytoidentifydifferentsubstanceswithinatestsample.Thetwocomponents,usedtogether,allowforafinerdegreeofsubstanceidentificationthaneithersystemwhenusedseparately.Theresultisaquantitativeanalysisofthecomponentsandthemassspectrumofeachcomponent.OurGC-MSsystemsareavailableintriplequadrupoleconfigurationsandcanbeconfiguredwithavarietyofoptionstosuitarangeofapplications.OurGC-MSsystemshaveapplicationsinfoodandproductsafety,forensics,clinicalandtoxicologytestingandenvironmental,pharmaceuticalandchemicalanalysis.

LC-MSsystemscombinetheseparationfeaturesofliquidchromatographywiththemolecularidentificationfeaturesofmassspectrometrytoseparate,identifyandquantifydifferentsubstanceswithinatestsample.AsacomplementarytechniquetoGC-MS,whichanalyzesvolatilecompounds,LC-MScanbeusedtoanalyzeawiderangeofnon-volatilecompoundsincomplexsamples.OurLC-MSsystemsareavailableinawiderangeofconfigurationstosuitauser'sspecificneeds.Althoughprimarilyusedforlifescienceapplications,ourLC-MSsystemsalsohaveapplicationsinfoodandproductsafety,forensicsandclinicalandtoxicologytesting,aswellasenvironmental,pharmaceuticalandchemicalanalysis.

FT-IRspectrometersutilizethemid-andfar-infraredregionsoftheelectromagneticspectrum.OurFT-IRsystemsarecommonlyusedforvariousqualitycontrolandmaterialsresearchapplications.

NIRspectrometersutilizethenear-infraredregionoftheelectromagneticspectrum.OurNIRinstrumentsareprimarilyusedforqualityandprocesscontrolapplicationsinthepharmaceutical,foodandagricultureandchemicalindustries.ThepharmaceuticalindustryistheleadinguserofNIRinstruments,andapplicationsincludequalitycontrol,researchanddevelopmentandprocessanalyticaltechnology.ThefoodandagriculturalindustryisthesecondlargestuserofNIRinstrumentation,withanincreasingdemandforfood,forageandbeveragequalitycontrol.

Ramanspectroscopyprovidesinformationonmolecularstructure.ThemechanismofRamanscatteringisdifferentfromthatofinfraredabsorption,inthatRamanandIRspectraprovidecomplementaryinformation.Ramanisusefulfortheidentificationofbothorganicandinorganiccompoundsandfunctionalgroups.Itisanondestructivetechnique,andcanbeusedfortheanalysisofbothliquidsandsolids.Ramaniswellsuitedforuseinthepolymerandpharmaceuticalindustries,andhasapplicationsinthemetals,electronicsandsemiconductorsindustries.Thetechniquealsohasapplicationsinlifesciences,forensicsandartworkauthentication.

Additionally,theBrukerDetectionDivisionoffersawiderangeofportableanalyticalandbioanalyticaldetectionsystemsandrelatedproductsforCBRNEdetection.Ourcustomersusethesedevicesfornuclear,biologicalagentandchemicalagentdefenseapplications,anti-terrorism,lawenforcementandprocessandfacilitiesmonitoring.OurCBRNEdetectionproductsusemanyofthe

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sametechnologyplatformsasourlifescienceproducts,aswellasadditionaltechnologies,includinginfraredstand-offdetectionandionmobilityspectrometry,forhandheldchemicaldetectors.Wealsoprovideintegrated,comprehensivedetectionsuitesthatincludeourmultipledetectionsystems,consumables,trainingandsimulators.

Bruker Nano Group

TheBrukerNanoGroupcomprisestheBrukerAXS,BrukerNanoSurfaces,BrukerNanoAnalyticsandBrukerSemiconductorDivisions.TheBrukerAXSDivisiondesigns,manufacturesanddistributesadvancedX-rayinstrumentsthatuseelectromagneticradiationwithextremelyshortwavelengthstodeterminethecharacteristicsofmatterandthethree-dimensionalstructureofmolecules.ThisincludesaproductportfolioofinstrumentsbasedonX-rayfluorescencespectroscopy(XRF),X-raydiffraction(XRD)andX-raymicrocomputedtomography(µCT),aswellassparkopticalemissionspectroscopysystems(S-OES)usedtoanalyzetheconcentrationofelementsinmetallicsamples.

BrukerNanoSurfacesDivision'sproductsincludeatomicforcemicroscopyinstrumentation(AFM).Suchinstrumentsprovideatomicornearatomicresolutionofsurfacetopographyandmechanical,electricalandchemicalinformationusingnanoscaleprobes.Inaddition,theBrukerNanoSurfacesDivisionprovidesadvancedfluorescenceopticalmicroscopyinstrumentsformulti-photon,multipointscanningconfocalandhigh-speed3Dsuper-resolutionstudiesinlifescienceapplications.TheBrukerNanoSurfacesDivisionalsoprovidesnon-contactnanometerresolutiontopographythroughwhitelightinterferometryandstylusprofilometry.

TheBrukerNanoAnalyticsDivisionmanufacturesandmarketsanalyticaltoolsforelectronmicroscopes,includingenergy-dispersiveX-rayspectrometers(EDS),electronbackscatterdiffractionsystems(EBSD)andµCTaccessories,aswellasmobileandbench-topmicroX-rayfluorescence(µXRF),totalreflectionX-rayfluorescencespectrometers(TXRF)andhandheld,portableandmobileX-rayfluorescence(HMP-XRF)spectrometryinstruments.

TheBrukerSemiconductorDivisionmanufacturesandmarketsX-raymetrologyandautomatedAFMdefect-detectionequipmentforsemiconductorprocesscontrol.

CustomersofourBrukerNanoGroupincludebiotechnologyandpharmaceuticalcompanies,academicinstitutions,governmentalcustomers,nanotechnologycompanies,semiconductorcompanies,rawmaterialmanufacturers,industrialcompaniesandotherbusinessesinvolvedinmaterialsanalysis.

During2017,welaunchedseveralnewproducts,includingthenextgenerationwavelengthdispersiveXRFspectrometerandnewhighperformancetechnologyforlaboratorymacromolecularcrystallography.Wealsoreleasednextgenerationmodelsofseveralotherproducts,includingtheEBSDdetectorsandsoftware.

TheBrukerNanoGroup'ssystemsarebasedonthefollowingtechnologyplatforms:

• XRD—PolycrystallineX-raydiffraction,oftenreferredtoasX-raydiffraction;

• XRF—X-rayfluorescence,alsocalledX-rayspectrometry,includinghandheldXRFsystems;

• SC-XRD—SinglecrystalX-raydiffraction,oftenreferredtoasX-raycrystallography;

• µCT—X-raymicrocomputedtomography;

• EDS—EnergydispersiveX-rayspectroscopyonelectronmicroscopes;

• EBSD—Electronbackscatterdiffractiononelectronmicroscopes;

• S-OES—Sparkopticalemissionspectroscopy;

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• CS/ONH—Combustionanalysisforcarbon,sulfur,oxygen,nitrogen,andhydrogeninsolids;

• AFM—Atomicforcemicroscopy;

• FM—Fluorescenceopticalmicroscopy;

• SOM—Stylusandopticalmetrology;and

• TMT—Tribologyandmechanicaltestsystemsforanalysisoffrictionandwear.

XRDsystemsinvestigatepolycrystallinesamplesorthinfilmswithsinglewavelengthX-rays.TheatomsinthepolycrystallinesamplescattertheX-raystocreateauniquediffractionpatternrecordedbyadetector.Computersoftwareprocessesthepatternandproducesavarietyofinformation,includingstress,texture,qualitativeandquantitativephasecomposition,crystallitesize,percentcrystallinityandlayerthickness,composition,defectsanddensityofthinfilmsandsemiconductormaterial.OurXRDsystemscontributetoareductioninthedevelopmentcyclesfornewproductsinthecatalyst,polymer,electronic,opticalmaterialandsemiconductorindustries.CustomersalsouseourXRDsystemsacademicandgovernmentresearchfacilities,aswellasavarietyofotherfields,includingforensics,artandarchaeology.

XRFsystemsdeterminetheelementalcompositionofamaterialandprovideafullqualitativeandquantitativeanalysis.OurXRFsystemsdirectX-raysatasample,andtheatomsinthesampleabsorbtheX-rayenergy.TheelementsinthesamplethenemitX-raysthatarecharacteristicforeachelement.ThesystemcollectstheX-rays,andthesoftwareanalyzestheresultingdatatodeterminetheelementsthatarepresent.OurXRFproductsprovideautomatedsolutionsonaturn-keybasisforindustrialusersthatrequireautomated,controlledproductionprocessesthatreduceproductandprocesscost,increaseoutputandimproveproductquality.OurXRFproductscoversubstantiallyalloftheperiodictableandcananalyzesolid,powderorliquidsamples.

SC-XRDsystemsdeterminethethree-dimensionalstructuresofmoleculesinachemical,mineral,orbiologicalsubstancebeinganalyzed.SC-XRDsystemshavethecapabilitytodeterminestructureinbothsmallchemicalmoleculesandlargerbiomolecules.SC-XRDsystemsdirectanX-raybeamatasolid,singlecrystalsample.TheatomsinthecrystalsamplescattertheX-raystocreateaprecisediffractionpatternrecordedbyanelectronicdetector.Softwarethenreconstructsamodelofthestructureandprovidestheuniquearrangementoftheatomsinthesample.Thisinformationontheexactarrangementofatomsinthesampleisacriticalpartofmolecularanalysisandcanprovideinsightintoavarietyofareas,includinghowaproteinfunctionsorinteractswithasecondmolecule.OurSC-XRDsystemsaredesignedforuseinthelifesciencesindustry,academicresearchandavarietyofotherapplications.

µCTisX-rayimagingin3D,bythesamemethodusedinhospitalCTscans,butonasmallscalewithmassivelyincreasedresolution.3Dmicroscopyallowsuserstoimagetheinternalstructureofobjectsnon-destructivelyonaveryfinescale.BrukerµCTisavailableinarangeofeasy-to-usedesktopinstruments,whichgenerate3Dimagesofthesample'smorphologyandinternalmicrostructurewithresolutiondowntothesub-micronlevel.OurµCTsystemsareusedfornumerousapplicationsinmaterialsresearchandinthelifesciencesindustry.

EDSsystemsanalyzethechemicalcompositionofmaterialsunderinvestigationinelectronmicroscopesbyutilizingthefactthatatomsofdifferentchemicalelements,whenexposedtothehighenergyelectronbeamgeneratedbythemicroscope,irradiateX-raysofdifferentcharacteristicenergy.Theevaluationoftheenergyspectrumcollectedbyourspectrometerallowsthedeterminationofthequalitativeandquantitativechemicalsamplecompositionatthecurrentbeamposition.EDSsystemsallowforsimultaneousanalysisofallelementsintheperiodictable,beginningwithatomicnumber4(beryllium).OurEDSsystemsareusedforarangeofapplications,includingnanotechnologyand

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advancedmaterialsresearch,aswellasmaterialsanalysisandqualitycontrol.CustomersforEDSsystemsincludeindustrialcustomers,academiaandgovernmentresearchfacilities.

EBSDsystemsareusedtoperformquantitativemicrostructureanalysisofcrystallinesamplesinelectronmicroscopes.Themicroscope'selectronbeamstrikesthetiltedsampleanddiffractedelectronsformapatternonafluorescentscreen.Thispatternischaracteristicofthecrystalstructureandorientationofthesampleregionfromwhichitwasgenerated.Itprovidestheabsolutecrystalorientationwithsub-micronresolution.EBSDcanbeusedtocharacterizematerialswithregardtocrystalorientation,texture,stress,strainandgrainsize.EBSDalsoallowstheidentificationofcrystallinephasesandtheirdistribution,andisappliedtomanyindustriessuchasmetalsprocessing,aerospace,automotive,microelectronicsandearthsciences.

S-OESinstrumentsareusedforanalyzingmetals.S-OEScoversabroadrangeofapplicationsformetalsanalysisfrompuremetalstraceanalysistohighalloyedgrades,andallowforanalysisofacompleterangeofrelevantelementssimultaneously.S-OESinstrumentspassanelectricsparkontoasample,whichburnsthesurfaceofthesampleandcausesatomstojumptoahigherorbit.Ourdetectorsquantifythelightemittedbytheseatomsandhelpourcustomerstodeterminetheelementalcompositionofthematerial.Thistechniqueiswidelyusedinproductioncontrollaboratoriesoffoundriesandsteelmills.

CS/ONHcarriergassystemsincorporateafurnaceandinfraredorthermalconductivitydetectiontoanalyzeinorganicmaterialsforthedeterminationofcarbon,sulfur,nitrogen,oxygenandhydrogen.Combustionandinertgasfusionanalyzersareusedforapplicationsinmetalproductionandprocessing,chemicals,ceramicsandcement,coalprocessing,oilrefiningandsemiconductors.

AFMsystemsprovideatomicornear-atomicresolutionofmaterialsurfacetopographyusinganano-scaleprobethatisbroughtintolightcontactwiththesamplebeinginvestigated.Inadditiontopresentingasurfaceimage,AFMcanalsoprovidequantitativenano-scalemeasurementsoffeaturesizes,materialproperties,electricalinformation,chemicalpropertiesandothersamplecharacteristics.OurAFMsystemsareusedforapplicationsinacademicandgovernmentalmaterialsandbiologicalresearchandsemiconductor,datastorageharddrive,LED,battery,solarcells,polymers,andpharmaceuticalproductdevelopmentandmanufacturing.

FMproductsusefluorescencemicroscopytodeterminethestructureandcompositionoflifesciencesamples.Ourproductsincludetwo-photonmicroscopes,multipointscanningconfocalmicroscopes,laserilluminationsources,photoactivation,photostimulationandphotoablationaccessoriesandsynchronizationandanalysissoftware.Two-photonmicroscopesallowimagingdeepintotissuesandcellsandareusedwidelyinneuroscience.Multipointscanningconfocalsystemsallowlivecellimagingwithrapidacquisitionofimagesforstructuralandcompositionanalysis.Wealsooffersuper-resolutionandsingle-moleculelocalizationmicroscopyproductswhichcanbreaktheopticaldiffractionlimitbyanorderofmagnitude.

SOMsystemsprovideatomicornear-atomictwodimensionalandthreedimensionalsurfaceresolutionusingwhitelightinterferometry,confocalopticalandstylusprofilometrymethods.SOMprofilersrangefromlow-costmanualtoolsforsinglemeasurementstoadvanced,highlyautomatedsystemsforproductionlinequalityassuranceandqualitycontrolapplicationswherethecombinationofthroughput,repeatabilityandreproducibilityisessential.SOMprofilerssupportarangeofapplicationsinresearch,productdevelopment,tribology,qualitycontrolandfailureanalysisrelatedtomaterialsandmachiningintheautomotive,orthopedic,ophthalmic,highbrightnessLED,semiconductor,datastorage,opticsandothermarkets.

TMTsystemsprovideaplatformforalltypesofcommonmechanical,friction,durability,scratchandindentationtestsforawidespectrumofmaterials.Tribologysystemsareutilizedforbothacademicresearchofthefundamentalmaterialpropertiesandindustrialapplicationsinthesemiconductor,aerospace,petroleum,automotiveandotherindustries.

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BESTSegment

BESTdesigns,manufacturesanddistributessuperconductingmaterials,primarilymetalliclowtemperaturesuperconductors,foruseinmagneticresonanceimaging,nuclearmagneticresonance,fusionenergyresearchandotherapplications.BESTalsodevelops,manufacturesandmarketsceramic,secondgenerationhightemperaturesuperconductorsforenergytechnologyandmagnetresearchapplications.Additionally,BESTdevelops,manufacturesandmarketssophisticateddevicesandcomplextoolsbasedprimarilyonmetalliclowtemperaturesuperconductorsthathaveapplicationsin"bigscience"research,includingradiofrequencyacceleratorcavitiesandmodules,powercouplersandlinearaccelerators.BESTalsomanufacturesandsellsnon-superconductinghightechnologytools,suchassynchrotronandbeamlineinstrumentation,principallytocustomersengagedinmaterialsresearchand"bigscience"researchprojects.

SalesandMarketing

WemaintaindirectsalesforcesthroughoutNorthAmerica,Europe,Russia,China,Japan,andelsewhereintheAsiaPacificregion.Wealsoutilizeindirectsaleschannelstoreachcustomers.Wehavevariousinternationaldistributors,independentsalesrepresentativesandvariousotherrepresentativesinpartsofAsia,LatinAmerica,Africa,theMiddleEastandEasternEurope.Theseentitiesaugmentourdirectsalesforceandprovidecoverageinareaswherewedonothavedirectsalespersonnel.Inaddition,wehaveadoptedadistributionbusinessmodelinwhichweengageinstrategicdistributionallianceswithothercompaniestoaddresscertainmarketsegments.Thesalescycleforourproductsisdependentonthesizeandcomplexityofthesystemandbudgetingcyclesofourcustomers.Oursalescycleistypicallythreetotwenty-fourmonthsforacademicandhigh-endresearchproductsandtwoweekstosixmonthsforindustrialproducts.Thesalescycleofourlowtemperaturesuperconductingmaterialsistypicallyfourtotwelvemonths,withcyclesofcertainhigh-endmaterialsexceedingoneyear.Salesofourhigh-endNMRandsuperconductingdevicestypicallytakemorethanoneyearandcertainlarge,complexcontractscantakemorethantwoyearstocomplete.

Wehavewell-equippedapplicationsanddemonstrationfacilitiesandqualifiedapplicationpersonnelwhoassistcustomersandprovideproductdemonstrationsinspecificapplicationareas.Wemaintainourprimarydemonstrationfacilitiesatourproductionfacilities,aswellasinotherkeymarketlocations.

SeasonalNatureofBusiness

Historicallywehavehigherlevelsofrevenueinthefourthquarterandlowerlevelsofrevenuesinthefirstquarteroftheyear,whichwebelieveisinfluencedbyourcustomers'budgetingcycles.

MajorCustomers

TheCompanyhasabroadanddiversifiedcustomerbaseandwedonotdependonanysinglecustomer.Nosinglecustomeraccountedformorethan10%ofrevenueinanyofthelastthreefiscalyearsormorethan10%ofaccountsreceivableasofDecember31,2017or2016.

Competition

Ourexistingproductsandsolutionsandanyproductsandsolutionsthatwedevelopinthefuturemaycompeteinmultiple,highlycompetitivemarkets.Inaddition,therehasbeenatrendtowardsconsolidationinourindustriesandmanyofourcompetitorshavesubstantiallygreaterfinancial,technicalandmarketingresourcesthanwedo.Ourcompetitorsmaysucceedindevelopingandofferingproductsthatcouldrenderourproductsorthoseofourstrategicpartnersobsoleteornoncompetitive.OurcompetitorsmayalsohavecostandpriceadvantagesbaseduponthevalueoftheircurrenciescomparedwiththeU.S.DollarorEuro.Inaddition,manyofthesecompetitorshavesignificantlymore

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experienceinthelifesciences,chemicalandmaterialsmarkets.Ourabilitytocompetesuccessfullywilldependonourabilitytodevelopproprietaryproductsthatreachourtargetmarketsinatimelymannerandaretechnologicallysuperiortoand/orlessexpensive,ormorecosteffective,thanproductsmarketedbyourcompetitors.Currentcompetitorsorothercompaniesmaypossessordeveloptechnologiesandproductsthataremoreeffectivethanours.Ourtechnologiesandproductsmayberenderedobsoleteoruneconomicalbytechnologicaladvancesorbyentirelydifferentapproachesdevelopedbyoneormoreofourcompetitors.

Wealsocompetewithcompaniesthatprovideanalyticalorautomationtoolsbasedontechnologiesotherthanthoseweoffer.Thesetechnologiesmayprovetobemoresuccessfulinmeetingdemandsinthemarketsthatourproductsandsolutionsareintendedtoserve.Inaddition,othercompaniesmaychoosetoenterourfieldsinthefuture.Webelievethattheprincipalcompetitivefactorsinourmarketsaretechnology-basedapplicationsexpertise,productspecifications,functionality,reliability,marketingexpertise,distributioncapability,proprietarypatentportfoliosandcosteffectiveness.

BSISegment

BrukerBioSpincompeteswithcompaniesthatoffermagneticresonancespectrometers,mainlyJEOLandOxfordInstruments.Inthefieldofpreclinicalimaging,BrukerBioSpincompeteswithPerkinElmer,Mediso,Trifoil,MRSolutionsandothers.BrukerCALIDcompeteswithavarietyofcompaniesthatoffermassspectrometrybasedsystems.BrukerCALID'scompetitorsinthelifesciencemarketsandchemicalandappliedmarketsincludeDanaher,Agilent,GE-Healthcare,Waters,ThermoFisherScientific,Shimadzu,HitachiandJEOL.Inthemicrobiologymarket,wecompetewithBiomerieux.BrukerCALID'sCBRNEdetectioncustomersarehighlyfragmented,andwecompetewithanumberofcompaniesinthisarea,ofwhichthemostsignificantcompetitorisSmithsDetection.BrukerCALIDalsocompeteswithavarietyofcompaniesthatoffermolecularspectrometrybasedsystems,includingThermoFisherScientific,PerkinElmer,Agilent,Foss,ABBBomem,Buchi,ShimadzuandJasco.Inaddition,thereareseveralsmallercompanies,specializinginvariousmarkets,withwhichtheBrukerCALIDGroupfrequentlycompetes.BrukerNanocompeteswithcompaniesthatofferanalyticalX-raysolutions,OESsystems,AFMandSOMsystemsandopticalfluorescencesystems,primarilyRigaku,OxfordInstruments,Agilent,ThermoFisherScientific,Ametek'sSpectroandEdaxdivisions,PANalytical,Olympus,Nikon,ZeissandDanaher'sLeicabusiness.

BESTSegment

BESTcompeteswithLuvataandJastecCo.,Ltd.inlowtemperaturesuperconductingmaterials.Inaddition,BESTcompeteswithFujikura,SuperPower(aFurukawacompany),SuperconductorTechnologiesInc.andSuNamCo.,Ltd.inthemarketforsecondgenerationhightemperaturesuperconductingmaterials.BESTfurthercompeteswithZanon,MitsubishiElectricandAESinthedevelopmentandsupplyofacceleratorcavities,withThales,ToshibaandCPIInternationalinthedevelopmentandsupplyofradiofrequencycouplers,withMitsubishiHeavyIndustriesinthedevelopmentandsupplyofsuperconductingacceleratormodulesandwithAESandThalesforelectronlinearaccelerators.

ManufacturingandSupplies

SeveralofourmanufacturingfacilitiesarecertifiedunderISO9001:2008andISO13485,aninternationalqualitystandard.WemanufactureandtestourmagneticresonanceproductsatourfacilitiesinFaellanden,Switzerland;Wissembourg,France;andKarlsruhe,Germany.WemanufactureandtestourpreclinicalimagingproductsatourfacilitiesinEttlingen,Germany;Wissembourg,France;Kontich,Belgium;andFaellanden,Switzerland.Wemanufactureandtestourmassspectrometryproducts,includingCBRNEdetectionproducts,atourfacilitiesinBremen,GermanyandLeipzig,Germany.Weprincipallymanufactureandtestourmolecularspectroscopyproductsatourfacilitiesin

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Ettlingen,Germany.WemanufactureandtestourX-ray,OESandAFMproductsatourfacilitiesinKarlsruhe,Germany;Berlin,Germany;Madison,Wisconsin,U.S.A.;SantaBarbara,California,U.S.A.;Kennewick,Washington,U.S.A.;andMigdalHa'Emek,Israel.WemanufactureandtestthemajorityofourenergyandsuperconductingproductsatourfacilitiesinHanau,Germany;BergischGladbach,Germany;Perth,ScotlandandCarteret,NewJersey,U.S.A.ManufacturingprocessesatourfacilitiesinEurope,IsraelandCalifornia,U.S.A.includeallphasesofmanufacturing,suchasmachining,fabrication,subassembly,systemassembly,andfinaltesting.Ourotherfacilitiesprimarilyperformhigh-levelassembly,systemintegrationandfinaltesting.Wetypicallymanufacturecriticalcomponentsin-housetoensurekeycompetenceandoutsourcetothirdpartymanufacturersnoncriticalcomponents.

Wepurchasematerialsandcomponentsfromvarioussuppliersthatareeitherstandardproductsorbuilttoourspecifications.Weobtainsomeofthecomponentsincludedinourproductsfromalimitedgroupofsuppliersorfromasingle-sourcesupplierforitemssuchaschargecoupleddeviceareadetectors,X-raytubes,robotics,infraredopticsandothers.BrukerAXShasanongoingcollaborationandjointdevelopmentprojectwiththeSiemensMedicalSolutionsVacuumTechnologyDivisioninGermanyforthedevelopmentofX-raytubes.SomeBrukerentities,specificallyBrukerNanoGmbHandBrukerAXSHandheldInc.,presentlyprocurekeyX-raydetectorchipsandcertainOESopticaldetectorsandminiaturizedX-raysourcesfromsingle-sourcesuppliers.Inaddition,BESTsourcesniobiumtitaniumandotherniobiumproductsfromasinglesupplier.

ResearchandDevelopment

Wecommitsubstantialcapitalandresourcestointernalandcollaborativeresearchanddevelopmentprojectsinordertoprovideinnovativeproductsandsolutionstoourcustomers.Weconductresearchprimarilytoenhancesystemperformanceandimprovethereliabilityofexistingproducts,andtodeveloprevolutionarynewproductsandsolutions.Weexpensed$162.7million(9.2%ofrevenue),$149.0million(9.2%ofrevenue)and$145.7million(9.0%ofrevenue)in2017,2016and2015,respectively,forresearchanddevelopmentpurposes.Ourresearchanddevelopmenteffortsareconductedfortherelevantproductswithineachoftheoperatingsegments,aswellasincollaborationwithothersonareassuchasmicrofluidics,automationandworkflowmanagementsoftware.WehavebeentherecipientofgovernmentgrantsfromGermanyandtheUnitedStatesforvariousprojectsrelatedtoearly-stageresearchanddevelopment.Wehavegenerallyretained,ataminimum,non-exclusiverightstoanyitemsorenhancementswedevelopunderthesegrants.TheGermangovernmentrequiresthatweuseandmarkettechnologydevelopedundergrantsinordertoretainourrightstothetechnology.Wehavealsoacceptedsomesponsoredresearchcontractsfromprivatesources.

BSISegment

TheresearchanddevelopmentperformedintheBSISegmentisprimarilyconductedatourfacilitiesinBremen,Ettlingen,KarlsruheandLeipzig,Germany;Faellanden,Switzerland;Wissembourg,France;Billerica,Massachusetts,U.S.A.;Madison,Wisconsin,U.S.A.;SanJoseandSantaBarbara,California,U.S.A.

TheBrukerBioSpinGroupmaintainstechnicalcompetenciesincoremagneticresonancetechnologiesandsingle-andmultimodalimagingtechnologiesandcapabilities,includingNMR,EPR,MRI,MPI,PET,CTandOI.Recentprojectsincludethedevelopmentofsolidstatedynamicnuclearpolarizationtechnologies,anongoingdevelopmentthatenablesgainsinsensitivityforNMR,highfieldEPRinstrumentationwithdedicatedcryogenfreemagnets,highfieldmagnettechnologyforpreclinicalMRI,basicNMRresearchandquadrupoletunedcryoprobesforbiologicalresearch,aswellasMPIimagingforpreclinicalapplication.

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TheBrukerCALIDGroupmaintainstechnicalcompetenciesincoremassspectrometrytechnologiesandcapabilities,including:MALDI,ESIandEI/CIionsource,TOF,TOF/TOF,iontraps,FTMS,quadrupoleandIMSanalyzersandbioinformatics.RecentprojectsincludetherapifleXMALDITissuetyper,whichisBrukerDaltonics'high-throughputMALDIimagingsolutionthatprovidesenhancedhigh-resolutionmolecularinformationanddistributionintissues.AnotherrecentprojectincludestheinnovativetimsTOFmassspectrometerforseparationandanalysisofunresolvedcompoundsandconformations.TheBrukerCALIDGroupalsomaintainstechnicalcompetenciesincorevibrationalspectroscopytechnologiesandcapabilities,includingFT-IR,NIRandRaman.

TheBrukerNanoGroupmaintainstechnicalcompetenciesincoreX-raytechnologiesandcapabilities,includingdetectorsusedtosenseX-rayandX-raydiffractionpatterns,X-raysourcesandopticsthatgenerateandfocustheX-rays,roboticsandsamplehandlingequipmentthatholdsandmanipulatestheexperimentalmaterial,andsoftwarethatgeneratesthestructuraldata.Recentprojectsincluderefiningnext-generationhighbrilliancyopticsandmicrosources,developingnewhigh-powerX-raysourcesforX-raydiffractionandproteincrystallographyapplications,developingaTXRFsystemfortraceelementanalysisinsemiconductormetrology,developinganewlargesolidangle,high-resolution,high-throughputenergydispersiveX-raydetectorformicroanalysis,creatingahighsensitivityareadetectorsystemanddevelopingothersolution-basedtechnologiesandsoftwareapplications,includingaproductforX-rayscatteringinvestigationsofproteincrystals.TheBrukerNanoGroupalsohascompetenciesinAFMtechnology,whichinvolvesub-angstromlevelpositionandmotioncontrol,aswellassub-piconewtonforcecontrol.TheBrukerNanoGrouptechnologiesalsoinclude3Dopticalinferencebasedmicroscopy,stylusprofilometry,tribologytesting,nano-indentation,opticalfluorescencetwo-photonmicroscopy,multipointscanningmicroscopyandhigh-speed,3Dsuper-resolutionflorescencemicroscopy.Recentinnovationsincludeelementalanalyzersystemsforadvancedapplicationsandresearchandsimultaneous,all-opticalstimulationandimagingplatformsforneuroscienceapplications.

BESTSegment

TheresearchanddevelopmentperformedintheBESTSegmentisprimarilyconductedatourfacilitiesinHanau,BergischGladbachandAlzenau,GermanyandCarteret,NewJersey,U.S.A.BESTmaintainstechnicalcompetenciesintheproductionanddevelopmentoflowandhightemperaturesuperconductingmaterialsanddevices.

IntellectualProperty

Ourintellectualpropertyconsistsofpatents,copyrights,tradesecrets,know-how,andtrademarks.Protectionofourintellectualpropertyisastrategicpriorityforourbusinessesbecauseofthelengthoftimeandexpenseassociatedwithbringingnewproductsthroughthedevelopmentprocessandtothemarketplace.Wehaveasubstantialpatentportfolio,andweintendtofileadditionalpatentapplicationsasappropriate.Webelieveourownedandlicensedpatentportfolioprovidesuswithacompetitiveadvantage.Thisportfoliopermitsustomaintainaccesstoanumberofkeytechnologies.Welicenseourownedpatentrightswhereappropriate.Weintendtoenforceourpatentrightsagainstinfringers,ifnecessary.Thepatentpositionsoflifesciencestoolscompaniesinvolvecomplexlegalandfactualquestions.Asaresult,wecannotpredicttheenforceabilityofourpatentswithcertainty.Inaddition,weareawareoftheexistencefromtimetotimeofpatentsincertaincountries,which,ifvalid,couldimpairourabilitytomanufactureandsellproductsinthesecountries.

Wealsorelyupontradesecrets,know-how,trademarks,copyrightprotectionandlicensingtodevelopandmaintainourcompetitiveposition.Wegenerallyrequiretheexecutionofconfidentialityagreementsbyouremployees,consultants,andotherscientificadvisors.Theseagreementsprovidethatallconfidentialinformationmadeknownduringthecourseofarelationshipwithuswillbeheldin

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confidenceandusedonlyforourbenefit.Inaddition,theseagreementsprovidethatweownallinventionsgeneratedduringthecourseoftherelationship.

GovernmentContracts

Weareapartytovariousgovernmentcontracts.Undersomeofthesegovernmentcontracts,thegovernmentmayreceivelicenseorsimilarrightstointellectualpropertydevelopedunderthecontract.However,undergovernmentcontractsweenterwegenerallyreceiveatleastnon-exclusiverightstoanyitemsortechnologieswedevelop.Althoughwetransactbusinesswithvariousgovernmentagencies,webelievethatnogovernmentcontractisofsuchmagnitudethatarenegotiationofprofitsorterminationofthecontractorsubcontractsattheelectionofthegovernmentwouldhaveamaterialadverseeffectonourfinancialresults.

GovernmentRegulation

Wearerequiredtocomplywithfederal,state,andlocalenvironmentalprotectionregulations.Wedonotexpectthiscompliancetohaveasignificantimpactonourcapitalspending,earningsorcompetitiveposition.

PriortointroducingaproductintheUnitedStates,ourBrukerAXSsubsidiaryprovidesnoticetotheU.S.FoodandDrugAdministration,orFDA,intheformofaRadiationSafetyInitialProductAbbreviatedReport,whichprovidesidentificationinformationandoperatingcharacteristicsoftheproduct.IftheFDAfindsthatthereportiscomplete,itprovidesapprovalintheformofwhatisknownasanaccessionnumber.BrukerAXSmaynotmarketaproductuntilithasreceivedanaccessionnumber.Inaddition,BrukerAXSsubmitsanannualreporttotheFDAthatincludestheradiationsafetyhistoryofallproductsitsellsintheUnitedStates.BrukerAXSisrequiredtoreporttotheFDAincidentsofaccidentalexposuretoradiationarisingfromthemanufacture,testing,oruseofanyofitsproducts.BrukerAXSalsoreportsinstallationsofitsproductstostategovernmentregulatoryagenciesresponsiblefortheregulationofradiationemittingdevices.ForsalesinGermany,BrukerAXSregisterseachsystemwiththelocalauthorities.InsomecountrieswhereBrukerAXSsellssystems,BrukerAXSusesthelicenseweobtainedfromthefederalauthoritiesinGermanytoassistitinobtainingalicensefromthecountryinwhichthesaleoccurs.Inaddition,asindicatedabove,wearesubjecttovariousotherforeignanddomesticenvironmental,healthandsafetylawsandregulationsinconnectionwithouroperations.Apartfromtheseareas,wearesubjecttothelawsandregulationsgenerallyapplicabletobusinessesinthejurisdictionsinwhichweoperate.

OurBrukerAXSsubsidiarypossesseslow-levelradiationmaterialslicensesfromtheU.S.NuclearRegulatoryCommissioninagreementwiththeStateofWisconsinforitsfacilityinMadison,Wisconsin;fromthelocalradiationsafetyauthority,GewerbeaufsichtsamtKarlsruhe,foritsfacilityinKarlsruhe,Germany;andfromthelocalradiationsafetyauthority,KanagawaPrefecture,foritsfacilityinYokohama,Japan,aswellasfromvariousothercountriesinwhichitsellsitsproducts.OurBrukerDaltonicssubsidiarypossesseslow-levelradiationlicensesforfacilitiesinBillerica,MassachusettsandLeipzig,Germany.TheU.S.NuclearRegulatoryCommissionalsohasregulationsconcerningtheexposureofouremployeestoradiation.

CertainofourclinicalproductsaresubjecttoregulationintheUnitedStatesbytheFDAandbysimilarregulatorybodiesinothercountrieswheresuchproductsaresold.Forexample,ourMALDIBiotyperCAsystemissubjecttoregulationbytheFDAandourIVD-CECertifiedMALDIBioTypersystemissubjecttoregulationintheEuropeanUnionundertheprovisionsofDirective98/79/EC.These,andsimilarlocalregulationselsewhereintheworld,governawidevarietyofproduct-relatedactivities,fromqualitymanagement,designanddevelopmenttolabeling,manufacturing,promotion,salesanddistribution.Assuch,wecontinuallyinvestinourmanufacturinginfrastructuretogainandmaintaincertificationsnecessaryfortherelevantlevelofregulatoryclearance.

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WorkingCapitalRequirements

Therewerenocredittermsextendedtocustomersthatwouldhaveamaterialadverseeffectonourworkingcapital.

Werecognizerevenuefromsystemsaleswhenpersuasiveevidenceofanarrangementexists,thepriceisfixedordeterminable,titleandriskoflosshasbeentransferredtothecustomer,andcollectabilityoftheresultingreceivableisreasonablyassured.Titleandriskoflossgenerallytransfersuponshipment,orforcertainsystems,baseduponcustomeracceptanceforasystemthathasbeendeliveredtothecustomerandinstalledatacustomerfacility.Forsystemsthatincludecustomer-specificacceptancecriteria,wearerequiredtoassesswhenwecandemonstratetheacceptancecriteriahavebeenmet,whichgenerallyisuponsuccessfulfactoryacceptancetestingorcustomeracceptanceandevidenceofinstallation.Systemsthathavebeenshippedtocustomers,butnotyetacceptedbythecustomer,areincludedasfinishedgoodsin-transit.Finishedgoodsin-transitwas$41.4millionand$37.5millionatDecember31,2017and2016,respectively.Wealsohavewell-equippedapplicationsanddemonstrationfacilitiesandqualifiedapplicationpersonnelwhoassistcustomersandprovideproductdemonstrationsinspecificapplicationareas.Intotal,weheld$54.5millionand$34.8millionofdemonstrationinventoryatDecember31,2017and2016,respectively.

Backlog

Ourbacklogconsistsoffirmordersundernon-cancellablepurchaseordersreceivedfromcustomers.TotalsystembacklogatDecember31,2017and2016wasapproximately$1,010millionand$932million,respectively.Weanticipatethatapproximately78%ofthebacklogasofDecember31,2017willbefilledin2018.Weexperiencevariableandfluctuatingrevenuesinthefirstthreequartersoftheyear,whileourfourthquarterrevenueshavehistoricallybeenstrongerthantherestoftheyear.Asaresult,backlogonanyparticulardatecanbeindicativeofourshort-termrevenueperformance,butisnotnecessarilyareliableindicatoroflong-termrevenueperformance.

Employees

AsofDecember31,2017and2016,wehadapproximately6,200and6,000full-timeemployeesworldwide,respectively.Oftheseemployees,approximately1,085and1,075werelocatedintheUnitedStatesasofDecember31,2017and2016,respectively.OuremployeesintheUnitedStatesarenotunionizedoraffiliatedwithanylabororganizations.EmployeesbasedoutsidetheUnitedStatesareprimarilylocatedinEurope,withworker'scouncilsorlaborunionsprimarilyinGermanyandFrance.Severalofourinternationalsubsidiariesarepartiestocontractswithlaborunionsandworkers'councils.Webelievethatwehavegoodrelationshipswithouremployeesandtheworkers'councils.

AsofDecember31,2017,wehadapproximately3,035employeesinproductionanddistribution,1,482employeesinsellingandmarketingand1,000employeesinresearchanddevelopment,withgeneralandadministrativeemployeesrepresentingtheremainder.AsofDecember31,2016,wehadapproximately2,975employeesinproductionanddistribution,1,500employeesinsellingandmarketingand940employeesinresearchanddevelopment,withgeneralandadministrativeemployeesrepresentingtheremainder.

FinancialInformationaboutGeographicAreasandSegments

FinancialinformationaboutourgeographicareasandsegmentsmaybefoundinNote19toourConsolidatedFinancialStatementsinthisAnnualReportonForm10-K,includedaspartofItem8tothisreport,whichincludesinformationaboutourrevenuesfromexternalcustomers,measureofprofitandtotalassetsbyreportablesegment.

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AvailableInformation

WearesubjecttotheinformationalrequirementsoftheSecuritiesExchangeActof1934("ExchangeAct").Therefore,wefileperiodicreports,proxystatementsandotherinformationwiththeSecuritiesandExchangeCommission("SEC").Suchreports,proxystatementsandotherinformationmaybereadandcopiedbyvisitingthePublicReferenceRoomoftheSECat100FStreetN.E.,Washington,D.C.20549.YoumayobtaininformationontheoperationofthePublicReferenceRoombycallingtheSECat1-800-SEC-0330.Inaddition,theSECmaintainsanInternetsite(http://www.sec.gov)thatcontainsreports,proxyandinformationstatementsandotherinformationregardingissuersthatfileelectronically.

Ourwebsiteislocatedatwww.bruker.com .WemakeavailablefreeofchargethroughthiswebsiteourannualreportsonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-K,andamendmentstothosereportsfiledwithorfurnishedtotheSECpursuanttoSection13(a)or15(d)oftheExchangeAct,assoonasreasonablypracticableaftertheyareelectronicallyfiledwithorfurnishedtotheSEC.Thecontentsofourwebsitearenotincorporatedintothisreport.

ITEM1ARISKFACTORS

ThefollowingriskfactorsshouldbeconsideredinconjunctionwiththeotherinformationincludedinthisAnnualReportonForm10-K.Thisreportmayincludeforward-lookingstatementsthatinvolverisksanduncertainties.Inadditiontothoseriskfactorsdiscussedelsewhereinthisreport,weidentifythefollowingriskfactors,whichcouldaffectouractualresultsandcauseactualresultstodiffermateriallyfromthoseintheforward-lookingstatements.

WemaylosemoneywhenweexchangeforeigncurrencyreceivedfrominternationalsalesintoU.S.Dollars.

AsignificantportionofourbusinessisconductedincurrenciesotherthantheU.S.Dollar,whichisourreportingcurrency.Asaresult,currencyfluctuationsamongtheU.S.Dollarandthecurrenciesinwhichwedobusinesshavecaused,andwillcontinuetocause,foreigncurrencytranslationgainsandlosses.Inaddition,currencyfluctuationscouldcausethepriceofourproductstobemoreorlesscompetitivethanourprincipalcompetitors'products.Currencyfluctuationswillincreaseordecreaseourcoststructurerelativetothoseofourcompetitors,whichcouldlessenthedemandforourproductsandaffectourcompetitiveposition.Fromtimetotimeweenterintocertainhedgingtransactionsand/oroptionandforeigncurrencyexchangecontractswhichareintendedtooffsetsomeofthemarketriskassociatedwithoursalesdenominatedinforeigncurrencies.Wecannotpredicttheeffectivenessofthesetransactionsortheirimpactuponourfutureoperatingresults,andfromtimetotimetheymaynegativelyaffectourquarterlyearnings.

Ourreportedfinancialresultsmaybeadverselyaffectedbyfluctuationsincurrencyexchangerates.

Inadditiontotheforeigncurrencyexposureassociatedwithdifferencesbetweenwhereourproductsaremanufacturedandsoldbyusandourcompetitors,ourexposuretocurrencyexchangeratefluctuationsresultsfromthecurrencytranslationexposureassociatedwiththepreparationofourconsolidatedfinancialstatements,aswellasfromtheexposureassociatedwithtransactionsofoursubsidiariesthataredenominatedinacurrencyotherthantherespectivesubsidiary'sfunctionalcurrency.WhileourfinancialresultsarereportedinU.S.Dollars,thefinancialstatementsofmanyofoursubsidiariesoutsidetheU.S.arepreparedusingthelocalcurrencyasthefunctionalcurrency.Duringconsolidation,theseresultsaretranslatedintoU.S.Dollarsbyapplyingappropriateexchangerates.Asaresult,fluctuationsintheexchangerateoftheU.S.Dollarrelativetothelocalcurrenciesinwhichourforeignsubsidiariesreportcouldcausesignificantfluctuationsinourreportedresults.Moreover,asexchangeratesvary,revenueandotheroperatingresultsmaydiffermateriallyfromourexpectations.Thefavorableeffectsofchangesincurrencyexchangeratesincreasedour2017revenues

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byapproximately$19.6million,or1.2%,whileunfavorableforeigncurrencyeffectsdecreasedour2016revenuesbyapproximately$8.3million,or0.5%,respectively.Adjustmentsresultingfromfinancialstatementtranslationsareincludedasaseparatecomponentofshareholders'equity.IntheyearendedDecember31,2017,werecordednetgainsfromcurrencytranslationadjustmentsof$97.1million.IntheyearendedDecember31,2016,werecordednetlossesfromcurrencytranslationadjustmentsof$27.6million.

Additionally,totheextentmonetaryassetsandliabilities,includingcashanddebt,areheldinadifferentcurrencythanthereportingsubsidiary'sfunctionalcurrency,fluctuationsincurrencyexchangeratesmayhaveasignificantimpactonourreportedfinancialresults,andmayleadtoincreasedearningsvolatility.Wemayrecordsignificantgainsorlossesrelatedtoboththetranslationofassetsandliabilitiesheldbyoursubsidiariesintolocalcurrenciesandtheremeasurementofinter-companyreceivablesandloanbalances.

Unfavorableeconomicorpoliticalconditionsinthecountriesinwhichweoperatemayhaveanadverseimpactonourbusinessresultsorfinancialcondition.

Ourbusinessesandresultsofoperationsareaffectedbyinternational,nationalandregionaleconomicandpoliticalconditions.Ourbusinessesorfinancialresultsmaybeadverselyimpactedbyunfavorablechangesineconomicorpoliticalconditionsinthecountriesandmarketsinwhichweoperate,including,amongothers,adversechangesininterestratesortaxrates,volatilityinfinancialandcommoditymarkets,contractionintheavailabilityofcreditinthemarketplace,andchangesincapitalspendingpatterns.

OurrevenuefromU.S.operationsrepresentedapproximately25%and27%oftotalconsolidatedrevenueforfiscal2017and2016,respectively.OurrevenuefromoperationsinEuroperepresentedapproximately38%and36%oftotalconsolidatedrevenueforthecorrespondingperiods.OurrevenuefromoperationsintheAsiaPacificregionrepresentedapproximately29%and28%oftotalconsolidatedrevenueforthecorrespondingperiods.EconomicfactorsthatcouldadverselyinfluencedemandfortheCompany'sproductsincludeuncertaintyaboutglobaleconomicconditionsleadingtoreducedlevelsofinvestment,changesingovernmentspendinglevelsand/orpriorities,thesizeandavailabilityofgovernmentbudgets,customers'andsuppliers'accesstocreditandothermacroeconomicfactorsaffectinggovernment,academicorindustrialspendingbehavior.Slowereconomicgrowthoradeteriorationineconomicconditionscouldresultinadecreaseingovernmentfundingforscientificresearch,adelayinordersfromcurrentorpotentialcustomersorareductioninpurchasesofourproducts.

Wecannotpredicthowchangesineconomicconditionsorpoliticalinstabilitywillaffectourcustomersandsuppliersorhowanynegativeimpactonourcustomersandsuppliersmightadverselyimpactourbusinessresultsorfinancialcondition.

TheeffectofcomprehensiveU.S.taxreformlegislationisuncertain.

OnDecember22,2017,thePresidentoftheUnitedStatessignedtheTaxCutsandJobsAct,orthe2017TaxAct,whichenactedawiderangeofchangestotheU.S.incometaxsystem,manyofwhichdiffersignificantlyfromtheprovisionsofthepreviousU.S.taxlaw.The2017TaxAct,amongotherthings,permanentlyreducestheU.S.corporateincometaxrateto21%beginningin2018andprovidesformoregeneralchangestothetaxationofcorporations,includingchangestothedeductibilityofinterestexpense,theadoptionofamodifiedterritorialtaxsystem,assessingarepatriationtaxor"toll-charge"onundistributedearningsandprofitsofU.S.-ownedforeigncorporationsandbroadeningthecorporatetaxbasethroughtheeliminationorreductionofdeductions,exclusionsandcredits.Wehavenotyetcompletedourassessmentofthetaxeffectsassociatedwiththeenactmentofthe2017TaxAct;however,reasonableestimateshavebeenmadeoftheeffectsofthe2017TaxActonthe

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Company'sexistingdeferredtaxbalancesandtheone-timetransitiontaxonundistributedearningsandprofitsofourforeignsubsidiaries.ChangesinthetaxratesandlawsareaccountedforintheperiodofenactmentandtheseestimatesarereflectedinourfinancialstatementsfortheperiodendedDecember31,2017.

Theactualresultsoftheimplementationofthe2017TaxActmaymateriallydifferfromourcurrentestimatedueto,amongotherthings,furtherguidancethatmaybeissuedbyU.S.taxauthoritiesorregulatorybodies,includingtheSECandtheFinancialAccountingStandardsBoard(FASB)tointerpretthe2017TaxAct.Wewillcontinuetoanalyzethe2017TaxActandanyadditionalguidancethatmaybeissuedandfinalizethefulleffectsofapplyingthenewlegislationinfutureperiods.Anyrevisionstoourcurrentestimatescouldmateriallyaffectourresultsofoperations,cashflowandfinancialposition.

Wederiveasignificantportionofourrevenuefrominternationalsalesandaresubjecttotherisksofdoingbusinessinforeigncountries.

Internationalsalesaccount,andareexpectedtocontinuetoaccount,forasignificantportionofourtotalrevenues.Ourrevenuefromnon-U.S.operationsrepresentedapproximately75%and73%ofourtotalconsolidatedrevenueforfiscal2017and2016,respectively.Ourinternationaloperationsare,andwillcontinuetobe,subjecttoavarietyofrisksassociatedwithconductingbusinessinternationally,manyofwhicharebeyondourcontrol.Theserisks,whichmayadverselyaffectourabilitytoachieveandmaintainprofitabilityandourabilitytosellourproductsinternationally,include:

• changesinforeigncurrencytranslationrates;

• changesinregulatoryrequirements;

• legislationandregulation,includingtariffs,relatingtotheimportorexportofhightechnologyproducts;

• theimpositionofgovernmentcontrols;

• politicalandeconomicinstability,includinginternationalhostilities,actsofterrorismandgovernmentalrestrictions,inflation,traderelationshipsandmilitaryandpoliticalalliances;

• costsandrisksofdeployingsystemsinforeigncountries;

• compliancewithexportlawsandcontrolsandtradeembargoesinmultiplejurisdictions;

• limitedintellectualpropertyrights;

• theburdenofcomplyingwithawidevarietyofcomplexforeignlawsandtreaties,includingunfavorablelaborregulations,specificallythoseapplicabletoourEuropeanoperations;and

• compliancewithU.S.andlocallawsaffectingtheactivitiesofU.S.companiesabroad,includingtheUnitedStatesForeignCorruptPracticesAct,orFCPA,andlocalanti-briberylaws.

