PART I FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)

	September 30,			December 31,			March 31,			December 31,
	2016			2015			2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	278.7		$	267.1		$	277.5		$	342.4
Short-term investments	162.8			201.2			187.0			157.9
Accounts receivable, net	223.6			234.7			225.4			243.9
Inventories	483.1			422.0			476.4			440.4
Other current assets	118.5			106.5			97.8			91.3
Total current assets	1,266.7			1,231.5			1,264.1			1,275.9

Property, plant and equipment, net	239.4			231.1			241.0			239.1
Intangibles, net and other long-term assets	291.8			267.4			334.8			293.4
Total assets	$	1,797.9		$	1,730.0		$	1,839.9		$	1,808.4

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	20.2		$	0.6		$	0.1		$	20.1
Accounts payable	93.3			72.1			94.7			86.1
Customer advances	148.2			178.3			148.9			149.0
Other current liabilities	290.9			303.5			271.2			269.5
Total current liabilities	552.6			554.5			514.9			524.7

Long-term debt	344.7			265.2			384.7			391.6
Other long-term liabilities	199.7			177.4			208.7			199.0

Commitments and contingencies (Note 10)

Shareholders’ equity:
Preferred stock, $0.01 par value 5,000,000 shares authorized, none issued or outstanding	—			—			—			—
Common stock, $0.01 par value 260,000,000 shares authorized, 170,457,222 and 169,644,644 shares issued and 160,402,832 and 165,354,180 shares outstanding at September 30, 2016 and December 31, 2015, respectively	1.7			1.7
Treasury stock, at cost, 10,054,390 and 4,290,527 shares at September 30, 2016 and December 31, 2015, respectively	(234.9		)	(90.9		)
Common stock, $0.01 par value 260,000,000 shares authorized, 170,636,719 and 170,552,890 shares issued and 159,933,578 and 159,854,695 shares outstanding at March 31, 2017 and December 31, 2016, respectively							1.7			1.7
Treasury stock, at cost, 10,703,141 and 10,698,195 shares at March 31, 2017 and December 31, 2016, respectively							(249.3		)	(249.3		)
Accumulated other comprehensive loss	(15.4		)	(44.2		)	(60.2		)	(75.9		)
Other shareholders’ equity	942.5			859.5			1,032.5			1,009.9
Total shareholders’ equity attributable to Bruker Corporation	693.9			726.1			724.7			686.4
Noncontrolling interest in consolidated subsidiaries	7.0			6.8			6.9			6.7
Total shareholders’ equity	700.9			732.9			731.6			693.1

Total liabilities and shareholders’ equity	$	1,797.9		$	1,730.0		$	1,839.9		$	1,808.4

The accompanying notes are an integral part of these statements.

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in millions, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Product revenue	$	328.2		$	334.6		$	946.1		$	968.8		$	318.9		$	312.3
Service revenue	62.3			58.8			186.5			171.1			63.3			60.7
Other revenue	3.4			2.7			8.4			5.7			2.7			2.4
Total revenue	393.9			396.1			1,141.0			1,145.6			384.9			375.4

Cost of product revenue	172.2			193.1			504.7			545.8			172.7			170.2
Cost of service revenue	35.4			34.8			110.8			101.7			35.7			37.4
Cost of other revenue	1.1			0.7			3.4			1.0			0.1			1.0
Total cost of revenue	208.7			228.6			618.9			648.5			208.5			208.6
Gross profit	185.2			167.5			522.1			497.1			176.4			166.8

Operating expenses:
Selling, general and administrative	96.8			96.1			290.4			289.2			98.1			92.7
Research and development	37.9			34.3			110.8			109.0			37.6			36.1
Other charges, net	4.6			8.9			20.6			23.9			3.1			4.0
Total operating expenses	139.3			139.3			421.8			422.1			138.8			132.8
Operating income	45.9			28.2			100.3			75.0			37.6			34.0

Interest and other income (expense), net	(2.9		)	(4.6		)	(11.1		)	(14.3		)
Interest and other expense, net													(6.0		)	(5.6		)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	43.0			23.6			89.2			60.7			31.6			28.4
Income tax (benefit) provision	(4.0		)	10.7			3.8			17.8
Income tax provision													9.9			4.8
Consolidated net income	47.0			12.9			85.4			42.9			21.7			23.6
Net income attributable to noncontrolling interest in consolidated subsidiaries	0.5			1.1			0.8			2.7			0.1			—
Net income attributable to Bruker Corporation	$	46.5		$	11.8		$	84.6		$	40.2		$	21.6		$	23.6

Net income per common share attributable to Bruker Corporation shareholders:
Basic and diluted	$	0.29		$	0.07		$	0.52		$	0.24
Basic													$	0.14		$	0.14
Diluted													$	0.13		$	0.14

Weighted average common shares outstanding:
Basic	160.8			167.8			161.8			168.2			159.7			163.3
Diluted	161.5			168.7			162.7			169.1			160.5			164.3


Comprehensive income	$	60.3		$	5.0		$	114.3		$	6.7		$	37.5		$	56.2
Less: Comprehensive income attributable to noncontrolling interests	0.6			1.2			$	0.9		2.4			0.2			0.2
Comprehensive income attributable to Bruker Corporation	$	59.7		$	3.8		$	113.4		$	4.3		$	37.3		$	56.0

Dividend declared	$	0.04		$	—		$	0.12		$	—		$	0.04		$	0.04

The accompanying notes are an integral part of these statements.

BRUKER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2017			2016
Cash flows from operating activities:
Consolidated net income	$	85.4		$	42.9		$	21.7		$	23.6
Adjustments to reconcile consolidated net income to cash flows from operating activities:
Depreciation and amortization	40.4			40.0			15.1			13.2
Write-down of demonstration inventories to net realizable value	12.5			15.0			2.8			4.8
Stock-based compensation expense	6.8			5.8			2.6			2.2
Deferred income taxes	(32.1		)	(1.1		)	0.4			(2.7		)
Loss on disposal of product line	—			0.2
Other non-cash expenses, net	12.7			9.5			1.3			1.7
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	15.4			37.7			25.6			7.2
Inventories	(73.4		)	(40.7		)	(31.1		)	(28.8		)
Accounts payable and accrued expenses	(11.5		)	4.8			(2.7		)	(9.0		)
Income taxes payable, net	(19.8		)	(4.5		)	(6.4		)	(13.7		)
Deferred revenue	3.0			(1.2		)	0.9			9.2
Customer advances	(6.5		)	(9.7		)	(3.1		)	(18.4		)
Other changes in operating assets and liabilities, net	7.1			(19.1		)	5.5			(3.3		)
Net cash provided by operating activities	40.0			79.6
Net cash provided by (used in) operating activities							32.6			(14.0		)

Cash flows from investing activities:
Purchases of short-term investments	(77.6		)	(78.0		)	(85.3		)	(21.7		)
Maturities of short-term investments	122.4			41.3			58.7			21.7
Cash paid for acquisitions, net of cash acquired	(1.2		)	—			(39.8		)	—
Purchases of property, plant and equipment	(26.0		)	(22.8		)	(11.5		)	(8.0		)
Proceeds from sales of property, plant and equipment	0.9			0.7			6.6			0.6
Net cash provided by (used in) investing activities	18.5			(58.8		)
Net cash used in investing activities							(71.3		)	(7.4		)

Cash flows from financing activities:
Repayments of the Note Purchase Agreement							(20.0		)	—
Repayments of revolving lines of credit							(40.0		)	—
Proceeds from revolving lines of credit	99.0			17.0			33.0			36.0
Proceeds (repayment) of other debt, net	0.1			(0.4		)	(0.1		)	0.4
Proceeds from issuance of common stock, net	10.2			7.0			1.2			7.5
Payment of contingent consideration	—			(3.0		)
Repurchase of common stock	(143.5		)	(24.9		)	—			(78.9		)
Changes in restricted cash	0.6			1.4
Payment of dividends	(19.4		)	—			(6.4		)	(6.5		)
Cash payments to noncontrolling interest	(0.7		)	(0.5		)
Excess tax benefits related to stock option awards	0.3			2.2
Net cash used in financing activities	(53.4		)	(1.2		)	(32.3		)	(41.5		)
Effect of exchange rate changes on cash and cash equivalents	6.5			(8.1		)
Net change in cash and cash equivalents	11.6			11.5
Cash and cash equivalents at beginning of period	267.1			319.5
Cash and cash equivalents at end of period	$	278.7		$	331.0
Effect of exchange rate changes on cash, cash equivalents and restricted cash							5.8			6.0
Net change in cash, cash equivalents and restricted cash							(65.2		)	(56.9		)
Cash, cash equivalents and restricted cash at beginning of period							345.9			271.2
Cash, cash equivalents and restricted cash at end of period							$	280.7		$	214.3

The accompanying notes are an integral part of these statements.

BRUKER CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

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

The Company has two reportable segments, Bruker Scientific Instruments (BSI), which represented approximately ~~92%~~90% and 93% of the Company’s revenues during the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 93% of the Company’s revenues during the nine months ended September 30, 2016,~~respectively, and Bruker Energy & Supercon Technologies (BEST), which represented the remainder of the Company’s revenues. Within BSI, the Company is organized into three operating segments: the Bruker BioSpin Group, the Bruker CALID Group and the Bruker Nano Group. For financial reporting purposes, the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments are aggregated into the BSI reportable segment because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments.

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

Bruker CALID (Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection)- — The Bruker CALID Group designs, manufactures and distributes life science mass spectrometry and ion mobility spectrometry systems, infrared spectroscopy and radiological/nuclear detectors for Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection in emergency response, homeland security and defense applications, and analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technologies. Customers of the Bruker CALID Group include pharmaceutical, biotechnology and diagnostics companies, contract research organizations, academic institutions, medical schools, nonprofit or for-profit forensics, agriculture, food and beverage safety, environmental and clinical microbiology laboratories, hospitals and government departments and agencies.

Bruker Nano- — The Bruker Nano Group designs, manufactures and distributes advanced X-ray instruments, atomic force microscopy instrumentation, advanced fluorescence optical microscopy instruments, analytical tools for electron microscopes and X-ray metrology, defect-detection equipment for semiconductor process control, handheld, portable and mobile X-ray fluorescence spectrometry instruments and spark optical emission spectroscopy systems. Customers of the Bruker Nano Group include biotechnology and pharmaceutical companies, academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies and other businesses involved in materials analysis.

The Company’s BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and ~~‘‘big science’’~~“big science” research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications, as well as ceramic high temperature superconductors primarily for energy grid and magnet applications.

The unaudited condensed consolidated financial statements represent the consolidated accounts of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, and for the three ~~and nine~~ months ended

~~September 30,~~ March 31, 2017 and 2016, ~~and 2015,~~ have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial

information presented herein does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of the results expected for any other interim period or the full year. Upon adoption of Accounting Standards Update 2015-03, the deferred financing costs related to the Company’s senior note obligations were reclassified as of December 31, 2015 to conform to the current year presentation and had no effect on previously reported net income or cash flows. See Note 7 for additional information regarding the Company’s senior note obligations.

At ~~September 30, 2016,~~March 31, 2017, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, have not changed.

In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Statement of Cash Flows, Restricted Cash, requiring restricted cash and restricted cash equivalents to be included with cash and cash equivalents on the statement of cash flows when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard during the first quarter of 2017. Restricted cash is now included as a component of cash, cash equivalents, and restricted cash on the Company’s unaudited condensed consolidated statement of cash flows. The Company has certain subsidiaries which are required by local governance to maintain restricted cash balances to cover future employee benefit payments. Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date. The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets, respectively, in the accompanying consolidated balance sheets. The inclusion of restricted cash increased the beginning balances of the unaudited condensed consolidated statement of cash flows by $3.4 million and $4.2 million, respectively, and the ending balances by $3.2 million and $4.4 million, respectively, for the three months ended March 31, 2017 and 2016.

2.Acquisitions

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

Consideration Transferred:
Cash paid	$	27.9
Cash acquired	(0.7		)
Contingent consideration	1.6
Total consideration transferred	$	28.8

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

The fair value allocation included contingent consideration in the amount of $1.6 million, which represented the estimated fair value of future payments to the former shareholders of Hysitron based on achieving annual revenue targets for the years 2017-2018. The maximum potential future payments related to the contingent consideration is $10 million. As of March 31, 2017, certain amounts relating to the tax related matters and the valuation of intangibles have not been finalized. The finalization of these amounts is expected within the measurement period and may result in changes to goodwill. The Company expects to complete the fair value allocation in the second quarter of 2017. The amortization period for intangible assets acquired in connection with Hysitron is 7 years for customer relationships, trademarks and other intangibles and 5 years for existing technology.

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

In the three months ended March 31, 2017, the Company completed various acquisitions that collectively complemented the Company’s existing product offerings and added aftermarket and software capabilities to the Company’s existing microbiology business. The impact of these acquisitions on revenues, net income and total assets was not material.

3. Stock-Based Compensation

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

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

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

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Stock options	$	2.1	$	2.0	$	5.6	$	5.3	$	1.7	$	1.8
Restricted stock awards	0.4		0.2		1.2		0.5		0.3		0.4
Restricted stock units	—		—		—		—		0.6		—
Total stock-based compensation	$	2.5	$	2.2	$	6.8	$	5.8	$	2.6	$	2.2

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Costs of product revenue	$	0.4	$	0.4	$	1.0	$	0.9	$	0.4	$	0.3
Selling, general and administrative	1.7		1.4		4.8		4.0		1.8		1.6
Research and development	0.4		0.4		1.0		0.9		0.4		0.3
Total stock-based compensation	$	2.5	$	2.2	$	6.8	$	5.8	$	2.6	$	2.2

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

stock-based award.

Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to ~~five~~four years. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Assumptions for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ regarding volatility, expected life, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below:

2016

2015

Risk-free interest rates

1.23% - 2.05%

1.58% - 1.89%

Expected life

5.75 - 7.02 years

6.0 - 6.25 years

Volatility

33.57% - 41.60%

36.09% - 52.23%

Expected dividend yield

0.0% - 0.73%

0.0%

	2017	2016
Risk-free interest rates	2.02% - 2.09%	1.32% - 2.05%
Expected life	5.56 years	5.75 - 7.02 years
Volatility	33.97% - 34.13%	34.39% - 41.60%
Expected dividend yield	0.67% - 0.74%	0% - 0.63%

Stock option activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was as follows:

Shares Subject
to Options

Weighted
Average
Option Price

Weighted
Average
Remaining
Contractual
Term (Yrs)

Aggregate
Intrinsic Value
(in millions) (b)

Outstanding at December 31, 2015

4,637,279

$
16.72

Granted

254,042

24.66

Exercised

(799,410
)
13.36

Forfeited

(163,037
)
18.99

Outstanding at September 30, 2016

3,928,874

$
17.82

6.5

$
19.5

Exercisable at September 30, 2016

2,370,900

$
15.92

5.3

$
16.0

Exercisable and expected to vest at September 30, 2016 (a)

3,831,345

$
17.75

6.4

$
19.3

	Shares Subject to Options		Weighted Average Option Price		Weighted Average Remaining Contractual Term (Yrs)	Aggregate Intrinsic Value (in millions) (b)
Outstanding at December 31, 2016	4,625,678		$	18.73
Granted	10,430		22.80
Exercised	(83,829	)	14.41
Forfeited	(69,772	)	17.73
Outstanding at March 31, 2017	4,482,507		$	18.83	6.5	$	20.7

Exercisable at March 31, 2017	2,304,015		$	16.42	5.0	$	16.0

Exercisable and expected to vest at March 31, 2017 (a)	4,336,330		$	18.75	6.4	$	20.3

(a) In addition to the options that are vested at ~~September 30, 2016,~~March 31, 2017, the Company expects a portion of the unvested options to vest in the future. Options expected to vest in the future are determined by applying an estimated forfeiture rate to the options that are unvested as of ~~September 30, 2016.~~March 31, 2017.

(b) The aggregate intrinsic value is based on the positive difference between the fair value of the Company’s common stock price of ~~$22.65~~$23.33 on ~~September 30, 2016,~~March 31, 2017, or the date of exercises, as appropriate, and the exercise price of the underlying stock options.

The weighted average fair value of options granted was ~~$9.67~~$7.40 and ~~$7.82~~$9.98 per share for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively.

The total intrinsic value of options exercised was ~~$10.4~~$0.8 million and ~~$5.1~~$7.5 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively.

Restricted stock award activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was as follows:

Shares Subject
to Restriction

Weighted
Average Grant
Date Fair
Value

Outstanding at December 31, 2015

243,150

$
18.58

Granted

13,105

24.80

Vested

(81,024
)
17.87

Forfeited

(1,375
)
16.57

Outstanding at September 30, 2016

173,856

$
19.39

	Shares Subject to Restriction		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016	172,506		$	19.37
Vested	(3,276	)	24.80
Forfeited	(4,053	)	22.46
Outstanding at March 31, 2017	165,177		$	19.19

The total fair value of restricted stock vested was ~~$1.4 million and $1.0~~$0.1 million for the ~~each of the nine~~three months ended ~~September 30, 2016 and 2015, respectively.~~March 31, 2017, with no corresponding amount in the comparable period in 2016.

