BRUKER CORP 10-K

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index of Consolidated Financial Statements ​ ​ ​ Page Report of Independent Registered Public Accounting Firm ​ 66 ​ ​ ​ Consolidated Balance Sheets as of December 31, 2020 and 2019 ​ 69 ​ ​ ​ Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2020, 2019 and 2018 ​ 70 ​ ​ ​ Consolidated Statements of Redeemable Noncontrolling Interest and Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018 ​ 71 ​ ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 ​ 72 ​ ​ ​ Notes to Consolidated Financial Statements ​ 73 ​ ​ ​ 65 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Bruker Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Bruker Corporation and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income and comprehensive income, of redeemable noncontrolling interest and shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Canopy Biosciences, LLC and SmartTip B.V. from its assessment of internal control over financial 66 Table of Contents reporting as of December 31, 2020 because they were acquired by the Company in purchase business combinations during 2020. We have also excluded Canopy Biosciences, LLC and SmartTip B.V. from our audit of internal control over financial reporting. Canopy Biosciences, LLC and SmartTip B.V. are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent 0.2% and 0.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2020. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill Impairment Assessment – Reporting Unit in Bruker Scientific Instruments(BSI) NANO Segment As described in Notes 2 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $320.4 million as of December 31, 2020, $228.0 million of which relates to the BSI NANO segment. Management evaluates goodwill for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. Management tests goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. Management determines fair value of reporting units using a weighting of both the market and the income methodologies. In assessing the recoverability of goodwill, management must make assumptions regarding the estimated future cash flows, including the forecasted revenue growth and the discount rate to determine the fair value. If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, management recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit. The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of a reporting unit in the BSI NANO segment is a critical audit matter are the significant judgment by management when developing the fair value measurement of the reporting unit. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s 67 Table of Contents siginificant assumptions related to the forecasted revenue growth and the discount rate. The audit effort also involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Company’s reporting unit. These procedures also included, among others, testing management’s process for developing the fair value estimate of the reporting unit; evaluating the appropriateness of using a weighting of both the market and income methodologies; testing the completeness, accuracy, and relevance of underlying data used in the methodologies; and evaluating the significant assumptions used by management related to the forecasted revenue growth and the discount rate. Evaluating management’s assumptions related to the forecasted revenue growth and the discount rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s methodologies and discount rate assumption. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts March 1, 2021 We have served as the Company’s auditor since 2016. ​ ​ ​ 68 Table of Contents BRUKER CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2020 2019 ASSETS ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 681.8 ​ $ 678.3 Short-term investments ​ ​ 50.0 ​ ​ 6.6 Accounts receivable, net ​ ​ 335.3 ​ 362.2 Inventories ​ ​ 692.3 ​ 577.2 Other current assets ​ ​ 165.6 ​ 172.0 Total current assets ​ 1,925.0 ​ 1,796.3 ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net ​ 395.5 ​ 306.1 Goodwill ​ 320.4 ​ 293.0 Intangible assets, net ​ 229.1 ​ 233.2 Operating lease assets ​ ​ 67.4 ​ ​ 65.6 Deferred tax assets ​ 72.0 ​ 60.5 Other long-term assets ​ 39.6 ​ 16.8 Total assets ​ $ 3,049.0 ​ $ 2,771.5 LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Current portion of long-term debt ​ $ 2.2 ​ $ 0.5 Accounts payable ​ ​ 134.6 ​ 118.4 Customer advances ​ ​ 189.2 ​ 137.9 Other current liabilities ​ ​ 465.9 ​ 388.8 Total current liabilities ​ 791.9 ​ 645.6 Long-term debt ​ ​ 842.3 ​ 812.8 Long-term deferred revenue ​ ​ 50.9 ​ 42.8 Deferred tax liabilities ​ ​ 43.1 ​ 48.8 Operating lease liabilities ​ ​ 47.0 ​ ​ 47.0 Accrued pension ​ ​ 123.4 ​ 122.4 Other long-term liabilities ​ ​ 176.1 ​ 113.9 ​ ​ ​ ​ ​ ​ ​ Commitments and contingencies (Note 17) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable noncontrolling interest ​ ​ — ​ ​ 21.1 ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.01 par value 5,000,000 shares authorized, none issued or outstanding at December 31, 2020 and 2019 ​ - ​ - Common stock, $ 0.01 par value 260,000,000 shares authorized, 174,045,610 and 173,502,375 shares issued and 151,987,081 and 154,155,798 outstanding at December 31, 2020 and 2019, respectively ​ 1.7 ​ 1.7 Treasury stock at cost, 22,058,529 and 19,346,577 shares at December 31, 2020 and 2019, respectively ​ ( 667.0 ) ​ ( 543.8 ) Additional paid-in capital ​ 216.3 ​ 199.7 Retained earnings ​ 1,406.5 ​ 1,274.7 Accumulated other comprehensive (loss) income ​ 3.7 ​ ( 25.5 ) Total shareholders’ equity attributable to Bruker Corporation ​ 961.2 ​ 906.8 Noncontrolling interest in consolidated subsidiaries ​ 13.1 ​ 10.3 Total shareholders’ equity ​ 974.3 ​ 917.1 Total liabilities, redeemable noncontrolling interest and shareholders’ equity ​ $ 3,049.0 ​ $ 2,771.5 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 69 Table of Contents BRUKER CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in millions, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Product revenue ​ $ 1,638.1 ​ $ 1,744.7 ​ $ 1,576.6 Service revenue ​ ​ 343.4 ​ 322.4 ​ 311.7 Other revenue ​ ​ 6.0 ​ 5.5 ​ 7.3 Total revenue ​ 1,987.5 ​ 2,072.6 ​ 1,895.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product revenue ​ 840.2 ​ 878.5 ​ 801.1 Cost of service revenue ​ 206.5 ​ 198.3 ​ 193.4 Cost of other revenue ​ ​ 1.0 ​ ​ 0.5 ​ ​ 1.1 Total cost of revenue ​ 1,047.7 ​ 1,077.3 ​ 995.6 Gross profit ​ 939.8 ​ 995.3 ​ 900.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ 468.6 ​ 500.2 ​ 444.7 Research and development ​ 198.0 ​ 187.7 ​ 173.4 Other charges, net ​ 24.9 ​ 6.5 ​ 19.5 Total operating expenses ​ 691.5 ​ 694.4 ​ 637.6 Operating income ​ 248.3 ​ 300.9 ​ 262.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and other income (expense), net ​ ( 22.5 ) ​ ( 20.5 ) ​ ( 17.7 ) Income before income taxes and noncontrolling interest in consolidated subsidiaries ​ 225.8 ​ 280.4 ​ 244.7 Income tax provision ​ ​ 64.4 ​ 82.4 ​ 63.7 Consolidated net income ​ 161.4 ​ 198.0 ​ 181.0 Net income attributable to noncontrolling interest in consolidated subsidiaries ​ 3.6 ​ 0.8 ​ 1.3 Net income attributable to Bruker Corporation ​ $ 157.8 ​ $ 197.2 ​ $ 179.7 Net income per common share attributable to ​ ​ ​ ​ ​ ​ ​ ​ ​ Bruker Corporation shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 1.03 ​ $ 1.27 ​ $ 1.15 Diluted ​ $ 1.02 ​ $ 1.26 ​ $ 1.14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 153.4 ​ 155.2 ​ 156.2 Diluted ​ ​ 154.6 ​ 156.6 ​ 157.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated net income ​ $ 161.4 ​ $ 198.0 ​ $ 181.0 Foreign currency translation (net of tax of $ 1.2 million, $ 5.1 million and $ 4.4 million, respectively) adjustments ​ 21.6 ​ ( 20.0 ) ​ ( 25.5 ) Pension liability adjustments (net of tax of ( $ 1.7 ) million, $ 6.3 million and $ 3.8 million, respectively) ​ 7.5 ​ ( 23.0 ) ​ 15.3 Net comprehensive income ​ 190.5 ​ 155.0 ​ 170.8 Less: Comprehensive income attributable to noncontrolling interests ​ 4.0 ​ 1.8 ​ 1.3 Less: Comprehensive loss attributable to redeemable noncontrolling interest ​ ​ ( 0.5 ) ​ ​ ( 1.5 ) ​ ​ ( 0.2 ) Comprehensive income attributable to Bruker Corporation ​ $ 187.0 ​ $ 154.7 ​ $ 169.7 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ 70 Table of Contents BRUKER CORPORATION CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY (in millions, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Equity ​ Noncontrolling ​ ​ ​ ​ ​ Redeemable ​ ​ ​ ​ ​ ​ ​ ​ Treasury ​ Additional ​ ​ ​ ​ Other ​ Attributable to ​ Interests in ​ Total ​ ​ Noncontrolling ​ Common ​ Common ​ Treasury ​ Stock ​ Paid-In ​ Retained ​ Comprehensive ​ Bruker ​ Consolidated ​ Shareholders’ ​ Interest Shares Amount Shares Amount Capital Earnings Income (Loss) Corporation Subsidiaries Equity Balance at December 31, 2017 ​ $ — 155,865,977 ​ $ 1.7 ​ 16,009,099 ​ $ ( 401.2 ) ​ $ 155.9 ​ $ 942.0 ​ $ 27.0 ​ $ 725.4 ​ $ 8.1 ​ $ 733.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted shares terminated ​ ​ — ( 6,553 ) ​ ​ — ​ 6,553 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock options exercised ​ ​ — ​ 575,372 ​ ​ — ​ — ​ ​ — ​ ​ 10.3 ​ ​ — ​ ​ — ​ ​ 10.3 ​ ​ — ​ ​ 10.3 Restricted stock units vested ​ ​ — 183,772 ​ ​ — ​ — ​ ​ — ​ ​ ( 0.6 ) ​ ​ — ​ ​ — ​ ​ ( 0.6 ) ​ ​ — ​ ​ ( 0.6 ) Stock-based compensation ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ 11.3 ​ ​ — ​ ​ — ​ ​ 11.3 ​ ​ — ​ ​ 11.3 Shares returned from 2017 acquisition ​ ​ — ​ ( 2,123 ) ​ ​ — ​ 2,123 ​ ​ ( 0.1 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ ​ — ​ ​ ( 0.1 ) Treasury stock acquired ​ ​ — ​ ( 7,105 ) ​ ​ — ​ 7,105 ​ ​ ( 0.2 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.2 ) ​ ​ — ​ ​ ( 0.2 ) Acquired 80 % interest in Hain LifeScience GmbH ​ ​ 23.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributions to noncontrolling interests ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.9 ) ​ ​ ( 0.9 ) Cash dividends paid to common stockholders ($ 0.16 per share) ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 25.1 ) ​ ​ — ​ ​ ( 25.1 ) ​ ​ — ​ ​ ( 25.1 ) Adoption impact from new revenue standard ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 5.9 ​ ​ — ​ ​ 5.9 ​ ​ 0.2 ​ ​ 6.1 Consolidated net income ​ ​ ( 0.2 ) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 179.7 ​ ​ — ​ ​ 179.7 ​ ​ 1.3 ​ ​ 181.0 Other comprehensive income (loss) ​ ​ ( 0.4 ) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 10.0 ) ​ ​ ( 10.0 ) ​ ​ ( 0.2 ) ​ ​ ( 10.2 ) Balance at December 31, 2018 ​ $ 22.6 156,609,340 ​ $ 1.7 ​ 16,024,880 ​ $ ( 401.5 ) ​ $ 176.9 ​ $ 1,102.5 ​ $ 17.0 ​ $ 896.6 ​ $ 8.5 ​ $ 905.1 Stock options exercised ​ ​ ​ 626,796 ​ ​ — ​ — ​ ​ — ​ ​ 12.0 ​ ​ — ​ ​ — ​ ​ 12.0 ​ ​ — ​ ​ 12.0 Restricted stock units vested ​ ​ ​ ​ 241,359 ​ ​ — ​ — ​ ​ — ​ ​ ( 1.1 ) ​ ​ — ​ ​ — ​ ​ ( 1.1 ) ​ ​ — ​ ​ ( 1.1 ) Stock-based compensation ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ 11.9 ​ ​ — ​ ​ — ​ ​ 11.9 ​ ​ — ​ ​ 11.9 Shares issued from 2017 acquisition ​ ​ — ​ 3,087 ​ ​ — ​ ( 3,087 ) ​ ​ 0.1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 0.1 ​ ​ — ​ ​ 0.1 Shares repurchased ​ ​ — ​ ( 3,323,104 ) ​ ​ — ​ 3,323,104 ​ ​ ( 142.3 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 142.3 ) ​ ​ — ​ ​ ( 142.3 ) Treasury stock acquired ​ ​ ​ ​ ( 1,680 ) ​ ​ — ​ 1,680 ​ ​ ( 0.1 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 0.1 ) ​ ​ — ​ ​ ( 0.1 ) Cash dividends paid to common stockholders ($ 0.16 per share) ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 25.0 ) ​ ​ — ​ ​ ( 25.0 ) ​ ​ — ​ ​ ( 25.0 ) Consolidated net income ​ ​ ( 1.1 ) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 197.2 ​ ​ — ​ ​ 197.2 ​ ​ 1.9 ​ ​ 199.1 Other comprehensive income (loss) ​ ​ ( 0.4 ) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 42.5 ) ​ ​ ( 42.5 ) ​ ​ ( 0.1 ) ​ ​ ( 42.6 ) Balance at December 31, 2019 ​ $ 21.1 154,155,798 ​ $ 1.7 ​ 19,346,577 ​ $ ( 543.8 ) ​ $ 199.7 ​ $ 1,274.7 ​ $ ( 25.5 ) ​ $ 906.8 ​ $ 10.3 ​ $ 917.1 Stock options exercised ​ ​ — 241,915 ​ ​ — ​ — ​ ​ — ​ ​ 4.9 ​ ​ — ​ ​ — ​ ​ 4.9 ​ ​ — ​ ​ 4.9 Restricted stock units vested ​ ​ — ​ 301,320 ​ ​ — ​ — ​ ​ — ​ ​ ( 1.6 ) ​ ​ — ​ ​ — ​ ​ ( 1.6 ) ​ ​ — ​ ​ ( 1.6 ) Stock-based compensation ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ 13.3 ​ ​ — ​ ​ — ​ ​ 13.3 ​ ​ — ​ ​ 13.3 Shares repurchased ​ ​ — ​ ( 2,711,952 ) ​ ​ — ​ 2,711,952 ​ ​ ( 123.2 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 123.2 ) ​ ​ — ​ ​ ( 123.2 ) Distributions to noncontrolling interests ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1.2 ) ​ ​ ( 1.2 ) Acquired remaining 20 % interest in Hain LifeScience GmbH ​ ​ ( 20.6 ) ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 1.3 ) ​ ​ — ​ ​ ( 1.3 ) ​ ​ — ​ ​ ( 1.3 ) Dividends declared ($ 0.16 per share) ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 24.7 ) ​ ​ — ​ ​ ( 24.7 ) ​ ​ — ​ ​ ( 24.7 ) Consolidated net income ​ ​ — — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ 157.8 ​ ​ — ​ ​ 157.8 ​ ​ 3.6 ​ ​ 161.4 Other comprehensive income (loss) ​ ​ ( 0.5 ) — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 29.2 ​ ​ 29.2 ​ ​ 0.4 ​ ​ 29.6 Balance at December 31, 2020 ​ $ — 151,987,081 ​ $ 1.7 ​ 22,058,529 ​ $ ( 667.0 ) ​ $ 216.3 ​ $ 1,406.5 ​ $ 3.7 ​ $ 961.2 ​ $ 13.1 ​ $ 974.3 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 71 Table of Contents BRUKER CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 2019 2018 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated net income ​ $ 161.4 ​ $ 198.0 ​ $ 181.0 Adjustments to reconcile consolidated net income to cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 80.4 ​ ​ 75.6 ​ ​ 64.9 Stock-based compensation expense ​ ​ 16.0 ​ ​ 9.6 ​ ​ 11.3 Deferred income taxes ​ ​ ( 22.5 ) ​ ​ ( 5.4 ) ​ ​ ( 15.1 ) Impairment and other non-cash expenses, net ​ ​ 27.3 ​ ​ 10.1 ​ ​ 39.8 Changes in operating assets and liabilities, net of acquisitions: ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 40.8 ​ ​ ( 5.0 ) ​ ​ ( 30.5 ) Inventories ​ ​ ( 91.6 ) ​ ​ ( 60.2 ) ​ ​ ( 35.5 ) Accounts payable and accrued expenses ​ ​ ( 2.4 ) ​ ​ 15.9 ​ ​ 5.0 Income taxes payable ​ ​ 42.9 ​ ​ 13.1 ​ ​ 4.0 Deferred revenue ​ ​ 16.9 ​ ​ 7.3 ​ ​ 7.1 Customer advances ​ ​ 51.7 ​ ​ 4.2 ​ ​ 3.5 Other changes in operating assets and liabilities ​ ​ 11.3 ​ ​ ( 49.8 ) ​ ​ 4.2 Net cash provided by operating activities ​ 332.2 ​ ​ 213.4 ​ ​ 239.7 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Purchase of short-term investments ​ ​ ( 150.0 ) ​ ​ ( 6.4 ) ​ ​ — Maturity of short-term investments ​ ​ 106.1 ​ ​ — ​ ​ 117.0 Purchase of available for sale debt securities ​ ​ ( 1.2 ) ​ ​ — ​ ​ — Cash paid for acquisitions, net of cash acquired ​ ( 59.2 ) ​ ​ ( 90.0 ) ​ ​ ( 191.6 ) Purchases of property, plant and equipment ​ ( 97.2 ) ​ ​ ( 73.0 ) ​ ​ ( 49.2 ) Proceeds from sales of property, plant and equipment ​ 0.2 ​ ​ 11.0 ​ ​ 0.4 Net proceeds from cross-currency swap agreements ​ ​ 8.6 ​ ​ — ​ ​ — Net cash used in investing activities ​ ( 192.7 ) ​ ​ ( 158.4 ) ​ ​ ( 123.4 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Proceeds from 2019 Note Purchase Agreement ​ ​ — ​ ​ 297.9 ​ ​ — Proceeds from 2019 Term Loan Agreement ​ ​ — ​ ​ 300.0 ​ ​ — Repayments of revolving lines of credit ​ ​ ( 305.1 ) ​ ​ ( 361.9 ) ​ ​ ( 218.1 ) Proceeds from revolving lines of credit ​ ​ 297.5 ​ ​ 250.6 ​ ​ 129.4 Repayment of 2012 Note Purchase Agreement ​ ​ — ​ ​ ( 15.0 ) ​ ​ — Repayment of other debt, net ​ ​ ( 0.7 ) ​ ​ ( 4.6 ) ​ ​ ( 4.8 ) Payment of deferred financing costs ​ ​ ( 0.1 ) ​ ​ ( 4.4 ) ​ ​ — Proceeds from issuance of common stock, net ​ ​ 3.3 ​ ​ 10.9 ​ ​ 9.4 Payment of contingent consideration ​ ​ ( 7.5 ) ​ ​ ( 6.2 ) ​ ​ ( 2.3 ) Payment of dividends to common stockholders ​ ​ ( 24.6 ) ​ ​ ( 25.0 ) ​ ​ ( 25.1 ) Repurchase of common stock ​ ​ ( 123.2 ) ​ ​ ( 142.3 ) ​ ​ — Cash payments to noncontrolling interests ​ ​ ( 1.2 ) ​ ​ — ​ ​ ( 0.9 ) Net cash (used in) provided by financing activities ​ ​ ( 161.6 ) ​ ​ 300.0 ​ ( 112.4 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ ​ 25.7 ​ ​ 0.6 ​ ( 6.5 ) Net change in cash, cash equivalents and restricted cash ​ ​ 3.6 ​ ​ 355.6 ​ ( 2.6 ) Cash, cash equivalents and restricted cash at beginning of year ​ ​ 681.9 ​ ​ 326.3 ​ 328.9 Cash, cash equivalents and restricted cash at end of year ​ $ 685.5 ​ $ 681.9 ​ $ 326.3 Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 28.7 ​ $ 16.0 ​ $ 11.7 Cash paid for taxes ​ $ 43.0 ​ $ 61.3 ​ $ 60.5 Restricted cash period beginning balance ​ $ 3.6 ​ $ 3.9 ​ $ 3.9 Restricted cash period ending balance ​ $ 3.7 ​ $ 3.6 ​ $ 3.9 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 72 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business Bruker Corporation, together with its consolidated subsidiaries (Bruker or the Company), develops, manufactures and distributes high-performance scientific instruments and analytical and diagnostic solutions that enable its customers to explore life and materials at microscopic, molecular and cellular levels. Many of the Company’s products are used to detect, measure and visualize structural characteristics of chemical, biological and industrial material samples. The Company’s products address the rapidly evolving needs of a diverse array of customers in life science research, pharmaceuticals, biotechnology, applied markets, cell biology, clinical research, microbiology, in-vitro diagnostics, nanotechnology and materials science research. The Company has four operating segments, Bruker BioSpin Group, Bruker CALID Group, Bruker Scientific Instruments (BSI) Nano Segment and Bruker Energy & Supercon Technologies (BEST) . The Company has three reportable segments, BSI Life Science Segment, BSI NANO Segment and BEST . For financial reporting purposes, the Bruker BioSpin Group and Bruker CALID Group operating segments are aggregated into the reportable BSI Life Science Segment because each has similar economic characteristics, production processes, service offerings, types and classes of customers, methods of distribution and regulatory environments. Bruker BioSpin - The Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on magnetic resonance technology. Bruker BioSpin Group’s revenues are generated by academic and government research customers, pharmaceutical and biotechnology companies and nonprofit laboratories, as well as chemical, food and beverage, clinical and other industrial companies. Bruker CALID (Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection) - The Bruker CALID Group designs, manufactures and distributes life science mass spectrometry and ion mobility spectrometry solutions, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technologies and radiological/nuclear detectors for Chemical, Biological, Radiological, Nuclear and Explosive (CBRNE) detection. Customers of the Bruker CALID Group include academic institutions and medical schools; pharmaceutical, biotechnology and diagnostics companies; contract research organizations; nonprofit and for-profit forensics laboratories; agriculture, food and beverage safety laboratories; environmental and clinical microbiology laboratories; hospitals and government departments and agencies. The BSI NANO Segment 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 BSI NANO Segment include academic institutions, governmental customers, nanotechnology companies, semiconductor companies, raw material manufacturers, industrial companies, biotechnology and pharmaceutical companies and other businesses involved in materials analysis. The BEST reportable segment develops and manufactures superconducting and non-superconducting materials and devices for use in renewable energy, energy infrastructure, healthcare and “big science” research. The segment focuses on metallic low temperature superconductors for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications. ​ 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and all majority and wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. 