WemustalsocomplywiththerecentlyenactedEuropeanUnionGeneralDataProtectionRegulation(GDPR).AllEuropeanUnionmemberstatesmustcomplywithGDPRbyMay2018.ThegoaloftheregulationistoincreaseindividualrightsandprotectionsforpersonaldatalocatedinororiginatingfromtheEuropeanUnion.GDPRisextraterritorialinthatitappliestoallbusinesswithintheEuropeanUnionandanybusinessislocatedoutsideoftheEuropeanUnionthatprocessespersonaldataofindividualslocatedwithintheEuropeanUnion.Therearesignificantfinesassociatedwithnon-compliance.

Whiletheimpactofthesefactorsisdifficulttopredict,anyoneormoreofthesefactorscouldadverselyaffectouroperationsinthefuture.

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Ifwearenotabletosuccessfullyintegratethebusinessesweacquirethroughmergers,acquisitionsorstrategicalliances,wemaynotbeabletorealizeallofthecostsavingsandotherbenefitsthatweexpecttoresultfromthetransactionsandourfinancialresultsmaybedifferentthanexpected.

Ourstrategyincludesexpandingourtechnologybaseandproductofferingsthroughselectedmergers,acquisitionsandstrategicalliances.Forexample,from2015toDecember31,2017,wehaveacquired13businessestoexpandourtechnologiesandproductofferings.

Successfulintegrationofthebusinessesweacquireinvolvesanumberofrisks,including,amongothers,risksrelatedto:

• coordinatingorconsolidatinggeographicallyseparateorganizationsandintegratingpersonnelwithdifferentbusinessbackgroundsandcorporatecultures;

• integratingpreviouslyautonomousdepartmentsinsalesandmarketing,distribution,accountingandadministrativefunctions,andinformationandmanagementsystems;

• diversionofresourcesandmanagementtime;

• disruptionofourongoingbusiness;

• potentialimpairmentofrelationshipswithcustomersasaresultofchangesinmanagementorotherwisearisingoutofsuchtransactions;and

• retentionofkeyemployeesoftheacquiredbusinesseswithinthefirstonetotwoyearsaftertheacquisition,includingtheriskthattheymaycompetewithussubsequently.

Wemayhavedifficultydeveloping,manufacturingandmarketingtheproductsofanewlyacquiredcompanyorbusinessinawaythatenhancestheperformanceofourcombinedbusinessesorproductlines.Asaresult,wemaynotrealizethevaluefromexpectedsynergies.Acquisitionshaveresulted,andmayinthefutureresult,inunexpectedsignificantcostsandexpenses.Inthefuture,wemayberequiredtorecordchargestoearningsduringtheperiodifwedeterminethereisanimpairmentofgoodwillorintangibleassets,uptothefullamountofthevalueoftheassets.

Itmaybedifficultforustoimplementourstrategiesforimprovingmargins,profitabilityandcashflow.

Wearepursuinganumberofstrategiestoimproveourfinancialperformance,includingimplementingvariousproductivityimprovementinitiativesatbothBSIandBESTinanefforttostreamlineouroperations.Theseinitiativesincludetheoutsourcingofmanufacturingactivities,consolidating,transferringorceasingoperationsatcertainfacilities;applyingleanmanufacturingandsixsigmaconceptstoouroperations,implementingERPandotherinformationtechnologysystemsandapplyingasharedserviceapproachtovariousfunctions.

Wemaynotbeabletosuccessfullyimplementthesestrategies,andtheseeffortsmaynotresultintheexpectedimprovementinourmargins,profitabilityorcashflow.Anticipatedbenefitstoouroperatingandfinancialperformancemightbereducedordelayedasaresultofdifficultiesinimplementingtheseinitiatives,whichmayincludecomplicationsinthetransferofassetsandproductionknowledge,lossofkeyemployeesand/orcustomers,thedisruptionofongoingbusinessandpossibleinconsistenciesinstandards,controlsandprocedures.Implementationcostsalsomightexceedourexpectationsandfurthercostreductionmeasuresmightbecomenecessary,resultinginadditionalfuturecharges.Ourabilitytosuccessfullyimplementthesestrategiesandachieveourobjectiveswillalsodependonourabilitytoidentify,attractandretainmanagementandotherpersonnelwiththeskillsandexperienceneededtoeffectivelymanagetheprocessanddriveouroperatingperformanceimprovementduringandafterimplementationofourimprovementinitiatives.

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Theseimprovementstrategiesmayalsohaveunintendedconsequences,suchasattritionbeyondourintendedreductioninworkforce,reducedemployeemoraleandlossofcustomerrelationships.Wealsomayundertakeadditionalrestructuringactivitiesinthefuture.Becauseoftheseandotherfactors,wecannotpredictwhetherwewillrealizethepurposeandanticipatedbenefitsofourrestructuringandrelatedmeasures,andifwedonot,ourbusinessandresultsofoperationsmaybeadverselyaffected.

Goodwill,intangibleassetsandotherlong-livedassetsaresubjecttoimpairment.

Wehaverecordedgoodwill,intangibleassetsandotherlong-livedassetsthatmustbeperiodicallyevaluatedforpotentialimpairment.Weassesstherealizabilityofthereportedgoodwill,intangibleassetsandotherlong-livedassetsannually,aswellaswhenevereventsorchangesincircumstancesindicatethattheassetsmaybeimpaired.Theseeventsorcircumstancesgenerallyincludeoperatinglossesorasignificantdeclineintheearningsassociatedwiththereportingunittheseassetsarereportedwithin.Adeclineinourstockpriceandmarketcapitalizationmayalsocauseustoconsiderwhethergoodwill,intangibleassetsandotherlong-livedassetsmayrequireanimpairmentassessment.Ourabilitytorealizethevalueoftheseassetswilldependonthefuturecashflowsofthereportingunitinadditiontohowwellweintegratethebusinessesweacquire.Wehaverecordedimpairmentlossesof$1.1million,$0.8millionand$4.6millionfortheyearsendedDecember31,2017,2016and2015,respectively.

Ifourproductsfailtoachieveandsustainsufficientmarketacceptanceacrosstheirbroadintendedrangeofapplications,wewillnotgenerateexpectedrevenue.

Ourbusinessstrategydependsonourabilitytosuccessfullycommercializeabroadrangeofproductsbasedonourtechnologyplatforms,includingmagneticresonancetechnology,pre-clinicalimagingtechnology,massspectrometrytechnology,X-raytechnology,atomicforcemicroscopytechnology,stylusandopticalmetrologytechnology,fluorescencemicroscopytechnology,infraredtechnologyandsuperconductingmagnettechnologiesforuseinavarietyoflifescience,chemistryandmaterialsanalysisapplications.Someofourproductshaveonlyrecentlybeencommerciallylaunchedandhaveachievedonlylimitedsalestodate.Thecommercialsuccessofourproductsdependsonobtainingandexpandingmarketacceptancebyadiversearrayofindustrial,academic,clinical,pharmaceutical,biotechnology,applied,medicalresearchandgovernmentalcustomersaroundtheworld.Wemayfailtoachieveorsustainsubstantialmarketacceptanceforourproductsacrossthefullrangeofourintendedapplicationsorinoneormoreofourprincipalintendedapplications.Anysuchfailurecoulddecreaseoursalesandrevenue.Tosucceed,wemustconvincesubstantialnumbersofpotentialcustomerstoinvestinnewsystemsorreplacetheirexistingtechniqueswithtechniquesemployingoursystems.Limitedfundingavailableforcapitalacquisitionsbyourcustomers,aswellasourcustomers'owninternalpurchasingapprovalpolicies,couldhindermarketacceptanceofourproducts.Ourintendedcustomersmaybereluctanttomakethesubstantialcapitalinvestmentgenerallyneededtoacquireourproductsortoincurthetrainingandothercostsinvolvedwithreplacingtheirexistingsystemswithourproducts.Wealsomaynotbeabletoconvinceourintendedcustomersthatoursystemsareanattractiveandcost-effectivealternativetoothertechnologiesandsystemsfortheacquisition,analysisandmanagementofmolecular,cellularandmicroscopicinformation.Additionally,ifethicalandotherconcernssurroundingtheuseofgeneticinformation,genetherapyorgeneticallymodifiedorganismsbecomewidespread,wemayhavelessdemandforourproducts.Becauseoftheseandotherfactors,ourproductsmayfailtogainorsustainmarketacceptance.

Ourproductscompeteinmarketsthataresubjecttorapidtechnologicalchange,andoneormoreofthetechnologiesunderlyingourproductscouldbemadeobsoletebynewtechnology.

Themarketfordiscoveryandanalysistoolsischaracterizedbyrapidtechnologicalchangeandfrequentnewproductintroductions.Rapidlychangingtechnologycouldmakesomeorourentire

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productlinesobsoleteunlessweareabletocontinuallyimproveourexistingproductsanddevelopnewproducts.Becausesubstantiallyallofourproductsarebasedonourtechnologyplatforms,includingmagneticresonancetechnology,massspectrometrytechnology,X-raytechnology,atomicforcemicroscopytechnology,fluorescencemicroscopytechnology,stylusandopticalmetrologytechnologyandinfraredtechnology,weareparticularlyvulnerabletoanytechnologicaladvancesthatwouldmakethesetechniquesobsoleteasthebasisforanalyticalsystemsinanyofourmarkets.Tomeettheevolvingneedsofourcustomers,wemustrapidlyandcontinuallyenhanceourcurrentandplannedproductsandservicesanddevelopandintroducenewproductsandservices.Inaddition,ourproductlinesarebasedoncomplextechnologiesthataresubjecttorapidchangeasnewtechnologiesaredevelopedandintroducedinthemarketplace.Wemayhavedifficultyinkeepingabreastoftherapidchangesaffectingeachofthedifferentmarketsweserveorintendtoserve.Ifwefailtodevelopandintroduceproductsinatimelymannerinresponsetochangingtechnology,marketdemandsortherequirementsofourcustomers,ourproductsalesmaydecline,andwecouldexperiencesignificantlosses.Currentlyinourbacklog,wehaveorderstotaling$112.0millionforultra-highfieldmagnets.Ifweareunabletoreachthetechnicalfeasibilityforthesemagnets,wewillbeunabletofulfillcustomerorderswherealternatearrangementshavenotbeenprovidedforincustomercontracts.Additionalrisksincludeextraordinarywarrantyexpenses,reworkandpotentialinventorywrite-offs.

Ourbusinesscouldbeharmedifourcollaborationsfailtoadvanceourproductdevelopment.

Demandforourproductswilldepend,inpart,upontheextenttowhichourcollaborationswithpharmaceutical,biotechnologyandproteomicscompaniesaresuccessfulindeveloping,orhelpingustodevelop,newproductsandnewapplicationsforourexistingproducts.Inaddition,wecollaboratewithacademicinstitutionsandgovernmentresearchlaboratoriesonproductdevelopment.Wehavelimitedornocontrolovertheresourcesthatanycollaboratormaydevotetoourproducts.Anyofourpresentorfuturecollaboratorsmaynotperformtheirobligationsasexpected.Ifwefailtoenterintoormaintainappropriatecollaborationagreements,orifanyoftheseeventsoccur,wemaynotbeabletodevelopsomeofournewproducts,whichcouldmateriallyimpedeourabilitytogeneraterevenueorprofits.

Wefacesubstantialcompetition.

Wefacesubstantialcompetitioninourindustriesandweexpectthatcompetitioninallofourmarketswillincreasefurther.Currently,ourprincipalcompetitioncomesfromestablishedcompaniesprovidingproductsusingexistingtechnologiesthatperformmanyofthesamefunctionsforwhichwemarketourproducts.Anumberofourcompetitorshaveexpandedtheirmarketshareinrecentyearsthroughbusinesscombinations.Othercompaniesalsomaychoosetoenterourfieldsinthefuture.Ourcompetitorsmaydevelopormarketproductsthataremoreeffectiveorcommerciallyattractivethanourcurrentorfutureproductsorthatmayrenderourproductsobsolete.Competitionhasinthepastsubjected,andislikelyinthefuturetosubject,ourproductstopricingpressure.Manyofourcompetitorshavemoreexperienceinthemarketandsubstantiallygreaterfinancial,operational,marketingandtechnicalresourcesthanwedo,whichcouldgivethemacompetitiveadvantageinareassuchasresearchanddevelopment,production,marketinganddistribution.Ourabilitytocompetesuccessfullywilldepend,inpart,onourabilitytodevelopproprietaryproductsthatreachthemarketinatimelymannerandaretechnologicallysuperiorto,lessexpensivethan,ormorecost-effectivethan,othercurrentlymarketedproducts.

Ifweloseourstrategicpartners,ourmarketingandsaleseffortscouldbeimpaired.

Asubstantialportionofoursalesofselectedproductsconsistsofsalestothirdpartieswhoincorporateourproductsintotheirsystems.Thesethirdpartiesareresponsibleforthemarketingandsalesoftheirsystems.Wehavelittleornocontrolovertheirmarketingandsalesactivitiesorhowthey

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usetheirresources.Ourpresentorfuturestrategicpartnersmayormaynotpurchasesufficientquantitiesofproductsfromusorperformappropriatemarketingandsalesactivities.Inaddition,ifweareunabletomaintainourrelationshipswithstrategicpartners,ourbusinessesmaysuffer.Failuresbyourpresentorfuturestrategicpartners,orourinabilitytomaintainorenterintonewarrangementswithstrategicpartnersforproductdistribution,couldmateriallyimpedethegrowthofourbusinessesandourabilitytogeneratesufficientrevenueandprofits.

Wefacerisksrelatedtosalesthroughdistributorsandotherthirdpartiesthatwedonotcontrol,whichcouldharmourbusiness.

Wesellsomeproductsthroughthirdpartyagents,includingdistributorsandvalue-addedresellers.Thisexposesustovariousrisks,includingcompetitivepressure,concentrationofsalesvolumes,creditrisks,andcompliancerisks.Wemayrelyononeorafewkeydistributorsforaproductormarket,andthelossofthesedistributorscouldreduceourrevenueandnetearnings.Distributorsmayalsofacefinancialdifficulties,includingbankruptcy,whichcouldharmourcollectionofaccountsreceivables.Risksrelatedtoouruseofdistributorsmayreducesales,increaseexpenses,andweakenourcompetitiveposition.Moreover,violationsoftheFCPAorsimilaranti-briberylawsbydistributorsorotherthirdpartyagentscouldmateriallyandadverselyimpactourbusinessandresultsofoperations.

Dependenceoncontractmanufacturingmayadverselyaffectourabilitytobringproductstomarketanddamageourreputation.

Aspartofoureffortstostreamlineouroperationsandreduceouroperatingcosts,weoutsourceaspectsofourmanufacturingprocessesandcontinuetoevaluateadditionaloutsourcing.Ifourcontractmanufacturersfailtoperformtheirobligationsinatimelymanneroratsatisfactoryqualitylevels,ourabilitytobringproductstomarketandourreputationcouldsuffer.Forexample,duringamarketupturn,ourcontractmanufacturersmaybeunabletomeetourdemandrequirements,whichmayprecludeusfromfulfillingourcustomers'ordersonatimelybasis.Theabilityofthesemanufacturerstoperformislargelyoutsideourcontrol.Additionally,changingorreplacingourcontractmanufacturerscouldcausedisruptionsordelays.Problemswithoutsourcedmanufacturingcouldresultinlowerrevenuesandunexecutedefficiencies,andadverselyaffectourfinancialconditionandresultsofoperations.

Ifinvestmentinlifeandmaterialscienceresearchspendingdeclines,ourabilitytogeneraterevenuemaysuffer.

Wearedependent,bothdirectlyandindirectly,upongeneralinvestmentinlifescienceresearch,particularlyintheresearchanddevelopmentbudgetsofthepharmaceuticalandbiotechnologyindustries,andinmaterialscienceresearchaswellasuponthefinancialconditionandfundingprioritiesofvariousgovernmentsandgovernmentagencies.Sinceourinception,bothweandouracademiccollaboratorsandcustomershavebenefitedfromvariousgovernmentalcontractsandresearchgrants.Whetherweorouracademiccollaboratorswillcontinuetobeabletoattractthesegrantsdependsnotonlyonthequalityofourproducts,butalsoongeneralspendingpatternsofpublicinstitutions.

Anyreductioninthecapitalresourcesorgovernmentfundingofourcustomerscouldreduceoursalesandimpedeourabilitytogeneraterevenue.

Asignificantportionofoursalesarecapitalpurchasesbyourcustomers.Thespendingpoliciesofourcustomerscouldhaveasignificanteffectonthedemandforourproducts.Thesepoliciesarebasedonawidevarietyoffactors,includingtheresourcesavailabletomakepurchases,thespendingprioritiesamongvarioustypesofequipment,policiesregardingspendingduringrecessionaryperiodsandchangesinthepoliticalclimate.Anychangesincapitalspendingorchangesinthecapitalbudgetsofour

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customerscouldsignificantlyreducedemandforourproducts.Thecapitalresourcesofourlifescienceandothercorporatecustomersmaybelimitedbytheavailabilityofequityordebtfinancing.Anysignificantdeclineinresearchanddevelopmentexpendituresbyourlifescienceandmaterialsciencecustomerscouldsignificantlydecreaseoursales.Inaddition,asubstantialportionofoursalesaretonon-profitandgovernmententities,whicharedependentongovernmentsupportforscientificresearch.Anydeclineinthissupportcoulddecreasetheabilityofthesecustomerstopurchaseourproducts.

Disruptionsatanyofourmanufacturingfacilitiescouldadverselyaffectourbusiness.

WehavemanufacturingfacilitieslocatedintheUnitedStates,EuropeandIsrael.Manyofourproductsaredevelopedandmanufacturedatsinglelocations,withlimitedalternatefacilities.Ifweexperienceanysignificantdisruptionofthosefacilitiesforanyreason,suchasstrikesorotherlaborunrest,powerinterruptions,fire,earthquakes,orothereventsbeyondourcontrol,wemaybeunabletomanufacturetherelevantproductsatpreviouslevelsoratall.Areductionorinterruptioninmanufacturingcouldharmourcustomerrelationships,impedeourabilitytogeneraterevenuesfromourbacklogorobtainnewordersandcouldhaveamaterialadverseeffectonourbusiness,resultsofoperations,financialconditionandcashflows.

Ifemployeesweretoengageinastrikeorotherworkstoppageorinterruption,ourbusiness,resultsofoperations,financialconditionandliquiditycouldbemateriallyadverselyaffected.

Someofouremployeesarerepresentedbyworkers'councilsandlaborunionsincertainjurisdictions,primarilyinGermanyandFrance.Althoughwebelievethatourrelationswithouremployeesaresatisfactory,ifdisputeswiththeseemployeesarise,orifourworkersengageinastrikeorotherworkstoppageorinterruption,wecouldexperienceasignificantdisruptionof,orinefficienciesin,ouroperationsorincurhigherlaborcosts,whichcouldhaveamaterialadverseeffectonourbusiness,resultsofoperations,financialconditionandliquidity.

Ouroperationsaredependentuponalimitednumberofsuppliersandcontractmanufacturers.

Wecurrentlypurchasecomponentsusedinourproductsfromalimitednumberofoutsidesuppliers.Ourrelianceonalimitednumberofsupplierscouldresultintimedelaysassociatedwithredesigningaproductduetoaninabilitytoobtainanadequatesupplyofrequiredcomponentsandreducedcontroloverpricing,qualityandtimelydelivery.Anyofthesefactorscouldadverselyaffectourrevenuesandprofitability.Inparticular,ourX-raymicroanalysisbusiness,whichmanufacturesandsellsaccessoriesforelectronmicroscopes,ispartiallydependentoncooperationfromlargermanufacturersofelectronmicroscopes.Additionally,ourelementalanalysisbusinesspurchasescertainopticaldetectorsfromasinglesupplier,PerkinElmer,Inc.,thesolesupplierofthesedetectorcomponents.BrukerCALIDpurchasesdetectorsandpowersuppliesfromsoleorlimitedsourcesuppliersanditsfocalplanearraydetectorsfromasinglesupplier,LockheedMartinCorporation.Similarly,BrukerBioSpinobtainsvariouscomponentsfromsoleorlimitedsourcesuppliersandBESTobtainsvariousrawmaterialsanduseskeyproductionequipmentfromsoleorlimitedsourcesuppliersorcontractmanufacturers.Therearelimited,ifany,availablealternativestothesesuppliers.Theexistenceofshortagesofthesecomponentsorthefailureofdeliverywithregardtothesecomponentscouldhaveamaterialadverseeffectuponourrevenuesandmargins.Inaddition,priceincreasesfromthesesuppliersorcontractmanufacturerscouldhaveamaterialadverseeffectuponourgrossmargins.

Becauseofthescarcityofsomecomponents,wemaybeunabletoobtainanadequatesupplyofcomponents,orwemayberequiredtopayhigherpricesortopurchasecomponentsoflesserquality.Anydelayorinterruptioninthesupplyoftheseorothercomponentscouldimpairourabilitytomanufactureanddeliverourproducts,harmourreputationandcauseareductioninourrevenues.Inaddition,anyincreaseinthecostofthecomponentsthatweuseinourproductscouldmakeourproductslesscompetitiveanddecreaseourgrossprofits.Wemaynotbeabletoobtainsufficient

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quantitiesofrequiredcomponentsonthesameorsubstantiallythesameterms.Additionally,consolidationamongoursupplierscouldresultinothersolesourcesuppliersforusinthefuture.

SupplyshortagesandincreasingpricesofrawmaterialscouldadverselyaffectthegrossprofitoftheBrukerBioSpinGroupandofourBrukerEnergy&SuperconTechnologiesbusiness.

Thelastfewyearshaveseenperiodicsupplyshortagesandsharpincreasesinthepricesforvariousrawmaterials,inpartduetohighdemandfromdevelopingcountries.BrukerBioSpinandBESTrelyonsomeofthesematerialsfortheproductionoftheirproducts.Inparticular,foritssuperconductingmagnetproduction,bothforthehorizontalandverticalmagnetseries,BrukerBioSpinreliesontheavailabilityofcopper,steelandthemetallicrawmaterialsfortraditionallow-temperaturesuperconductingwires.Similarly,BESTreliesontheavailabilityofniobiumtitaniumforitsproductionoflow-temperaturesuperconductingmaterialsanddevices.Higherpricesforthesecommoditieswillincreasetheproductioncostofsuperconductingwiresandsuperconductingmagnetsandmayadverselyaffectgrossprofits.

Thepricesofcopperandcertainotherrawmaterialsusedforsuperconductorshaveincreasedsignificantlyoverthelastdecade.Sincecopperisamainconstituentoflowtemperaturesuperconductors,thismayaffectthepriceofsuperconductingwire.Thistypeofincreasewouldhaveanimmediateeffectontheproductioncostsofsuperconductingmagnetsandmaynegativelyaffecttheprofitmarginsforthoseproducts.Inaddition,anincreaseinrawmaterialcostaffectstheproductioncostofthesuperconductingwireproducedbyBESTandofsuperconductingwireusedbyBrukerBioSpin.

BrukerBioSpinanditscustomersalsorelyonliquidheliumtooperateitssuperconductingmagnets.HeliumiscontrolledbytheFederalHeliumReserveandissubjecttopricechanges.ShortagesofliquidheliumassociatedwithfederalpricecontrolscouldhaveanadverseimpactonproducingandoperatingBioSpin'ssuperconductingmagnetsandmayalsonegativelyimpacttheprofitmarginsforthoseproducts.

Regulationsrelatedto"conflictminerals"maycauseustoincuradditionalexpensesandcouldlimitthesupplyandincreasethecostofcertainmetalsusedinmanufacturingourproducts.

Regulationsrequiredisclosuresbypubliccompaniesofspecifiedminerals,knownasconflictminerals,thatarenecessarytothefunctionalityorproductionofproductsmanufacturedorcontractedtobemanufactured.ThisrequirestheperformanceofduediligencetodeterminewhetherornotsuchmineralsoriginatefromtheDemocraticRepublicofCongooranadjoiningcountry.Theseregulationscouldaffectsourcingatcompetitivepricesandavailabilityinsufficientquantitiesofcertainmineralsusedinthemanufactureofourproducts,includingtantalum,tin,goldandtungsten.Thenumberofsupplierswhoprovideconflict-freemineralsmaybelimited.Inaddition,theremaybematerialcostsassociatedwithcomplyingwiththedisclosurerequirements,suchascostsrelatedtodeterminingthesourceofcertainmineralsusedinourproducts,aswellascostsofpossiblechangestoproducts,processesorsourcesofsupplyasaconsequenceofsuchverificationactivities.Asoursupplychainiscomplexandweusecontractmanufacturersforsomeofourproducts,wemaynotbeabletosufficientlyverifytheoriginsoftherelevantmineralsusedinourproductsthroughtheduediligenceproceduresthatweimplement,whichmayharmourreputation.Inaddition,wemayencounterchallengestosatisfythosecustomerswhorequirethatallofthecomponentsofourproductsbecertifiedasconflict-free,whichcouldplaceusatacompetitivedisadvantageifweareunabletodoso.

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Ifwefailtomaintainaneffectivesystemofinternalcontrols,wemaynotbeabletoaccuratelyreportourfinancialresults,whichcouldleadtoalossofinvestorconfidenceinourfinancialstatementsandhaveanadverseeffectonourstockprice.

Effectiveinternalcontrolsarenecessaryforustoprovidereliableandaccuratefinancialstatementsandtoeffectivelypreventfraud.WedevotesignificantresourcesandtimetocomplywiththeinternalcontroloverfinancialreportingrequirementsoftheSarbanesOxleyActof2002andcontinuetoenhanceourcontrols.However,wecannotbecertainthatwewillbeabletopreventfuturesignificantdeficienciesormaterialweaknesses.IntheyearendedDecember31,2017,weremediatedthepreviouslydisclosedmaterialweaknessinourinternalcontrolsovertheaccountingforincometaxes.Inadequateinternalcontrolscouldcauseinvestorstoloseconfidenceinourreportedfinancialinformation,whichcouldhaveanegativeeffectoninvestorconfidenceinourfinancialstatements,thetradingpriceofourstockandouraccesstocapital.

Ourmanufactureandsaleofproductscouldleadtoproductliabilityclaimsforwhichwecouldhavesubstantialliability.

Themanufactureandsaleofourproductsexposeustoproductliabilityclaimsifanyofourproductscauseinjuryorarefoundotherwiseunsuitableduringmanufacturing,marketing,saleorcustomeruse.Inparticular,ifoneofourCBRNEdetectionproductsmalfunctions,thiscouldleadtocivilianormilitarycasualtiesinatimeofunrest,exposingustoincreasedpotentialforhigh-profileliability.IfourCBRNEdetectionproductsmalfunctionbygeneratingafalse-positivetoapotentialthreat,wecouldbeexposedtoliabilitiesassociatedwithactionstakenthatotherwisewouldnothavebeenrequired.Additionally,thenuclearmagneticresonance,researchmagneticresonanceimaging,FouriertransformmassspectrometryandcertainelectronparamagneticresonancemagnetsofBrukerBioSpinutilizehighmagnetfieldsandcryogenicstooperateatapproximately4Kelvin,thetemperatureofliquidhelium.Thereisaninherentriskofpotentialproductliabilityduetotheexistenceofthesehighmagneticfields,associatedstrayfieldsoutsidethemagnet,andthehandlingofthecryogensassociatedwithsuperconductingmagnets.Inaddition,ourMALDIBiotyperproducthasanIVD-CEmarkandisusedfortheidentificationofmicroorganisms.Misidentificationorafalse-negativeofcertainbacteria,yeastsorfungicouldleadtoinappropriatetreatmentforpatients,andcouldexposeustoproductliabilityclaims.

Asuccessfulproductliabilityclaimbroughtagainstusinexcessof,oroutsidethecoverageof,ourinsurancecoveragecouldhaveamaterialadverseeffectonourbusiness,financialconditionandresultsofoperations.Wemaynotbeabletomaintainproductliabilityinsuranceonacceptableterms,ifatall,andinsurancemaynotprovideadequatecoverageagainstpotentialliabilities.

Respondingtoclaimsrelatingtoimproperhandling,storageordisposalofhazardouschemicalsandradioactiveandbiologicalmaterialswhichweusecouldbetimeconsumingandcostly.

WeusecontrolledhazardousandradioactivematerialsinourbusinessandgeneratewastesthatareregulatedashazardouswastesunderU.S.federal,andMassachusetts,California,NewJersey,WashingtonandWisconsinstate,environmentalandatomicenergyregulatorylawsandunderequivalentprovisionsoflawinthoseandotherjurisdictionsinwhichourresearchandmanufacturingfacilitiesarelocated.Ouruseofthesesubstancesandmaterialsissubjecttostringent,andperiodicallychanging,regulationthatcanimposecostlycomplianceobligationsonusandhavethepotentialtoadverselyaffectourmanufacturingactivities.Theriskofaccidentalcontaminationorinjuryfromthesematerialscannotbecompletelyeliminated.Ifanaccidentwiththesesubstancesoccurs,wecouldbeheldliableforanydamagesthatresult,inadditiontoincurringclean-upcostsandliabilities,whichcanbesubstantial.Additionally,anaccidentcoulddamageourresearchandmanufacturingfacilitiesresultingindelaysandincreasedcosts.

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Wearesubjecttoenvironmentallawsandregulationswhichmayimposesignificantcomplianceorothercostsonus.

Ourmanufacturing,productdevelopmentandresearchanddevelopmentoperationsandprocessesinvolvethecontrolleduseofcertainhazardousmaterials.Inaddition,weownand/orleaseanumberoffacilities,someofwhichhavebeeninoperationformanydecades,whereweorothersmayhaveusedsubstancesorgeneratedanddisposedofwasteswhichareconsideredhazardousormaybeconsideredhazardousinthefuture.Wealsohaveacquiredvariouscompanieswhichhistoricallymayhaveusedcertainhazardousmaterialsandwhichmayhaveownedand/orleasedfacilitiesatwhichhazardousmaterialshavebeenused.Forallofthesereasons,wearesubjecttofederal,state,foreign,andlocallawsandregulationsgoverningtheuse,manufacture,storage,transportation,handling,treatment,remediation,anddisposalofhazardousmaterialsandcertainwasteproducts.Wehavepotentialliabilityundertheselawsandregulationswithrespecttotheremediationofpastcontaminationincertainofthefacilitieswenowownorlease.Additionally,inthefutureourfacilitiesandthedisposalsitesownedbyotherstowhichwesendorsentwaste,maybeidentifiedascontaminatedandrequireremediation.Accordingly,wemaybecomesubjecttoadditionalcompliancecostsorenvironmentalliabilitieswhichmaybesignificantandcouldmateriallyharmourresultsofoperationsorfinancialcondition.

Inadditiontotherisksapplicabletoourlifescienceandmaterialsanalysisproducts,ourCBRNEdetectionproductsaresubjecttoanumberofadditionalrisks,includinglengthyproductdevelopmentandcontractnegotiationperiodsandcertainrisksinherentinlong-termgovernmentcontracts.

OurCBRNEdetectionproductsaresubjecttomanyofthesamerisksassociatedwithourlifescienceproducts,includingvulnerabilitytorapidtechnologicalchange,dependenceonmassspectrometryandothertechnologiesandsubstantialcompetition.Inaddition,ourCBRNEdetectionproductsandcertainFT-IRproductsaregenerallysoldtogovernmentagenciesunderlong-termcontracts.Thesecontractsgenerallyinvolvelengthypre-contractnegotiationsandproductdevelopment.Wemayberequiredtodevotesubstantialworkingcapitalandotherresourcespriortoobtainingproductorders.Asaresult,wemayincursubstantialcostsbeforewerecognizerevenuefromtheseproducts.Moreover,inreturnforlarger,longer-termcontracts,ourcustomersfortheseproductsoftendemandmorestringentacceptancecriteria.Thesecriteriamayalsocausedelaysinourabilitytorecognizerevenuefromsalesoftheseproducts.Furthermore,wemaynotbeabletoaccuratelypredictinadvanceourcoststofulfillourobligationsundertheselong-termcontracts.Ifwefailtoaccuratelypredictourcosts,duetoinflationorotherfactors,wecouldincursignificantlosses.Also,thepresenceorabsenceofsuchcontractsmaycausesubstantialvariationinourresultsofoperationsbetweenfiscalperiodsand,asaresult,ourresultsofoperationsforanygivenfiscalperiodmaynotbepredictiveofourresultsforsubsequentfiscalperiods.Theresultinguncertaintymayhaveanadverseimpactonourstockprice.

Wearesubjecttoexistingandpotentialadditionalregulationandgovernmentinquiry,whichcanimposeburdensonouroperationsandnarrowthemarketsforourproducts.

Wearesubject,bothdirectlyandindirectly,totheadverseimpactofexistingandpotentialfuturegovernmentregulationofouroperationsandmarkets.Forexample,exportationofourproducts,particularlyourCBRNEdetectionproducts,issubjecttostrictregulatorycontrolinanumberofjurisdictions.Thefailuretosatisfyexportcontrolcriteriaorobtainnecessaryclearancescoulddelayorpreventshipmentofproducts,whichcouldadverselyaffectourrevenuesandprofitability.

Inaddition,asaresultofourinternationaloperations,wearesubjecttocompliancewithvariouslawsandregulations,includingtheFCPAandlocalanti-briberylawsinthejurisdictionsinwhichwedobusiness,whichgenerallyprohibitcompaniesandtheirintermediariesoragentsfromengaginginbriberyormakingimproperpaymentstoforeignofficialsortheiragents.TheFCPAalsorequiresproperrecordkeepingandcharacterizationofsuchpaymentsinourreportsfiledwiththeSEC.

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Despitemaintainingpoliciesandproceduresthatrequireouremployeestocomplywiththeselawsandourstandardsofethicalconduct,wecannotensurethatthesepoliciesandprocedureswillalwaysprotectusfromintentional,recklessornegligentactscommittedbyouremployeesoragents.Forexample,in2014weresolvedaninvestigationbytheSECintopossibleviolationsoftheFCPAarisingfrompastconductofoursubsidiariesoperatinginChina.Inconnectionwiththeresolution,weconsentedtotheentryofanadministrativeceaseanddesistorderbytheSECconcerningviolationsofthebooksandrecordsandinternalcontrolsprovisionsoftheFCPAandpaidanaggregateamountofapproximately$2.4million,consistingof$1.7millionindisgorgement,$0.3millioninprejudgmentinterest,anda$0.4millionpenalty.Wealsoincurredlegalandprofessionalfeesassociatedwiththeinvestigationandsettlementofapproximately$25.1million.Additionally,in2017weresolvedaninvestigationoftheKoreaFairTradeCommission("KFTC")intoimproperbiddingbyBrukerKoreaCo.,Ltd.("BrukerKorea")andseveralothercompaniesinconnectionwithbidsforsalesofX-raysystemsin2010and2012.Inconnectionwiththesematters,variousKoreangovernmentalentitiesimposedsuspensionsonBrukerKorea,withoverlappingsuspensionperiodsrangingfromthreetosixmonths.Duringtheperiodsofthesesuspensions,whichexpiredin2017,BrukerKoreawasprohibitedfrombiddingfororconductingsalestoKoreangovernmentalagencies.

OnOctober19,2017,theCompanyreceivedanoticeofinvestigationandsubpoenatoproducedocumentsfromtheDivisionofEnforcementoftheSEC.ThesubpoenaseeksinformationrelatedtoanemployeeterminatedaspartofarestructuringandcertainmattersinvolvingtheCompany'spoliciesandaccountingpracticesrelatedtorevenuerecognitionandrestructuringactivities,aswellasrelatedfinancialreporting,disclosureandcompliancematters,sinceJanuary1,2013.Thesubpoenaalsoseeksinformationconcerning,amongotherthings,theCompany'spreviouslyidentifiedmaterialweaknessininternalcontrolsovertheaccountingforincometaxes,relatedfinancialreportingmattersandcertainpaymentsfornon-employeetravelexpenses.TheCompanyisproducingdocumentsinresponsetothesubpoenaandintendstocontinuetocooperatefullywiththeSEC'sinvestigation.Atthistime,theCompanyisunabletopredicttheduration,scopeoroutcomeofthisinvestigation.

Moreover,thelifesciencesindustry,whichisthemarketforourprincipalproducts,hashistoricallybeenheavilyregulated.Thereare,forexample,lawsinseveraljurisdictionsrestrictingresearchingeneticengineering,whichcanoperatetonarrowourmarkets.Giventheevolvingnatureofthisindustry,legislativebodiesorregulatoryauthoritiesmayadoptadditionalregulationthatadverselyaffectsourmarketopportunities.Ourbusinessisalsodirectlyaffectedbyawidevarietyofgovernmentregulationsapplicabletobusinessenterprisesgenerallyandtocompaniesoperatinginthelifesciencesindustryinparticular.

OurclinicalproductsaresubjecttoregulationbytheFDA.Theseregulationsgovernawidevarietyofproductrelatedactivities,fromqualitymanagement,designanddevelopmenttolabeling,manufacturing,promotion,salesanddistribution.IfweoranyofoursuppliersordistributorsfailtocomplywithFDAandotherapplicableregulatoryrequirements,orareperceivedtopotentiallyhavefailedtocomply,wemayface,amongotherthings,warningletters;adversepublicityaffectingbothusandourcustomers;investigationsornoticesofnon-compliance,fines,injunctions,andcivilpenalties;importorexportrestrictions;partialsuspensionsortotalshutdownofproductionfacilitiesortheimpositionofoperatingrestrictions;increaseddifficultyinobtainingrequiredFDAclearancesorapprovalsorforeignequivalents;seizuresorrecallsofourproductsorthoseofourcustomers;ortheinabilitytosellsuchproducts.AnysuchFDAactionscoulddisruptourbusinessandoperations,leadtosignificantremedialcostsandhaveamaterialadverseimpactonourfinancialpositionandresultsofoperations.

Wehavebeen,are,andexpecttobeinthefuture,subjecttoinquiriesfromthegovernmentagenciesthatenforcetheseregulations,includingtheU.S.DepartmentofState,theU.S.DepartmentofCommerce,theU.S.FoodandDrugAdministration,theU.S.InternalRevenueService,theU.S.DepartmentofHomelandSecurity,theU.S.DepartmentofJustice,theSecuritiesandExchange

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Commission,theFederalTradeCommission,theU.S.CustomsandBorderProtectionandtheU.S.DepartmentofDefense,amongothers,aswellasfromstateorforeigngovernmentsandtheirdepartmentsandagencies.Asaresult,fromtimetotime,theattentionofourmanagementandotherresourcesmaybedivertedtoattendtotheseinquiries.Inaddition,failuretocomplywiththeseregulationsorobtainormaintainnecessarypermitsandlicensescouldresultinavarietyoffinesorothercensuresoraninterruptioninourbusinessoperationswhichmayhaveanegativeimpactonourabilitytogeneraterevenuesandcouldadverselyaffectourfinancialconditionandresultsofoperations.

Oursuccessdependsonourabilitytooperatewithoutinfringingormisappropriatingtheproprietaryrightsofothers.

Ourcommercialsuccessdependsonavoidingtheinfringementofotherparties'patentsandproprietaryrightsaswellasavoidingthebreachofanylicensesrelatingtoourtechnologiesandproducts.Giventhattheremaybepatentsofwhichweareunaware,particularlyintheUnitedStateswherepatentapplicationsareconfidential,avoidanceofpatentinfringementmaybedifficult.Variousthirdpartiesholdpatentswhichmayrelatetoourtechnology,andwemaybefoundinthefuturetoinfringetheseorotherpatentsorproprietaryrightsofthirdparties,eitherwithproductswearecurrentlymarketingordevelopingorwithnewproductswhichwemaydevelopinthefuture.Ifathirdpartyholdingrightsunderapatentsuccessfullyassertsaninfringementclaimwithrespecttoanyofourcurrentorfutureproducts,wemaybepreventedfrommanufacturingormarketingourinfringingproductinthecountryorcountriescoveredbythepatentweinfringe,unlesswecanobtainalicensefromthepatentholder.Wemaynotbeabletoobtainalicenseoncommerciallyreasonableterms,ifatall,especiallyifthepatentholderisacompetitor.Inaddition,evenifwecanobtainthelicense,itmaybenon-exclusive,whichwillpermitotherstopracticethesametechnologylicensedtous.Wealsomayberequiredtopaysubstantialdamagestothepatentholderintheeventofaninfringement.UndersomecircumstancesintheUnitedStatesthesedamagescouldincludedamagesequaltotripletheactualdamagesthepatentholderincurs.Ifwehavesuppliedinfringingproductstothirdpartiesformarketingbythemorlicensedthirdpartiestomanufacture,useormarketinfringingproducts,wemaybeobligatedtoindemnifythesethirdpartiesforanydamagestheymayberequiredtopaytothepatentholderandforanylossesthethirdpartiesmaysustainthemselvesastheresultoflostsalesorlicensepaymentstheyarerequiredtomaketothepatentholder.Anysuccessfulinfringementactionbroughtagainstusmayalsoadverselyaffectmarketingoftheinfringingproductinothermarketsnotcoveredbytheinfringementaction,aswellasourmarketingofotherproductsbasedonsimilartechnology.Furthermore,wewillsufferadverseconsequencesfromasuccessfulinfringementactionagainstuseveniftheactionissubsequentlyreversedonappeal,nullifiedthroughanotheractionorresolvedbysettlementwiththepatentholder.Thedamagesorotherremediesawarded,ifany,maybesignificant.Asaresult,anysuccessfulinfringementactionagainstusmayharmourbusiness.

Ifweareunabletoeffectivelyprotectourintellectualproperty,thirdpartiesmayuseourtechnology,whichwouldimpairourabilitytocompeteinourmarkets.

Ourcontinuedsuccesswilldependinsignificantpartonourabilitytoobtainandmaintainmeaningfulpatentprotectionforourproductsthroughouttheworld.Werelyonpatentstoprotectasignificantpartofourintellectualpropertyandtoenhanceourcompetitiveposition.However,ourpresentlypendingorfuturepatentapplicationsmaynotissueaspatents,andanypatentpreviouslyissuedtousmaybechallenged,invalidated,heldunenforceableorcircumvented.Furthermore,theclaimsinpatentswhichhavebeenissued,orwhichmaybeissuedtousinthefuture,maynotbesufficientlybroadtopreventthirdpartiesfromproducingcompetingproductssimilartoourproducts.Inaddition,thelawsofvariousforeigncountriesinwhichwecompetemaynotprotectourintellectualpropertytothesameextentasdothelawsoftheUnitedStates.Failuretoobtainadequatepatentprotectionforourproprietarytechnologycouldmateriallyimpairourabilitytobecommerciallycompetitive.

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Inadditiontopatentprotection,wealsorelyontheprotectionoftradesecrets,know-howandconfidentialandproprietaryinformation.Tomaintaintheconfidentialityoftradesecretsandproprietaryinformation,wegenerallyseektoenterintoconfidentialityagreementswithouremployees,consultantsandstrategicpartnersuponthecommencementofarelationshipwithus.However,wemaynotobtaintheseagreementsinallcircumstances.Intheeventofunauthorizeduseordisclosureofthisinformation,theseagreements,evenifobtained,maynotprovidemeaningfulprotectionforourtradesecretsorotherconfidentialinformation.Inaddition,adequateremediesmaynotexistintheeventofunauthorizeduseordisclosureofthisinformation.Thelossorexposureofourtradesecretsandotherproprietaryinformationwouldimpairourcompetitiveadvantagesandcouldhaveamaterialadverseeffectonouroperatingresults,financialconditionandfuturegrowthprospects.Furthermore,othersmayhave,ormayinthefutureindependentlydevelop,substantiallysimilarorsuperiorknow-howandtechnology.

Wemaybeinvolvedinlawsuitstoprotectorenforceourpatentsthatarebroughtbyuswhichcouldbeexpensiveandtimeconsumingand,ifdeterminedadversely,couldadverselyaffectourpatentposition.

Inordertoprotectorenforceourpatentrights,wemayinitiatepatentlitigationagainstthirdparties,andwemaybesimilarlysuedbyothers.Wemayalsobecomesubjecttointerferenceproceedingsconductedinthepatentandtrademarkofficesofvariouscountriestodeterminethepriorityofinventions.Thedefenseandprosecution,ifnecessary,ofintellectualpropertysuits,interferenceproceedingsandrelatedlegalandadministrativeproceedingsiscostlyanddivertsourtechnicalandmanagementpersonnelfromtheirnormalresponsibilities.Wemaynotprevailinanyofthesesuits.Anadversedeterminationofanylitigationordefenseproceedingscouldputourpatentsatriskofbeinginvalidatedorinterpretednarrowlyandcouldputourpatentapplicationsatriskofnotissuing.

Furthermore,becauseofthesubstantialamountofdiscoveryrequiredinconnectionwithintellectualpropertylitigation,thereisariskthatsomeofourconfidentialinformationcouldbecompromisedbydisclosureduringthistypeoflitigation.Inaddition,duringthecourseofthiskindoflitigation,therecouldbepublicannouncementsoftheresultsofhearings,motionsorotherinterimproceedingsordevelopmentsinthelitigation.Ifsecuritiesanalystsorinvestorsperceivetheseresultstobenegative,itcouldhaveasubstantialnegativeeffectonthetradingpriceofourcommonstock.

Werelyoninformationtechnologytosupportouroperationsandreportingenvironments.Asecurityfailureofthattechnologycouldimpactourabilitytooperateourbusinesseseffectively,adverselyaffectourfinancialresults,damageourreputationandexposeustopotentialliabilityorlitigation.

Weuseinformationsystemstocarryoutouroperationsandmaintainourbusinessrecords.Somesystemsareinternallymanagedandsomearemaintainedbythird-partyserviceproviders.Weandourserviceprovidersemploywhatwebelieveareadequatesecuritymeasures.Ourabilitytoconductbusinesscouldbemateriallyandadverselyaffectedifthesesystemsorresourcesarecompromised,damagedorfail.Thiscouldbearesultofacyber-incident,naturaldisaster,hardwareorsoftwarecorruption,failureorerror,telecommunicationssystemfailure,serviceprovidererrororfailure,intentionalorunintentionalpersonnelactionsorotherdisruption.

Intheordinarycourseofbusiness,wecollectandstoresensitivedata,includingintellectualproperty,otherproprietaryinformationandpersonallyidentifiableinformation.Ifthisdataiscompromised,destroyedorinappropriatelydisclosed,itcouldhaveamaterialadverseeffect,includingdamagetoourreputation,lossofcustomers,significantexpensestoaddressandresolvetheissues,orlitigationorotherproceedingsbyaffectedindividuals,businesspartnersorregulatoryauthorities.

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Ourdebtmayadverselyaffectourcashflowandmayrestrictourinvestmentopportunitiesorlimitouractivities.

AsofDecember31,2017,wehadoutstandinganaggregateprincipalamountofdebttotalingapproximately$415.6million,including$220.0millionofseniorunsecurednotes,$195.0millionoflong-termborrowingsunderourrevolvingloanfacilityand$1.3millionofotherdebt,offsetbyunamortizeddebtissuancecostsfortheseniorunsecurednotesof$0.7million.Wealsohadtheabilitytoborrowanadditional$303.9millionavailableunderourexistingcreditfacility.MostofouroutstandingdebtisintheUnitedStatesandtherearesubstantialcashrequirementsintheUnitedStatestoservicedebtinterestobligations,fundoperations,capitalexpendituresandourdeclareddividendsandfinancepotentialacquisitionsorsharerepurchases.Ourabilitytosatisfyourdebtobligationsandmeetourotherliquidityneedsdependsonourfutureoperatingperformanceandoneconomic,financial,competitiveandotherfactorsbeyondourcontrol.Ourbusinessmaynotgeneratesufficientcashflowtomeetourdebtobligationsorprovidesufficientfundsforourotherobjectives.Ifweareunabletoserviceourdebtorobtainadditionalfinancing,wemaybeforcedtodelaystrategicacquisitions,capitalexpendituresorresearchanddevelopmentexpendituresorsuspendourdividendpaymentsandsharerepurchases.Wemaynotbeabletoobtainadditionalfinancingontermsacceptabletousoratall.Furthermore,amajorityofourcash,cashequivalentsandshort-terminvestmentsisgeneratedfromforeignoperations,with$405.8million,or92.4%heldbyforeignsubsidiariesasofDecember31,2017.OurfinancialconditionandresultsofoperationscouldbeadverselyimpactedifweareunabletomaintainasufficientlevelofcashflowintheUnitedStatestoaddressourfundingrequirementsthroughcashfromoperationsandtimelyrepatriationofcashfromoverseasorothersourcesobtainedatanacceptablecost.