Restricted stock unit activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was as follows:

Shares Subject
to Restriction

Weighted
Average Grant
Date Fair
Value

Outstanding at December 31, 2015

—

$
—

Granted

8,427

25.95

Outstanding at September 30, 2016

8,427

$
25.95

	Shares Subject to Restriction		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016	262,317		$	22.32
Granted	53,581		21.91
Forfeited	(9,199	)	22.19
Outstanding at March 31, 2017	306,699		$	22.25

No restricted stock units vested in the ~~nine~~three months ended ~~September 30,~~March 31, 2017 or 2016.

At ~~September 30, 2016,~~March 31, 2017, the Company expects to recognize pre-tax stock-based compensation expense of ~~$11.6~~$12.8 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of ~~2.25~~2.44 years. The Company expects to recognize additional pre-tax stock-based compensation expense of ~~$2.9~~$2.1 million associated with outstanding restricted stock awards granted under the Company’s stock plans over the weighted average remaining service period of ~~2.34~~1.94 years. The Company also expects to recognize additional pre-tax stock-based compensation expense of ~~$0.2~~$5.5 million associated with outstanding restricted stock units granted under the 2016 Plan over the weighted average remaining service period of ~~3.68~~3.12 years.

In March 2016, the FASB issued ASU No. 2016-09, Stock Compensation - Improvements to Employee Share-Based Payment Accounting. The new standard simplifies accounting for share-based payment transactions, including income tax consequences and the classification of the tax impact on the statement of cash flows. The Company has adopted this standard effective January 1, 2017. The ASU requires that the difference between the actual tax benefit realized upon exercise or vesting, as applicable, and the tax benefit recorded based on the fair value of the stock award at the time of grant (the “excess tax benefits”) be reflected as a reduction of the current period provision for income taxes with any shortfall recorded as an increase in the tax provision rather than as a component of changes to additional paid-in capital. The ASU also requires the excess tax benefit realized be reflected as operating cash flow rather than a financing cash flow. This standard was adopted by the Company on a modified retrospective basis, which resulted in a cumulative adjustment to retained earnings of $3.6 million, which related to the timing of when excess tax benefits are recognized. The actual benefit realized in future periods is inherently uncertain and will vary based on the timing and relative value realized for future share-based transactions.

3.4. Earnings Per Share

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

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

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Net income attributable to Bruker Corporation, as reported	$	46.5	$	11.8	$	84.6	$	40.2	$	21.6	$	23.6

Weighted average shares outstanding:
Weighted average shares outstanding-basic	160.8		167.8		161.8		168.2		159.7		163.3
Effect of dilutive securities:
Stock options and restricted stock	0.7		0.9		0.9		0.9		0.8		1.0
	161.5		168.7		162.7		169.1		160.5		164.3

Net income per common share attributable to Bruker Corporation shareholders:
Basic and diluted	$	0.29	$	0.07	$	0.52	$	0.24
Basic									$	0.14	$	0.14
Diluted									$	0.13	$	0.14

Stock options to purchase approximately ~~2.4~~0.3 million shares and ~~2.3~~0.0 million shares were excluded from the computation of diluted earnings per share in the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively, as their effect would have been anti-dilutive. ~~Approximately 1.9 million shares and 2.3 million shares were excluded from the computation of diluted earnings per share in the nine months ended September 30, 2016 and 2015, respectively.~~

4.5. Fair Value of Financial Instruments

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

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

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

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

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

The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 (in millions):

September 30, 2016	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2017									Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Foreign exchange contracts	$	0.2	$	—	$	0.2	$	—
Embedded derivatives in purchase and delivery contracts	0.1		—		0.1		—		$	3.0	$	—	$	3.0	$	—
Fixed price commodity contracts									0.3		—		0.3		—
Total assets recorded at fair value	$	0.3	$	—	$	0.3	$	—	$	3.3	$	—	$	3.3	$	—

Liabilities:
Contingent consideration	$	12.8	$	—	$	—	$	12.8	$	18.3	$	—	$	—	$	18.3
Foreign exchange contracts	0.2		—		0.2		—		0.5		—		0.5		—
Embedded derivatives in purchase and delivery contracts	0.1		—		0.1		—
Fixed price commodity contracts	0.2		—		0.2		—
Total liabilities recorded at fair value	$	13.3	$	—	$	0.5	$	12.8	$	18.8	$	—	$	0.5	$	18.3

December 31, 2015	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Embedded derivatives in purchase and delivery contracts	$	0.5	$	—	$	0.5	$	—
Total assets recorded at fair value	$	0.5	$	—	$	0.5	$	—

Liabilities:
Contingent consideration	$	4.6	$	—	$	—	$	4.6
Foreign exchange contracts	1.3		—		1.3		—
Embedded derivatives in purchase and delivery contracts	0.5		—		0.5		—
Fixed price commodity contracts	0.4		—		0.4		—
Total liabilities recorded at fair value	$	6.8	$	—	$	2.2	$	4.6

December 31, 2016	Total		Quoted Prices in Active Markets Available (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Embedded derivatives in purchase and delivery contracts	$	4.0	$	—	$	4.0	$	—
Fixed price commodity contracts	0.2		—		0.2		—
Total assets recorded at fair value	$	4.2	$	—	$	4.2	$	—

Liabilities:
Contingent consideration	$	16.6	$	—	$	—	$	16.6
Foreign exchange contracts	1.4		—		1.4		—
Embedded derivatives in purchase and delivery contracts	0.3		—		0.3		—
Total liabilities recorded at fair value	$	18.3	$	—	$	1.7	$	16.6

The Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of forward foreign exchange contracts, commodity contracts, derivatives embedded in certain purchase and sale contracts, accounts receivable, ~~short-term~~ borrowings under a revolving credit agreement, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, ~~short-term~~ borrowings under a revolving credit agreement and accounts payable approximate fair value ~~due to~~because of their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists principally of a private placement arrangement entered into in 2012 with various fixed interest rates based on the maturity date. The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was ~~$260.3~~$230.4 million and ~~$252.1~~$253.3 million at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively, based on the outstanding amount at March 31, 2017 and December 31, 2016, market and observable sources with similar maturity dates.

The Company measures certain assets and liabilities at fair value with changes in fair value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to remeasure any of its existing financial assets or liabilities and did not elect the fair value option for any financial assets or liabilities which originated during the three ~~or nine~~ months ended ~~September 30,~~March 31, 2017 or 2016.

Excluded from the table above are cash equivalents, restricted cash and short-term investments as the cost approximates current fair value. The Company has a program to enter into time deposits with varying maturity dates ranging from one to

twelve months, as well as call deposits for which the Company has the ability to redeem the invested amounts over a period of 95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the consolidated balance sheets based on call and maturity dates. There are no cash equivalents, $3.2 million and $3.4 million of restricted cash and $187.0 million and $157.9 million of short-term investments outstanding as of March 31, 2017 and December 31, 2016, respectively.

Short-term investments are classified as available-for-sale and are reported at fair value, with unrealized gains (losses) excluded from earnings and reported, net of tax, in accumulated other comprehensive income (loss) within the accompanying unaudited condensed consolidated balance sheets. There were no unrealized gains (losses) recorded during the three months ended March 31, 2017 and 2016. On a quarterly basis, the Company reviews its short-term investments to determine if there have been any events that could create an impairment. None were noted for the three month periods ended March 31, 2017 or ~~2015.~~2016.

As part of certain ~~historical~~ acquisitions in 2017, 2016, and 2015, the Company recorded contingent consideration liabilities that have been

classified as Level 3 in the fair value hierarchy. The contingent consideration represents the estimated fair value of future payments to the former shareholders of applicable acquired companies based on achieving annual revenue and gross margin targets in certain years as specified in the purchase and sale agreements. The Company initially ~~values~~valued the contingent consideration by using a Monte Carlo simulation which models future revenue and costs of goods sold projections and discounts the average results to present value. For the nine months ended September 30, 2016, additional contingent consideration of $7.7 million was recognized in earnings related to a recent acquisition within the Bruker Nano Group based upon an increase in forecasted revenue levels for the acquired business for the remainder of 2016 and was recorded within other charges, net in the unaudited condensed consolidated statements of income and comprehensive income.

The following table sets forth the changes in contingent consideration liabilities for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 (in millions):

Balance at December 31, 2015

$
4.6

Current period additions

0.5

Current period adjustments

7.7

Balance at September 30, 2016

$
12.8

Balance at December 31, 2016	$	16.6
Current period additions	1.6
Foreign currency effect	0.1
Balance at March 31, 2017	$	18.3

~~For~~There was no change in the ~~three and nine months ended September 30, 2015, the changes to the fair~~ value of the contingent consideration recognized in earnings ~~was $0.0 million and $(3.0) million, respectively, and was recorded within other charges, net in the unaudited condensed consolidated statements of income and comprehensive income.~~

The Company enters into time deposits with varying maturity dates ranging from one to twelve months, as well as call deposits for which the Company has the ability to redeem the invested amounts over a period of 31 to 95 days. The Company has classified these investments within cash and cash equivalents or short-term investments within the unaudited condensed consolidated balance sheets based on the call and maturity dates. As of September 30, 2016 none were classified as cash equivalents outstanding and $162.8 million were classified as short-term investments.

Short-term investments are classified as available-for-sale and are reported at fair value, with unrealized gains (losses) excluded from earnings and reported, net of tax, in accumulated other comprehensive income (loss) within the accompanying unaudited condensed consolidated balance sheets. There were no unrealized gains (losses) recorded during the three or nine months ended September 30, 2016 and 2015. On a quarterly basis, the Company reviews its short-term investments to determine if there have been any events that could create an impairment. None were noted for the three month periods ended March 31, 2017 or ~~nine months ended September 30, 2016 and 2015.~~2016.

5.6. Inventories

Inventories consisted of the following (in millions):

	September 30,		December 31,		March 31,		December 31,
	2016		2015		2017		2016
Raw materials	$	156.5	$	158.8	$	140.4	$	132.8
Work-in-process	189.9		131.1		195.2		181.0
Finished goods	99.1		93.3		104.7		91.8
Demonstration units	37.6		38.8		36.1		34.8
Inventories	$	483.1	$	422.0	$	476.4	$	440.4

Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. As of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, inventory-in-transit was ~~$40.6~~$46.0 million and ~~$44.7~~$37.5 million, respectively.

The Company reduces the carrying value of its demonstration inventories for differences between its cost and estimated ~~net realizable~~market value through a charge to cost of product revenue that is based on a number of factors, including the age of the unit, the physical condition of the unit and an assessment of technological obsolescence. Amounts recorded in ~~Cost~~cost of ~~Revenue~~revenue related to the write-down of demonstration units to net realizable value were ~~$4.0~~$2.8 million and ~~$5.1~~$4.8 million for the three months ended ~~September 30,~~March 31, 2017 and 2016, respectively.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new guidance eliminates the measurement of inventory at market value, and ~~2015, respectively,~~inventory will now be measured at the lower of cost and ~~$12.5 million~~net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably

predictable costs of completion, disposal, and ~~$15.0 million~~transportation. No other changes were made to the current guidance on inventory measurement. The Company adopted ASU 2015-11 on a prospective basis for the ~~nine months~~quarter ended ~~September 30, 2016~~March 31, 2017 and ~~2015, respectively.~~the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

6.7. Goodwill and Other Intangible Assets

The following table sets forth the changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 (in millions):

Balance at December 31, 2015

$
130.6

Foreign currency effect

0.8

Balance at September 30, 2016

$
131.4

Balance at December 31, 2016	$	130.6
Goodwill acquired during the period	20.6
Foreign currency effect	0.4
Balance at March 31, 2017	$	151.6

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

	September 30, 2016							December 31, 2015							March 31, 2017							December 31, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Existing technology and related patents	$	156.8	$	(109.1	)	$	47.7	$	154.5	$	(95.5	)	$	59.0	$	177.2	$	(119.3	)	$	57.9	$	169.0	$	(113.9	)	$	55.1
Customer relationships	18.4		(7.5		)	10.9		18.4		(5.9		)	12.5		32.5		(8.9		)	23.6		20.0		(7.9		)	12.1
Non compete contracts	1.8		(1.0		)	0.8		1.8		(0.6		)	1.2		2.4		(1.2		)	1.2		1.8		(1.1		)	0.7
Trade names	1.6		(0.3		)	1.3		1.6		(0.2		)	1.4		3.1		(0.5		)	2.6		1.6		(0.4		)	1.2
Intangible assets subject to amortization	178.6		(117.9		)	60.7		176.3		(102.2		)	74.1		215.2		(129.9		)	85.3		192.4		(123.3		)	69.1
In-process research and development	—		—			—		0.6		—			0.6		0.6		—			0.6		0.6		—			0.6
Intangible assets	$	178.6	$	(117.9	)	$	60.7	$	176.9	$	(102.2	)	$	74.7	$	215.8	$	(129.9	)	$	85.9	$	193.0	$	(123.3	)	$	69.7

For the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ the Company recorded amortization expense of ~~$5.4~~$6.9 million and $5.1 million, respectively, related to intangible assets subject to amortization. For the nine months ended September 30, 2016 and 2015, the Company recorded amortization expense of $16.2 million and $15.5$5.4 million, respectively, related to intangible assets subject to amortization.

The goodwill and intangibles acquired in the first quarter of 2017 related primarily to the Hysitron acquisition. Please see Note 2—Acquisitions, for additional details on the goodwill and intangibles acquired.

7.8. Debt

The Company’s debt obligations as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 consisted of the following (in millions):

	September 30,			December 31,			March 31,			December 31,
	2016			2015			2017			2016
US Dollar revolving loan under the 2015 Credit Agreement	$	124.0		$	25.0		$	164.0		$	171.0
US Dollar notes under the Note Purchase Agreement	240.0			240.0			220.0			240.0
Unamortized debt issuance costs under the Note Purchase Agreement	(0.8		)	(0.9		)	(0.8		)	(0.8		)
Capital lease obligations and other loans	1.7			1.7			1.6			1.5
Total debt	364.9			265.8			384.8			411.7
Current portion of long-term debt	(20.2		)	(0.6		)	(0.1		)	(20.1		)
Total long-term debt, less current portion	$	344.7		$	265.2		$	384.7		$	391.6

On October 27, 2015, the Company entered into a new revolving credit agreement, referred to as the 2015 Credit ~~Agreement, and terminated the prior credit agreement.~~Agreement. The 2015 Credit Agreement provides a maximum commitment on the Company’s revolving credit line of ~~$500.0~~$500 million and a maturity date of October 2020. Borrowings under the revolving credit line of the 2015 Credit Agreement accrue interest, at the Company’s option, at either (a) the greatest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) adjusted LIBOR plus 1.00%, plus margins ranging from 0.00% to 0.30% or (b) LIBOR, plus margins ranging from 0.90% to 1.30%. There is also a facility fee ranging from 0.10% to 0.20%.

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

As of ~~September 30, 2016,~~March 31, 2017, the Company was in compliance with the covenants of the 2015 Credit Agreement. The Company’s leverage ratio (as defined in the 2015 Credit Agreement) was ~~1.4~~1.39 and interest coverage ratio (as defined in the 2015 Credit Agreement) was ~~15.7.~~14.9.

The following is a summary of the maximum commitments and the net amounts available to the Company under the 2015 Credit Agreement and other lines of credit with various financial institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly, at ~~September 30, 2016~~March 31, 2017 (in millions):

	Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Lines of Credit		Total Amount Available		Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Lines of Credit		Total Amount Available
2015 Credit Agreement	1.8	%	$	500.0	$	124.0	$	1.1	$	374.9	2.2	%	$	500.0	$	164.0	$	1.1	$	334.9
Other lines of credit	—		237.6		—		129.8		107.8		—		234.6		—		131.0		103.6
Total revolving lines of credit			$	737.6	$	124.0	$	130.9	$	482.7			$	734.6	$	164.0	$	132.1	$	438.5

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

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

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

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

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

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

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

Agreement, as of the end of any fiscal quarter to exceed 3.50 to 1.00, (ii) its interest coverage ratio as determined pursuant to the Note Purchase Agreement as of the end of any fiscal quarter for any period of four consecutive fiscal quarters to be less than 2.50 to 1 or (iii) priority debt at any time to exceed 25% of consolidated net worth, as determined pursuant to the Note Purchase Agreement.

As of ~~September 30, 2016,~~March 31, 2017, the Company was in compliance with the covenants of the Note Purchase Agreement. The Company’s leverage ratio (as defined in the Note Purchase Agreement) was ~~1.4~~1.39 and interest coverage ratio (as defined in the Note Purchase Agreement) was ~~15.7.~~14.9.