73 Table of Contents Noncontrolling Interests Noncontrolling interests represents the minority shareholders’ proportionate share of the Company’s majority-owned subsidiaries. The portion of net income or net loss attributable to non-controlling interests is presented as net income attributable to noncontrolling interests in consolidated subsidiaries in the consolidated statements of income and comprehensive income, and the portion of other comprehensive income of these subsidiaries is presented in the consolidated statements of shareholders’ equity. Redeemable Noncontrolling Interests The Company had an agreement with noncontrolling interest holders that provided the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, their remaining minority interest at a contractually defined redemption value. These rights were accelerated in certain events. As the redemption is contingently redeemable at the option of the noncontrolling interest shareholders, the Company classified the carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities. Subsequent to the acquisition, the redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling interest were recorded through retained earnings. The Company exercised its option to purchase the remainder of the entity during 2020. The carrying value of the noncontrolling interest was accreted to the redemption value through retained earnings and then reclassified to additional paid in capital. At December 31, 2020, there were no redeemable noncontrolling interests. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. Accordingly, at the date of each acquisition, the Company measures the fair value of all identifiable assets acquired (including intangible assets), liabilities assumed and any remaining noncontrolling interests and allocates the amounts paid to all items measured. The fair value of identifiable intangible assets acquired is based on valuations that use information and assumptions determined by management and which consider management’s best estimates of inputs and assumptions that a market participant would use. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates and judgments made by management in preparing these financial statements include revenue recognition, allowances for doubtful accounts, write-downs for excess and obsolete inventory, estimated fair values used to record impairment charges related to intangible assets, goodwill, and other long-lived assets, amortization periods, expected future cash flows used to evaluate the recoverability of long-lived assets and to record intangible assets in business combinations, stock-based compensation expense, warranty allowances, restructuring and other related charges, contingent liabilities and the recoverability of the Company’s net deferred tax assets. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions were reasonable when made. 74 Table of Contents Subsequent Events Considerations The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that, other than as reported herein, there are no material recognized or unrecognized subsequent events. Cash and Cash Equivalents Cash and cash equivalents primarily include cash on hand, money market funds and time deposits with original maturities of three months or less at the date of acquisition. Time deposits represent amounts on deposit in banks and temporarily invested in instruments with maturities of three months or less at the time of purchase. Certain of these investments represent deposits which are not insured by the FDIC or any other government agency. Cash equivalents are carried at cost, which approximates fair value. Short-term Investments Short-term investments represent time and call deposits with original maturities of greater than three months at the date of acquisition. Short-term investments are classified as available-for-sale and are reported at fair value. There were no unrealized gains (losses) recorded as of December 31, 2020, 2019 and 2018, as cost approximates current fair value. There were no short-term investments held by the Company as of December 31, 2018. Restricted Cash Restricted cash is included as a component of cash, cash equivalents, and restricted cash on the Company’s consolidated statement of cash flows. The Company has certain subsidiaries that are required by local laws and regulations to maintain restricted cash balances to cover future employee benefit payments. Restricted cash balances are classified as non-current unless, under the terms of the applicable agreements, the funds will be released from restrictions within one year from the balance sheet date. The current and non-current portion of restricted cash is recorded within other current assets and other long-term assets , respectively, in the accompanying consolidated balance sheets. Accounts Receivable, net Accounts receivable have been reduced by an allowance for doubtful accounts. The allowance for doubtful accounts represents the Company’s best estimate of the amount of probable credit losses in our accounts receivable. The Company’s allowance is based on a number of factors, including an evaluation of customer credit worthiness, the age of the outstanding receivable, economic trends and historical experience. Provisions for doubtful accounts are recorded in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. ​ Derivative Financial Instruments and Hedging Activities All derivatives, whether designated in a hedging relationship or not, are recorded on the consolidated balance sheets at fair value. The accounting for changes in fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based on the exposure being hedged, as a fair value hedge, cash flow hedge, foreign currency hedge or a hedge of a net investment in a foreign operation. If a derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Derivatives that are not designated as hedges are recorded at fair value through earnings. The Company presents the cross-currency swap periodic settlements in investing activities and the interest rate swap periodic settlements in operating activities in the statement of cash flows. 75 Table of Contents 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 Company’s financial instruments consist primarily of cash equivalents, short-term investments, restricted cash, derivative instruments consisting of forward foreign exchange contracts, cross-currency interest rate swap agreements, commodity contracts, derivatives embedded in certain purchase and sale contracts, derivatives embedded within noncontrolling interests, accounts receivable, accounts payable, contingent consideration and long-term debt. The carrying amounts of the Company’s cash equivalents, short-term investments and restricted cash, accounts receivable, borrowings under a revolving credit agreement and accounts payable approximate fair value because of their short-term nature. Derivative assets and liabilities are measured at fair value on a recurring basis. The Company’s long-term debt consists principally of a note purchase agreement entered into in 2012 and a revolving credit agreement, long term loan agreement and note purchase agreement entered into in 2019. The Company has evaluated the estimated fair value of financial instruments using available market information and management’s estimates. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. Concentration of Credit Risk Financial instruments that subject the Company to credit risk consist of cash, cash equivalents, short-term investments, derivative instruments, accounts receivables and restricted cash. The risk with respect to cash, cash equivalents and short-term investments is minimized by the Company’s policy of investing in short-term financial instruments issued by highly rated financial institutions. The risk with respect to derivative instruments is minimized by the Company’s policy of entering into arrangements with highly rated financial institutions. The risk with respect to accounts receivables is minimized by the creditworthiness and diversity of the Company’s customers. The Company performs periodic credit evaluations of its customers’ financial condition and generally requires an advanced deposit for a portion of the purchase price. Credit losses have been within management’s expectations and the allowance for doubtful accounts totaled $ 3.0 million and $ 3.4 million at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, no single customer represented 10 % or more of the Company’s accounts receivable. For the years ended December 31, 2020, 2019 and 2018, no single customer represented 10 % or more of the Company’s total revenue. 76 Table of Contents Inventories Components of inventory include raw materials, work-in-process, demonstration units and finished goods. Demonstration units include systems which are located in the Company’s demonstration laboratories or installed at the sites of potential customers and are considered available for sale. Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. All inventories are stated at the lower of cost and net realizable value. Cost is determined principally by the first-in, first-out method for a majority of subsidiaries and by average-cost for certain other subsidiaries. The Company reduces the carrying value of its inventories for differences between cost and estimated net realizable value, taking into consideration usage in the preceding twelve months , expected demand, technological obsolescence and other information including the physical condition of demonstration inventories. The Company records a charge to cost of product revenue for the amount required to reduce the carrying value of inventory to net realizable value. Costs associated with the procurement of inventories, such as inbound freight charges and purchasing and receiving costs, are capitalized as part of inventory and are also included in the cost of product revenue line item within the consolidated statements of income and comprehensive income. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Major improvements that extend the useful lives are capitalized while expenditures for maintenance, repairs and minor improvements are charged to expense as incurred. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in the consolidated statements of income and comprehensive income. Depreciation and amortization are calculated on a straight-line basis over the estimated useful lives of the assets as follows: ​ ​ ​ ​ ​ ​ Estimated Useful Life Buildings 25 to 40 years Machinery and equipment ​ 3 to 10 years Computer equipment and software ​ 3 to 5 years Furniture and fixtures ​ 3 to 10 years Leasehold improvements ​ Lesser of 15 years or the remaining lease term ​ Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may not be recoverable. In assessing the recoverability of goodwill and indefinite-lived intangible assets, the Company must make assumptions regarding the estimated future cash flows, including forecasted revenue growth and the discount rate to determine the fair value of these assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges against these assets in the reporting period in which the impairment is determined. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. The adoption of this ASU on January 1, 2020 did not have a material impact on the Company's consolidated financial statements. The Company tests goodwill for impairment at the reporting unit level, which is the operating segment or one level below an operating segment. The Company has the option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the quantitative assessment. If as a result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, a quantitative impairment test will be required. Otherwise, no further testing will be required. If a quantitative impairment test is performed, the Company compares the fair values of the applicable reporting 77 Table of Contents units with their aggregate carrying values, including goodwill. The Company determines fair value of reporting units using a weighting of both the market and the income methodologies. Estimating the fair value of the reporting units requires significant judgment by management. If the carrying amount of a reporting unit exceeds the fair value of the reporting unit, an impairment charge is recognized for the amount by which the carrying value amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to the reporting unit. In process research and development, or IPR&D, acquired as part of business combinations under the acquisition method represents ongoing development work associated with enhancements to existing products, as well as the development of next generation products. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment on an annual basis, or when indicators of impairment are identified. When the IPR&D project is complete, it is reclassified as a finite-lived intangible asset and is amortized over its estimated useful life. If an IPR&D project is abandoned before completion or is otherwise determined to be impaired, the value of the asset or the amount of the impairment is charged to the consolidated statements of income and comprehensive income in the period the project is abandoned or impaired. At December 31, 2020 and 2019, the Company did not have any IPR&D. Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful lives as follows: ​ ​ ​ ​ ​ ​ Estimated Useful Life Existing technology and related patents 3 to 15 years Customer and distributor relationships ​ 5 to 15 years Trade names ​ 5 to 15 years ​ Impairment of Long-Lived Assets Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the quoted market price, if available or the estimated fair value of those assets are less than the assets’ carrying value and are not recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their fair values. Impairment losses are charged to the consolidated statements of income and comprehensive income for the difference between the fair value and carrying value of the asset. Warranty Costs and Deferred Revenue The Company typically provides a one-year parts and labor warranty with the purchase of equipment. The anticipated cost for this warranty is accrued upon recognition of the sale and is included as a current liability on the accompanying consolidated balance sheets. The Company’s warranty reserve reflects estimated material and labor costs for potential product issues for which the Company expects to incur an obligation. The Company’s estimates of anticipated rates of warranty claims and costs are primarily based on historical information. The Company assesses the adequacy of the warranty reserve on a quarterly basis and adjusts the amount as necessary. If the historical data used to calculate the adequacy of the warranty reserve is not indicative of future requirements, additional or reduced warranty reserves may be required. The Company also offers to its customers extended warranty and service agreements extending beyond the initial warranty for a fee. These fees are recorded as deferred revenue and recognized ratably into income over the life of the extended warranty contract or service agreement. Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A 78 Table of Contents valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in a Company’s financial statements. This guidance prescribes a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company includes accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax expense. Customer Advances The Company typically requires an advance deposit under the terms and conditions of contracts with customers. These deposits are recorded as a current or long-term liability until revenue is recognized on the specific contract in accordance with the Company’s revenue recognition policy. Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition requirements under Accounting Standards Codification (ASC) Topic 605. The new guidance was the result of a joint project between the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop common revenue standards for U.S. GAAP and International Financial Reporting Standards. The core principle of the new guidance is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance was effective as of January 1, 2018 and was applied on a modified retrospective basis. The Company elected the practical expedient and only evaluated contracts for which substantially all revenue had not been recognized under ASC 605 with the cumulative effect of the new guidance recorded as of the date of initial application. The impact of adoption was an increase to beginning retained earnings of $ 6.1 million, net of $ 2.1 million related to taxes. The adoption impact was primarily due to the change in license revenue being recognized at a point in time under ASC 606 rather than over time as it was recognized under ASC 605. The difference between ASC 606 and ASC 605 was not material to the year ended December 31, 2018. The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers . The key elements of ASC 606 are: 1) identifying a contract with the customer; 2) identifying the performance obligations in the contract; 3) determining the transaction price; 4) allocating the transaction price to the performance obligations in the contract; and 5) recognizing revenue when (or as) each performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of the Company’s contracts have multiple performance obligations, most commonly due to providing additional goods or services along with a system, such as installation, accessories, parts and services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service being provided to the customer. The Company’s best evidence of standalone selling price is its normal selling pricing and discounting practices for the specific product or service when sold on a standalone basis. Alternatively, when not sold separately, the Company may determine standalone selling price using an expected cost plus a margin approach. The Company’s performance obligations are typically satisfied at a point in time, most commonly either on shipment or customer acceptance. Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period. In addition, certain arrangements 79 Table of Contents to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion. For performance obligations recognized over time, revenue is measured by progress toward completion of the performance obligation that reflects the transfer of control. Typically, progress is measured using a cost-to-cost method based on cost incurred to date relative to total estimated costs upon completion as this best depicts the transfer of control to the customer. Application of the cost-to-cost method requires the Company to make reasonable estimates of the extent of progress toward completion and the total costs the Company expects to incur. Losses are recorded immediately when the Company estimates that contracts will ultimately result in a loss. Changes in the estimates could affect the timing of revenue recognition. The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative costs. Amounts billed to customers in connection with these costs are included in total revenues. When control of the goods transfers prior to the completion of the Company’s obligation to ship the products to its customers, the Company has elected the practical expedient to account for the shipping services as a fulfillment cost. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period is one year or less or the amount is immaterial. The Company excludes from the transaction price all taxes assessed by a governmental authority on revenue-producing transactions that are collected by the Company from a customer. The Company recognizes revenue from systems sales upon transfer of control in an amount that reflects the consideration it expects to receive. Transfer of control generally occurs upon shipment, or for certain systems, based upon customer acceptance for a system once delivered and installed at a customer facility. For systems that include customer-specific acceptance criteria, the Company is required to assess when it can demonstrate the acceptance criteria has been met, which generally is upon successful factory acceptance testing or customer acceptance and evidence of installation. For systems that require installation and where system revenue is recognized upon shipment, the standalone selling price of installation is deferred until customer acceptance. Revenue from accessories and parts is generally recognized based on shipment. Service revenue is recognized as the services are performed or ratably over the contractual obligation and includes maintenance contracts, extended warranties, training, application support and on-demand services. When products are sold through an independent distributor or a strategic distribution partner, the Company recognizes the system sale upon transfer of control which is typically on shipment. When the Company is responsible for installation, the standalone selling price of installation is deferred until customer acceptance. The Company’s distributors do not have price protection rights or rights of return; however, the Company’s products are typically warranted to be free from defect for a period of one year. The Company requires an advance deposit based on the terms and conditions of contracts with customers for many of its contracts. Typically, revenue is recognized within one year of receiving an advance deposit. The Company does not have any material payment terms that extend beyond one year. There is minimal variable consideration included in the transaction price of the Company’s contracts. Other revenues are primarily comprised of development arrangements recognized on a cost-plus-fixed-fee basis and licensing arrangements recognized either when the licenses are provided or ratably over the contract term depending on the nature of the arrangement. Contract Assets and Liabilities Contract assets represent unbilled receivables when revenue recognized exceeds the amount billed to the customer, and the right to payment is not just subject to the passage of time. Contract assets typically result from system revenue recorded where a portion of the transaction price is not billable until a future event, such as customer acceptance, or from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis as revenue exceeds the amount billed to the customer. Amounts may not exceed their net realizable value. Contract assets are generally classified as current. Contract liabilities consist of customer advances, deferred revenue and billings in excess of revenue from contracts recognized on a cost-to-cost or cost-plus-fixed-fee basis. Contract liabilities are classified as current or 80 Table of Contents long-term based on the timing of when the Company expects to recognize revenue. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases, which provides guidance on the recognition, measurement, presentation and disclosure of leases. The new standard, effective as of January 1, 2019, superseded previous U.S. GAAP guidance on leases and requires all leases with terms longer than 12 months to be reported on the balance sheet as right-of-use (ROU) assets and lease liabilities, as well additional disclosures pertaining to those leases. The lease liability represents the lessee’s obligation to make lease payments arising from a lease and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. Under ASU No. 2016-02, companies are required to transition to the new standard in the period of adoption at the beginning of the earliest period presented in the financial statements (January 1, 2017 for the Company). In July 2018, the FASB issued ASU No. 2018-11 as an update to ASU No. 2016-02, which in part provided companies the option of transitioning to the new standard as of the adoption date and recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard as of January 1, 2019 using the alternative transition method under ASU No. 2018-11 and recognized a cumulative-effect adjustment to the opening balance sheet. The Company’s prior period financial statements were not adjusted due to adopting the new standard based on the alternative transition method. The Company elected the available package of practical expedients for leases that commenced prior to the effective date that allows it to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) the accounting treatment of initial direct costs for any expired or existing leases. The Company also elected the practical expedient that allows lessees to treat lease and non-lease components of leases as a single lease component for all asset classes. The adoption of the new standard resulted in recording $ 75.5 million and $ 77.9 million of ROU assets and lease liabilities, respectively, as of January 1, 2019 on the Company’s balance sheet. The adoption of the new standard did not significantly affect the Company’s results of operations. Starting in the first quarter of 2019, the Company accounts for leases in accordance with ASC 842, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than 12 months are recognized on the balance sheet as ROU assets with a corresponding lease liability. The Company has elected not to recognize on the balance sheet leases with an initial term of 12 months or less. Leases with an initial term of 12 months or less are directly expensed as incurred. Leases are classified as either operating or finance depending on the specific terms of the arrangement. The Company’s leases mainly consist of facilities, office equipment, and vehicles. The majority of leases are classified as operating. The remaining lease term ranges from 2021 to 2034, with some leases including an option to extend the lease for varying periods of time or to terminate prior to the end of the lease term. Certain lease agreements contain provisions for future rent increases. Lease payments included in the measurement of the lease liability comprise fixed payments, future rent increases tied to an index or rate, and the exercise price of a Company option to purchase the underlying asset if the Company is reasonably certain to exercise the option. Future rent increases dependent on an index or rate are initially measured at the index or rate at the commencement date. The Company’s leases typically do not contain residual value guarantees. At the commencement date, operating and finance lease liabilities, and their corresponding ROU assets, are recorded based on the present value of lease payments over the expected lease term. The lease term includes the non-cancellable period of the lease, plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. The interest rate implicit in lease contracts is typically not readily determinable, therefore an incremental borrowing rate is used to calculate the lease liability. The incremental 81 Table of Contents borrowing rate is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as prepayments, lease incentives received or initial direct costs paid. Shipping and Handling Costs The Company includes costs incurred in connection with shipping and handling of products within selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Shipping and handling costs were $ 28.3 million, $ 27.0 million and $ 25.2 million in the years ended December 31, 2020, 2019 and 2018, respectively. Amounts billed to customers in connection with these costs are included in total revenues. Research and Development The Company commits substantial capital and resources to internal and collaborative research and development projects in order to provide innovative products and solutions to its customers. The Company conducts research primarily to enhance system performance and improve the reliability of existing products, and to develop revolutionary new products and solutions. Research and development costs are expensed as incurred and include salaries, wages and other personnel related costs, material costs and depreciation, consulting costs and facility costs. Capitalized Software Purchased software is capitalized at cost and is amortized over the estimated useful life, which is generally three years . Software developed for use in the Company’s products is expensed as incurred to research and development expense until technological feasibility is achieved. Subsequent to the achievement of technological feasibility, amounts are capitalizable; however, to date such amounts have not been material. Advertising The Company expenses advertising costs as incurred. Advertising expenses were $ 9.7 million, $ 15.4 million and $ 14.4 million during the years ended December 31, 2020, 2019 and 2018, respectively. Stock-Based Compensation The Company recognizes stock-based compensation expense in the consolidated statements of income and comprehensive income based on the fair value of the share-based award at the grant date. The Company’s primary types of share-based compensation are stock options, restricted stock awards and restricted stock units. Compensation expense is amortized on a straight-line basis over the underlying vesting terms of the share-based award. Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years . The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The determination of the fair value of stock-based payment awards using the Black-Scholes model are affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rates and expected dividends. Risk-free interest rates are based on the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected life assumption. Expected life is determined through a calculation based on historical experience. Expected volatility is based the Company’s historical volatility results. Expected dividend yield is based on the estimated annualized dividend yield on our stock based on our history of paying dividends. The Company utilizes an estimated forfeiture rate derived from an analysis of historical data. Assumptions regarding volatility, expected term, dividend yield and risk-free interest rates are required for the Black-Scholes model and are presented in the table below: 82 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 ​ Risk-free interest rates ​ ​ 0.23 % ​ 1.55 % ​ 2.80 % Expected life ​ ​ 5.1 years ​ 5.3 years ​ 5.4 years Volatility ​ ​ 34.1 % ​ 29.57 % ​ 28.46 % Expected dividend yield ​ ​ 0.37 % ​ 0.38 % ​ 0.47 % Weighted-average fair value per share ​ $ 12.08 ​ $ 11.16 ​ $ 9.50 ​ ​ Stock-based compensation for restricted stock awards and restricted stock units is expensed ratably over the vesting period based on the grant date fair value. Earnings Per Share Net income per common share attributable to Bruker Corporation shareholders is calculated by dividing net income attributable to Bruker Corporation, adjusted to reflect changes in the redemption value of the redeemable noncontrolling interest, by the 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. There was no redemption value adjustment of the redeemable noncontrolling interest for the years ended December 31, 2020 and 2019. Post Retirement Benefit Plans The Company recognizes the over-funded or under-funded status of defined benefit pension and other postretirement defined benefit plans as an asset or liability, respectively, in its consolidated balance sheets and recognizes changes in the funded status in the year in which the changes occur through other comprehensive income. Other Comprehensive Income (Loss) Other comprehensive income (loss) refers to revenues, expenses, gains and losses that are 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) was composed of foreign currency translation adjustments and pension liability adjustments. Foreign Currency Translation Assets and liabilities of the Company’s foreign subsidiaries, where the functional currency is the local currency, are translated into U.S. dollars using the current exchange rate as of the consolidated balance sheet date and shareholders’ equity is translated using historical 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. Gains and losses resulting from translation of foreign currency monetary transactions are reported in interest and other income (expense), net in the consolidated statements of income and comprehensive income for all periods presented. The Company has certain intercompany foreign currency transactions that are deemed to be of a long-term investment nature. Exchange adjustments related to those transactions are made directly to a separate component of shareholders’ equity. Risks and Uncertainties The Company is subject to risks common to its industry including, but not limited to, global economic conditions, government and academic funding levels, the impact of the COVID-19 pandemic, rapid technological change, changes in commodity prices, spending patterns of its customers, protection of its intellectual property, 83 Table of Contents availability of key raw materials and components, compliance with existing and future regulation by government agencies and fluctuations in foreign currency exchange rates. In December 2019, a novel strain of coronavirus, referred to as COVID-19, surfaced in Wuhan, China. In March 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The virus has spread globally. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in disruptions to the global economy, as well as businesses and capital markets around the world. Impacts to the Company’s business include temporary closures of many of its government and university customers and suppliers, disruptions or restrictions on its employees’ and customers’ ability to travel, and delays in product installations or shipments to and from affected countries. In an effort to halt the outbreak of COVID-19, a number of countries, including the United States, have implemented and continue to implement significant restrictions on travel, shelter in place or stay at home orders, and business closures. Certain jurisdictions, including many within the United States, implemented policies with the goal of re-opening these markets only to return to restrictions in the face of increases in new COVID-19 cases. For example, a number of states, including California, Massachusetts and New Jersey where the Company has significant operations, had issued shelter in place or stay-at-home orders. Although these states have begun implementing phased re-opening policies, many of the Company’s employees in these areas continue to work remotely, and any re-openings may be delayed or pulled back if the virus continues to spread or as new strains of the virus emerge. In addition, a number of the Company’s production facilities had to either temporarily close or operate on a reduced capacity. Most commercial activity in sales and marketing, and customer demonstrations and applications training, are either being conducted remotely or postponed. Customer purchasing departments are operating at reduced capacity, and many customers could delay or cut capital expenditures and operating budgets. Even where customers have re-opened their sites, many still operate at productivity levels that are below pre-pandemic levels in an effort to accommodate safety protocols. Any resurgence of the virus or the emergence of new strains of the virus may require the Company or its customers to close or partially close operations once again. These travel restrictions, business closures and reduction in operations at Bruker, customers, distributors, and/or suppliers have and will continue to adversely impact the Company’s operations worldwide, including the ability to manufacture, sell or distribute products, as well as cause temporary closures of foreign distributors, or the facilities of suppliers or customers. This disruption of the Company’s employees, distributors, suppliers and customers has and will continue to impact the Company’s global sales and future operating results. The Company is continuing to monitor and assess the effects of the COVID-19 pandemic on commercial operations, including its impact on revenue in 2021. However, the Company cannot at this time accurately predict what effects these conditions will ultimately have on its operations due to uncertainties relating to the severity of the disease, the duration of the outbreak, including the impact of any resurgence of the virus or the emergence of new strains of the virus, and the length or severity of the travel restrictions, business closures, and other safety and precautionary measures imposed by the governments of impacted countries. The pandemic has also adversely affected the economies and financial markets of many countries, which has affected and likely will continue to affect demand for the Company’s products and its operating results. 84 Table of Contents The preparation of the consolidated financial statements requires the Company to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis the Company evaluates estimates, judgments and methodologies. Changes in estimates are recorded in the period in which they become known. The Company bases estimates on historical experience and on various other assumptions that they believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. The full extent to which the COVID-19 pandemic will directly or indirectly impact the business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, the effectiveness of any COVID-19 vaccines and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international customers and markets. The Company has made estimates of the impact of COVID-19 within the financial statements and there may be changes to those estimates in future periods. Actual results may differ from management's estimates if these results differ from historical experience. Loss Contingencies Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding related to patents, products and other matters, is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure is 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. ​ ​ 3. Recent Accounting Pronouncements In March 2020, the FASB issued Accounting Standards Updates (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include: contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848) : Scope, to clarify that certain optional expedients and exceptions under the reference rate reform guidance for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in the reference rate reform guidance, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. This temporary guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company may elect to apply this guidance for all contract modifications or eligible hedging relationships during that time period subject to certain criteria. The Company is still evaluating the impact of reference rate reform and whether this guidance will be adopted. In January 2020, the FASB issued ASU 2020-01 - Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) , which clarifies the interaction of the accounting for certain equity securities, equity method investments, and certain forward contracts and purchased options. The guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying measurement principles for certain equity securities immediately before applying or discontinuing the equity method. The Company adopted this guidance using a prospective method. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting 85 Table of Contents for Income Taxes . The guidance simplifies the accounting for income taxes by removing certain exceptions within the current guidance; including the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The amendment also improves consistent application by clarifying and amending existing guidance related to aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step up in the tax basis of goodwill. This guidance is effective for annual and interim periods beginning after December 15, 2020 and early adoption is permitted. The assessment of the adoption of this ASU is in process and is not expected to have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements of fair value measurements, including the consideration of costs and benefits. This ASU is effective for the Company in fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 and the adoption did not have a material impact on it’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. This ASU will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted this ASU on January 1, 2020 and the adoption did not have a material impact on it’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The guidance modifies the recognition of credit losses related to financial assets, such as debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, and other financial assets that have the contractual right to receive cash. Current guidance requires the recognition of a credit loss when it is considered probable that a loss event has occurred. The new guidance requires the measurement of expected credit losses to be based upon relevant information, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the asset. As such, expected credit losses may be recognized sooner under the new guidance due to the broader range of information that will be required to determine credit loss estimates. The new guidance also amends the current other-than-temporary impairment model used for debt securities classified as available-for-sale. When the fair value of an available-for-sale debt security is below its amortized cost, the new guidance requires the total unrealized loss to be bifurcated into its credit and non-credit components. Any expected credit losses or subsequent recoveries will be recognized in earnings and any changes not considered credit related will continue to be recognized within other comprehensive income (loss). This guidance is effective for annual and interim periods beginning after December 15, 2019. The Company adopted this new standard on January 1, 2020 using a modified retrospective method for all financial assets measured at amortized cost. The new standard impacts the Company's accounts receivables and off-balance sheet credit exposures. The new standard did not have an impact on the Company’s results of operations and cash flows. ​ 86 Table of Contents 4. Revenue The following table presents the Company’s revenues by Group (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Revenue by Group: ​ ​ ​ ​ Bruker BioSpin ​ $ 600.0 ​ $ 621.4 ​ $ 591.1 Bruker CALID ​ 653.9 ​ 623.5 ​ 547.8 BSI NANO ​ 556.1 ​ 632.7 ​ 568.1 BEST ​ 189.5 ​ 209.9 ​ 194.8 Eliminations ​ ( 12.0 ) ​ ( 14.9 ) ​ ( 6.2 ) Total revenue ​ $ 1,987.5 ​ $ 2,072.6 ​ $ 1,895.6 ​ Revenue for the Company recognized at a point in time versus over time is as follows (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Revenue recognized at a point in time ​ $ 1,726.7 ​ $ 1,847.4 ​ $ 1,716.8 Revenue recognized over time ​ ​ 260.8 ​ 225.2 ​ 178.8 Total revenue ​ $ 1,987.5 ​ $ 2,072.6 ​ $ 1,895.6 ​ Remaining Performance Obligations Remaining performance obligations represent the aggregate transaction price allocated to a promise to transfer a good or service that is fully or partially unsatisfied at the end of the period. As of December 31, 2020, remaining performance obligations were approximately $ 2,006.7 million. The Company expects to recognize revenue on approximately 67.3 % of the remaining performance obligations over the next twelve months and the remaining performance obligations primarily within one to three years . Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Company’s consolidated balance sheets. Contract assets— Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Billing often occurs subsequent to revenue recognition, resulting in contract assets. Contract assets are generally classified as other current assets in the consolidated balance sheets. The balance of contract assets as of December 31, 2020 and December 31, 2019 was $ 41.8 million and $ 43.9 million, respectively. Contract liabilities— The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the consolidated balance sheet based on the timing of when revenue recognition is expected. As of December 31, 2020 and December 31, 2019, the contract liabilities were $ 399.4 million and $ 312.5 million, respectively. The increase in the contract liability balance during the year ended December 31, 2020 is primarily a result of a delay in instrument installation due to customer facility closures or reduced operations as a result of COVID-19. Approximately $ 184.8 million of the contract liability balance on December 31, 2019 was recognized as revenue during the year ended December 31, 2020. ​ 5. Acquisitions The impact of all acquisitions, individually and collectively, on revenues, net income and total assets was not material. Pro forma financial information reflecting all acquisitions has not been presented because the impact, 87 Table of Contents individually and collectively, on revenues, net income and total assets is not material. Amounts allocated to goodwill that are attributable to expected synergies are not expected to be deductible for tax purposes. 2020 Canopy Biosciences On September 10, 2020, Bruker acquired Canopy Biosciences, LLC (“Canopy”) for a purchase price of $ 24.2 million with the potential for additional consideration of up to $ 5.0 million based on achieving revenue targets in calendar years 2021 and 2022. Canopy is a leader in high multiplex biomarker imaging for immunology, immune-oncology and cell therapy. Canopy will be integrated into the BSI Nano Segment. The acquisition is being accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition are as follows (in millions): ​ ​ ​ ​ ​ Consideration Transferred: ​ Cash paid ​ $ 24.4 Contingent consideration ​ 0.5 Cash acquired ​ ( 0.5 ) Working capital adjustment ​ 0.3 Total consideration transferred ​ $ 24.7 ​ ​ ​ ​ Allocation of Consideration Transferred: ​ Inventories ​ $ 1.1 Accounts receivable ​ 1.2 Other current and non-current assets ​ 1.0 Property, plant and equipment ​ 0.9 Operating lease assets ​ 0.3 Intangible assets: ​ Technology ​ 5.7 Customer relationships ​ 6.1 Trade name ​ 0.7 Backlog ​ 0.3 Goodwill ​ 12.0 Deferred taxes, net ​ ( 2.0 ) Liabilities assumed ​ ( 2.6 ) Total consideration allocated ​ $ 24.7 ​ The preliminary fair value allocation included contingent consideration in the amount of $ 0.5 million, which represented the estimated fair value of future payments to the former shareholders of Canopy based on achieving revenue targets for calendar years 2021 and 2022. The Company expects to complete the fair value allocation during the measurement period. The amortization period for the intangible assets acquired is ten years for the customer relationships and technology, eight years for the trade name and one year for the backlog intangible asset. Hain On October 15, 2018, Bruker acquired an 80 % interest in Hain LifeScience GmbH (“Hain”) for a purchase price of Euro 66 million (approximately $ 76.4 million) with options to acquire the remaining 20 %. Hain is an infectious disease specialist with a broad range of molecular diagnostics solutions for the detection of microbial and viral pathogens, as well as for molecular antibiotic resistance testing. Hain is located in Nehren, Germany and was integrated into the BSI Life Science Segment. On January 31, 2020, the Company acquired the 88 Table of Contents remaining 20 % interest in Hain for a purchase price of EUR 20 million (approximately $ 22.2 million). The carrying value of the noncontrolling interest was accreted to the redemption value of EUR 20 million through retained earnings and then reclassified to additional paid in capital. In addition to the acquisitions noted above, in 2020 the Company completed acquisitions that complemented the Company’s existing product offerings. The following table reflects the consideration transferred and the respective reportable segment for the acquisitions (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Cash Name of Acquisition ​ Date Acquired ​ Segment ​ Consideration Consideration SmartTip B.V. ​ April 1, 2020 BSI Nano $ 3.1 $ 2.4 Integrated Proteomics Applications, Inc. ​ ​ August 7, 2020 BSI Life Science ​ 3.0 ​ 3.0 ​ ​ ​ ​ ​ ​ ​ $ 6.1 ​ $ 5.4 ​ 2019 On April 2, 2019, the Company acquired Rave LLC (Rave), a privately held company, for a purchase price of $ 52.2 million with the potential for additional consideration of up to $ 5.0 million based on revenue and gross margin achievements in 2019 and 2020. Rave develops and manufactures nanomachining and laser photomask repair equipment. Rave was integrated into the BSI NANO Segment. The acquisition of Rave was accounted for under the acquisition method. The components and fair value allocation of the consideration transferred in connection with the acquisition were as follows (in millions): ​ ​ ​ ​ ​ Consideration Transferred: ​ Cash paid ​ $ 55.8 Contingent consideration ​ ​ 4.4 Working capital adjustment ​ ​ ( 3.6 ) Total consideration transferred ​ $ 56.6 Allocation of Consideration Transferred: ​ Inventories ​ $ 23.1 Accounts receivable ​ 2.2 Other current and non current assets ​ 0.8 Property, plant and equipment ​ 2.1 Operating lease assets ​ ​ 1.0 Intangible assets: ​ ​ ​ Technology ​ 17.9 Customer relationships ​ 15.5 Trade name ​ 1.5 Goodwill ​ 6.4 Liabilities assumed ​ ( 13.9 ) Total consideration transferred ​ $ 56.6 ​ The fair value allocation included contingent consideration in the amount of $ 4.4 million, which represented the estimated fair value of future payments to the former shareholders of Rave based on achieving revenue and gross margin percentage targets for the period ended April 30, 2020. The Company completed the fair value allocation during 2020. The amortization period for all intangible assets acquired in connection with Rave is ten years. In addition to the Rave acquisition noted above, in the year ended December 31, 2019, the Company completed various other acquisitions that collectively complemented the Company’s existing product offerings or 89 Table of Contents added aftermarket and software capabilities to the Company’s existing businesses. The following table reflects the consideration transferred and the respective reportable segment for each of these acquisitions (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Name of Acquisition Date Acquired Segment Consideration Cash Consideration Arxspan, LLC ​ March 4, 2019 ​ BSI Life Science ​ $ 16.6 ​ $ 14.4 Ampegon PPT GmbH ​ March 7, 2019 BEST ​ 2.0 ​ 2.0 PMOD Technologies GmbH ​ July 1, 2019 BSI Life Science ​ 8.9 ​ 7.9 Magnettech GmbH ​ October 2, 2019 BSI Life Science ​ 9.3 ​ 9.3 BioVendor Instruments a.s. ​ November 1, 2019 BSI Life Science ​ 1.3 ​ 1.3 ​ ​ ​ $ 38.1 ​ $ 34.9 ​ 2018 In the year ended December 31, 2018, the Company completed various acquisitions that collectively complemented the its existing product offerings or added aftermarket and software capabilities to the Company’s existing businesses. The following tables reflect the consideration transferred and the respective reportable segment for each of the 2018 acquisitions (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Anasys JPK Mestrelab Hain Alicona ​ ​ ​ ​ ​ ​ BSI ​ BSI ​ ​ Segment ​ BSI NANO ​ BSI NANO ​ Life Science ​ Life Science ​ BSI NANO ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consideration Transferred: ​ ​ ​ ​ ​ Cash paid ​ $ 27.0 ​ $ 16.6 ​ $ 11.2 ​ $ 76.6 ​ $ 55.4 Cash acquired ​ — ​ ( 0.2 ) ​ ( 1.9 ) ​ ( 3.4 ) ​ ( 1.4 ) Contingent consideration ​ 5.3 ​ 4.3 ​ — ​ — ​ — Total consideration transferred ​ $ 32.3 ​ $ 20.7 ​ $ 9.3 ​ $ 73.2 ​ $ 54.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allocation of Consideration Transferred: ​ ​ ​ ​ ​ Inventories ​ $ 2.8 ​ $ 3.0 ​ $ — ​ $ 9.7 ​ $ 10.1 Accounts receivable ​ 0.8 ​ 1.8 ​ 2.4 ​ 5.9 ​ 3.7 Other current and non-current assets ​ 1.1 ​ 0.7 ​ 0.8 ​ 1.5 ​ 2.0 Property, plant and equipment ​ — ​ — ​ 0.1 ​ 2.3 ​ 1.5 Intangible assets: ​ ​ ​ ​ ​ Technology ​ 7.3 ​ 7.0 ​ 4.9 ​ 38.1 ​ 15.2 Customer relationship ​ 8.0 ​ 7.5 ​ 4.7 ​ 38.6 ​ 19.8 Backlog ​ 1.8 ​ 1.1 ​ — ​ — ​ 2.3 Trade name ​ 0.6 ​ 0.6 ​ 0.5 ​ 3.9 ​ 1.9 Goodwill ​ 16.6 ​ 8.0 ​ 12.5 ​ 42.3 ​ 19.3 Deferred taxes, net ​ ( 3.2 ) ​ ( 4.9 ) ​ ( 2.5 ) ​ ( 19.6 ) ​ ( 9.1 ) Liabilities assumed ​ ( 3.5 ) ​ ( 4.1 ) ​ ( 1.3 ) ​ ( 15.0 ) ​ ( 6.5 ) Assumed debt ​ — ​ — ​ — ​ ( 11.3 ) ​ ( 6.2 ) Redeemable noncontrolling interest ​ — ​ — ​ — ​ ( 23.2 ) ​ — Hybrid instrument liability ​ — ​ — ​ ( 12.8 ) ​ — ​ — Total consideration transferred ​ $ 32.3 ​ $ 20.7 ​ $ 9.3 ​ $ 73.2 ​ $ 54.0 ​ Anasys On April 8, 2018, the Company acquired a 100 % interest in Anasys Instruments Corp. (Anasys), a privately held company, for a purchase price of $ 27.0 million with the potential for additional consideration based on 90 Table of Contents achieving revenue targets in 2019 and 2020. Anasys develops and manufactures nanoscale infrared spectroscopy and thermal measurement instruments. Anasys was integrated into the BSI NANO Segment. The fair value allocation included contingent consideration in the amount of $ 5.3 million, which represented the estimated fair value of future payments to the former shareholders of Anasys based on Anasys achieving annual revenue targets for the years 2019 and 2020. The Company completed the fair value allocation in the fourth quarter of 2018. The amortization period for all intangible assets acquired in connection with Anasys is eight years , except for backlog which will be amortized over one year . JPK On July 11, 2018, the Company acquired a 100 % interest in JPK Instruments AG (JPK), a privately held company, for a purchase price of Euro 14.2 million (approximately $ 16.6 million), with the potential for additional consideration based on various operational achievements throughout 2019 and 2020. JPK adds in-depth expertise in live-cell imaging, cellular mechanics, adhesion, and molecular force measurements, optical trapping, and biological stimulus-response characterization to Bruker’s capabilities. JPK is located in Berlin, Germany and was integrated into the BSI NANO Segment. The fair value allocation included contingent consideration in the amount of $ 4.3 million, which represented the estimated fair value of future payments to the former shareholders of JPK based on JPK achieving various operational achievements for the years 2019 and 2020 . The Company completed the fair value allocation in the second quarter of 2019 . The amortization period for all intangible assets acquired in connection with JPK is eight years , except for backlog which was amortized over one year . Mestrelab On October 1, 2018, Bruker acquired a 24.9 % interest in Mestrelab Research, S.L. (Mestrelab) for a purchase price of Euro 4.7 million (approximately $ 5.4 million) and acquired an additional 26.1 % interest on December 4, 2018 for a purchase price of Euro 5.2 million (approximately $ 5.9 million). The Company has options that can be exercised after 2022 to acquire the remaining 49 %. Mestrelab adds in-depth expertise to assist in advancing chemistry software that handles spectroscopic data and extracts and manages chemical information from a variety of analytical techniques, including, for example, NMR and mass spectrometry. Mestrelab is located in Santiago de Compostela, Spain and was integrated into the BSI Life Science Segment. The Company completed the fair value allocation in the fourth quarter of 2019 . The amortization period for all intangible assets acquired in connection with Mestrelab is nine years , except for customer relationships which will be amortized over ten years . Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 49 % of Mestrelab for cash at a contractually defined redemption value. These rights (embedded derivative) are exercisable beginning in 2022 and can be accelerated, at a discounted redemption value, upon certain events related to post combination services. As the option is tied to continued employment, the Company classified the hybrid instrument (noncontrolling interest with an embedded derivative) as a long-term liability on the consolidated balance sheet. Subsequent to the acquisition, the carrying value of the hybrid instrument is remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the requisite service period vested. During the year ended December 31, 2019, the fair value remeasurement resulted in a $ 2.3 million stock compensation benefit. Hain On October 15, 2018, Bruker acquired an 80 % interest in Hain Lifescience GmbH (Hain) for a purchase price of Euro 66 million (approximately $ 76.4 million) and had options to acquire the remaining 20 % exercisable after 2022. Hain is an infectious disease specialist with a broad range of molecular diagnostics solutions for the 91 Table of Contents detection of microbial and viral pathogens, as well as for molecular antibiotic resistance testing. Hain is located in Nehren, Germany and was integrated into the BSI Life Science Segment. The Company completed the fair value allocation in the fourth quarter of 2019. The amortization period for all intangible assets acquired in connection with Hain is 15 years . Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that provided the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 20 % of Hain for cash at a contractually defined redemption value. These rights are accelerated in certain events. As the redemption is contingently redeemable at the option of the noncontrolling interest shareholders, the Company classifies the carrying amount of the redeemable noncontrolling interest in the mezzanine section on the consolidated balance sheet, which is presented above the equity section and below liabilities. The agreement establishes a redemption price floor of Euro 16.7 million. Beginning in 2022, the redemption price is capped at Euro 46 million and increases by Euro 6 million each year thereafter if unexercised by either party. Subsequent to the acquisition, the redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest. Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings. During the year ended December 31, 2019, there were no adjustments to the carrying value of the redeemable noncontrolling interest. Alicona On December 17, 2018, Bruker acquired a 100 % interest in Agapetus GmbH (Alicona) for a purchase price of Euro 48.9 million (approximately $ 55.4 million). Alicona is a provider of optical-based metrology products. Alicona is located in Graz, Austria and was integrated into the BSI NANO Segment. The Company completed the fair value allocation in the fourth quarter of 2019 . The amortization period for the intangible assets acquired in connection with Alicona is 8 years for the customer relationships and technology intangible assets, 12 years for the trade name intangible asset and 1 year for the backlog intangible asset. Other Acquisitions In addition to the acquisitions noted above, in the year ended December 31, 2018, the Company completed various other acquisitions that collectively complemented the Company’s existing product offerings or added aftermarket and software capabilities to the Company’s existing businesses. The total consideration transferred for the additional acquisitions was $ 12.7 million. ​ 6. Allowance for Doubtful Accounts ​ The following is a summary of the components for allowance for doubtful accounts (in millions): ​ ​ ​ ​ ​ Balance at December 31, 2017 $ 4.7 Additions ​ 0.8 Deductions ​ ( 1.7 ) Balance at December 31, 2018 ​ 3.8 Additions ​ 1.5 Deductions ​ ( 1.9 ) Balance at December 31, 2019 ​ 3.4 Additions ​ 0.9 Deductions ​ ( 1.3 ) Balance at December 31, 2020 ​ $ 3.0 ​ ​ 92 Table of Contents 7. Inventories Inventories consisted of the following (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Raw materials ​ $ 198.8 ​ $ 188.8 Work-in-process ​ ​ 245.7 ​ ​ 206.4 Finished goods ​ ​ 152.1 ​ ​ 104.5 Demonstration units ​ ​ 95.7 ​ ​ 77.5 Inventories ​ $ 692.3 ​ $ 577.2 ​ Finished goods include in-transit systems that have been shipped to the Company’s customers but not yet installed and accepted by the customer. At December 31, 2020 and 2019, inventory-in-transit was $ 67.8 million and $ 36.0 million, respectively. ​ 8. Property, Plant and Equipment, Net The following is a summary of property, plant and equipment, net by major asset class (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Land ​ $ 36.5 ​ $ 26.5 Building and leasehold improvements ​ ​ 374.7 ​ 305.2 Machinery, equipment, software and furniture and fixtures ​ ​ 416.8 ​ 400.0 ​ ​ 828.0 ​ 731.7 Less accumulated depreciation and amortization ​ ( 432.5 ) ​ ( 425.6 ) Property, plant and equipment, net ​ $ 395.5 ​ $ 306.1 ​ Depreciation expense, which includes the amortization of leasehold improvements, for the years ended December 31, 2020, 2019 and 2018 was $ 44.7 million, $ 37.3 million and $ 36.0 million, respectively. ​ 9. Goodwill and Intangible Assets Goodwill The following table sets forth the changes in the carrying amount of goodwill by segment (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BSI Life ​ ​ ​ ​ ​ ​ ​ ​ Science BSI NANO BEST Total Balance at December 31, 2017 ​ $ 8.9 ​ $ 160.9 ​ $ — ​ $ 169.8 Current period additions/adjustments ​ 64.1 ​ 44.9 ​ — ​ 109.0 Foreign currency impact ​ ( 1.0 ) ​ ( 2.1 ) ​ — ​ ( 3.1 ) Balance at December 31, 2018 ​ ​ 72.0 ​ ​ 203.7 ​ ​ — ​ ​ 275.7 Current period additions/adjustments ​ ​ 13.1 ​ ​ 6.3 ​ ​ 0.3 ​ ​ 19.7 Foreign currency impact ​ ( 0.9 ) ​ ( 1.5 ) ​ — ​ ( 2.4 ) Balance at December 31, 2019 ​ ​ 84.2 ​ ​ 208.5 ​ ​ 0.3 ​ ​ 293.0 Current period additions/adjustments ​ ​ — ​ ​ 13.7 ​ ​ — ​ ​ 13.7 Foreign currency impact ​ 7.9 ​ 5.8 ​ — ​ 13.7 Balance at December 31, 2020 ​ $ 92.1 ​ $ 228.0 ​ $ 0.3 ​ $ 320.4 ​ As a result of the impact of the COVID-19 pandemic, the Company performed an interim impairment assessment of the goodwill balance as of March 31, 2020 using a combination of both quantitative and qualitative approaches. Based on this interim assessment, the Company concluded the fair values of each of the reporting 93 Table of Contents units were significantly greater than their carrying amounts, and therefore, no impairment is required. The goodwill assessment was based on management's estimates and assumptions, certain of which are dependent on external factors. No further triggering events were identified subsequent to March 31, 2020. To the extent actual results differ materially from these estimates, and the risks presented by COVID-19 and the current economic environment persist to negatively affect the Company’s operations in subsequent periods, further interim impairment assessments could be required, which could result in an impairment of goodwill. ​ The Company performed its annual impairment evaluation using both a quantitative and qualitative approach at December 31, 2020 and 2019, and a quantitative approach at December 31, 2018 and concluded it was more likely than not that goodwill has not been impaired. Based on the most recent quantitative analysis the fair values of each of the Company’s reporting units was greater than their carrying amounts and, therefore, no impairment was required. The Company has recorded $ 3.1 million in the cumulative impairment of goodwill. Intangible Assets The following is a summary of intangible assets (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 ​ ​ ​ Gross ​ ​ ​ ​ Net ​ Gross ​ ​ ​ ​ Net ​ ​ ​ Carrying ​ Accumulated ​ Carrying ​ Carrying ​ Accumulated ​ Carrying ​ ​ Amount Amortization Amount Amount Amortization Amount Existing technology and related patents ​ $ 309.8 ​ $ ( 194.6 ) ​ $ 115.2 ​ $ 300.9 ​ $ ( 182.4 ) ​ $ 118.5 ​ Customer relationships ​ ​ 148.3 ​ ​ ( 45.4 ) ​ ​ 102.9 ​ ​ 134.7 ​ ​ ( 30.9 ) ​ ​ 103.8 ​ Non-compete contracts ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.8 ​ ​ ( 1.8 ) ​ ​ — ​ Trade names ​ ​ 15.2 ​ ​ ( 4.4 ) ​ ​ 10.8 ​ ​ 13.7 ​ ​ ( 2.9 ) ​ ​ 10.8 ​ Other ​ ​ 0.3 ​ ​ ( 0.1 ) ​ ​ 0.2 ​ ​ 5.5 ​ ​ ( 5.4 ) ​ ​ 0.1 ​ Intangible assets ​ $ 473.6 ​ $ ( 244.5 ) ​ $ 229.1 ​ $ 456.6 ​ $ ( 223.4 ) ​ $ 233.2 ​ ​ For the years ended December 31, 2020, 2019 and 2018, the Company recorded amortization expense of approximately $ 35.8 million, $ 38.3 million and $ 28.9 million, respectively, in the consolidated statements of income and comprehensive income. The estimated future amortization expense related to amortizable intangible assets is as follows (in millions): ​ ​ ​ ​ ​ 2021 $ 36.3 2022 ​ ​ 30.7 2023 ​ ​ 28.0 2024 ​ ​ 25.6 2025 ​ ​ 24.7 Thereafter ​ ​ 83.8 Total ​ $ 229.1 ​ ​ ​ 94 Table of Contents 10. Other Current Liabilities The following is a summary of other current liabilities (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Deferred revenue ​ $ 118.0 ​ $ 102.6 Accrued compensation ​ ​ 110.6 ​ 105.7 Accrued warranty ​ ​ 20.3 ​ ​ 21.1 Contingent consideration ​ ​ 2.7 ​ ​ 12.6 Income taxes payable ​ ​ 98.0 ​ 52.4 Other taxes payable ​ ​ 18.5 ​ ​ 17.5 Derivative liabilities ​ ​ 8.0 ​ 1.2 Operating leases ​ ​ 21.3 ​ ​ 20.6 Legal and professional fees ​ ​ 14.3 ​ ​ 8.8 Other accrued expenses ​ ​ 54.2 ​ 46.3 Other current liabilities ​ $ 465.9 ​ $ 388.8 ​ The following table sets forth the changes in accrued warranty (in millions): ​ ​ ​ ​ ​ Balance at December 31, 2017 $ 20.6 Accruals for warranties issued during the year ​ 21.3 Settlements of warranty claims ​ ( 21.5 ) Foreign currency impact ​ ( 0.7 ) Balance at December 31, 2018 ​ ​ 19.7 Accruals for warranties issued during the year ​ 24.5 Settlements of warranty claims ​ ( 22.9 ) Foreign currency impact ​ ( 0.2 ) Balance at December 31, 2019 ​ 21.1 Accruals for warranties issued during the year ​ 19.2 Settlements of warranty claims ​ ( 21.1 ) Foreign currency impact ​ 1.1 Balance at December 31, 2020 ​ $ 20.3 ​ ​ ​ ​ 11. Debt The Company’s debt obligations consist of the following (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 US Dollar notes under the 2012 Note Purchase Agreement ​ $ 205.0 ​ $ 205.0 ​ CHF notes (in dollars) under the 2019 Note Purchase Agreement ​ ​ 335.5 ​ ​ 306.8 ​ US Dollar notes under the 2019 Term Loan ​ ​ 300.0 ​ ​ 300.0 ​ Unamortized debt issuance costs ​ ​ ( 2.4 ) ​ ​ ( 2.6 ) ​ Capital lease obligations and other loans ​ ​ 6.4 ​ ​ 4.1 ​ Total debt ​ 844.5 ​ 813.3 ​ Current portion of long-term debt ​ ( 2.2 ) ​ ( 0.5 ) ​ Total long-term debt, less current portion ​ $ 842.3 ​ $ 812.8 ​ ​ On December 11, 2019, the Company entered into (1) a new revolving credit agreement to establish a new revolving credit facility in the aggregate principal amount of $ 600 million; (2) a term loan agreement to establish a new term loan facility in the aggregate principal amount of $ 300 million; and (3) a note purchase agreement to issue and sell CHF 297 million aggregate principal amount of 1.01 % senior notes due December 11, 2029. 95 Table of Contents The new revolving credit agreement replaced the Company’s $ 500 million five-year revolving credit agreement established on October 27, 2015, which was terminated on December 11, 2019. The existing $ 105 million 4.31 % Series 2012A Senior Notes, Tranche C, due January 18, 2022, and the existing $ 100 million 4.46 % Series 2012A Senior Notes, Tranche D, due January 18, 2024, which the Company issued pursuant to a note purchase agreement dated January 18, 2012, remain in full force and effect. Each of the revolving credit agreements, term loan agreement and note purchase agreements are described below. 2019 Revolving Credit Agreement On December 11, 2019, the Company entered into a new credit agreement, referred to as the 2019 Revolving Credit Agreement. The 2019 Revolving Credit Agreement provides for a five-year revolving credit facility in the U.S. Dollar equivalent amount of $ 600 million, comprised of sub-facilities for revolving loans, swing-line loans, letters of credit and foreign borrowings. The 2019 Revolving Credit Agreement also provides for an uncommitted incremental facility whereby, under certain circumstances, the Company may, at its option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $ 250 million. Loans under the 2019 Revolving Credit Agreement will be repayable in full at maturity and may also be prepaid at the Company’s option in whole or in part without premium or penalty. Amounts borrowed under the 2019 Revolving Credit Agreement may be repaid and reborrowed from time to time prior to the maturity date. The obligations under the 2019 Revolving Credit Agreement are unsecured and are fully and unconditionally guaranteed by the Company and certain of its subsidiaries. Borrowings under the 2019 Revolving Credit Agreement bear interest at a rate equal to, at the Company’s option, (a) the London Interbank Offered Rate ( LIBOR ) applicable to the relevant currency, plus a margin ranging from 1.000 % to 1.500 %, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus ½ of 1%, (ii) the prime rate announced by Bank of America, N.A., and (iii) LIBOR, as adjusted , plus 1 %, plus, in each case, a margin rate ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio. The Company has also agreed to pay a quarterly facility fee based on the aggregate unused amount available under the 2019 Revolving Credit Agreement ranging from 0.100 % to 0.200 %, based on the Company’s leverage ratio. The 2019 Revolving Credit Agreement includes affirmative, negative and financial covenants and events of default customary for financings of this type. The negative covenants include, among others, restrictions on liens, indebtedness of the Company and its subsidiaries, asset and equity sales, dividends, and transactions with affiliates. The financial covenants include maximum leverage ratio and minimum interest coverage ratios of the Company, specifically, the Company’s leverage ratio cannot exceed 3.5 and the interest coverage ratio cannot be less than 2.5 . The events of default include, among others, payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations and warranties, bankruptcy and insolvency related events, certain ERISA events, material judgments, and the occurrence of a change of control. The following is a summary of the maximum commitments and the net amounts available to the Company under the 2019 Revolving Credit Agreement and other lines of credit with various financial institutions located 96 Table of Contents primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Committed and ​ ​ Weighted ​ Total Amount ​ Total Amount ​ ​ ​ ​ Outstanding ​ Uncommitted ​ ​ Average ​ Committed by ​ Uncommitted by ​ Outstanding ​ Letters of ​ Amounts ​ ​ Interest Rate ​ Lenders ​ Lenders ​ Borrowings ​ Credit ​ Available 2019 Credit Agreement 1.3 % $ 600.0 ​ — ​ $ — ​ $ 0.1 ​ $ 599.9 Bank guarantees and working capital line ​ 0.0 % ​ 132.9 ​ 103.3 ​ ​ — ​ ​ 132.9 ​ ​ 103.3 Total revolving lines of credit ​ ​ ​ $ 732.9 ​ 103.3 ​ $ — ​ $ 133.0 ​ $ 703.2 ​ 2019 Term Loan Agreement On December 11, 2019, the Company, together with certain of its subsidiaries, as borrowers, entered into a term loan agreement, referred to as Term Loan Agreement with a bank consortium. The Term Loan Agreement provides for a $ 300 million seven-year term loan facility subject to terms and conditions substantially consistent with those provisions contained in the 2019 Revolving Credit Agreement. Loans under the Term Loan Agreement will be repayable in full at maturity, subject to scheduled amortization beginning in 2022, and may also be prepaid at the Company’s option in whole or in part without premium or penalty. The obligations under the Term Loan Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries. Amounts outstanding under the Term Loan Agreement bear interest at a rate equal to, at the Company’s option, (a) the US Dollar London Interbank Offered Rate ( USD LIBOR ), plus a margin ranging from 1.000 % to 1.500 %, based on the Company’s leverage ratio, or (b) the highest of (i) the federal funds effective rate plus ½ of 1% , (ii) the prime rate announced by Bank of America, N.A., and (iii) USD LIBOR , as adjusted, plus 1 %, plus a margin ranging from 0.100 % to 0.500 %, based on the Company’s leverage ratio. The other terms of the Term Loan Agreement are substantially similar to the terms of the 2019 Revolving Credit Agreement, including representations and warranties, affirmative, negative and financial covenants, and events of default. 2019 Note Purchase Agreement On December 11, 2019, the Company entered into a note purchase agreement, referred to as the 2019 Note Purchase Agreement, with a group of institutional accredited investors. Pursuant to the 2019 Note Purchase Agreement, the Company issued and sold CHF 297 million aggregate principal amount of 1.01 % senior notes due December 11, 2029, referred to as the 2019 Senior Notes. The obligations under the Note Purchase Agreement are unsecured and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries. Interest on the 2019 Senior Notes is payable semi-annually on June 11 and December 11 of each year, commencing June 11, 2020. The 2019 Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed by certain of the Company’s subsidiaries. The Company may prepay some or all of the 2019 Senior Notes at any time in an amount not less than 10 % of the aggregate principal amount of the 2019 Senior Notes then outstanding at a price equal to the sum of (a) the principal amount to be prepaid, plus accrued and unpaid interest, (b) any applicable “make-whole” amount, and (c) certain other fees and expenses. In the event of a change in control (as defined in the 2019 Note Purchase Agreement) of the Company, the Company may be required to prepay the 2019 Senior Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest and certain other fees and expenses. The 2019 Note Purchase Agreement contains customary affirmative and negative covenants, including, among others, restrictions on the Company’s ability to incur liens, transfer or sell equity or assets, engage in 97 Table of Contents certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to engage in certain lines of business. The 2019 Note Purchase Agreement also includes customary representations and warranties and events of default. Additionally, so long as any 2019 Senior Notes are outstanding, the Company may not permit (i) its leverage ratio (as determined pursuant to the 2019 Note Purchase Agreement) as of the end of any fiscal quarter to exceed 3.50 to 1.00 unless a material acquisition causes an adjusted leverage ratio to apply pursuant to the 2019 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2019 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 1.00, or (iii) priority Debt at any time to exceed 15 % of consolidated total assets (as determined pursuant to the 2019 Note Purchase Agreement). 2012 Note Purchase Agreement In January 2012, the Company entered into a note purchase agreement, referred to as the 2012 Note Purchase Agreement, with a group of accredited institutional investors. Pursuant to the 2012 Note Purchase Agreement, the Company issued and sold $ 240.0 million of senior notes, referred to as the 2012 Senior Notes, which consist of the following: ● $ 20 million 3.16 % Series 2012A Senior Notes, Tranche A, due January 18, 2017; ● $ 15 million 3.74 % Series 2012A Senior Notes, Tranche B, due January 18, 2019; ● $ 105 million 4.31 % Series 2012A Senior Notes, Tranche C, due January 18, 2022; and ● $ 100 million 4.46 % Series 2012A Senior Notes, Tranche D, due January 18, 2024. On January 18, 2017, the outstanding $ 20.0 million principal amount of Tranche A of the 2012 Senior Notes was repaid in accordance with the terms of the 2012 Note Purchase Agreement. On January 18, 2019, the outstanding $ 15.0 million principal amount of Tranche B of the 2012 Senior Notes was repaid in accordance with the terms of the 2012 Note Purchase Agreement. Under the terms of the 2012 Note Purchase Agreement, interest is payable semi-annually on January 18 and July 18 of each year. The 2012 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 2012 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 2012 Senior Notes at any time in an amount not less than 10 % of the original aggregate principal amount of the 2012 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 2012 Senior Notes. In the event of a change in control of the Company, as defined in the Note Purchase Agreement, the Company may be required to prepay the Notes at a price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest. The 2012 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 2012 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 2012 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 2012 Senior Notes will become due and payable immediately without further action or notice. In the case of payment events of defaults, any holder of 2012 Senior Notes affected thereby may declare all 2012 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 2012 Senior Notes may declare all the 2012 Senior Notes to be due and payable immediately. Pursuant to the 2012 Note Purchase Agreement, so long as any 2012 Senior Notes are outstanding, the Company will not permit (i) its leverage ratio, as determined pursuant to the 2012 Note Purchase Agreement, as of the end of any 98 Table of Contents fiscal quarter to exceed 3.50 to 1.00, (ii) its interest coverage ratio as determined pursuant to the 2012 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 2012 Note Purchase Agreement. As of December 31, 2020, the Company was in compliance with the covenants of all debt agreements. Annual maturities of debt outstanding, less deferred financing cost amortization are as follows (in millions): ​ ​ ​ ​ ​ 2021 $ 2.6 2022 ​ ​ 112.0 2023 ​ ​ 16.6 2024 ​ ​ 115.8 2025 ​ ​ 15.2 Thereafter ​ ​ 584.7 Total ​ $ 846.9 ​ As of December 31, 2020 and 2019, the Company has entered into several cross-currency and interest rate swap agreements with a notional value of $ 150.0 million of U.S. to Swiss Franc and a notional value of $ 355.0 million of U.S. to Euro to hedge the variability in the movement of foreign currency exchange rates on portions of our Euro and Swiss Franc denominated net asset investments. These agreements qualify for hedge accounting and accordingly the change in fair value of the derivative are recorded in other comprehensive income as part of foreign currency translation adjustments and remain in accumulated comprehensive income (loss) attributable to Bruker Corporation in shareholders’ equity until the sale or substantial liquidation of the foreign operation. The difference between the interest rate received and paid under the interest rate and cross-currency swap agreements is recorded in interest and other income (expenses) in the consolidated statements of income and comprehensive income. As a result of entering into these agreements, the Company has lowered net interest expense by $ 7.2 million and $ 0.6 million during 2020 and 2019, respectively. The losses related to hedges of net asset investments in international operations that were recorded within the cumulative translational adjustment section of other comprehensive income were $ 47.1 million and $ 6.8 million for the years ended December 31, 2020 and 2019, respectively. Interest expense for the years ended December 31, 2020, 2019 and 2018 was $ 14.4 million, $ 16.0 million and $ 12.6 million, respectively. 