Additionally,theagreementsgoverningourdebtrequirethatwemaintaincertainfinancialratiosrelatedtomaximumleverageandminimuminterestcoverageandcontainnegativecovenants,includingamongothers,restrictionsonliens,indebtednessoftheCompanyanditssubsidiaries,assetsales,dividendsandtransactionswithaffiliates.Ourabilitytocomplywiththesefinancialrestrictionsandcovenantsisdependentonourfutureperformance,whichissubjecttoprevailingeconomicconditionsandotherfactors,includingfactorsthatarebeyondourcontrolsuchasforeigncurrencytranslationratesandinterestrates.Ourfailuretocomplywithanyoftheserestrictionsorcovenantsmayresultinaneventofdefaultundertheapplicabledebtinstrument,whichcouldpermitaccelerationofthedebtunderthefacilityandrequireustoprepaythedebtbeforeitsscheduledduedate.

Changesinoureffectiveincometaxratecouldadverselyaffectourresultsofoperations.

WearesubjecttoincometaxesinboththeUnitedStatesandvariousforeignjurisdictionsandourdomesticandinternationaltaxliabilitiesarelargelydependentuponthedistributionofincomeamongthesedifferentjurisdictions.Variousfactorsmayhavefavorableorunfavorableeffectsonoureffectiveincometaxrate.Thesefactorsincludeinterpretationsofexistingtaxlaws,theaccountingforstockoptionsandothershare-basedcompensation,changesintaxlawsandrates,includingtherecentlyenactedTaxCutsandJobsAct,futurelevelsofresearchanddevelopmentspending,changesinaccountingstandards,changesinthemixofearningsinthevarioustaxjurisdictionsinwhichweoperate,theoutcomeofexaminationsbytheU.S.InternalRevenueServiceandothertaxauthorities,theaccuracyofourestimatesforunrecognizedtaxbenefitsandrealizationofdeferredtaxassetsandchangesinoveralllevelsofpre-taxearnings.

Variousinternationaltaxriskscouldadverselyaffectourearningsandcashflows.

Wearesubjecttointernationaltaxrisks.Wecouldbesubjecttodoubletaxationonincomerelatedtooperationsincertaincountriesthatdonothavetaxtreatieswiththecountryofthetradingpartner.Inaddition,wemayhaveahighereffectiveincometaxratethanthatofothercompaniesinourindustryiflossesincurredbyoneoperatingcompanyarenotavailabletooffsettheincomeofan

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operatingcompanylocatedinanothercountry.Also,distributionsofearningsandotherpaymentsreceivedfromoursubsidiariesmaybesubjecttowithholdingtaxesimposedbythecountrieswheretheyareoperatingorareincorporated.IftheseforeigncountriesdonothaveincometaxtreatieswiththeUnitedStatesorthecountrieswhereoursubsidiariesareincorporated,wecouldbesubjecttohighratesofwithholdingtaxesonthesedistributionsandpayments.Additionally,theamountofthecreditthatwemayclaimagainstourU.S.federalincometaxforforeignincometaxespaidoraccruedissubjecttomanylimitationswhichmaysignificantlyrestrictourabilitytoclaimacreditforalloftheforeigntaxeswepay.

Wecurrentlyhavereservesestablishedforpotentialtaxliabilities.Ifthesereservesarechallenged,andweareunabletosuccessfullydefendourtaxpositions,anegativeimpacttoourcashflowscouldresult.

Theunpredictabilityandfluctuationofourquarterlyresultsmayadverselyaffectthetradingpriceofourcommonstock.

Ourrevenuesandresultsofoperationshaveinthepastandwillinthefuturevaryfromquartertoquarterduetoanumberoffactors,manyofwhichareoutsideourcontrolandanyofwhichmaycauseourstockpricetofluctuate.Theprimaryfactorsthatmayaffectusincludethefollowing:

• thetimingofsalesofourproductsandservices;

• thetimingofrecognizingrevenueanddeferredrevenueunderU.S.GAAP;

• changesinourpricingpoliciesorthepricingpoliciesofourcompetitors;

• increasesinsalesandmarketing,productdevelopmentoradministrationexpenses;

• themixofservicesprovidedbyusandthird-partycontractors;

• ourabilitytoattainandmaintainqualitylevelsforourproducts;

• costsrelatedtoacquisitionsoftechnologyorbusinesses;and

• theeffectivenessoftransactionsenteredintotohedgetherisksassociatedwithforeigncurrencyandinterestratefluctuations.

Wecanexperiencequarter-to-quarterfluctuationsinouroperatingresultsasaresultofvariousfactors,someofwhichareoutsideourcontrol,suchas:

• thetimingofgovernmentalstimulusprogramsandacademicresearchbudgets;

• thetimeittakesbetweenthedatecustomerordersanddepositsarereceived,systemsareshippedandacceptedbyourcustomersandfullpaymentisreceived;

• thetimeittakestosatisfylocalcustomsrequirementsandotherexport/importrequirements;

• thetimeittakesforcustomerstoconstructorpreparetheirfacilitiesforourproducts;and

• thetimerequiredtoobtaingovernmentallicenses.

Thesefactorshaveinthepastaffectedtheamountandtimingofrevenuerecognizedonsalesofourproductsandreceiptofrelatedpaymentsandwillcontinuetodosointhefuture.Accordingly,ouroperatingresultsinanyparticularquartermaynotnecessarilybeanindicationofanyfuturequarter'soperatingperformance.

Historicallywehavehigherlevelsofrevenueinthefourthquarteroftheyearcomparedtothefirst,secondandthirdquarters,whichwebelieveisprimarilytheresultofourcustomers'budgetingcycles.Quarter-to-quartercomparisonsofourresultsofoperationsshouldnotberelieduponasanindicationofourfutureperformance.Itislikelythatinsomefuturequarters,ourresultsofoperations

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maybebelowtheexpectationsofpublicmarketanalystsandinvestors.Inthisevent,thepriceofourcommonstockmayfall.

Existingstockholdershavesignificantinfluenceoverus.

AsofMarch12,2018,Laukienfamilymembers,includingourChairman,PresidentandChiefExecutiveOfficerFrankLaukienandDirectorJoergLaukien,owned,intheaggregate,approximately35.7%ofouroutstandingcommonstock.Asaresult,thesestockholderswillbeabletoexercisesubstantialinfluenceoverallmattersrequiringstockholderapproval,includingtheelectionofdirectorsandapprovalofsignificantcorporatetransactions.Thiscouldhavetheeffectofdelayingorpreventingachangeincontrolofourcompanyandwillmakesometransactionsdifficulttoaccomplishwithoutthesupportofthesestockholders.

Othercompaniesmayhavedifficultyacquiringus,evenifdoingsowouldbenefitourstockholders,duetoprovisionsunderourcorporatecharterandbylaws,aswellasDelawarelaw.

Provisionsinourcertificateofincorporation,asamended,andourbylaws,aswellasDelawarelawcouldmakeitmoredifficultforothercompaniestoacquireus,evenifdoingsowouldbenefitourstockholders.Ourcertificateofincorporation,asamended,andbylawscontainthefollowingprovisions,amongothers,whichmayinhibitanacquisitionofourcompanybyathirdparty:

• astaggeredBoardofDirectors,wherestockholderselectonlyaminorityoftheboardeachyear;

• advancenotificationproceduresformatterstobebroughtbeforestockholdermeetings;

• alimitationonwhomaycallstockholdermeetings;and

• theabilityofourBoardofDirectorstoissueupto5,000,000sharesofpreferredstockwithoutastockholdervote.

ITEM1BUNRESOLVEDSTAFFCOMMENTS

WehavenotreceivedanywrittencommentsfromthestaffoftheSecuritiesandExchangeCommissionregardingourperiodicorcurrentreportsthat(1)webelievearematerial,(2)wereissuednotlessthan180daysbeforetheendofour2017fiscalyearend,and(3)remainunresolved.

ITEM2PROPERTIES

Webelievethatourexistingprincipalfacilitiesarewellmaintainedandingoodoperatingconditionandthattheyareadequateforourforeseeablebusinessneeds.

Inadditiontotheprincipalfacilitiesnotedbelow,weleaseadditionalfacilitiesforsales,applicationsandservicesupportinvariouscountriesthroughouttheworldincludingAustralia,Austria,Belgium,Brazil,China,CzechRepublic,Estonia,France,Germany,HongKong,India,Israel,Italy,Japan,Malaysia,Mexico,Netherlands,Poland,Portugal,Russia,Singapore,SouthAfrica,SouthKorea,Spain,Sweden,Switzerland,Taiwan,Thailand,Turkey,Ukraine,theUnitedKingdomandtheUnitedStates.Ifweshouldrequireadditionaloralternativefacilities,webelievethatsuchfacilitiescanbeobtainedonshortnoticeatcompetitiverates.

Thelocationandgeneralcharacterofourprincipalpropertiesbyoperatingsegmentareasfollows:

BSISegment:

BrukerBioSpin'sfiveprincipalfacilitiesarelocatedinRheinstetten,EttlingenandKarlsruhe,Germany;Faellanden,Switzerland;andWissembourg,France.Thesefacilities,whichincorporate

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manufacturing,researchanddevelopment,applicationanddemonstration,marketingandsalesandadministrationfunctionsforthebusinessesofBrukerBioSpin,include:

• anowned475,000squarefootfacilityinRheinstetten,Germany;

• anowned360,000squarefootfacilityinEttlingen,Germany;

• anowned345,000squarefootfacilityinKarlsruhe,Germany;

• anowned300,000squarefootfacilityandaleased70,000squarefootfacilityinFaellanden,Switzerland;and

• anowned175,000squarefootfacilityandaleased16,000squarefootfacilityinWissembourg,France.

BrukerCALID'sthreeprincipalfacilitiesarelocatedinBremen,EttlingenandLeipzig,Germany.Thesefacilities,whichincorporatemanufacturing,researchanddevelopment,applicationanddemonstration,marketingandsalesandadministrationfunctionsforthemassspectrometryandCBRNEbusinessesofBrukerCALID,include:

• anowned270,500squarefootfacilityinBremen,Germany;

• anowned205,000squarefootfacilityinEttlingen,Germany;and

• anowned165,000squarefootfacilityinLeipzig,Germany.

BrukerNano'sfiveprincipalfacilitiesarelocatedinKarlsruheandBerlin,Germany;MigdalHa'Emek,Israel;Madison,Wisconsin,U.S.A.;andSantaBarbara,California,U.S.A.Thesefacilities,whichincorporatemanufacturing,researchanddevelopment,applicationanddemonstration,marketingandsalesandadministrationfunctionsforthebusinessesofBrukerNano,include:

• anowned76,000squarefootfacilityandanowned46,000squarefootfacilityinKarlsruhe,Germany;

• anowned100,000squarefootfacilityinSantaBarbara,California,U.S.A.;

• anowned87,000squarefootfacilityinBerlin,Germany;

• anowned43,000squarefootfacilityinMadison,Wisconsin,U.S.A.;and

• aleased22,000squarefootfacilityinMigdalHa'Emek,Israel.

BESTSegment:

BEST'sfiveprincipalfacilitiesarelocatedinHanau,BergischGladbachandAlzenau,Germany,Carteret,NewJersey,U.S.A.,andPerth,Scotland.Thesefacilities,whichincorporatemanufacturing,researchanddevelopment,applicationanddemonstration,marketingandsalesandadministrationfunctionsforthebusinessofBEST,include:

• anowned47,000squarefootfacilityinPerth,Scotland;

• aleased170,000squarefootfacilityinHanau,Germany;

• aleased80,000squarefootfacilityinBergischGladbach,Germany;

• aleased107,000squarefootfacilityinCarteret,NewJersey,U.S.A.;and

• aleased31,000squarefootfacilityinAlzenau,Germany.

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ITEM3LEGALPROCEEDINGS

Weareinvolvedinlawsuits,claims,andproceedings,including,butnotlimitedto,patentandcommercialmatters,whichariseintheordinarycourseofbusiness.Therearenosuchmatterspendingthatwecurrentlybelievearereasonablypossibleofhavingamaterialimpactonourbusinessortoourconsolidatedfinancialstatements.

Inaddition,fromtimetotime,theCompanyisthesubjectofinvestigationsbynational,stateandlocalgovernmentagenciesintheUnitedStatesandothercountriesinwhichitoperates,involving,amongotherthings,regulatory,financialreporting,marketingandotherbusinesspractices.Thesegovernmentalinvestigationsmayresultinthecommencementofcivilandcriminalproceedings,fines,penaltiesandadministrativeremediesandmayhaveamaterialadverseeffectonourfinancialposition,resultsofoperationsand/orbusiness.

OnOctober19,2017,wereceivedanoticeofinvestigationandsubpoenatoproducedocumentsfromtheDivisionofEnforcementoftheSEC.ThesubpoenaseeksinformationrelatedtoanemployeeterminatedaspartofarestructuringandcertainmattersinvolvingtheCompany'spoliciesandaccountingpracticesrelatedtorevenuerecognitionandrestructuringactivities,aswellasrelatedfinancialreporting,disclosureandcompliancematters,sinceJanuary1,2013.Thesubpoenaalsoseeksinformationconcerning,amongotherthings,theCompany'spreviouslyidentifiedmaterialweaknessininternalcontrolsovertheaccountingforincometaxes,relatedfinancialreportingmattersandcertainpaymentsfornon-employeetravelexpenses.TheCompanyisproducingdocumentsinresponsetothesubpoenaandintendstocontinuetocooperatefullywiththeSEC'sinvestigation.Atthistime,weareunabletopredicttheduration,scopeoroutcomeofthisinvestigation.

ITEM4MINESAFETYDISCLOSURE

Notapplicable.

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PARTII

ITEM5MARKETFORREGISTRANT'SCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERSANDISSUERPURCHASESOFEQUITYSECURITIES

MarketPrices

OurcommonstockistradedontheNasdaqGlobalSelectMarketunderthesymbol"BRKR."Thefollowingtablesetsforth,fortheperiodindicated,thehighandlowsalespricesforourcommonstockasreportedontheNasdaqGlobalSelectMarket:

AsofMarch12,2018,therewereapproximately88holdersofrecordofourcommonstock.Thisnumberdoesnotincludeindividualbeneficialownersofsharesheldinnomineenameorwithinclearinghousepositionsofbrokeragefirmsandbanks.

Dividends

OnFebruary22,2016,weannouncedtheestablishmentofadividendpolicyandthedeclarationbyourBoardofDirectorsofaninitialquarterlycashdividendintheamountof$0.04pershareofourissuedandoutstandingcommonstock.Cashdividendspaidin2017and2016totaled$0.04pershareineachofMarch,June,SeptemberandDecember.Underthedividendpolicy,wewilltargetacashdividendtoourstockholdersintheamountof$0.16pershareperannum,payableinequalquarterlyinstallments.Subsequentdividenddeclarationsandtheestablishmentofrecordandpaymentdatesforsuchfuturedividendpayments,ifany,aresubjecttotheBoardofDirectors'continuingdeterminationthatthedividendpolicyisinthebestinterestsofourstockholders.ThedividendpolicymaybesuspendedorcancelledatthediscretionoftheBoardofDirectorsatanytime.Weareincompliancewithrestrictionsthatthetermsofcertaindebtfacilitiesplaceontheamountofcashdividendsthatwecouldpotentiallypay.

RecentSalesofUnregisteredSecurities

Therewerenounregisteredsalesofequitysecuritiesduringthefourthquarterof2017.

High Low FirstQuarter2017 $ 25.39 $ 21.20SecondQuarter2017 30.02 21.83ThirdQuarter2017 30.23 26.98FourthQuarter2017 36.53 29.59

FirstQuarter2016 $ 29.23 $ 20.90SecondQuarter2016 29.85 21.76ThirdQuarter2016 25.37 21.38FourthQuarter2016 23.52 19.59

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IssuerPurchasesofEquitySecurities

ThefollowingtablesetsforthallpurchasesmadebyoronbehalfoftheCompanyorany"affiliatedpurchaser,"asdefinedinRule10b-18(a)(3)undertheExchangeAct,ofsharesofourcommonstockduringeachmonthinthefourthquarterof2017.

Period

TotalNumberofShares

Purchased(1)

AveragePricePaidperShare

TotalNumberofSharesPurchasedasPartofPublicly

AnnouncedPlansorPrograms(2)

MaximumNumberofShares(or

approximatedollarvalue)thatMayYetBePurchasedUnder

thePlansorPrograms(3)

October1-October31,2017 560,000 $ 30.55 560,000 $ 76,090,259November1-November30,2017 100,000 32.61 100,000 72,828,939December1-December31,2017 — — — 72,828,939

660,000 $ 30.86 660,000

(1) Includes(i)sharesrepurchasedundera$225millionsharerepurchaseprogramapprovedbytheBoardofDirectorsandannouncedonMay12,2017(the"RepurchaseProgram"),underwhichrepurchasesofcommonstockmayoccurfromtimetotime,inamounts,atprices,andatsuchtimesastheCompanydeemsappropriate,subjecttomarketconditions,legalrequirementsandotherconsiderations.

(2) RepresentssharesrepurchasedundertheRepurchaseProgram.

(3) TheRepurchaseProgramauthorizespurchasesofupto$225millionoftheCompany'scommonstockoveratwo-yearperiodcommencingMay12,2017.AsofDecember31,2017,sharesofcommonstockwithanaggregatecostofapproximately$152.2millionhavebeenrepurchased.TheremainingauthorizationundertheRepurchaseProgramis$72.8millionasofMarch12,2018.TheRepurchaseProgramexpiresMay11,2019andcanbesuspended,modifiedorterminatedatanytimewithoutpriornotice.

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StockPricePerformanceGraph

Thegraphbelowshowsthecumulativestockholderreturn,assumingtheinvestmentof$100(andthereinvestmentofanydividendsthereafter)fortheperiodbeginningonDecember31,2012andendingonDecember31,2017,forourcommonstock,stockstradedonNasdaq,andapeergroupconsistingofU.S.PublicCompanieswithaStandardIndustryClassification,orSIC,code3826LaboratoryAnalyticalInstruments.ThestockpriceperformanceofBrukerCorporationshowninthefollowinggraphisnotindicativeoffuturestockpriceperformance.

Comparisonof5YearCumulativeTotalReturnAssumesInitialInvestmentof$100

December2017

ThedataforthisperformancegraphwascompiledbyZack'sInvestmentResearch,Inc.andisusedwiththeirpermission.

CumulativeTotalReturnIndexfor: 2012 2013 2014 2015 2016 2017 BrukerCorporation $ 100.0 $ 129.7 $ 128.7 $ 159.3 $ 139.9 $ 228.0NASDAQStockMarket(UScompanies) 100.0 139.4 160.7 173.1 190.1 203.1SICCode3826LaborartoryAnalyticalInstruments 100.0 140.6 165.5 181.7 176.7 265.7

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ITEM6SELECTEDFINANCIALDATA

TheconsolidatedstatementsofincomeandcomprehensiveincomedataforeachoftheyearsendedDecember31,2017,2016and2015,andtheconsolidatedbalancesheetdataasofDecember31,2017and2016,havebeenderivedfromourauditedconsolidatedfinancialstatementsincludedinItem8inthisAnnualReportonForm10-K.

ThedatapresentedbelowwasderivedfromconsolidatedfinancialstatementsthatwerepreparedinaccordancewithU.S.generallyacceptedaccountingprinciplesandshouldbereadwiththeconsolidatedandcombinedfinancialstatements,includingthenotesthereto,and"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"includedelsewhereinthisAnnualReportonForm10-K.

YearEndedDecember31, 2017(1) 2016(2) 2015(3) 2014(4) 2013(5) (inmillions,exceptpersharedata) Consolidated/CombinedStatementsofIncomeData: Productrevenue $ 1,479.5 $ 1,345.4 $ 1,381.1 $ 1,571.9 $ 1,611.4Servicerevenue 278.2 254.7 235.5 231.8 219.3Otherrevenue 8.2 11.2 7.2 5.2 8.7Totalrevenue 1,765.9 1,611.3 1,623.8 1,808.9 1,839.4Totalcostsandoperatingexpenses 1,551.2 1,434.1 1,478.1 1,703.5 1,691.2Operatingincome 214.7 177.2 145.7 105.4 148.2NetincomeattributabletoBrukerCorporation 78.6 153.6 101.6 56.7 80.1Netincomepercommonshareattributableto BrukerCorporationshareholders: Basic $ 0.50 $ 0.95 $ 0.60 $ 0.34 $ 0.48Diluted $ 0.49 $ 0.95 $ 0.60 $ 0.33 $ 0.48

Cashdividendsdeclaredpercommonshare $ 0.16 $ 0.16 $ — $ — $ —

(1) 2017includes$16.2millionofrestructuringcostsand$1.1millionofimpairmentofotherlong-livedassetsandincludes$68.9millionofincrementalincometaxprovisionrelatedtothe2017TaxAct.

(2) 2016includes$20.8millionofrestructuringcostsand$0.8millionofimpairmentofotherlong-livedassets.

(3) 2015includes$29.3millionofrestructuringcostsand$4.6millionofimpairmentofgoodwill,definite-livedintangibleassetsandotherlong-livedassets.

(4) 2014includes$36.1millionofrestructuringcostsand$11.5millionofimpairmentofdefinite-livedintangibleassetsandotherlong-livedassets.

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(5) 2013includes$25.3millionofrestructuringcosts.

YearEndedDecember31, 2017 2016(1) 2015 2014(2) 2013 (inmillions) Consolidated/CombinedBalanceSheetData: Cashandcashequivalents $ 325.0 $ 342.4 $ 267.1 $ 319.5 $ 438.7Short-terminvestments 114.2 157.9 201.2 178.0 —Workingcapital(3) 834.3 751.2 677.0 783.6 783.3Totalassets 1,948.5 1,808.4 1,730.0 1,863.7 1,987.1Totaldebt 415.6 411.7 265.8 353.9 353.8Otherlong-termliabilities 274.9 199.0 177.4 156.2 135.2Totalshareholders'equity 733.5 693.1 732.9 771.7 850.2

(1) In2016,theCompanyadoptedAccountingStandardsUpdate2015-03,Simplifying the Presentation of Debt Issuance Costs ,andreclassifiedthedebtissuancecostsassociatedwiththeseniorunsecurednotestoareductionofthecarryingamountofdebtinsteadofasanotherassetasofeachoftheyearspresentedabove.Theimpactwas$0.9million,$1.1million,$1.2millionand$1.4millionineachoftheyearsendedDecember31,2015,2014and2013,respectively.

(2) In2014,theCompanycommencedaprogramtoenterintotimedepositswithvaryingmaturitydatesaswellascalldeposits.Basedonthecallandmaturitydates,certainoftheseinvestmentshavebeenclassifiedasshort-terminvestments.

(3) Workingcapitalisdefinedintheabovetableascurrentassetslesscurrentliabilites.

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ITEM7MANAGEMENT'SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONS

ThefollowingManagement'sDiscussionandAnalysisofFinancialConditionandResultsofOperations,orMD&A,describestheprincipalfactorsaffectingtheresultsofouroperations,financialconditionandchangesinfinancialcondition,aswellasourcriticalaccountingpoliciesandestimates.OurMD&Aisorganizedasfollows:

• Overview. Thissectionprovidesabriefdiscussionofourreportablesegments'resultsofoperations,significantrecentdevelopmentsinourbusinesses,andchallengesandrisksthatmayimpactourbusinessesinthefuture.

• Results of Operations. ThissectionprovidesouranalysisofthesignificantlineitemsonourconsolidatedstatementsofincomeandcomprehensiveincomefortheyearendedDecember31,2017comparedtotheyearendedDecember31,2016andfortheyearendedDecember31,2016comparedtotheyearendedDecember31,2015.

• Liquidity and Capital Resources. Thissectionprovidesananalysisofourliquidityandcashflowandadiscussionofouroutstandingdebtandcommitments.

• Critical Accounting Policies and Estimates. Thissectiondiscussestheaccountingestimatesthatareconsideredimportanttoourfinancialconditionandresultsofoperationsandrequireustoexercisesubjectiveorcomplexjudgmentsintheirapplication.AllofoursignificantaccountingpoliciesaresummarizedinNote2toourconsolidatedfinancialstatementsinItem8ofthisAnnualReportonForm10-K.

• Recent Accounting Pronouncements. Thissectionprovidesasummaryofrecentaccountingpronouncementsanddiscussestheirpotentialimpactonourconsolidatedfinancialstatements.

• Transactions with Related Parties. Thissectionsummarizestransactionswithrelatedparties.

StatementscontainedinManagement'sDiscussionandAnalysisofFinancialConditionandResultsofOperations,whichexpressthatwe"believe,""anticipate,""plan,""expect,""seek,""estimate,"or"should,"aswellasotherstatementswhicharenothistoricalfact,areforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Actualeventsorresultsmaydiffermateriallyfromthosesetforthinforward-lookingstatements.Certainfactorsthatmightcausesuchadifferencearediscussedin"RiskFactors"and"Management'sDiscussionandAnalysisofFinancialConditionandResultsofOperations"inthisAnnualReportonForm10-KfortheyearendedDecember31,2017.

AlthoughourconsolidatedfinancialstatementshavebeenpreparedinaccordancewithgenerallyacceptedaccountingprinciplesintheUnitedStatesofAmerica(GAAP),webelievedescribingrevenueandexpenses,excludingtheeffectsofforeigncurrency,acquisitionsanddivestitures,aswellascertainothercharges,net,providesmeaningfulsupplementalinformationregardingourperformance.Specifically,managementbelievesthatfreecashflowandorganicrevenue,bothnon-GAAPfinancialmeasures,aswellasnon-GAAPgrossprofitmarginandnon-GAAPoperatingmargin,providerelevantandusefulinformationwhichiswidelyusedbyequityanalysts,investorsandcompetitorsinourindustry,aswellasbyourmanagement,inassessingbothconsolidatedandbusinessunitperformance.WedefinethetermorganicrevenueasGAAPrevenueexcludingtheeffectofforeigncurrencytranslationchangesandtheeffectofacquisitionsanddivestitures.Wedefinethetermnon-GAAPgrossprofitmarginasGAAPgrossprofitmarginwithcertainnon-GAAPmeasuresexcludedandnon-GAAPoperatingmarginasGAAPoperatingmarginwithcertainnon-GAAPmeasuresexcluded.Thesenon-GAAPmeasuresexcludecostsrelatedtorestructuringactions,acquisitionandrelatedintegrationexpenses,amortizationofacquiredintangibleassetsandothercoststhatareinfrequentornon-recurringinnatureandwebelievetheseareusefulmeasurestoevaluateourcontinuingbusiness.

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Wedefinefreecashflowasnetcashprovidedbyoperatingactivitieslessadditionstoproperty,plant,andequipment.Webelievefreecashflowisausefulmeasuretoevaluateourbusinessasitindicatestheamountofcashgeneratedafteradditionstoproperty,plant,andequipmentwhichisavailablefor,amongotherthings,investmentsinourbusiness,acquisitions,sharerepurchases,dividendsandrepaymentofdebt.

Weusethesenon-GAAPfinancialmeasurestoevaluateourperiod-over-periodoperatingperformancebecauseourmanagementbelievestheyprovidemorecomparablemeasuresofourcontinuingbusinessbecausetheyadjustforcertainitemsthatarenotreflectiveoftheunderlyingperformanceofourbusiness.Thesemeasuresmayalsobeusefultoinvestorsinevaluatingtheunderlyingoperatingperformanceofourbusiness.Weregularlyusethesenon-GAAPfinancialmeasuresinternallytounderstand,manage,andevaluateourbusinessresultsandmakeoperatingdecisions.Wealsomeasureouremployeesandcompensatethem,inpart,basedonsuchnon-GAAPmeasuresandusethisinformationforourplanningandforecastingactivities.Thepresentationofthesenon-GAAPfinancialmeasuresisnotintendedtobeasubstitutefor,orsuperiorto,thefinancialinformationpreparedandpresentedinaccordancewithGAAPandmaybedifferentfromnon-GAAPfinancialmeasuresusedbyothercompanies,andtherefore,maynotbecomparableamongcompanies.

OVERVIEW

Weareorganizedintofouroperatingsegments:theBrukerBioSpinGroup,theBrukerCALIDGroup,theBrukerNanoGroupandtheBrukerEnergy&SuperconTechnologies(BEST)Segment.

FortheyearendedDecember31,2017,ourrevenueincreasedby$154.6million,or9.6%,to$1,765.9million,comparedto$1,611.3millionfortheyearendedDecember31,2016.Includedinrevenuewereanincreaseofapproximately$77.2millionattributabletoourrecentacquisitionsandanincreaseofapproximately$19.6millionfromtheimpactofforeigncurrencytranslationcausedbytheweakeningoftheU.S.DollarversustheEuroandothercurrencies.Excludingtheeffectsofforeigncurrencytranslationandourrecentacquisitions,ourorganicrevenue,anon-GAAPmeasure,increasedby$57.8million,or3.6%.

Ourgrossprofitmarginremainedapproximatelyconsistentat46.0%duringtheyearendedDecember31,2017ascomparedto46.1%duringtheyearendedDecember31,2016.ThepositiveeffectofhighersalesresultingfromimprovementsinEuropeanandIndustrialendmarketswasoffsetprimarilybyunfavorablebusinessandproductmixcausedhigherrevenuesinournowlargerBESTsegmentwhichhaslowergrossprofitmarginsandunfavorablemixwithintheBioSpinGroup.

Ouroperatingmarginincreasedto12.2%fortheyearendedDecember31,2017from11.0%duringtheyearendedDecember31,2016demonstratingoperatingleveragefollowingBruker'smulti-yearoperationaltransformationwhileappropriatelyinvestinginoursixstrategicgrowthareas.Theoperatingmarginincreaseddueprimarilytopositiveoperatingleverageonhighersales,costdisciplineandsavingsfromrestructuringinitiatives.Thesefactorsmorethanoffsetdilutionfromrecentacquisitionsandforeigncurrencytranslationseffects.

TheincometaxprovisionintheyearsendedDecember31,2017and2016was$117.5millionand$23.1million,respectively,representingeffectivetaxratesof59.4%and13.0%,respectively.TheincreaseinoureffectivetaxratefortheyearendedDecember31,2017,comparedto2016,wasprimarilyattributabletotheimpactofU.S.taxreformin2017offsetbythe2016releaseofourremainingvaluationallowancesandtherecognitionofpreviouslyunrecognizedtaxbenefitsduetotheclosureoftaxauditsin2016.Ourtaxratemaychangeovertimeastheamountandmixofjurisdictionalincomechanges.

OnDecember22,2017(EnactmentDate),thePresidentoftheUnitedStatessignedtaxreformlegislation(2017TaxAct),whichenactedawiderangeofchangestotheU.S.corporateincometax

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system,manyofwhichdiffersignificantlyfromtheprovisionsofthepreviousU.S.taxlaw.Wehavenotyetcompletedtheassessmentofthetaxeffectsassociatedwiththeenactmentofthe2017TaxAct.However,areasonableestimatehasbeenmadeoftheeffectsontheexistingdeferredtaxbalancesandtheone-timetransitiontax.Changesinthetaxratesandlawsareaccountedforintheperiodofenactment.Therefore,duringthefourthquarterof2017,werecordedanincrementalincometaxprovisionof$68.9million,whichisprimarilycomprisedofthefollowing:

• Anestimatedincometaxprovisionof$55.0millionforthefederalandstateimpactsoftheone-timedeemedrepatriationofpre-2018E&P.Inaccordancewiththe2017TaxAct,thefederalportionofthetollchargeliabilitymaybepaidovereightyears.Suchliabilitycanbereducedbycertaincredits.Accordingly,wehaverecorded$30.6millionand$2.7millioninlong-termincometaxliabilitiesandaccruedincometaxes(current),respectively,asofDecember31,2017

• Anestimatednetincometaxbenefitof$1.4million,fortheremeasurementofourdeferredtaxassetsandliabilitiesatthenewlyenactedtaxrateof21%;and

• Asaresultofthe2017TaxActandourexpectationsaboutdistributingcertaincashbalancesfromitsforeignsubsidiariestotheUnitedStates,wealsorecordedestimatedincometaxprovisionsforestimatedstateincometaxesandforeignwithholdingtaxesof$12.5million.

Theactualresultsoftheimplementationofthe2017TaxActmaymateriallydifferfromourcurrentestimatedueto,amongotherthings,furtherguidancethatmaybeissuedbyU.S.taxauthoritiesorregulatorybodiesincludingtheSECandtheFASBtointerpretthe2017TaxAct.Wewillcontinuetoanalyzethe2017TaxActandanyadditionalguidancethatmaybeissuedandfinalizethefulleffectsofapplyingthenewlegislationinthemeasurementperiod.

Earningspersharedecreasedfrom$0.95to$0.49perdilutedsharefortheyearendedDecember31,2017whencomparedtotheyearendedDecember31,2016.ThedecreasewasprimarilyduetotheimpactofU.S.taxreformwhichresultedinasignificantlyhighereffectivetaxratefortheyearendedDecember31,2017.

OperatingcashflowfortheyearendedDecember31,2017wasasourceofcashof$154.4million.FortheyearendedDecember31,2017,ourfreecashflow,anon-GAAPmeasure,was$110.7million,calculatedasfollows:

FortheyearendedDecember31,2017ourfreecashflowwas18%higherthanfortheyearendedDecember31,2016primarilyattributabletohighernetearningsadjustedfornon-cashitems,lowerinventorylevelsandtimingofemployeepayments.Theseeffectswerepartiallyoffsetbyanincreaseinaccountsreceivablescausedbyproportionatelyhighersaleslateinthefourthquarterof2017.

InMay2017,ourBoardofDirectorsapprovedasharerepurchaseprogram(the"RepurchaseProgram")thatauthorizedrepurchasesofupto$225.0millionofcommonstockovertwoyears.Atotalof5,318,063shareswererepurchasedatanaggregatecostof$152.2millioninthetwelvemonthsendedDecember31,2017.

OnFebruary22,2016,weannouncedtheestablishmentofadividendpolicyandthedeclarationbyourBoardofDirectorsofaninitialquarterlycashdividendintheamountof$0.04pershareofourissuedandoutstandingcommonstock.Dividendsamountingto$25.4millionand$25.8millionwere

YearEndedDecember31, 2017 2016 2015 Netcashprovidedbyoperatingactivities $ 154.4 $ 130.8 $ 229.2Less:Purchasesofproperty,plantandequipment 43.7 37.1 34.2FreeCashFlow $ 110.7 $ 93.7 $ 195.0

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paidduringtheyearsendedDecember31,2017and2016,respectively.Futuredividendpayments,ifanyaresubjecttoapprovalofourBoardofDirectors.Wearetargetingacashdividendtoourshareholdersintheamountof$0.16pershareperannum,payableinequalquarterlyinstallments.

IntheyearsendedDecember31,2017and2016,wecompletedvariousacquisitionsthatcomplementedourexistingmarketofferingsandaddedaftermarketandsoftwarecapabilitiestoourexistingmicrobiologybusiness.Theimpactoftheacquiredcompaniesonrevenues,netincomeandtotalassetswasnotmaterial.

Wecanexperiencequarter-to-quarterfluctuationsinouroperatingresultsasaresultofvariousfactors,someofwhichareoutsideofourcontrol,suchas:

• thetimingofgovernmentalstimulusprogramsandacademicresearchbudgets;

• thetimeittakesbetweenthedatecustomerordersanddepositsarereceived,systemsareshippedandacceptedbyourcustomersandfullpaymentisreceived;

• thetimeittakestosatisfylocalcustomsrequirementsandotherexport/importrequirements;

• thetimeittakesforcustomerstoconstructorpreparetheirfacilitiesforourproducts;and

• thetimerequiredtoobtaingovernmentallicenses.

Thesefactorshaveinthepastaffectedtheamountandtimingofrevenuerecognizedonsalesofourproductsandreceiptofrelatedpaymentsandwillcontinuetodosointhefuture.Accordingly,ouroperatingresultsinanyparticularquartermaynotnecessarilybeanindicationofanyfuturequarter'soperatingperformance.

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RESULTSOFOPERATIONS

Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016

ConsolidatedResults

ThefollowingtablepresentsourresultsfortheyearsendedDecember31,2017and2016(dollarsinmillions,exceptpersharedata):

Revenue

FortheyearendedDecember31,2017,ourrevenueincreasedby$154.6million,or9.6%,to$1,765.9million,comparedto$1,611.3millionfortheyearendedDecember31,2016.Includedinrevenuewereanincreaseofapproximately$77.2millionattributabletoourrecentacquisitionsandan

YearEndedDecember31,

2017 2016 Productrevenue $ 1,479.5 $ 1,345.4Servicerevenue 278.2 254.7Otherrevenue 8.2 11.2Totalrevenue 1,765.9 1,611.3

Costofproductrevenue 790.7 714.2Costofservicerevenue 160.8 150.0Costofotherrevenue 1.4 4.6Totalcostofrevenue 952.9 868.8Grossprofit 813.0 742.5

Operatingexpenses: Selling,generalandadministrative 415.9 390.5Researchanddevelopment 162.7 149.0Othercharges 19.7 25.8Totaloperatingexpenses 598.3 565.3Operatingincome 214.7 177.2

Interestandotherincome(expense),net (16.9) 0.4Incomebeforeincometaxesandnoncontrollinginterestinconsolidatedsubsidiaries 197.8 177.6Incometaxprovision 117.5 23.1Consolidatednetincome 80.3 154.5Netincomeattributabletononcontrollinginterestinconsolidatedsubsidiaries 1.7 0.9NetincomeattributabletoBrukerCorporation $ 78.6 $ 153.6

Netincomepercommonshareattributableto BrukerCorporationshareholders: Basic $ 0.50 $ 0.95Diluted $ 0.49 $ 0.95

Weightedaveragecommonsharesoutstanding: Basic 158.1 161.4Diluted 159.1 162.2

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increaseofapproximately$19.6millionfromtheimpactofforeigncurrencytranslationcausedbytheweakeningoftheU.S.DollarversustheEuroandothercurrencies.Excludingtheeffectsofforeigncurrencytranslationandourrecentacquisitions,ourorganicrevenue,anon-GAAPmeasure,increasedby$57.8million,or3.6%.

GrossProfit

OurgrossprofitfortheyearendedDecember31,2017was$813.0million,resultinginagrossprofitmarginof46.0%,comparedto$742.5million,resultinginagrossprofitmarginof46.1%,fortheyearendedDecember31,2016.Includedingrossprofitwerevariouschargesforamortizationofacquisition-relatedintangibleassetsandotheracquisition-relatedcostsandrestructuringcoststotaling$36.1millionand$31.9millionfortheyearsendedDecember31,2017and2016,respectively.Excludingthesecharges,ournon-GAAPgrossprofitmarginswas48.1%ineachoftheyearsendedDecember31,2017and2016.

Selling,GeneralandAdministrative

Ourselling,generalandadministrativeexpensesfortheyearendedDecember31,2017increasedto$415.9million,or23.6%ofrevenue,from$390.5million,or24.2%ofrevenue,fortheyearendedDecember31,2016.TheincreasewasprimarilycausedbytheeffectofrecentacquisitionsinourBrukerNanoGroupandBrukerCALIDGroup.Thedecreaseinselling,generalandadministrativeexpensesasapercentageofrevenuewasattributabletocostcontroldisciplineandsavingsassociatedwithrestructuringinitiatives.

OurresearchanddevelopmentexpensesfortheyearendedDecember31,2017increasedto$162.7million,or9.2%ofrevenue,from$149.0million,or9.2%ofrevenue,fortheyearendedDecember31,2016.TheincreasewasprimarilycausedbytheeffectofrecentacquisitionsinourBrukerNanoGroupandBrukerCALIDGroup.

OtherCharges,Net

Othercharges,netwas$19.7millionfortheyearendedDecember31,2017,ofwhich$18.7millionrelatedtotheBSISegmentand$1.0millionrelatedtotheBESTSegment.Thechargesconsistedprimarilyof$10.6millionofrestructuringcostsrelatedtoclosingfacilitiesandimplementingoutsourcingandotherrestructuringinitiatives,$4.5millionrelatedprimarilytoadditionalcontingentconsiderationrecognizedfortheacquisitionofJordanValleySemiconductors,Ltd.("JordanValley")baseduponanincreaseinrevenuelevelsoftheacquiredbusinesswhichincreasedtheamountofexpectedearnoutpayments,$4.2millionofcostsassociatedwithourglobalinformationtechnology(IT)transformationinitiativeandimpairmentchargesof$0.2millioncomprisedofotherlong-livedassetsrelatedtotherestructuringactions.

Othercharges,netwas$25.8millionfortheyearendedDecember31,2016,ofwhich$25.2millionrelatedtotheBSISegmentand$0.6millionrelatedtotheBESTSegment.Thechargesconsistedprimarilyof$9.8millionofrestructuringcostsrelatedtoclosingfacilitiesandimplementingoutsourcingandotherrestructuringinitiatives,$9.0millionrelatedprimarilytoadditionalcontingentconsiderationrecognizedfortheJordanValleyacquisitionbaseduponanincreaseinrevenuelevelsoftheacquiredbusinesswhichincreasedtheamountofexpectedearnoutpayments,$6.2millionofcostsassociatedwithourglobalITtransformationinitiativeandimpairmentchargesof$0.8millioncomprisedofotherlong-livedassetsrelatedtotherestructuringactionswithintheBrukerCALIDandBrukerNanoGroupsduringtheyear.

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In2018,weexpecttoincur$7.0to$10.0millionofexpenserelatedtovariousoutsourcinginitiativesandotherrestructuringactivitiesthatwereimplementedin2017orwillcommencein2018.

AtDecember31,2017and2016,weperformedourannualgoodwillandindefinite-livedintangibleimpairmentevaluationandconcludedthefairvaluesofeachofourreportingunitsweresignificantlygreaterthantheircarryingamounts,andtherefore,noadditionalimpairmentisrequired.

Wewillcontinuetomonitorgoodwillandlong-livedintangibleassets,aswellaslong-livedtangibleassets,forpossiblefutureimpairment.

OperatingIncome

OperatingincomefortheyearendedDecember31,2017was$214.7million,resultinginanoperatingmarginof12.2%,comparedtoincomefromoperationsof$177.2million,resultinginanoperatingmarginof11.0%,fortheyearendedDecember31,2016.Theoperatingmarginincreaseddueprimarilytopositiveoperatingleverageonhigherrevenues,costdisciplineandsavingsfromrestructuringinitiatives.Thesefactorsmorethanoffsetdilutionfromrecentacquisitionsandforeigncurrencytranslationeffects.Includedinoperatingincomewerevariouschargesforamortizationofacquisition-relatedintangibleassetsandotheracquisition-relatedcostsandrestructuringcoststotaling$61.4millionand$60.7millionfortheyearsendedDecember31,2017and2016,respectively.Excludingthesecharges,ournon-GAAPoperatingmarginswas15.6%and14.8%intheyearsendedDecember31,2017and2016,respectively.

InterestandOtherIncome(Expense),Net

Interestandotherincome(expense),netduringtheyearendedDecember31,2017was($16.9)million,comparedto$0.4millionfortheyearendedDecember31,2016.

DuringtheyearendedDecember31,2017,themajorcomponentswithininterestandotherincome(expense),netwerenetinterestexpenseof$14.6millionandrealizedandunrealizedlossesonforeigncurrencydenominatedtransactionsof$5.5million,partiallyoffsetby$2.1millionofproceedsfromacargoinsurancesettlementandagainonacquisitionof$0.6million.The$0.6milliongainonacquisitionrelatedtotheacquisitionofMERLINDiagnostikaGmbHwithintheBSISegmentasthevalueoftheassetspurchasedexceededtheconsiderationpaid.DuringtheyearendedDecember31,2016,themajorcomponentswithininterestandotherincome(expense),netwereagainonacquisitionof$9.2million,realizedandunrealizedgainsonforeigncurrencydenominatedtransactionsof$4.1million,partiallyoffsetbynetinterestexpenseof$12.9million.The$9.2milliongainonacquisitionrelatedtotheacquisitionofOxfordInstrumentsSuperconductingWireLLC("OST")withintheBESTSegmentasthevalueoftheassetspurchasedexceededtheconsiderationpaid.

Weexpecttoincurapproximately$13.5millionofinterestexpensein2018.

IncomeTaxProvision

TheincometaxprovisionintheyearsendedDecember31,2017and2016was$117.5millionand$23.1million,respectively,representingeffectivetaxratesof59.4%and13.0%,respectively.TheincreaseinoureffectivetaxratefortheyearendedDecember31,2017,comparedto2016,wasprimarilyattributableimpactofU.S.taxreformin2017whichwasoffsetbythe2016releaseofourremainingvaluationallowancesandtherecognitionofpreviouslyunrecognizedtaxbenefitsduetotheclosureoftaxauditsin2016.Ourtaxratemaychangeovertimeastheamountandmixofjurisdictionalincomechanges.

Weexpectoureffectiveincometaxratetobeapproximately25.0%fortheyearendedDecember31,2018.

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OnDecember22,2017(EnactmentDate),thePresidentoftheUnitedStatessignedtaxreformlegislation(2017TaxAct),whichenactedawiderangeofchangestotheU.S.corporateincometaxsystem,manyofwhichdiffersignificantlyfromtheprovisionsofthepreviousU.S.taxlaw.Wehavenotyetcompletedtheassessmentofthetaxeffectsassociatedwiththeenactmentofthe2017TaxAct.However,areasonableestimatehasbeenmadeoftheeffectsontheexistingdeferredtaxbalancesandtheone-timetransitiontax.Changesinthetaxratesandlawsareaccountedforintheperiodofenactment.Therefore,duringthefourthquarterof2017,werecordedanincrementalincometaxprovisionof$68.9million,whichisprimarilycomprisedofthefollowing:

Theactualresultsoftheimplementationofthe2017TaxActmaymateriallydifferfromourcurrentestimatedueto,amongotherthings,furtherguidancethatmaybeissuedbyU.S.taxauthoritiesorregulatorybodiesincludingtheSECandtheFASBtointerpretthe2017TaxAct.Wewillcontinuetoanalyzethe2017TaxActandanyadditionalguidancethatmaybeissuedandfinalizethefulleffectsofapplyingthenewlegislationinthemeasurementperiod.

ThemajorityoftheCompany'searningsarederivedinGermanyandSwitzerland.Accountingforthevariousfederalandlocaltaxingauthorities,thestatutoryratesfor2017wereapproximately30.0%and20.0%forGermanyandSwitzerland,respectively.Themixofearningsinthosetwojurisdictionsresultedinareductionof7.8%fromtheU.S.statutoryrateof35.0%in2017.TheCompanyhasnotbeenpartytoanytaxholidayagreements.

NetIncomeAttributabletoNoncontrollingInterests

NetincomeattributabletononcontrollinginterestsfortheyearendedDecember31,2017was$1.7millioncomparedto$0.9millionfortheyearendedDecember31,2016.Thenetincomeattributabletononcontrollinginterestsrepresentedtheminorityshareholders'proportionateshareofthenetincomerecordedbyourmajority-ownedindirectsubsidiaries.

NetIncomeAttributabletoBrukerCorporation

OurnetincomeattributabletoBrukerCorporationfortheyearendedDecember31,2017was$78.6million,or$0.49perdilutedshare,comparedtonetincomeof$153.6million,or$0.95perdilutedshare,for2016.ThedecreasefortheyearendedDecember31,2017wasprimarilycausedbytheimpactofU.S.taxreformasnotedabove.

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SegmentResults

Revenue

Thefollowingtablepresentsrevenue,changeinrevenue,andrevenuegrowthbyreportablesegmentfortheyearsendedDecember31,2017and2016(dollarsinmillions):

BSISegmentRevenues

Forfinancialreportingpurposes,weaggregatetheBrukerBioSpin,BrukerCALIDandBrukerNanooperatingsegmentsintotheBrukerScientificInstruments(BSI)reportablesegment,whichrepresentedapproximately90%oftheCompany'srevenuesduringtheyearendedDecember31,2017.Thisaggregationreflectstheseoperatingsegments'similareconomiccharacteristics,productionprocesses,customerservicesprovided,typesandclassesofcustomers,methodsofdistributionandregulatoryenvironments.OurBESTSegmentisourotherreportablesegmentandrepresentstheremainderofourrevenues.

BSISegmentrevenueincreasedby$91.3million,or6.1%,to$1,583.9millionfortheyearendedDecember31,2017,comparedto$1,492.6millionfortheyearendedDecember31,2016.Includedinrevenuewasanincreaseofapproximately$33.4millionrelatedtoourrecentacquisitionsandapproximately$17.3millionfromtheimpactofforeigncurrencytranslationcausedbytheweakeningoftheU.S.DollarversustheEuroandothercurrencies.Excludingtheeffectsofforeigncurrencytranslationandourrecentacquisitions,organicrevenue,anon-GAAPmeasure,increasedby$40.6million,or2.7%.

BrukerBioSpinGrouprevenueincreasedby$9.2millionto$571.9millionfortheyearendedDecember31,2017,comparedto$562.7millionfortheyearendedDecember31,2016.TheBrukerBioSpinGrouprevenueincreaseddespiteachallengingcomparisonastheyearendedDecember31,2016benefitedfromthesaleofthefirstshieldedultra-highfieldonegigahertzNMRsystemandhigherlevelsofhighfieldNMRsystems.TheincreaseinrevenuewasprimarilyattributabletotheserviceandaftermarketbusinessoftheBrukerBioSpinGroupandforeigncurrencytranslations.