~~In April 2015,~~

On January 18, 2017, the ~~Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-03,~~ ~~Simplifying the Presentation of Debt Issuance Costs,~~ ~~which amends the existing guidance to require that debt issuance costs be presented in the unaudited condensed consolidated balance sheet as a reduction from the carrying~~outstanding $20.0 million principal amount of the related debt liability instead of as an other asset. The Company adopted ASU 2015-03 on a retrospective basis for the nine months ended September 30, 2016. As of September 30, 2016 and December 31, 2015, there were $0.8 million and $0.9 million, respectively, in debt issuance costs recorded as a reduction in the carrying valueTranche A of the ~~related debt liability under~~Senior Notes was repaid in accordance with the ~~Note Purchase Agreement. The $0.8 million in debt issuance costs as of September 30, 2016 will be amortized over the remaining term~~terms of the Note Purchase Agreement. The retrospective adoption resulted in $0.9 million of debt issuance costs being reclassified from other current assets and other non-current assets to a reduction of the carrying value of long-term debt as of December 31, 2015. The Company also adopted ASU No. 2015-15, ~~Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,~~ ~~and elected not to reclassify the debt issuance costs related to line-of-credit arrangements for the 2015 Credit Agreement.~~

8.9. Derivative Instruments and Hedging Activities

Interest Rate Risks

The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related short-term market rates. The most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2015 Credit Agreement, which totaled ~~$124.0~~$164.0 million at ~~September 30, 2016.~~March 31, 2017. The Company currently has a higher level of fixed rate debt than variable rate debt, which limits the exposure to adverse movements in interest rates.

Foreign Exchange Rate Risk Management

The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union ~~Switzerland~~ and ~~Japan,~~Switzerland, which subjects its operations to the ~~impact~~exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign ~~exchange~~currency contracts in order to minimize the volatility that fluctuations in ~~foreign~~ currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the ~~unaudited condensed~~ consolidated statements of income and comprehensive ~~income.~~income (loss). The Company had the following notional amounts outstanding under foreign exchange contracts at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 (in millions):

Buy

Notional
Amount in Buy
Currency

Sell

Maturity

Notional
Amount in U.S.
Dollars

Fair Value of
Assets

Fair Value of
Liabilities

September 30, 2016:

Euro

19.9

U.S. Dollars

October 2016

$
22.2

$
0.2

$
—

Swiss Francs

6.4

U.S. Dollars

October 2016

6.6

—

—

U.S. Dollars

6.0

Israel Shekel

October 2016

6.0

—

0.2

Israel Shekel

7.5

U.S. Dollars

October 2016

2.0

—

—

Euro

1.4

Polish Zloty

January 2017

1.5

—

—

$
38.3

$
0.2

$
0.2

December 31, 2015:

Euro

21.1

U.S. Dollars

January 2016

$
24.2

$
—

$
1.2

Swiss Francs

5.9

U.S. Dollars

April 2016

6.0

—

0.1

U.S. Dollars

6.0

Israel Shekel

April 2016

6.0

—

—

$
36.2

$
—

$
1.3

Buy	Notional Amount in Buy Currency	Sell	Maturity	Notional Amount in U.S. Dollars		Fair Value of Assets		Fair Value of Liabilities
March 31, 2017:
Euro	72.3	U.S. Dollars	April 2017 to January 2018	$	78.3	$	—	$	0.4

Swiss Francs	8.0	U.S. Dollars	April 2017	8.0		—		—

Euro	1.4	Polish Zloty	April 2017	1.5		—		0.1
				$	87.8	$	—	$	0.5

December 31, 2016:
Euro	21.1	U.S. Dollars	January 2017	$	23.3	$	—	$	1.1

Swiss Francs	7.9	U.S. Dollars	January 2017	8.0		—		0.3

U.S. Dollars	4.0	Israel Shekel	January 2017	4.0		—		—

Israel Shekel	15.3	U.S. Dollars	January 2017	4.0		—		—

Euro	1.4	Polish Zloty	January 2017	1.4		—		—
				$	40.7	$	—	$	1.4

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the

functional currency of the parties to the transaction. The Company accounts for these transactions by separately valuing the “embedded derivative” component of these contracts. ~~Contracts~~The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to ~~$59.8~~$110.5 million for the delivery of products and ~~$2.8~~$1.9 million for the purchase of products at ~~September 30, 2016~~March 31, 2017 and ~~$59.0~~$120.7 million for the delivery of products and ~~$4.1~~$2.3 million for the purchase of products at December 31, ~~2015.~~2016. The changes in the fair value of these embedded derivatives are recorded ~~as foreign currency exchange gains/losses within~~in interest and other income (expense), net in the ~~unaudited condensed~~ consolidated statements of income and comprehensive ~~income.~~income (loss).

Commodity Price Risk Management

The Company has ~~an arrangement~~arrangements with ~~a customer~~certain customers under which it has a firm commitment to deliver copper based ~~superconductors~~superconductor wire at a fixed price. In order to minimize the volatility that fluctuations in the price of copper have on the Company’s sales of these ~~superconductors,~~commodities, the Company enters into commodity hedge contracts. At ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, the Company had fixed price commodity contracts with notional amounts aggregating ~~$3.3~~$4.8 million and ~~$2.0~~$2.7 million, respectively. The changes in the fair value of these commodity contracts are recorded within interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income.

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

		September 30,		December 31,			March 31,		December 31,
	Balance Sheet Location	2016		2015		Balance Sheet Location	2017		2016
Derivative assets:
Foreign exchange contracts	Other current assets	$	0.2	$	—
Embedded derivatives in purchase and delivery contracts						Other current assets	$	2.0	$	2.7
Fixed price commodity contracts						Other current assets	0.3		0.2
Embedded derivatives in purchase and delivery contracts	Other current assets	0.1		0.5		Other long-term assets	1.0		1.3

Derivative liabilities:
Foreign exchange contracts	Other current liabilities	$	0.2	$	1.3	Other current liabilities	$	0.5	$	1.4
Embedded derivatives in purchase and delivery contracts	Other current liabilities	0.1		0.5		Other current liabilities	—		0.3
Fixed price commodity contracts	Other current liabilities	0.2		0.4

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

	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2016		2015			2016		2015			2017			2016
Foreign exchange contracts	$	0.7	$	(2.2	)	$	1.3	$	5.8		$	0.9		$	2.2
Embedded derivatives in purchase and delivery contracts	0.3		(0.4		)	—		(0.2		)	(0.7		)	(0.3		)
Fixed price commodity contracts	—		(0.1		)	0.2		(0.2		)	0.1			0.1
Other income (expense), net	$	1.0	$	(2.7	)	$	1.5	$	5.4		$	0.3		$	2.0

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

9.10. ~~(Benefit)~~ Provision for Income Taxes

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

recognition threshold.

The income tax ~~(benefit)~~ provision for the three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ was ~~$(4.0)~~$9.9 million and ~~$10.7~~$4.8 million, respectively, representing effective tax rates of ~~(9.3)%~~31.3% and ~~45.3%~~16.9%, respectively. The ~~income tax provision for~~increase in the ~~nine months ended September 30, 2016 and 2015 was $3.8 million and $17.8 million, respectively, representing effective tax rates of 4.3% and 29.3%, respectively. The decrease in our~~Company’s effective tax rate for the three months ended ~~September 30, 2016,~~March 31, 2017, compared to the same period in ~~2015, was primarily caused by the release of valuation allowances. The decrease in our effective tax rate for the nine months ended September 30,~~ 2016, ~~compared to the same period in 2015,~~ was primarily caused by the recognition of previously ~~unrecognized~~uncertain tax benefits due to the closure of certain tax audits and the release of valuation allowances ~~and changes~~ in the ~~expected mix~~first quarter of ~~earnings among tax jurisdictions.~~2016. The Company’s effective tax rate may change over time as the amount or mix of income and taxes changes among the jurisdictions in which the Company is subject to tax.

As of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, the Company ~~has~~had unrecognized tax benefits, excluding penalties and interest, of approximately ~~$7.3~~$5.9 million and ~~$26.9~~$6.2 million, respectively, of which ~~$6.4~~$5.0 million and ~~$13.0~~$5.3 million, if recognized, would result in a reduction of the Company’s effective tax rate. The Company recognizes penalties and interest related to unrecognized tax benefits in the provision for income taxes. As of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, approximately ~~$0.7~~$0.5 million ~~and $4.7 million, respectively,~~ of accrued interest and penalties related to uncertain tax positions was included in each period in other long-term liabilities on the unaudited condensed consolidated balance sheets. Penalties and interest related to unrecognized tax benefits of ~~$0.9 million and $0.0~~$0.1 million were recorded in the provision for income taxes during the three months ended ~~September 30, 2016 and 2015, respectively, and $1.5 million and $1.1 million during~~March 31, 2016. No corresponding amount was recorded in the ~~nine months~~three month period ended ~~September 30, 2016 and 2015, respectively.~~March 31, 2017.

The Company files tax returns in the United States which include federal, state and local jurisdictions and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The tax years ~~2009~~2013 to ~~2015~~2016 are open tax years in the significant foreign jurisdictions. In 2016, the Company settled tax audits in Germany and Switzerland. The settlement was immaterial to the consolidated financial statements. Tax years 2011 to ~~2015~~2016 remain open for examination in the United States.

The Company asserts that its foreign earnings, with the exception of its foreign earnings that have been previously taxed by the U.S., are indefinitely reinvested. The Company regularly evaluates its assertion that its foreign earnings are indefinitely reinvested. If the cash, cash equivalents and short-term investments held by the Company’s foreign subsidiaries are needed to fund operations in the ~~U.S.,~~United States or the Company otherwise elects to repatriate the unremitted earnings of its foreign subsidiaries in the form of dividends or otherwise, or if the shares of the subsidiaries were sold or transferred, the Company would likely be subject to additional U.S. income taxes, net of the impact of any available tax credits, which could result in a higher effective tax rate in the future.

~~10.~~11. Commitments and Contingencies

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

~~Legal~~Litigation and Related Contingencies

Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure also is provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. The Company believes the outcome of ~~these~~pending proceedings, individually and in the aggregate, will not have a material impact on the Company’s financial ~~position or results of operations.~~statements. As of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, no material accruals have been recorded for ~~such~~ potential ~~contingencies were immaterial to the unaudited condensed consolidated financial statements.~~contingencies.

Governmental Investigations

The Korea Fair Trade Commission (“KFTC”) has conducted an investigation into improper bidding by Bruker Korea Co., Ltd. and several other companies in connection with bids for sales of X-ray systems in 2010 and 2012. Three of the bids under investigation involved Bruker Korea. The Company cooperated fully with the KFTC regarding this matter. In September 2016, the KFTC fined Bruker Korea approximately $15,000 and referred the matter to the Korean Public Prosecutor’s Office for criminal prosecution. ~~The potential range~~Additional monetary penalties may also result from the ongoing criminal proceeding. Since December 2016, various Korean governmental entities have imposed suspensions on Bruker Korea, with suspension periods ranging from three to six months. During the periods of ~~penalties~~these suspensions, which ~~may arise as a result of any criminal or other proceedings which may be brought by other Korean government agencies against the Company or its subsidiaries operating in~~are overlapping, Bruker Korea ~~involving this matter could include the imposition of a criminal fine and a suspension of all or a portion of the Company’s operations~~is prohibited from bidding for or conducting sales to Korean governmental ~~agencies for a period of time. At this time the Company cannot reasonably assess the timing or outcome of these matters or their effect, if any, on the Company’s business or results of operations.~~agencies. Sales to these customers ~~in Korea~~ were ~~approximately 2%~~less than 1% of the Company’s revenue for the year ended December 31, ~~2015.~~2016. In the course of normal business, the Company conducts business in Korea with other non-governmental customers that are not affected by these suspensions. Accordingly,

the Company does not expect these contingencies to have a material adverse effect on its financial statements.

Letters of Credit and Guarantees

At ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, the Company had bank guarantees of ~~$130.9~~$132.1 million and ~~$137.7~~$131.5 million,

respectively, related primarily to customer advances. These arrangements guarantee the refund of advance payments received from customers in the event that the merchandise is not delivered or warranty obligations are not fulfilled in compliance with the terms of the contract. These guarantees affect the availability of the Company’s lines of credit.

~~11.~~12. Shareholders’ Equity

Share Repurchase Program

In ~~November 2015,~~2016, the ~~Company’s Board of Directors suspended the Company’s~~ previously announced ~~Anti-Dilutive Repurchase Program until January 1, 2017 and approved an additional~~ share repurchase program ~~(the “Repurchase Program”) under which repurchases of common stock up to $225.0 million may occur from time to time, in amounts, at prices,~~was completed and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. A total of 1,163,751 shares were repurchased at an aggregate cost of $25.9 millionMarch 31, 2017 there was no active repurchase plan in the three months ended September 30, 2016 and 5,741,609 shares were repurchased at an aggregate cost of $143.5 million in the nine months ended September 30, 2016. Since inception of the Repurchase Program through September 30, 2016, 8,578,651 shares were repurchased at an aggregate cost of $208.5 million. The remaining authorization under the Repurchase Program is $16.5 million. Any future repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility.

~~The repurchased shares are reflected within Treasury stock in the accompanying unaudited condensed consolidated balance sheets at September 30, 2016 and December 31, 2015.~~place.

Cash Dividends on Shares of Common Stock

On February 22, 2016, the Company announced the establishment of a dividend policy and the declaration by its Board of Directors of an initial quarterly cash dividend in the amount of $0.04 per share of the Company’s issued and outstanding common stock. Dividends were paid on March 24, 2016 to shareholders of record as of March 4, 2016 for an aggregate cost of $6.5 million, on June 24, 2016 to shareholders of record as of June 6, 2016 for an aggregate cost of $6.5 million and on September 23, 2016 to shareholders of record as of September 6, 2016 for an aggregate cost of $6.4 million. Under the dividend policy, the Company will target a cash dividend to the Company’s shareholders in the amount of $0.16 per share per annum, payable in equal quarterly installments. Dividends were paid on March 24, 2017 to shareholders of record as of March 8, 2017 for an aggregate cost of $6.4 million. Subsequent dividend declarations and the establishment of record and payment dates for such future dividend payments, if any, are subject to the Board of Directors’ continuing determination that the dividend policy is in the best interests of the Company’s shareholders. The dividend policy may be suspended or cancelled at the discretion of the Board of Directors at any time.

Accumulated Other Comprehensive Income

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

	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2016		2015			2016		2015			2017		2016
Consolidated net income	$	47.0	$	12.9		$	85.4	$	42.9		$	21.7	$	23.6
Foreign currency translation adjustments	12.7		(10.2		)	27.7		(47.3		)	15.6		33.6
Pension liability adjustments	0.6		2.3			1.2		11.1			0.2		(1.0		)
Net comprehensive income	60.3		5.0			114.3		6.7			37.5		56.2
Less: Comprehensive income attributable to noncontrolling interests	0.6		1.2			0.9		2.4			0.2		0.2
Comprehensive income attributable to Bruker Corporation	$	59.7	$	3.8		$	113.4	$	4.3		$	37.3	$	56.0

The following is a summary of the components of accumulated other comprehensive income (loss), net of tax, at ~~September 30, 2016~~March 31, 2017 (in millions):

Foreign
Currency
Translation

Pension
Liability
Adjustment

Accumulated
Other
Comprehensive
Income (Loss)

Balance at December 31, 2015

$
3.2

$
(47.4
)
$
(44.2
)
Other comprehensive income (loss) before reclassifications

27.6

(1.4
)
26.2

Realized gain on reclassification, net of tax of $0.3 million

—

2.6

2.6

Net current period other comprehensive income

27.6

1.2

28.8

Balance at September 30, 2016

$
30.8

$
(46.2
)
$
(15.4
)

	Foreign Currency Translation			Pension Liability Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2016	$	(24.1	)	$	(51.8	)	$	(75.9	)
Other comprehensive income (loss) before reclassifications	15.5			(0.9		)	14.6
Realized gain on reclassification, net of tax of $0.0 million	—			1.1			1.1
Net current period other comprehensive income	15.5			0.2			15.7
Balance at March 31, 2017	$	(8.6	)	$	(51.6	)	$	(60.2	)

~~12.~~13. Noncontrolling Interests

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

	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015		2016			2015			2017		2016
Balance at beginning of period	$	7.1		$	6.6	$	6.8		$	5.8		$	6.7	$	6.8
Net income	0.5			1.1		0.8			2.7			0.1		—
Foreign currency translation adjustments	0.1			—		0.1			(0.3		)	0.1		0.2
Cash payments to noncontrolling interests	(0.7		)	—		(0.7		)	(0.5		)
Balance at end of period	$	7.0		$	7.7	$	7.0		$	7.7		$	6.9	$	7.0

~~13.~~14. Other Charges, Net

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

	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
	2016		2015		2016		2015			2017		2016
Information technology transformation costs	$	1.6	$	2.6	$	5.5	$	6.2		$	1.2	$	2.2
Restructuring charges	2.8		3.0		6.4		5.3			1.5		1.8
Pension settlement charge	—		—		—		10.2
Professional fees incurred in connection with internal investigation	—		0.4		—		0.4
Acquisition-related charges (benefits)	0.2		0.4		8.1		(2.5		)	0.4		—
Long-lived asset impairments	—		2.5		0.6		4.3
Other charges, net	$	4.6	$	8.9	$	20.6	$	23.9		$	3.1	$	4.0

In recent years, the Company has been undertaking productivity improvement initiatives in an effort to better optimize its operations. These restructuring initiatives have included the divestiture of certain non-core businesses, outsourcing of various manufacturing activities, transferring or ceasing operations at certain facilities, and an overall right-sizing within the Company based on the current business environment.Restructuring Initiatives

2016

The Company ~~recorded total~~commenced a restructuring ~~charges during~~initiative in the ~~three months ended September 30,~~third quarter of 2016 to address lower demand in the Bruker CALID and Bruker Nano Groups as a result of ~~$5.3 million~~softness in order entry levels from European academic institutions and ongoing weakness in several of the industrial end market segments served by the Bruker Nano Group. This initiative is intended to improve the Bruker CALID and Bruker Nano Group operating results in response to these market conditions. Restructuring actions will result in a reduction of approximately 125 employees within the Bruker CALID and Bruker Nano Groups.