99 Table of Contents ​ 12. Fair Value of Financial Instruments The Company measures the following financial assets and liabilities at fair value on a recurring basis. The following tables set forth the Company’s financial instruments and presents them within the fair value hierarchy using the lowest level of input that is significant to the fair value measurement (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Other ​ Significant ​ ​ ​ ​ ​ Markets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Available ​ Inputs ​ Inputs December 31, 2020 Total (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits and money market funds ​ $ 183.2 ​ $ — ​ $ 183.2 ​ $ — Short-term investments ​ ​ 50.0 ​ ​ — ​ ​ 50.0 ​ ​ — Interest rate and cross currency swap agreements ​ ​ 7.6 ​ ​ — ​ ​ 7.6 ​ ​ — Foreign exchange contracts ​ ​ 2.1 ​ ​ — ​ ​ 2.1 ​ ​ — Embedded derivatives in purchase and delivery contracts ​ ​ 0.1 ​ ​ — ​ ​ 0.1 ​ ​ — Fixed price commodity contracts ​ ​ 3.1 ​ ​ — ​ ​ 3.1 ​ ​ — Debt securities available for sale ​ ​ 1.2 ​ ​ — ​ ​ — ​ ​ 1.2 Total assets recorded at fair value ​ $ 247.3 ​ $ — ​ $ 246.1 ​ $ 1.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 4.3 ​ $ — ​ $ — ​ $ 4.3 Hybrid instrument liability ​ ​ 13.9 ​ ​ — ​ ​ — ​ ​ 13.9 Interest rate and cross currency swap agreements ​ ​ 61.5 ​ ​ — ​ ​ 61.5 ​ ​ — Foreign exchange contracts ​ ​ 0.4 ​ ​ — ​ ​ 0.4 ​ ​ — Total liabilities recorded at fair value ​ $ 80.1 ​ $ — ​ $ 61.9 ​ $ 18.2 ​ 100 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Other ​ Significant ​ ​ ​ ​ ​ Markets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Available ​ Inputs ​ Inputs December 31, 2019 Total (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits and money market funds ​ $ 9.0 ​ $ — ​ $ 9.0 ​ $ — Short-term investments ​ ​ 6.6 ​ ​ — ​ ​ 6.6 ​ ​ — Interest rate and cross currency swap agreements ​ ​ 10.1 ​ ​ — ​ ​ 10.1 ​ ​ — Foreign exchange contracts ​ ​ 0.9 ​ ​ — ​ ​ 0.9 ​ ​ — Embedded derivatives in purchase and delivery contracts ​ ​ 0.1 ​ ​ — ​ ​ 0.1 ​ ​ — Fixed price commodity contracts ​ ​ 0.3 ​ ​ — ​ ​ 0.3 ​ ​ — Total assets recorded at fair value ​ $ 27.0 ​ $ — ​ $ 27.0 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 15.8 ​ $ — ​ $ — ​ $ 15.8 Hybrid instrument liability ​ ​ 10.6 ​ ​ — ​ ​ — ​ ​ 10.6 Interest rate and cross currency swap agreements ​ ​ 16.9 ​ ​ — ​ ​ 16.9 ​ ​ — Foreign exchange contracts ​ ​ 0.4 ​ ​ — ​ ​ 0.4 ​ ​ — Embedded derivatives in purchase and delivery contracts ​ ​ 0.6 ​ ​ — ​ ​ 0.6 ​ ​ — Total liabilities recorded at fair value ​ $ 44.3 ​ $ — ​ $ 17.9 ​ $ 26.4 ​ Derivative financial instruments are classified within level 2 because there is not an active market for each derivative contract. However, the inputs used to calculate the value of the instruments are obtained from active markets. 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 year ended December 31, 2020 or 2019. The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was $ 549.8 million and $ 517.4 million at December 31, 2020 and 2019, respectively, based on market and observable sources with similar maturity dates.The remaining long-term debt has variable interest rates and the cost approximates fair value accordingly. 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 years ended December 31, 2020, 2019 and 2018. Debt securities consist of investments in redeemable preferred stock. Debt securities are classified as either current or long-term investments based on their contractual maturities unless the Company intends to sell an investment within the next twelve months, in which case it is classified as current on the consolidated balance sheets. Debt securities are classified as available for sale and are carried at fair value. Contingent consideration recorded within other current liabilities represents the estimated fair value of future payments to the former shareholders as part of certain acquisitions. These contingent considerations are primarily based on the applicable acquired company achieving annual revenue and gross margin targets in certain years as specified in the relevant purchase and sale agreement. The Company initially values the contingent consideration on acquisition date by using a Monte Carlo simulation or an income approach method. The Monte Carlo method models future revenue and costs of goods sold projections and discounts the average results to present value. The income approach method involves calculating the earnout payment based on the forecasted 101 Table of Contents cash flows, adjusting the future earnout payment for the risk of reaching the projected financials, and then discounting the future payments to present value by the counterparty risk. The counterparty risk considers the risk of the buyer having the cash to make the earnout payments and is commensurate with a cost of debt over an appropriate term. The following table sets forth the changes in contingent consideration liabilities (in millions): ​ ​ ​ ​ Balance at December 31, 2018 $ 15.1 Current period additions ​ 5.4 Current period adjustments ​ 2.3 Current period settlements ​ ( 6.7 ) Foreign currency effect ​ ( 0.3 ) Balance at December 31, 2019 ​ 15.8 Current period additions ​ 1.2 Current period adjustments ​ ( 4.4 ) Current period settlements ​ ( 8.7 ) Foreign currency effect ​ 0.4 Balance at December 31, 2020 ​ $ 4.3 ​ As part of the Mestrelab acquisition, the Company entered into an agreement with the noncontrolling interest holders that provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining 49 % of Mestrelab for cash at a contractually defined redemption value. These rights (an embedded derivative) are exercisable beginning in 2022 and can be accelerated, at a discounted redemption value, upon certain events related to post combination services. As the option is tied to continued employment, the Company classified the hybrid instrument (noncontrolling interest with an embedded derivative) as a long-term liability on the consolidated balance sheet. Subsequent to the acquisition, the carrying value of the hybrid instrument is remeasured to fair value with changes recorded to stock-based compensation expense in proportion to the requisite service period vested. The hybrid instrument is classified as Level 3 in the fair value hierarchy. The following table sets forth the changes in hybrid instrument liability (in millions): ​ ​ ​ ​ ​ Balance at December 31, 2018 ​ $ 12.9 Current period additions ​ ​ ( 2.3 ) Balance at December 31, 2019 ​ 10.6 Current period additions ​ ​ 2.6 Foreign currency effect ​ ​ 0.7 Balance at December 31, 2020 ​ $ 13.9 ​ ​ 13. Derivative Instruments and Hedging Activities Interest Rate Risk The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related market rates. Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2019 Credit Agreement and the 2019 Term Loan. Commodity Price Risk Management The Company has arrangements with certain customers under which it has a firm commitment to deliver copper based superconductors at a fixed price. In order to minimize the volatility that fluctuations in the price of copper have on the Company’s sales of these commodities, the Company enters into commodity hedge contracts. At December 31, 2020 and 2019, the Company has fixed price commodity contracts with notional amounts aggregating $ 8.8 million and $ 5.6 million, respectively. As commodity contracts settle, gains (losses) as a result of changes in fair values are adjusted to the contracts with the customers through revenues. 102 Table of Contents Foreign Exchange Rate Risk Management The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany and other countries in the European Union and Switzerland, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into foreign currency contracts in order to minimize the volatility that fluctuations in currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months, with some agreements extending to longer periods. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the consolidated statements of income and comprehensive income. The Company had the following notional amounts outstanding under foreign exchange contracts and cross-currency interest rate swap agreements (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ December 31, 2019 ​ ​ Notional Amount ​ ​ ​ ​ Notional Amount ​ ​ ​ ​ in U.S. Dollars ​ Fair Value in U.S. Dollars ​ Fair Value Forward Currency Contracts (1): ​ ​ ​ ​ Assets ​ $ 175.8 ​ $ 2.1 ​ $ 66.7 ​ $ 0.9 Liabilities ​ 102.5 ​ ( 0.4 ) ​ 7.7 ​ ( 0.4 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cross-Currency and Interest Rate Swap Agreements (2): ​ ​ ​ ​ Liabilities ​ 505.0 ​ ( 53.9 ) ​ 505.0 ​ ( 6.8 ) ​ ​ $ 783.3 ​ $ ( 52.2 ) ​ $ 579.4 ​ $ ( 6.3 ) (1) Derivatives not designated as accounting hedges. (2) Derivatives designated as accounting hedges. In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the “embedded derivative” component of these contracts. The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $ 7.5 million for the delivery of products and $ 4.8 million for the purchase of products at December 31, 2020 and $ 12.3 million for the delivery of products and $ 6.1 million for the purchase of products at December 31, 2019. The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income. 103 Table of Contents The fair value of the derivative instruments described above were recorded in the consolidated balance sheets as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2020 2019 Derivatives designated as hedging instruments ​ ​ ​ ​ ​ ​ Interest rate cross-currency swap agreements ​ ​ ​ ​ ​ ​ Other current assets ​ $ 7.6 ​ $ 10.1 Other current liabilities ​ ​ ( 4.3 ) ​ ​ — Other long-term liabilities ​ ​ ( 57.2 ) ​ ​ ( 16.9 ) Total derivatives designated as hedging instruments ​ ​ ( 53.9 ) ​ ​ ( 6.8 ) ​ ​ ​ ​ ​ ​ ​ Derivatives not designated as hedging instruments ​ ​ ​ ​ ​ ​ Forward currency contracts ​ ​ ​ ​ ​ ​ Other current assets ​ $ 2.1 ​ $ 0.9 Other current liabilities ​ ​ ( 0.4 ) ​ ​ ( 0.4 ) Embedded derivatives in purchase and delivery contracts ​ ​ ​ ​ ​ ​ Other current assets ​ ​ 0.1 ​ ​ 0.1 Other current liabilities ​ ​ — ​ ​ ( 0.6 ) Fixed price commodity contracts ​ ​ ​ ​ ​ ​ Other current assets ​ ​ 3.1 ​ ​ 0.3 Total derivatives not designated as hedging instruments ​ ​ 4.9 ​ ​ 0.3 ​ ​ ​ ​ ​ ​ ​ Total derivatives ​ $ ( 49.0 ) ​ $ ( 6.5 ) ​ The following is a summary of the activity included in the consolidated statements of income and comprehensive income related to the derivative instruments described above (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ ​ ​ December 31, ​ ​ Financial Statement Classification ​ 2020 ​ 2019 ​ 2018 Derivatives not designated as hedging instruments ​ ​ ​ Forward currency contracts Interest and other income (expense), net ​ $ 2.1 ​ $ 3.0 ​ $ ( 7.0 ) Embedded derivatives in purchase and delivery contracts Interest and other income (expense), net ​ 0.5 ​ — ​ 1.5 Total ​ ​ ​ $ 2.6 ​ $ 3.0 ​ $ ( 5.5 ) Derivatives designated as Cash Flow hedging instruments ​ ​ ​ ​ Interest rate cross-currency swap agreements ​ ​ ​ ​ Interest incurred ​ Interest and other income (expense), net ​ $ ( 3.0 ) ​ $ — ​ $ — Unrealized gains (losses) on contracts ​ Accumulated other comprehensive income ​ ( 20.4 ) ​ 2.0 ​ — Total ​ ​ ​ $ ( 23.4 ) ​ $ 2.0 ​ $ — Derivatives designated as Net Investment hedging instruments ​ ​ ​ ​ Interest rate cross-currency swap agreements ​ ​ ​ ​ Interest earned ​ Interest and other income (expense), net ​ $ 10.1 ​ $ 0.6 ​ $ — Unrealized losses on contracts ​ Accumulated other comprehensive income ​ ( 26.7 ) ​ ( 8.8 ) ​ — Total ​ ​ ​ $ ( 16.6 ) ​ $ ( 8.2 ) ​ $ — ​ ​ ​ ​ ​ 104 Table of Contents 14. Income Taxes The domestic and foreign components of income before taxes are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Domestic ​ $ ( 31.1 ) ​ $ 3.8 ​ $ ( 15.4 ) Foreign ​ ​ 256.9 ​ 276.6 ​ 260.1 Total income before provision for income taxes ​ $ 225.8 ​ $ 280.4 ​ $ 244.7 ​ The components of the income tax provision are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Current income tax expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ $ ( 0.5 ) ​ $ 0.6 ​ $ 10.1 State ​ ( 0.5 ) ​ ​ 2.2 ​ ​ 1.0 Foreign ​ 85.4 ​ ​ 82.1 ​ ​ 61.8 Total current income tax expense ​ 84.4 ​ ​ 84.9 ​ ​ 72.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred income tax (benefit) expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal ​ ( 4.9 ) ​ ​ ( 2.2 ) ​ ​ ( 15.4 ) State ​ ( 1.0 ) ​ ​ 0.3 ​ ​ ( 0.3 ) Foreign ​ ( 14.1 ) ​ ​ ( 0.6 ) ​ ​ 6.5 Total deferred income tax (benefit) expense ​ ( 20.0 ) ​ ​ ( 2.5 ) ​ ​ ( 9.2 ) Income tax provision ​ $ 64.4 ​ $ 82.4 ​ $ 63.7 ​ The income tax provision differs from the tax provision computed at the U.S. federal statutory rate due to the following significant components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Statutory tax rate ​ 21.0 % 21.0 % 21.0 % Foreign tax rate differential ​ 4.9 ​ 5.9 ​ 4.6 ​ Permanent differences ​ 1.6 ​ 1.1 ​ 0.7 ​ Mandatory Repatriation ​ 0.5 ​ ( 0.6 ) ​ 1.7 ​ Tax contingencies ​ 1.4 ​ 1.4 ​ 0.9 ​ Change in tax rates ​ 0.1 ​ 0.3 ​ 1.1 ​ Withholding taxes ​ ( 0.1 ) ​ ( 0.1 ) ​ 0.1 ​ Repatriation of foreign earnings ​ 0.6 ​ 0.3 ​ ( 4.9 ) ​ State income taxes, net of federal benefits ​ ( 0.6 ) ​ 0.7 ​ ( 0.4 ) ​ Purchase accounting ​ — ​ — ​ 0.1 ​ Tax credits ​ ( 0.6 ) ​ ( 0.6 ) ​ — ​ Other ​ ( 1.3 ) ​ — ​ 0.6 ​ Change in valuation allowance for unbenefitted losses ​ 1.0 ​ — ​ 0.5 ​ Effective tax rate ​ 28.5 % 29.4 % 26.0 % ​ 105 Table of Contents The tax effect of temporary items that give rise to significant portions of the deferred tax assets and liabilities are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Deferred tax assets: ​ ​ ​ ​ ​ ​ Accrued expenses ​ $ 4.7 ​ $ 7.5 Compensation ​ ​ 32.3 ​ ​ 32.6 Deferred revenue ​ ​ 13.9 ​ ​ 8.4 Disallowed interest carryforward ​ ​ 5.0 ​ ​ 2.9 Net operating loss carryforwards ​ ​ 31.1 ​ ​ 21.2 Foreign tax and other tax credit carryforwards ​ ​ 16.4 ​ ​ 11.0 Unrealized currency gain/loss ​ ​ 9.6 ​ ​ 6.1 Lease obligations ​ ​ 15.2 ​ ​ 16.3 Gross deferred tax assets ​ 128.2 ​ ​ 106.0 Less valuation allowance ​ ( 6.6 ) ​ ​ ( 4.2 ) Total deferred tax assets ​ 121.6 ​ ​ 101.8 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 2.7 ​ ​ 0.6 Inventory ​ ​ 10.8 ​ ​ 13.3 Fixed assets ​ ​ 10.4 ​ ​ 4.9 Foreign patent reserves ​ 2.4 ​ ​ 2.2 Intangibles ​ 40.2 ​ ​ 40.1 Accrued expenses ​ 2.8 ​ ​ 0.9 Accrued Withholding Tax ​ ​ 6.7 ​ ​ 5.2 Right of use asset ​ ​ 14.9 ​ ​ 15.6 Other ​ ​ 2.2 ​ ​ 7.3 Total deferred tax liabilities ​ 93.1 ​ ​ 90.1 Net deferred tax assets ​ $ 28.5 ​ $ 11.7 ​ The Company uses the liability method to account for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences of differences between the tax and financial accounting bases of assets and liabilities at each reporting period. Deferred income taxes are based on enacted tax laws and statutory tax rates applicable to the period in which these differences are expected to affect taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the expected realizable amounts. The Company can only recognize a deferred tax asset to the extent this it is “more likely than not” that these assets will be realized. Judgments around realizability depend on the availability and weight of both positive and negative evidence. Changes in the valuation allowance for deferred tax assets were as follows (in millions): ​ ​ ​ ​ ​ Balance at December 31, 2017 ​ $ — Increases recorded as a loss to income tax provision ​ ​ 1.3 Increases recorded as part of acquisition purchase accounting ​ ​ 3.0 Balance at December 31, 2018 ​ $ 4.3 Decreases recorded as a benefit to income tax provision ​ ​ ( 0.1 ) Balance at December 31, 2019 ​ $ 4.2 Increases recorded as part of acquisition purchase accounting ​ ​ 2.4 Balance at December 31, 2020 ​ $ 6.6 ​ 106 Table of Contents As of December 31, 2020, the Company has approximately $ 65.2 million net operating loss carryforwards available to reduce state taxable income that are expected to expire at various times beginning in 2021. The Company also has approximately $ 108.4 million of German Trade Tax and Corporate Income Tax net operating losses that are carried forward indefinitely. Additionally, the Company has $ 18.5 million of other foreign net operating losses that are expected to expire at various times beginning in 2021. The Company also has state research and development tax credit carryforwards of $ 7.1 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 Code Section 382 and similar state provisions. In the event of a deemed change in control under 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. At December 31, 2020 the Company recorded state income and foreign withholding taxes on the cash and liquid assets portion of the unremitted earnings and profits (E&P) of foreign subsidiaries expected to be repatriated from its foreign subsidiaries to the United States, except for amounts from certain subsidiaries, which the Company has asserted to be indefinitely reinvested. Specifically, the Company asserts that a total of $ 1.7 billion of unremitted