BrukerCALIDGrouprevenueincreasedby$23.6millionto$499.0millionfortheyearendedDecember31,2017comparedto$475.4millionfortheyearendedDecember31,2016.TheBrukerCALIDGroupincreasewasprimarilytheresultofimprovedacademicendmarkets,particularlyformassspectrometryproductsandwithinEurope,andinfraredandRamantechnologiesusedinappliedandindustrialendmarkets,andthecontributionsofacquisitionsandforeigncurrencytranslationeffects.TheseincreaseswerepartlyoffsetbylowerCBRNErevenue,whichbenefitedfromasignificantcontractintheyearendedDecember31,2016.

BrukerNanoGrouprevenueincreasedby$58.4millionto$513.0millionfortheyearendedDecember31,2017,comparedto$454.6millionfortheyearendedDecember31,2016.TheBrukerNanoGrouprevenueincreasewasprimarilyasaresultofrecentacquisitions,growthwithintheacademicandindustrialmarketsforX-rayandnanosurfacesproductsandgrowthinsemiconductormetrologymarkets.

2017 2016 DollarChange PercentageChange

BSI $ 1,583.9 $ 1,492.6 $ 91.3 6.1%BEST 191.2 130.2 61.0 46.9%Eliminations(a) (9.2) (11.5) 2.3

$ 1,765.9 $ 1,611.3 $ 154.6 9.6%

(a) Representsproductandservicerevenuebetweenreportablesegments.

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SystemrevenueandaftermarketrevenueasapercentageoftotalBSISegmentrevenuewereasfollowsduringtheyearsendedDecember31,2017and2016(dollarsinmillions):

BESTSegmentRevenues

BESTSegmentrevenueincreasedby$61.0million,or46.9%,to$191.2millionfortheyearendedDecember31,2017,comparedto$130.2millionfortheyearendedDecember31,2016.TheincreaseinrevenueresultedfromtheOSTacquisition,whichwascompletedinthefourthquarterof2016,andorganicrevenuegrowthcausedbyhighershipmentsofsuperconductorstolargemagneticresonanceimagingcustomers.

SystemandwirerevenueandaftermarketrevenueasapercentageoftotalBESTSegmentrevenuewereasfollowsduringtheyearsendedDecember31,2017and2016(dollarsinmillions):

GrossProfitandOperatingExpenses

FortheyearendedDecember31,2017,grossprofitmarginintheBSISegmentincreasedto49.6%from48.1%intheyearendedDecember31,2016.TheincreaseingrossmarginwascausedprimarilybyhighersalesattributabletoimprovedEuropeanandindustrialendmarketsandoperatingcostimprovementsresultingfromrecentrestructuringandoperationalinitiatives.AproductmixfavoringlessprofitablelowerfieldNMRsystemswithintheBioSpinGroupwasanoffsettotheyearoveryearBSISegmentgrossmarginexpansion.TheBESTSegmentgrossprofitmargindecreasedto15.3%from17.1%fortheyearendedDecember31,2016.LowergrossmarginsresultedprimarilyfromtheimpactoftheOSTacquisition.IntegrationplansfortheBESTSegment'sOSTbusinessincludecommercialandproductivityimprovementactionsdesignedtoachievepre-acquisitiongrossprofitmarginlevels.

FortheyearendedDecember31,2017,selling,generalandadministrativeexpensesandresearchanddevelopmentexpensesintheBSISegmentincreasedto$557.8million,or35.2%ofsegmentrevenue,from$524.0million,or35.1%ofsegmentrevenue,forthecomparableperiodin2016.Selling,generalandadministrativeexpensesandresearchanddevelopmentexpensesintheBESTSegmentincreasedto$20.7million,or10.8%ofsegmentrevenue,in2017comparedto$15.5million,or11.9%ofsegmentrevenue,in2016.ThedecreaseinBESTSegmentoperatingexpensesasapercentofrevenuewasprimarilyattributabletotheincreasedrevenueduringtheyearendedDecember31,2017.

2017 2016

Revenue Percentageof

SegmentRevenue Revenue Percentageof

SegmentRevenue Systemrevenue $ 1,147.1 72.4% $ 1,092.8 73.2%Aftermarketrevenue 436.8 27.6% 399.8 26.8%Totalrevenue $ 1,583.9 100.0% $ 1,492.6 100.0%

2017 2016

SegmentRevenue Revenue Percentageof

SegmentRevenue Systemandwirerevenue $ 187.7 98.2% $ 126.9 97.5%Aftermarketrevenue 3.5 1.8% 3.3 2.5%Totalrevenue $ 191.2 100.0% $ 130.2 100.0%

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OperatingIncome

ThefollowingtablepresentsoperatingincomeandoperatingmarginsonrevenuebyreportablesegmentfortheyearsendedDecember31,2017and2016(dollarsinmillions):

BSISegmentoperatingincomefortheyearendedDecember31,2017was$208.6million,resultinginanoperatingmarginof13.2%,comparedtoincomefromoperationsof$168.9million,resultinginanoperatingmarginof11.3%,fortheyearendedDecember31,2016.Ouroperatingmarginincreasedprimarilybecauseofthegrossprofitimprovementsnotedabove,aswellasoperationalimprovementsasaresultofourrestructuringinitiatives.

BESTSegmentoperatingincomefortheyearendedDecember31,2017was$7.4million,resultinginanoperatingmarginof3.9%,comparedtooperatingincomeof$6.6million,resultinginanoperatingmarginof5.1%,fortheyearendedDecember31,2016.Thedecreaseinoperatingmarginwasprimarilytheresultofthegrossmargindeteriorationnotedabove.

2017 2016

OperatingIncome

PercentageofSegmentRevenue

OperatingIncome

BSI $ 208.6 13.2% $ 168.9 11.3%BEST 7.4 3.9% 6.6 5.1%Corporate,eliminationsandother(a) (1.3) 1.7 Totaloperatingincome $ 214.7 12.2% $ 177.2 11.0%

(a) Representscorporatecostsandeliminationsnotallocatedtothereportablesegments.

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Year Ended December 31, 2016 Compared to the Year Ended December 31, 2015

ConsolidatedResults

ThefollowingtablepresentsourresultsfortheyearsendedDecember31,2016and2015(dollarsinmillions,exceptpersharedata):

Revenue

FortheyearendedDecember31,2016,ourrevenuedecreasedby$12.5million,or0.8%,to$1,611.3million,comparedto$1,623.8millionfortheyearendedDecember31,2015.Includedinrevenuewasanincreaseofapproximately$32.4millionattributableprimarilytotheacquisitionofJordanValleyandadecreaseofapproximately$8.3millionfromtheimpactofforeigncurrencytranslationcausedbythestrengtheningoftheU.S.DollarversustheEuro,SwissFrancandother

YearEndedDecember31,

2016 2015 Productrevenue $ 1,345.4 $ 1,381.1Servicerevenue 254.7 235.5Otherrevenue 11.2 7.2Totalrevenue 1,611.3 1,623.8

Costofproductrevenue 714.2 774.2Costofservicerevenue 150.0 139.7Costofotherrevenue 4.6 1.3Totalcostofrevenue 868.8 915.2Grossprofit 742.5 708.6

Operatingexpenses: Selling,generalandadministrative 390.5 392.2Researchanddevelopment 149.0 145.7Othercharges 25.8 25.0Totaloperatingexpenses 565.3 562.9Operatingincome 177.2 145.7

Interestandotherincome(expense),net 0.4 (17.7)Incomebeforeincometaxesandnoncontrollinginterestinconsolidatedsubsidiaries 177.6 128.0Incometaxprovision 23.1 23.1Consolidatednetincome 154.5 104.9Netincomeattributabletononcontrollinginterestinconsolidatedsubsidiaries 0.9 3.3NetincomeattributabletoBrukerCorporation $ 153.6 $ 101.6

Netincomepercommonshareattributableto BrukerCorporationshareholders: Basic $ 0.95 $ 0.60Diluted $ 0.95 $ 0.60

Weightedaveragecommonsharesoutstanding: Basic 161.4 168.2Diluted 162.2 169.1

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currencies.Excludingtheeffectsofforeigncurrencytranslationandourrecentacquisitions,ourorganicrevenue,anon-GAAPmeasure,decreasedby$36.6million,or2.3%.

GrossProfit

OurgrossprofitfortheyearendedDecember31,2016was$742.5million,resultinginagrossprofitmarginof46.1%,comparedto$708.6million,resultinginagrossprofitmarginof43.6%,fortheyearendedDecember31,2015.Theincreaseinourgrossprofitmarginwascausedprimarilybyoperatingcostimprovementsasaresultofrecentrestructuringandoperationalinitiatives,theimpactofpricingincreasesandafavorablebusinessmixwithintheBrukerBioSpinGroupandtheimpactoftheJordanValleyacquisition.ThefavorableeffectoftheseitemswaspartiallyoffsetbyweaknessinBrukerNanoGroupindustrialmarketsegmentsanddelaysinEuropeanacademicfundingwithinourBrukerCALIDandBrukerNanoGroupsduringthefirstthreequartersof2016.

Selling,GeneralandAdministrative

Ourselling,generalandadministrativeexpensesfortheyearendedDecember31,2016decreasedto$390.5million,or24.2%ofrevenue,from$392.2million,or24.2%ofrevenue,fortheyearendedDecember31,2015.Selling,generalandadministrativeexpensesremainedconsistentasapercentageofrevenuecomparedtotheyearendedDecember31,2015asthefavorableimpactsofouroutsourcingandrestructuringinitiativeswasoffsetbyadditionalexpensesincurredrelatedtoour2015acquisitionofJordanValleyandotherrecentacquisitions.

OurresearchanddevelopmentexpensesfortheyearendedDecember31,2016increasedto$149.0million,or9.2%ofrevenue,from$145.7million,or9.0%ofrevenue,fortheyearendedDecember31,2015.Theincreasewasattributabletonewinitiativesrelatedtoourrecentacquisitionsandourexpandedtechnologicalportfolio.

OtherCharges,Net

Othercharges,netwas$25.8millionfortheyearendedDecember31,2016,ofwhich$25.2millionrelatedtotheBSISegmentand$0.6millionrelatedtotheBESTSegment.Thechargesconsistedprimarilyof$9.8millionofrestructuringcostsrelatedtoclosingfacilitiesandimplementingoutsourcingandotherrestructuringinitiatives,$9.0millionrelatedprimarilytoadditionalcontingentconsiderationrecognizedforJordanValleybaseduponanincreaseinrevenuelevelsoftheacquiredbusinesswhichincreasedtheamountofexpectedearnoutpayments,$6.2millionofcostsassociatedwithourglobalinformationtechnology(IT)transformationinitiativeandimpairmentchargesof$0.8millioncomprisedofotherlong-livedassetsrelatedtotherestructuringactionswithintheBrukerCALIDandBrukerNanoGroupsduringtheyear.

Othercharges,netwas$25.0millionfortheyearendedDecember31,2015andrelatedalmostentirelytotheBSISegment.Thechargesconsistedprimarilyofa$10.2millionone-time,non-cashsettlementchargeastheplanassetsandpensionobligationsfortheretireesandothercertainmembersofthepopulationwithinourpensionplaninSwitzerlandweretransferredtoanoutsideinsuranceprovider,$8.1millionofrestructuringcostsrelatedtoclosingfacilitiesandimplementingoutsourcingandotherrestructuringinitiatives,$8.9millionofcostsassociatedwithourglobalITtransformationinitiativeandimpairmentchargesof$4.6millioncomprisedofgoodwill,definite-livedintangibleassetsandotherlong-livedassets,relatedtotherestructuringactionswithintheBrukerBioSpinGroup,partiallyoffsetby($7.2)millionofcontingentconsiderationreversals,asitwasdeterminedthatcertainfinancialtargetsrelatedtotheapplicableacquisitionswouldnotmeettherequiredthresholdsforpayment.

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AtDecember31,2016and2015,weperformedourannualgoodwillandindefinite-livedintangibleimpairmentevaluationandconcludedthefairvaluesofeachofourreportingunitsweresignificantlygreaterthantheircarryingamounts,andtherefore,noadditionalimpairmentisrequired.

OperatingIncome

OperatingincomefortheyearendedDecember31,2016was$177.2million,resultinginanoperatingmarginof11.0%,comparedtoincomefromoperationsof$145.7million,resultinginanoperatingmarginof9.0%,fortheyearendedDecember31,2015.Theincreaseinoperatingmarginwasprimarilyattributabletothegrossmarginimprovementsdiscussedabove,operatingcostimprovementsasaresultofourrestructuringinitiativesandprudentcostcontrols.

InterestandOtherIncome(Expense),Net

Interestandotherincome(expense),netduringtheyearendedDecember31,2016was$0.4millioncomparedto($17.7)millionfortheyearendedDecember31,2015.

DuringtheyearendedDecember31,2016,themajorcomponentswithininterestandotherincome(expense),netwereagainonacquisitionof$9.2million,realizedandunrealizedgainsonforeigncurrencydenominatedtransactionsof$4.1million,partiallyoffsetbynetinterestexpenseof$12.9million.The$9.2milliongainonacquisitionrelatedtotheacquisitionofOSTwithintheBESTSegmentasthevalueoftheassetspurchasedexceededtheconsiderationpaid.DuringtheyearendedDecember31,2015,themajorcomponentswithininterestandotherincome(expense),netwerenetinterestexpenseof$11.8millionandrealizedandunrealizedlossesonforeigncurrencydenominatedtransactionsof$5.5million.

IncomeTaxProvision

TheincometaxprovisionineachoftheyearsendedDecember31,2016and2015was$23.1million,representingeffectivetaxratesof13.0%and18.0%,respectively.ThedecreaseinoureffectivetaxratefortheyearendedDecember31,2016,comparedto2015,wasprimarilyattributabletothereleaseofourremainingvaluationallowancesandtherecognitionofpreviouslyunrecognizedtaxbenefitsduetotheclosureoftaxaudits.Ourtaxratemaychangeovertimeastheamountandmixofjurisdictionalincomechanges.

NetIncomeAttributabletoNoncontrollingInterests

NetincomeattributabletononcontrollinginterestsfortheyearendedDecember31,2016was$0.9millioncomparedto$3.3millionfortheyearendedDecember31,2015.Thenetincomeattributabletononcontrollinginterestsrepresentedtheminorityshareholders'proportionateshareofthenetincomerecordedbyourmajority-ownedindirectsubsidiaries.

NetIncomeAttributabletoBrukerCorporation

OurnetincomeattributabletoBrukerCorporationfortheyearendedDecember31,2016was$153.6million,or$0.95perdilutedshare,comparedtonetincomeof$101.6million,or$0.60perdilutedshare,for2015.TheincreasefortheyearendedDecember31,2016wasprimarilycausedbyincreasedgrossprofit,operatingprofitimprovements,alowereffectivetaxrateandthepositiveimpactofforeigncurrencytranslationandoursharerepurchaseprogram.

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SegmentResults

Revenue

Thefollowingtablepresentsrevenue,changeinrevenue,andrevenuegrowthbyreportablesegmentfortheyearsendedDecember31,2016and2015(dollarsinmillions):

BSISegmentRevenues

Forfinancialreportingpurposes,weaggregatetheBrukerBioSpin,BrukerCALIDandBrukerNanooperatingsegmentsintotheBrukerScientificInstruments(BSI)reportablesegment,whichrepresentedapproximately93%oftheCompany'srevenuesduringtheyearendedDecember31,2016.Thisaggregationreflectstheseoperatingsegments'similareconomiccharacteristics,productionprocesses,customerservicesprovided,typesandclassesofcustomers,methodsofdistributionandregulatoryenvironments.OurBESTSegmentisourotherreportablesegmentandrepresentstheremainderofourrevenues.

BSISegmentrevenuedecreasedby$6.6million,or0.4%,to$1,492.6millionfortheyearendedDecember31,2016,comparedto$1,499.2millionfortheyearendedDecember31,2015.Includedinrevenuewasanincreaseofapproximately$26.6millionrelatedtotheacquisitionofJordanValley,offsetinpartbyapproximately$7.6millionfromtheimpactofforeigncurrencytranslationcausedbythestrengtheningoftheU.S.DollarversustheEuro,SwissFrancandothercurrencies.Excludingtheeffectsofforeigncurrencytranslationandourrecentacquisitions,ourorganicrevenue,anon-GAAPmeasure,decreasedby$25.6million,or1.7%.

BrukerBioSpinGrouprevenueincreasedby$15.7millionto$562.7millionfortheyearendedDecember31,2016,comparedto$547.0millionfortheyearendedDecember31,2015.TheBrukerBioSpinGroupincreaseinrevenuewasprimarilyduetoincreasedpricingandtherecognitionofrevenuesfromthesaleofthefirstshieldedultra-highfieldgigahertznuclearmagneticresonancesystem.

BrukerCALIDGrouprevenuedecreasedby$17.2millionto$475.4millionfortheyearendedDecember31,2016,comparedto$492.6millionfortheyearendedDecember31,2015.TheBrukerCALIDGroupexperiencedlowerrevenueprimarilyduetodelaysinEuropeanacademicfundinginthefirstthreequartersof2016andlowersalesofourMALDIBiotyperinChinaandtheUnitedStatesinthefirsthalfof2016.

BrukerNanoGrouprevenuedecreasedby$5.2millionto$454.6millionfortheyearendedDecember31,2016,comparedto$459.8millionfortheyearendedDecember31,2015.TheBrukerNanoGroupexperiencedlowerrevenueprimarilyduetodelaysinEuropeanacademicfundinginthefirstthreequartersof2016aswellascontinuedweakerdemandwithinglobalindustrialmarkets.

2016 2015 DollarChange PercentageChange

BSI $ 1,492.6 $ 1,499.2 $ (6.6) (0.4)%BEST 130.2 133.7 (3.5) (2.6)%Eliminations(a) (11.5) (9.1) (2.4)

$ 1,611.3 $ 1,623.8 $ (12.5) (0.8)%

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SystemrevenueandaftermarketrevenueasapercentageoftotalBSISegmentrevenuewereasfollowsduringtheyearsendedDecember31,2016and2015(dollarsinmillions):

BESTSegmentRevenues

BESTSegmentrevenuedecreasedby$3.5million,or2.6%,to$130.2millionfortheyearendedDecember31,2016,comparedto$133.7millionfortheyearendedDecember31,2015.ThedeclineinrevenuewasprimarilyattributabletothecompletionandfinalacceptanceoftheROSATOMpilotlineinRussia,andhighmargincustomerprojects(DESYparticleaccelerationandITERmagneticfusion)intheyearendedDecember31,2015.

SystemandwirerevenueandaftermarketrevenueasapercentageoftotalBESTSegmentrevenuewereasfollowsduringtheyearsendedDecember31,2016and2015(dollarsinmillions):

GrossProfitandOperatingExpenses

FortheyearendedDecember31,2016,grossprofitmarginintheBSISegmentincreasedto48.1%from45.5%intheyearendedDecember31,2015.Theincreaseingrossmarginpercentagewascausedprimarilybyoperatingcostimprovementsresultingfromrecentrestructuringandoperationalinitiatives,theimpactofpricingincreaseswithintheBrukerBioSpinGroupandtheimpactoftheJordanValleyacquisitionwithintheBrukerNanoGroup.TheseeffectswerepartiallyoffsetbyrevenueweaknessincertainBrukerNanoandBrukerCALIDGroupmarketsegmentsresultingfromdelaysinEuropeanacademicfundingduringthefirstthreequartersof2016.TheBESTSegmentgrossprofitmargindecreasedto17.1%from19.5%fortheyearendedDecember31,2015.LowergrossmarginsresultedprimarilyfromthecompletionoftheROSATOMpilotlineandtheDESYandITERordersin2015.

FortheyearendedDecember31,2016,selling,generalandadministrativeexpensesandresearchanddevelopmentexpensesintheBSISegmentremainedconsistentat$524.0million,or35.1%ofsegmentrevenue,from$524.2million,or35.0%ofsegmentrevenue,forthecomparableperiodin2015.Selling,generalandadministrativeexpensesandresearchanddevelopmentexpensesintheBESTSegmentincreasedto$15.5million,or11.9%ofsegmentrevenue,in2016comparedto$13.7million,or10.2%ofsegmentrevenue,in2015.TheincreaseinBESTSegmentoperatingexpenseswasprimarilyattributabletoincreasedcostsassociatedwithselectiveresearchanddevelopmentinitiatives.

2016 2015

Revenue

PercentageofSegmentRevenue Revenue

Systemrevenue $ 1,092.8 73.2% $ 1,119.7 74.7%Aftermarketrevenue 399.8 26.8% 379.5 25.3%Totalrevenue $ 1,492.6 100.0% $ 1,499.2 100.0%

2016 2015

Revenue

PercentageofSegmentRevenue Revenue

Systemandwirerevenue $ 126.9 97.5% $ 129.7 97.0%Aftermarketandotherrevenue 3.3 2.5% 4.0 3.0%Totalrevenue $ 130.2 100.0% $ 133.7 100.0%

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OperatingIncome

ThefollowingtablepresentsoperatingincomeandoperatingmarginsonrevenuebyreportablesegmentfortheyearsendedDecember31,2016and2015(dollarsinmillions):

BSIoperatingincomefortheyearendedDecember31,2016was$168.9million,resultinginanoperatingmarginof11.3%,comparedtoincomefromoperationsof$133.2million,resultinginanoperatingmarginof8.9%,fortheyearendedDecember31,2015.Ouroperatingmarginincreasedprimarilybecauseofthegrossprofitimprovementsnotedabove,aswellasoperationalimprovementsasaresultofourrestructuringinitiatives.

BESToperatingincomefortheyearendedDecember31,2016was$6.6million,resultinginanoperatingmarginof5.1%,comparedtooperatingincomeof$11.5million,resultinginanoperatingmarginof8.6%,fortheyearendedDecember31,2015.ThedecreaseinoperatingmarginisprimarilytheresultofthedecreasedgrossmarginsasaresultofthecompletionoftheROSATOMpilotlineandtheDESYandITERprojectsin2015.

LIQUIDITYANDCAPITALRESOURCES

Wecurrentlyanticipatethatourexistingcashandcreditfacilitieswillbesufficienttosupportouroperatingandinvestingneedsforatleastthenexttwelvemonths.Ourfuturecashrequirementscouldbeaffectedbyacquisitionsthatwemaycomplete,repurchasesofourcommonstock,orthepaymentofdividendsinthefuture.Historically,wehavefinancedourgrowthandliquidityneedsthroughcashflowgenerationandacombinationofdebtfinancingsandissuancesofcommonstock.Inthefuture,therearenoassurancesthatadditionalfinancingalternativeswillbeavailabletous,ifrequired,orifavailable,willbeobtainedontermsfavorabletous.

DuringtheyearendedDecember31,2017,netcashprovidedbyoperatingactivitieswas$154.4million,resultingprimarilyfromconsolidatednetincomeadjustedfornon-cashitemsof$195.0million,offsetbyanetincreaseinoperatingassetsandliabilities,netofacquisitionsanddivestitures,of$40.6million.Theincreaseinoperatingassetsandliabilities,netofacquisitionsanddivestitures,fortheyearendedDecember31,2017wasprimarilycausedbyanincreaseinaccountsreceivablescausedbyproportionatelyhighersaleslateinthefourthquarterof2017,whichwasoffsetinpartbytheincometaxaccrualsinthefourthquarterof2017relatedtoU.S.taxreformlegislation,aswellashighercompensationandrestructuringaccruals.

DuringtheyearendedDecember31,2016,netcashprovidedbyoperatingactivitieswas$130.8million,resultingprimarilyfromconsolidatednetincomeadjustedfornon-cashitemsof$219.6million,offsetbyanetincreaseinoperatingassetsandliabilities,netofacquisitionsanddivestitures,of$88.8million.Theincreaseinoperatingassetsandliabilities,netofacquisitionsanddivestitures,fortheyearendedDecember31,2016wasprimarilycausedbythetimingofcustomerpayments,asthefourthquarterof2015includedhigherthannormalcollectionsofreceivables,anincreaseininventoryin2016asaresultofinventorybuildfor2017orderswiththeBrukerBioSpin

2016 2015

OperatingIncome

BSI $ 168.9 11.3% $ 133.2 8.9%BEST 6.6 5.1% 11.5 8.6%Corporate,eliminationsandother(a) 1.7 1.0 Totaloperatingincome $ 177.2 11.0% $ 145.7 9.0%

(a) Representscorporatecostsandeliminationsnotallocatedtothereportablesegments.

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GroupandBESTSegment,incometaxpaymentsforauditsettlementsandwithholdingtaxpaymentsmadeinthefirstquarterof2016relatedtotheCompany's2015Europeancashrepatriation.

DuringtheyearendedDecember31,2017,netcashusedininvestingactivitieswas$30.2million,comparedtonetcashusedininvestingactivitiesof$21.8millionduringtheyearendedDecember31,2016.CashusedininvestingactivitiesduringtheyearendedDecember31,2017wasprimarilyduetothenetcashpaidforacquisitionsof$66.3millionandnetcapitalexpendituresof$32.2million.Theseactivitieswereoffset,inpart,bynetcashproceedsofshort-terminvestmentsof$68.3million.DuringtheyearendedDecember31,2016,netcashusedininvestingactivitieswas$21.8million,comparedtonetcashusedininvestingactivitiesof$102.4millionduringtheyearendedDecember31,2015.CashusedininvestingactivitiesduringtheyearendedDecember31,2016wasprimarilycausedbynetcapitalexpendituresof$36.0millionandcashpaidforacquisitions,netofcashacquired,of$24.3millionoffset,inpart,bymaturities,netofpurchases,ofshort-terminvestmentsof$38.5million.

Weexpectcapitalexpendituresin2018toamounttoapproximately$50.0million.

DuringtheyearendedDecember31,2017,netcashusedinfinancingactivitieswas$159.0million,comparedtonetcashusedinfinancingactivitiesof$27.9millionduringtheyearendedDecember31,2016.CashusedinfinancingactivitiesduringtheyearendedDecember31,2017wasprimarilycausedbytherepurchaseofcommonstockof$152.2million,$130.0millionofrepaymentsundertherevolvinglineofcredit,$25.4millionusedforthepaymentofdividendsand$20.0millionofrepaymentsundertheNotePurchaseAgreement.Thesecashuseswerepartiallyoffsetbyborrowingsof$154.0millionundertherevolvinglineofcreditand$20.0millionofproceedsfromtheissuanceofcommonstockinconnectionwithstockoptionexercises.CashusedinfinancingactivitiesduringtheyearendedDecember31,2016wasprimarilycausedbytherepurchaseofcommonstockof$160.0millionand$25.8millionusedforthepaymentofdividends,partiallyoffsetbyborrowingsof$146.0millionundertherevolvinglineofcreditand$11.5millionofproceedsfromtheissuanceofcommonstockinconnectionwithstockoptionexercises.

InMay2017,ourBoardofDirectorsapprovedasharerepurchaseprogram(the"RepurchaseProgram")underwhichrepurchasesofcommonstockintheamountofupto$225.0millionmayoccurfromtimetotime,inamounts,atprices,andatsuchtimesaswedeemappropriate,subjecttomarketconditions,legalrequirementsandotherconsiderations.Atotalof5,318,063shareswererepurchasedatanaggregatecostof$152.2millionasofDecember31,2017underthisRepurchaseProgram.Weintendtofundanyadditionalrepurchasesfromcashonhand,futurecashflowsfromoperationsandavailableborrowingsunderourrevolvingcreditfacility.

TherepurchasedsharesarereflectedwithinTreasurystockintheaccompanyingconsolidatedbalancesheetatDecember31,2017.

Cash,cashequivalentsandshort-terminvestmentsatDecember31,2017and2016totaled$439.2millionand$500.3million,respectively,ofwhich$405.8millionand$460.9million,respectively,relatedtocash,cashequivalentsandshort-terminvestmentsheldoutsideoftheU.S.inourforeignsubsidiaries,mostsignificantlyintheNetherlandsandSwitzerland.

AtDecember31,2017andinaccordancewiththe2017TaxAct,werecordedstateandforeignwithholdingtaxesonthecashandliquidassetsportionoftheunremittedearningsandprofits(E&P)offoreignsubsidiariesexpectedtoberepatriatedfromitsforeignsubsidiariestotheUnitedStates.Wecontinuetobeindefinitelyreinvestedamountingto$740.0millionofnon-cashE&Pthatisrelatedtothe2017TaxActdeemedrepatriation.IfthisE&PisultimatelydistributedtotheUnitedStatesintheformofdividendsorotherwisewewouldlikelybesubjecttoadditionalwithholdingtax.WewillcontinuetoevaluateourassertionsonthecumulativehistoricaloutsidebasisdifferencesinourforeignsubsidiariesasofDecember31,2017.Weexpecttofinalizeitsanalysisandaccountingrelatedtothetollchargeandanyremainingoutsidebasisdifferencesinourforeignsubsidiariesduringthe

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measurementperiod.WeestimatetheamountofunrecognizeddeferredwithholdingtaxesontheundistributedE&Ptobeapproximately$27millionatDecember31,2017.

AsofDecember31,2017,wehadapproximately$23.2millionofnetoperatinglosscarryforwardsavailabletoreducestatetaxableincome.Wealsohadapproximately$77.4millionofGermanTradeTaxandCorporateIncomeTaxnetoperatinglossesthatarecarriedforwardindefinitely.Additionally,wehad$13.9millionofotherforeignnetoperatinglossesthatareexpectedtoexpireatvarioustimesbeginningin2018.Wealsohadstateresearchanddevelopmenttaxcreditsof$7.5million.UtilizationofthesecreditsandstatenetoperatinglossesmaybesubjecttoannuallimitationsduetotheownershippercentagechangelimitationsprovidedbytheInternalRevenueCodeSection382andsimilarstateprovisions.IntheeventofadeemedchangeincontrolunderInternalRevenueCodeSection382,anannuallimitationontheutilizationofnetoperatinglossesandcreditsmayresultintheexpirationofalloraportionofthenetoperatinglossandcreditcarryforwards.

Uncertaintaxcontingenciesarepositionstakenorexpectedtobetakenonanincometaxreturnthatmayresultinadditionalpaymentstotaxauthorities.Ifataxauthorityagreeswiththetaxpositiontakenorexpectedtobetakenortheapplicablestatuteoflimitationsexpires,thenadditionalpaymentswillnotbenecessary.

AtDecember31,2017,wehadoutstandingdebttotaling$415.6million,consistingof$220.0millionoutstandingundertheNotePurchaseAgreementdescribedbelow,$195.0millionoutstandingundertherevolvingloancomponentofthe2015CreditAgreementdescribedbelowand$1.3millionundercapitalleaseobligationsandotherloans.TheseamountswereoffsetbyunamortizeddebtissuancecostsundertheNotePurchaseAgreementof$0.7million.AtDecember31,2016,wehadoutstandingdebttotaling$411.7million,consistingof$240.0millionoutstandingundertheNotePurchaseAgreementdescribedbelow,$171.0millionoutstandingundertherevolvingloancomponentofthe2015CreditAgreementdescribedbelowand$1.5millionundercapitalleaseobligationsandotherloans.TheseamountswereoffsetbyunamortizeddebtissuancecostsundertheNotePurchaseAgreementof$0.8million.

Thefollowingisasummaryofthemaximumcommitmentsandthenetamountsavailabletousunderthe2015CreditAgreementandotherlinesofcreditwithvariousfinancialinstitutionslocatedprimarilyinGermanyandSwitzerlandthatareunsecuredandtypicallydueupondemandwithinterestpayablemonthly,atDecember31,2017(inmillions):

OnOctober27,2015,weenteredintoarevolvingcreditagreement,referredtoasthe2015CreditAgreement,andterminatedthepriorcreditagreement.The2015CreditAgreementprovidesamaximumcommitmentontherevolvingcreditlineof$500.0millionandamaturitydateofOctober2020.Borrowingsundertherevolvingcreditlineofthe2015CreditAgreementaccrueinterest,attheCompany'soption,ateither(a)thegreatestof(i)theprimerate,(ii)thefederalfundsrateplus0.50%,and(iii)adjustedLIBORplus1.00%,plusmarginsrangingfrom0.00%to0.30%or(b)LIBOR,plusmarginsrangingfrom0.90%to1.30%.Thereisalsoafacilityfeerangingfrom0.10%to0.20%.

Borrowingsunderthe2015CreditAgreementaresecuredbyguaranteesfromcertainmaterialsubsidiaries,asdefinedinthe2015CreditAgreement.The2015CreditAgreementalsorequiresustomaintaincertainfinancialratiosrelatedtomaximumleverageandminimuminterestcoverage.

WeightedAverage

InterestRate

TotalAmountCommittedbyLenders

OutstandingBorrowings

OutstandingLettersofCredit

TotalAmountAvailable

2015CreditAgreement 2.7% $ 500.0 $ 195.0 $ 1.1 $ 303.9Otherlinesofcredit — 257.9 — 137.7 120.2Totalrevolvingloans $ 757.9 $ 195.0 $ 138.8 $ 424.1

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Specifically,ourleverageratiocannotexceed3.5andourinterestcoverageratiocannotbelessthan2.5.Inadditiontothefinancialratios,the2015CreditAgreementcontainsnegativecovenants,includingamongothers,restrictionsonliens,indebtednessoftheCompanyanditssubsidiaries,assetsales,dividendsandtransactionswithaffiliates.Failuretocomplywithanyoftheserestrictionsorcovenantsmayresultinaneventofdefaultonthe2015CreditAgreement,whichcouldpermitaccelerationofthedebtandrequireustoprepaythedebtbeforeitsscheduledduedate.

AsofDecember31,2017,wewereincompliancewiththecovenants,asdefinedbythe2015CreditAgreement,asourleverageratiowas1.32andourinterestcoverageratiowas15.5.

InJanuary2012,weenteredintoanotepurchaseagreement,referredtoastheNotePurchaseAgreement,withagroupofaccreditedinstitutionalinvestors.UndertheNotePurchaseAgreementweissuedandsold$240.0millionofseniornotes,whichconsistofthefollowing:

• $20.0million3.16%Series2012AseniornotesdueJanuary18,2017;

• $15.0million3.74%Series2012AseniornotesdueJanuary18,2019;

• $105.0million4.31%Series2012AseniornotesdueJanuary18,2022;and

• $100.0million4.46%Series2012AseniornotesdueJanuary18,2024.

OnJanuary18,2017,theoutstanding$20.0millionprincipalamountofTrancheAoftheSeniorNoteswasrepaidinaccordancewiththetermsoftheNotePurchaseAgreement.

UnderthetermsoftheNotePurchaseAgreement,wemayissueandselladditionalseniornotesuptoanaggregateprincipalamountof$600million,subjecttocertainconditions.InterestontheSeniorNotesispayablesemi-annuallyonJanuary18andJuly18ofeachyear.TheSeniorNotesareunsecuredobligationsofoursandarefullyandunconditionallyguaranteedbycertainofourdirectandindirectsubsidiaries.TheSeniorNotesrankparipassuinrightofrepaymentwithourotherseniorunsecuredindebtedness.WemayprepaysomeoralloftheSeniorNotesatanytimeinanamountnotlessthan10%oftheoriginalaggregateprincipalamountoftheSeniorNotestobeprepaid,atapriceequaltothesumof(a)100%oftheprincipalamountthereof,plusaccruedandunpaidinterest,and(b)theapplicablemake-wholeamount,uponnotlessthan30andnomorethan60dayswrittennoticetotheholdersoftheSeniorNotes.IntheeventofachangeincontroloftheCompany,asdefinedintheNotePurchaseAgreement,wemayberequiredtoprepaytheNotesatapriceequalto100%oftheprincipalamountthereof,plusaccruedandunpaidinterest.

TheNotePurchaseAgreementcontainsaffirmativecovenants,including,withoutlimitation,maintenanceofcorporateexistence,compliancewithlaws,maintenanceofinsuranceandproperties,paymentoftaxes,additionofsubsidiaryguarantorsandfurnishingnoticesandotherinformation.TheNotePurchaseAgreementalsocontainscertainrestrictivecovenantsthatrestrictourabilityto,amongotherthings,incurliens,transferorsellassets,engageincertainmergersandconsolidationsandenterintotransactionswithaffiliates.TheNotePurchaseAgreementalsoincludescustomaryrepresentationsandwarrantiesandeventsofdefault.Inthecaseofaneventofdefaultarisingfromspecifiedeventsofbankruptcyorinsolvency,alloutstandingSeniorNoteswillbecomedueandpayableimmediatelywithoutfurtheractionornotice.Inthecaseofpaymenteventsofdefaults,anyholderofSeniorNotesaffectedtherebymaydeclareallSeniorNotesheldbyitdueandpayableimmediately.Inthecaseofanyothereventofdefault,amajorityoftheholdersoftheSeniorNotesmaydeclarealltheSeniorNotestobedueandpayableimmediately.PursuanttotheNotePurchaseAgreement,solongasanySeniorNotesareoutstandingwewillnotpermit(i)ourleverageratio,asdeterminedpursuanttotheNotePurchaseAgreement,asoftheendofanyfiscalquartertoexceed3.50to1.00,(ii)ourinterestcoverageratioasdeterminedpursuanttotheNotePurchaseAgreementasoftheendofanyfiscalquarterforanyperiodoffourconsecutivefiscalquarterstobelessthan2.50to1or(iii)prioritydebt

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atanytimetoexceed25%ofconsolidatednetworth,asdeterminedpursuanttotheNotePurchaseAgreement.

AsofDecember31,2017,wewereincompliancewiththecovenantsoftheNotePurchaseAgreement.Ourleverageratio(asdefinedintheNotePurchaseAgreement)was1.32andourinterestcoverageratio(asdefinedintheNotePurchaseAgreement)was15.5.

ThefollowingtablesummarizesmaturitiesforoursignificantfinancialobligationsasofDecember31,2017(dollarsinmillions):

CRITICALACCOUNTINGPOLICIESANDESTIMATES

Thisdiscussionandanalysisofourfinancialconditionandresultsofoperationsisbaseduponourconsolidatedfinancialstatements,whichhavebeenpreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica,orU.S.GAAP.Thepreparationofthesefinancialstatementsrequiresthatwemakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesandthedisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandreportedamountsofrevenuesandexpensesduringthereportingperiod.Onanongoingbasis,managementevaluatesitsestimatesandjudgments,includingthoserelatedto:revenuerecognition;theexpensingandcapitalizationofsoftwaredevelopmentcosts;stock-basedcompensationexpense;restructuringandotherrelatedcharges;incometaxes,includingtherecoverabilityofdeferredtaxassets;allowancesfordoubtfulaccounts;inventoryreductionsforexcessandobsoleteinventories;estimatedfairvaluesoflong-livedassetsusedtomeasuretherecoverabilityoflong-livedassets;intangibleassetsandgoodwill;expectedfuturecashflowsusedtomeasuretherecoverabilityofintangibleassetsandlong-livedassets;warrantycosts;derivativefinancialinstruments;andcontingentliabilities.Webaseourestimatesandjudgmentsonourhistoricalexperience,currentmarketandeconomicconditions,industrytrends,andotherassumptionsthatwebelievearereasonableandform

ContractualObligations Total Lessthan1

Year 1-3Years 4-5Years Morethan5Years

Revolvinglinesofcredit $ 195.0 $ — $ 195.0 $ — $ —Otherlong-termdebt,includingcurrentportion 220.6 — 14.9 104.9 100.8Interestpayableonlong-termdebtandrevolvinglinesofcredit 65.1 14.8 27.9 15.7 6.7Unconditionalpurchasecommitments(1) 164.0 157.0 6.8 0.2 —Acquisition-relatedcontingentconsideration(2) 12.7 6.5 2.9 3.3 —Operatingleaseobligations 76.9 21.2 27.4 14.7 13.62017TaxActimpact 33.3 2.7 8.0 7.7 14.9Pensionliabilities 45.5 2.7 6.0 8.0 28.8Uncertaintaxcontingencies 4.6 1.1 0.9 0.1 2.5

$ 817.7 $ 206.0 $ 289.8 $ 154.6 $ 167.3

(1) Unconditionalpurchasecommitmentsincludeagreementstopurchasegoods,services,orfixedassetsthatareenforceableandlegallybindingandthatspecifyallsignificantterms,including:fixedorminimumquantitiestobepurchased;fixed,minimumorvariablepriceprovisions;andtheapproximatetimingofthetransaction.Purchasecommitmentsexcludeagreementsthatarecancellableatanytimewithoutpenalty.

(2) Acquisition-relatedcontingentconsiderationsrepresentstheestimatedfairvalueoffuturepaymentstotheformershareholdersofapplicableacquiredcompaniesbasedonachievingannualrevenueandgrossmargintargetsincertainyearsasspecifiedinthepurchaseandsaleagreements.

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thebasisformakingjudgmentsaboutthecarryingvalueofassetsandliabilitiesthatarenotreadilyapparentfromothersources.Actualresultscoulddifferfromtheseestimates.

Webelievethefollowingcriticalaccountingpoliciesandestimatestobeboththosemostimportanttotheportrayalofourfinancialpositionandresultsofoperationsandthosethatrequirethemostestimationandsubjectivejudgment.

Revenue recognition. Werecognizerevenuefromsystemsaleswhenpersuasiveevidenceofanarrangementexists,thepriceisfixedordeterminable,titleandriskoflosshasbeentransferredtothecustomer,andcollectabilityoftheresultingreceivableisreasonablyassured.Titleandriskoflossgenerallytransfersuponshipment,orforcertainsystems,baseduponcustomeracceptanceforasystemthathasbeendeliveredtothecustomerandinstalledatacustomerfacility.Forsystemsthatincludecustomer-specificacceptancecriteria,wearerequiredtoassesswhenwecandemonstratetheacceptancecriteriahasbeenmet,whichgenerallyisuponsuccessfulfactoryacceptancetestingorcustomeracceptanceandevidenceofinstallation.

Whenproductsaresoldthroughanindependentdistributororastrategicdistributionpartnerwhoassumesresponsibilityforinstallation,werecognizethesystemsalewhentheproducthasbeenshippedandtitleandriskoflosshavebeentransferredtothedistributor.Ourdistributorsdonothavepriceprotectionrightsorrightsofreturn;however,ourproductsaretypicallywarrantedtobefreefromdefectforaperiodofoneyear.Revenueisdeferreduntilcashisreceivedwhencollectabilityisnotreasonablyassuredorwhenthepriceisnotfixedordeterminable.

Fortransactionsthatincludemultipleelements,arrangementconsiderationisallocatedtoeachelementusingthefairvaluehierarchyasrequiredbyASUNo.2009-13.Welimittheamountofrevenuerecognizedfordeliveredelementstotheamountthatisnotcontingentonthefuturedeliveryofproductsorservices,futureperformanceobligations,orsubjecttocustomer-specificreturnorrefundprivileges.

Wedeterminethefairvalueofproductsandservicesbaseduponvendorspecificobjectiveevidence("VSOE").WedetermineVSOEbasedonnormalsellingpricinganddiscountingpracticesforthespecificproductorservicewhensoldonastand-alonebasis.IndeterminingVSOE,ourpolicyrequiresasubstantialmajorityofsellingpricesforaproductorservicetobewithinareasonablynarrowrange.Wealsoconsidertheclassofcustomer,methodofdistributionandthegeographiesintowhichproductsandservicesarebeingsoldwhendeterminingVSOE.

IfVSOEcannotbeestablished,weattempttoestablishthesellingpricebasedonthird-partyevidence("TPE").VSOEcannotbeestablishedininstanceswhereaproductorservicehasnotbeensoldseparately,stand-alonesalesaretooinfrequentorproductpricingisnotwithinasufficientlynarrowrange.TPEisdeterminedbasedoncompetitorpricesforsimilardeliverableswhensoldseparately.

WhenwecannotdetermineVSOEorTPE,weuseestimatedsellingprice("ESP")inourallocationofarrangementconsideration.TheobjectiveofESPistodeterminethepriceatwhichwewouldtypicallytransactastand-alonesaleoftheproductorservice.ESPisdeterminedbyconsideringanumberoffactorsincludingourpricingpolicies,internalcostsandgrossprofitobjectives,methodofdistribution,marketresearchandinformation,recenttechnologicaltrends,competitivelandscapeandgeographies.Weanalyzethesellingpricesusedinourallocationofarrangementconsideration,ataminimum,onanannualbasis.Sellingpriceswillbeanalyzedmorefrequentlyifasignificantchangeinourbusinessoccursorotherfactorsnecessitatemorefrequentanalysis,orifweexperiencesignificantvariancesinoursellingprices.

Revenuefromaccessoriesandconsumablepartsisgenerallyrecognizeduponshippingterms.Servicerevenueisrecognizedastheservicesareperformedorratablyoverthecontractualobligation

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andincludesmaintenancecontracts,extendedwarranty,training,applicationsupportandon-demandservices.

Wealsohavecontractsforwhichweapplythepercentage-of-completionmodelandcompletedcontractmodelofrevenuerecognition.Applicationofthepercentage-of-completionmethodrequiresustomakereasonableestimatesoftheextentofprogresstowardcompletionofthecontractandthetotalcostswewillincurunderthecontractandlossesarerecordedimmediatelywhenweestimatethatcontractswillultimatelyresultinaloss.Changesintheestimatescouldaffectthetimingofrevenuerecognition.

Otherrevenuesareprimarilycomprisedofdevelopmentarrangementsrecognizedonacost-plus-fixed-feebasisandlicensingarrangementsrecognizedratablyoverthetermoftherelatedcontracts.

Income taxes. Thedeterminationofincometaxexpenserequiresustomakecertainestimatesandjudgmentsconcerningtheannualeffectivetaxrate,thecalculationofdeferredtaxassetsandliabilities,theforecastedprofitabilityofoursubsidiariesincertaingeographicjurisdictions,aswellasthedeductions,carryforwardsandcreditsthatareavailabletoreducetaxableincome.Deferredtaxassetsandliabilitiesarisefromdifferencesinthetimingoftherecognitionofrevenueandexpensesforfinancialstatementandtaxpurposes.Deferredtaxassetsandliabilitiesaremeasuredusingthetaxratesineffectfortheyearinwhichthesetemporarydifferencesareexpectedtobesettled.Weestimatethedegreetowhichtaxassetsandlosscarryforwardswillresultinabenefitbasedonexpectedprofitabilitybytaxjurisdiction,andweprovideavaluationallowancefortaxassetsandlosscarryforwardsthatwebelievewillmorelikelythannotgounused.Ifitbecomesmorelikelythannotthatataxassetorlosscarryforwardwillbeusedforwhichavaluationallowancehasbeenprovided,wereversetherelatedvaluationallowance.Ifouractualfuturetaxableincomebytaxjurisdictiondiffersfromestimates,additionalallowancesorreversalsofavaluationallowancemaybenecessary.Inaddition,weonlyrecognizebenefitsfortaxpositionsthatwebelievearemorelikelythannotofbeingsustaineduponreviewbyataxingauthoritywithknowledgeofallrelevantinformation.Wereevaluateouruncertaintaxpositionsonaquarterlybasisandanychangestothesepositionsasaresultoftaxaudits,taxlawsorotherfactsandcircumstancescouldresultinadditionalchargesorcreditstooperations.Theexpirationofstatutesoflimitationsaffectingestimatesmadeforuncertaintaxpositionscancausehigherearnings.

OnDecember22,2017(EnactmentDate),thePresidentoftheUnitedStatessignedtaxreformlegislation(2017TaxAct),whichenactedawiderangeofchangestotheU.S.corporateincometaxsystem,manyofwhichdiffersignificantlyfromtheprovisionsofthepreviousU.S.taxlaw.Wehavenotyetcompletedtheassessmentofthetaxeffectsassociatedwiththeenactmentofthe2017TaxAct;however,areasonableestimatehasbeenmadeoftheeffectsontheexistingdeferredtaxbalancesandtheone-timetransitiontax.Changesinthetaxratesandlawsareaccountedforintheperiodofenactment.Theactualresultsoftheimplementationofthe2017TaxActmaymateriallydifferfromourcurrentestimatedueto,amongotherthings,furtherguidancethatmaybeissuedbyU.S.taxauthoritiesorregulatorybodiesincludingtheSECandtheFASBtointerpretthe2017TaxAct.Wewillcontinuetoanalyzethe2017TaxActandanyadditionalguidancethatmaybeissuedandfinalizethefulleffectsofapplyingthenewlegislationinthemeasurementperiod.

Inventories. Inventoriesarestatedatthelowerofcostandnetrealizablevalue,withcostsdeterminedbythefirst-in,first-outmethodforamajorityofsubsidiariesandbyaveragecostforcertainothersubsidiaries.Werecordprovisionstoaccountforexcessandobsoleteinventorytoreflecttheexpectednon-saleableornon-refundableinventorybasedonanevaluationofslowmovingproductsorproductsnolongerofferedforsale.Inventoriesalsoincludedemonstrationunitslocatedinourdemonstrationlaboratoriesorinstalledatthesitesofpotentialcustomers.Weconsiderourdemonstrationunitstobeavailableforsaleandhaveahistoryofsellingthesedemonstrationunits.We

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reducethecarryingvalueofdemonstrationinventoriesfordifferencesbetweencostandestimatednetrealizablevalue,takingintoconsiderationusageintheprecedingtwelvemonths,expecteddemand,technologicalobsolescenceandotherinformationincludingthephysicalconditionoftheunit.Ifultimateusageordemandvariessignificantlyfromexpectedusageordemand,additionalwrite-downsmayberequired,resultinginadditionalchargestooperations.