The following is a summary of the restructuring expenses related to these initiatives, all within the BSI Segment. These charges consisted of $0.3 million of inventory provisions for excess inventory, $4.6 million of severance costs and $0.4 million of exit related costs, such as professional service and facility exit charges. During the three months ended September 30, 2016, the Companythis initiative which are recorded ~~restructuring charges of $2.5 million as a component of cost of revenue and $2.8 million as a component of other charges, net~~ in the accompanying unaudited condensed consolidated statements of income and comprehensive ~~income. The Company recorded total restructuring charges during~~income for the ~~nine~~three months ended ~~September 30, 2016 of $12.8 million~~March 31, 2017:

	Three months ended March 31,
	2017
	Severance and Exit Costs		Inventory Writedown and Asset Impairment		Total
Cost of revenues	$	1.2	$	0.3	$	1.5
Other charges, net	0.8		—		0.8
	$	2.0	$	0.3	$	2.3

Total restructuring and other one-time charges incurred through March 31, 2017 related to ~~these initiatives, all within the BSI Segment. These~~this initiative were $12.7 million. Total restructuring and other one-time charges ~~consisted of $1.4~~related to this initiative in 2016 and 2017 are expected to be between $14.0 and $16.0 million, of ~~inventory provisions for excess inventory, $7.9~~which $13.0 to $14.5 million ~~of severance costs and $3.5 million of exit related costs, such as professional service~~relate to employee separation and facility exit ~~charges. During the nine months ended September 30, 2016, the Company recorded restructuring charges of $6.4~~costs and $1.0 to $1.5 million ~~as a component of cost of revenue~~relate to estimated inventory write-downs and ~~$6.4 million as a component of other charges, net in the accompanying unaudited condensed consolidated statements of income and comprehensive income.~~asset impairments.

2015

The Company commenced a restructuring initiative in 2015 within the Bruker BioSpin Group, which was developed as a

result of a revenue decline that occurred during the second half of 2014 and continued during the first half of 2015. This initiative was intended to improve Bruker BioSpin Group’s operating results. Restructuring actions resulted in a reduction of employee headcount within the Bruker BioSpin Group of approximately 9%. ~~Included~~The final expenses related to this initiative were incurred in the ~~total restructuring charges discussed above are~~three months ended March 31, 2017 due to the sale of a manufacturing facility.

The following is a summary of the restructuring expenses related to this initiative ~~recorded during the nine months ended September 30, 2016 of $3.3 million of severance and exit costs, of~~ which ~~$2.2 million was~~are recorded as a component of cost of revenue and $1.1 million as a component of other charges, net in the accompanying unaudited condensed consolidated statements of income and comprehensive income. This restructuring initiative also included the closure and consolidation of a Bruker BioSpin Group manufacturing facility. From inception of this restructuring initiative in the second quarter of 2015, cumulative restructuring expenses and other one-time charges recorded have been $19.5 million, consisting of $4.2 million of inventory write-downs and asset impairments and $15.3 million of severance and exit costs. As of September 30, 2016, expenses incurred under this restructuring initiative were substantially complete.

The Company commenced a restructuring initiative in 2016 to address lower demand in the Bruker CALID and Bruker Nano Groups as a result of weakness in European academic funding and ongoing weakness in several of the industrial end market segments that affect the Bruker Nano Group. This initiative is intended to improve the Bruker CALID and Bruker Nano Group operating results in response to these market conditions. Restructuring actions will result in a reduction of approximately 125 employees within the Bruker CALID and Bruker Nano Groups. Included in the total restructuring charges discussed above are restructuring expenses related to this initiative of $5.4 million for severance and exit costs, of which $3.0 million was recorded as a component of cost of revenue and $2.4 million as a component of other charges, net, and $0.7 million for inventory write-down and asset impairment charges related to the closure and consolidation of manufacturing facilities, of which $0.5 million was recorded as a component of cost of revenue and $0.2 million as a component of other charges, net in the accompanying unaudited condensed consolidated statements of income and comprehensive income for the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~respectively. Total~~respectively:

	Three months ended March 31,
	2017								2016
	Severance and Exit Costs			Inventory Writedown and Asset Impairment		Total			Severance and Exit Costs		Inventory Writedown and Asset Impairment		Total
Cost of revenues	$	(2.7	)	$	—	$	(2.7	)	$	1.3	$	—	$	1.3
Other charges, net	—			—		—			1.0		—		1.0
	$	(2.7	)	$	—	$	(2.7	)	$	2.3	$	—	$	2.3

As of March 31, 2017, expenses incurred under this restructuring initiative were substantially complete.

Restructuring charges for the three month periods ended March 31, 2017 and 2016 included charges for various other ~~one-time charges related to this initiative~~programs which were recorded in ~~2016~~the accompanying unaudited condensed consolidated statements of income and 2017 are expected to be between $11.0 and $13.0 million, of which $10.0 to $11.5 million relate to employee separation and facility exit costs and $1.0 to $1.5 million relate to estimated inventory write-downs and asset impairments.comprehensive income.

	Three Months Ended March 31,
	2017			2016
Cost of revenues	$	(0.2	)	$	0.7
Other charges, net	0.7			0.8
	$	0.5		$	1.5

The following table sets forth the changes in restructuring reserves for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 (in millions):

Total

Severance

Exit Costs

Provisions
for Excess
Inventory

Balance at December 31, 2015

$
23.1

$
10.3

$
2.4

$
10.4

Restructuring charges

12.8

7.9

3.5

1.4

Cash payments

(16.7
)
(12.5
)
(3.3
)
(0.9
)
Other, non-cash adjustments and foreign currency effect

(3.2
)
(0.1
)
(0.6
)
(2.5
)
Balance at September 30, 2016

$
16.0

$
5.6

$
2.0

$
8.4

	Total			Severance			Exit Costs			Provisions for Excess Inventory
Balance at December 31, 2016	$	16.2		$	4.9		$	3.7		$	7.6
Restructuring charges	0.1			1.5			(1.7		)	0.3
Cash payments	(3.0		)	(3.9		)	1.1			(0.2		)
Other, non-cash adjustments and foreign currency effect	(0.6		)	(0.1		)	(0.2		)	(0.3		)
Balance at March 31, 2017	$	12.7		$	2.4		$	2.9		$	7.4

~~14.~~15. Interest and Other Income (Expense), Net

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Interest expense, net	$	(3.4	)	$	(3.0	)	$	(9.4	)	$	(9.2	)	$	(3.7	)	$	(3.1	)
Exchange gains (losses) on foreign currency transactions	—			(2.1		)	(1.6		)	(5.4		)	(2.3		)	(2.3		)
Loss on disposal of product line	—			—			—			(0.2		)
Other	0.5			0.5			(0.1		)	0.5			—			(0.2		)
Interest and other income (expense), net	$	(2.9	)	$	(4.6	)	$	(11.1	)	$	(14.3	)	$	(6.0	)	$	(5.6	)

~~15.~~16. Business Segment Information

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

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

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Revenue:
BSI	$	361.5		$	366.6		$	1,057.6		$	1,060.3		$	346.4		$	350.4
BEST	35.5			32.9			91.2			91.2			40.1			27.2
Eliminations (a)	(3.1		)	(3.4		)	(7.8		)	(5.9		)	(1.6		)	(2.2		)
Total revenue	$	393.9		$	396.1		$	1,141.0		$	1,145.6		$	384.9		$	375.4

Operating Income
BSI	$	43.3		$	25.8		$	95.3		$	68.2		$	38.1		$	33.0
BEST	2.7			2.5			4.1			6.1			(0.5		)	—
Corporate, eliminations and other (b)	(0.1		)	(0.1		)	0.9			0.7			—			1.0
Total operating income	$	45.9		$	28.2		$	100.3		$	75.0		$	37.6		$	34.0

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

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

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

September 30,

December 31,

2016

2015

Assets:

BSI

$
1,780.6

$
1,714.4

BEST

21.5

79.1

Eliminations and other (a)

(4.2
)
(63.5
)
Total assets

$
1,797.9

$
1,730.0

	March 31,			December 31,
	2017			2016
Assets:
BSI	$	1,806.4		$	1,779.8
BEST	36.5			36.0
Eliminations and other (a)	(3.0		)	(7.4		)
Total assets	$	1,839.9		$	1,808.4

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

~~16.~~17. Recent Accounting Pronouncements

In October 2016, the ~~Financial Accounting Standards Board (FASB)~~FASB issued ~~Accounting Standards Update (ASU)~~ASU No. 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other than Inventory. The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. The new standard is effective as of January 1, 2018 and early adoption is permitted. The Company is evaluating the provisions of this standard, including which period to adopt, and has not determined what impact the adoption of ASU No. 2016-16 ~~will have on the Company’s unaudited condensed consolidated financial statements.~~

~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Stock Compensation - Improvements to Employee Share-Based Payment Accounting~~. The new standard simplifies accounting for share-based payment transactions, including income tax consequences and the classification of the tax impact on the statement of cash flows. The new standard is effective as of January 1, 2017, and early adoption is permitted. The Company is evaluating the provisions of this standard, including which period to adopt, and has not determined what impact the adoption of ASU No. 2016-09 will have on the Company’s unaudited condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard provides guidance on the recognition, measurement, presentation, and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. The Company is evaluating the provisions of this standard, including which period to adopt, and has not determined what impact the adoption of ASU No. 2016-02 will have on the Company’s unaudited condensed consolidated financial statements.

In ~~July 2015, the FASB issued ASU No. 2015-11,~~ ~~Simplifying the Measurement of Inventory~~~~. The new guidance eliminates~~

the measurement of inventory at market value, and inventory will now be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. The Company is evaluating the provisions of this standard, including which period to adopt, and has not determined what impact the adoption of ASU No. 2015-11 will have on the Company’s unaudited condensed consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under ~~ASC~~Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 was originally effective prospectively for annual periods beginning after December 15, 2016, and interim periods within those years. In August 2015, the FASB elected to defer the effective date of ASU No. 2014-09 by one year to annual periods beginning after December 15, 2017, with early application permitted as of the ~~previous~~original effective date. The new guidance may be applied on a retrospective basis for all prior periods presented, or on a modified retrospective basis with the cumulative effect of the new guidance as of the date of ~~December 15, 2016.~~initial application. The new guidance will be effective for the Company as of January 1, 2018 and the Company currently expects to use the modified retrospective transition method.

During 2016, the Company substantially completed the impact assessment phase of its evaluation of ASU 2014-09. As a result of its impact assessment, the Company will be implementing additional processes and controls, including additional disclosures, to comply with the new standard. The largest financial impact will be the timing of revenue recognition for certain project-based orders for which the Company currently applies the percentage-of-completion or completed contract model. Under the new guidance, there are specific criteria to determine if a performance obligation should be recognized over time or at a point in time. The Company ~~is currently assessing~~expects that in some cases the revenue recognition timing under the new guidance will change from current practice based on applying the specific criteria under the new guidance. The Company has not yet quantified the impact the ~~new guidance may~~adoption of ASU No. 2014-09 will have on ~~its unaudited condensed~~the consolidated financial ~~statements upon adoption.~~statements.

18. Subsequent Event

On May 5, 2017, the Company acquired Luxendo, a privately held spin-off of the European Molecular Biology Laboratory (EMBL) for a purchase price of $18.3 million, with the potential for additional consideration based on revenue achievements in 2018 through 2021. Luxendo is a developer and manufacturer of proprietary light-sheet fluorescence microscopy instruments and the acquisition will significantly enhance Bruker’s existing portfolio of swept-field confocal, super-resolution, and multiphoton fluorescence microscope product lines, enabling new research advances in small organism embryology, live-cell imaging, brain development and cleared brain tissue, and optogenetics applications. Luxendo is located in Heidelberg, Germany and will be integrated into the Bruker Nano Group within the BSI reportable segment. The purchase accounting for this acquisition will be finalized within the measurement period.

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

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

Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

Statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, which express that we “believe,” “anticipate,” “plan,” “expect,” “seek,” “estimate,” or “should,” as well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results may differ materially from those set forth in forward-looking statements. Certain factors that might cause such a difference are discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

Although our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), we believe describing revenue and expenses, excluding the effects of foreign currency, acquisitions and divestitures, as well as certain other charges, net, provides meaningful supplemental information regarding our performance. Specifically, management believes that free cash flow and organic revenue, both non-GAAP financial measures, as well as non-GAAP gross margin and non-GAAP operating margin, provide relevant and useful information which is widely used by analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance. We define the term organic revenue as GAAP revenue excluding the effect of foreign currency changes and the effect of acquisitions and divestitures. We define the term non-GAAP gross margin as GAAP gross margin with certain non-GAAP measures excluded and non-GAAP operating margin as GAAP operating margin with certain non-GAAP measures excluded. These non-GAAP measures exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets and other costs that are infrequent or non-recurring in nature and we believe these are useful measures to evaluate our continuing business. We define free cash flow as net cash provided by operating activities less additions to property, plant, and equipment. We believe free cash flow is a useful measure to evaluate our business as it indicates the amount of cash generated after additions to property, plant, and equipment which is available for, among other things, investments in our business, acquisitions and repayment of debt. We use these non-GAAP financial measures to evaluate our period-over-period operating performance because our management believes ~~this provides a~~they provide more comparable ~~measure~~measures of our continuing business as itthey adjusts for certain items that are not reflective of the underlying performance of our business. These measures may also be useful to investors in evaluating the underlying operating performance of our business.

These non-GAAP financial measures are not in accordance with, nor are they a substitute for, the comparable GAAP financial measures and are intended to supplement our financial results that are prepared in accordance with GAAP. We regularly use these non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP ~~measures.~~ measures and use this information for our planning and forecasting activities.

The ~~calculation~~presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP and may ~~differ~~be different from ~~the calculation of similarly titled~~non-GAAP financial measures ~~presented~~used by other companies, and therefore, may not be comparable among companies. We believe these non-GAAP financial measures provide meaningful supplemental information regarding our performance. Specifically, management believes that the non-GAAP measures mentioned above provide relevant and useful information which is widely used by analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance.

OVERVIEW

Bruker develops and manufactures high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels. The Company’s products address the needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research. We are organized into four operating ~~segments, as further described in Note 1 in the unaudited condensed consolidated financial statements and in our Annual Report on Form 10-K for the year ended December 31, 2015:~~segments: the Bruker BioSpin Group, the Bruker CALID Group, the Bruker Nano Group and the Bruker Energy & Supercon Technologies (BEST) Segment.

~~For~~

Revenue for the three ~~months~~month period ended ~~September 30, 2016, our revenue decreased by $2.2~~March 31, 2017 was $384.9 million, an increase of $9.5 million, or ~~0.6%~~2.5%, from the three month period ended March 31, 2016. Overall revenue showed solid growth in Asia Pacific, particularly China, but was flat in the Americas, and modestly lower in Europe. Revenue increased approximately $19.7 million related primarily to ~~$393.9 million, compared to $396.1 million for~~ the ~~comparable period~~acquisitions of Oxford Instruments Superconducting Wire LLC (OST) and Hysitron, Incorporated (Hysitron), offset in ~~2015. The~~part

by unfavorable currency translation impact of ~~changes in~~approximately $7.3 million caused by the strengthening of the U.S. Dollar versus the Euro, British Pound and other currencies. Excluding the effects of foreign currency translation and aour recent ~~acquisition in~~acquisitions, our ~~Bruker Nano Group caused a net increase of $7.4 million, or 1.9%. Excluding these items,~~ organic revenue, a non-GAAP measure, decreased ~~2.4%~~by $2.9 million, or 0.8%, driven primarily ~~as a result of weakness~~by delayed order bookings in 2016 due to funding delays in European academic funding primarily within our Bruker CALID and Bruker Nano Groups and weaker industrial markets within the Bruker Nano Group. The decline in revenue caused by these factors was partially offset by increased revenues within the Bruker BioSpin Group due to higher pricing.

For the nine months ended September 30, 2016, our revenue decreased by $4.6 million, or 0.4%, to $1,141.0 million, compared to $1,145.6 million for the comparable period in 2015. The impact of changes in foreign currency and a recent acquisition in our Bruker Nano Group caused a net increase of $21.5 million, or 1.8%. Excluding these items, organic revenue, a non-GAAP measure, decreased 2.3%. The decrease was primarily caused by continued weak demand within our Bruker Nano Group industrial market segments and weakness in European academicresearch funding. These decreases were partially offset by increased revenues within the Bruker BioSpin Group due to higher volume, increased pricing and the sale of the first shielded ultra-high field gigahertz nuclear magnetic resonance system.

Our gross profit margin increased to ~~47.0% from 42.3%~~45.8% during the three months ended ~~September 30, 2016 and 2015, respectively, and to 45.8%~~March 31, 2017 from ~~43.4%~~44.4% during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2016. The increase in our gross profit margin was caused primarily by increased pricing and ~~2015, respectively. The increases in gross margin percentages were primarily caused by~~operational efficiencies within the Bruker BioSpin Group and operating cost improvements as a result of recent restructuring and outsourcing actions the impact of pricing increases and a business mix favouring our Bruker BioSpin Group and the impact of a recent acquisition within the Bruker Nano Group. The beneficial impact of these items was offset in part by weakness in Bruker Nano Group industrial market segments and weakness in European academic funding within our Bruker CALID and Bruker Nano Groups.

~~Operating~~Selling, general and administrative expenses and research and development costs increased during the three months ended ~~September 30, 2016 remained consistent with the comparable period in the prior year at $139.3 million. Operating expenses during the nine months ended September 30, 2016 decreased~~March 31, 2017 by approximately ~~$0.3~~$5.4 million compared to the ~~prior year,~~three month period ended March 31, 2016. This increase primarily ~~caused by the effects of restructuring~~resulted from our recent acquisitions and ~~outsourcing initiatives, which were partially offset by~~research and developments costs associated with a ~~recent acquisition in our Bruker Nano Group.~~new product launch.

~~Earnings~~The income tax provision in the three month periods ended March 31, 2017 and 2016 was $9.9 million and $4.8 million, respectively, representing effective tax rates of 31.3% and 16.9%, respectively. The Company’s first quarter 2016 effective tax rate reflected the benefits of certain discrete tax items in that quarter, including the recognition of previously uncertain tax benefits resulting from the closure of certain tax audits and the release of valuation allowances. These discrete tax items were not recurring in the three month period ended March 31, 2017, resulting in a significantly higher effective tax rate for the first quarter of 2017.

Diluted earnings per ~~share increased $0.22 to $0.29 per diluted~~ share for the three ~~months~~month periods ended ~~September 30,~~March 31, 2017 were $0.13, a decrease of $0.01 from the three month period ended March 31, 2016 ~~when compared~~due to the same period in 2015. Earnings per share increased $0.28 to $0.52 per diluted share for the nine months ended September 30, 2016 when compared to the same period in 2015. The increase in earnings per diluted share for the three and nine months ended September 30, 2016 was caused by increased gross profit margins, operational improvements and the impact of restructuring actions, the impact of a recent acquisition within our Bruker Nano Group, the impact of our share repurchase program and a favorable effectivehigher current year tax ~~rate as a result of the release of our remaining valuation allowances.~~rate.

Operating cash flow for the ~~nine months~~three month period ended ~~September 30, 2016~~March 31, 2017 was a source of cash of ~~$40.0~~$32.6 million. We believe free cash flow, a non-GAAP financial measure which we define as net cash provided by operating activities less purchases of property, plant and equipment, is a useful measure to evaluate our business as it indicatesFor the amount of cash generated after additions to property, plant, and equipment that is available for, among other things, strategic acquisitions, investments in our business, dividends, repurchase of our common stock and repayment of debt. In the nine monthsthree month period ended ~~September 30, 2016,~~March 31, 2017, our free cash flow was ~~$14.0~~$21.1 million, calculated as follows:

	Nine Months Ended September 30,				Three Months Ended March 31,
	2016		2015		2017		2016
Net cash provided by operating activities	$	40.0	$	79.6	$	32.6	$	(14.0	)
Less: Purchases of property, plant and equipment	$	26.0	22.8		11.5		8.0
Free cash flow	$	14.0	$	56.8
Free Cash Flow					$	21.1	$	(22.0	)

Our free cash flow was ~~lower in~~higher for the ~~nine months~~three month period ended ~~September 30, 2016 then~~March 31, 2017 than for the ~~same~~comparable period in ~~the prior year,~~2016, primarily ~~caused by an increase in operating assets and liabilities, net~~as a result of acquisitions and divestitures. The increase was primarily caused by an increase in inventory associated with this year’s restructuring actions, inventory needed to fulfill orders in the fourth quarterlower than normal collections of ~~2016, income tax payments net of refunds received due to the closure of tax audits, withholding tax payments made in~~receivables during the first quarter of 2016 ~~related to~~and the ~~Company’s 2015 European cash repatriation~~timing of customer advances because the first quarter of 2016 included the recognition of the first shielded ultra-high field gigahertz nuclear magnetic resonance system and ~~estimated tax prepayments. These uses~~the customer advances associated with the sale of ~~cash were partially offset by a decrease in accounts receivable resulting from lower revenues and improvements in collections and customer credit management practices.~~this system.

In November 2015, our Board of Directors approved a share repurchase program (the “Repurchase Program”) ~~under which~~that authorized repurchases of ~~common stock~~ up to $225.0 million ~~may occur. A total~~ of ~~1,163,751 shares were repurchased at an aggregate cost of $25.9 million~~common stock. The Repurchase Program concluded in the ~~three months~~year ended ~~September 30,~~December 31, 2016 ~~5,741,609 shares~~when the authorized level of repurchases was completed. As of March 31, 2017 there were ~~repurchased at an aggregate cost of $143.5 million~~no active share repurchase programs in the nine months ended September 30, 2016 and 8,578,651 shares were repurchased at an aggregate cost of $208.5 million from the inception of the Repurchase Program through September 30, 2016. The remaining authorization under the Repurchase Program is $16.5 million. Any additional repurchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility.effect.

On February 22, 2016, we announced the establishment of a dividend policy and the declaration by our Board of Directors of an initial quarterly cash dividend in the amount of $0.04 per share of our issued and outstanding common stock. Dividends amounting to ~~$6.5~~$6.4 million were paid in March ~~and June and $6.4 million was paid in September~~ of ~~this year. Going forward, we will target~~2017. Future dividend payments, if any, are subject to approval of our Board of Directors. We are targeting a cash dividend to our shareholders in the amount of $0.16 per share per annum, payable in equal quarterly installments.

In the three months ended March 31, 2017, we completed various acquisitions that collectively complemented our existing product offerings and added aftermarket and software capabilities to our existing microbiology business. The impact of acquired companies on revenues, net income and total assets was not material.

In 2016, we ~~commenced~~began a restructuring initiative to address lower demand in the Bruker CALID and Bruker Nano Groups as a result of ~~weakness~~softness in order entry levels from European academic ~~funding~~institutions and ongoing weakness in several of the industrial end market segments ~~that affect~~served by the Bruker Nano Group. This initiative is intended to improve the Bruker CALID and Bruker

Nano Group operating results in response to these market conditions. Restructuring actions will result in a reduction of approximately 125 employees within the Bruker CALID and Bruker Nano Groups. In the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, we recorded ~~$5.4~~$2.3 million of restructuring charges associated with this initiative. Expenses related to this initiative are expected to be substantially completed by June 30, 2017. Total restructuring and other one-time charges related to this initiative in ~~2016 and~~ 2017 are expected to be between ~~$11.0~~$14.0 and ~~$13.0~~$16.0 million. We expect to generate approximately ~~$10.0~~$14.0 to ~~$13.0~~$16.0 million in annualized savings upon completion of this initiative, which is expected to take full effect in the second ~~quarter~~half of 2017.

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

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

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

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

· the time required to obtain governmental licenses.

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

This discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. The preparation of these financial statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. We base our estimates and judgments on our historical experience, current market and economic conditions, industry trends, and other assumptions that we believe are reasonable and form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

We believe the following critical accounting policies and estimates to be both those most important to the portrayal of our financial position and results of operations and those that require the most estimation and subjective judgment:

· Revenue recognition;

· Income taxes;

· Inventories;

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

· ~~Employee benefit plan assumptions.~~

For a further discussion of our critical accounting policies, please refer to our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. We no longer consider changes in employee benefit plan assumptions to be a critical accounting policy. There were no other significant changes to our critical accounting policies for the three ~~or nine~~ months ended ~~September 30, 2016.~~March 31, 2017.

RESULTS OF OPERATIONS

Three Months Ended ~~September 30, 2016~~March 31, 2017 compared to the Three Months Ended ~~September 30, 2015~~March 31, 2016

Consolidated Results

The following table presents our results for the three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ (dollars in millions, except per share data):

	Three Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2017			2016
Product revenue	$	328.2		$	334.6		$	318.9		$	312.3
Service revenue	62.3			58.8			63.3			60.7
Other revenue	3.4			2.7			2.7			2.4
Total revenue	393.9			396.1			384.9			375.4

Cost of product revenue	172.2			193.1			172.7			170.2
Cost of service revenue	35.4			34.8			35.7			37.4
Cost of other revenue	1.1			0.7			0.1			1.0
Total cost of revenue	208.7			228.6			208.5			208.6
Gross profit	185.2			167.5			176.4			166.8

Operating expenses:
Selling, general and administrative	96.8			96.1			98.1			92.7
Research and development	37.9			34.3			37.6			36.1
Other charges, net	4.6			8.9			3.1			4.0
Total operating expenses	139.3			139.3			138.8			132.8
Operating income	45.9			28.2			37.6			34.0

Interest and other income (expense), net	(2.9		)	(4.6		)	(6.0		)	(5.6		)
Income before income taxes and noncontrolling interest in consolidated subsidiaries	43.0			23.6			31.6			28.4
Income tax (benefit) provision	(4.0		)	10.7			9.9			4.8
Consolidated net income	47.0			12.9			21.7			23.6
Net income attributable to noncontrolling interest in consolidated subsidiaries	0.5			1.1			0.1			—
Net income attributable to Bruker Corporation	$	46.5		$	11.8		$	21.6		$	23.6

Net income per common share attributable to Bruker Corporation shareholders:
Basic and diluted	$	0.29		$	0.07
Basic							$	0.14		$	0.14
Diluted							$	0.13		$	0.14

Weighted average common shares outstanding:
Basic	160.8			167.8			159.7			163.3
Diluted	161.5			168.7			160.5			164.3

Revenue

For the three months ended ~~September 30, 2016,~~March 31, 2017, our revenue ~~decreased $2.2~~increased $9.5 million, or ~~0.6%~~2.5%, to ~~$393.9~~$384.9 million, compared to ~~$396.1~~$375.4 million for the comparable period in ~~2015.~~2016. Included in revenue was an increase of approximately ~~$6.3~~$19.7 million primarily attributable to a recent ~~acquisition~~acquisitions within the BEST Segment and the Bruker Nano Group and a ~~$1.2~~$7.3 million ~~increase~~decrease caused by foreign currency translation. Excluding the effects of foreign currency translation and our recent ~~acquisition,~~acquisitions, our organic revenue, a non-GAAP measure, decreased by ~~$9.7~~$2.9 million, or ~~2.4%~~0.8%.

Please see the Segment Results section later in this ~~discussion~~section for additional ~~information regarding~~discussion of our revenue.

Gross Profit

Gross profit for the three months ended ~~September 30, 2016~~March 31, 2017 was ~~$185.2~~$176.4 million, or ~~47.0%~~45.8% of revenue, compared to ~~$167.5~~ $166.8

million, or ~~42.3%~~44.4% of revenue, for the three months ended ~~September 30, 2015.~~March 31, 2016. Included in gross profit were various charges for

amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling ~~$7.4~~$7.0 million and ~~$15.2~~$8.6 million for the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively. Excluding these charges, our non-GAAP gross profit margin for the three months ended ~~September 30,~~March 31, 2017 and 2016 was 47.6% and ~~2015 was 48.9% and 46.1%~~46.7%, respectively. The increase in our gross profit margins was caused primarily by increased pricing and operational efficiencies within our Bruker BioSpin Group and operating cost improvements as a result of recent restructuring and outsourcing actions the impact of pricing increases within the Bruker BioSpin Group and the impact of a recent acquisition within the Bruker Nano Group. The favorable effect of these items was partially offset by weakness in Bruker Nano Group industrial market segments and weakness in European academic funding within our Bruker CALID and Bruker Nano ~~Groups.~~Group.

Selling, General and Administrative

Our selling, general and administrative expenses for the three months ended ~~September 30, 2016~~March 31, 2017 increased to ~~$96.8~~$98.1 million, or ~~24.6%~~25.5% of total revenue, from ~~$96.1~~$92.7 million, or ~~24.3%~~24.7% of total revenue, for the comparable period in ~~2015.~~2016. The increase in selling, general and administrative expenses was attributable to aour recent ~~acquisition in the Bruker Nano Group, which was partially offset by the impact of recent operational improvement and restructuring actions.~~acquisitions.

Research and Development

Our research and development expenses for the three months ended ~~September 30, 2016~~March 31, 2017 increased to ~~$37.9~~$37.6 million, or ~~9.6%~~9.8% of total revenue, from ~~$34.3~~$36.1 million, or ~~8.7%~~9.6% of total revenue, for the comparable period in ~~2015.~~2016. The increase in research and development expenses was primarily attributable to ~~the timing of certain research~~our recent acquisitions and ~~development initiatives and~~costs associated with a ~~recent acquisition in the Bruker Nano Group.~~new product launch.

Other Charges, Net

Other ~~Charges,~~charges, net of ~~$4.6~~$3.1 million recorded for the three months ended ~~September 30, 2016~~March 31, 2017 were ~~all~~primarily related to the BSI Segment and consisted ~~primarily~~ of ~~$2.8~~$1.5 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives, ~~$1.6~~$1.2 million of costs associated with our global information technology (IT) transformation initiative and ~~$0.2~~$0.4 million of acquisition-related charges related ~~primarily~~ to ~~a recent acquisition~~acquisitions completed in ~~the Bruker Nano Group.~~2016 and 2017. The IT transformation initiative is a multi-year project aimed at updating and integrating our global enterprise resource planning and human resource information systems.

Other ~~Charges,~~charges, net of ~~$8.9~~$4.0 million recorded for the three months ended ~~September 30, 2015~~March 31, 2016 were all related ~~primarily~~ to the BSI ~~segment~~Segment and consisted ~~predominately~~ of ~~$3.0~~$1.8 million of restructuring costs, ~~including $2.3 million within the BSI segment and $0.7 million within the BEST segment,~~ related to closing facilities and implementing outsourcing and other restructuring initiatives, ~~$2.5 million of long-lived asset impairments~~ and ~~$2.6~~$2.2 million of costs associated with our global ITinformation technology (IT) transformation initiative.

Operating Income

Operating income for the three months ended ~~September 30, 2016~~March 31, 2017 was ~~$45.9~~$37.6 million, resulting in an operating margin of ~~11.7%~~9.8%, compared to operating income of ~~$28.2~~$34.0 million, ~~resulting in~~and an operating margin of ~~7.1%~~9.1%, for the three months ended ~~September 30, 2015.~~March 31, 2016. The increase in operating income during the three months ended March 31, 2017 was caused primarily by increased gross profit margins as a result of higher prices, operational improvements, ~~during the three months ended September 30, 2016 as noted above.~~benefits from restructuring activities, and our recent acquisitions.

We ~~commenced~~continued to execute on a restructuring initiative launched in 2016 which is intended to improve the Bruker CALID and Bruker Nano Groups’ operating results. Please refer to the Overview section of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional discussion of this restructuring initiative.

Interest and Other Income (Expense), Net

Interest and other income (expense), net during the three months ended ~~September 30, 2016~~March 31, 2017 was an expense of ~~$2.9~~$6.0 million compared to an expense of ~~$4.6~~$5.6 million for the comparable period of ~~2015.~~2016.

During the three months ended ~~September 30, 2016,~~March 31, 2017, the primary component within interest and other income (expense), net was net interest expense of ~~$3.4~~$3.7 million and realized and unrealized losses on foreign currency denominated transactions of $2.3 million. During the three months ended ~~September 30, 2015,~~March 31, 2016, the primary components within interest and other income (expense), net were net interest expense of ~~$3.0~~$3.1 million and realized and unrealized losses on foreign currency denominated transactions of ~~$2.1~~$2.3 million.

Income Tax (Benefit) Provision

The ~~2016~~2017 and ~~2015~~2016 effective tax rates were estimated using projected annual pre-tax income on a jurisdictional basis.

Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances, and the effect of jurisdictional differences in statutory tax rates, were also considered in the calculation.

The income tax ~~(benefit)~~ provision for the three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ was ~~$(4.0)~~$9.9 million and ~~$10.7~~$4.8 million, respectively, representing effective tax rates of ~~(9.3)%~~31.3% and ~~45.3%~~16.9%, respectively. The ~~decrease~~Company’s first quarter 2016 effective tax rate reflected the benefits of certain discrete tax items in ~~our~~that quarter, including the recognition of previously uncertain tax benefits resulting from the closure of certain tax audits and the release of valuation allowances. These discrete tax items did not reoccur in the three month period ended March 31, 2017, resulting in a significantly higher effective tax rate for the ~~three months ended September 30, 2016, compared to the same period in 2015, was primarily due to the release~~first quarter of ~~our remaining valuation allowances.~~2017.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ was ~~$0.5~~$0.1 million and ~~$1.1~~$0.0 million, respectively. The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

Net Income Attributable to Bruker Corporation

Our net income for the three months ended ~~September 30, 2016~~March 31, 2017 was ~~$46.5~~$21.6 million, or ~~$0.29~~$0.13 per diluted share, compared to ~~$11.8~~$23.6 million, or ~~$0.07~~$0.14 per diluted share, for the comparable period in ~~2015.~~2016. The ~~increase~~decrease in net income was primarily caused by ~~increased gross profit margins due to price increases, operational improvements and a favorable~~the increase in the effective tax rate ~~due to the release of valuation allowances.~~noted above.

Segment Results

For financial reporting purposes, we aggregate the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments into the Bruker Scientific Instruments (BSI) reportable segment, which represented approximately ~~92%~~90% of the Company’s revenues during the three months ended ~~September 30, 2016.~~March 31, 2017. This aggregation reflects these operating segments’ similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Our BEST Segment is our other reportable segment and represents the remainder of our revenues.

Revenue

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

	Three Months Ended September 30,									Percentage		Three Months Ended March 31,									Percentage
	2016			2015			Dollar Change			Change		2017			2016			Dollar Change			Change
BSI	$	361.5		$	366.6		$	(5.1	)	(1.4	)%	$	346.4		$	350.4		$	(4.0	)	(1.1	)%
BEST	35.5			32.9			2.6			7.9	%	40.1			27.2			12.9			47.4	%
Eliminations (a)	(3.1		)	(3.4		)	0.3					(1.6		)	(2.2		)	0.6
	$	393.9		$	396.1		$	(2.2	)	(0.6	)%	$	384.9		$	375.4		$	9.5		2.5	%

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

BSI Segment Revenues

BSI Segment revenue decreased by ~~$5.1~~$4.0 million, or ~~1.4%~~1.1%, to ~~$361.5~~$346.4 million for the three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~$366.6~~$350.4 million for the three months ended ~~September 30, 2015. Included in revenue~~March 31, 2016. Revenue includes approximately $6.5 million attributable to recent acquisitions, which was ~~an increase of approximately $1.3~~largely offset by a $6.2 million decrease from the impact of foreign currency ~~translation and an increase of approximately $6.3 million attributable to a recent acquisition in our Bruker Nano Group.~~translation. Excluding the effects of foreign currency translation and our recent ~~acquisition,~~acquisitions, organic revenue, a non-GAAP measure, decreased by ~~$12.7~~$4.3 million, or ~~3.5%, with an~~1.2% driven largely by softness in order entry levels during 2016 resulting from delays in European academic ~~funding revenue decline in Europe and a global industrial revenue decline driving the majority of the decrease.~~funding.

The Bruker BioSpin Group revenues ~~increased~~remained consistent during the three months ended ~~September 30, 2016~~March 31, 2017 when compared to the

three months ended ~~September 30, 2015, primarily~~March 31, 2016 despite a challenging comparison as ~~a result~~the three months ended March 31, 2016 benefited from the sale of ~~increased pricing.~~the first shielded ultra-high field one gigahertz nuclear magnetic resonance system.

The Bruker CALID Group revenues decreased during the three months ended ~~September 30, 2016~~March 31, 2017 when compared to the three months ended ~~September 30, 2015~~March 31, 2016, primarily as a result of weaker demand in mass spectrometry ~~attributed~~attributable to ~~weak~~softness of order entry levels during 2016 from European academic ~~funding in Europe and more~~institutions, as well as the timing of CBRNE product shipments ~~than last year’s third quarter. Shipment~~as the three months ended March 31, 2016 benefited from a large contract that did not reoccur in 2017. The volume of shipments of these products can be large in certain quarters and not sequentially consistent. ~~This decrease was partially offset by an increase in infrared and Raman molecular spectroscopy product sales.~~

Excluding the effects of a recent acquisition, the Bruker Nano Group experienced ~~a decrease~~an increase in revenue primarily caused by ~~continued weaker~~stronger demand ~~within industrial markets and European academic funding weakness.~~in the seminconductor metrology market.

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

Three Months Ended September 30,

2016

2015

Revenue

Percentage of
Segment
Revenue

Revenue

Percentage of
Segment
Revenue

System revenue

$
266.6

73.7
%
$
271.6

74.1
%
Aftermarket revenue

94.9

26.3
%
95.0

25.9
%
Total revenue

$
361.5

100.0
%
$
366.6

100.0
%

System revenue in the BSI Segment includes nuclear magnetic resonance systems, magnetic resonance imaging systems, electron paramagnetic imaging systems, mass spectrometry systems, gas chromatography systems, CBRNE detection systems, X-ray systems, spark-optical emission spectroscopy systems, atomic force microscopy systems, stylus and optical metrology systems and molecular spectroscopy systems. Aftermarket revenues in the BSI Segment include accessory sales, consumables, training and services.

	Three Months Ended March 31,
	2017				2016
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System revenue	$	245.2	70.8	%	$	259.7	74.1	%
Aftermarket revenue	101.2		29.2	%	90.7		25.9	%
Total revenue	$	346.4	100.0	%	$	350.4	100.0	%

BEST Segment Revenues

BEST Segment revenue increased ~~$2.6~~$12.9 million, or ~~7.9%~~47.4%, to ~~$35.5~~$40.1 million for the three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~$32.9~~$27.2 million for the comparable period in ~~2015.~~2016. The increase in revenue resulted primarily from the OST acquisition that was ~~primarily caused by higher demand for low temperature superconducting materials to large magnetic resonance imaging system suppliers than~~completed in the ~~comparable prior period.~~fourth quarter of 2016.

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

Three Months Ended September 30,

2016

2015

Revenue

Percentage of
Segment
Revenue

Revenue

Percentage of
Segment
Revenue

System and wire revenue

$
34.6

97.5
%
$
31.8

96.7
%
Aftermarket revenue

0.9

2.5
%
1.1

3.3
%
Total revenue

$
35.5

100.0
%
$
32.9

100.0
%

System and wire revenue in the BEST Segment includes low and high temperature superconducting wire and superconducting devices, including magnets, linear accelerators and radio frequency cavities. Aftermarket revenues in the BEST Segment consist primarily of consumables sales.

	Three Months Ended March 31,
	2017				2016
	Revenue		Percentage of Segment Revenue		Revenue		Percentage of Segment Revenue
System and wire revenue	$	39.2	97.8	%	$	26.4	97.1	%
Aftermarket revenue	0.9		2.2	%	0.8		2.9	%
Total revenue	$	40.1	100.0	%	$	27.2	100.0	%

Gross Profit and Operating Expenses

For the three months ended ~~September 30, 2016,~~March 31, 2017, gross profit margin in the BSI Segment increased to 49.5% from ~~44.0%~~46.3% for the comparable period in ~~2015.~~2016. The increase was primarily caused by ~~price increases~~increased pricing and operational efficiencies within the Bruker BioSpin Group and operating cost improvements resulting from recent

restructuring and outsourcing actions ~~and the impact of a recent acquisition~~ within the Bruker ~~Nano Group. These increases were offset in part by industrial end market weakness in the~~CALID and Bruker Nano ~~Group and by weakness in European academic funding.~~Groups. BEST Segment gross margin decreased to ~~17.9%~~12.5% from ~~19.1%~~13.6% for the comparable period in ~~2015~~2016 due to the ~~completion~~impact of ~~certain high margin orders in~~ the ~~prior comparable period.~~acquisition of OST.

In the three months ended ~~September 30, 2016,~~March 31, 2017, selling, general and administrative expenses and research and development expenses in the BSI Segment increased to ~~$131.1~~$130.6 million, or ~~36.3%~~37.7% of segment revenue, from ~~$127.3~~$125.1 million, or ~~34.7%~~35.7% of segment revenue. This increase was primarily caused by the effect of a recent ~~acquisition~~acquisitions in our Bruker Nano Group ~~partially offset by the effects of our restructuring~~ and ~~outsourcing initiatives.~~Bruker CALID Group.

Selling, general and administrative expenses and research and development expenses in the BEST Segment increased to ~~$3.7~~$5.2 million, or ~~10.3%~~13.0% of segment revenue, from ~~$3.1~~$3.7 million, or ~~9.4%~~13.6% of segment revenue, for the comparable period in ~~2015.~~2016. The increase iswas primarily caused by the ~~timing~~effect of ~~expenditures, particularly research and development initiatives.~~the OST acquisition.

Operating Income

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

	Three Months Ended September 30,										Three Months Ended March 31,
	2016					2015					2017					2016
	Operating Income			Percentage of Segment Revenue		Operating Income			Percentage of Segment Revenue		Operating Income			Percentage of Segment Revenue		Operating Income		Percentage of Segment Revenue
BSI	$	43.3		12.0	%	$	25.8		7.0	%	$	38.1		11.0	%	$	33.0	9.4	%
BEST	2.7			7.6	%	2.5			7.6	%	(0.5		)	(1.2	)%	—		0.0	%
Corporate, eliminations and other (a)	(0.1		)			(0.1		)			—					1.0
Total operating income	$	45.9		11.7	%	$	28.2		7.1	%	$	37.6		9.8	%	$	34.0	9.1	%

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

BSI Segment operating income for the three months ended ~~September 30, 2016~~March 31, 2017 was ~~$43.3~~$38.1 million, resulting in an operating margin of ~~12.0%~~11.0%, compared to operating income of ~~$25.8~~$33.0 million, resulting in an operating margin of ~~7.0%~~9.4%, for the comparable period in ~~2015.~~2016. Operating income included ~~$12.7~~$9.4 million and ~~$23.9~~$13.3 million for the three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs, restructuring costs and costs associated with our global IT transformation initiative. Excluding these charges, non-GAAP operating margins were ~~15.5%~~13.7% and ~~13.6%~~13.2% for the three months ended ~~September 30,~~March 31, 2017 and 2016, respectively. GAAP and ~~2015, respectively.~~ Non-GAAP operating margins increased primarily due to the gross margin improvements noted above.

BEST Segment operating income ~~remained consistent~~decreased for the three months ended ~~September 30, 2016~~March 31, 2017 at ~~$2.7~~$(0.5) million, resulting in an operating margin of ~~7.6%~~(1.2)%, when compared to ~~$2.5~~$0.0 million, resulting in an operating margin of ~~7.6%~~0.0%, for the comparable period in ~~2015.~~

~~Nine Months Ended September 30, 2016 compared to the Nine Months Ended September 30, 2015~~

~~Consolidated Results~~

2016. The ~~following table presents our results for the nine months ended September 30, 2016 and 2015 (dollars~~decline in ~~millions, except per share data):~~

Nine Months Ended September 30,

2016

2015

Product revenue

$
946.1

$
968.8

Service revenue

186.5

171.1

Other revenue

8.4

5.7

Total revenue

1,141.0

1,145.6

Cost of product revenue

504.7

545.8

Cost of service revenue

110.8

101.7

Cost of other revenue

3.4

1.0

Total cost of revenue

618.9

648.5

Gross profit

522.1

497.1

Operating expenses:

Selling, general and administrative

290.4

289.2

Research and development

110.8

109.0

Other charges, net

20.6

23.9

Total operating expenses

421.8

422.1

Operating income

100.3

75.0

Interest and other income (expense), net

(11.1
)
(14.3
)
Income before income taxes and noncontrolling interest in consolidated subsidiaries

89.2

60.7

Income tax provision

3.8

17.8

Consolidated net income

85.4

42.9

Net income attributable to noncontrolling interest in consolidated subsidiaries

0.8

2.7

Net income attributable to Bruker Corporation

$
84.6

$
40.2

Net income per common share attributable to Bruker Corporation shareholders:

Basic and diluted

$
0.52

$
0.24

Weighted average common shares outstanding:

Basic

161.8

168.2

Diluted

162.7

169.1

~~Revenue~~

For the nine months ended September 30, 2016, our revenue decreased $4.6 million, or 0.4%, to $1,141.0 million, compared to $1,145.6 million for the comparable period in 2015. Included in revenue was a decrease of approximately $1.9 million from the impact of foreign currency caused by the strengthening of the U.S. Dollar primarily versus the British Pound, as well as various other currencies, and an increase of approximately $23.5 million attributable to a recent acquisition within the Bruker Nano Group. Excluding the effects of foreign currency and our recent acquisition, our organic revenue, a non-GAAP measure, decreased by $26.2 million, or 2.3%.

BSI Segment revenue decreased by $2.7 million, or 0.3%, to $1,057.6 million for the nine months ended September 30, 2016, compared to $1,060.3 million for the nine months ended September 30, 2015. BEST Segment revenue remained consistent at $91.2 million for the nine months ended September 30, 2016 and 2015.

~~Please see the Segment Results section later in this discussion for additional information regarding our revenue.~~

~~Gross Profit~~

~~Gross profit for the nine months ended September 30, 2016 was $522.1 million, or 45.8% of revenue, compared to $497.1~~

million, or 43.4% of revenue, for the nine months ended September 30, 2015. Included in gross profit were various charges for amortization of acquisition-related intangible assets and other acquisition-related costs and restructuring costs totaling $22.8 million and $31.1 million for the nine months ended September 30, 2016 and 2015, respectively. Excluding these charges, our non-GAAP gross profit margin for the nine months ended September 30, 2016 and 2015 was 47.8% and 46.1%, respectively. The increase in our gross profit margins was caused primarily by operating cost improvements as a result of recent restructuring and outsourcing actions, the impact of pricing increases within the Bruker BioSpin Group and the impact of a recent acquisition within the Bruker Nano Group. A business mix favoring our higher margin Bruker BioSpin Group also increased our gross profit margins. The favorable effect of these items was offset in part by weakness in Bruker Nano Group industrial market segments and weakness in European academic funding within our Bruker CALID and Bruker Nano Groups.

~~Selling, General and Administrative~~

Our selling, general and administrative expenses for the nine months ended September 30, 2016 increased to $290.4 million, or 25.5% of total revenue, from $289.2 million, or 25.2% of total revenue, for the comparable period in 2015. The increase in selling, general and administrative expenses was attributable to the impact of a recent acquisition within our Bruker Nano Group, which was partially offset by the impact of recent operational improvements as a result of our restructuring actions.

~~Research and Development~~

Our research and development expenses for the nine months ended September 30, 2016 increased to $110.8 million, or 9.7% of total revenue, from $109.0 million, or 9.5% of total revenue, for the comparable period in 2015. The increase in research and development expenses was primarily attributable to the timing of certain research and development initiatives.

~~Other Charges, Net~~

Other Charges, net of $20.6 million recorded for the nine months ended September 30, 2016 were all related to the BSI Segment and consisted mainly of $8.1 million of acquisition-related charges, related primarily to additional contingent consideration recognized for a recent acquisition in the Bruker Nano Group based upon an increase in forecasted revenue levels of the acquired business for the remainder of 2016, $6.4 million of restructuring costs related to closing facilities and implementing outsourcing and other restructuring initiatives and $5.5 million of costs associated with our global IT transformation initiative.

Other Charges, net of $23.9 million recorded for the nine months ended September 30, 2015 is almost entirely related to the BSI segment and predominately consisted of a $10.2 million one-time, non-cash settlement charge as the plan assets and pension obligations for the retirees and other certain members of the population within our pension plan in Switzerland were transferred to an outside insurance provider, $(2.5) million of acquisition-related benefits primarily caused by the reversal of certain contingent consideration liabilities, $4.3 million of long-lived asset impairments within the MRS and Preclinical Imaging divisions, $5.3 million of restructuring costs, including $4.6 million within the BSI segment and $0.7 million within the BEST segment, related to closing facilities and implementing outsourcing and other restructuring initiatives, and $6.2 million of costs associated with our global IT transformation initiative.

~~Operating Income~~

~~Operating income for the nine months ended September 30, 2016 was $100.3 million, resulting in an operating margin of 8.8%, compared to~~ operating income ~~of $75.0 million, resulting in an operating margin of 6.5%, for the nine months ended September 30, 2015. The increase in operating margin~~ was ~~primarily caused by the gross margin improvements discussed above, as well as operational improvements as a result of our restructuring initiatives.~~

~~We commenced a restructuring initiative in 2016 intended~~due to improve the Bruker CALID and Bruker Nano Groups’ operating results. Please refer to the Overview section of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional discussion of this restructuring initiative.

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

~~Interest and other income (expense), net during the nine months ended September 30, 2016 was an expense of $11.1 million compared to an expense of $14.3 million for the comparable period in 2015.~~

During the nine months ended September 30, 2016, the major components within interest and other income (expense), net were net interest expense of $9.4 million and realized and unrealized losses on foreign currency denominated transactions of $1.6 million. The realized and unrealized losses on foreign currency denominated transactions during the nine months ended September 30, 2016 were primarily caused by the fluctuation of the U.S. dollar versus the Euro and other currencies. During the nine months ended September 30, 2015, the components within interest and other income (expense), net were net interest expense of $9.2 million and realized and unrealized losses on foreign currency denominated transactions of $5.4 million. The realized and unrealized losses on foreign currency denominated transactions during the nine months ended September 30, 2015 were primarily caused by the fluctuations of the US dollar, the Euro and the Swiss Franc.

~~Income Tax Provision~~

The 2016 and 2015 effective tax rates were estimated using projected annual pre-tax income or loss on a jurisdictional basis. Expected tax benefits, including tax credits and incentives, the impact of changes to valuation allowances, and the effect of ~~jurisdictional differences in statutory tax rates, were also considered in~~ the ~~calculation.~~

The income tax provision for the nine months ended September 30, 2016 and 2015 was $3.8 million and $17.8 million, respectively, representing effective tax rates of 4.3% and 29.3%, respectively. The decrease in our effective tax rate for the nine months ended September 30, 2016, compared to the same period in 2015, was primarily caused by the release of our remaining valuation allowances, the recognition of previously unrecognized tax benefits due to the closure of certain tax audits, and changes in the expected mix of earnings among tax jurisdictions. With these effects, we estimate the full year effective income tax rate to be between 16.0% and 17.0%.

~~Net Income Attributable to Noncontrolling Interests~~

Net income attributable to noncontrolling interests for the nine months ended September 30, 2016 and 2015 was $0.8 million and $2.7 million, respectively. The net income attributable to noncontrolling interests represented the minority shareholders’ proportionate share of the net income recorded by our majority-owned subsidiaries.

~~Net Income Attributable to Bruker Corporation~~

Our net income for the nine months ended September 30, 2016 was $84.6 million, or $0.52 per diluted share, compared to $40.2 million, or $0.24 per diluted share, for the comparable period in 2015. The increase was primarily caused by increased gross profit, operating profit improvements, a lower effective tax rate and the impact of our share repurchase program.

~~Segment Results~~

For financial reporting purposes, we aggregate the Bruker BioSpin, Bruker CALID and Bruker Nano operating segments into the Bruker Scientific Instruments (BSI) reportable segment, which represented approximately 93% of the Company’s revenues during the nine months ended September 30, 2016. This aggregation reflects these operating segments’ similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Our BEST Segment is our other reportable segment and represents the remainder of our revenues.

~~Revenue~~

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

Nine Months Ended September 30,

Percentage

2016

2015

Dollar Change

Change

BSI

$
1,057.6

$
1,060.3

$
(2.7
)
(0.3
)%
BEST

91.2

91.2

—

0.0
%
Eliminations (a)

(7.8
)
(5.9
)
(1.9
)

$
1,141.0

$
1,145.6

$
(4.6
)
(0.4
)%

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

~~BSI Segment Revenues~~

approximately $1.9 million from the impact of foreign currency caused by the strengthening of the U.S. Dollar primarily versus the British Pound, as well as other currencies, and an increase of approximately $23.5 million attributable to a recent acquisition in our Bruker Nano Group. Excluding the effects of foreign currency and our recent acquisition, organic revenue, a non-GAAP measure, decreased by $24.3 million, or 2.3%, with weaker sales in Europe driving the majority of the decrease.

The Bruker BioSpin Group revenues increased during the nine months ended September 30, 2016 when compared to the nine months ended September 30, 2015 primarily due to increased pricing and the recognition of revenues from the sale of the first shielded ultra-high field gigahertz nuclear magnetic resonance system.

The Bruker CALID Group revenues decreased during the nine months ended September 30, 2016 when compared to the nine months ended September 30, 2015 primarily due to weakness in European academic funding.

Excluding the effects of a recent acquisition, the Bruker Nano Group experienced a decrease in revenue primarily caused by continued weaker demand within industrial markets and European academic funding weakness.

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

Nine Months Ended September 30,

2016

2015

Revenue

Percentage of
Segment
Revenue

Revenue

Percentage of
Segment
Revenue

System revenue

$
768.1

72.6
%
$
781.8

73.7
%
Aftermarket revenue

289.5

27.4
%
278.5

26.3
%
Total revenue

$
1,057.6

100.0
%
$
1,060.3

100.0
%

~~BEST Segment Revenues~~

~~BEST Segment revenue remained consistent at $91.2 million for the nine months ended September 30, 2016 and 2015.~~

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

Nine Months Ended September 30,

2016

2015

Revenue

Percentage of
Segment
Revenue

Revenue

Percentage of
Segment
Revenue

System and wire revenue

$
88.7

97.3
%
$
87.9

96.4
%
Aftermarket revenue

2.5

2.7
%
3.3

3.6
%
Total revenue

$
91.2

100.0
%
$
91.2

100.0
%

~~Gross Profit and Operating Expenses~~

For the nine months ended September 30, 2016, gross profit margin in the BSI Segment increased to 47.8% from 45.2% for the comparable period in 2015. The increase in gross margin percentage was caused primarily by operating cost improvements resulting from recent restructuring and outsourcing actions, the impact of pricing increases within the Bruker BioSpin Group and the impact of a recent acquisition within the Bruker Nano Group, partially offset by weakness in certain Bruker Nano and Bruker CALID Group market segments caused by weakness in European academic funding. BEST Segment gross margin decreased to 16.8% from 19.3% for the comparable period in 2015 due to the completion of certain high margin orders in the comparable prior period.

In the nine months ended September 30, 2016, selling, general and administrative expenses and research and development expenses in the BSI Segment increased to $390.0 million, or 36.96% of segment revenue, from $387.6 million, or 36.6% of segment revenue. This increase was primarily caused by a recent acquisition in our Bruker Nano Group, which was partially offset by the effects of restructuring and outsourcing initiatives.

Selling, general and administrative expenses and research and development expenses in the BEST Segment increased to $11.2 million, or 12.3% of segment revenue, from $10.6 million, or 11.6% of segment revenue, for the comparable period in 2015. The increase was primarily caused by the timing of research and development initiatives.

~~Operating Income~~

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

Nine Months Ended September 30,

2016

2015

Operating
Income

Percentage of
Segment
Revenue

Operating
Income

Percentage of
Segment
Revenue

BSI

$
95.3

9.0
%
$
68.2

6.4
%
BEST

4.1

4.5
%
6.1

6.7
%
Corporate, eliminations and other (a)

0.9

0.7

Total operating income

$
100.3

8.8
%
$
75.0

6.5
%

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

BSI Segment operating income for the nine months ended September 30, 2016 was $95.3 million, resulting in an operating margin of 9.0%, compared to operating income of $68.2 million, resulting in an operating margin of 6.4%, for the comparable period in 2015. Operating income included $45.5 million and $55.5 million for the nine months ended September 30, 2016 and 2015, respectively, of various charges for amortization of acquisition-related intangible assets and other acquisition-related costs, restructuring costs, and costs associated with our global IT transformation initiative. Excluding these charges, non-GAAP operating margins were 13.3% and 11.7% for the nine months ended September 30, 2016 and 2015, respectively. Our operating margins increased primarily due to the gross margin improvements noted above.

BEST Segment operating income for the nine months ended September 30, 2016 was $4.1 million, resulting in an operating margin of 4.5%, compared to $6.1 million, resulting in an operating margin of 6.7%, for the comparable period in 2015. The decrease in operating margin was caused by the lower gross margin levels as noted above.OST acquisition.

LIQUIDITY AND CAPITAL RESOURCES

We anticipate that our existing cash and credit facilities will be sufficient to support our operating and investing needs for at least the next twelve ~~months.~~months beyond the issuance date of this Quarterly Report on Form 10-Q. Our future cash requirements could be affected by acquisitions that we may ~~make~~complete, repurchases of our common stock, or the payment of dividends in the ~~future, dividend payments, share repurchases or changes in our capital structure.~~future. Historically, we have financed our growth and liquidity needs through cash flow generation and a combination of debt financings and issuances of common stock. In the future, there are no assurances that additional financing alternatives will be available to us, if required, or if available, will be obtained on terms favorable to us.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, net cash provided by operating activities was ~~$40.0~~$32.6 million, resulting from consolidated net income adjusted for non-cash items of ~~$125.7~~$43.9 million, partially offset by an increase in operating assets and liabilities, net of acquisitions and divestitures of ~~$85.7~~$11.3 million. The increase in operating assets and liabilities, net of acquisitions and divestitures for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was primarily caused by an increase in inventory ~~needed to fulfill~~for orders in ~~the fourth quarter of~~ 2016 and ~~lower revenue than expected due to weakness~~2017 and acquisitions that occurred in ~~European academic funding, income tax payments net of refunds received due to the closure of tax audits and withholding tax payments made in the first quarter of~~ 2016, ~~related to the Company’s 2015 European cash repatriation. These uses of cash were~~ partially offset by a decrease in accounts receivable resulting from improvements in collections and customer credit management practices.

During the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, net cash ~~provided by~~used in operating activities was ~~$79.6~~$14.0 million, resulting from consolidated net income adjusted for non-cash items of ~~$112.3~~$42.8 million, ~~partially~~ offset by an increase in ~~operating assets and liabilities, net~~working capital of ~~acquisitions and divestitures of $32.7~~$56.8 million. The increase in ~~operating assets and liabilities, net of acquisitions and divestitures~~working capital for the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 was primarily caused by an increase in inventory needed ~~to fulfill shipments~~for production in 2016, the timing of customer advances received and installation and acceptance of the systems, and tax payments including withholding tax payments made in the ~~last~~first quarter of ~~2015 for long lead time items, income tax payments net of refunds received due~~2016 related to the ~~closure of tax audits made during the first nine months of the year, and an increase in non-income tax receivables.~~2015 European cash repatriation. These uses of cash were partially offset by a decrease in accounts ~~receivable. The decrease~~receivable resulting from higher than normal collections in ~~accounts receivable was predominantly~~ the ~~result~~fourth quarter of ~~lower revenue levels and improvements in collections and customer credit management practices.~~2015.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, net cash ~~provided by~~used in investing activities was ~~$18.5~~$71.3 million, compared to net cash used in investing activities of ~~$58.8~~$7.4 million during the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. Cash ~~provided by~~used in investing activities during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was primarily caused by the cash paid for acquisitions, net of cash

acquired of $39.8 million, net activity of purchases and maturities ~~and purchases in~~of short-term investments of ~~$44.8~~$26.6 million ~~offset by the~~and purchases of property, plant and equipment, net of proceeds from the sale of property, plant and equipment, of ~~$25.1~~$4.9 million. Cash used in investing activities during the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 was caused by capital expenditures, net of ~~$22.1 million and net activity of purchases and maturities of short-term investments of $36.7~~$7.4 million.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, net cash used in financing activities was ~~$53.4~~$32.3 million, compared to net cash used in financing activities of ~~$1.2~~$41.5 million during the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. Net cash used in financing activities during the ~~nine~~three months ended ~~September 30,~~March 31, 2017 was primarily attributable to repayment of $40.0 million of borrowings under the 2015 Credit Agreement, defined below, and $20.0 million of Senior Notes, defined below, and $6.4 million used for the payment of dividends, offset in part by borrowings of $33.0 million under the 2015 Credit Agreement. Net cash used in financing activities during the three months ended March 31, 2016 was primarily attributable to ~~$143.5~~$78.9 million used for the repurchase of our common stock and ~~$19.4~~$6.5 million used for the payment of dividends. This was offset by ~~$99.0~~$36.0 million of proceeds from borrowings under the 2015 Credit Agreement ~~as defined below,~~ and $10.2 million of proceeds from the issuance of common stock in connection with stock option exercises. Net cash used in financing activities during the nine months ended September 30, 2015 was primarily attributable to $24.9 million used for the repurchase of our common stock. This was offset by $17.0 million of proceeds from the revolving line of credit and $7.0$7.5 million of proceeds from the issuance of common stock in connection with stock option exercises.

In ~~November 2015, our Board of Directors suspended~~2016, the previously announced ~~Anti-Dilutive Repurchase Program until January 1, 2017 and approved an additional~~ share repurchase program ~~(the “Repurchase Program”) under which repurchases of common stock up to $225.0 million may occur from time to time,~~was completed and there is currently no active repurchase plan in amounts, at prices, and at such times as we deem appropriate, subject to market conditions, legal requirements and other considerations. A total of 5,741,609 shares were repurchased at an aggregate cost of $143.5 million in the nine months ended September 30, 2016 and 8,578,651 shares were repurchased at an aggregate cost of $208.5 million from the inception of the Repurchase Program through September 30, 2016. Any future repurchases will be funded by cash on hand, future cash flows from operations and available borrowings under the revolving credit facility.place.

Cash, cash equivalents and short-term investments at ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 totaled ~~$441.5~~$464.5 million and ~~$468.3~~$500.3 million, respectively, of which ~~$417.1~~$424.7 million and ~~$420.9~~$460.9 million, respectively, related to foreign cash and short-term investments, most significantly in the Netherlands and Switzerland.

We assert that our foreign earnings, with the exception of our foreign earnings that have been previously taxed by the U.S., are indefinitely reinvested. We regularly evaluate our assertion that our foreign earnings are indefinitely reinvested. If the cash, cash equivalents and short-term investments held by our foreign subsidiaries are needed to fund operations in the ~~U.S.,~~United States, or we otherwise elect to repatriate the unremitted earnings of our foreign subsidiaries in the form of dividends or otherwise, or if the shares of the subsidiaries were sold or transferred, we would likely be subject to additional U.S. income taxes, net of the impact of any available tax credits, which could result in a higher effective tax rate in the future.

At ~~September 30, 2016,~~March 31, 2017, we had outstanding debt totaling ~~$364.9~~$384.8 million, consisting of ~~$240.0~~$220.0 million outstanding under the Note Purchase Agreement described below, ~~$124.0~~$164.0 million outstanding under the revolving credit line component of the 2015 Credit Agreement described below and ~~$1.7 million under capital lease obligations and other loans, offset by unamortized~~

debt issuance costs under the Note Purchase Agreement of $0.8 million. At December 31, 2015, we had outstanding debt totaling $265.8 million, consisting of $240.0 million outstanding under the Note Purchase Agreement, $25.0 million outstanding under the revolving credit line component of the prior credit agreement and $1.7$1.6 million under capital lease obligations and other loans, offset by unamortized debt issuance costs under the Note Purchase Agreement of ~~$0.9~~$0.8 million. At December 31, 2016, we had outstanding debt totaling $411.7 million, consisting of $240.0 million outstanding under the Note Purchase Agreement, $171.0 million outstanding under the revolving credit line component of the prior credit agreement and $1.5 million under capital lease obligations and other loans, offset by unamortized debt issuance costs under the Note Purchase Agreement of $0.8 million.

The following is a summary of the maximum commitments and the net amounts available to us under the 2015 Credit Agreement and other lines of credit with various financial institutions located primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly, at ~~September 30, 2016~~March 31, 2017 (in millions):

	Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Lines of Credit		Total Amount Available		Weighted Average Interest Rate		Total Amount Committed by Lenders		Outstanding Borrowings		Outstanding Lines of Credit		Total Amount Available
2015 Credit Agreement	1.8	%	$	500.0	$	124.0	$	1.1	$	374.9	2.2	%	$	500.0	$	164.0	$	1.1	$	334.9
Other lines of credit	—		237.6		—		129.8		107.8		—		234.6		—		131.0		103.6
Total revolving lines of credit			$	737.6	$	124.0	$	130.9	$	482.7			$	734.6	$	164.0	$	132.1	$	438.5

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

coverage ratio cannot be less than 2.5. In addition to the financial ratios, the 2015 Credit Agreement contains negative covenants, including among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset sales, dividends and transactions with affiliates. Failure to comply with any of these restrictions or covenants may result in an event of default on the 2015 Credit Agreement, which could permit acceleration of the debt and require us to prepay the debt before its scheduled due date.

As of March 31, 2017, we were in compliance with the covenants, as defined by both the 2015 Credit Agreement and the Note Purchase Agreement, as our leverage ratio was 1.39 and our interest coverage ratio was 14.9.

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

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

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

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

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

AsOn January 18, 2017, the outstanding $20.0 million principal amount of ~~September 30, 2016, we were~~Tranche A of the Senior Notes was repaid in ~~compliance~~accordance with the ~~covenants, as defined by both the 2015 Credit Agreement and~~terms of the Note Purchase ~~Agreement, as our leverage ratio was 1.4 and our interest coverage ratio was 15.7.~~Agreement.

As of ~~September 30, 2016,~~March 31, 2017, we had approximately ~~$3.1~~$40.7 million of net operating loss carryforwards available to reduce state taxable income; approximately ~~$55.1~~$41.6 million of net operating losses available to reduce German federal income and trade taxes that are carried forward indefinitely; and ~~$37.9~~$23.0 million of other foreign net operating losses that are expected to expire at various times beginning in 2018. We also had U.S. federal tax credits of approximately ~~$14.0~~$15.1 million that expire at various dates available to offset future tax liabilities, which include research and development tax credits of ~~$12.9~~$12.2 million expiring at various times through 2035, foreign tax credits of ~~$1.2~~$2.9 million expiring at various times through 2024, and state research and development tax credits of ~~$7.4~~$7.8 million. Utilization of these credits and state net operating losses may be subject to annual limitations due to the ownership percentage change limitations provided by the Internal Revenue Code Section 382 and similar state provisions. In the event of a deemed change in control under Internal Revenue Code Section 382, an annual limitation on

the utilization of net operating losses and credits may result in the expiration of all or a portion of the net operating loss and credit carryforwards.

RECENT ACCOUNTING PRONOUNCEMENTS

In October 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfer of Assets Other than Inventory. The new standard requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. This is a change from existing GAAP which prohibits recognition of current and deferred income taxes until the asset is sold to a third party. The new standard is effective as of January 1, 2018 and early adoption is permitted. We are evaluating the provisions of this standard, including which period to adopt, and have not determined what impact the adoption of ASU No. 2016-16 will have on our unaudited condensed consolidated financial statements.

In ~~March 2016, the FASB issued ASU No. 2016-09,~~ ~~Stock Compensation - Improvements to Employee Share-Based Payment Accounting~~. The new standard simplifies accounting for share-based payment transactions, including income tax consequences and the classification of the tax impact on the statement of cash flows. The new standard is effective as of January 1, 2017, and early adoption is permitted. We are evaluating the provisions of this standard, including which period to adopt, and have not determined what impact the adoption of ASU No. 2016-09 will have on our unaudited condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard provides guidance on the recognition, measurement, presentation, and disclosure of leases. The new standard supersedes present U.S. GAAP guidance on leases and requires substantially all leases to be reported on the balance sheet as right-of-use assets and lease liabilities, as well as additional disclosures. The new standard is effective as of January 1, 2019, and early adoption is permitted. We are evaluating the provisions of this standard, including which period to adopt, and have not determined what impact the adoption of ASU No. 2016-02 will have on our unaudited condensed consolidated financial statements.

In ~~July 2015, the FASB issued Accounting Standards Update ASU No. 2015-11,~~ ~~Simplifying the Measurement of Inventory~~. The new guidance eliminates the measurement of inventory at market value, and inventory will now be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU No. 2015-11 is effective for interim and annual periods beginning after December 15, 2016. Early application is permitted and should be applied prospectively. We are evaluating the provisions of this standard, including which period to adopt, and have not determined what impact the adoption of ASU No. 2015-11 will have on our unaudited condensed consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 was originally effective prospectively for annual periods beginning after December 15, 2016, and interim periods within those years. In August 2015, the FASB elected to defer the effective date of ASU No. 2014-09 by one year to annual periods beginning after December 15, 2017, with early application permitted as of the ~~previous~~original effective ~~date of December 15, 2016. We are currently assessing~~date. The new guidance may be applied on a retrospective basis for all prior periods presented, or on a modified retrospective basis with the ~~impact adoption~~cumulative effect of the new guidance ~~may~~as of the date of initial application. The new guidance will be effective for us as of January 1, 2018 and we currently expect to use the modified retrospective transition method.

During 2016, we substantially completed the impact assessment phase of our evaluation of ASU 2014-09. As a result of our impact assessment, we will be implementing additional processes and controls, including additional disclosures, to comply with the new standard. The largest financial impact will relate to the timing of revenue recognition for certain project-based orders for which we currently apply the percentage-of-completion or completed contract model. Under the new guidance, there are specific criteria to determine if a performance obligation should be recognized over time or at a point in time. We expect that in some cases the revenue recognition timing under the new guidance will change from current practice based on applying the specific criteria. We have not yet quantified the impact the adoption of ASU No. 2014-09 will have on our ~~unaudited condensed~~ consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Impact of Foreign Currencies

We generate a substantial portion of our revenues in international markets, principally Germany and other countries in the

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

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

Changes in foreign currency translation rates decreased our revenue by ~~0.1%~~2.0% for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 and decreased our revenue by approximately ~~11.2%~~0.9% for the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016.

Assets and liabilities of our foreign subsidiaries, where the functional currency is the local currency, are translated into U.S. dollars using period-end exchange rates. Revenues and expenses of foreign subsidiaries are translated at the average exchange rates in effect during the year. Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity. For the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ we recorded net gains ~~(losses)~~ from currency translation adjustments of ~~$27.7~~$15.6 million and ~~$(47.3)~~$33.6 million, respectively. Gains and losses resulting from foreign currency transactions are reported in interest and other income (expense), net in the unaudited condensed consolidated statements of income and comprehensive income. Our foreign exchange losses, net were ~~$1.6 million and $5.4~~$2.3 million for each of the ~~nine months~~three month periods ended ~~September 30, 2016~~March 31, 2017 and ~~2015, respectively.~~2016.

From time to time, we have entered into foreign exchange contracts designed to minimize the volatility that fluctuations in foreign currency have on our cash flows related to purchases and sales denominated in foreign currencies. Under these arrangements, we agree to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates typically with maturities of less than twelve months. These transactions are recorded at fair value with the corresponding gains and losses recorded in interest and other income (expense), net in the unaudited condensed

consolidated statements of income and comprehensive income. At ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, we had foreign exchange contracts with notional amounts aggregating ~~$38.3~~$87.8 million and ~~$36.2~~$40.7 million, respectively. We will continue to evaluate our currency risks and in the future may utilize foreign currency contracts more frequently.

Impact of Interest Rates

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

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

Impact of Commodity Prices

We are exposed to certain commodity risks associated with prices for various raw materials. The prices of copper and certain other raw materials, particularly niobium tin, used to manufacture superconductors have increased significantly over the last decade. Copper and niobium tin are the main components of low temperature superconductors and continued commodity price increases for copper and niobium as well as other raw materials may negatively affect our profitability. Periodically, we enter into commodity forward purchase contracts to minimize the volatility that fluctuations in the price of copper have on our sales of these products. At ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, we had fixed price commodity contracts with notional amounts aggregating $~~3.3~~4.8 million and ~~$2.0~~$2.7 million, respectively. We will continue to evaluate our commodity risks and may utilize commodity forward purchase contracts more frequently in the future.

Inflation

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

ITEM 4.CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that ~~material~~ information ~~relating~~required to ~~us,~~be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed is accumulated and communicated to management, including ~~our consolidated subsidiaries, is made known to~~ our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) ~~by others within our organization~~, to allow timely decisions regarding ~~required~~ disclosure. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of ~~September 30, 2016.~~March 31, 2017. Based on this evaluation, ~~as a result of the material weakness in our internal control over financial reporting described below,~~ our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective ~~as of September 30, 2016.~~

At the time that our Annual Report on Form 10-K for the year ended December 31, 2015 was filed on February 29, 2016, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2015. At the time that our Quarterly Report on Form 10-Q for the period ended March 31, 2016 was filed on May 6, 2016 and our Quarterly Report on Form 10-Q for the period ended June 30, 2016 was filed on August 5, 2016, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effectiveat a reasonable assurance level as of March 31, ~~2016 and June 30, 2016, respectively. Subsequent~~2017 due to these evaluations, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2015, March 31, 2016 and June 30, 2016, as thea material weakness in internal control over financial reporting, as described below ~~was determined to exist as~~and in Part II, Item 9A of ~~such dates. We will be filing an amendment to~~ the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and amendments to the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016 to reflect the conclusion by our management that our disclosure controls and procedures were not effective as of those dates, and that there was a material weakness in our internal control over financial reporting as of the end of the periods covered by these reports.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.2016.

We did not design and maintain effective internal ~~control~~controls over the accounting for income taxes, including the income tax provision and related tax assets and liabilities. Specifically, management did not design and maintain controls with a level of precision that would identify a material misstatement. This control deficiency resulted in immaterial errors to deferred tax assets and liabilities, income taxes payable and income tax expense accounts in the Company’s consolidated financial statements for the year ended December 31, 2015. These errors did not, individually or in the aggregate, result in a material misstatement of the Company’s consolidated financial statements and disclosures for any periods through and including the ~~fiscal~~ year ended December 31, 2015. This control deficiency did not result in a misstatement of the Company’s consolidated financial statements for the year ended December 31, 2016 or the three month period ending March 31, 2017. However, this control deficiency could result in a misstatement of the aforementioned account balances or disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, our management ~~has~~ determined that this control deficiency constitutes a material weakness.

Notwithstanding this material weakness, management concluded that the unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Remediation Plans

During the ~~nine months~~year ended ~~September 30,~~December 31, 2016, as part of our routine efforts to maintain adequate and effective internal control over financial reporting, we initiated and ~~are implementing~~implemented measures designed to improve our financial statement closing process and enhance certain internal controls processes and procedures. As indicated below, a number of these initiatives relate directly to strengthening our control over accounting for income taxes and address specific control deficiencies which contributed to the material ~~weakness discussed above.~~weakness. As a result of these efforts, as of the date of this filing the Company believes it has made progress ~~as of September 30, 2016~~ toward remediating the underlying causes of the material weakness. Specifically, the Company has undertaken the following steps in 2016 to remediate the deficiencies underlying this material weakness:

· We augmented our tax accounting resources by adding personnel with specific international tax expertise to strengthen tax accounting review procedures in significant jurisdictions;

· We implemented procedures designed to improve the process and timeliness of tax return preparation in significant jurisdictions;

· We developed and implemented enhanced policies, procedures and ~~procedures~~controls relating to income tax account reconciliations and ~~analysis;~~analysis, including enhancing our documentation to reflect the control attributes that are performed;

· We ~~are implementing~~implemented accelerated and additional annual close procedures ~~at an interim period~~and controls during the fourth quarter of 2016 to allow for more timely issue identification and ~~increased oversight~~increase the frequency of review procedures and controls performed by our management ofaround the calculation and reporting of certain tax balances;

· We identified and implemented technology improvements designed to enhance the functionality of our tax provision software to automate tasks and control workflow; and

· ~~We are reassessing~~During the fourth quarter of 2016, we reassessed and revised the design of our tax review controls to ~~identify areas where enhanced~~add greater precision ~~will~~to help detect and prevent material misstatements.

We are committed to maintaining a strong internal control environment, and believe that these remediation efforts represent significant improvements in our control environment. The identified material weakness in internal control will not be considered fully remediated until the internal controls over these areas have been in operation for a sufficient period of time for our management to conclude that the material weakness has been fully remediated. The Company will continue its efforts to ~~implement and~~ test the new controls in order to make this final determination.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2016~~March 31, 2017 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~The Korea Fair Trade Commission (“KFTC”) has conducted an investigation into improper bidding by Bruker Korea Co., Ltd.~~We are involved in lawsuits, claims, investigations and ~~several other companies~~proceedings, including, but not limited to, patent and commercial matters, which arise in ~~connection with bids for sales~~the ordinary course of ~~X-ray systems in 2010 and 2012. Three~~business. There are no matters pending that we currently believe are reasonably possible of the bids under investigation involved Bruker Korea. We cooperated fully with the KFTC regarding this matter. In September 2016, the KFTC fined Bruker Korea approximately $15,000 and referred the matter for criminal prosecution. The potential range of penalties which may arise ashaving a result of any criminal or other proceedings which may be brought by other Korean government agencies against us or our subsidiaries operating in Korea involving this matter could include the imposition of a criminal fine and a suspension of all or a portion of our operations from bidding for or conducting sales to Korean governmental agencies for a period of time. At this time we cannot reasonably assess the timing or outcome of these matters or their effect, if any,material impact on our business or ~~results of operations. Sales~~ to ~~customers in Korea were approximately 2%~~our consolidated financial statements.

There have been no material developments with respect to the information previously reported under Part I, Item 3 “Legal Proceedings” of our ~~revenue~~Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015.~~2016.

ITEM 1A. RISK FACTORS

~~The risk factors set forth below supplement the risk factors disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015.~~ In addition to ~~these risk factors and~~ the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on

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

~~Other than as set forth below, there~~There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015.~~2016.

~~We have identified a material weakness in our internal control over financial reporting which could, if not remediated, result in material misstatements in our consolidated financial statements.~~

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. As disclosed in this Quarterly Report on Form 10-Q for the period ended September 30, 2016, management identified a material weakness in our internal control over financial reporting over the accounting for income

taxes, including the income tax provision and related tax assets and liabilities. Specifically, management did not design and maintain controls with a level of precision that would identify a material misstatement. This control deficiency resulted in immaterial errors to deferred tax assets and liabilities, income taxes payable and income tax expense accounts in the Company’s consolidated financial statements for the year ended December 31, 2015.

A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Although this material weakness has not required us to restate our financial results, if we are unable to satisfactorily address the deficiencies underlying this material weakness in a timely fashion, or if additional material weaknesses in our internal control over financial reporting are discovered or occur in the future, then our consolidated financial statements may contain material misstatements and we could be required to restate our financial results and the price of our common stock could be adversely impacted.

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

The following table sets forth all purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the ~~third~~first quarter of ~~2016.~~2017.

Period

Total Number of Shares
Purchased (1)

Average Price Paid
per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (2)

Maximum Number
of Shares (or
approximate dollar
value) that May Yet
Be Purchased Under
the Plans or
Programs (3)

July 1 - July 31, 2016

—

$
—

—

$
42,341,627

August 1 - August 31, 2016

861,440

22.23

838,751

23,693,686

September 1 - September 30, 2016

325,000

22.23

325,000

16,467,569

1,186,440

$
22.23

1,163,751

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share
January 1 - January 31, 2017	—	$	—
February 1 - February 28, 2017	1,237	24.64
March 1 - March 31, 2017	6,600	23.48
	7,837	$	23.66

(1) Includes (i) shares repurchased under a $225.0 million share repurchase program approved by the Board of Directors and announced on November 13, 2015 (the “Repurchase Program”), under which repurchases of common stock may occur from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations, (ii) 18,1891,237 shares surrendered by participants under our long-term incentive plans to pay taxes upon vesting of restricted stock awards, and ~~(iii) 4,500~~(ii) 6,600 shares purchased by Frank H. Laukien, the Company’s Chief Executive Officer and Chairman of the Board of Directors, in open market transactions which ~~was~~were previously disclosed on ~~a Form~~Forms 4 filed with the SEC on ~~August 8, 2016.~~

~~(2)~~ ~~Represents shares repurchased under the Repurchase Program.~~

~~(3)~~ The Repurchase Program authorizes purchases of up to $225.0 million of the Company’s common stock over a two-year period commencing November 12, 2015. As of September 30, 2016, approximately $208.5 million of common shares have been repurchased. The Repurchase Program expires November 11,March 13, 2017 and can be suspended, modified or terminated at any time without prior notice. The Company had previously announced on May 20, 2015 a program approved by the Board of Directors (the “Anti-Dilutive Repurchase Program”) under which repurchases were authorized in an amount intended to approximately offset, on an annual basis, the dilutive effect of shares that are or may be issued pursuant to stock option and restricted stock awards under our long-term incentive plans. The Anti-Dilutive Repurchase Program was suspended until January 1, 2017 upon the approval of the Repurchase Program.March 17, 2017.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.		Description
10.1		Project Completion Agreement dated March 23, 2017(1)
31.1		Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
31.2		Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
32.1		Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(2)
101		The following materials from the Bruker Corporation Quarterly Report on Form 10-Q for the quarterly period ended ~~September 30, 2016~~March 31, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income, (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flows and (iv) Notes to the Unaudited Condensed Consolidated Financial Statements(1)

(1) Filed herewith.

(2) Furnished herewith.

SIGNATURES

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

	BRUKER CORPORATION

Date: ~~November 9, 2016~~May 10, 2017	By:	/s/ FRANK H. LAUKIEN, PH.D.
		Frank H. Laukien, Ph.D.
		President, Chief Executive Officer and Chairman (Principal Executive Officer)

Date: ~~November 9, 2016~~May 10, 2017	By:	/s/ ANTHONY L. MATTACCHIONE
		Anthony L. Mattacchione
		Chief Financial Officer and Senior Vice President (Principal Financial Officer)

4236

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the quarterly period ended March 31, 2017 oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934~~

~~For the quarterly period ended September 30, 2016~~

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

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

Large accelerated filer x		Accelerated filer o
Non-accelerated filer o		~~Smaller reporting company~~o
(Do not check if a smaller reporting company)		Smaller reporting company o
Emerging growth company o

Class		Outstanding at ~~November 7, 2016~~May 5, 2017
Common Stock, $0.01 par value per share		~~160,403,524~~159,937,197 shares

		Page
Part I	FINANCIAL INFORMATION	1
Item 1:	Unaudited Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016	1
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~	2
	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2021
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	3632
Item 4:	Controls and Procedures	3833
Part II	OTHER INFORMATION	3934
Item 1:	Legal Proceedings	3934
Item 1A:	Risk Factors	3934
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	4035
Item 3:	Defaults Upon Senior Securities	4035
Item 4:	Mine Safety Disclosure	4035
Item 5:	Other Information	4135
Item 6:	Exhibits	4135
	Signatures	4236

	Shares Subject to Restriction		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	243,150		$	18.58
Granted	13,105		24.80
Vested	(81,024	)	17.87
Forfeited	(1,375	)	16.57
Outstanding at September 30, 2016	173,856		$	19.39

Balance at December 31, 2015	$	4.6
Current period additions	0.5
Current period adjustments	7.7
Balance at September 30, 2016	$	12.8

	Total			Severance			Exit Costs			Provisions for Excess Inventory
Balance at December 31, 2015	$	23.1		$	10.3		$	2.4		$	10.4
Restructuring charges	12.8			7.9			3.5			1.4
Cash payments	(16.7		)	(12.5		)	(3.3		)	(0.9		)
Other, non-cash adjustments and foreign currency effect	(3.2		)	(0.1		)	(0.6		)	(2.5		)
Balance at September 30, 2016	$	16.0		$	5.6		$	2.0		$	8.4