foreign earnings is indefinitely reinvested. This figure is comprised of $ 1.2 billion in unremitted earnings as well as $ 436 million of non-cash E&P in all jurisdictions not indefinitely reinvested. If this E&P is ultimately distributed to the United States in the form of dividends or otherwise the Company would likely be subject to additional withholding tax. The Company estimates the amount of unrecognized deferred withholding taxes on the undistributed E&P to be approximately $ 63 million at December 31, 2020. The Company had gross unrecognized tax benefits, excluding interest, of approximately $ 22.7 million as of December 31, 2020, that if recognized, would reduce the Company’s effective tax rate. In the next twelve months it is reasonably possible that the Company will reduce its unrecognized tax benefits by an immaterial amount due to the expiration of statutes of limitations. A tabular reconciliation of the Company’s gross unrecognized tax benefits is as follows (in millions): ​ ​ ​ ​ ​ Gross unrecognized tax benefits at December 31, 2017 ​ $ 4.4 Gross increases - tax positions in prior periods ​ 3.1 Lapse of statutes ​ ( 0.9 ) Gross unrecognized tax benefits at December 31, 2018 ​ ​ 6.6 Gross increases - tax positions in prior periods ​ ​ 4.7 Gross increases - current period tax positions ​ ​ 4.7 Lapse of statutes ​ ​ ( 0.1 ) Gross unrecognized tax benefits at December 31, 2019 ​ $ 15.9 Gross increases - tax positions in prior periods ​ ​ 1.2 Gross increases - current period tax positions ​ ​ 5.6 Gross unrecognized tax benefits at December 31, 2020 ​ ​ 22.7 ​ The Company’s policy is to include accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax expense. At December 31, 2020 and 2019, the Company had approximately $ 1.8 million and $ 0.7 million, respectively, of accrued interest and penalties related to uncertain tax positions included in other long-term liabilities in the consolidated balance sheets. The Company recorded an expense of $ 1.1 million for penalties and interest related to unrecognized tax benefits in the provision for income taxes during the year ended December 31, 2020. There was no benefit recognized during the year ended December 31, 2020. The Company files tax returns in the United States, which includes federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The majority of the Company’s earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2020 were approximately 30.0 % and 20.0 % for Germany and Switzerland, respectively. The mix of earnings in those two jurisdictions resulted in an increase of 5.2 % from the U.S. statutory rate of 21 % in 2020. The tax 107 Table of Contents years 2013 through present are open to examination in Germany and Switzerland. During the 2020 fiscal year, the Company settled tax audits in some of the entities located in Germany for tax years 2013 and 2014. The settlements were immaterial to the consolidated financial statements. Tax years 2013 through present remain open for examination in the United States. In 2020, the Company was granted an income tax holiday for our manufacturing facility in Malaysia. The tax holiday allows for tax-free operations through February 28, 2023, with the option to apply for a 5 year extension if certain conditions are met, Malaysia tax holiday has an immaterial impact to earnings per share for the year ended December 31, 2020. In connection with the Tax Act, the SEC issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), to provide guidance to companies that had not completed their accounting for the income tax effects of the Tax Act. Under SAB 118, companies were permitted to record provisional amounts to the extent reasonable estimates could be made. Additionally, upon obtaining, preparing, or analyzing additional information (including computations), companies were permitted to record additional tax effects and adjustments to previously recorded provisional amounts within one year from the enactment date of the Tax Act. During the fourth quarter of 2018, the Company completed its accounting for the elements of U.S. Tax Reform. During 2018, the Company recorded tax adjustments under SAB 118 equal to a net benefit of $ 5.4 million. Among those adjustments were $ 6.6 million of additional tax expense related to the toll charge liability that was estimated to be $ 55.0 million in 2017. In addition, a $ 12.0 million tax benefit was recorded in 2018 that reduced the estimated liability of $ 12.5 that the Company recorded in 2017 for expected state income and foreign withholding taxes associated with unremitted foreign earnings. There was no change from the $ 1.4 million that was recorded in 2017 to the net deferred tax liability related to the reduction on the U.S. federal statutory tax rate from 35 % to 21 %. During 2020, the Company recorded a tax expense of $ 1.1 million related to the recalculation of the toll charge liability as reflected on a 2017 amended tax return. The total toll charge liability as of December 31, 2020 was $ 35.4 million. Of that amount, approximately $ 8.5 million has already been paid. In 2020, the U.S. Treasury Department issued final regulations regarding Foreign Derived Intangible Income (“FDII”) and Global Intangible Low-Taxed Income (“GILTI”). We have determined we will elect the GILTI high tax exception as allowed by the final regulations and we will be assessing the impact to our 2018 and 2019 US Federal consolidated income tax returns. 108 Table of Contents ​ 15. Leases Operating lease cost is recognized over the lease term on a straight-line basis, while finance lease cost is amortized over the expected term on a straight-line basis. Variable lease cost not dependent on an index or rate is recognized when incurred and typically consists of amounts owed by the Company to a lessor that are not fixed, such as reimbursement for common area maintenance and utilities cost. The components of lease expense were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Amortization of right-of-use assets ​ $ 0.7 ​ $ 0.3 Interest on lease liabilities ​ 0.1 ​ — Total finance lease cost ​ $ 0.8 ​ $ 0.3 ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ ​ 23.3 ​ ​ 24.9 Short term lease cost ​ ​ 3.9 ​ ​ 2.2 Variable lease cost ​ ​ 3.4 ​ ​ 3.5 Sublease income ​ ​ ( 1.9 ) ​ ​ ( 1.2 ) Total lease cost ​ $ 29.5 ​ $ 29.7 ​ Prior to the adoption of the new lease standard, total rental expense under operating leases was $ 25.1 million during the year ended December 31, 2018. Supplemental balance sheet information related to leases was as follows (dollars in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2020 2019 Operating leases ​ ​ ​ Operating lease assets, net ​ $ 67.4 ​ $ 65.6 ​ Other current liabilities ​ 21.3 ​ 20.6 ​ Operating lease liability - long term ​ 47.0 ​ 47.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ ​ 5.2 years ​ 5.0 years Weighted average discount rate ​ ​ 1.9 % ​ 2.3 % ​ ​ ​ ​ ​ ​ ​ ​ Finance leases ​ ​ ​ Property, plant and equipment, net ​ $ 3.7 ​ $ 1.7 ​ Current portion of long-term debt ​ 0.8 ​ 0.4 ​ Long-term debt ​ 2.6 ​ 1.1 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ 3.3 years 3.7 years Weighted average discount rate ​ ​ 2.2 % ​ 3.0 % ​ 109 Table of Contents Supplemental cash flow information related to leases was as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ Operating cash flows from finance leases ​ $ 0.1 ​ $ — Operating cash flows from operating leases ​ 24.0 ​ 27.1 Financing cash flows from finance leases ​ 0.9 ​ 0.4 ​ ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for lease liabilities ​ ​ ​ ​ ​ ​ Operating leases ​ $ 24.3 ​ $ 19.8 Finance leases ​ 2.6 ​ 1.2 ​ Future lease payments under operating leases and finance leases as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases Finance Leases Twelve months ending December 31: ​ ​ ​ ​ ​ ​ 2021 ​ $ 22.6 ​ $ 1.2 2022 ​ 15.0 ​ 1.0 2023 ​ 10.6 ​ 0.8 2024 ​ 7.3 ​ 0.4 2025 ​ 5.6 ​ 0.1 Thereafter ​ 10.9 ​ — Total undiscounted lease payments ​ 72.0 ​ 3.5 Less: imputed interest ​ ( 3.7 ) ​ ( 0.1 ) Total lease liabilities ​ $ 68.3 ​ $ 3.4 ​ ​ 16. Post Retirement Benefit Plans Defined Contribution Plans The Company sponsors various defined contribution plans that cover certain domestic and international employees. The Company may make contributions to these plans at its discretion. The Company contributed $ 8.1 million, $ 8.7 million and $ 8.4 million to such plans in the years ended December 31, 2020, 2019 and 2018, respectively. Defined Benefit Plans Substantially all of the Company’s employees in Switzerland, France and Japan, as well as certain employees in Germany, are covered by Company-sponsored defined benefit pension plans. Retirement benefits are generally earned based on years of service and compensation during active employment. Eligibility is generally determined in accordance with local statutory requirements; however, the level of benefits and terms of vesting varies among plans. 110 Table of Contents The Company records pension service cost within cost of sales, selling, general and administrative, and research and development expenses while non-service related pension costs are recorded within interest and other income (expense), net in the consolidated statements of income and comprehensive income. The components of net periodic benefit costs included in the accompanying consolidated statements of income were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Components of net periodic benefit costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ Service cost ​ $ 8.2 ​ $ 6.4 ​ $ 7.5 Interest cost ​ ​ 1.1 ​ ​ 2.6 ​ ​ 2.0 Expected return on plan assets ​ ​ ( 2.5 ) ​ ​ ( 2.0 ) ​ ​ ( 1.9 ) Amortization of net loss ​ ​ 4.7 ​ ​ 2.0 ​ ​ 3.8 Net periodic benefit costs ​ $ 11.5 ​ $ 9.0 ​ $ 11.4 ​ The Company measures its benefit obligation and the fair value of plan assets as of December 31st each year. The changes in benefit obligations and plan assets under the defined benefit pension plans, projected benefit obligation and funded status of the plans were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Change in benefit obligation: ​ ​ ​ ​ ​ ​ Benefit obligation at beginning of year ​ $ 255.0 ​ $ 216.7 Service cost ​ ​ 8.2 ​ ​ 6.4 Interest cost ​ ​ 1.1 ​ ​ 2.6 Plan participant contributions ​ ​ 4.4 ​ ​ 4.8 Plan amendments ​ ​ ( 2.8 ) ​ ​ — Plan settlements ​ ​ — ​ ​ — Benefits paid ​ ​ ( 5.7 ) ​ ​ ( 2.8 ) Actuarial loss (gain) ​ ​ ( 6.7 ) ​ ​ 25.8 Premiums paid ​ ​ ( 1.4 ) ​ ​ ( 1.6 ) Impact of foreign currency exchange rates ​ ​ 23.1 ​ ​ 3.1 Benefit obligation at end of year ​ 275.2 ​ ​ 255.0 ​ ​ ​ ​ ​ ​ ​ Change in plan assets: ​ ​ ​ ​ ​ ​ Fair value of plan assets at beginning of year ​ 131.4 ​ ​ 124.6 Return on plan assets ​ 3.1 ​ ​ ( 2.5 ) Plan participant and employer contributions ​ 10.7 ​ ​ 11.6 Benefits paid ​ ( 5.7 ) ​ ​ ( 2.8 ) Plan settlements ​ ​ — ​ ​ — Premiums paid ​ ​ ( 1.5 ) ​ ​ ( 1.7 ) Impact of foreign currency exchange rates ​ 12.5 ​ ​ 2.2 Fair value of plan assets at end of year ​ 150.5 ​ ​ 131.4 Net under-funded status ​ $ ( 124.7 ) ​ $ ( 123.6 ) ​ Plan amendments relate to a reduction in the conversion rate for the pension plan in Switzerland that will be effective in 2022. The accumulated benefit obligation for the defined benefit pension plans is $ 260.4 million and $ 243.6 million at December 31, 2020 and 2019, respectively. All defined benefit pension plans have an accumulated benefit obligation and projected benefit obligation in excess of plan assets at December 31, 2020 and 2019. 111 Table of Contents The following amounts were recognized in the accompanying consolidated balance sheets for the Company’s defined benefit plans (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Current liabilities ​ $ ( 1.9 ) ​ $ ( 1.6 ) Non-current liabilities ​ ​ ( 122.8 ) ​ ( 122.0 ) Net benefit obligation ​ $ ( 124.7 ) ​ $ ( 123.6 ) ​ The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Reconciliation of amounts recognized in the consolidated balance sheets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Prior service cost ​ $ ( 2.4 ) ​ $ ( 6.0 ) ​ $ ( 6.9 ) Net actuarial loss ​ ​ ( 56.6 ) ​ ​ ( 62.3 ) ​ ​ ( 32.0 ) Accumulated other comprehensive loss ​ ​ ( 59.0 ) ​ ​ ( 68.3 ) ​ ​ ( 38.9 ) Accumulated contributions in excess of net periodic benefit cost ​ ​ ( 65.7 ) ​ ​ ( 55.3 ) ​ ​ ( 53.2 ) Net amount recognized ​ $ ( 124.7 ) ​ $ ( 123.6 ) ​ $ ( 92.1 ) ​ The amount in accumulated other comprehensive income at December 31, 2020 expected to be recognized as amortization of net loss within net periodic benefit cost in 2021 is $ 3.7 million. For the defined benefit pension plans, the Company uses a corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of ten percent of the larger of the projected benefit obligation or the fair value of plan assets are amortized over the average remaining service of active participants who are expected to receive benefits under the plans. The range of assumptions used for defined benefit pension plans reflects the different economic environments within the various countries. The range of assumptions used to determine the net periodic benefit costs and the projected benefit obligations are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Discount rates 0.1 % - 1.3 % ​ 0.3 % - 2.3 % ​ 0.2 % - 2.3 % Expected return on plan assets ​ 0.0 %- 3.0 % ​ 0.0 %- 3.0 % ​ 0.0 %- 3.0 % Expected rate of compensation increase 0.0 %- 3.0 % ​ 0.0 %- 3.0 % ​ 1.0 %- 3.0 % ​ To determine the expected long-term rate of return on pension plan assets, the Company considers current asset allocations, as well as historical and expected returns on various asset categories of plan assets. For the defined benefit pension plans, the Company applies the expected rate of return to a market-related value of assets, which stabilizes variability in assets to which the expected return is applied. 112 Table of Contents Asset Allocations by Asset Category The fair value of the Company’s pension plan assets by asset category and by level in the fair value hierarchy, is as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets ​ Observable Inputs ​ Unobservable Inputs December 31, 2020 Total Available (Level 1) (Level 2) (Level 3) Plan Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Group BPCE Life (a) ​ $ 0.5 ​ $ — ​ $ 0.5 ​ $ — Swiss Life Collective BVG Foundation (b) ​ 150.0 ​ — ​ ​ 150.0 ​ ​ — Total plan assets ​ $ 150.5 ​ $ — ​ $ 150.5 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in ​ Significant Other ​ Significant ​ ​ ​ ​ ​ Active Markets ​ Observable Inputs ​ Unobservable Inputs December 31, 2019 Total Available (Level 1) (Level 2) (Level 3) Plan Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Group BPCE Life (a) ​ $ 0.5 ​ $ — ​ $ 0.5 ​ $ — Swiss Life Collective BVG Foundation (b) ​ 130.9 ​ — ​ 130.9 ​ ​ — Total plan assets ​ $ 131.4 ​ $ — ​ $ 131.4 ​ $ — (a) The Company’s pension plan in France is invested in a larger fund that invests in a variety of instruments. The assets are not directly dedicated to the French pension plan. The Group BPCE Life fund invests in debt securities of foreign corporations and governments, equity securities of foreign government funds and private real estate funds. (b) The Company’s pension plan in Switzerland is outsourced to Swiss Life AG, an outside insurance provider. Under the insurance contract, the plan assets are invested in Swiss Life Collective BVG Foundation (the Foundation), which is an umbrella fund for which the retirement savings and interest rates are guaranteed a minimum of 1.0 % on the mandatory withdrawal portion, as defined by Swiss law, and 0.125 % on the non-mandatory portion starting 2021. The Foundation utilizes plan administrators and investment managers to oversee the investment allocation process, set long-term strategic targets and monitor asset allocations. The target allocations are 65 % bonds, 2.5 % cash, 7.5 % equity investments and 25 % real estate and mortgages. Should the Foundation yield a return greater than the guaranteed amounts, the Company, according to Swiss law, shall receive 90 % of the additional return with Swiss Life AG retaining 10 % . The withdrawal benefits and interest allocations are secured at all times by Swiss Life AG. Contributions and Estimated Future Benefit Payments During 2021, the Company expects contributions to be consistent with 2020. The estimated future benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2020. The following benefit payments reflect future employee service as appropriate (in millions): ​ ​ ​ ​ ​ 2021 $ 8.3 2022 ​ ​ 7.8 2023 ​ ​ 8.0 2024 ​ ​ 8.4 2025 ​ ​ 8.6 2026-2030 ​ ​ 45.7 ​ ​ 17. Commitments and Contingencies In accordance with ASC Topic 450, Contingencies, the Company accrues anticipated costs of settlement, damages, or other costs to the extent specific losses are probable and estimable. 113 Table of Contents Litigation and Related Contingencies Lawsuits, claims and proceedings of a nature considered normal to its businesses may be pending from time to time against the Company. Third parties might allege that the Company or its collaborators are infringing their patent rights or that the Company is otherwise violating their intellectual property rights. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure is also provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. The Company believes the outcome of pending proceedings, individually and in the aggregate, will not have a material impact on the Company’s financial statements. On September 25, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Carl Zeiss Microscopy GmbH, a subsidiary of Carl Zeiss AG (Zeiss), sued Luxendo GmbH (Luxendo), a subsidiary of Bruker Corporation, for infringement of a recently registered German utility model patent licensed to Zeiss pertaining to one specific Luxendo product category. The Company is vigorously defending against these claims. On September 23, 2019, in a complaint filed in the Düsseldorf, Germany, District Court, Micromass UK Limited, a subsidiary of Waters Corporation, sued Bruker Corporation, as well as its affiliate, Bruker Daltonik GmbH, for infringement of a European patent pertaining to our timsTOF product line. On February 17, 2020, Micromass expanded its complaint in Düsseldorf to assert another recently granted European patent in Germany. The Company is vigorously defending against these claims and does not expect any material losses in excess of amounts already accrued. At December 31, 2020 and 2019, no material accruals have been recorded for potential contingencies. Governmental Investigations The Company is subject to regulation by national, state and local government agencies in the United States and other countries in which it operates. From time to time, the Company is the subject of governmental investigations often involving regulatory, marketing and other business practices. These governmental investigations may result in the commencement of civil and criminal proceedings, fines, penalties and administrative remedies which could have a material adverse effect on the Company’s financial position, results of operations and/or liquidity. In August 2018, the Korea Fair Trade Commission (KFTC) informed the Company that it was conducting an investigation into the public tender bidding activities of a number of life science instrument companies operating in Korea, including Bruker Korea Co., Ltd (Bruker Korea). The Company cooperated fully with the KFTC and on June 16, 2019, the KFTC announced its decision to impose a civil fine of approximately $ 20,000 on Bruker Korea and declined to impose any criminal liability against Bruker Korea in connection with this matter. As a result of the KFTC’s decision, the Korea Public Procurement Service (PPS) imposed a three-month suspension on Bruker Korea’s ability to bid for or conduct sales to Korean government entities which ended on March 27, 2020. Sales to Korean entities were less than 4 % of the Company’s revenue for the year ended December 31, 2020. In late August 2019, the KFTC informed the Company that it was conducting a separate investigation into the public tender bidding activities of a number of life science instrument companies operating in Korea, including five public tenders involving Bruker Korea during 2015. The Company cooperated fully with the KFTC and on July 8, 2020, the KFTC announced its decision to impose a civil fine of approximately $ 11,000 on Bruker Korea and declined to impose any criminal liability against Bruker Korea in connection with this matter. There was no suspension imposed in connection with this matter. At December 31, 2020 and 2019, no material accruals have been recorded for potential contingencies related to these matters. The Company does not expect additional losses to be incurred in excess of the amounts accrued. 114 Table of Contents Internal Investigations As previously disclosed in the Company’s Current Report on Form 8-K filed on February 18, 2020, the Company’s Audit Committee initiated an internal investigation into an allegation received in connection with the Company’s fiscal year 2019 year-end close, primarily relating to income tax matters including the effective income tax rate for 2019 and the related income tax balance sheet accounts. The Audit Committee, with the assistance of independent external legal counsel and independent forensic accountants, concluded its investigation in March 2020. This investigation did not identify any material misstatements or omissions regarding the Company’s financial statements, misconduct, violations of the Company’s Code of Conduct, or tone at the top failures. Unconditional Purchase Commitments The Company has entered into unconditional purchase commitments, in the ordinary course of business, that include agreements to purchase goods, services or fixed assets and to pay royalties that are enforceable and legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase commitments exclude agreements that are cancelable at any time without penalty. The majority of these commitments are expected to be settled during 2021. Unconditional purchase commitments that are fixed and determinable are as follows (in millions): ​ ​ ​ ​ ​ 2021 $ 281.9 2022 ​ 30.6 2023 ​ 0.6 2024 ​ — 2025 ​ 0.8 Total ​ $ 313.9 ​ License Agreements The Company has entered into license agreements allowing it to utilize certain patents. If these patents are used in connection with a commercial product sale, the Company pays royalties on the related product revenues. Licensing fees for the years ended December 31, 2020, 2019 and 2018, were $ 8.4 million, $ 2.6 million and $ 3.7 million, respectively, and are recorded in cost of product revenue in the consolidated statements of income and comprehensive income. Letters of Credit and Guarantees At December 31, 2020 and 2019, the Company had bank guarantees of $ 133.0 million and $ 143.2 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. Indemnifications The Company enters into standard indemnification arrangements in the Company’s ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. These parties are generally the Company’s directors, officers, business partners or customers, in connection with any patent, or any copyright or other intellectual property infringement claim by any third party with respect to its products. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is 115 Table of Contents unlimited. The Company believes the estimated fair value of these agreements is minimal based on historical experiences. ​ 18. Earnings Per Share The following table sets forth the computation of basic and diluted weighted average shares outstanding and net income per common share attributable to Bruker shareholders (in millions, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Net income attributable to Bruker Corporation, as reported ​ $ 157.8 ​ $ 197.2 ​ $ 179.7 Weighted average shares outstanding: ​ ​ ​ Weighted average shares outstanding-basic ​ 153.4 ​ 155.2 ​ 156.2 Effect of dilutive securities: ​ ​ ​ Stock options, restricted stock awards and restricted stock units ​ 1.2 ​ 1.4 ​ 1.0 ​ ​ 154.6 ​ 156.6 ​ 157.2 Net income per common share attributable to Bruker Corporation shareholders: ​ ​ ​ Basic ​ $ 1.03 ​ $ 1.27 ​ $ 1.15 Diluted ​ $ 1.02 ​ $ 1.26 ​ $ 1.14 ​ The following common share equivalents have been excluded from the computation of diluted weighted-average shares outstanding, as their effect would have been anti-dilutive (in millions of shares): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 ​ 2018 Stock options 0.2 — — Unvested restricted stock awards — — — Unvested restricted stock units — — 0.2 ​ ​ 19. Shareholders’ Equity Share Repurchase Program In May 2019, the Company’s Board of Directors approved a share repurchase program which authorizes the purchase of our common stock up to $ 300.0 million from time to time, in amounts, at prices, and at such times as management deems appropriate, subject to market conditions, legal requirements and other considerations. The Company purchased a total of 2,711,952 shares at an aggregate cost of $ 123.2 million for the year ended December 31, 2020. The Company purchased a total of 3,323,104 shares at an aggregate cost of $ 142.3 million for the year ended December 31, 2019. The remaining authorization as of December 31, 2020 is $ 34.5 million and the Plan expires on May 13, 2021. Any additional purchases will be funded from cash on hand, future cash flows from operations and available borrowings under the revolving credit facility. Cash Dividends on Common Stock Dividends are declared by the Company’s Board of Directors in accordance with the Company’s dividend policy. Under the policy, the Company will target a $ 0.16 per share cash dividend per annum to the Company’s shareholders payable in equal quarterly installments. 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. 116 Table of Contents Accumulated Other Comprehensive Income (Loss) The following is a summary of the components of accumulated other comprehensive income (loss), net of tax (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ Foreign ​ Pension ​ Other ​ ​ Currency ​ Liability ​ Comprehensive ​ Translation Adjustment Income (Loss) Balance at December 31, 2017 ​ $ 72.2 ​ ​ ( 45.2 ) ​ ​ 27.0 Other comprehensive income ​ ( 25.3 ) ​ ​ 11.9 ​ ​ ( 13.4 ) Realized loss on reclassification ​ — ​ ​ 3.4 ​ ​ 3.4 Balance at December 31, 2018 ​ 46.9 ​ ​ ( 29.9 ) ​ ​ 17.0 Other comprehensive income (loss) ​ ( 19.5 ) ​ ​ ( 25.1 ) ​ ​ ( 44.6 ) Realized loss on reclassification ​ — ​ ​ 2.1 ​ ​ 2.1 Balance at December 31, 2019 ​ ​ 27.4 ​ $ ( 52.9 ) ​ $ ( 25.5 ) Other comprehensive income ​ 22.0 ​ ​ 2.3 ​ ​ 24.3 Realized loss on reclassification ​ — ​ ​ 4.9 ​ ​ 4.9 Balance at December 31, 2020 ​ $ 49.4 ​ $ ( 45.7 ) ​ $ 3.7 ​ Stock Compensation Plans On March 9, 2010, the Company’s Board of Directors unanimously approved and adopted the Bruker Corporation 2010 Incentive Compensation Plan (the “2010 Plan”), and on May 14, 2010, 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 determined to be 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 . As of December 31, 2020, 5,545,090 options and 570,011 restricted stock awards have been granted under the 2010 Plan. At December 31, 2020, 893,045 options were outstanding under the 2010 Plan In May 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. Stock option awards granted under the 2016 Plan typically vest over a period of one to four years . As of December 31, 2020, 1,406,191 options and 1,882,358 restricted stock units have been granted under the 2016 Plan. At December 31, 2020, 963,131 options and 805,052 restricted stock units were outstanding under the 2016 Plan. Members of the Company’s Board of Directors receive an annual award of restricted stock units which vest over a one-year service period. Stock options to purchase the Company’s common stock are periodically awarded to executive officers and other employees of the Company subject to a vesting period of three to four years . Restricted shares of the Company’s common stock were periodically awarded to executive officers, directors and certain key employees of the Company, subject to service restrictions, which vested ratably over periods of one to four years . The restricted shares of common stock may not be sold or transferred during the restriction period. Restricted stock units of the Company’s common stock are periodically awarded to executive officers, directors and certain employees of the Company which vest ratably over service periods of one to four years . 117 Table of Contents Stock-based Compensation The following presents the impact of stock-based compensation expense on our consolidated statements of income (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 ​ 2018 Stock options $ 1.8 $ 2.7 $ 4.2 Restricted stock awards ​ — ​ 0.3 ​ 0.8 Restricted stock units ​ 11.5 ​ 8.9 ​ 6.3 Total stock-based compensation ​ $ 13.3 ​ $ 11.9 ​ $ 11.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 ​ 2018 Costs of product revenue $ 2.0 $ 1.8 $ 1.7 Selling, general and administrative ​ 9.3 ​ 8.3 ​ 7.9 Research and development ​ 2.0 ​ 1.8 ​ 1.7 Total stock-based compensation ​ $ 13.3 ​ $ 11.9 ​ $ 11.3 ​ In addition to the awards above, the Company recorded stock-based compensation of $ 2.6 million in year ended December 31, 2020, a benefit of $ 2.3 million in the year ended December 31, 2019 and additional expense of $ 0.5 million in the year ended December 31, 2018 related to the 2018 acquisition of Mestrelab Research, S.L. At December 31, 2020, the Company had $ 24.9 million of unrecognized pre-tax stock-based compensation expense related to employee and director unvested stock options and restricted stock units that is expected to be recognized over a weighted average remaining service period of 2.6 years. Stock Option Awards Stock option activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted - ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ Aggregate ​ ​ Number of ​ Average Price ​ Contractual ​ Intrinsic Value ​ ​ Options ​ Per Share ​ Term (in Years) ​ (in millions) (a) Outstanding at December 31, 2019 1,988,696 ​ $ 23.43 4.9 ​ $ 54.8 Granted 125,794 ​ ​ 45.54 ​ ​ ​ ​ ​ Exercised ( 241,915 ) ​ ​ 20.29 ​ ​ ​ ​ ​ Forfeited/Expired ( 16,399 ) ​ ​ 20.98 ​ ​ ​ ​ ​ Outstanding at December 31, 2020 1,856,176 ​ $ 25.32 ​ 4.2 ​ $ 53.5 Exercisable at December 31, 2020 1,546,061 ​ $ 22.14 ​ 3.9 ​ $ 49.5 Exercisable and expected to vest at December 31, 2020 (b) 1,818,104 ​ $ 24.95 ​ 4.2 ​ $ 53.1 (a) Represents the number of vested options at December 31, 2020, plus the number of unvested options at December 31, 2020 that are ultimately expected to vest based on our estimated forfeiture rate. (b) The aggregate intrinsic value is calculated as the positive difference between the exercise price of the underlying options and the quoted price of our common stock on December 31, 2020. The total intrinsic value of options exercised was $ 6.1 million, $ 15.2 million and $ 8.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. 118 Table of Contents Unvested Restricted Stock Units ​ Unvested restricted stock unit activity is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average Grant ​ ​ Shares ​ Date Fair ​ ​ Subject to Value ​ Restriction ​ Per Share Outstanding at December 31, 2019 865,101 ​ $ 34.73 Granted ​ 336,341 ​ ​ 43.96 Vested ( 336,728 ) ​ ​ 32.00 Forfeited ​ ( 59,662 ) ​ ​ 35.99 Outstanding at December 31, 2020 805,052 ​ $ 39.63 ​ The total fair value of restricted stock vested was $ 15.0 million, $ 7.9 million and $ 6.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. ​ 20. Other Charges, Net The components of other charges, net were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Acquisition-related expenses (income), net ​ $ 2.4 ​ $ 4.6 ​ $ 3.4 ​ Professional fees incurred in connection with investigation matters and other legal matters ​ ​ 5.9 ​ ​ 2.1 ​ ​ 4.5 ​ Information technology transformation costs ​ ​ 2.5 ​ ​ 3.7 ​ ​ 4.8 ​ Restructuring charges ​ ​ 12.0 ​ ​ ( 3.9 ) ​ ​ 6.8 ​ Long-lived asset impairments ​ ​ 2.1 ​ ​ — ​ ​ — ​ Other charges, net ​ $ 24.9 ​ $ 6.5 ​ $ 19.5 ​ ​ Restructuring Initiatives Restructuring charges for the years ended December 31, 2020, 2019 and 2018 included charges for various other programs which were recorded in the accompanying consolidated statements of income and comprehensive income as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Cost of revenues ​ $ 3.8 ​ $ 5.3 ​ $ 2.6 Other charges, net ​ ​ 12.0 ​ ​ ( 3.9 ) ​ ​ 6.8 ​ ​ $ 15.8 ​ $ 1.4 ​ $ 9.4 ​ The restructuring charges included a gain on the sale of a building of $ 7.7 million in the year ended December 31, 2019. 119 Table of Contents The following table sets forth the changes in the restructuring reserves (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provisions for ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Excess ​ Total Severance Exit Costs Inventory Balance at December 31, 2017 ​ $ 10.8 ​ $ 2.0 ​ $ 2.1 ​ $ 6.7 Restructuring charges ​ 9.4 ​ 4.1 ​ 5.3 ​ — Cash payments ​ ( 9.2 ) ​ ( 4.4 ) ​ ( 4.8 ) ​ — Non-cash adjustments ​ ( 3.5 ) ​ 0.3 ​ ( 1.2 ) ​ ( 2.6 ) Foreign currency impact ​ ​ ( 0.2 ) ​ — ​ — ​ ( 0.2 ) Balance at December 31, 2018 ​ $ 7.3 ​ $ 2.0 ​ $ 1.4 ​ $ 3.9 Restructuring charges ​ 1.4 ​ 6.1 ​ ( 5.0 ) ​ 0.3 Cash payments ​ ( 6.8 ) ​ ( 5.3 ) ​ ( 1.5 ) ​ — Non-cash adjustments ​ 2.9 ​ ( 0.5 ) ​ 5.2 ​ ( 1.8 ) Foreign currency impact ​ ( 0.2 ) ​ ( 0.1 ) ​ — ​ ( 0.1 ) Balance at December 31, 2019 ​ $ 4.6 ​ $ 2.2 ​ $ 0.1 ​ $ 2.3 Restructuring charges ​ 15.8 ​ 13.6 ​ ​ 2.0 ​ ​ 0.2 Cash payments ​ ( 10.0 ) ​ ( 8.0 ) ​ ​ ( 2.0 ) ​ ​ — Non-cash adjustments ​ ( 1.0 ) ​ ( 0.5 ) ​ ​ 0.7 ​ ​ ( 1.2 ) Foreign currency impact ​ 0.4 ​ 0.3 ​ ​ — ​ ​ 0.1 Balance at December 31, 2020 ​ $ 9.8 ​ $ 7.6 ​ $ 0.8 ​ $ 1.4 ​ ​ 21. Interest and Other Income (Expense), Net The components of interest and other income (expense), net were as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Interest income ​ $ 3.2 ​ $ 1.3 ​ $ 1.2 Interest expense ​ ​ ( 14.4 ) ​ ​ ( 16.0 ) ​ ​ ( 12.6 ) Exchange gains (losses) on foreign currency transactions ​ ​ ( 8.0 ) ​ ​ ( 3.3 ) ​ ​ ( 3.0 ) Pension components ​ ​ ( 3.3 ) ​ ​ ( 2.5 ) ​ ​ ( 3.9 ) Other ​ ​ — ​ ​ — ​ ​ 0.6 Interest and other income (expense), net ​ $ ( 22.5 ) ​ $ ( 20.5 ) ​ $ ( 17.7 ) ​ ​ 22. Business Segment Information The Company has three reportable segments, BSI Life Science, BSI NANO and BEST, as discussed in Note 1 to the consolidated financial statements. 120 Table of Contents Selected reportable segment information is presented below (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ BSI Life Science ​ $ 1,253.9 ​ $ 1,244.9 ​ $ 1,138.9 BSI NANO ​ ​ 556.1 ​ ​ 632.7 ​ ​ 568.1 BEST ​ ​ 189.5 ​ ​ 209.9 ​ ​ 194.8 Eliminations (a) ​ ​ ( 12.0 ) ​ ​ ( 14.9 ) ​ ​ ( 6.2 ) Total revenue ​ $ 1,987.5 ​ $ 2,072.6 ​ $ 1,895.6 Operating Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ BSI Life Science ​ $ 273.8 ​ $ 290.3 ​ $ 244.0 BSI NANO ​ ​ 23.6 ​ ​ 40.4 ​ ​ 48.4 BEST ​ ​ 6.2 ​ ​ 16.4 ​ ​ 14.5 Corporate, eliminations and other (b) ​ ​ ( 55.3 ) ​ ​ ( 46.2 ) ​ ​ ( 44.5 ) Total operating income ​ $ 248.3 ​ $ 300.9 ​ $ 262.4 (a) Represents product and service revenue between reportable segments. (b) Represents corporate costs and eliminations not allocated to the reportable segments. Total assets by segment are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 Assets: ​ ​ ​ ​ ​ ​ BSI Life Science, BSI NANO & Corporate ​ $ 2,964.5 ​ $ 2,711.6 BEST ​ ​ 88.7 ​ ​ 64.6 Eliminations and other (a) ​ ​ ( 4.2 ) ​ ​ ( 4.7 ) Total assets ​ $ 3,049.0 ​ $ 2,771.5 (a) Assets not allocated to the reportable segments and eliminations of intercompany transactions. The Company is unable, without unreasonable effort or expense to disclose the amount of total assets by the BSI Life Science and BSI NANO Segments as well as the Corporate function and further, the Company’s chief operating decision maker does not receive any asset information by operating segment. Total capital expenditures and depreciation and amortization by segment are presented below (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Capital Expenditures: ​ ​ ​ ​ ​ ​ ​ ​ ​ BSI Life Science ​ $ 59.1 ​ $ 44.4 ​ $ 27.6 BSI NANO ​ ​ 10.6 ​ ​ 18.5 ​ ​ 11.6 Corporate ​ ​ 17.4 ​ ​ 4.7 ​ ​ 3.6 BEST ​ ​ 10.1 ​ ​ 5.4 ​ ​ 6.4 Total capital expenditures ​ $ 97.2 ​ $ 73.0 ​ $ 49.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and Amortization: ​ ​ ​ ​ ​ ​ ​ ​ ​ BSI Life Science ​ $ 35.0 ​ $ 30.5 ​ $ 24.0 BSI NANO ​ ​ 35.7 ​ ​ 35.9 ​ ​ 32.2 Corporate ​ ​ 4.0 ​ ​ 3.8 ​ ​ 4.0 BEST ​ ​ 5.7 ​ ​ 5.4 ​ ​ 4.7 Total depreciation and amortization ​ $ 80.4 ​ $ 75.6 ​ $ 64.9 ​ 121 Table of Contents Revenue and long-lived assets (including property, plant and equipment, net and operating lease right of use assets) by geographical area are as follows (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 455.9 ​ $ 529.8 ​ $ 489.4 Germany ​ ​ 244.9 ​ ​ 213.6 ​ ​ 201.1 Rest of Europe ​ ​ 519.8 ​ ​ 505.2 ​ ​ 500.2 Asia Pacific ​ ​ 629.1 ​ ​ 651.0 ​ ​ 549.2 Other ​ ​ 137.8 ​ ​ 173.0 ​ ​ 155.7 Total revenue ​ $ 1,987.5 ​ $ 2,072.6 ​ $ 1,895.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2019 2018 Long-lived assets ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 61.3 ​ $ 53.2 ​ $ 44.1 Germany ​ ​ 227.8 ​ ​ 175.1 ​ ​ 137.0 Rest of Europe ​ ​ 144.7 ​ ​ 118.3 ​ ​ 78.7 Asia Pacific ​ ​ 22.1 ​ ​ 16.4 ​ ​ 6.3 Other ​ ​ 7.1 ​ ​ 8.7 ​ ​ 4.5 Total long-lived assets ​ $ 463.0 ​ $ 371.7 ​ $ 270.6 ​ ​ 23. Related Parties On February 26, 2020, the Company acquired land and buildings at 15 Fortune Drive and 44 Manning Road, both in Billerica MA, for a total purchase price of $ 12.3 million. Each property was owned by a trust controlled equally by Bruker’s President & CEO, Frank Laukien, and his half-brother, Dirk D. Laukien. Both properties acquired are adjacent to Bruker’s headquarters building at 40 Manning Road, a property already owned by the Company. Bruker BioSpin formerly leased the property at 15 Fortune Drive and will continue to occupy the property for the foreseeable future. The property at 44 Manning Road, which is currently fully leased to unrelated third parties, provides for potential expansion of Bruker operations in the future. The purchase price was allocated between the two properties as follows: $ 5.6 million for 15 Fortune Drive and $ 6.7 million for 44 Manning Road. The price for each property was established based on an independent third-party appraisal. The Audit Committee of the Board reviewed, voted on and approved this related party transaction in accordance with Bruker’s Related Persons Transactions Policy and the Audit Committee charter. ​ ​ ​ ​ ​ 122 Table of Contents ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​