Goodwill, other intangible assets and other long-lived assets. Weevaluategoodwillforimpairmentannuallyandwheneventsoccurorcircumstanceschange.Wetestgoodwillforimpairmentatthereportingunitlevel,whichistheoperatingsegmentoronelevelbelowanoperatingsegment.UnderU.S.GAAP,wehavetheoptionofperformingaqualitativeassessmenttodeterminewhetherfurtherimpairmenttestingisnecessarybeforeperformingatwo-stepquantitativeassessment.Thequalitativeassessmentrequiressignificantjudgmentsaboutmacro-economicconditionsincludingtheentity'soperatingenvironment;itsindustryandothermarketconsiderations;entity-specificeventsrelatedtofinancialperformanceorlossofkeypersonnel;andothereventsthatcouldimpactthereportingunit.If,asaresultofourqualitativeassessment,itismore-likely-than-notthatthefairvalueofareportingunitislessthanitscarryingamount,thequantitativeimpairmenttestwillberequired.Otherwise,nofurthertestingisrequired.Ifaquantitativeimpairmenttestisperformed,thefirststepinvolvescomparingthefairvaluesoftheapplicablereportingunitswiththeiraggregatecarryingvalues,includinggoodwill.Wegenerallydeterminethefairvalueofourreportingunitsusingaweightingofboththemarketapproachandtheincomeapproachmethodologies.Theincomeapproachvaluationmethodologyincludesdiscountedcashflowestimates.Estimatingthefairvalueofthereportingunitsrequiressignificantjudgmentaboutthefuturecashflows.Ifthecarryingamountofareportingunitexceedsthefairvalueofthereportingunit,weperformthesecondstepofthegoodwillimpairmenttesttomeasuretheamountoftheimpairment.Inthesecondstepofthegoodwillimpairmenttest,wecomparetheimpliedfairvalueofthereportingunit'sgoodwillwiththecarryingvalueofthatgoodwill.AtDecember31,2017,weperformedourannualgoodwillandindefinite-livedintangibleimpairmentevaluationusingaqualitativeimpairmenttestandconcludedthefairvaluesofeachofourreportingunitsweresignificantlygreaterthantheircarryingamounts,andtherefore,noadditionalimpairmentwasrequired.

Wealsoreviewdefinite-livedintangibleassetsandotherlong-livedassetswhenindicationsofpotentialimpairmentexist.Shouldthefairvalueofourlong-livedassetsdeclinebecauseofreducedoperatingperformance,marketdeclinesorotherindicatorsofanimpairment,achargetooperationsforimpairmentmaybenecessary.

RECENTACCOUNTINGPRONOUNCEMENTS

InJanuary2017,theFinancialAccountingStandardsBoard("FASB")issuedAccountingStandardsUpdate("ASU")2017-04,Intangibles-Goodwill andOther (Topic 350): Simplifying the Test for Goodwill Impairment. Thenewstandardsimplifiesthesubsequentmeasurementofgoodwillbyeliminatingthesecondstepofthegoodwillimpairmenttest.ThisASUwillbeappliedprospectivelyandiseffectiveforannualorinterimgoodwillimpairmenttestsinfiscalyearsbeginningafterDecember15,2019.Theadoptionofthisstandardisnotexpectedtohaveamaterialimpactonourfinancialposition,resultsofoperationsorstatementsofcashflowsuponadoption.

InJanuary2017,theFASBissuedASUNo.2017-01,Business Combinations (Topic 805): Clarifying the Definition of a Business. Thisnewstandardclarifiesthedefinitionofabusinessandprovidesascreentodeterminewhenanintegratedsetofassetsandactivitiesisnotabusiness.Thescreenrequiresthatwhensubstantiallyallofthefairvalueofthegrossassetsacquired(ordisposedof)isconcentratedinasingleidentifiableassetoragroupofsimilaridentifiableassets,thesetisnotabusiness.ThisnewstandardwasadoptedasoftheeffectivedateofJanuary1,2018.WehaveevaluatedtheprovisionsofthisstandardandhavedeterminedthattheimpactofadoptionofASUNo.2017-01wasnotmaterialtoourconsolidatedfinancialstatements.

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InOctober2016,theFASBissuedASUNo.2016-16,Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory .Thenewstandardrequiresrecognitionofcurrentanddeferredincometaxesresultingfromanintra-entitytransferofanyasset(excludinginventory)whenthetransferoccurs.ThisisachangefromexistingU.S.GAAPwhichprohibitsrecognitionofcurrentanddeferredincometaxesuntiltheassetissoldtoathirdparty.ThisnewstandardwasadoptedasoftheeffectivedateofJanuary1,2018.WehaveevaluatedtheprovisionsofthisstandardandhavedeterminedthattheimpactofadoptionofASUNo.2016-16wasnotmaterialtoourconsolidatedfinancialstatements.

InFebruary2016,theFASBissuedASUNo.2016-02,Leases .Thenewstandardprovidesguidanceontherecognition,measurement,presentation,anddisclosureofleases.ThenewstandardsupersedespresentU.S.GAAPguidanceonleasesandrequiressubstantiallyallleasestobereportedonthebalancesheetasright-of-useassetsandleaseliabilities,aswellasadditionaldisclosures.ThenewstandardiseffectiveasofJanuary1,2019,andearlyadoptionispermitted.Weareevaluatingtheprovisionsofthisstandard,includingwhichperiodtoadopt,andhavenotdeterminedwhatimpacttheadoptionofASUNo.2016-02willhaveonourconsolidatedfinancialstatements.

InMay2014,theFASBissuedASUNo.2014-09,Revenue from Contracts with Customers, whichsupersedestherevenuerecognitionrequirementsunderAccountingStandardsCodification(ASC)Topic605.ThenewguidancewastheresultofajointprojectbetweentheFASBandtheInternationalAccountingStandardsBoardtoclarifytheprinciplesforrecognizingrevenueandtodevelopcommonrevenuestandardsforU.S.GAAPandInternationalFinancialReportingStandards.Thecoreprincipleofthenewguidanceisthatrevenueshouldberecognizedtodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.InAugust2015,theFASBelectedtodefertheeffectivedateofASUNo.2014-09byoneyeartoannualperiodsbeginningafterDecember15,2017,withearlyapplicationpermittedasoftheoriginaleffectivedate.Thenewguidancemaybeappliedonaretrospectivebasisforallpriorperiodspresented,oronamodifiedretrospectivebasiswiththecumulativeeffectofthenewguidanceasofthedateofinitialapplication.ThenewguidancewillbeeffectiveforusasofJanuary1,2018andwecurrentlyintendtousethemodifiedretrospectivetransitionmethod.

WehavesubstantiallycompletedtheimpactassessmentphaseofourevaluationofASUNo.2014-09.Underthenewguidance,therearespecificcriteriatodetermineifaperformanceobligationshouldberecognizedovertimeoratapointintime.Accordingly,wehaveidentifiedcertainproject-basedordersintheBESTSegmentandCBRNEdetectionordersintheBrukerCALIDGroupforwhichthetimingofwhenwerecognizerevenuemaybeimpacted.Duetothecomplexityoftheseproject-basedorders,revenuerecognitionunderthenewstandardishighlydependentonspecificcontractterms.

Duringthefourthquarterof2017,wehavesubstantiallycompletedtheassessmentovertheimpactthatthisnewstandardwillhaveonourconsolidatedbalancesheets.Wepreliminarilyexpecttorecognizeanadjustmentofapproximately$6.0milliontoretainedearningsonJanuary1,2018toreflectthecumulativeeffectoftheaccountingchangesmadeupontheadoptionofthestandard.Thefinalizationoftheassessmentmayresultinsignificantchangestotheestimatesthatmaymateriallyimpactthepreliminaryestimateofthecumulativeeffect.

TRANSACTIONSWITHRELATEDPARTIES

Weleasecertainofficespacefromcertainofourprincipalshareholders,includingadirectorandexecutiveofficerandanothermemberofourBoardofDirectors,andmembersoftheirimmediatefamilies,whichhaveexpirationdatesrangingfrom2017to2020.Totalrentexpenseundertheseleaseswas$3.5million,$3.9millionand$1.8millionfortheyearsendedDecember31,2017,2016and2015,respectively.

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DuringtheyearsendedDecember31,2017,2016and2015,werecordedrevenueof$2.6million,$1.1millionand$0.7million,respectively,arisingfromcommercialtransactionswithalifesciencescompanyinwhichamemberofourBoardofDirectorsisChairmanandChiefExecutiveOfficer.

DuringtheyearendedDecember31,2016and2015,werecordedrevenueof$0.2millionand$0.5million,respectivelyfromcommercialtransactionswithathermalanalysiscompanyforwhichamemberofourBoardofDirectorsservesasaconsultant.

ITEM7AQUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISK

Wearepotentiallyexposedtomarketrisksassociatedwithchangesinforeigncurrencytranslationrates,interestratesandcommodityprices.Weselectivelyusefinancialinstrumentstoreducetheserisks.Alltransactionsrelatedtoriskmanagementtechniquesareauthorizedandexecutedpursuanttoourpoliciesandprocedures.Analyticaltechniquesusedtomanageandmonitorforeigncurrencytranslationandinterestrateriskincludemarketvaluationsandsensitivityanalysis.

ImpactofForeignCurrencies

Wegenerateasubstantialportionofourrevenuesininternationalmarkets,principallyGermanyandothercountriesintheEuropeanUnion,SwitzerlandandJapan,whichexposesouroperationstotheriskofexchangeratefluctuations.Theimpactofcurrencyexchangeratemovementcanbepositiveornegativeinanyperiod.Ourcostsrelatedtosalesinforeigncurrenciesarelargelydenominatedinthesamerespectivecurrencies,limitingourtransactionriskexposure.However,forforeigncurrencydenominatedsalesincertainregions,suchasJapan,wherewedonotincursignificantcostsdenominatedinJapaneseYen,wearemoreexposedtotheimpactofforeigncurrencyfluctuations.ForsalesnotdenominatedinU.S.Dollars,ifthereisanincreaseintherateatwhichaforeigncurrencyisexchangedforU.S.Dollars,itwillrequiremoreoftheforeigncurrencytoequalaspecifiedamountofU.S.Dollarsthanbeforetherateincrease.Insuchcases,ifwepriceourproductsintheforeigncurrency,wewillreceivelessinU.S.Dollarsthanwewouldhavereceivedbeforetherateincreasewentintoeffect.IfwepriceourproductsinU.S.Dollarsandcompetitorspricetheirproductsinlocalcurrency,anincreaseintherelativestrengthoftheU.S.Dollarcouldresultinourpricesnotbeingcompetitiveinamarketwherebusinessistransactedinthelocalcurrency.IntheyearsendedDecember31,2017and2016ourrevenuebygeographywasasfollows(dollarsinmillions):

Changesinforeigncurrencyexchangeratesincreasedourrevenuebyapproximately1.2%intheyearendedDecember31,2017anddecreasedourrevenuebyapproximately0.5%intheyearendedDecember31,2016.

Assetsandliabilitiesofourforeignsubsidiaries,wherethefunctionalcurrencyisthelocalcurrency,aretranslatedintoU.S.Dollarsusingyear-endexchangerates,orhistoricalrates,asappropriate.Revenuesandexpensesofforeignsubsidiariesaretranslatedattheaverageexchangeratesineffectduringtheyear.Adjustmentsresultingfromfinancialstatementtranslationsareincludedasaseparatecomponentofshareholders'equity.IntheyearendedDecember31,2017,werecordednetgainsfromcurrencytranslationadjustmentsof$97.1million.IntheyearendedDecember31,2016,we

2017 2016

Revenue Revenue Percentageof

Revenue UnitedStates $ 434.7 24.6% $ 428.2 26.6%Europe 665.2 37.6% 582.9 36.2%AsiaPacific 514.8 29.2% 458.1 28.4%Restofworld 151.2 8.6% 142.1 8.8%Totalrevenue $ 1,765.9 100.0% $ 1,611.3 100.0%

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recordednetlossesfromcurrencytranslationof$27.6million.A10%depreciationinfunctionalcurrencies,relativetotheU.S.Dollar,atDecember31,2017,wouldhaveresultedinareductionofshareholders'equityofapproximately$137.2million.

Gainsandlossesresultingfromforeigncurrencytransactionsarereportedininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincome.Ourforeigncurrencytranslationgains(losses),netwere($5.5)millionand$4.1millionforyearsendedDecember31,2017and2016,respectively.

Fromtimetotime,wehaveenteredintoforeigncurrencycontractsinordertominimizethevolatilitythatfluctuationsinexchangerateshaveonourcashflowsrelatedtopurchasesandsalesdenominatedinforeigncurrencies.Underthesearrangements,weagreetopurchaseafixedamountofaforeigncurrencyinexchangeforafixedamountofU.S.Dollarsorothercurrenciesonspecifieddates,typicallywithmaturitiesoflessthantwelvemonths.Thesetransactionsdonotqualifyforhedgeaccountingand,accordingly,theinstrumentisrecordedatfairvaluewiththecorrespondinggainsandlossesrecordedininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincome.

AtDecember31,2017and2016,wehadforeigncurrencycontractswithnotionalamountsaggregating$84.2millionand$40.7million,respectively.AtDecember31,2017,theCompanyhadthefollowingnotionalamountsoutstandingunderforeigncurrencycontracts(inmillions):

BasedonthecontractualmaturitiesofthesecontractsandexchangeratesasofDecember31,2017,weanticipatethatthesecontractswillresultinnetcashinflowsof$4.4millionin2018.AtDecember31,2017,assumingallothervariablesareconstant,iftheU.S.Dollarweakenedby10%,themarketvalueofourforeigncurrencycontractswouldhaveincreasedbyapproximately$8.6millionandiftheU.S.Dollarstrengthenedby10%,themarketvalueofourforeigncurrencycontractswouldhavedecreasedbyapproximately$8.6million.

Wewillcontinuetoevaluateourcurrencyrisksandinthefuturemayutilizeforeigncurrencycontractsmorefrequentlyaspartofatransactionalhedgingprogram.

ImpactofInterestRates

Weregularlyinvestexcesscashinshort-terminvestmentsthataresubjecttochangesininterestrates.Webelievethatthemarketriskarisingfromholdingthesefinancialinstrumentsisminimalbecauseofourpolicyofinvestinginshort-termfinancialinstrumentsissuedbyhighlyratedfinancialinstitutions.

Ourexposurerelatedtoadversemovementsininterestratesisderivedprimarilyfromoutstandingfloatingratedebtinstrumentsthatareindexedtoshort-termmarketrates.Wecurrentlyhaveapproximatelyequallevelsoffixedandfloatingratedebt,whichlimitsourexposuretoadversemovementsininterestrates.

NotionalAmountinBuy

Currency Sell Maturity

NotionalAmountinU.S.

Dollars FairValueof

Assets FairValueofLiabilities

December31,2017: Euro 59.5 U.S.Dollars January2018 $ 67.0 $ 4.5 $ —

SwissFrancs 11.0 U.S.Dollars January2018 11.3 — —

SingaporeDolar 4.9 U.S.Dollars January2018 3.6 — —

Euro 1.8 PolishZloty January2018 2.3 — 0.1 $ 84.2 $ 4.5 $ 0.1

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ImpactofCommodityPrices

Weareexposedtocertaincommodityrisksassociatedwithpricesforvariousrawmaterials.Thepricesofcopperandcertainotherrawmaterials,particularlyniobium-tin,usedtomanufacturesuperconductorshaveincreasedsignificantlyoverthelastdecade.Copperandniobium-tinarethemaincomponentsoflowtemperaturesuperconductorsandcontinuedcommoditypriceincreasesforcopperandniobium,aswellasotherrawmaterials,maynegativelyaffectourprofitability.Periodically,weenterintocommodityforwardpurchasecontractstominimizethevolatilitythatfluctuationsinthepriceofcopperhaveonoursalesoftheseproducts.AtDecember31,2017and2016,wehadfixedpricecommoditycontractswithnotionalamountsaggregating$3.0millionand$2.7million,respectively.ThefairvalueofthefixedpricecommoditycontractsatDecember31,2017and2016was$0.8millionand$0.2million,respectively.Wewillcontinuetoevaluateourcommodityrisksandmayutilizecommodityforwardpurchasecontractsmorefrequentlyinthefuture.

Inflation

Wedonotbelieveinflationhadamaterialimpactonourbusinessoroperatingresultsduringanyoftheperiodspresented.

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ITEM8FINANCIALSTATEMENTSANDSUPPLEMENTARYDATA

IndexofConsolidatedFinancialStatements

PageReportsofIndependentRegisteredPublicAccountingFirms 70

ConsolidatedBalanceSheetsasofDecember31,2017and2016

ConsolidatedStatementsofIncomeandComprehensiveIncomefortheyearsendedDecember31,2017,2016and2015

ConsolidatedStatementsofShareholders'EquityfortheyearsendedDecember31,2017,2016and2015

ConsolidatedStatementsofCashFlowsfortheyearsendedDecember31,2017,2016and2015

NotestoConsolidatedFinancialStatements

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ReportofIndependentRegisteredPublicAccountingFirm

TotheBoardofDirectorsandShareholdersofBrukerCorporation

OpinionsontheFinancialStatementsandInternalControloverFinancialReporting

WehaveauditedtheaccompanyingconsolidatedbalancesheetsofBrukerCorporationanditssubsidiariesasofDecember31,2017and2016,andtherelatedconsolidatedstatementsofincomeandcomprehensiveincome,ofshareholders'equity,andofcashflowsfortheyearsthenended,includingtherelatednotes(collectivelyreferredtoasthe"consolidatedfinancialstatements").WealsohaveauditedtheCompany'sinternalcontroloverfinancialreportingasofDecember31,2017,basedoncriteriaestablishedinInternal Control—Integrated Framework (2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).

Inouropinion,theconsolidatedfinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofDecember31,2017and2016,andtheresultsoftheiroperationsandtheircashflowsfortheyearsthenendedinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Alsoinouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofDecember31,2017,basedoncriteriaestablishedinInternal Control—Integrated Framework (2013)issuedbytheCOSO.

Change in Accounting Principles

AsdiscussedinNotes6and16totheconsolidatedfinancialstatements,respectively,theCompanychangedthemannerinwhichitaccountsforthemeasurementofinventoryandthemannerinwhichitaccountsfortheincometaxeffectsofsharebasedpaymenttransactionsin2017.

BasisforOpinions

TheCompany'smanagementisresponsiblefortheseconsolidatedfinancialstatements,formaintainingeffectiveinternalcontroloverfinancialreporting,andforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedinManagement'sReportonInternalControloverFinancialReportingappearingunderItem9A.OurresponsibilityistoexpressopinionsontheCompany'sconsolidatedfinancialstatementsandontheCompany'sinternalcontroloverfinancialreportingbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)("PCAOB")andarerequiredtobeindependentwithrespecttotheCompanyinaccordancewiththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.

WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsarefreeofmaterialmisstatement,whetherduetoerrororfraud,andwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.

Ourauditsoftheconsolidatedfinancialstatementsincludedperformingprocedurestoassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherduetoerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresintheconsolidatedfinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingand

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evaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.

AsdescribedinManagement'sReportonInternalControloverFinancialReporting,managementhasexcludedHysitron,Incorporated("Hysitron")fromitsassessmentofinternalcontroloverfinancialreportingasofDecember31,2017becauseitwasacquiredbytheCompanyinapurchasebusinesscombinationduring2017.WehavealsoexcludedHysitronfromourauditofinternalcontroloverfinancialreporting.Hysitronisawholly-ownedsubsidiarywhosetotalassetsandtotalrevenuesexcludedfrommanagement'sassessmentandourauditofinternalcontroloverfinancialreportingrepresent0.7%and0.9%,respectively,oftherelatedconsolidatedfinancialstatementamountsasofandfortheyearendedDecember31,2017.

DefinitionandLimitationsofInternalControloverFinancialReporting

Acompany'sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany'sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany'sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

/s/PricewaterhouseCoopersLLPBoston,MassachusettsMarch16,2018

WehaveservedastheCompany'sauditorsince2016.

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ReportofIndependentRegisteredPublicAccountingFirm

TheBoardofDirectorsandShareholdersofBrukerCorporation

Wehaveauditedtheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome(loss),shareholders'equity,andcashflowsofBrukerCorporationfortheyearendedDecember31,2015.ThesefinancialstatementsaretheresponsibilityoftheCompany'smanagement.Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.

WeconductedourauditinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,theconsolidatedresultsofBrukerCorporation'soperationsanditscashflowsfortheyearendedDecember31,2015,inconformitywithU.S.generallyacceptedaccountingprinciples.

Boston,MassachusettsFebruary26,2016

exceptforNote2—SummaryofSignificantAccountingPolicies—RestrictedCash,astowhichthedateis

March16,2018

/s/Ernst&YoungLLP

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BRUKERCORPORATION

CONSOLIDATEDBALANCESHEETS

(Inmillions,exceptshareandpersharedata)

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

December31, 2017 2016

ASSETS Currentassets: Cashandcashequivalents $ 325.0 $ 342.4Short-terminvestments 114.2 157.9Accountsreceivable,net 319.3 243.9Inventories 486.2 440.4Othercurrentassets 114.1 91.3Totalcurrentassets 1,358.8 1,275.9

Property,plantandequipment,net 266.5 239.1Goodwill 169.8 130.6Intangibleassets,net 82.4 69.7Deferredtaxassets 57.0 76.5Otherlong-termassets 14.0 16.6

Totalassets $ 1,948.5 $ 1,808.4LIABILITIESANDSHAREHOLDERS'EQUITY

Currentliabilities: Currentportionoflong-termdebt $ — $ 20.1Accountspayable 90.8 86.1Customeradvances 111.7 149.0Othercurrentliabilities 322.0 269.5Totalcurrentliabilities 524.5 524.7

Long-termdebt 415.6 391.6Long-termdeferredrevenue 48.7 46.8Deferredtaxliabilities 24.3 10.1Accruedpension 105.6 102.5Otherlong-termliabilities 96.3 39.6

Commitmentsandcontingencies(Note14)

Shareholders'equity: Preferredstock,$0.01parvalue5,000,000sharesauthorized,noneissuedoroutstandingatDecember31,2017and2016 — —

Commonstock,$0.01parvalue260,000,000sharesauthorized,171,875,076and170,552,890sharesissuedand155,865,977and159,854,695outstandingatDecember31,2017and2016,respectively 1.7 1.7

Treasurystockatcost,16,009,099and10,698,195sharesatDecember31,2017and2016,respectively (401.2) (249.3)

Additionalpaid-incapital 155.9 124.7Retainedearnings 942.0 885.2Accumulatedothercomprehensiveloss 27.0 (75.9)Totalshareholders'equityattributabletoBrukerCorporation 725.4 686.4

Noncontrollinginterestinconsolidatedsubsidiaries 8.1 6.7Totalshareholders'equity 733.5 693.1Totalliabilitiesandshareholders'equity $ 1,948.5 $ 1,808.4

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BRUKERCORPORATION

CONSOLIDATEDSTATEMENTSOFINCOMEANDCOMPREHENSIVEINCOME

(Inmillions,exceptpersharedata)

YearEndedDecember31, 2017 2016 2015 Productrevenue $ 1,479.5 $ 1,345.4 $ 1,381.1Servicerevenue 278.2 254.7 235.5Otherrevenue 8.2 11.2 7.2Totalrevenue 1,765.9 1,611.3 1,623.8

Costofproductrevenue 790.7 714.2 774.2Costofservicerevenue 160.8 150.0 139.7Costofotherrevenue 1.4 4.6 1.3Totalcostofrevenue 952.9 868.8 915.2Grossprofit 813.0 742.5 708.6

Operatingexpenses: Selling,generalandadministrative 415.9 390.5 392.2Researchanddevelopment 162.7 149.0 145.7Othercharges,net 19.7 25.8 25.0Totaloperatingexpenses 598.3 565.3 562.9Operatingincome 214.7 177.2 145.7

Interestandotherincome(expense),net (16.9) 0.4 (17.7)Incomebeforeincometaxesandnoncontrollinginterestinconsolidatedsubsidiaries 197.8 177.6 128.0Incometaxprovision 117.5 23.1 23.1Consolidatednetincome 80.3 154.5 104.9Netincomeattributabletononcontrollinginterestinconsolidatedsubsidiaries 1.7 0.9 3.3NetincomeattributabletoBrukerCorporation $ 78.6 $ 153.6 $ 101.6NetincomepercommonshareattributabletoBrukerCorporationshareholders: Basic $ 0.50 $ 0.95 $ 0.60Diluted $ 0.49 $ 0.95 $ 0.60

Weightedaveragecommonsharesoutstanding: Basic 158.1 161.4 168.2Diluted 159.1 162.2 169.1

Consolidatednetincome $ 80.3 $ 154.5 $ 104.9Foreigncurrencytranslationadjustments 97.1 (27.6) (63.8)Pensionliabilityadjustments(netoftaxof$2.9million,$2.1millionand$2.1million,respectively) 6.5 (4.4) (9.6)Netcomprehensiveincome 183.9 122.5 31.5

Less:Comprehensiveincomeattributabletononcontrollinginterests 2.4 0.6 2.3ComprehensiveincomeattributabletoBrukerCorporation $ 181.5 $ 121.9 $ 29.2Dividenddeclaredpercommonshare $ 0.16 $ 0.16 $ —

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BRUKERCORPORATIONCONSOLIDATEDSTATEMENTSOFSHAREHOLDERS'EQUITY

(Inmillions,exceptsharedata)

CommonShares

CommonStockAmount

TreasuryShares

TreasuryStockAmount

AdditionalPaid-InCapital

RetainedEarnings

AccumulatedOther

ComprehensiveIncome

TotalShareholders'

EquityAttributable

toBruker

Corporation

NoncontrollingInterestsinConsolidatedSubsidiaries

TotalShareholders'

Equity BalanceatDecember31,2014 168,527,584 $ 1.7 55,404 $ (0.9) $ 81.1 $ 655.8 $ 28.2 $ 765.9 $ 5.8 $ 771.7

Restrictedsharesissued 135,677 — — — — — — — — —

Restrictedsharesterminated (145,857) — 145,857 — — — — — — —

Stockoptionsexercised 926,042 — — — 10.8 — — 10.8 — 10.8

Stockbasedcompensation — — — — 8.0 — — 8.0 — 8.0

Excesstaxbenefitrelatedtoexerciseofstockawards — — — — 2.2 — — 2.2 — 2.2

Sharesrepurchased (4,082,042) — 4,082,042 (89.9) — — — (89.9) — (89.9)Treasurystockacquired (7,224) — 7,224 (0.1) — — — (0.1) — (0.1)

Distributionstononcontrollinginterests — — — — — — — — (1.3) (1.3)

Consolidatednetincome — — — — — 101.6 — 101.6 3.3 104.9

Othercomprehensiveincome(loss) — — — — — — (72.4) (72.4) (1.0) (73.4)

BalanceatDecember31,2015 165,354,180 $ 1.7 4,290,527 $ (90.9) $ 102.1 $ 757.4 $ (44.2) $ 726.1 $ 6.8 $ 732.9

Restrictedsharesissued 13,105 — — — — — — — — —

Stockoptionsexercised 895,078 — — — 12.0 — — 12.0 — 12.0

Excesstaxbenefitrelatedtoexerciseofstockawards — — — — 1.3 — — 1.3 — 1.3

Sharesissuedforacquisition 90,066 — (90,066) 2.1 (0.1) — — 2.0 — 2.0

Cashdividendspaidtocommonstockholders — — — — — (25.8) — (25.8) — (25.8)

Othercomprehensiveincome(loss) — — — — — — (31.7) (31.7) (0.3) (32.0)

BalanceatDecember31,2016 159,854,695 $ 1.7 10,698,195 $ (249.3) $ 124.7 $ 885.2 $ (75.9) $ 686.4 $ 6.7 $ 693.1

Stockoptionsexercised 1,263,767 — — — 20.4 — — 20.4 — 20.4

Restrictedstockunitsvested 58,419 — — — (0.3) — — (0.3) — (0.3)

Excesstaxbenefitrelatedtoexerciseofstockawards — — — — — 3.6 — 3.6 — 3.6

Sharesissuedforacquisition 18,110 — (18,110) 0.5 0.1 — — 0.6 — 0.6

Cashdividendspaidtocommonstockholders — — — — — (25.4) — (25.4) — (25.4)

Othercomprehensiveincome(loss) — — — — — — 102.9 102.9 0.7 103.6

BalanceatDecember31,2017 155,865,977 $ 1.7 16,009,099 $ (401.2) $ 155.9 $ 942.0 $ 27.0 $ 725.4 $ 8.1 $ 733.5

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BRUKERCORPORATION

CONSOLIDATEDSTATEMENTSOFCASHFLOWS

(Inmillions)

YearEndedDecember31, 2017 2016 2015 Cashflowsfromoperatingactivities: Consolidatednetincome $ 80.3 $ 154.5 $ 104.9Adjustmentstoreconcileconsolidatednetincometocashflowsfromoperatingactivities: Depreciationandamortization 63.9 54.3 53.3Stock-basedcompensationexpense 11.0 9.4 8.0Deferredincometaxes 28.2 (22.7) (29.4)Gain(loss)ondisposalofproductlines — — 0.2Impairmentandothernon-cashexpenses,net 11.6 24.1 45.9

Changesinoperatingassetsandliabilities,netofacquisitions: Accountsreceivable (55.5) (8.4) 45.0Inventories (6.6) (43.2) (5.4)Accountspayableandaccruedexpenses 33.7 (19.6) 12.6Incometaxespayable,net 5.2 (26.8) 22.7Deferredrevenue 4.0 4.9 3.8Customeradvances (27.8) (7.3) 1.4Otherchangesinoperatingassetsandliabilities,net 6.4 11.6 (33.8)

Netcashprovidedbyoperatingactivities 154.4 130.8 229.2Cashflowsfrominvestingactivities: Purchaseofshort-terminvestments (118.5) (126.5) (159.4)Maturityofshort-terminvestments 186.8 165.0 118.7Cashpaidforacquisitions,netofcashacquired (66.3) (24.3) (28.6)Proceedsfromdisposalofproductlines — — 0.2Purchasesofproperty,plantandequipment (43.7) (37.1) (34.2)Proceedsfromsalesofproperty,plantandequipment 11.5 1.1 0.9

Netcashusedininvestingactivities (30.2) (21.8) (102.4)Cashflowsfromfinancingactivities: Repaymentsofrevolvinglinesofcredit (130.0) — (129.5)Proceedsfromrevolvinglinesofcredit 154.0 146.0 42.0RepaymentofNotePurchaseAgreement (20.0) — —Repaymentofotherdebt,net (0.9) (0.1) (0.6)Proceedsfromissuanceofcommonstock,net 20.0 11.5 10.8Paymentofcontingentconsideration (3.5) — (3.0)Paymentofdividendstocommonstockholders (25.4) (25.8) —Repurchaseofcommonstock (152.2) (160.0) (90.0)Cashpaymentstononcontrollinginterests (1.0) (0.7) (1.3)Excesstaxbenefitsrelatedtostockoptionawards — 1.2 2.2

Netcashusedinfinancingactivities (159.0) (27.9) (169.4)Effectofexchangeratechangesoncash,cashequivalentsandrestrictedcash 17.8 (6.4) (11.0)Netchangeincash,cashequivalentsandrestrictedcash (17.0) 74.7 (53.6)Cash,cashequivalentsandrestrictedcashatbeginningofyear 345.9 271.2 324.8Cash,cashequivalentsandrestrictedcashatendofyear $ 328.9 $ 345.9 $ 271.2Supplementalcashflowinformation: Cashpaidforinterest $ 15.2 $ 12.5 $ 12.2Cashpaidfortaxes $ 53.1 $ 72.4 $ 56.6

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BRUKERCORPORATION

NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

Note1—DescriptionofBusiness

BrukerCorporation,togetherwithitsconsolidatedsubsidiaries("Bruker"orthe"Company"),develops,manufacturesanddistributeshigh-performancescientificinstrumentsandanalyticalanddiagnosticsolutionsthatenableitscustomerstoexplorelifeandmaterialsatmicroscopic,molecularandcellularlevels.ManyoftheCompany'sproductsareusedtodetect,measureandvisualizestructuralcharacteristicsofchemical,biologicalandindustrialmaterialsamples.TheCompany'sproductsaddresstherapidlyevolvingneedsofadiversearrayofcustomersinlifescienceresearch,pharmaceuticals,biotechnology,appliedmarkets,cellbiology,clinicalresearch,microbiology,in-vitrodiagnostics,nanotechnologyandmaterialsscienceresearch.

TheCompanyhastworeportablesegments,Bruker Scientific Instruments (BSI) ,whichrepresentedapproximately90%and93%oftheCompany'srevenuesduringtheyearendedDecember31,2017and2016,respectively,andBruker Energy & Supercon Technologies (BEST) ,whichrepresentedtheremainderoftheCompany'srevenues.WithinBSI,theCompanyisorganizedintothreeoperatingsegments:theBrukerBioSpinGroup,theBrukerCALIDGroupandtheBrukerNanoGroup.Forfinancialreportingpurposes,theBrukerBioSpin,BrukerCALIDandBrukerNanooperatingsegmentsareaggregatedintotheBSIreportablesegmentbecauseeachhassimilareconomiccharacteristics,productionprocesses,serviceofferings,typesandclassesofcustomers,methodsofdistributionandregulatoryenvironments.

Bruker BioSpin —TheBrukerBioSpinGroupdesigns,manufacturesanddistributesenablinglifesciencetoolsbasedonmagneticresonancetechnology.ThemajorityoftheBrukerBioSpinGroup'srevenuesaregeneratedbyacademicandgovernmentresearchcustomers.Othercustomersincludepharmaceuticalandbiotechnologycompaniesandnonprofitlaboratories,aswellaschemical,foodandbeverage,clinicalandotherindustrialcompanies.

Bruker CALID ( C hemicals, A pplied Markets, L ife Science, I n-Vitro Diagnostics, D etection) —TheBrukerCALIDGroupdesigns,manufacturesanddistributeslifesciencemassspectrometryandionmobilityspectrometrysolutions,analyticalandprocessanalysisinstrumentsandsolutionsbasedoninfraredandRamanmolecularspectroscopytechnologies;andradiological/nucleardetectorsforChemical,Biological,Radiological,NuclearandExplosive(CBRNE)detection.CustomersoftheBrukerCALIDGroupinclude:academicinstitutionsandmedicalschools;pharmaceutical,biotechnologyanddiagnosticscompanies;contractresearchorganizations;nonprofitorfor-profitforensicslaboratories;agriculture,foodandbeveragesafetylaboratories;environmentalandclinicalmicrobiologylaboratories;hospitalsandgovernmentdepartmentsandagencies.

Bruker Nano —TheBrukerNanoGroupdesigns,manufacturesanddistributesadvancedX-rayinstruments;atomicforcemicroscopyinstrumentation;advancedfluorescenceopticalmicroscopyinstruments;analyticaltoolsforelectronmicroscopesandX-raymetrology;defect-detectionequipmentforsemiconductorprocesscontrol;handheld,portableandmobileX-rayfluorescencespectrometryinstruments;andsparkopticalemissionspectroscopysystems.CustomersoftheBrukerNanoGroupincludeacademicinstitutions,governmentalcustomers,nanotechnologycompanies,semiconductorcompanies,rawmaterialmanufacturers,industrialcompanies,biotechnologyandpharmaceuticalcompaniesandotherbusinessesinvolvedinmaterialsanalysis.

TheCompany'sBESTreportablesegmentdevelopsandmanufacturessuperconductingandnon-superconductingmaterialsanddevicesforuseinrenewableenergy,energyinfrastructure,healthcareand"bigscience"research.Thesegmentfocusesonmetalliclowtemperaturesuperconductorsforuseinmagneticresonanceimaging,nuclearmagneticresonance,fusionenergy

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researchandotherapplications,aswellasceramichightemperaturesuperconductorsprimarilyforenergygridandmagnetapplications.

Note2—SummaryofSignificantAccountingPolicies

Theaccompanyingconsolidatedfinancialstatementsreflecttheapplicationofcertainsignificantaccountingpoliciesasdescribedbelowandelsewhereinthenotestotheconsolidatedfinancialstatements.

PrinciplesofConsolidation

TheaccompanyingconsolidatedfinancialstatementsincludetheaccountsoftheCompanyandallmajorityandwholly-ownedsubsidiaries.Allintercompanyaccountsandtransactionshavebeeneliminated.

NoncontrollingInterests

Noncontrollinginterestsrepresentstheminorityshareholders'proportionateshareoftheCompany'smajority-ownedsubsidiaries.Theportionofnetincomeornetlossattributabletonon-controllinginterestsispresentedasnetincomeattributabletononcontrollinginterestsinconsolidatedsubsidiariesintheconsolidatedstatementsofincomeandcomprehensiveincome,andtheportionofothercomprehensiveincomeofthesesubsidiariesispresentedintheconsolidatedstatementsofshareholders'equity.

SubsequentEvents

TheCompanyhasevaluatedallsubsequenteventsanddeterminedthattherearenomaterialrecognizedorunrecognizedsubsequentevents,oranysubsequenteventsrequiredtobementionedinthefootnotestotheconsolidatedfinancialstatements.

CashandCashEquivalents

Cashandcashequivalentsprimarilyincludecashonhand,moneymarketfundsandtimedepositswithoriginalmaturitiesofthreemonthsorlessatthedateofacquisition.Timedepositsrepresentamountsondepositinbanksandtemporarilyinvestedininstrumentswithmaturitiesofthreemonthsorlessatthetimeofpurchase.CertainoftheseinvestmentsrepresentdepositswhicharenotinsuredbytheFDICoranyothergovernmentagency.Cashequivalentsarecarriedatcost,whichapproximatesfairvalue.

Short-termInvestments

Short-terminvestmentsrepresenttimeandcalldepositswithoriginalmaturitiesofgreaterthanthreemonthsatthedateofacquisition.Short-terminvestmentsareclassifiedasavailable-for-saleandarereportedatfairvalue.Therewerenounrealizedgains(losses)recordedasofDecember31,2017and2016,ascostapproximatescurrentfairvalue.

RestrictedCash

InNovember2016,theFinancialAccountingStandardsBoard(FASB)issuedAccountingStandardsUpdate(ASU)2016-18,Statement of Cash Flows,Restricted Cash ,requiringrestrictedcashandrestrictedcashequivalentstobeincludedwithcashandcashequivalentsonthestatementofcashflowswhenreconcilingthebeginning-of-periodandend-of-periodtotalamountsshownonthestatementofcashflows.TheguidanceiseffectiveforinterimandannualperiodsbeginningafterDecember15,2017,withearlyadoptionpermitted.TheCompanyadoptedthisstandardduringthefirst

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quarterof2017.Restrictedcashisnowincludedasacomponentofcash,cashequivalents,andrestrictedcashontheCompany'sconsolidatedstatementofcashflows.TheCompanyhascertainsubsidiarieswhicharerequiredbylocalgovernancetomaintainrestrictedcashbalancestocoverfutureemployeebenefitpayments.Restrictedcashbalancesareclassifiedasnon-currentunless,underthetermsoftheapplicableagreements,thefundswillbereleasedfromrestrictionswithinoneyearfromthebalancesheetdate.Thecurrentandnon-currentportionofrestrictedcashisrecordedwithinothercurrentassetsandotherlong-termassets,respectively,intheaccompanyingconsolidatedbalancesheets.

Theinclusionofrestrictedcashincreasedthebalancesoftheconsolidatedstatementofcashflowsasfollows:

DerivativeFinancialInstrumentsandHedgingActivities

Allderivatives,whetherdesignatedinahedgingrelationshipornot,arerecordedontheconsolidatedbalancesheetsatfairvalue.Theaccountingforchangesinfairvalueofaderivativeinstrumentdependsonwhetherithasbeendesignatedandqualifiesaspartofahedgingrelationshipandfurther,onthetypeofhedgingrelationship.Forthosederivativeinstrumentsthataredesignatedandqualifyashedginginstruments,theCompanymustdesignatethehedginginstrument,basedontheexposurebeinghedged,asafairvaluehedge,cashflowhedge,foreigncurrencyhedgeorahedgeofanetinvestmentinaforeignoperation.

FairValueofFinancialInstruments

TheCompanyappliesthefollowinghierarchytodeterminethefairvalueoffinancialinstruments,whichprioritizestheinputsusedtomeasurefairvalueintothreelevelsandbasesthecategorizationwithinthehierarchyuponthelowestlevelofinputthatisavailableandsignificanttothefairvaluemeasurement.Thelevelsinthehierarchyaredefinedasfollows:

• Level 1: Inputstothevaluationmethodologyarequotedprices(unadjusted)foridenticalassetsorliabilitiesinactivemarkets.

• Level 2: Inputstothevaluationmethodologyincludequotedpricesforsimilarassetsandliabilitiesinactivemarkets,andinputsthatareobservablefortheassetorliability,eitherdirectlyorindirectly,forsubstantiallythefulltermofthefinancialinstrument.

• Level 3: Inputstothevaluationmethodologyareunobservableandsignificanttothefairvaluemeasurement.

ThevaluationtechniquesthatmaybeusedbytheCompanytodeterminethefairvalueofLevel2andLevel3financialinstrumentsarethemarketapproach,theincomeapproachandthecostapproach.Themarketapproachusespricesandotherrelevantinformationgeneratedbymarkettransactionsinvolvingidenticalorcomparableassetsorliabilities.Theincomeapproachusesvaluationtechniquestoconvertfutureamountstoasinglepresentvaluebasedoncurrentmarketexpectationsaboutthosefutureamounts,includingpresentvaluetechniques,option-pricingmodelsandtheexcessearningsmethod.Thecostapproachisbasedontheamountthatwouldberequiredtoreplacetheservicecapacityofanasset(replacementcost).

TheCompany'sfinancialinstrumentsconsistprimarilyofcashequivalents,short-terminvestments,restrictedcash,derivativeinstrumentsconsistingofforwardforeignexchangecontracts,commoditycontracts,derivativesembeddedincertainpurchaseandsalecontracts,accountsreceivable,accounts

2017 2016 2015 BeginningBalance $ 3.5 $ 4.1 $ 5.2EndingBalance 4.0 3.5 4.1

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payable,contingentconsiderationandlong-termdebt.ThecarryingamountsoftheCompany'scashequivalents,short-terminvestmentsandrestrictedcash,accountsreceivable,borrowingsunderarevolvingcreditagreementandaccountspayableapproximatefairvaluebecauseoftheirshort-termnature.Derivativeassetsandliabilitiesaremeasuredatfairvalueonarecurringbasis.TheCompany'slong-termdebtconsistsprincipallyofaprivateplacementarrangemententeredintoin2012withvariousfixedinterestratesbasedonthematuritydateandborrowingsunderarevolvingcreditagreement,

TheCompanyhasevaluatedtheestimatedfairvalueoffinancialinstrumentsusingavailablemarketinformationandmanagement'sestimates.Theuseofdifferentmarketassumptionsand/orestimationmethodologiescouldhaveasignificanteffectontheestimatedfairvalueamounts.

ConcentrationofCreditRisk

FinancialinstrumentsthatsubjecttheCompanytocreditriskconsistofcash,cashequivalents,short-terminvestments,derivativeinstruments,accountsreceivablesandrestrictedcash.Theriskwithrespecttocash,cashequivalentsandshort-terminvestmentsisminimizedbytheCompany'spolicyofinvestinginshort-termfinancialinstrumentsissuedbyhighly-ratedfinancialinstitutions.TheriskwithrespecttoderivativeinstrumentsisminimizedbytheCompany'spolicyofenteringintoarrangementswithhighly-ratedfinancialinstitutions.TheriskwithrespecttoaccountsreceivablesisminimizedbythecreditworthinessanddiversityoftheCompany'scustomers.TheCompanyperformsperiodiccreditevaluationsofitscustomers'financialconditionandgenerallyrequiresanadvanceddepositforaportionofthepurchaseprice.Creditlosseshavebeenwithinmanagement'sexpectationsandtheallowancefordoubtfulaccountstotaled$4.7millionand$7.9millionasofDecember31,2017and2016,respectively.AsofDecember31,2017and2016,nosinglecustomerrepresented10%ormoreoftheCompany'saccountsreceivable.FortheyearsendedDecember31,2017,2016and2015,nosinglecustomerrepresented10%ormoreoftheCompany'stotalrevenue.

Inventories

Componentsofinventoryincluderawmaterials,work-in-process,demonstrationunitsandfinishedgoods.DemonstrationunitsincludesystemswhicharelocatedintheCompany'sdemonstrationlaboratoriesorinstalledatthesitesofpotentialcustomersandareconsideredavailableforsale.Finishedgoodsincludein-transitsystemsthathavebeenshippedtotheCompany'scustomers,butnotyetinstalledandacceptedbythecustomer.Allinventoriesarestatedatthelowerofcostandnetrealizablevalue.Costisdeterminedprincipallybythefirst-in,first-outmethodforamajorityofsubsidiariesandbyaverage-costforcertainothersubsidiaries.TheCompanyreducesthecarryingvalueofitsinventoriesfordifferencesbetweencostandestimatednetrealizablevalue,takingintoconsiderationusageintheprecedingtwelvemonths,expecteddemand,technologicalobsolescenceandotherinformationincludingthephysicalconditionofdemonstrationinventories.TheCompanyrecordsachargetocostofproductrevenuefortheamountrequiredtoreducethecarryingvalueofinventorytonetrealizablevalue.Costsassociatedwiththeprocurementofinventories,suchasinboundfreightchargesandpurchasingandreceivingcosts,arecapitalizedaspartofinventoryandarealsoincludedinthecostofproductrevenuelineitemwithintheconsolidatedstatementsofincomeandcomprehensiveincome.

Property,PlantandEquipment

Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandamortization.Majorimprovementsarecapitalizedwhileexpendituresformaintenance,repairsandminorimprovementsarechargedtoexpenseasincurred.Whenassetsareretiredorotherwisedisposedof,theassetsandrelatedaccumulateddepreciationandamortizationareeliminatedfromtheaccountsandanyresultinggainorlossisreflectedintheconsolidatedstatementsofincomeandcomprehensive

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income.Depreciationandamortizationarecalculatedonastraight-linebasisovertheestimatedusefullivesoftheassetsasfollows:

GoodwillandIntangibleAssets

Goodwillandindefinite-livedintangibleassetsarenotamortized,butareevaluatedforimpairmentonanannualbasis,oronaninterimbasiswheneventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.Inassessingtherecoverabilityofgoodwillandindefinite-livedintangibleassets,theCompanymustmakeassumptionsregardingtheestimatedfuturecashflows,andotherfactors,todeterminethefairvalueoftheseassets.Iftheseestimatesortheirrelatedassumptionschangeinthefuture,theCompanymayberequiredtorecordimpairmentchargesagainsttheseassetsinthereportingperiodinwhichtheimpairmentisdetermined.

TheCompanytestsgoodwillforimpairmentatthereportingunitlevel,whichistheoperatingsegmentoronelevelbelowanoperatingsegment.TheCompanyhastheoptionofperformingaqualitativeassessmenttodeterminewhetherfurtherimpairmenttestingisnecessarybeforeperformingthetwo-stepquantitativeassessment.Ifasaresultofthequalitativeassessment,itismore-likely-than-notthatthefairvalueofareportingunitislessthanitscarryingamount,aquantitativeimpairmenttestwillberequired.Otherwise,nofurthertestingwillberequired.Ifaquantitativeimpairmenttestisperformed,thefirststepinvolvescomparingthefairvaluesoftheapplicablereportingunitswiththeiraggregatecarryingvalues,includinggoodwill.TheCompanygenerallydeterminesfairvalueofreportingunitsusingaweightingofboththemarketandtheincomemethodologies.Estimatingthefairvalueofthereportingunitsrequiressignificantjudgmentbymanagement.Ifthecarryingamountofareportingunitexceedsthefairvalueofthereportingunit,theCompanyperformsthesecondstepofthegoodwillimpairmenttesttomeasuretheamountoftheimpairment.InthesecondstepofthegoodwillimpairmenttesttheCompanycomparestheimpliedfairvalueofthereportingunit'sgoodwillwiththecarryingvalueofthatgoodwill.

Inprocessresearchanddevelopment,orIPR&D,acquiredaspartofbusinesscombinationsundertheacquisitionmethodrepresentsongoingdevelopmentworkassociatedwithenhancementstoexistingproducts,aswellasthedevelopmentofnextgenerationproducts.IPR&Disinitiallycapitalizedatfairvalueasanintangibleassetwithanindefinitelifeandassessedforimpairmentonanannualbasis,orwhenindicatorsofimpairmentareidentified.WhentheIPR&Dprojectiscomplete,itisreclassifiedasafinite-livedintangibleassetandisamortizedoveritsestimatedusefullife.IfanIPR&Dprojectisabandonedbeforecompletionorisotherwisedeterminedtobeimpaired,thevalueoftheassetortheamountoftheimpairmentischargedtotheconsolidatedstatementsofincomeandcomprehensiveincomeintheperiodtheprojectisabandonedorimpaired.

Intangibleassetswithafiniteusefullifeareamortizedonastraight-linebasisovertheirestimatedusefullivesasfollows:

Buildings 25-40years Machineryandequipment 3-10years Computerequipmentandsoftware 3-5years Furnitureandfixtures 3-10years Leaseholdimprovements Lesserof15yearsortheremainingleaseterm

Existingtechnologyandrelatedpatents 3-10years Customeranddistributorrelationships 5-12years Tradenames 5-10years

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ImpairmentofLong-LivedAssets

Impairmentlossesarerecordedonlong-livedassetsusedinoperationswhenindicatorsofimpairmentarepresentandthequotedmarketprice,ifavailableortheestimatedfairvalueofthoseassetsarelessthantheassets'carryingvalueandarenotrecoverable.Determinationofrecoverabilityisbasedonanestimateofundiscountedfuturecashflowsresultingfromtheuseoftheassetanditseventualdisposition.Intheeventthatsuchcashflowsarenotexpectedtobesufficienttorecoverthecarryingamountoftheassets,theassetsarewritten-downtotheirfairvalues.Impairmentlossesarechargedtotheconsolidatedstatementsofincomeandcomprehensiveincomeforthedifferencebetweenthefairvalueandcarryingvalueoftheasset.

WarrantyCostsandDeferredRevenue

TheCompanytypicallyprovidesaoneyearpartsandlaborwarrantywiththepurchaseofequipment.Theanticipatedcostforthiswarrantyisaccrueduponrecognitionofthesaleandisincludedasacurrentliabilityontheaccompanyingconsolidatedbalancesheets.TheCompany'swarrantyreservereflectsestimatedmaterialandlaborcostsforpotentialproductissuesforwhichtheCompanyexpectstoincuranobligation.TheCompany'sestimatesofanticipatedratesofwarrantyclaimsandcostsareprimarilybasedonhistoricalinformation.TheCompanyassessestheadequacyofthewarrantyreserveonaquarterlybasisandadjuststheamountasnecessary.Ifthehistoricaldatausedtocalculatetheadequacyofthewarrantyreserveisnotindicativeoffuturerequirements,additionalorreducedwarrantyreservesmayberequired.

TheCompanyalsoofferstoitscustomersextendedwarrantyandserviceagreementsextendingbeyondtheinitialwarrantyforafee.Thesefeesarerecordedasdeferredrevenueandrecognizedratablyintoincomeoverthelifeoftheextendedwarrantycontractorserviceagreement.

IncomeTaxes

Deferredtaxassetsandliabilitiesarerecognizedfortheexpectedfuturetaxconsequencesoftemporarydifferencesbetweenthefinancialstatementcarryingamountsandtheincometaxbasisofassetsandliabilities.Avaluationallowanceisappliedagainstanynetdeferredtaxassetif,basedontheavailableevidence,itismorelikelythannotthatsomeorallofthedeferredtaxassetswillnotberealized.

TheCompanyrecordsliabilitiesrelatedtouncertaintaxpositionsinaccordancewiththeguidancethatclarifiestheaccountingforuncertaintyinincometaxesrecognizedinaCompany'sfinancialstatements.Thisguidanceprescribesaminimumrecognitionthresholdandmeasurementattributeforthefinancialstatementrecognitionandmeasurementofataxpositiontakenorexpectedtobetakeninataxreturn.TheCompanyincludesaccruedinterestandpenaltiesrelatedtounrecognizedtaxbenefitsandincometaxliabilities,whenapplicable,inincometaxexpense.

CustomerAdvances

TheCompanytypicallyrequiresanadvancedepositunderthetermsandconditionsofcontractswithcustomers.Thesedepositsarerecordedasacurrentorlong-termliabilityuntilrevenueisrecognizedonthespecificcontractinaccordancewiththeCompany'srevenuerecognitionpolicy.

RevenueRecognition

TheCompanyrecognizesrevenuefromsystemssaleswhenpersuasiveevidenceofanarrangementexists,thepriceisfixedordeterminable,titleandriskoflosshasbeentransferredtothecustomerandcollectabilityoftheresultingreceivableisreasonablyassured.Titleandriskoflossgenerallytransfersuponshipment,orforcertainsystems,baseduponcustomeracceptanceforasystemthathasbeen

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deliveredandinstalledatacustomerfacility.Forsystemsthatincludecustomer-specificacceptancecriteria,theCompanyisrequiredtoassesswhenitcandemonstratetheacceptancecriteriahasbeenmet,whichgenerallyisuponsuccessfulfactoryacceptancetestingorcustomeracceptanceandevidenceofinstallation.

Whenproductsaresoldthroughanindependentdistributororastrategicdistributionpartnerwhoassumesresponsibilityforinstallation,theCompanyrecognizesthesystemsalewhentheproducthasbeenshippedandtitleandriskoflosshavebeentransferredtothedistributor.TheCompany'sdistributorsdonothavepriceprotectionrightsorrightsofreturn;however,theCompany'sproductsaretypicallywarrantedtobefreefromdefectforaperiodofoneyear.Revenueisdeferreduntilcashisreceivedwhencollectabilityisnotreasonablyassuredorwhenthepriceisnotfixedordeterminable.

Fortransactionsthatincludemultipleelements,arrangementconsiderationisallocatedtoeachelementusingthefairvaluehierarchyasrequiredbyASUNo.2009-13.TheCompanylimitstheamountofrevenuerecognizedfordeliveredelementstotheamountthatisnotcontingentonthefuturedeliveryofproductsorservices,futureperformanceobligations,orsubjecttocustomer-specificreturnorrefundprivileges.

TheCompanydeterminesthefairvalueofitsproductsandservicesbaseduponvendorspecificobjectiveevidence("VSOE").TheCompanydeterminesVSOEbasedonitsnormalsellingpricinganddiscountingpracticesforthespecificproductorservicewhensoldonastand-alonebasis.IndeterminingVSOE,theCompany'spolicyrequiresasubstantialmajorityofsellingpricesforaproductorservicetobewithinareasonablynarrowrange.TheCompanyalsoconsiderstheclassofcustomer,methodofdistributionandthegeographiesintowhichproductsandservicesarebeingsoldwhendeterminingVSOE.

IfVSOEcannotbeestablished,theCompanyattemptstoestablishthesellingpricebasedonthird-partyevidence("TPE").VSOEcannotbeestablishedininstanceswhereaproductorservicehasnotbeensoldseparately,stand-alonesalesaretooinfrequentorproductpricingisnotwithinasufficientlynarrowrange.TPEisdeterminedbasedoncompetitorpricesforsimilardeliverableswhensoldseparately.

WhentheCompanycannotdetermineVSOEorTPE,itusesestimatedsellingprice("ESP")initsallocationofarrangementconsideration.TheobjectiveofESPistodeterminethepriceatwhichtheCompanywouldtypicallytransactastand-alonesaleoftheproductorservice.ESPisdeterminedbyconsideringanumberoffactorsincludingtheCompany'spricingpolicies,internalcostsandgrossprofitobjectives,methodofdistribution,marketresearchandinformation,recenttechnologicaltrends,competitivelandscapeandgeographies.TheCompanyanalyzesthesellingpricesusedinitsallocationofarrangementconsideration,ataminimum,onanannualbasis.SellingpriceswillbeanalyzedmorefrequentlyifasignificantchangeintheCompany'sbusinessorotherfactorsnecessitatemorefrequentanalysisoriftheCompanyexperiencessignificantvariancesinitssellingprices.

Revenuefromaccessoriesandpartsisgenerallyrecognizedbasedonshippingterms.Servicerevenueisrecognizedastheservicesareperformedorratablyoverthecontractualobligationandincludesmaintenancecontracts,extendedwarranty,training,applicationsupportandon-demandservices.

TheCompanyalsohascontractsforwhichitappliesthepercentage-of-completionmodelandcompletedcontractmodelofrevenuerecognition.Applicationofthepercentage-of-completionmethodrequirestheCompanytomakereasonableestimatesoftheextentofprogresstowardcompletionofthecontractandthetotalcoststheCompanywillincurunderthecontractandlossesarerecordedimmediatelywhenweestimatethatcontractswillultimatelyresultinaloss.Changesintheestimatescouldaffectthetimingofrevenuerecognition.

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Otherrevenuesareprimarilycomprisedofdevelopmentarrangementsrecognizedonacost-plus-fixed-feebasisandlicensingarrangementsrecognizedratablyoverthetermoftherelatedcontracts.

ShippingandHandlingCosts

TheCompanyincludescostsincurredinconnectionwithshippingandhandlingofproductswithinselling,generalandadministrativeexpensesintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome.Shippingandhandlingcostswere$23.2million,$21.3millionand$20.6millionintheyearsendedDecember31,2017,2016and2015,respectively.Amountsbilledtocustomersinconnectionwiththesecostsareincludedintotalrevenues.

TheCompanycommitssubstantialcapitalandresourcestointernalandcollaborativeresearchanddevelopmentprojectsinordertoprovideinnovativeproductsandsolutionstotheircustomers.TheCompanyconductsresearchprimarilytoenhancesystemperformanceandimprovethereliabilityofexistingproducts,andtodeveloprevolutionarynewproductsandsolutions.Researchanddevelopmentcostsareexpensedasincurredandincludesalaries,wagesandotherpersonnelrelatedcosts,materialcostsanddepreciation,consultingcostsandfacilitycosts.

CapitalizedSoftware

Purchasedsoftwareiscapitalizedatcostandisamortizedovertheestimatedusefullife,whichisgenerallythreeyears.SoftwaredevelopedforuseintheCompany'sproductsisexpensedasincurredtoresearchanddevelopmentexpenseuntiltechnologicalfeasibilityisachieved.Subsequenttotheachievementoftechnologicalfeasibility,amountsarecapitalizable;however,todatesuchamountshavenotbeenmaterial.

Advertising

TheCompanyexpensesadvertisingcostsasincurred.Advertisingexpenseswere$14.0million,$12.7millionand$12.9millionduringtheyearsendedDecember31,2017,2016and2015,respectively.

Stock-BasedCompensation

TheCompanyrecognizesstock-basedcompensationexpenseintheconsolidatedstatementsofincomeandcomprehensiveincomebasedonthefairvalueoftheshare-basedawardatthegrantdate.TheCompany'sprimarytypesofshare-basedcompensationarestockoptions,restrictedstockawardsandrestrictedstockunits.TheCompanyrecordedstock-basedcompensationexpensefortheyearsendedDecember31,2017,2016and2015,asfollows(inmillions):

2017 2016 2015 Stockoptions $ 6.2 $ 7.5 $ 7.1Restrictedstockawards 1.4 1.6 0.9Restrictedstockunits 3.4 0.3 —Totalstock-basedcompensation $ 11.0 $ 9.4 $ 8.0

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Compensationexpenseisamortizedonastraight-linebasisovertheunderlyingvestingtermsoftheshare-basedaward.StockoptionstopurchasetheCompany'scommonstockareperiodicallyawardedtoexecutiveofficersandotheremployeesoftheCompanysubjecttoavestingperiodofthreetofouryears.ThefairvalueofeachoptionawardisestimatedonthedateofgrantusingtheBlack-Scholesoption-pricingmodel.Assumptionsregardingvolatility,expectedterm,dividendyieldandrisk-freeinterestratesarerequiredfortheBlack-Scholesmodelandarepresentedinthetablebelow:

Risk-freeinterestratesarebasedontheyieldonzero-couponU.S.Treasurysecuritiesforaperiodthatiscommensuratewiththeexpectedlifeassumption.ExpectedlifeisdeterminedthroughacalculationbasedonhistoricaldataandtheCompanybelievesthatthisisthebestestimateoftheexpectedtermofanewoption.Expectedvolatilityisbasedonanumberoffactors,buttheCompanycurrentlybelievesthattheexclusiveuseofitshistoricalvolatilityresultsinthebestestimateoftheexpectationsoffuturevolatilityovertheexpectedterm.TheexpecteddividendyieldwasincludedintheoptionpricingformulabeginninginFebruaryof2016astheCompanyadoptedadividendpolicy.Inaddition,theCompanyutilizesanestimatedforfeitureratewhencalculatingthestock-basedcompensationexpensefortheperiod.TheCompanyhasappliedestimatedforfeitureratesderivedfromananalysisofhistoricaldataof6.7%,6.2%and5.8%fortheyearsendedDecember31,2017,2016and2015,respectively,indeterminingtheexpenserecordedintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome.

Startingin2017,membersoftheCompany'sBoardofDirectorsreceiveanannualawardofrestrictedstockunitswhichvestoveraoneyearserviceperiod.

EarningsPerShare

NetincomepercommonshareattributabletoBrukerCorporationshareholdersiscalculatedbydividingnetincomeattributabletoBrukerCorporationbytheweighted-averagesharesoutstandingduringtheperiod.Thedilutednetincomepersharecomputationincludestheeffectofshareswhichwouldbeissuableupontheexerciseofoutstandingstockoptionsandthevestingofrestrictedstock,reducedbythenumberofshareswhichareassumedtobepurchasedbytheCompanyunderthetreasurystockmethod.

2017 2016 2015 Costsofproductrevenue $ 1.7 $ 1.4 $ 1.2Selling,generalandadministrative 7.6 6.6 5.6Researchanddevelopment 1.7 1.4 1.2Totalstock-basedcompensation $ 11.0 $ 9.4 $ 8.0

2017 2016 2015 Risk-freeinterestrates 1.78%-2.09% 1.23%-2.21% 1.58%-1.91%Expectedlife 5.56years 5.75-7.02years 6.0-6.25yearsVolatility 30.78%-34.13% 33.57%-41.60% 35.10%-52.23%Expecteddividendyield 0.55%-0.74% 0.0%-0.78% —

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ThefollowingtablesetsforththecomputationofbasicanddilutedweightedaveragesharesoutstandingfortheyearsendedDecember31,(inmillions,exceptpersharedata):

Stockoptionsandrestrictedstockunitstopurchaseapproximately0.3millionshares,0.6millionsharesand1.3millionshareswereexcludedfromthecomputationofdilutedearningspersharefortheyearsendedDecember31,2017,2016and2015,respectively,becausetheireffectwouldhavebeenanti-dilutive.

PostRetirementBenefitPlans

TheCompanyrecognizestheover-fundedorunder-fundedstatusofdefinedbenefitpensionandotherpostretirementdefinedbenefitplansasanassetorliability,respectively,initsconsolidatedbalancesheetsandrecognizeschangesinthefundedstatusintheyearinwhichthechangesoccurthroughothercomprehensiveincome.

OtherComprehensiveIncome(Loss)

Othercomprehensiveincome(loss)referstorevenues,expenses,gainsandlossesthatareexcludedfromnetincomeastheseamountsarerecordeddirectlyasanadjustmenttoshareholders'equity,netoftax.TheCompany'sothercomprehensiveincome(loss)wascomposedofforeigncurrencytranslationadjustmentsandpensionliabilityadjustments.

ForeignCurrencyTranslation

AssetsandliabilitiesoftheCompany'sforeignsubsidiaries,wherethefunctionalcurrencyisthelocalcurrency,aretranslatedintoU.S.Dollarsusingyear-endexchangerates,orhistoricalrates,asappropriate.Revenuesandexpensesofforeignsubsidiariesaretranslatedattheaverageexchangeratesineffectduringtheyear.Adjustmentsresultingfromfinancialstatementtranslationsareincludedasaseparatecomponentofshareholders'equity.Gainsandlossesresultingfromtranslationofforeigncurrencymonetarytransactionsarereportedininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincomeforallperiodspresented.TheCompanyhascertainintercompanyforeigncurrencytransactionsthataredeemedtobeofalong-terminvestmentnature.Exchangeadjustmentsrelatedtothosetransactionsaremadedirectlytoaseparatecomponentofshareholders'equity.

RiskandUncertainties

TheCompanyissubjecttoriskscommontoitsindustryincluding,butnotlimitedto,globaleconomicconditions,rapidtechnologicalchange,governmentandacademicfundinglevels,changesin

2017 2016 2015 NetincomeattributabletoBrukerCorporation,asreported $ 78.6 $ 153.6 $ 101.6Weightedaveragesharesoutstanding: Weightedaveragesharesoutstanding-basic 158.1 161.4 168.2Effectofdilutivesecurities: Stockoptions,restrictedstockawardsandrestrictedstockunits 1.0 0.8 0.9

159.1 162.2 169.1NetincomepercommonshareattributabletoBrukerCorporationshareholders: Basic $ 0.50 $ 0.95 $ 0.60Diluted $ 0.49 $ 0.95 $ 0.60

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commodityprices,spendingpatternsfromitscustomers,protectionofitsintellectualproperty,availabilityofkeyrawmaterialsandcomponents,compliancewithexistingandfutureregulationbygovernmentagenciesandfluctuationsinforeigncurrencyexchangerates.

LossContingencies

Losscontingencyprovisionsarerecordedifthepotentiallossfromanyclaim,assertedorunasserted,orlegalproceedingrelatedtopatents,productsandothermatters,isconsideredprobableandtheamountcanbereasonablyestimatedorarangeoflosscanbedetermined.Theseaccrualsrepresentmanagement'sbestestimateofprobableloss.Disclosureisprovidedwhenitisreasonablypossiblethatalosswillbeincurredorwhenitisreasonablypossiblethattheamountofalosswillexceedtherecordedprovision.

UseofEstimates

ThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatementsandreportedamountsofrevenuesandexpensesduringthereportingperiod.

Significantestimatesandjudgmentsmadebymanagementinpreparingthesefinancialstatementsincluderevenuerecognition,allowancesfordoubtfulaccounts,write-downsforexcessandobsoleteinventory,estimatedfairvaluesusedtorecordimpairmentchargesrelatedtointangibleassets,goodwill,andotherlong-livedassets,amortizationperiods,expectedfuturecashflowsusedtoevaluatetherecoverabilityoflong-livedassets,stock-basedcompensationexpense,warrantyallowances,restructuringandotherrelatedcharges,contingentliabilitiesandtherecoverabilityoftheCompany'snetdeferredtaxassets.

AlthoughtheCompanyregularlyreassessestheassumptionsunderlyingtheseestimates,actualresultscoulddiffermateriallyfromtheseestimates.Changesinestimatesarerecordedintheperiodinwhichtheybecomeknown.TheCompanybasesitsestimatesonhistoricalexperienceandvariousotherassumptionsthatitbelievestobereasonableunderthecircumstances.Actualresultsmaydifferfrommanagement'sestimatesiftheseresultsdifferfromhistoricalexperienceorotherassumptionsprovenottobesubstantiallyaccurate,evenifsuchassumptionswerereasonablewhenmade.

Note3—Acquisitions

OnMay5,2017,theCompanyacquired100%ofthesharesofLuxendoGmbH("Luxendo"),aprivatelyheldspin-offoftheEuropeanMolecularBiologyLaboratory,forapurchasepriceofEuro17million(approximately$18.8million),withthepotentialforadditionalconsiderationbasedonrevenueachievementsin2018through2021.Luxendoisadeveloperandmanufacturerofproprietarylight-sheetfluorescencemicroscopyinstruments.TheCompanybelievestheacquisitionenhancestheCompany'sportfolioofswept-fieldconfocal,super-resolution,andmultiphotonfluorescencemicroscopeproductlinesforsmallorganismembryology,live-cellimaging,braindevelopmentandclearedbraintissueandoptogeneticsapplications.LuxendoislocatedinHeidelberg,GermanyandisbeingintegratedintotheBrukerNanoGroupwithintheBSIreportablesegment.TheacquisitionofLuxendo

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wasaccountedforundertheacquisitionmethod.Thecomponentsandfairvalueallocationoftheconsiderationtransferredinconnectionwiththeacquisitionwereasfollows(inmillions):

Thepreliminaryfairvalueallocationincludedcontingentconsiderationintheamountof$3.1million,whichrepresentedtheestimatedfairvalueoffuturepaymentstotheformershareholdersofLuxendobasedonachievingannualrevenuetargetsfortheyears2018through2021.TheCompanycompletedthefairvalueallocationinthethirdquarterof2017.TheamortizationperiodforintangibleassetsacquiredinconnectionwiththeacquisitionofLuxendois10yearsfortradenamesand7yearsfortechnology.

TheresultsofLuxendo,includingtheamountallocatedtogoodwillthatisattributabletoexpectedsynergiesandnotexpectedtobedeductiblefortaxpurposes,havebeenincludedintheBSISegmentfromthedateofacquisition.ProformafinancialinformationreflectingtheacquisitionofLuxendohasnotbeenpresentedbecausetheimpactonrevenues,netincomeandtotalassetsisnotmaterial.

OnJanuary23,2017,theCompanyacquired100%ofthesharesofHysitron,Incorporated("Hysitron").TheacquisitionaddsHysitron'snanomechanicaltestinginstrumentstotheCompany'sexistingportfolioofatomicforcemicroscopes,surfaceprofilometers,andtribologyandmechanicaltestingsystems.HysitronisincludedintheBrukerNanoGroupwithintheBSIreportablesegment.TheacquisitionofHysitronwasaccountedforundertheacquisitionmethod.Thecomponentsandfair

ConsiderationTransferred: Cashpaid $ 20.1Cashacquired (1.3)Contingentconsideration 3.1Totalconsiderationtransferred $ 21.9

AllocationofConsiderationTransferred: Inventories 1.1Othercurrentandnon-currentassets 0.4Property,plantandequipment 0.3Intangibleassets: Existingtechnology 10.9Tradename 0.8

Goodwill 11.2Deferredtaxes,net (2.4)Liabilitiesassumed (0.4)Totalconsiderationtransferred $ 21.9

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valueallocationoftheconsiderationtransferredinconnectionwiththeacquisitionofHysitronwereasfollows(inmillions):

Thefairvalueallocationincludedcontingentconsiderationintheamountof$1.6million,whichrepresentedtheestimatedfairvalueoffuturepaymentstotheformershareholdersofHysitronbasedonachievingannualrevenuetargetsfortheyears2017through2018.TheCompanycompletedthefairvalueallocationinthesecondquarterof2017.Themaximumpotentialfuturepaymentsrelatedtothecontingentconsiderationis$10million.TheamortizationperiodforintangibleassetsacquiredinconnectionwithHysitronis7yearsforcustomerrelationships,trademarksandotherintangiblesand5yearsforexistingtechnology.

TheresultsofHysitron,includingtheamountallocatedtogoodwillthatisattributabletoexpectedsynergiesandnotexpectedtobedeductiblefortaxpurposes,havebeenincludedintheBSISegmentfromthedateofacquisition.ProformafinancialinformationreflectingtheacquisitionofHysitronhasnotbeenpresentedbecausetheimpactonrevenues,netincomeandtotalassetsisnotmaterial.

Inadditiontotheacquisitionsnotedabove,intheyearendedDecember31,2017,theCompanycompletedvariousotheracquisitionsthatcollectivelycomplementedtheCompany'sexistingproductofferingsoraddedaftermarketandsoftwarecapabilitiestotheCompany'sexistingmicrobiologybusiness.Theimpactoftheseacquisitions,individuallyandcollectively,onrevenues,netincomeandtotalassetswasnotmaterial.Proformafinancialinformationreflectingtheseacquisitionshasnotbeenpresentedbecausetheimpact,individuallyandcollectively,onrevenues,netincomeandtotalassetsis

AllocationofConsiderationTransferred: Accountsreceivable,net $ 3.0Inventories 3.8Othercurrentassets 0.2Property,plantandequipment 0.6Intangibleassets: Customerrelationships 5.8Existingtechnology 4.7Tradename 1.2Other 0.6

Goodwill 16.6Deferredtaxes,net (4.1)Capitallease (0.2)Liabilitiesassumed (3.4)Totalconsiderationtransferred $ 28.8

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notmaterial.Thefollowingtablereflectstheconsiderationtransferredandtherespectivereportingsegmentforeachoftheacquisitions:

OnDecember14,2016,weacquired100%ofthestockofActiveSpectrumInc.,amanufacturerofmagneticresonancespectroscopy.OnNovember17,2016,weacquired100%ofthemembershipinterestsofOxfordInstrumentsSuperconductingWireLLC(OST),amanufactureroflow-temperaturesuperconductors.OnNovember2,2016,weacquiredtheassetsofRenishawDiagnosticsLtd.,adeveloperandproducerofmolecularassaysforapplicationsinmicrobiology.OnNovember21,2016,weacquiredthepreclinicalimagingbusinessofOncoVision,aleadingproviderofinnovativemedicalimagingdevices.OnJune20,2016,weacquiredtheassetsofYingshengTechnologyPtyLtd.,whichcompriseatechnologyforadvancedmineralsidentificationandcharacterization.TheproductsoftheacquiredcompaniesareintendedtocomplementtheCompany'sexistingproductportfolioandtechnologybase.Thefollowingtablereflectstheconsiderationtransferredandtherespectivereportingsegmentforeachoftheacquisitions:

NameofAcquisition DateAcquired Segment Consideration CashConsideration InVivoBiotechSvsGmbH. January2,2017 BSI $ 9.1 $ 9.1SCIILsGmbH January2,2017 BSI 3.1 3.1Hysitron,Incorporated January23,2017 BSI 28.8 27.2LuxendoGmbH May5,2017 BSI 21.9 18.8XGLabS.r.l. August1,2017 BSI 5.5 5.5thepTD/ePaTOXIIbusinessofAnalytikJenaAG August2,2017 BSI 0.4 0.4MERLINDiagnostikaGmbH September20,2017 BSI 2.5 2.2

$ 71.3 $ 66.3

NameofAcquisition Segment Consideration CashConsideration YingshengTechnologyPtyLtd BSI $ 1.7 $ 1.2RenishawDiagnosticsLtd. BSI 3.6 1.2OxfordInstrumentsSuperconductingWireLLC BEST 15.9 15.9PreclinicalImagingBusinessofOncoVision BSI 7.4 6.0ActiveSpectrumInc. BSI 2.8 —

$ 31.4 $ 24.3

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Thecomponentsandfairvalueallocationoftheconsiderationtransferredinconnectionwiththeseacquisitionswereasfollows(inmillions):

TheCompanycompletedthefairvalueallocationfortheseacquisitionsatDecember31,2016.Thefairvalueallocationincludedcontingentconsiderationintheamountof$5.1million,whichrepresentedtheestimatedfairvalueoffuturepaymentstotheformershareholdersoftheacquiredcompaniesbasedonachievingannualrevenueandgrossmargintargetsinfutureyears.Thefuturepaymentsofthecontingentconsiderationmaydifferfromthefairvaluerecordedbasedonthefinancialresultsoftheacquiredbusinesses.Theamortizationperiodforintangibleassetsisbetween5and7years.Thebargainpurchasegainof$9.2millionrelatedtotheacquisitionofOST,andhasbeenrecordedwithininterestandotherincome,netontheconsolidatedstatementsofincomeandcomprehensiveincome.Theacquisitionresultedinabargainpurchasegainbecausetheassetsacquiredexceededtheconsiderationpaid.Proformafinancialinformationreflectingtheseacquisitionshavenotbeenpresentedbecausetheimpactonrevenues,netincomeandtotalassetsisnotmaterial.

InOctober2015,theCompanycompletedtheacquisitionofJordanValleySemiconductors,Ltd.("JordanValley"),acompanyheadquarteredinIsraelthatprovidesX-raymetrologyanddefect-detectionequipmentforsemiconductorprocesscontrol.TheacquisitionofJordanValleywasaccounted

ConsiderationTransferred: Cashpaid $ 25.9Cashacquired (1.6)Sharesissued 2.0Contingentconsideration 5.1Totalconsiderationtransferred $ 31.4

AllocationofConsiderationTransferred: Accountsreceivable $ 6.9Inventories 19.1Othercurrentassets 0.1Property,plantandequipment 7.5Intangibleassets: Customerrelationships 2.0Existingtechnology 14.6Tradename 0.6

Goodwill 1.0Bargainpurchasegain (9.2)Deferredtaxes,net (1.0)Liabilitiesassumed (10.2)Totalconsiderationtransferred $ 31.4

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forundertheacquisitionmethod.ThecomponentsandfairvalueallocationoftheconsiderationtransferredinconnectionwiththeacquisitionofJordanValleywereasfollows(inmillions):

TheCompanycompletedthefairvalueallocationinthefourthquarterof2015.Thefairvalueallocationincludedcontingentconsiderationintheamountof$4.1million,whichrepresentedtheestimatedfairvalueoffuturepaymentstotheformershareholdersofJordanValleybasedonachievingannualrevenueandgrossmargintargetsfortheyears2016-2017.DuringtheyearendedDecember31,2016,theCompanyrecordedanadditional$7.7milliontoothercharges,netforadditionalconsiderationbasedon2016revenueandgrossmarginachievements.Themaximumpotentialfuturepaymentsrelatedtothecontingentconsiderationis$4.1millionatDecember31,2016.TheamortizationperiodforintangibleassetsacquiredinconnectionwithJordanValleyis7yearsforcustomerrelationships,existingtechnologyandtradename.

TheresultsofJordanValley,includingtheamountallocatedtogoodwillwhichisattributabletoexpectedsynergiesandnotexpectedtobedeductiblefortaxpurposes,havebeenincludedintheBSISegmentfromthedateofacquisition.ProformafinancialinformationreflectingtheacquisitionofJordanValleyhasnotbeenpresentedbecausetheimpactonrevenues,netincomeandtotalassetsisnotmaterial.

Note4—FairValueofFinancialInstruments

TheCompanymeasuresthefollowingfinancialassetsandliabilitiesatfairvalueonarecurringbasis.ThefollowingtablessetforththeCompany'sfinancialinstrumentsandpresentsthemwithinthe

AllocationofConsiderationTransferred: Accountsreceivable $ 3.8Inventories 10.5Othercurrentassets 2.2Property,plantandequipment 1.6Intangibleassets: Customerrelationships 6.8Existingtechnology 6.0Tradename 1.5

Goodwill 6.3Liabilitiesassumed (6.0)Totalconsiderationtransferred $ 32.7

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fairvaluehierarchyusingthelowestlevelofinputthatissignificanttothefairvaluemeasurementatDecember31,2017and2016(inmillions):

Derivativefinancialinstrumentsareclassifiedwithinlevel2becausethereisnotanactivemarketforeachderivativecontract.However,theinputsusedtocalculatethevalueoftheinstrumentsareobtainedfromactivemarkets.

Thefairvalueofthelong-termfixedinterestratedebt,whichhasbeenclassifiedasLevel2,was$231.3millionand$253.3millionatDecember31,2017and2016,respectively,basedonmarketandobservablesourceswithsimilarmaturitydates.

TheCompanymeasurescertainassetsandliabilitiesatfairvaluewithchangesinfairvaluerecognizedinearnings.Fairvaluetreatmentmaybeelectedeitheruponinitialrecognitionofaneligibleassetorliabilityor,foranexistingassetorliability,ifaneventtriggersanewbasisofaccounting.TheCompanydidnotelecttoremeasureanyofitsexistingfinancialassetsorliabilitiesduringtheyearsendedDecember31,2017and2016.

Excludedfromthetableabovearecashequivalents,restrictedcashandshort-terminvestmentsasthecostapproximatescurrentfairvalue.TheCompanyhasaprogramtoenterintotimedepositsandcalldepositandmoneymarketfunds.ThetimeandcalldepositshavevaryingmaturitydatesrangingfromonetotwelvemonthforwhichtheCompanyhastheabilitytoredeemtheinvestedamountsover

December31,2017 Total

QuotedPricesinActiveMarketsAvailable(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3)

Assets: Foreignexchangecontracts $ 4.5 $ — $ 4.5 $ —Embeddedderivativesinpurchaseanddeliverycontracts 0.9 — 0.9 —Fixedpricecommoditycontracts 0.8 — 0.8 —Totalassetsrecordedatfairvalue $ 6.2 $ — $ 6.2 $ —

Liabilities: Contingentconsideration $ 12.7 $ — $ — $ 12.7Foreignexchangecontracts 0.1 — 0.1 —Embeddedderivativesinpurchaseanddeliverycontracts 2.9 — 2.9 —Totalliabilitiesrecordedatfairvalue $ 15.7 $ — $ 3.0 $ 12.7

QuotedPricesinActiveMarketsAvailable(Level1)

SignificantOther

ObservableInputs(Level2)

SignificantUnobservable

Inputs(Level3)

Assets: Embeddedderivativesinpurchaseanddeliverycontracts $ 4.0 $ — $ 4.0 $ —Fixedpricecommoditycontracts 0.2 — 0.2 —Totalassetsrecordedatfairvalue $ 4.2 $ — $ 4.2 $ —

Liabilities: Contingentconsideration $ 16.6 $ — $ — $ 16.6Foreignexchangecontracts 1.4 — 1.4 —Embeddedderivativesinpurchaseanddeliverycontracts 0.3 — 0.3 —Totalliabilitiesrecordedatfairvalue $ 18.3 $ — $ 1.7 $ 16.6

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aperiodof31to95days.TheCompanyhasclassifiedtheseinvestmentswithincashandcashequivalentsorshort-terminvestmentswithintheconsolidatedbalancesheetsbasedoncallandmaturitydates.Therearenocashequivalents,$4.0millionand$3.4millionofrestrictedcashand$114.2millionand$157.9millionofshort-terminvestmentsoutstandingasofDecember31,2017and2016,respectively.Onaquarterlybasis,theCompanyreviewsitsshort-terminvestmentstodetermineiftherehavebeenanyeventsthatcouldcreateanimpairment.NonewerenotedfortheyearsendedDecember31,2017and2016.

Aspartofcertainacquisitionsin2017,2016,and2015,theCompanyrecordedcontingentconsiderationliabilitiesthathavebeenclassifiedasLevel3inthefairvaluehierarchy.Thecontingentconsiderationrepresentstheestimatedfairvalueoffuturepaymentstotheformershareholdersofapplicableacquiredcompaniesbasedonachievingannualrevenueandgrossmargintargetsincertainyearsasspecifiedinthepurchaseandsaleagreements.TheCompanyinitiallyvaluesthecontingentconsiderationsbyusingaMonteCarlosimulationoranincomeapproachmethod.TheMonteCarlomethodmodelsfuturerevenueandcostsofgoodssoldprojectionsanddiscountstheaverageresultstopresentvalue.Theincomeapproachmethodinvolvescalculatingtheearnoutpaymentbasedontheforecastedcashflows,adjustingthefutureearnoutpaymentfortheriskofreachingtheprojectedfinancials,andthendiscountingthefuturepaymentstopresentvaluebythecounterpartyrisk.Thecounterpartyriskconsiderstheriskofthebuyerhavingthecashtomaketheearnoutpaymentsandiscommensuratewiththecostofdebtoveranappropriateterm.

ChangestothefairvalueofthecontingentconsiderationrecognizedinearningsfortheyearsendedDecember31,2017andDecember31,2016were$2.3millionand$6.9million,respectively,Theseamountswererecordedtoothercharges,netintheconsolidatedstatementsofincomeandcomprehensiveincomeforincreasesofcontingentconsiderationrepresentingexpectedachievementoffinancialtargets.ThefollowingtablesetsforththechangesincontingentconsiderationliabilitiesfortheyearsendedDecember31,2017and2016(inmillions):

Note5—AccountsReceivable

ThefollowingisasummaryoftradeaccountsreceivableatDecember31,(inmillions):

BalanceatDecember31,2015 $ 4.6Currentperiodadditions 5.1Currentperiodadjustments 6.9

BalanceatDecember31,2016 16.6Currentperiodadditions 5.0Currentperiodadjustments 2.3Currentperiodsettlements (11.7)Foreigncurrencyeffect 0.5

BalanceatDecember31,2017 $ 12.7

2017 2016 Grossaccountsreceivable $ 324.0 $ 251.8Allowancefordoubtfulaccounts (4.7) (7.9)Accountsreceivable,net $ 319.3 $ 243.9

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Theallowancefordoubtfulaccountsismanagement'sestimateofcreditlossesintheaccountsreceivable.Theallowancefordoubtfulaccountsisbasedonanumberoffactors,includinganevaluationofcustomercreditworthiness,theageoftheoutstandingreceivable,economictrendsandhistoricalexperience.Theallowancefordoubtfulaccountsisreviewedonaquarterlybasisandchangesinestimatesarereflectedintheperiodinwhichtheybecomeknown.TheCompanyrecordsaccountbalancesagainsttheallowanceafterallmeansofcollectionhavebeenexhaustedandthepotentialforrecoveryisconsideredremote.Provisionsfordoubtfulaccountsarerecordedinselling,generalandadministrativeexpensesintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome.

ThefollowingisasummaryoftheactivityintheCompany'sallowancefordoubtfulaccountsatDecember31,(inmillions):

Note6—Inventories

InventoriesconsistedofthefollowingatDecember31,(inmillions):

Finishedgoodsincludein-transitsystemsthathavebeenshippedtotheCompany'scustomersbutnotyetinstalledandacceptedbythecustomer.AsofDecember31,2017and2016,inventory-in-transitwas$41.4millionand$37.5million,respectively.

InJuly2015,theFASBissuedASUNo.2015-11,Simplifying the Measurement of Inventory .Thisguidanceeliminatesthemeasurementofinventoryatmarketvalue,andinventoryisnowmeasuredatthelowerofcostandnetrealizablevalue.TheASUdefinesnetrealizablevalueastheestimatedsellingpricesintheordinarycourseofbusiness,lessreasonablypredictablecostsofcompletion,disposal,andtransportation.Nootherchangesweremadetothecurrentguidanceoninventorymeasurement.TheCompanyadoptedASUNo.2015-11onaprospectivebasisinthefirstquarterof2017.

BalanceatBeginning

ofPeriod

AdditionsChargedtoExpense

DeductionsAmountsWrittenOff

ForeignCurrencyImpact

BalanceatEndofPeriod

2017 $ 7.9 $ 0.5 $ (4.4) $ 0.7 4.72016 9.1 0.9 (2.0) (0.1) 7.92015 10.1 2.1 (2.5) (0.6) 9.1

2017 2016 Rawmaterials $ 152.0 $ 132.8Work-in-process 183.1 181.0Finishedgoods 96.6 91.8Demonstrationunits 54.5 34.8Inventories $ 486.2 $ 440.4

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Note7—Property,PlantandEquipment,Net

Thefollowingisasummaryofproperty,plantandequipment,netbymajorassetclassatDecember31,(inmillions):

Depreciationexpense,whichincludestheamortizationofleaseholdimprovements,fortheyearsendedDecember31,2017,2016and2015was$34.3million,$32.6millionand$32.6million,respectively.

DuringtheyearsendedDecember31,2017,2016and2015,theCompanyrecordedimpairmentchargesof$1.1million,$0.8millionand$2.1million,respectively,representingthewritedowntofairvalueofcertainproperty,plantandequipment,netrelatedtorestructuringandoutsourcingactivitiesundertakenduringtherespectiveyears.Theseimpairmentchargesarerecordedwithinothercharges,netintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome.PleaseseeNote17—othercharges,net,foradditionaldetailsontherestructuringactivities.

Note8—GoodwillandIntangibleAssets

Goodwill

ThefollowingtablesetsforththechangesinthecarryingamountofgoodwillfortheyearsendedDecember31,2017,2016and2015(inmillions):

AtDecember31,2017and2016,allgoodwillwasallocatedwithintheBSISegment.TheCompanyperformeditsannualimpairmentevaluationusingaqualitativeapproachatDecember31,2017and2016andaquantitativeapproachatDecember31,2015andconcludeditwasmorelikelythannotthatgoodwillhasnotbeenimpaired.Basedonthemostrecentquantitativeanalysisthefairvaluesofeachofourreportingunitswassignificantlygreaterthantheircarryingamountsand,therefore,noadditionalimpairmentwasrequired.

2017 2016 Land $ 28.1 $ 26.7Buildingandleaseholdimprovements 294.8 266.7Machinery,equipment,softwareandfurnitureandfixtures 364.9 323.1

687.8 616.5Lessaccumulateddepreciationandamortization (421.3) (377.4)Property,plantandequipment,net $ 266.5 $ 239.1

BalanceatDecember31,2014 $ 127.8Currentperiodadditions/adjustments 6.8Impairment (0.7)Foreigncurrencyimpact (3.3)

BalanceatDecember31,2015 $ 130.6Currentperiodadditions/adjustments 1.0Foreigncurrencyimpact (1.0)

BalanceatDecember31,2016 130.6Currentperiodadditions/adjustments 33.8Foreigncurrencyimpact 5.4

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IntangibleAssets

ThefollowingisasummaryofintangibleassetsatDecember31,(inmillions):

FortheyearsendedDecember31,2017,2016and2015,theCompanyrecordedamortizationexpenseofapproximately$29.6million,$21.7millionand$20.7million,respectively,intheconsolidatedstatementsofincomeandcomprehensiveincome.DuringtheyearendedDecember31,2015,theCompanyrecordedanimpairmentchargeof$1.8millionrepresentingtheimpairmentofintangibleassetsintheBrukerBioSpinGrouprelatedtocertainrestructuringandoutsourcingactivitiesduringtheyear.

TheestimatedfutureamortizationexpenserelatedtoamortizableintangibleassetsatDecember31,2017isasfollows(inmillions):

Note9—OtherCurrentLiabilities

ThefollowingisasummaryofothercurrentliabilitiesatDecember31,(inmillions):

2017 2016

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

GrossCarryingAmount

AccumulatedAmortization

NetCarryingAmount

Existingtechnologyandrelatedpatents $ 195.4 $ (138.9) $ 56.5 $ 169.0 $ (113.9) $ 55.1Customerrelationships 34.6 (12.9) 21.7 20.0 (7.9) 12.1Noncompeteconracts 1.8 (1.5) 0.3 1.8 (1.1) 0.7Tradenames 4.2 (0.9) 3.3 1.6 (0.4) 1.2Intangibleassetssubjecttoamortization 236.0 (154.2) 81.8 192.4 (123.3) 69.1

In-processresearchanddevelopment 0.6 — 0.6 0.6 — 0.6Intangibleassets $ 236.6 $ (154.2) $ 82.4 $ 193.0 $ (123.3) $ 69.7

2018 $ 24.42019 16.62020 13.32021 12.62022 6.9Thereafter 8.0Total $ 81.8

2017 2016 Deferredrevenue $ 87.0 $ 75.5Accruedcompensation 105.4 83.8Accruedwarranty 20.6 18.7Contingentconsideration 6.5 13.5Incometaxespayable 28.1 11.3Othertaxespayable 16.7 12.4Derivativeliabilities 2.4 1.8Otheraccruedexpenses 55.3 52.5Othercurrentliabilities $ 322.0 $ 269.5

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ThefollowingtablesetsforththechangesinaccruedwarrantyfortheyearsendedDecember31,2017,2016and2015(inmillions):

Note10—Debt

TheCompany'sdebtobligationsconsistofthefollowingasofDecember31,(inmillions):

CreditAgreements

OnOctober27,2015,theCompanyenteredintoanewrevolvingcreditagreement,referredtoasthe2015CreditAgreement.The2015CreditAgreementprovidesamaximumcommitmentontheCompany'srevolvingcreditlineof$500millionandamaturitydateofOctober2020.Borrowingsundertherevolvingcreditlineofthe2015CreditAgreementaccrueinterest,attheCompany'soption,ateither(a)thegreatestof(i)theprimerate,(ii)thefederalfundsrateplus0.50%and(iii)adjustedLIBORplus1.00%,plusmarginsrangingfrom0.00%to0.30%or(b)LIBOR,plusmarginsrangingfrom0.90%to1.30%.Thereisalsoafacilityfeerangingfrom0.10%to0.20%.

Borrowingsunderthe2015CreditAgreementaresecuredbyguaranteesfromcertainmaterialsubsidiaries,asdefinedinthe2015CreditAgreement.The2015CreditAgreementalsorequirestheCompanytomaintaincertainfinancialratiosrelatedtomaximumleverageandminimuminterestcoverage(asdefinedinthe2015CreditAgreement).Specifically,theCompany'sleverageratiocannotexceed3.5andtheCompany'sinterestcoverageratiocannotbelessthan2.5.Inadditiontothefinancialratios,the2015CreditAgreementcontainsnegativecovenants,includingamongothers,restrictionsonliens,indebtednessoftheCompanyanditssubsidiaries,assetsales,dividendsandtransactionswithaffiliates.Failuretocomplywithanyoftheserestrictionsorcovenantsmayresultinaneventofdefaultonthe2015CreditAgreement,whichcouldpermitaccelerationofthedebtandrequiretheCompanytoprepaythedebtbeforeitsscheduledduedate.

BalanceatDecember31,2014 $ 21.6Accrualsforwarrantiesissuedduringtheyear 21.1Settlementsofwarrantyclaims (21.7)Foreigncurrencyimpact (1.4)

BalanceatDecember31,2015 19.6Accrualsforwarrantiesissuedduringtheyear 17.4Settlementsofwarrantyclaims (17.8)Foreigncurrencyimpact (0.5)

BalanceatDecember31,2016 18.7Accrualsforwarrantiesissuedduringtheyear 17.0Settlementsofwarrantyclaims (17.0)Foreigncurrencyimpact 1.9

2017 2016 USDollarrevolvingloanunderthe2015CreditAgreement $ 195.0 $ 171.0USDollarnotesundertheNotePurchaseAgreement 220.0 240.0UnamortizeddebtissuancecostsundertheNotePurchaseAgreement (0.7) (0.8)Capitalleaseobligationsandotherloans 1.3 1.5Totaldebt 415.6 411.7Currentportionoflong-termdebt — (20.1)Totallong-termdebt,lesscurrentportion $ 415.6 $ 391.6

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AsofDecember31,2017,theCompanywasincompliancewiththecovenantsofthe2015CreditAgreement.TheCompany'sleverageratio(asdefinedinthe2015CreditAgreement)was1.32andinterestcoverageratio(asdefinedinthe2015CreditAgreement)was15.5.

ThefollowingisasummaryofthemaximumcommitmentsandthenetamountsavailabletotheCompanyunderthe2015CreditAgreementandotherlinesofcreditwithvariousfinancialinstitutionslocatedprimarilyinGermanyandSwitzerlandthatareunsecuredandtypicallydueupondemandwithinterestpayablemonthly,atDecember31,2017(inmillions):

NotePurchaseAgreement

InJanuary2012,theCompanyenteredintoanotepurchaseagreement,referredtoastheNotePurchaseAgreement,withagroupofaccreditedinstitutionalinvestors.PursuanttotheNotePurchaseAgreement,theCompanyissuedandsold$240.0millionofseniornotes,referredtoastheSeniorNotes,whichconsistofthefollowing:

• $20million3.16%Series2012ASeniorNotes,TrancheA,dueJanuary18,2017;

• $15million3.74%Series2012ASeniorNotes,TrancheB,dueJanuary18,2019;

• $105million4.31%Series2012ASeniorNotes,TrancheC,dueJanuary18,2022;and

• $100million4.46%Series2012ASeniorNotes,TrancheD,dueJanuary18,2024.

OnJanuary18,2017,theoutstanding$20.0millionprincipalamountofTrancheAoftheSeniorNoteswasrepaidinaccordancewiththetermsoftheNotePurchaseAgreement.

UnderthetermsoftheNotePurchaseAgreement,theCompanymayissueandselladditionalseniornotesuptoanaggregateprincipalamountof$600million,subjecttocertainconditions.InterestontheSeniorNotesispayablesemi-annuallyonJanuary18andJuly18ofeachyear.TheSeniorNotesareunsecuredobligationsoftheCompanyandarefullyandunconditionallyguaranteedbycertainoftheCompany'sdirectandindirectsubsidiaries.TheSeniorNotesrankparipassuinrightofrepaymentwiththeCompany'sotherseniorunsecuredindebtedness.TheCompanymayprepaysomeoralloftheSeniorNotesatanytimeinanamountnotlessthan10%oftheoriginalaggregateprincipalamountoftheSeniorNotestobeprepaid,atapriceequaltothesumof(a)100%oftheprincipalamountthereof,plusaccruedandunpaidinterest,and(b)theapplicablemake-wholeamount,uponnotlessthan30andnomorethan60dayswrittennoticetotheholdersoftheSeniorNotes.IntheeventofachangeincontroloftheCompany,asdefinedintheNotePurchaseAgreement,theCompanymayberequiredtoprepaytheNotesatapriceequalto100%oftheprincipalamountthereof,plusaccruedandunpaidinterest.

TheNotePurchaseAgreementcontainsaffirmativecovenants,including,withoutlimitation,maintenanceofcorporateexistence,compliancewithlaws,maintenanceofinsuranceandproperties,paymentoftaxes,additionofsubsidiaryguarantorsandfurnishingnoticesandotherinformation.TheNotePurchaseAgreementalsocontainscertainrestrictivecovenantsthatrestricttheCompany'sabilityto,amongotherthings,incurliens,transferorsellassets,engageincertainmergersandconsolidationsandenterintotransactionswithaffiliates.TheNotePurchaseAgreementalsoincludescustomary

WeightedAverageInterestRate

TotalAmountCommittedby

Lenders OutstandingBorrowings

OutstandingLettersofCredit

TotalAmountAvailable

2015CreditAgreement 2.7%$ 500.0 $ 195.0 $ 1.1 $ 303.9Otherlinesofcredit — 257.9 — 137.7 120.2Totalrevolvingloans $ 757.9 $ 195.0 $ 138.8 $ 424.1

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representationsandwarrantiesandeventsofdefault.Inthecaseofaneventofdefaultarisingfromspecifiedeventsofbankruptcyorinsolvency,alloutstandingSeniorNoteswillbecomedueandpayableimmediatelywithoutfurtheractionornotice.Inthecaseofpaymenteventsofdefaults,anyholderofSeniorNotesaffectedtherebymaydeclareallSeniorNotesheldbyitdueandpayableimmediately.Inthecaseofanyothereventofdefault,amajorityoftheholdersoftheSeniorNotesmaydeclarealltheSeniorNotestobedueandpayableimmediately.PursuanttotheNotePurchaseAgreement,solongasanySeniorNotesareoutstandingtheCompanywillnotpermit(i)itsleverageratio,asdeterminedpursuanttotheNotePurchaseAgreement,asoftheendofanyfiscalquartertoexceed3.50to1.00,(ii)itsinterestcoverageratioasdeterminedpursuanttotheNotePurchaseAgreementasoftheendofanyfiscalquarterforanyperiodoffourconsecutivefiscalquarterstobelessthan2.50to1or(iii)prioritydebtatanytimetoexceed25%ofconsolidatednetworth,asdeterminedpursuanttotheNotePurchaseAgreement.

AsofDecember31,2017,theCompanywasincompliancewiththecovenantsoftheNotePurchaseAgreement.TheCompany'sleverageratio(asdefinedintheNotePurchaseAgreement)was1.32andinterestcoverageratio(asdefinedintheNotePurchaseAgreement)was15.5.

Annualmaturitiesofdebtoutstanding,lessdeferredfinancingcostamortization,atDecember31,2017areasfollows(inmillions):

InterestexpensefortheyearsendedDecember31,2017,2016and2015,was$15.4million,$13.2millionand$13.0million,respectively.

InApril2015,theFinancialAccountingStandardsBoard(FASB)issuedAccountingStandardsUpdate(ASU)2015-03,Simplifying the Presentation of DebtIssuance Costs, whichamendedtheexistingguidancetorequirethatdebtissuancecostsbepresentedintheconsolidatedbalancesheetasareductionfromthecarryingamountoftherelateddebtliabilityinsteadofasanotherasset.TheCompanyadoptedASU2015-03onaretrospectivebasisfortheyearendedDecember31,2016.AsofDecember31,2017and2016,therewere$0.7millionand$0.8million,respectively,indebtissuancecostsrecordedasareductioninthecarryingvalueoftherelateddebtliabilityundertheNotePurchaseAgreement.The$0.7millionindebtissuancecostsasofDecember31,2017willbeamortizedovertheremainingtermoftheNotePurchaseAgreement.TheCompanyalsoadoptedASUNo.2015-15,Presentation and Subsequent Measurement ofDebt Issuance Costs Associated with Line-of-Credit Arrangements, andelectednottoreclassifythedebtissuancecostsrelatedtoline-of-creditarrangementsforthe2015CreditAgreement.

Note11—DerivativeInstrumentsandHedgingActivities

InterestRateRisks

TheCompany'sexposuretointerestrateriskrelatesprimarilytooutstandingvariableratedebtandadversemovementsintherelatedshort-termmarketrates.ThemostsignificantcomponentoftheCompany'sinterestrateriskrelatestoamountsoutstandingunderthe2015CreditAgreement,whichtotaled$195.0millionatDecember31,2017.TheCompanycurrentlyhasapproximatelyequallevelsoffixedandfloatingratedebt,whichlimitstheexposuretoadversemovementsininterestrates.

2018 $ —2019 15.02020 194.92021 —2022 104.9Thereafter 100.8Total $ 415.6

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ForeignExchangeRateRiskManagement

TheCompanygeneratesasubstantialportionofitsrevenuesandexpensesininternationalmarkets,principallyGermanyandothercountriesintheEuropeanUnionandSwitzerland,whichsubjectsitsoperationstotheexposureofforeignratefluctuations.Theimpactofforeignexchangeratemovementcanbepositiveornegativeinanyperiod.TheCompanyperiodicallyentersintoforeigncurrencycontractsinordertominimizethevolatilitythatfluctuationsincurrencytranslationhaveonitsmonetarytransactions.Underthesearrangements,theCompanytypicallyagreestopurchaseafixedamountofaforeigncurrencyinexchangeforafixedamountofU.S.Dollarsorothercurrenciesonspecifieddateswithmaturitiesoflessthantwelvemonths.Thesetransactionsdonotqualifyforhedgeaccountingand,accordingly,theinstrumentisrecordedatfairvaluewiththecorrespondinggainsandlossesrecordedintheconsolidatedstatementsofincomeandcomprehensiveincome.TheCompanyhadthefollowingnotionalamountsoutstandingunderforeigncurrencycontractsatDecember31,(inmillions):

Inaddition,theCompanyperiodicallyentersintopurchaseandsalescontractsdenominatedincurrenciesotherthanthefunctionalcurrencyofthepartiestothetransaction.TheCompanyaccountsforthesetransactionsseparatelyvaluingthe"embeddedderivative"componentofthesecontracts.Thecontracts,denominatedincurrenciesotherthanthefunctionalcurrencyofthetransactingparties,amountedto$98.3millionforthedeliveryofproductsand$3.6millionforthepurchaseofproductsatDecember31,2017and$120.7millionforthedeliveryofproductsand$2.3millionforthepurchaseofproductsatDecember31,2016.Thechangesinthefairvalueoftheseembeddedderivativesarerecordedininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincome.

CommodityPriceRiskManagement

TheCompanyhasanarrangementwithacustomerunderwhichithasafirmcommitmenttodelivercopperbasedsuperconductorsatafixedprice.InordertominimizethevolatilitythatfluctuationsinthepriceofcopperhaveontheCompany'ssalesofthesecommodities,theCompanyentersintocommodityhedgecontracts.AtDecember31,2017and2016,theCompanyhasfixedpricecommoditycontractswithnotionalamountsaggregating$3.0millionand$2.7million,respectively.Thechangesinthefairvalueofthesecommoditycontractsarerecordedininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincome.

NotionalAmountin

BuyCurrency Sell Maturity

NotionalAmountinU.S.Dollars

FairValueofAssets

FairValueofLiabilities

December31,2017: Euro 59.5 U.S.Dollars January2018 $ 67.0 $ 4.5 $ —SwissFrancs 11.0 U.S.Dollars January2018 11.3 — —SingaporeDollar 4.9 U.S.Dollars January2018 3.6 — —Euro 1.8 PolishZloty January2018 2.3 — 0.1

$ 84.2 $ 4.5 $ 0.1December31,2016: Euro 21.1 U.S.Dollars January2017 $ 23.3 $ — $ 1.1SwissFrancs 7.9 U.S.Dollars January2017 8.0 — 0.3U.S.Dollars 4.0 IsraelShekel January2017 4.0 — —IsraelShekel 15.3 U.S.Dollars January2017 4.0 — —Euro 1.4 PolishZloty January2017 1.4 — —

$ 40.7 $ — $ 1.4

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ThefairvalueofthederivativeinstrumentsdescribedabovewererecordedintheconsolidatedbalancesheetsfortheyearsendedDecember31,2017and2016asfollows(inmillions):

TheimpactonnetincomeofunrealizedgainsandlossesresultingfromchangesinthefairvalueofderivativeinstrumentsfortheyearsendingDecember31areasfollows(inmillions)andarerecordedwithininterestandotherincome(expense),netintheconsolidatedstatementsofincomeandcomprehensiveincome:

Note12—IncomeTaxes

OnDecember22,2017(EnactmentDate),thePresidentoftheUnitedStatessignedtaxreformlegislation(2017TaxAct),whichenactedawiderangeofchangestotheU.S.corporateincometaxsystem,manyofwhichdiffersignificantlyfromtheprovisionsofthepreviousU.S.taxlaw.The2017TaxActcontainsseveralkeyprovisionsincluding,amongotherthings:

• Aone-timetaxonthemandatorydeemedrepatriationofpost-1986untaxedforeignearningsandprofits(E&P),referredtoasthe"tollcharge";

• Areductioninthecorporatetaxratefrom35.0%to21.0%forthetaxyearsbeginningafterDecember31,2017;

• TheintroductionofanewU.S.taxoncertainoff-shoreearningsreferredtoasthe"GlobalIntangibleLow-TaxedIncome"(GILTI)ataneffectivetaxrateof10.5%fortaxyearsbeginningafterDecember31,2017(increasingto13.125%fortaxyearsbeginningafterDecember31,2025)withapartialoffsetbyforeigntaxcredits;and

• Theintroductionofaterritorialtaxsystembeginningin2018byprovidinga100%dividendsreceiveddeductiononcertainqualifieddividendsfromforeignsubsidiaries.

AlsoonDecember22,2017,theSecuritiesandExchangeCommission(SEC)issuedStaffAccountingBulletin(SAB)No.118,whichprovidescompanieswithadditionalguidanceonhowtoimplementtheprovisionsofthe2017TaxActintheirfinancialstatements.Theguidanceprovidesforameasurementperiod,uptooneyearfromtheEnactmentDate,inwhichprovisionalamountsmaybeadjustedwhenadditionalinformationisobtained,preparedoranalyzedaboutfactsandcircumstancesthatexistedasoftheEnactmentDate,ifknown,whichwouldhaveimpactedtheamountsthatwereinitiallyrecordedbytheCompany.

BalanceSheetLocation 2017 2016 Derivativeassets: Foreignexchangecontracts Othercurrentassets $ 4.5 $ —Embeddedderivativesinpurchaseanddeliverycontracts Othercurrentassets 0.9 2.7Fixedpricecommoditycontracts Othercurrentassets 0.8 0.2Embeddedderivativesinpurchaseanddeliverycontracts Otherlong-termassets — 1.3

Derivativeliabilities: Foreignexchangecontracts Othercurrentliabilities $ 0.1 $ 1.4Embeddedderivativesinpurchaseanddeliverycontracts Othercurrentliabilities 1.5 0.3Embeddedderivativesinpurchaseanddeliverycontracts Otherlong-termliabilities 1.4 —

2017 2016 2015 Foreignexchangecontracts $ 5.8 $ (0.1) $ 3.8Embeddedderivativesinpurchaseanddeliverycontracts (5.7) 3.7 (0.2)Fixedpricecommoditycontracts 0.6 0.6 (0.2)Income(expense),net $ 0.7 $ 4.2 $ 3.4

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TheCompanyhasnotyetcompletedtheassessmentofthetaxeffectsassociatedwiththeenactmentofthe2017TaxAct;however,areasonableestimatehasbeenmadeoftheeffectsontheexistingdeferredtaxbalancesandtheone-timetransitiontax.Changesinthetaxratesandlawsareaccountedforintheperiodofenactment.Therefore,duringthefourthquarterof2017,theCompanyrecordedanincrementalincometaxprovisionof$68.9million,whichisprimarilycomprisedofthefollowing:

Thenetchargeof$68.9millionrecordedwasbasedoncurrentlyavailableinformationandinterpretationsofapplyingtheprovisionsofthe2017TaxActasofthetimeoffilingthisAnnualReportonForm10-K.TheCompanyexpectstofinalizetheseprovisionalestimatesbeforetheendof2018aftercompletingthereviewandanalysis,includingreviewsandanalysisofanyinterpretationsissuedduringthismeasurementperiod.

TheCompanyisstillevaluatingtheGILTIprovisionsofthe2017TaxActanditsimpact,ifany,totheconsolidatedfinancialstatementsasofDecember31,2017.CompaniesareallowedtoadoptanaccountingpolicytoeitherrecognizedeferredtaxesforGILTIortreatsuchasataxcostintheyearincurred.TheCompanyhasnotyetdeterminedtheaccountingpolicybecausedeterminingtheimpactoftheGILTIprovisionsrequiresanalysisoftheexistinglegalentitystructure,thereversalofU.S.GAAPandU.S.taxbasisdifferencesintheassetsandliabilitiesofforeignsubsidiaries,andtheabilitytooffsetanytaxwithforeigntaxcredits.Assuch,theCompanydidnotrecordadeferredincometaxexpenseorbenefitrelatedtotheGILTIprovisionsofthe2017TaxActintheconsolidatedstatementofincomefortheyearendedDecember31,2017.Thiswillalsobefinalizedduringthemeasurementperiod.

TheCompanyrecordedaprovisionalamountforthetollcharge,whichrepresentsitsreasonableestimateoftheliabilitydueforthemandatorydeemedrepatriationofitspost-1986untaxedforeignE&P.Determiningtheprovisionaltollchargeliabilityrequiredasignificanteffortbasedonanumberoffactorsincluding:

• AnalyzingtheaccumulateduntaxedforeignE&Psince1986includinghistoricalpracticesandassertionsmadeindeterminingsuch;

• Determiningthecomposition,includingintercompanyreceivablesandpayablesofspecifiedforeigncorporations,ofourpost-1986untaxedforeignE&Pthatisheldincashorliquidassetsandotherassetsatseveralmeasurementdates.Thisisrequiredbecauseadifferenttaxrateisappliedtoeachwhendeterminingthetollchargeliability;and

• AssessingthepotentialimpactofexistinguncertaintaxpositionsindeterminingouraccumulatedundistributedE&P.

DuetothetimingoftheEnactmentDate,theCompanyhadlimitedtimetounderstandthe2017TaxActanditsvariousinterpretations,toassesshowtoapplythenewtaxlawtothespecificfactsand

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circumstancesoftheCompanyandtodeterminethetollcharge.Assuchtheamountsrecordedforthetollchargeareprovisional.

Theactualresultsoftheimplementationofthe2017TaxActmaymateriallydifferfromtheCompany'scurrentestimatedueto,amongotherthings,furtherguidancethatmaybeissuedbyU.S.taxauthoritiesorregulatorybodiesincludingtheSECandtheFASBtointerpretthe2017TaxAct.TheCompanywillcontinuetoanalyzethe2017TaxActandanyadditionalguidancethatmaybeissuedandfinalizethefulleffectsofapplyingthenewlegislationinthemeasurementperiod.

ThedomesticandforeigncomponentsofincomebeforetaxesareasfollowsfortheyearsendedDecember31,(inmillions):

ThecomponentsoftheincometaxprovisionareasfollowsfortheyearsendedDecember31,(inmillions):

2017 2016 2015 Domestic $ (14.0) $ 18.4 $ 31.6Foreign 211.8 159.2 96.4

$ 197.8 $ 177.6 $ 128.0

2017 2016 2015 Currentincometax(benefit)expense: Federal $ 32.2 $ (2.4) $ 5.7State 2.0 0.3 1.3Foreign 42.7 59.8 50.0Totalcurrentincometaxexpense 76.9 57.7 57.0

Deferredincometax(benefit)expense: Federal 35.5 3.1 (31.1)State (0.4) (5.3) (2.4)Foreign 5.5 (32.4) (0.4)Totaldeferredincometax(benefit)expense 40.6 (34.6) (33.9)Incometaxprovision $ 117.5 $ 23.1 $ 23.1

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TheincometaxprovisiondiffersfromthetaxprovisioncomputedattheU.SfederalstatutoryrateduetothefollowingsignificantcomponentsfortheyearsendedDecember31:

ThetaxeffectoftemporaryitemsthatgiverisetosignificantportionsofthedeferredtaxassetsandliabilitiesasofDecember31,2017and2016areasfollows(inmillions):

TheCompanyusestheliabilitymethodtoaccountforincometaxes.Underthismethod,deferredincometaxesarerecognizedforthefuturetaxconsequencesofdifferencesbetweenthetaxandfinancialaccountingbasesofassetsandliabilitiesateachreportingperiod.Deferredincometaxesare

2017 2016 2015 Statutorytaxrate 35.0% 35.0% 35.0%Foreigntaxratedifferential (11.7) (11.6) (3.6)Permanentdifferences (0.5) 8.2 (2.0)MandatoryRepatriation 27.0 — —Taxcontingencies (1.3) (3.0) 2.3Changeintaxrates 0.9 0.2 1.3Withholdingtaxes 2.2 1.3 8.1PermanentReinvestmentAssertionAccrual 7.8 — —Stateincometaxes,netoffederalbenefits 1.3 (2.9) (0.9)Purchaseaccounting 0.5 1.6 0.8Taxcredits (0.3) (3.0) (1.1)Other (1.2) 4.3 (2.7)Changeinvaluationallowanceforunbenefittedlosses (0.3) (17.1) (19.2)Effectivetaxrate 59.4% 13.0% 18.0%

2017 2016 Deferredtaxassets: Accountsreceivable $ 3.9 $ 2.9Accruedexpenses 6.7 4.6Compensation 27.9 30.6Deferredrevenue 0.4 2.0Netoperatinglosscarryforwards 19.1 14.1Fixedassets — 0.8Inventory 2.8 3.2Foreigntaxandothertaxcreditcarryforwards 5.9 17.2Unrealizedcurrencygain/loss 3.2 3.0Grossdeferredtaxassets 69.9 78.4

Lessvaluationallowance — (0.5)Totaldeferredtaxassets 69.9 77.9

Deferredtaxliabilities: Fixedassets 0.3 —Foreignstatutoryreserves 0.9 1.1Intangibles 13.0 7.2Accruedexpenses 0.6 1.2AccruedWithholdingTax 16.1 2.0Other 6.4 —Totaldeferredtaxliabilities 37.3 11.5Netdeferredtaxassets $ 32.6 $ 66.4

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basedonenactedtaxlawsandstatutorytaxratesapplicabletotheperiodinwhichthesedifferencesareexpectedtoaffecttaxableincome.Avaluationallowanceisestablishedwhennecessarytoreducedeferredtaxassetstotheexpectedrealizableamounts.

TheCompanycanonlyrecognizeadeferredtaxassettotheextentthisitis"morelikelythannot"thattheseassetswillberealized.Judgmentsaroundrealizabilitydependontheavailabilityandweightofbothpositiveandnegativeevidence.ChangesinthevaluationallowancefordeferredtaxassetsduringtheyearsendedDecember31,2017,2016and2015wereasfollows:

Thedecreasesrelatedprimarilytotherealizabilityofforeignnetoperatingandcapitallossesbasedonfuturetaxableincome.

AsofDecember31,2017,theCompanyhasapproximately$23.2millionnetoperatinglosscarryforwardsavailabletoreducestatetaxableincome.TheCompanyalsohasapproximately$77.4millionofGermanTradeTaxandCorporateIncomeTaxnetoperatinglossesthatarecarriedforwardindefinitely.Additionally,theCompanyhas$13.9millionofotherforeignnetoperatinglossesthatareexpectedtoexpireatvarioustimesbeginningin2018.TheCompanyalsohasstateresearchanddevelopmenttaxcreditsof$7.5million.UtilizationofthesecreditsandstatenetoperatinglossesmaybesubjecttoannuallimitationsduetotheownershippercentagechangelimitationsprovidedbytheInternalRevenueCodeSection382andsimilarstateprovisions.IntheeventofadeemedchangeincontrolunderInternalRevenueCodeSection382,anannuallimitationontheutilizationofnetoperatinglossesandcreditsmayresultintheexpirationofalloraportionofthenetoperatinglossandcreditcarryforwards.

TheCompanyreflectscertainstatutoryreservesinitstabularreconciliationofunrecognizedtaxbenefits.EffectivefortheyearendedDecember31,2013andthereafter,theseunrecognizedtaxbenefitsarepresentedasareductionoftheassociatednetdeferredtaxassets.

AtDecember31,2017andinaccordancewiththe2017TaxAct,theCompanyrecordedstateandforeignwithholdingtaxesonthecashandliquidassetsportionoftheunremittedearningsandprofits(E&P)offoreignsubsidiariesexpectedtoberepatriatedfromitsforeignsubsidiariestotheUnitedStates.TheCompanycontinuestobeindefinitelyreinvestedamountingto$740.0millionofnon-cashE&Pthatisrelatedtothe2017TaxActdeemedrepatriation.IfthisE&PisultimatelydistributedtotheUnitedStatesintheformofdividendsorotherwisetheCompanywouldlikelybesubjecttoadditionalwithholdingtax.TheCompanywillcontinuetoevaluateitsassertionsonthecumulativehistoricaloutsidebasisdifferencesinitsforeignsubsidiariesasofDecember31,2017.TheCompanyexpectstofinalizeitsanalysisandaccountingrelatedtothetollchargeandanyremainingoutsidebasisdifferencesinitsforeignsubsidiariesduringthemeasurementperiod.TheCompanyestimatestheamountofunrecognizeddeferredwithholdingtaxesontheundistributedE&Ptobeapproximately$27millionatDecember31,2017.

TheCompanyhadgrossunrecognizedtaxbenefits,excludinginterest,ofapproximately$4.4millionasofDecember31,2017,thatifrecognized,wouldreducetheCompany'seffectivetaxrate.InthenexttwelvemonthsitisreasonablypossiblethattheCompanywillreduceitsunrecognized

BalanceatDecember31,2014 $ 57.4Decreasesrecordedasabenefittoincometaxprovision (20.2)

BalanceatDecember31,2017 $ —

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taxbenefitsby$0.8millionduetotheexpirationofstatutesoflimitationsandfavorablesettlementwithtaxingauthoritieswhichwouldreducetheCompany'seffectivetaxrate.Atabularreconciliationofthebeginningandendingamountofunrecognizedtaxbenefitsisasfollows(inmillions):

TheCompany'spolicyistoincludeaccruedinterestandpenaltiesrelatedtounrecognizedtaxbenefitsandincometaxliabilities,whenapplicable,inincometaxexpense.AsofDecember31,2017and2016,theCompanyhadapproximately$0.2millionand$0.5million,respectively,ofaccruedinterestandpenaltiesrelatedtouncertaintaxpositionsincludedinotherlong-termliabilitiesintheconsolidatedbalancesheets.TheCompanyrecordedabenefitof$0.3millionand$1.8millionforpenaltiesandinterestrelatedtounrecognizedtaxbenefitsintheprovisionforincometaxesduringtheyearendedDecember31,2017andDecember31,2016,respectively.

TheCompanyfilestaxreturnsintheUnitedStates,whichincludesfederal,stateandlocaljurisdictions,andmanyforeignjurisdictionswithvaryingstatutesoflimitations.TheCompanyconsidersGermany,theUnitedStatesandSwitzerlandtobeitssignificanttaxjurisdictions.ThemajorityoftheCompany'searningsarederivedinGermanyandSwitzerland.Accountingforthevariousfederalandlocaltaxingauthorities,thestatutoryratesfor2017wereapproximately30.0%and20.0%forGermanyandSwitzerland,respectively.Themixofearningsinthosetwojurisdictionsresultedinareductionof7.8%fromtheU.S.statutoryrateof35.0%in2017.TheCompanyhasnotbeenapartytoanytaxholidayagreements.Thetaxyears2013to2016areopentoexaminationinGermanyandSwitzerland.Inthethirdquarterof2015,theCompanysettledtaxauditsinGermanyandItaly.In2016,theCompanysettledtaxauditsinGermanyandSwitzerland.Thesettlementswereimmaterialtotheconsolidatedfinancialstatements.Taxyears2011to2016remainopenforexaminationintheUnitedStates.

Note13—PostRetirementBenefitPlans

DefinedContributionPlans

TheCompanysponsorsvariousdefinedcontributionplansthatcovercertaindomesticandinternationalemployees.TheCompanymaymakecontributionstotheseplansatitsdiscretion.TheCompanycontributed$6.4million,$6.0millionand$6.5milliontosuchplansintheyearsendedDecember31,2017,2016and2015,respectively.

GrossunrecognizedtaxbenefitsatDecember31,2014 $ 40.0Grossdecreases—taxpositionsinpriorperiods (1.5)Grossincreases—currentperiodtaxpositions 0.4Settlements (2.7)Lapseofstatutes (3.0)

GrossunrecognizedtaxbenefitsatDecember31,2015 33.2Grossdecreases—taxpositionsinpriorperiods (4.8)Grossincreases—currentperiodtaxpositions 0.9Settlements (21.3)Lapseofstatutes (1.8)

GrossunrecognizedtaxbenefitsatDecember31,2016 6.2Lapseofstatutes (1.8)

GrossunrecognizedtaxbenefitsatDecember31,2017 $ 4.4

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DefinedBenefitPlans

SubstantiallyalloftheCompany'semployeesinSwitzerland,FranceandJapan,aswellascertainemployeesinGermany,arecoveredbyCompany-sponsoreddefinedbenefitpensionplans.Retirementbenefitsaregenerallyearnedbasedonyearsofserviceandcompensationduringactiveemployment.Eligibilityisgenerallydeterminedinaccordancewithlocalstatutoryrequirements,however,thelevelofbenefitsandtermsofvestingvariesamongplans.

ThecomponentsofnetperiodicbenefitcostsfortheyearsendedDecember31,2017,2016and2015wereasfollows(inmillions):

ThenetperiodicbenefitcostsfortheyearendedDecember31,2015includesaone-time,non-cashsettlementlossof$10.2millionastheCompanyoutsourceditspensionplaninSwitzerlandtoanoutsideinsuranceprovider,transferredcertainplanassetsandpensionobligationsforretireesandothercertainmembersofthepopulation,madecertainplandesignchangesandre-measuredtheliability.

TheCompanymeasuresitsbenefitobligationandthefairvalueofplanassetsasofDecember31steachyear.Thechangesinbenefitobligationsandplanassetsunderthedefinedbenefitpensionplans,projectedbenefitobligationandfundedstatusoftheplanswereasfollowsatDecember31,(inmillions):

2017 2016 2015 Componentsofnetperiodicbenefitcosts: Servicecost $ 7.8 $ 6.8 $ 7.2Interestcost 1.7 2.2 2.5Expectedreturnonplanassets (1.7) (1.8) (2.3)Settlementlossrecognized — — 10.2Amortizationofnetloss 4.8 4.1 4.1Netperiodicbenefitcosts $ 12.6 $ 11.3 $ 21.7

2017 2016 Changeinbenefitobligation: Benefitobligationatbeginningofyear $ 210.1 $ 199.2Servicecost 7.8 6.8Interestcost 1.7 2.2Planparticipantcontributions 4.1 4.0Benefitspaid (3.6) (7.1)Actuarialloss(gain) (3.6) 11.1Premiumspaid (1.5) (1.4)Impactofforeigncurrencyexchangerates 13.0 (4.7)Benefitobligationatendofyear 228.0 210.1

Changeinplanassets: Fairvalueofplanassetsatbeginningofyear 105.9 106.1Returnonplanassets 5.0 1.3Planparticipantandemployercontributions 9.5 9.2Benefitspaid (3.6) (7.1)Premiumspaid (1.5) (1.4)Impactofforeigncurrencyexchangerates 5.0 (2.2)Fairvalueofplanassetsatendofyear 120.3 105.9Netunderfundedstatus $ (107.7) $ (104.2)

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Theaccumulatedbenefitobligationforthedefinedbenefitpensionplansis$217.2millionand$199.9millionatDecember31,2017and2016,respectively.AlldefinedbenefitpensionplanshaveanaccumulatedbenefitobligationandprojectedbenefitobligationinexcessofplanassetsatDecember31,2017and2016.

ThefollowingamountswererecognizedintheaccompanyingconsolidatedbalancesheetsfortheCompany'sdefinedbenefitplansatDecember31,(inmillions):

Thefollowingpre-taxamountswererecognizedinaccumulatedothercomprehensiveincomefortheCompany'sdefinedbenefitplansatDecember31,(inmillions):

TheamountinaccumulatedothercomprehensiveincomeatDecember31,2017expectedtoberecognizedasamortizationofnetlosswithinnetperiodicbenefitcostin2018is$3.9million.

Forthedefinedbenefitpensionplans,theCompanyusesacorridorapproachtoamortizeactuarialgainsandlosses.Underthisapproach,netactuarialgainsorlossesinexcessoftenpercentofthelargeroftheprojectedbenefitobligationorthefairvalueofplanassetsareamortizedovertheaverageremainingserviceofactiveparticipantswhoareexpectedtoreceivebenefitsundertheplans.

Therangeofassumptionsusedfordefinedbenefitpensionplansreflectsthedifferenteconomicenvironmentswithinthevariouscountries.TherangeofassumptionsusedtodeterminetheprojectedbenefitobligationsfortheyearsendedDecember31,areasfollows:

Todeterminetheexpectedlong-termrateofreturnonpensionplanassets,theCompanyconsiderscurrentassetallocations,aswellashistoricalandexpectedreturnsonvariousassetcategoriesofplanassets.Forthedefinedbenefitpensionplans,theCompanyappliestheexpectedrateofreturntoamarket-relatedvalueofassets,whichstabilizesvariabilityinassetstowhichtheexpectedreturnisapplied.

2017 2016 Currentliabilities $ (2.1) $ (1.7)Non-currentliabilities (105.6) (102.5)Netbenefitobligation $ (107.7) $ (104.2)

2017 2016 Reconciliationofamountsrecognizedintheconsolidatedbalancesheets: Priorservicecost $ (9.7) $ (10.6)Netactuarialloss (48.9) (56.0)Accumulatedothercomprehensiveloss (58.6) (66.6)Accumulatedcontributionsinexcessofnetperiodicbenefitcost (49.1) (37.6)Netamountrecognized $ (107.7) $ (104.2)

2017 2016 2015Discountrates 0.2%-2.1% 0.2%-2.1% 0.3%-2.5%Expectedreturnonplanassets 0.0%-3.0% 0.0%-3.0% 0.0%-3.0%Expectedrateofcompensationincrease 1.0%-3.0% 1.0%-3.0% 1.0%-3.0%

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AssetAllocationsbyAssetCategory

ThefairvalueoftheCompany'spensionplanassetsatDecember31,2017and2016,byassetcategoryandbylevelinthefairvaluehierarchy,isasfollows(inmillions):

ContributionsandEstimatedFutureBenefitPayments

During2018,theCompanyexpectscontributionstobeconsistentwith2017.TheestimatedfuturebenefitpaymentsarebasedonthesameassumptionsusedtomeasuretheCompany'sbenefitobligation

QuotedPricesinActiveMarkets

Available(Level1)

SignificantOtherObservableInputs

(Level2)

SignificantUnobservableInputs

(Level3) PlanAssets: GroupBPCELife(a) $ 1.1 $ — $ 1.1 $ —SwissLifeCollectiveBVGFoundation(b) 119.2 — 119.2 —Totalplanassets $ 120.3 $ — $ 120.3 $ —

QuotedPricesinActiveMarkets

Available(Level1)

SignificantOtherObservableInputs

(Level2)

SignificantUnobservableInputs

(Level3) PlanAssets: GroupBPCELife(a) $ 1.3 $ — $ 1.3 $ —SwissLifeCollectiveBVGFoundation(b) 104.6 — 104.6 —Totalplanassets $ 105.9 $ — $ 105.9 $ —

(a) TheCompany'spensionplaninFranceisinvestedinalargerfundthatinvestsinavarietyofinstruments.TheassetsarenotdirectlydedicatedtotheFrenchpensionplan.TheGroupBPCELifefundinvestsindebtsecuritiesofforeigncorporationsandgovernments,equitysecuritiesofforeigngovernmentfundsandprivaterealestatefunds.

(b) TheCompany'spensionplaninSwitzerlandisoutsourcedtoSwissLifeAG,anoutsideinsuranceprovider.Undertheinsurancecontract,theplanassetsareinvestedinSwissLifeCollectiveBVGFoundation(theFoundation),whichisanumbrellafundforwhichtheretirementsavingsandinterestratesareguaranteedaminimumof1.75%onthemandatorywithdrawalportion,asdefinedbySwisslaw,and0.75%and1.25%fortheyearsendedDecember31,2017and2016,respectivelyonthenon-mandatoryportion.TheFoundationutilizesplanadministratorsandinvestmentmanagerstooverseetheinvestmentallocationprocess,setlong-termstrategictargetsandmonitorassetallocations.Thetargetallocationsare75%bonds,includingcash,5%equityinvestmentsand20%realestateandmortgages.ShouldtheFoundationyieldareturngreaterthantheguaranteedamounts,theCompany,accordingtoSwisslaw,shallreceive90%oftheadditionalreturnwithSwissLifeAGretaining10%.ThewithdrawalbenefitsandinterestallocationsaresecuredatalltimesbySwissLifeAG.

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atDecember31,2017.Thefollowingbenefitpaymentsreflectfutureemployeeserviceasappropriate(inmillions):

Note14—CommitmentsandContingencies

InaccordancewithASCTopic450,Contingencies,theCompanyaccruesanticipatedcostsofsettlement,damages,orothercoststotheextentspecificlossesareprobableandestimable.

LitigationandRelatedContingencies

Lawsuits,claimsandproceedingsofanatureconsiderednormaltoitsbusinessesmaybependingfromtimetotimeagainsttheCompany.ThirdpartiesmightallegethattheCompanyoritscollaboratorsareinfringingtheirpatentrightsorthattheCompanyisotherwiseviolatingtheirintellectualpropertyrights.Losscontingencyprovisionsarerecordedifthepotentiallossfromanyclaim,assertedorunasserted,orlegalproceedingisconsideredprobableandtheamountcanbereasonablyestimatedorarangeoflosscanbedetermined.Theseaccrualsrepresentmanagement'sbestestimateofprobableloss.Disclosurealsoisprovidedwhenitisreasonablypossiblethatalosswillbeincurredorwhenitisreasonablypossiblethattheamountofalosswillexceedtherecordedprovision.TheCompanybelievestheoutcomeofpendingproceedings,individuallyandintheaggregate,willnothaveamaterialimpactontheCompany'sfinancialstatements.AsofDecember31,2017and2016,nomaterialaccrualshavebeenrecordedforpotentialcontingencies.

GovernmentalInvestigations

TheCompanyissubjectfromtimetotimetoinvestigationsbyU.S.orforeigngovernmentalagencies,fromwhichcivil,criminaloradministrativeproceedingscouldresult.

OnOctober19,2017,theCompanyreceivedanoticeofinvestigationandsubpoenatoproducedocumentsfromtheDivisionofEnforcementoftheSEC.ThesubpoenaseeksinformationrelatedtoanemployeeterminatedaspartofarestructuringandcertainmattersinvolvingtheCompany'spoliciesandaccountingpracticesrelatedtorevenuerecognitionandrestructuringactivities,aswellasrelatedfinancialreporting,disclosureandcompliancematters,sinceJanuary1,2013.Thesubpoenaalsoseeksinformationconcerning,amongotherthings,theCompany'spreviouslyidentifiedmaterialweaknessininternalcontrolsovertheaccountingforincometaxes,relatedfinancialreportingmattersandcertainpaymentsfornon-employeetravelexpenses.TheCompanyisproducingdocumentsinresponsetothesubpoenaandintendstocontinuetocooperatefullywiththeSEC'sinvestigation.Atthistime,theCompanyisunabletopredicttheduration,scopeoroutcomeofthisinvestigation.

TheKoreaFairTradeCommission("KFTC")hasconductedaninvestigationintoimproperbiddingbyBrukerKoreaCo.,Ltd.andseveralothercompaniesinconnectionwithbidsforsalesofX-raysystemsin2010and2012.ThreeofthebidsunderinvestigationinvolvedBrukerKorea.TheCompanycooperatedfullywiththeKFTCregardingthismatter.InSeptember2016,theKFTCfinedBrukerKoreaapproximately$15,000andreferredthemattertotheKoreanPublicProsecutor'sOffice("PPO")forcriminalprosecution.OnMay31,2017,thePPOissuedofficialnoticeofitsdecisionnottopursuecriminalproceedingsagainstBrukerKorea.Additionally,sinceDecember2016,variousKoreangovernmentalentitiesimposedsuspensionsonBrukerKorea,withoverlapping

2018 $ 2.72019 2.82020 3.22021 3.82022 4.22023-2027 28.8

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suspensionperiodsrangingfromthreetosixmonths.Duringtheperiodsofthesesuspensions,BrukerKoreawasprohibitedfrombiddingfororconductingsalestoKoreangovernmentalagencies.Salestothesecustomerswerelessthan1%oftheCompany'srevenuefortheyearendedDecember31,2016.AtDecember31,2017,allsuchsuspensionperiodshavelapsed.TheCompanyconsidersthesemattersresolvedandnoadditionalpaymentsareowedoraccruedasofDecember31,2017inconnectionwithsuchresolutions.

OperatingLeases

Certainbuildings,officeequipmentandvehiclesareleasedunderagreementsthatareaccountedforasoperatingleases.Totalrentalexpenseunderoperatingleaseswas$23.7million,$22.0millionand$23.0millionduringtheyearsendedDecember31,2017,2016and2015,respectively.Futureminimumleasepaymentsundernon-cancelableoperatingleasesatDecember31,2017,foreachofthenextfiveyearsandthereafterareasfollows(inmillions):

CapitalLeases

TheCompanyleasescertainassetsunderagreementsthatareclassifiedascapitalleases.Thecostoftheseassetsunderthecapitalleasesisincludedintheconsolidatedbalancesheetsasproperty,plantandequipmentandwas$0.9millionatDecember31,2017.AccumulatedamortizationoftheleasedbuildingsatDecember31,2017was$0.5million.TherewerenoassetsundercapitalleaseagreementsasofDecember31,2016.Amortizationexpenserelatedtoassetsundercapitalleaseswasincludedindepreciationexpense.Theobligationsrelatedtocapitalleaseswasrecordedasacomponentoflong-termdebtorthecurrentportionoflong-termdebtintheconsolidatedbalancesheets,dependingonwhentheleasepaymentsaredue.

UnconditionalPurchaseCommitments

TheCompanyhasenteredintounconditionalpurchasecommitments,intheordinarycourseofbusiness,thatincludeagreementstopurchasegoods,servicesorfixedassetsandtopayroyaltiesthatareenforceableandlegallybindingandthatspecifyallsignificanttermsincluding:fixedorminimumquantitiestobepurchased;fixed,minimumorvariablepriceprovisions;andtheapproximatetimingofthetransaction.Purchasecommitmentsexcludeagreementsthatarecancelableatanytimewithoutpenalty.TheaggregateamountoftheCompany'sunconditionalpurchasecommitmentstotaled$164.0millionatDecember31,2017andthemajorityofthesecommitmentsareexpectedtobesettledduring2018.

LicenseAgreements

TheCompanyhasenteredintocross-licensingagreementsforvarioustechnologiesthatallowothercompaniestoutilizecertainofitspatentsandrelatedtechnologiesovervariousperiodsorintoperpetuity.IncomefromtheseagreementsfortheyearsendedDecember31,2017,2016and2015was$2.1million,$1.9millionand$2.5million,respectively,andisclassifiedinotherrevenueintheconsolidatedstatementsofincomeandcomprehensiveincome.Theunearnedportionsofproceedsfromthecross-licensingagreementsareclassifiedasshort-termorlong-termdeferredrevenuedependingonwhentherevenuewillbeearned.

2018 $ 21.22019 15.42020 12.02021 9.12022 5.6Thereafter 13.6Total $ 76.9

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TheCompanyhasalsoenteredintolicenseagreementsallowingittoutilizecertainpatents.Ifthesepatentsareusedinconnectionwithacommercialproductsale,theCompanypaysroyaltiesontherelatedproductrevenues.LicensingfeesfortheyearsendedDecember31,2017,2016and2015,were$3.5million,$3.0millionand$3.2million,respectively,andarerecordedincostofproductrevenueintheconsolidatedstatementsofincomeandcomprehensiveincome.

LettersofCreditandGuarantees

AtDecember31,2017and2016,theCompanyhadbankguaranteesof$138.8millionand$131.5million,respectively,relatedprimarilytocustomeradvances.Thesearrangementsguaranteetherefundofadvancepaymentsreceivedfromcustomersintheeventthatthemerchandiseisnotdeliveredorwarrantyobligationsarenotfulfilledincompliancewiththetermsofthecontract.TheseguaranteesaffecttheavailabilityoftheCompany'slinesofcredit.

Indemnifications

TheCompanyentersintostandardindemnificationarrangementsintheCompany'sordinarycourseofbusiness.Pursuanttothesearrangements,theCompanyindemnifies,holdsharmless,andagreestoreimbursetheindemnifiedpartiesforlossessufferedorincurredbytheindemnifiedparty.ThesepartiesaregenerallytheCompany'sbusinesspartnersorcustomers,inconnectionwithanypatent,oranycopyrightorotherintellectualpropertyinfringementclaimbyanythirdpartywithrespecttoitsproducts.Thetermoftheseindemnificationagreementsisgenerallyperpetualanytimeaftertheexecutionoftheagreement.ThemaximumpotentialamountoffuturepaymentstheCompanycouldberequiredtomakeundertheseagreementsisunlimited.TheCompanybelievestheestimatedfairvalueoftheseagreementsisminimalbasedonhistoricalexperiences.

Note15—Shareholders'Equity

ShareRepurchaseProgram

InMay2015,theCompany'sBoardofDirectorsapprovedasharerepurchaseprogram(the"Anti-DilutiveRepurchaseProgram")underwhichtheCompanywasauthorizedtorepurchasetheCompany'scommonstockinamountsintendedtoapproximatelyoffset,onanannualbasis,thedilutiveeffectofsharesthathavebeen,ormaybe,issuedpursuanttooptionorrestrictedstockawardsundertheCompany'sincentivecompensationplans.In2015,atotalof1,245,000shareswererepurchasedatanaggregatecostof$24.9millionundertheAnti-DilutiveRepurchaseProgram.

InNovember2015,theCompany'sBoardofDirectorssuspendedtheAnti-DilutiveRepurchaseProgramuntilJanuary1,2017andapprovedanadditionalsharerepurchaseprogram.Thisprogramauthorizedrepurchasesofcommonstockupto$225millionfromtimetotime,inamounts,atprices,andatsuchtimesastheCompanydeemedappropriate,subjecttomarketconditions,legalrequirementsandotherconsiderations.Atotalof9,312,522shareswererepurchasedatanaggregatecostof$225.0millionasofDecember31,2016underthatcompletedrepurchaseprogram.

InMay2017,theCompany'sBoardofDirectorsapprovedanadditionalsharerepurchaseprogram(the"RepurchaseProgram")underwhichrepurchasesofcommonstockupto$225.0millionwereauthorizedtooccurfromtimetotime,inamounts,atprices,andatsuchtimesastheCompanydeemsappropriate,subjecttomarketconditions,legalrequirementsandotherconsiderations.Atotalof5,318,063shareswererepurchasedatanaggregatecostof$152.2millionintheyearendedDecember31,2017undertheRepurchaseProgram.Anyfuturerepurchaseswillbefundedfromcashonhand,futurecashflowsfromoperationsandavailableborrowingsundertherevolvingcreditfacility.

TherepurchasedsharesarereflectedwithinTreasurystockintheaccompanyingconsolidatedbalancesheetatDecember31,2017and2016.

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CashDividendsonCommonStock

OnFebruary22,2016,theCompanyannouncedtheestablishmentofadividendpolicyandthedeclarationbyitsBoardofDirectorsofaninitialquarterlycashdividendintheamountof$0.04pershareoftheCompany'sissuedandoutstandingcommonstock.Underthedividendpolicy,theCompanywilltargetacashdividendtotheCompany'sshareholdersintheamountof$0.16pershareperannum,payableinequalquarterlyinstallments.ThefollowingisasummaryofthedividendspaidintheyearsendedDecember31,2017and2016(inmillions):

Subsequentdividenddeclarationsandtheestablishmentofrecordandpaymentdatesforsuchfuturedividendpayments,ifany,aresubjecttotheBoardofDirectors'continuingdeterminationthatthedividendpolicyisinthebestinterestsoftheCompany'sshareholders.ThedividendpolicymaybesuspendedorcancelledatthediscretionoftheBoardofDirectorsatanytime.

AccumulatedOtherComprehensiveIncome(Loss)

Thefollowingisasummaryofthecomponentsofaccumulatedothercomprehensiveincome(loss),netoftax,atDecember31,(inmillions):

Note16—Stock-BasedCompensation

InFebruary2010,theBrukerBioSciencesCorporationAmendedandRestated2000StockOptionPlan(the"2000Plan"),expiredattheendofitsscheduledten-yearterm.OnMarch9,2010,theCompany'sBoardofDirectorsunanimouslyapprovedandadoptedtheBrukerCorporation2010IncentiveCompensationPlan(the"2010Plan"),andonMay14,2010,the2010PlanwasapprovedbytheCompany'sstockholders.The2010Planprovidedfortheissuanceofupto8,000,000sharesoftheCompany'scommonstock.The2010PlanallowedacommitteeoftheBoardofDirectors(the

2017DividendsPaidon March24 June23 September22 December22ShareholdersofRecordasof March8 June5 September5 December4AggregateCost $6.4 $6.4 $6.3 $6.3

2016DividendsPaidon March24 June24 September23 December23ShareholdersofRecordasof March4 June6 September6 December5AggregateCost $6.5 $6.5 $6.4 $6.4

ForeignCurrencyTranslation

PensionLiability

Adjustment

AccumulatedOther

ComprehensiveIncome(Loss)

BalanceatDecember31,2014 $ 66.0 $ (37.8) $ 28.2Othercomprehensiveincome(loss) (62.8) (23.6) (86.4)Realizedlossonreclassification — 14.0 14.0

BalanceatDecember31,2015 3.2 (47.4) (44.2)Othercomprehensiveincome(loss) (27.3) (8.4) (35.7)Realizedlossonreclassification — 4.0 4.0

BalanceatDecember31,2016 (24.1) (51.8) (75.9)Othercomprehensiveincome 96.3 1.8 98.1Realizedlossonreclassification — 4.8 4.8

BalanceatDecember31,2017 $ 72.2 $ (45.2) $ 27.0

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"CompensationCommittee")tograntincentivestockoptions,non-qualifiedstockoptionsandrestrictedstockawards.TheCompensationCommitteehadtheauthoritytodeterminewhichemployeeswouldreceivetheawards,theamountoftheawardsandothertermsandconditionsofanyawards.Awardsgrantedunderthe2010Plantypicallyweremadesubjecttoavestingperiodofthreetofiveyears.

InMay2016,theBrukerCorporation2016IncentiveCompensationPlan(the"2016Plan")wasapprovedbytheCompany'sstockholders.Withtheapprovalofthe2016Plan,nofurthergrantswillbemadeunderthe2010Plan.The2016Planprovidesfortheissuanceofupto9,500,000sharesoftheCompany'scommonstockandpermitsthegrantofawardsofnon-qualifiedstockoptions,incentivestockoptions,stockappreciationrights,restrictedstock,unrestrictedstock,restrictedstockunits,performancesharesandperformanceunits,aswellascash-basedawards.The2016PlanisadministeredbytheCompensationCommittee.TheCompensationCommitteehastheauthoritytodeterminewhichemployeeswillreceiveawards,theamountofanyawards,andothertermsandconditionsofsuchawards.Stockoptionawardsgrantedunderthe2016Plantypicallyvestoveraperiodofthreetofouryears.

StockoptionactivityfortheyearendedDecember31,2017wasasfollows:

Theweightedaveragefairvalueofoptionsgrantedwas$7.61,$7.72and$7.82persharefortheyearsendedDecember31,2017,2016and2015,respectively.

Thetotalintrinsicvalueofoptionsexercisedwas$16.2million,$11.2millionand$8.2millionfortheyearsendedDecember31,2017,2016and2015,respectively.

Unrecognizedpre-taxstock-basedcompensationexpenseof$8.3millionrelatedtostockoptionsawardedunderthe2010and2016Plansisexpectedtoberecognizedovertheweightedaverageremainingserviceperiodof2.2yearsforstockoptionsoutstandingatDecember31,2017.

RestrictedsharesoftheCompany'scommonstockareperiodicallyawardedtoexecutiveofficers,directorsandcertainkeyemployeesoftheCompany,subjecttoservicerestrictions,whichvestratablyoverperiodsofonetofouryears.Therestrictedsharesofcommonstockmaynotbesoldor

SharesSubjecttoOptions

WeightedAverage

OptionPrice

WeightedAverageRemainingContractualTerm(Yrs)

AggregateIntrinsicValue(inmillions)(b)

OutstandingatDecember31,2016 4,625,678 $ 18.73 Granted 180,677 27.97 Exercised (1,263,767) 16.17 Forfeited/Expired (306,915) 19.54

OutstandingatDecember31,2017 3,235,673 $ 20.16 6.3 $ 45.8ExercisableatDecember31,2017 1,786,898 $ 18.31 5.4 $ 28.6Exercisableandexpectedtovestat December31,2017(a) 3,138,460 $ 20.09 6.3 $ 44.6

(a) InadditiontotheoptionsthatarevestedatDecember31,2017,theCompanyexpectsaportionoftheunvestedoptionstovestinthefuture.OptionsexpectedtovestinthefuturearedeterminedbyapplyinganestimatedforfeitureratetotheoptionsthatareunvestedasofDecember31,2017.

(b) TheaggregateintrinsicvalueisbasedonthepositivedifferencebetweenthefairvalueoftheCompany'scommonstockpriceof$34.32onDecember31,2017,orthedateofexercises,asappropriate,andtheexercisepriceoftheunderlyingstockoptions.

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transferredduringtherestrictionperiod.Stock-basedcompensationforrestrictedstockisrecordedbasedonthestockpriceonthegrantdateandchargedtoexpenseratablythroughouttherestrictionperiod.

ThefollowingtablesummarizesinformationaboutrestrictedstockawardactivityduringtheyearendedDecember31,2017:

Thetotalfairvalueofrestrictedstockvestedwas$2.3million,$1.5millionand$1.0millionfortheyearsendedDecember31,2017,2016and2015,respectively.

Unrecognizedpre-taxstock-basedcompensationexpenseof$1.1millionrelatedtorestrictedstockawardedunderthe2010Planisexpectedtoberecognizedovertheweightedaverageremainingserviceperiodof1.44yearsforawardsoutstandingatDecember31,2017.

RestrictedstockunitsoftheCompany'scommonstockareperiodicallyawardedtoexecutiveofficers,directorsandcertainemployeesoftheCompanywhichvestratablyoveraserviceperiodsofonetofouryears.Stock-basedcompensationforrestrictedstockunitsisrecordedbasedonthestockpriceonthegrantdateandchargedtoexpenseratablythroughoutthevestingperiod.

ThefollowingtablesummarizesinformationaboutrestrictedstockunitactivityforyearendedDecember31,2017:

Thetotalfairvalueofrestrictedstockvestedwas$2.0millionfortheyearendedDecember31,2017.NorestrictedstockunitsvestedintheyearsendedDecember31,2016and2015.

Unrecognizedpre-taxstock-basedcompensationexpenseof$13.2millionrelatedtorestrictedstockunitsawardedunderthe2016Planisexpectedtoberecognizedovertheweightedaverageremainingserviceperiodof3.38yearsforunitsoutstandingatDecember31,2017.

InMarch2016,theFASBissuedASUNo.2016-09,Stock Compensation—Improvements to Employee Share-Based Payment Accounting .Thenewstandardsimplifiesaccountingforshare-basedpaymenttransactions,includingincometaxconsequencesandtheclassificationofthetaximpactonthestatementofcashflows.TheCompanyadoptedthisstandardeffectiveJanuary1,2017.TheASUrequiresthatthedifferencebetweentheactualtaxbenefitrealizeduponexerciseorvesting,asapplicable,andthetaxbenefitrecordedbasedonthefairvalueofthestockawardatthetimeofgrant(the"excesstaxbenefits")bereflectedasareductionofthecurrentperiodprovisionforincometaxes

SharesSubjecttoRestriction

WeightedAverageGrant

DateFairValue

OutstandingatDecember31,2016 172,506 $ 19.37Vested (82,924) 18.17Forfeited (4,053) 22.46

OutstandingatDecember31,2017 85,529 $ 20.39

SharesSubjecttoRestriction

WeightedAverageGrant

DateFairValue

OutstandingatDecember31,2016 262,317 $ 22.32Granted 488,552 26.55Vested (67,057) 22.27Forfeited (31,689) 22.81

OutstandingatDecember31,2017 652,123 $ 25.47

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withanyshortfallrecordedasanincreaseinthetaxprovisionratherthanasacomponentofchangestoadditionalpaid-incapital.TheASUalsorequiredtheexcesstaxbenefitrealizedbereflectedasanoperatingcashflowratherthanafinancingcashflow.ThisstandardwasadoptedbytheCompanyonamodifiedretrospectivebasiswithrespecttothepreviouslyunrecognizedwindfalls,whichresultedinacumulativeadjustmenttoretainedearningsof$3.6millionasofJanuary1,2017relatedtothetimingofwhenexcesstaxbenefitsarerecognized.TheCompanyadoptedthisstandardonaprospectivebasiswithrespecttothestatementsofincomeandcashflowsandrecognizedanexcesstaxbenefitrelatedtostockcompensationwhichdecreasedincometaxexpenseintheamountof$1.9millionfortheyearendedDecember31,2017.Theexcesstaxbenefitswerepreviouslyrecordedinequity.TheCompanycontinuestoutilizeahistoricalforfeitureratetoestimatefutureforfeitures.

Note17—OtherCharges,Net

Thecomponentsofothercharges,netfortheyearsendedDecember31,2017,2016and2015,wereasfollowsinmillions):

RestructuringInitiatives

TheCompanycommencedarestructuringinitiativein2016toaddresslowerdemandintheBrukerCALIDandBrukerNanoGroupsasaresultofdelaysinEuropeanacademicfundingandongoingweaknessinseveraloftheindustrialendmarketsegmentsthataffecttheBrukerNanoGroup.ThisinitiativewasintendedtoimprovetheBrukerCALIDandBrukerNanoGroupoperatingresultsinresponsetothesemarketconditions.Restructuringactionswillresultinareductionofapproximately125employeeswithintheBrukerCALIDandBrukerNanoGroups.

ThefollowingisasummaryoftherestructuringexpensesrelatedtothisinitiativewhicharerecordedintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincomefortheyearsendedDecember31,2017and2016:

2017 2016 2015 Acquisition-relatedexpenses(income),net $ 4.5 $ 9.0 $ (7.2)Professionalfeesincurredinconnectionwithinvestigationmatters 0.2 — 0.4Pensionsettlementcharge — — 10.2Informationtechnologytransformationcosts 4.2 6.2 8.9Restructuringcharges 10.6 9.8 8.1Long-livedassetimpairments 0.2 0.8 4.6Othercharges,net $ 19.7 $ 25.8 $ 25.0

2017 2016

SeveranceandExitCosts

InventoryWritedownandAssetImpairment Total

Costofrevenues $ 3.5 $ 0.5 $ 4.0 $ 4.4 $ 2.4 $ 6.8Othercharges,net 3.0 — 3.0 3.4 0.2 3.6

$ 6.5 $ 0.5 $ 7.0 $ 7.8 $ 2.6 $ 10.4

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TheCompanycommencedarestructuringinitiativeinthesecondquarterof2015withintheBrukerBioSpinGroup,whichwasdevelopedasaresultofarevenuedeclinethatoccurredduringthesecondhalfof2014andcontinuedduringthefirsthalfof2015.ThisinitiativewasintendedtoimproveBrukerBioSpinGroup'soperatingresults.RestructuringactionsresultedinareductionofemployeeheadcountwithintheBrukerBioSpinGroupofapproximately9%andtheclosureandconsolidationofaBrukerBioSpinGroupmanufacturingfacility.

ThefollowingisasummaryoftherestructuringexpensesrelatedtothisinitiativewhicharerecordedintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincomeforyearsendedDecember31,2017,2016and2015:

AsofDecember31,2017,expensesincurredunderthisrestructuringinitiativeweresubstantiallycomplete.

RestructuringchargesfortheyearsendedDecember31,2017,2016and2015includedchargesforvariousotherprogramswhichwererecordedintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincomeasfollows:

2017 2016 2015

Costofrevenues $ (2.7) $ — $ (2.7) $ 2.2 $ — $ 2.2 $ 10.2 $ 2.1 $ 12.3

Othercharges,net — — — 1.1 — 1.1 1.8 2.1 3.9

$ (2.7) $ — $ (2.7) $ 3.3 $ — $ 3.3 $ 12.0 $ 4.2 $ 16.2

2017 2016 2015 Costofrevenues $ 4.3 $ 2.0 $ 8.9Othercharges,net 7.6 5.1 4.2

$ 11.9 $ 7.1 $ 13.1

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ThefollowingtablesetsforththechangesintherestructuringreservesfortheyearsendedDecember31,2017,2016and2015(inmillions):

RestructuringchargesbysegmentasofandfortheyearsendedDecember31,areasfollows(inmillions):

Note18—InterestandOtherIncome(Expense),Net

Thecomponentsofinterestandotherincome(expense),netfortheyearsendedDecember31,2017,2016and2015,wereasfollows(inmillions):

Total Severance ExitCosts

ProvisionsforExcess

Inventory BalanceatDecember31,2014 $ 16.1 $ 7.1 $ 1.3 $ 7.7Restructuringcharges 29.3 15.9 6.4 7.0Cashpayments (18.0) (11.9) (5.1) (1.0)Non-cashadjustments (2.9) (0.2) (0.2) (2.5)Foreigncurrencyimpact (1.4) (0.6) — (0.8)

BalanceatDecember31,2015 $ 23.1 $ 10.3 $ 2.4 $ 10.4Restructuringcharges 20.8 10.6 7.2 3.0Cashpayments (22.1) (15.6) (5.6) (0.9)Non-cashadjustments (5.4) (0.4) (0.3) (4.7)Foreigncurrencyimpact (0.2) — — (0.2)

BalanceatDecember31,2016 $ 16.2 $ 4.9 $ 3.7 $ 7.6Restructuringcharges 16.2 7.7 6.2 2.3Cashpayments (17.1) (10.1) (6.8) (0.2)Non-cashadjustments (5.5) (0.7) (1.0) (3.8)Foreigncurrencyimpact 1.0 0.2 — 0.8

BalanceatDecember31,2017 $ 10.8 $ 2.0 $ 2.1 $ 6.7

2017 2016 2015 BSI $ 14.1 $ 20.8 $ 28.4BEST 2.1 — 0.9

$ 16.2 $ 20.8 $ 29.3

2017 2016 2015 Interestincome $ 0.8 $ 0.3 $ 1.2Interestexpense (15.4) (13.2) (13.0)Exchangegains(losses)onforeigncurrencytransactions (5.5) 4.1 (5.5)Gainonbargainpurchase 0.6 9.2 —(Loss)gainondisposalofproductline — — (0.2)Other 2.6 — (0.2)Interestandotherincome(expense),net $ (16.9) $ 0.4 $ (17.7)

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Note19—BusinessSegmentInformation

TheCompanyhastworeportablesegments,BSIandBEST,asdiscussedinNote1totheconsolidatedfinancialstatements.

SelectedbusinesssegmentinformationispresentedbelowfortheyearsendedDecember31,(inmillions):

TheCompanyrecordedanimpairmentchargeof$1.1million,$0.8millionand$4.6millionfortheyearsendedDecember31,2017,2016and2015,respectively,withintheBSIandBESTSegments.PleaseseeNote7—Property,PlantandEquipment,netandNote8—GoodwillandOtherIntangibleAssets,fordescriptionofimpairmentchargesrecordedin2017,2016and2015.Theseimpairmentchargesareincludedwithinothercharges,netintheaccompanyingconsolidatedstatementsofincomeandcomprehensiveincome.

TotalassetsbysegmentasofandfortheyearsendedDecember31,areasfollows(inmillions):

2017 2016 2015 Revenue: BSI $ 1,583.9 $ 1,492.6 $ 1,499.2BEST 191.2 130.2 133.7Eliminations(a) (9.2) (11.5) (9.1)Totalrevenue $ 1,765.9 $ 1,611.3 $ 1,623.8

OperatingIncome: BSI $ 208.6 $ 168.9 $ 133.2BEST 7.4 6.6 11.5Corporate,eliminationsandother(b) (1.3) 1.7 1.0Totaloperatingincome $ 214.7 $ 177.2 $ 145.7

(b) Representscorporatecostsandeliminationsnotallocatedtothereportablesegments.

2017 2016 Assets: BSI $ 1,917.8 $ 1,779.8BEST 35.6 36.0Eliminationsandother(a) (4.9) (7.4)Totalassets $ 1,948.5 $ 1,808.4

(a) Assetsnotallocatedtothereportablesegmentsandeliminationsofintercompanytransactions.

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TotalcapitalexpendituresanddepreciationandamortizationbysegmentarepresentedbelowfortheyearsendedDecember31,(inmillions):

Revenueandproperty,plantandequipment,netbygeographicalareaasofandfortheyearendedDecember31,areasfollows(inmillions):

Note20—RelatedParties

TheCompanyleasescertainofficespacefromcertainofitsprincipalshareholders,includingadirectorandexecutiveofficerandanothermemberoftheCompany'sBoardofDirectors,andmembersoftheirimmediatefamilies,whichhaveexpirationdatesrangingfrom2018to2020.Totalrentexpenseundertheseleaseswas$3.5million,$3.9millionand$1.8millionforeachoftheyearsendedDecember31,2017,2016and2015,respectively.

DuringtheyearsendedDecember31,2017,2016and2015,theCompanyrecordedrevenueof$2.6million,$1.1millionand$0.7million,respectively,arisingfromcommercialtransactionswithalifesciencescompanyinwhichamemberoftheCompany'sBoardofDirectorsisChairmanandChiefExecutiveOfficer.

2017 2016 2015 CapitalExpenditures: BSI $ 38.5 $ 34.6 $ 30.1BEST 5.2 2.5 4.1Totalcapitalexpenditures $ 43.7 $ 37.1 $ 34.2

DepreciationandAmortization: BSI $ 59.8 $ 51.3 $ 50.5BEST 4.1 3.0 2.8Totaldepreciationandamortization $ 63.9 $ 54.3 $ 53.3

2017 2016 2015 Revenue: UnitedStates $ 434.7 $ 428.2 $ 380.4Germany 200.2 189.5 198.9RestofEurope 465.0 393.4 479.6AsiaPacific 514.8 458.1 414.9Other 151.2 142.1 150.0Totalrevenue $ 1,765.9 $ 1,611.3 $ 1,623.8

2017 2016 Property,plantandequipment,net: UnitedStates $ 46.2 $ 46.4Germany 140.9 122.5RestofEurope 71.9 63.3AsiaPacific 5.4 4.4Other 2.1 2.5Totalproperty,plantandequipment,net $ 266.5 $ 239.1

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DuringtheyearendedDecember31,2016and2015,theCompanyrecordedrevenueof$0.2millionand$0.5million,respectively,fromcommercialtransactionswithathermalanalysiscompanyinwhichoneoftheformermembersofitsBoardofDirectorsservesasaconsultant.

Note21—RecentAccountingPronouncements

InJanuary2017,theFinancialAccountingStandardsBoard("FASB")issuedAccountingStandardsUpdate("ASU")2017-04,Intangibles-Goodwill andOther (Topic 350): Simplifying the Test for Goodwill Impairment. Thenewstandardsimplifiesthesubsequentmeasurementofgoodwillbyeliminatingthesecondstepofthegoodwillimpairmenttest.ThisASUwillbeappliedprospectivelyandiseffectiveforannualorinterimgoodwillimpairmenttestsinfiscalyearsbeginningafterDecember15,2019.TheadoptionofthisstandardisnotexpectedtohaveamaterialimpactontheCompany'sconsolidatedfinancialstatementsuponadoption.

InJanuary2017,theFASBissuedASUNo.2017-01,Business Combinations (Topic 805): Clarifying the Definition of a Business. Thisnewstandardclarifiesthedefinitionofabusinessandprovidesascreentodeterminewhenanintegratedsetofassetsandactivitiesisnotabusiness.Thescreenrequiresthatwhensubstantiallyallofthefairvalueofthegrossassetsacquired(ordisposedof)isconcentratedinasingleidentifiableassetoragroupofsimilaridentifiableassets,thesetisnotabusiness.ThisnewstandardwasadoptedasoftheeffectivedateofJanuary1,2018.TheCompanyhasevaluatedtheprovisionsofthisstandardandhasdeterminedthattheimpactofadoptionofASUNo.2017-01wasnotmaterialtotheconsolidatedfinancialstatements.

InOctober2016,theFASBissuedASUNo.2016-16,Income Taxes (Topic 740)—Intra-Entity Transfer of Assets Other than Inventory .Thenewstandardrequiresrecognitionofcurrentanddeferredincometaxesresultingfromanintra-entitytransferofanyasset(excludinginventory)whenthetransferoccurs.ThisisachangefromexistingU.S.GAAPwhichprohibitsrecognitionofcurrentanddeferredincometaxesuntiltheassetissoldtoathirdparty.ThisnewstandardwasadoptedasoftheeffectivedateofJanuary1,2018.TheCompanyhasevaluatedtheprovisionsofthisstandardandhasdeterminedthattheimpactofadoptionofASUNo.2016-16wasnotmaterialtotheconsolidatedfinancialstatements.

InFebruary2016,theFASBissuedASUNo.2016-02,Leases .Thenewstandardprovidesguidanceontherecognition,measurement,presentation,anddisclosureofleases.ThenewstandardsupersedespresentU.S.GAAPguidanceonleasesandrequiressubstantiallyallleasestobereportedonthebalancesheetasright-of-useassetsandleaseliabilities,aswellasadditionaldisclosures.ThenewstandardiseffectiveasofJanuary1,2019,andearlyadoptionispermitted.TheCompanyisevaluatingtheprovisionsofthisstandardandhasnotdeterminedwhatimpacttheadoptionofASUNo.2016-02willhaveontheCompany'sconsolidatedfinancialstatements.

InMay2014,theFASBissuedASUNo.2014-09,Revenue from Contracts with Customers ,whichsupersedestherevenuerecognitionrequirementsunderAccountingStandardsCodification(ASC)Topic605.ThenewguidancewastheresultofajointprojectbetweentheFASBandtheInternationalAccountingStandardsBoardtoclarifytheprinciplesforrecognizingrevenueandtodevelopcommonrevenuestandardsforU.S.GAAPandInternationalFinancialReportingStandards.Thecoreprincipleofthenewguidanceisthatrevenueshouldberecognizedtodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.InAugust2015,theFASBelectedtodefertheeffectivedateofASUNo.2014-09byoneyeartoannualperiodsbeginningafterDecember15,2017,withearlyapplicationpermittedasoftheoriginaleffectivedate.Thenewguidancemaybeappliedonaretrospectivebasisforallpriorperiodspresented,oronamodifiedretrospectivebasiswiththecumulativeeffectofthenewguidanceasofthedateofinitialapplication.Thenewguidancewillbe

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effectivefortheCompanyasofJanuary1,2018andtheCompanycurrentlyintendstousethemodifiedretrospectivetransitionmethod.

Underthenewguidance,therearespecificcriteriatodetermineifaperformanceobligationshouldberecognizedovertimeoratapointintime.Accordingly,theCompanyhasidentifiedcertainproject-basedordersintheBESTSegmentandCBRNEdetectionordersintheBrukerCALIDGroupforwhichthetimingofwhentheCompanyrecognizesrevenuemaybeimpacted.Duetothecomplexityoftheseproject-basedorders,revenuerecognitionunderthenewstandardishighlydependentonspecificcontractterms.

Duringthefourthquarterof2017,theCompanysubstantiallycompletedtheassessmentovertheimpactthatthisnewstandardwillhaveonitsconsolidatedbalancesheets.TheCompanypreliminarilyexpectstorecognizeanadjustmentofapproximately$6.0milliontoretainedearningsonJanuary1,2018toreflectthecumulativeeffectoftheaccountingchangesmadeupontheadoptionofthestandard.Thefinalizationoftheassessmentmayresultinsignificantchangestotheestimatesthatmaymateriallyimpactthepreliminaryestimateofthecumulativeeffect.

Note22—QuarterlyFinancialData(Unaudited)

AsummaryofoperatingresultsforthequarterlyperiodsintheyearsendedDecember31,2017and2016,issetforthbelow(inmillions,exceptpersharedata):

QuarterEnded March31(1) June30(2) September30(3) December31(1)(2)(3)(4)(5) YearendedDecember31,2017 Netrevenue $ 384.9 $ 414.9 $ 435.6 $ 530.5Grossprofit 176.4 183.4 198.0 255.2Operatingincome 37.6 33.5 49.9 93.7Netincome(loss)attributabletoBrukerCorporation 21.6 23.4 37.0 (3.4)

Netincome(loss)percommonshareattributabletoBrukerCorporationshareholders: Basic $ 0.14 $ 0.15 $ 0.23 $ (0.02)Diluted $ 0.13 $ 0.15 $ 0.23 $ (0.02)

YearendedDecember31,2016 Netrevenue $ 375.4 $ 371.7 $ 393.9 $ 470.3Grossprofit 166.8 170.1 185.2 220.4Operatingincome 34.0 20.4 45.9 76.9NetincomeattributabletoBrukerCorporation 23.6 14.5 46.5 69.0NetincomepercommonshareattributabletoBrukerCorporationshareholders: Basic $ 0.14 $ 0.09 $ 0.29 $ 0.43Diluted $ 0.14 $ 0.09 $ 0.29 $ 0.43

(1) Thefirstandfourthquarterof2017includesimpairmentofassetsof$0.3millionand$0.8million,respectively,comprisedofotherlong-livedassets.

(2) Thesecondandfourthquarterof2016includesimpairmentofassetsof$0.7millionand$0.1million,respectively,comprisedofotherlong-livedassets.

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(3) Thethirdquarterof2017includesbargainpurchasegainof$1.1millionrelatedtotheMerlinDiagnostikaGmbHacquisitionandthefourthquarterof2017includesanadjustmenttothebargainpurchasegainof$0.5millionrelatedtothesameacquisition.

(4) Thefourthquarterof2016includesbargainpurchasegainof$9.2millionrelatedtotheOxfordInstrumentsSuperconductingWireLLC.,acquisition.

(5) Thefourthquarterof2017includes$68.9millionofincrementalincometaxprovisionrelatedtothe2017TaxAct.

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ITEM9CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONAUDITINGANDFINANCIALDISCLOSURE

AtameetingheldonJune1,2016,theauditcommitteeoftheCompany'sBoardofDirectorsapprovedthedismissalofErnst&YoungLLP("Ernst&Young")astheCompany'sindependentregisteredpublicaccountingfirm,effectiveJune1,2016,andtheappointmentofPricewaterhouseCoopersLLPastheCompany'sindependentregisteredpublicaccountingfirm,effectiveJune1,2016,toperformindependentauditservicesforthefiscalyearendingDecember31,2016.

ThereportofErnst&YoungontheconsolidatedfinancialstatementsoftheCompanyforthefiscalyearendedDecember31,2015didnotcontainanadverseopinionordisclaimerofopinionandwerenotqualifiedormodifiedastouncertainty,auditscope,oraccountingprinciples.

InconnectionwiththeauditofourfinancialstatementsforthefiscalyearendedDecember31,2015,andinthesubsequentinterimperiodthroughJune1,2016,therewereno"disagreements"(asthattermisdefinedinItem304(a)(1)(iv)ofRegulationS-Kandtherelatedinstructions)withErnst&Youngonanymatterofaccountingprinciplesorpractices,financialstatementdisclosure,orauditingscopeandprocedures,which,ifnotresolvedtothesatisfactionofErnst&Young,wouldhavecausedErnst&Youngtomakereferencetothematterintheirreportsforsuchyears.Therewereno"reportableevents"asthattermisdescribedinItem304(a)(1)(v)ofRegulationS-K,exceptforamaterialweaknessintheCompany'sinternalcontroloverfinancialreportingasofDecember31,2015concerningtheaccountingforincometaxes,whichmaterialweaknesswasidentifiedsubsequenttothefilingofourAnnualReportonForm10-KfortheyearendedDecember31,2015.

Asaresultofsuchmaterialweakness,ourmanagementconcludedinNovember2016thattheCompany'sinternalcontroloverfinancialreportingwasnoteffectiveatDecember31,2015.OnNovember15,2016,theCompanyfiledAmendmentNo.1toitsAnnualReportonForm10-KforthefiscalyearendedDecember31,2015,aswellasamendmentstoeachofitsQuarterlyReportsonForm10-QfortheperiodsendedMarch31,2016,andJune30,2016,toreflecttheconclusionbymanagementthattherewasamaterialweaknessininternalcontroloverfinancialreportingasoftheendoftheperiodscoveredbythosereports.TheCompany'sAmendmentNo.1toitsAnnualReportonForm10-KforthefiscalyearendedDecember31,2015alsoincludedrevisedauditor'sreportsfromErnst&YoungstatingthattheCompany'sinternalcontroloverfinancialreportingatDecember31,2015wasnoteffective.

ITEM9ACONTROLSANDPROCEDURES

DisclosureControlsandProcedures

Wehaveestablisheddisclosurecontrolsandprocedures(assuchtermisdefinedinRules13a-15(e)and15d-15(e)undertheSecuritiesExchangeActof1934,asamended(the"ExchangeAct"))thataredesignedtoensurethatinformationrequiredtobedisclosedinthereportsthatwefileorsubmitundertheExchangeActisrecorded,processed,summarizedandreportedwithinthetimeperiodsspecifiedintherulesandformsoftheSECandtoensurethatinformationrequiredtobedisclosedisaccumulatedandcommunicatedtomanagement,includingourChiefExecutiveOfficer(principalexecutiveofficer)andChiefFinancialOfficer(principalfinancialofficer),toallowtimelydecisionsregardingrequireddisclosures.Underthesupervisionandwiththeparticipationofourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,weconductedanevaluationoftheeffectivenessofourdisclosurecontrolsandproceduresasofDecember31,2017.Basedonthisevaluation,ourChiefExecutiveOfficerandChiefFinancialOfficerconcludedthatourdisclosurecontrolsandprocedureswereeffectiveatareasonableassurancelevelasofDecember31,2017.

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Management'sReportonInternalControloverFinancialReporting

Ourmanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreporting.Underthesupervisionandwiththeparticipationofourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,weconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingasofDecember31,2017,basedonthecriteriasetforthbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO)inInternal Control—Integrated Framework (2013).Basedonthisevaluation,managementconcludedthatourinternalcontroloverfinancialreportingwaseffectiveasofDecember31,2017.

WeexcludedHysitron,Incorporated("Hysitron")fromourassessmentofinternalcontroloverfinancialreportingasofDecember31,2017becauseitwasacquiredbytheCompanyinapurchasebusinesscombinationduring2017.ThetotalassetsandtotalrevenuesofHysitron,represent0.7%and0.9%,respectively,oftherelatedconsolidatedfinancialstatementamountsasofandfortheyearendedDecember31,2017.

TheeffectivenessofourinternalcontroloverfinancialreportingasofDecember31,2017hasbeenauditedbyPricewaterhouseCoopersLLP,anindependentregisteredpublicaccountingfirm,asstatedintheirreportwhichappearsherein.

ChangesinInternalControloverFinancialReporting

TherewerenochangesinourinternalcontroloverfinancialreportingthatoccurredduringthequarterendedDecember31,2017thatmateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

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ITEM9BOTHERINFORMATION

PARTIII

ITEM10DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCE

ThefulltextoftheCompany'scodeofethics,whichappliestoitsPrincipalExecutiveOfficer,PrincipalFinancialOfficer,PrincipalAccountingOfficerandBoardofDirectorsispublishedontheCompany'sInvestorRelationswebsiteatwww.bruker.com .WeintendtodisclosefutureamendmentstocertainprovisionsofourCode,orwaiversofsuchprovisionsgrantedtoexecutiveofficersanddirectors,onthewebsitewithinfourbusinessdaysfollowingthedateofsuchamendmentorwaiver.

Informationregardingourexecutiveofficersmaybefoundunderthecaption"Executive Officers "inourdefinitiveproxystatementforour2018AnnualMeetingofStockholders.Informationregardingourdirectors,includingcommitteesofourBoardofDirectorsandourAuditCommitteeFinancialExperts,maybefoundunderthecaptions"Election of Directors," "Board Meetings, Committees and Compensation," and"Audit Committee Report" inourdefinitiveproxystatementforour2018AnnualMeetingofStockholders.InformationregardingcompliancewithSection16(a)oftheExchangeActmaybefoundinourdefinitiveproxystatementforour2018AnnualMeetingofStockholdersunderthecaption"Section 16(a) Beneficial Ownership Reporting Compliance. "InformationregardingtheproceduresbywhichsecurityholdersmayrecommendnomineestoourBoardofDirectorsmaybefoundinourdefinitiveproxystatementforour2018AnnualMeetingofStockholdersunderthecaption"Director Nominations. "Suchinformationisincorporatedhereinbyreference.

ITEM11EXECUTIVECOMPENSATION

Informationregardingexecutivecompensationmaybefoundunderthecaptions"Compensation of Directors," "Compensation Discussion and Analysis,""Summary of Executive Compensation," "Compensation Committee Interlocks and Insider Participation," and"Compensation Committee Report" inourdefinitiveproxystatementforour2018AnnualMeetingofStockholders.Suchinformationisincorporatedhereinbyreference.

ITEM12SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENTANDRELATEDSTOCKHOLDERMATTERS

ThefollowingtablesummarizesinformationaboutourequitycompensationplansasofDecember31,2017:

TheBrukerCorporation2016IncentiveCompensationPlan,orthe2016Plan,wasapprovedbyourstockholdersinMay2016.The2016Planhasatermoftenyearsandprovidesfortheissuanceof

PlanCategory

NumberofSecuritiestobeIssued

UponExerciseofOutstandingOptions,WarrantsandRights

Weighted-AverageExercisePriceof

OutstandingOptions,WarrantsandRights

NumberofSecuritiesRemainingAvailableforFutureIssuance

UnderEquityCompensationPlans(excludingsecuritiesreflectedincolumn(a))

Equitycompensationplansapprovedbysecurityholders 3,973,325 $ 21.04 11,016,454Equitycompensationplansnotapprovedbysecurityholders N/A N/A N/A

3,973,325 $ 21.04 11,016,454

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upto9,500,000sharesoftheCompany'scommonstock.Withtheapprovalofthe2016Plan,noadditionalgrantscanbemadefromtheCompany's2010IncentiveCompensationPlan.Outstandingawardsunderthe2010IncentiveCompensationPlanwillcontinueinaccordancewiththeirterms.

Theinformationcontainedinourdefinitiveproxystatementforour2018AnnualMeetingofStockholdersunderthecaption"Security Ownership of CertainBeneficial Owners and Management" isincorporatedhereinbyreference.

ITEM13CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS,ANDDIRECTORINDEPENDENCE

Theinformationcontainedinourdefinitiveproxystatementforour2018AnnualMeetingofStockholdersunderthecaptions"Related Persons Transactions"and"Board Meetings, Committees and Compensation" isincorporatedhereinbyreference.

ITEM14PRINCIPALACCOUNTINGFEESANDSERVICES

Theinformationcontainedinourdefinitiveproxystatementforour2018AnnualMeetingofStockholdersunderthecaptions"Independent Registered PublicAccounting Firm" and"Ratification of Independent Registered Public Accounting Firm" isincorporatedhereinbyreference.

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PARTIV

ITEM15EXHIBITS,FINANCIALSTATEMENTSANDSCHEDULES

(a) FinancialStatementsandSchedules

(1) FinancialStatements

ThefollowingconsolidatedfinancialstatementsofBrukerCorporationarefiledaspartofthisreportunderItem8—FinancialStatementsandSupplementaryData:

(2) FinancialStatementSchedules

AllscheduleshavebeenomittedbecausetheyarenotrequiredorbecausetherequiredinformationisprovidedintheConsolidatedFinancialStatementsorNotestheretosetforthunderItem8above.

(3) Exhibits

(b) ListofExhibits

ReportofPricewaterhouseCoopersLLP,IndependentRegisteredPublicAccountingFirmReportofErnst&YoungLLP,IndependentRegisteredPublicAccountingFirmConsolidatedBalanceSheetsasofDecember31,2017and2016ConsolidatedStatementsofIncomeandComprehensiveIncomefortheyearsendedDecember31,2017,2016and2015ConsolidatedStatementsofShareholders'EquityfortheyearsendedDecember31,2017,2016and2015ConsolidatedStatementsofCashFlowsfortheyearsendedDecember31,2017,2016and2015NotestoConsolidatedFinancialStatements

IncorporatedbyReference(1)Exhibit

Herewith Description Form Date3.1 AmendedCertificateofIncorporationoftheRegistrant 10-K December31,2007

3.2 BylawsoftheRegistrant S-1 August3,2000

4.1 SpecimenstockcertificaterepresentingsharesofcommonstockoftheRegistrant

10-K December31,2016

10.1† BrukerCorporation2010IncentiveCompensationPlan S-8 June4,2010

10.2† BrukerCorporation2010IncentiveCompensationPlanFormofIncentiveStockOptionAgreement

10-Q June30,2010

10.3† BrukerCorporation2010IncentiveCompensationPlanFormofNon-QualifiedStockOptionAgreement

10-Q June30,2010

10.4† BrukerCorporation2010IncentiveCompensationPlanFormofRestrictedStockAgreement

10-Q June30,2010

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Herewith Description Form Date10.30 AmendedandRestatedCreditAgreementdatedasofMay24,2011among

theCompany,BrukerAXSGmbH,BrukerDaltonikGmbH,BrukerOptikGmbH,BrukerPhysikGmbH,BrukerBioSpinInvestAG,BrukerBioSpinAGandBrukerBioSpinInternationalAG,theotherforeignsubsidiaryborrowersfromtimetotimepartythereto,thelendersfromtimetotimepartythereto,DeutscheBankSecuritiesInc.,CommerzbankAg,NewYork,GrandCaymanAndStuttgartBranchesandRBSCitizens,NationalAssociation,asCo-DocumentationAgents,BankofAmerica,N.A.asSyndicationAgentandJPMorganChaseBank,N.A.,asAdministrativeAgent

8-K May25,2011

10.31* NotePurchaseAgreementdatedasofJanuary18,2012. 8-K January18,2012

10.34† BrukerEnergy&SuperconTechnologies,Inc.2009StockOptionPlan 10-K December31,2009

10.35† FormofBrukerEnergy&SuperconTechnologies,Inc.IncentiveStockOptionAgreement

10.36† FormofBrukerEnergy&SuperconTechnologies,Inc.Non-QualifiedStockOptionAgreement

10.41† EmploymentofferletteragreementdatedJune25,2012betweenBrukerCorporationandJuergenSrega

10-Q March31,2013

10.43* CreditAgreement,datedOctober27,2015,byandamongtheCompanyandcertainofitsforeignsubsidiariesasborrowers,CitizensBank,N.A.,DeutscheBankSecuritiesInc.andTDBank,N.A.,asCo-DocumentationAgents,BankofAmerica,N.A.andWellsFargoBank,NationalAssociation,asCo-SyndicationAgents,JPMorganChaseBank,N.A.,asAdministrativeAgentforitselfandtheotherlenderspartythereto,andtheseveralbanksorotherfinancialinstitutionsorentitiesfromtimetotimepartytheretoaslenders(incorporatedbyreferencetoExhibit10.1totheCompany'sCurrentReportontheForm8-KfiledonOctober27,2015,FileNo.000-30833)

8-K October27,2015

10.44† EmploymentagreementwithaneffectivedateofNovember1,2015betweenBrukerCorporationandDr.RenéLenggenhager

10-Q November6,2015

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Herewith Description Form Date10.45† BrukerCorporation2016IncentiveCompensationPlanFormofIncentive

StockOptionAwardAgreement 10-Q August5,2016

10.46† BrukerCorporation2016IncentiveCompensationPlanFormofNon-QualifiedStockOptionAwardAgreement

10-Q August5,2016

10.47† BrukerCorporation2016IncentiveCompensationPlanFormofRestrictedStockUnitAwardAgreement

10-Q August5,2016

10.48† BrukerCorporation2016IncentiveCompensationPlanFormofDirectorRestrictedStockUnitAwardAgreement

10-K March1,2017

10.49† ProjectCompletionAgreementdatedMarch23,2017 10-Q May10,2017

21.1 SubsidiariesoftheRegistrant X

23.1 ConsentofPricewaterhouseCoopersLLP,IndependentRegisteredPublicAccountingFirm

23.2 ConsentofErnst&YoungLLP,IndependentRegisteredPublicAccountingFirm

24.1 Powerofattorney(includedonsignaturepagehereto) X

31.1 CertificationbyPrincipalExecutiveOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002

31.2 CertificationbyPrincipalFinancialOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002

32.1 CertificationbyChiefExecutiveOfficerandChiefFinancialOfficerpursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002

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ITEM16FORM10-KSUMMARY

NotApplicable.

Herewith Description Form Date101 ThefollowingmaterialsfromtheBrukerCorporationAnnualReporton

Form10-KforthefiscalyearendedDecember31,2017formattedinExtensibleBusinessReportingLanguage(XBRL):(i)theConsolidatedBalanceSheets,(ii)ConsolidatedStatementsofIncomeandComprehensiveIncome,(iii)ConsolidatedStatementsofShareholders'EquityandComprehensiveIncome(Loss),(iv)ConsolidatedStatementsofCashFlowsand(iv)NotestotheConsolidatedFinancialStatements

* CertainportionshavebeenomittedpursuanttoanordergrantingconfidentialtreatmentandhavebeenfiledseparatelywiththeSecuritiesandExchangeCommission.

† Designatesmanagementcontractorcompensatoryplanorarrangement.

(1) InaccordancewithRule12b-32undertheExchangeActreferenceismadetothedocumentspreviouslyfiledwiththeSecuritiesandExchangeCommission,whichdocumentsareherebyincorporatedbyreference.ThedateslistedforForms8-Karedatestherespectiveformswerefiledon,thedateslistedforForms10-Q,Forms10-KandForms10-K/AareforthequarterlyorannualperiodendeddatesandthedateslistedforFormsS-1,FormsS-3andFormsS-4aredatesonwhichtheSecuritiesandExchangeCommissiondeclaredthemeffective.

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SIGNATURES

PursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.

We,theundersignedofficersanddirectorsofBrukerCorporation,herebyseverallyconstituteandappointFrankH.Laukien,Ph.D.tosignforusandinournamesinthecapacitiesindicatedbelow,thereportonForm10-Kfiledherewithandanyandallamendmentstosuchreport,andtofilethesame,withallexhibitstheretoandotherdocumentsinconnectiontherewith,ineachcase,withtheSecuritiesandExchangeCommission,andgenerallytodoallsuchthingsinournamesandonourbehalfinourcapacitiesconsistentwiththeprovisionsoftheSecuritiesExchangeActof1934,asamended,andallrequirementsoftheSecuritiesandExchangeCommission.

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheregistrantandinthecapacitiesandonthedatesindicated.

BRUKERCORPORATION

Date:March16,2018 By: /s/FRANKH.LAUKIEN,PH.D.

Name:FrankH.Laukien,Ph.D.Title:President, Chief Executive Officer and Chairman

Name Title Date

/s/FRANKH.LAUKIEN,PH.D.

FrankH.Laukien,Ph.D. President,ChiefExecutiveOfficerandChairman(PrincipalExecutiveOfficer)

March16,2018

/s/ANTHONYL.MATTACCHIONE

AnthonyL.Mattacchione ChiefFinancialOfficerandSeniorVicePresident(PrincipalFinancialOfficer)

March16,2018

/s/GERALDN.HERMAN

GeraldN.Herman VicePresidentandCorporateControllerPrincipalAccountingOfficer

March16,2018

/s/CYNTHIAM.FRIEND,PH.D.

CynthiaFriend,PH.D. Director March16,2018

/s/MARCA.KASTNER,PH.D.

MarcA.Kastner,PH.D. Director March16,2018

/s/RICHARDD.KNISS

RichardD.Kniss Director March16,2018

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Name Title Date/s/JOERGC.LAUKIEN

JoergC.Laukien Director March16,2018

/s/WILLIAMA.LINTON

WilliamA.Linton Director March16,2018

/s/GILLESG.MARTIN,PH.D.

GillesG.Martin Director March16,2018

/s/JOHNORNELL

JohnOrnell Director March16,2018

/s/RICHARDA.PACKER

RichardA.Packer Director March16,2018

/s/ADELENEQ.PERKINS

AdeleneQ.Perkins Director March16,2018

/s/HERMANNREQUARDT,PH.D.

HermannRequardt,PH.D. Director March16,2018

/s/ROBERTROSENTHAL,PH.D.

RobertRosenthal,PH.D Director March16,2018

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EXHIBIT21.1

SUBSIDIARIESOFBRUKERCORPORATION

NameofSubsidiary JurisdictionofIncorporationBrukerEnergy&SuperconTechnologies,Inc. Delaware,U.S.A.BrukerHTSGmbH(1) GermanyBrukerAdvancedSuperconGmbH(2) GermanyBrukerEASGmbH(2) GermanyHydrostaticExtrusionsLtd.(1) UnitedKingdomRIResearchInstrumentsGmbH(3) GermanyBrukerAXSInc. Delaware,U.S.A.BrukerAXSGmbH(4) GermanyBrukerAustriaGmbH(5) AustriaBrukerdoBrasilLtda.(5) BrazilBrukerNanoGmbH(5) GermanyBrukerMexicanaS.A.deC.V.(6) MexicoBrukerPolskaSp.Zo.o.(5) PolandBrukerSouthAfrica(Pty)Ltd.(5) SouthAfricaInCoaTecGmbH(7) GermanyBrukerAXSHandheldInc.(8) Delaware,U.S.A.BrukerAXSK.K.(25) JapanBrukerNano,Inc.(8) Arizona,U.S.A.VutaraLLC(9) Delaware,U.S.A.BrukerBioSciencesSecuritiesCorporation Massachusetts,U.S.A.BrukerBioSpinCorporation Massachusetts,U.S.A.BrukerInvestAG(10) SwitzerlandBrukerBioSpinAG(11) SwitzerlandBrukerEspanolaS.A.(11) SpainBruker(Malaysia)SDNBHD(11) MalaysiaBrukerSingaporePte.Ltd.(11) SingaporeBruker(Beijing)ScientificTechnologyCo.,Ltd.(12) ChinaBrukerLtd.(11) RussiaBrukerIndiaScientificPVT,Ltd.(26) IndiaBrukerBioSpinK.K.(11) JapanBrukerKoreaCo.Ltd.(11) KoreaBrukerBioSpinMRIGmbH(11) GermanyBrukerBioSpinMRIInc.(11) Massachusetts,U.S.A.BrukerNederlandB.V.(11) NetherlandsBrukerLtd.(11) CanadaBrukerUKLtd.(11) UnitedKingdomBrukerAXSLtd.(14) UnitedKingdomOxfordResearchSystemsLtd.(15) UnitedKingdomBrukerPTYLtd.(11) AustraliaBrukerFranceS.AS..(11) FranceBrukerBelgiumS.A./N.V.(11) BelgiumBrukerItaliaS.r.l.(11) ItalyXGLabsS.r.l.(27)) ItalyBrukerPortugalUnipessoalLDA(11) PortugalBrukerScientificInstrumentsHongKongCo.,Ltd.(11) HongKongBrukerMicroCTN.V.(11) BelgiumBrukerTurkeyTeknolojikSistemlerTicaretLtd.Sirketi(11) TurkeyLuxendoGmbH(11) GermanyBrukerScientificIsraelLtd.(11) Israel

NameofSubsidiary JurisdictionofIncorporationBrukerJVIsraelLtd.(16) IsraelBrukerJVUKLtd.(17) UnitedKingdomBrukerPhysikGmbH(18) GermanyBrukerBioSpinGmbH(19) GermanyBrukerDaltonicsInc. Delaware,U.S.A.BrukerDaltonikGmbH(20) GermanyBrukers.r.o.(21) CzechRepublicInVivoBiotechSvsGmbH.(21) GermanyMerlinDiagnostikaGmbH(21) GermanyBrukerTaiwanCo.Ltd.(22) TaiwanBrukerDaltonicsK.K.(25) JapanBrukerDaltonicsPty.Ltd.(22) SouthAfricaBrukerNordicAB(22) SwedenBrukerChemicalAnalysisB.V.(22) NetherlandsBrukerDaltonicsGmbH(22) SwitzerlandBrukerDaltonicsLtd.(22) UnitedKingdomBrukerDaltonicsS.r.l.(22) ItalyBrukerDetectionCorporation(22) Massachusetts,U.S.A.BrukerOpticsInc. Delaware,U.S.A.BrukerOpticsK.K.(25) JapanBrukerOpticsGmbH(23) SwitzerlandBrukerOptikGmbH(23) GermanyBrukerOpticsUkraine(24) UkraineBrukerFinanceB.V. NetherlandsBrukerBusinessSupportCentersp.zo.o(28) PolandBrukerOSTLLC(1) UnitedStates

(1) Theseentitiesarewholly-ownedsubsidiariesofBrukerEnergy&SuperconTechnologies,Inc.

(2) Theseentitiesarewholly-ownedsubsidiariesofBrukerHTSGmbH.

(3) RIResearchInstrumentsGmbHisanindirectsubsidiaryofBrukerEnergy&SuperconTechnologies,Inc.RIResearchInstrumentsGmbHis51%ownedbyBrukerEnergy&SuperconTechnologies,Inc.

(4) BrukerAXSGmbHis90%ownedbyBrukerAXSInc.and10%ownedbyBrukerCorporation.

(5) Theseentitiesarewholly-ownedsubsidiariesofBrukerAXSGmbH.

(6) BrukerMexicanaS.AdeC.V.is99.99%ownedbyBrukerAXSGmbHand0.01%ownedbyBrukerAXSInc.

(7) InCoaTecGmbHisanindirectsubsidiaryofBrukerAXSGmbH.InCoaTecGmbHis66%ownedbyBrukerAXSGmbH.

(8) Theseentitiesarewholly-ownedsubsidiariesofBrukerAXSInc.

(9) VutaraLLCisawholly-ownedsubsidiaryofBrukerNano,Inc.

(10) BrukerInvestAGis90%ownedbyBrukerBioSpinCorporationand10%ownedbyBrukerCorporation.

(11) Theseentitiesarewholly-ownedsubsidiariesofBrukerInvestAG.

(12) Bruker(Beijing)ScientificTechnologyCo.,Ltd.isawholly-ownedsubsidiaryofBrukerSingaporePte.Ltd.

(13) BrukerIndiaSuppliersPVT,Ltd.isawholly-ownedsubsidiaryofBrukerIndiaScientificPVT,Ltd.

(14) BrukerAXSLtd.is50%ownedbyBrukerInvestAGand50%ownedbyBrukerUKLtd.

(15) OxfordResearchSystems,Ltd.is50%ownedbyBrukerInvestAGand50%ownedbyBrukerUKLtd.

(16) BrukerJVIsraelLtd.isawholly-ownedsubsidiaryofBrukerScientificIsraelLtd.

(17) BrukerJVUKLtd.isawholly-ownedsubsidiaryofBrukerJVIsraelLtd.

(18) BrukerPhysikGmbHis50.5%ownedbyBrukerBioSpinCorporation,24.75%ownedbyBrukerDaltonikGmbHand24.75%ownedbyBrukerOptikGmbH.

(19) BrukerBioSpinGmbHisawholly-ownedsubsidiaryofBrukerPhysikGmbH.

(20) BrukerDaltonikGmbHis90%ownedbyBrukerDaltonicsInc.and10%ownedbyBrukerCorporation.

(21) Theseentitiesarewholly-ownedsubsidiariesofBrukerDaltonikGmbH.

(22) Theseentitiesarewholly-ownedsubsidiariesofBrukerDaltonicsInc.

(23) Theseentitiesarewholly-ownedsubsidiariesofBrukerOpticsInc.

(24) Theseentitiesarewholly-ownedsubsidiariesofBrukerOptikGmbH.

(25) Theseentitiesarewholly-ownedsubsidiariesofBrukerBioSpinK.K.

(26) BrukerIndiaScientificPVT,Ltd.is73.59%ownedbyBrukerInvestAG,6.53%ownedbyBrukerDaltonikGmbHand19.88%ownedbyBrukerAXSGmbH

(27) XGLabsS.r.l.isawholly-ownedsubsidiaryofBrukerItaliaS.r.l.

(28) BrukerBusinessSupportCentersp.zo.o.isawholly-ownedsubsidiaryofBrukerFinanceB.V.

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EXHIBIT21.1

SUBSIDIARIESOFBRUKERCORPORATION

EXHIBIT23.1

CONSENTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM

WeherebyconsenttotheincorporationbyreferenceintheRegistrationStatementonFormS-3(No.333-159982)andFormsS-8(Nos.333-211686,333-167333,333-150430,333-137090,333-107294,and333-47836)ofBrukerCorporationofourreportdatedMarch16,2018relatingtothefinancialstatementsandtheeffectivenessofinternalcontroloverfinancialreporting,whichappearsinthisForm10-K.

/s/PricewaterhouseCoopersLLP

Boston,MassachusettsMarch16,2018

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EXHIBIT23.1

EXHIBIT23.2

WeconsenttotheincorporationbyreferenceinthefollowingRegistrationStatements:

(1) RegistrationStatement(FormS-8,No.333-211686)pertainingtotheBrukerCorporation2016IncentiveCompensationPlan,

(2) RegistrationStatement(FormS-8,No.333-167333)pertainingtotheBrukerCorporation2010IncentiveCompensationPlan,

(3) RegistrationStatement(FormS-3,No.333-159982)andrelatedProspectusofBrukerCorporationfortheregistrationof70,000,000sharesofitscommonstock,and

(4) RegistrationStatements(FormS-8,Nos.333-150430,333-137090,333-107294,and333-47836)pertainingtotheBrukerBioSciencesCorporationAmendedandRestated2000StockOptionPlan;

ofourreportdatedFebruary26,2016,exceptforNote2—SummaryofSignificantAccountingPolicies—RestrictedCash,astowhichthedateisMarch16,2018,withrespecttotheconsolidatedfinancialstatementsofBrukerCorporationincludedinthisAnnualReport(Form10-K)ofBrukerCorporationfortheyearendedDecember31,2017.

Boston,MassachusettsMarch16,2018

/s/Ernst&YoungLLP

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EXHIBIT23.2

EXHIBIT31.1

CERTIFICATION

I,FrankH.Laukien,certifythat:

1. IhavereviewedthisannualreportonForm10-KofBrukerCorporation;

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant'sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))andinternalcontroloverfinancialreporting(asdefinedinExchangeActRules13a-15(f)and15d-15(f))fortheregistrantandhave:

a. designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensurethatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b. designedsuchinternalcontroloverfinancialreporting,orcausedsuchinternalcontroloverfinancialreportingtobedesignedunderoursupervision,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples;

c. evaluatedtheeffectivenessoftheregistrant'sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

d. disclosedinthisreportanychangeintheregistrant'sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant'smostrecentfiscalquarter(theregistrant'sfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant'sinternalcontroloverfinancialreporting;and

5. Theregistrant'sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant'sauditorsandtheauditcommitteeofregistrant'sboardofdirectors(orpersonsperformingtheequivalentfunctions):

a. allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheregistrant'sabilitytorecord,process,summarizeandreportfinancialinformation;and

b. anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant'sinternalcontroloverfinancialreporting.

FrankH.Laukien,Ph.D.President, Chief Executive Officer and Chairman (Principal Executive Officer)

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EXHIBIT31.1

CERTIFICATION

EXHIBIT31.2

CERTIFICATION

I,AnthonyL.Mattacchione,certifythat: