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Item 8. Financial Statements and Supplementary Data

2022-02-28 compared with 2021-03-01 · 668 added, 535 removed, 1088 unchanged (53% of the section changed)

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index of Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets as of December 31, 2021 and 2020

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Bruker Corporation

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, 2021 and 2020, 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, 2021, 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).

We also have audited the Company’s internal control over financial reporting as of December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 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.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal

(2013) issued by the COSO.

Basis for Opinions

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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

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.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded SCI Instruments, SVXR, Inc.

and Molecubes NV from its assessment of internal control over financial reporting as of December 31, 2021 because they were acquired by the Company in purchase business combinations during 2021.

We have also excluded SCI Instruments, SVXR, Inc.

and Molecubes NV from our

audit of internal control over financial reporting.

SCI Instruments, SVXR, Inc.

and Molecubes NV 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 1.9% and 0.4%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.

Definition and Limitations of Internal Control over Financial Reporting

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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.

Management determines the 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 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

siginificant assumptions related to the forecasted revenue growth and the discount rate.

The principal consideration for our determination that performing procedures relating to the goodwill impairment assessment is a critical audit matter is 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 significant assumption related to the forecasted revenue growth.

The audit effort also involved the use of professionals with specialized skill and knowledge.

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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;

These procedures also included, among others, testing management’s process for developing the fair value estimates 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.

and evaluating the significant assumption used by management related to the forecasted revenue growth.

Evaluating management’s assumption related to the forecasted revenue growth involved evaluating whether the assumption used by management was reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether the assumption was 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.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March 1, 2021

February 28, 2022

We have served as the Company’s auditor since 2016.

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Accounts receivable, net

Assets held for sale

Other current assets

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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

Treasury stock at cost, 22,058,529 and 19,346,577 shares at December 31, 2020 and 2019, respectively

Additional paid-in capital

Preferred stock, $ 0.01

par value 5,000,000 shares authorized, none

issued or outstanding at December 31, 2021 and 2020

Common stock, $ 0.01

par value 260,000,000

shares authorized, 174,905,035

and 174,045,610

shares issued and 150,753,687

and 151,987,081

outstanding at December 31, 2021 and 2020, respectively

Treasury stock at cost, 24,151,348

and 22,058,529

shares at December 31, 2021 and 2020, respectively

Additional paid-in

Retained earnings

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Total shareholders’ equity attributable to Bruker Corporation

Noncontrolling interest in consolidated subsidiaries

Noncontrolling interest s

in consolidated subsidiaries

Total shareholders’ equity

Total liabilities, redeemable noncontrolling interest and shareholders’ equity

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an

integral part of these consolidated financial statements.

BRUKER CORPORATION

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Interest and other income (expense), net

Income before income taxes and noncontrolling interest in consolidated subsidiaries

Income before income taxes and noncontrolling interest s

in consolidated subsidiaries

Income tax provision

Consolidated net income

Net income attributable to noncontrolling interest in consolidated subsidiaries

Net income attributable to noncontrolling interest s

in consolidated subsidiaries

Net income attributable to Bruker Corporation

Net income per common share attributable to

Bruker Corporation shareholders:

Net income per common share attributable to Bruker Corporation shareholders:

Weighted average common shares outstanding:

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Foreign currency translation (net of tax of $ 2.1 million, $ 1.2 million and $ 5.1 million, respectively) adjustments

Pension liability adjustments (net of tax of ( $ 1.7 ) million, $ 6.3 million and $ 3.8 million, respectively)

Derivatives designated as hedging instruments (net of tax of $ 12.5 million in 2021)

Pension liability adjustments (net of tax of ($ 3.9 )

million, ($ 1.7 ) million and $ 6.3 million, respectively)

Net comprehensive income

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(in millions, except share data)

Shareholders’

Noncontrolling

Comprehensive

Income (Loss)

Shareholders’

Attributable to

Noncontrolling

Comprehensive

Shareholders’

Income (Loss)

Balance at December 31, 2018

Restricted shares terminated

Stock options exercised

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Stock-based compensation

Shares returned from 2017 acquisition

Shares issued from 2017 acquisition

Shares repurchased

Treasury stock acquired

Acquired 80 % interest in Hain LifeScience GmbH

Distributions to noncontrolling interests

Cash dividends paid to common stockholders ($ 0.16 per share)

Adoption impact from new revenue standard

Cash dividends paid to common stockholders

($ 0.16 per share)

Consolidated net income

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Stock-based compensation

Shares issued from 2017 acquisition

Shares repurchased

( 3,323,104 )

Treasury stock acquired

Cash dividends paid to common stockholders ($ 0.16 per share)

Distributions to noncontrolling interests

Acquired remaining 20 % interest in Hain LifeScience GmbH

Cash dividends paid to common stockholders

($ 0.16 per share)

Consolidated net income

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Stock-based compensation

Shares repurchased

( 2,711,952 )

Distributions to noncontrolling interests

Acquired remaining 20 % interest in Hain LifeScience GmbH

Dividends declared ($ 0.16 per share)

Cash dividends paid to

common stockholders

Formation of Acuity Spatial Genomics, Inc.

Consolidated net income

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Deferred income taxes

Impairment and other non-cash expenses, net

Other non-cash expenses, net

Changes in operating assets and liabilities, net of acquisitions:

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Maturity of short-term investments

Purchase of available for sale debt securities

Purchase of investments held to maturity

Cash paid for acquisitions, net of cash acquired

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Cash flows from financing activities:

Proceeds from 2019 Note Purchase Agreement

Proceeds from 2019 Term Loan Agreement

Proceeds from issuance of long-term debt

Repayment of long-term debt

Repayments of revolving lines of credit

Proceeds from revolving lines of credit

Repayment of 2012 Note Purchase Agreement

Repayment of other debt, net

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Cash payments to noncontrolling interests

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash

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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 .

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

- 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.

(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;

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contract research organizations;

nonprofit and for-profit forensics laboratories;

nonprofit and for-profit

forensics laboratories;

agriculture, food and beverage safety laboratories;

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hospitals and government departments and agencies.

The BSI NANO Segment designs, manufactures and distributes advanced X-ray instruments;

The BSI Nano Segment designs, manufactures and distributes advanced X-ray

atomic force microscopy instrumentation;

advanced fluorescence optical microscopy instruments;

analytical tools for electron microscopes and X-ray metrology;

analytical tools for electron microscopes and X-ray

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.

handheld, portable and mobile X-ray

fluorescence spectrometry instruments;

spark optical emission spectroscopy systems;

chip cytometry products and services for targeted spatial proteomics, multi-omic services, and products and services for spatial genomics research.

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 research and life science research 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.

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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.

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.

The Company has agreements with noncontrolling interest holders that provide 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 can be accelerated in certain events.

As the redemptions are 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 redeemable noncontrolling interests are 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 years ended December 31, 2021 and 2020, carrying value adjustments were immaterial.

Business Combinations

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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.

Subsequent Events Considerations

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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.

Certain of these investments represent deposits which are not insured by the Federal Deposit Insurance Corporation 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.

Short-term investments represent time and call deposits maturing within twelve months and

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, 2021, 2020 and 2019, as cost approximates current fair value.

There were no short-term investments held by the Company as of December 31, 2018.

Restricted Cash

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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.

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

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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.

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.

The Company presents the cross-currency swap periodic settlements in investing activities and the interest rate swap periodic settlements in operating activities in the consolidated statements of cash flows.

The Company records derivative assets and liabilities on a gross basis in the consolidated balance sheets.

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.

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:

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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.

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.

use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts.

Concentration of Credit Risk

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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.

The Company performs periodic credit evaluations of its customers’ financial condition and generally

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 $ 4.2 million and $ 3.0 million at December 31, 2021 and 2020, respectively.

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For the years ended December 31, 2021, 2020 and 2019, no single customer represented 10 % or more of the Company’s total revenue.

Components of inventory include raw materials, work-in-process, demonstration units and finished goods.

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.

Finished goods include

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.

Cost is determined principally by the

method for a majority of subsidiaries and by

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.

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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:

Depreciation and amortization are calculated on a straight-line

basis over the estimated useful lives of the assets as follows:

Estimated Useful Life

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Leasehold improvements

Lesser of 15 years or the remaining lease term

of 15 years or

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.

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, 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.

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No.

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 new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment

The adoption of this ASU on January 1, 2020 did not have a material impact on the Company’s consolidated financial statements.

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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.

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

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.

If a quantitative impairment test is performed, the Company compares the fair values of the applicable reporting units with their aggregate carrying values, including goodwill.

The Company determines the 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.

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At December 31, 2021 and 2020, 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:

Intangible assets with a finite useful life are amortized on a straight-line

basis over their estimated useful lives as follows:

Estimated Useful Life

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3 to 15 years

Customer and distributor relationships

Customer relationships

5 to 15 years

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Warranty Costs and Deferred Revenue

The Company typically provides a one-year parts and labor warranty with the purchase of equipment.

typically provides a

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.

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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.

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.

A 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.

The Company includes accrued interest and penalties related to unrecognized tax benefits and income tax liabilities, when applicable, in income tax provision.

Customer Advances

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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 Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers

The key elements of ASC 606 are:

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Certain performance obligations, such as maintenance contracts and extended warranty, are recognized over time based on the contractual obligation period.

In addition, certain arrangements

to provide more customized deliverables may be satisfied over time based on the extent of progress towards completion.

In addition, certain arrangements 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.

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.

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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.

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.

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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.

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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.

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.

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 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

Contract liabilities are classified as current or

long-term based on the timing of when the Company expects to recognize revenue.

Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

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.

Contract assets and liabilities are reported in a net position on a contract-by-contract

basis at the end of each reporting period.

accounts for leases in accordance with ASC 842,

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 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 consolidated balance sheets 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.

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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 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

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.

The incremental 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.

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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.

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;

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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

Advertising expenses were $ 13.8 million, $ 9.7 million and $ 15.4 million during the years ended December 31, 2021, 2020 and 2019,

respectively.

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.

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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 .

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

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.

The determination of the fair value of stock-based payment awards using the Black-Scholes model is

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

Treasury securities for a period that is commensurate with the expected life assumption.

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Weighted-average fair value per share

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.

Stock-based compensation for restricted stock awards and restricted stock units is expensed ratably over the vesting period based on the gran

t date fair value.

Earnings Per Share

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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.

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.

The Company’s other comprehensive income (loss) was composed of foreign currency translation adjustments, derivatives designated as hedging instruments and pension liability adjustments.

Foreign Currency Translation

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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.

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,

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 Company is subject to risks common to its industry including, but not limited to, global economic conditions, rapid technological change, government and academic funding levels, the impact of the COVID-19

coronavirus, changes in commodity prices, spending patterns of its customers, protection of its intellectual property, availability of key raw materials and components, compliance with existing and future regulation by government agencies and fluctuations in foreign currency exchange rates and interest rates.

The impact of the COVID-19

worldwide pandemic has been and will likely continue to be extensive in certain geographies and aspects of society.

The pandemic has resulted in and will likely continue to result in significant disruptions to the global economy, global supply chains, as well as businesses and capital markets around the world.

Impacts to the Company’s business included temporary closures in 2020 of many of the Company’s government and university customers and suppliers, disruptions or restrictions on 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, implemented and some continue to implement significant restrictions on travel, shelter in place or stay at home orders, and business closures.

While some of these restrictions are loosening in certain jurisdictions, some markets have returned to restrictions in the face of increases in new COVID-19

cases, particularly as more contagious strains of the virus emerge.

Many of the Company’s employees in jurisdictions in which it has significant operations continue to work remotely.

In addition, certain Asia Pacific geographies where the Company operates are continuing to experience significant COVID-19

Much of the commercial activity in sales and marketing, and customer demonstrations and applications training, is still either being conducted remotely or postponed.

Even where customers have re-opened

their sites, some still operate at productivity levels that are below pre-pandemic

levels in an effort to accommodate safety protocols and as a result of pandemic-related supply chain disruptions.

Any resurgence of the virus or the emergence of new strains of the virus, particularly any new strains which are more easily transmitted or which are resistant to existing vaccines, may require the Company or its customers to close or partially close operations once again.

These travel restrictions, business closures and operating reductions at Bruker, customers, distributors, and/or suppliers have in the past adversely impacted and may 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.

Global supply chains, including for semiconductor chips, components and raw materials such as copper, have been disrupted, causing shortages, which has impacted the Company’s ability to manufacture or supply its products.

The Company could also experience increased compensation expenses associated with employee recruiting and employee retention to the extent employment opportunities continue to multiply post-pandemic, causing the search for and retention of talent to become more competitive.

This disruption of the Company’s employees, distributors, suppliers and customers has historically impacted and may continue to impact the Company’s global sales and operating results.

In September 2021, President Biden issued an Executive Order requiring certain COVID-19

precautions for government contractors and their subcontractors, including mandatory employee vaccination (subject to medical and religious exemptions).

In November 2021, the Department of Labor’s Occupational Safety and Health Administration, or OSHA, issued an Emergency Temporary Standard, or ETS, requiring that all employers with at least 100 employees ensure that their employees are fully vaccinated for COVID-19

or obtain a negative COVID-19

test at least once a week.

The Executive Order was preliminarily enjoined by several U.S.

federal district courts, the U.S.

Supreme Court preliminarily stayed the OSHA ETS in January 2022, and OSHA subsequently withdrew the ETS.

While the Company is not currently subject to any vaccine mandate, any requirement to mandate COVID-19

vaccination of its workforce or require its unvaccinated employees to be tested weekly could result in employee attrition and difficulty securing future labor needs and may have an adverse effect on future operations.

In addition, any requirement to impose such obligations on the Company’s suppliers who are deemed government contractors and their subcontractors could impact the price and continuity of supply of raw materials and its results of operations and financial condition could be adversely affected.

It continues to be the Company’s policy to encourage each of its employees to be fully vaccinated against COVID-19.

The Company has experienced supply chain interruptions as a result of the COVID-19 pandemic, general global economic conditions, a tight labor market and other factors, including natural events and disasters.

Various factors, including increased demand for certain components and production delays, are contributing to shortages of certain components used in the Company’s products and increased difficulties in its ability to obtain a consistent supply of materials at stable pricing levels.

Supply shortages and longer lead times for components used in the Company’s products, including limited source components, can result in significant additional costs and inefficiencies in manufacturing.

A shortage of key components may cause a significant disruption to the Company’s production activities, which could have a substantial adverse effect on the Company’s financial condition or results of operations.

If the Company is unsuccessful in resolving any such component shortages in a timely manner, the Company could experience a significant adverse impact on the timing of its revenue, a possible loss of revenue, or an increase in manufacturing costs, any of which could have a material adverse impact on the Company’s operating results.

The Company is continuing to monitor and assess the effects of the COVID-19

pandemic on its commercial operations in 2022.

However, the Company cannot at this time accurately predict what effects these conditions will ultimately have on future 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 continued emergence of new strains of the virus, the effectiveness and availability of vaccines, (including to protect against any new strains of the virus), the willingness of individuals to receive vaccines, 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.

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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.

The full extent to which the COVID-19

pandemic will directly or indirectly impact future 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,

new strains of the virus, the effectiveness and availability of COVID-19

vaccines or individuals’ willingness to receive vaccines, and the actions taken to contain or treat the virus, 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.

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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.

Disclosure is provided when a loss is considered probable but the loss is not reasonably estimable and when a material loss is reasonably possible but not probable.

Recent Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Updates (“ASU”) No.

In October 2021, the FASB issued Accounting Standards Update (“ASU”) No.

Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

to improve the accounting for acquired revenue contracts with customers in a business combination.

The amendments require an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606.

Previous guidance required an entity to recognize contract assets and contract liabilities at fair value as of the acquisition date.

The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The Company elected to early adopt ASU No.

in the fourth quarter of 2021, and in accordance with the early adoption requirements in an interim period, has applied the provisions retrospectively to all acquisitions completed on or after January 1, 2021.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No.

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.

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 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) :

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.

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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 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.

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

for Income Taxes .

The adoption of this ASU in 2020 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 for Income Taxes

The guidance simplifies the accounting for income taxes by removing certain exceptions within the current guidance;

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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.

The adoption of this ASU in 2021 did not 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.

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.

The Company adopted this guidance on January 1, 2020 and the adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No.

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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):

The Company adopted this ASU on January 1, 2020 and the adoption did not have a material impact on its 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.

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.

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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.

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

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 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

sheet credit exposures.

The new standard did not have an impact on the Company’s results of operations and cash flows.

The following table presents the Company’s revenues by Group (in millions):

The following table presents the Company’s revenues by Group for the years ended December 31:

(in millions)

Revenue by Group:

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Total revenue

Revenue for the Company recognized at a point in time versus over time is as follows (dollars in millions):

Revenue for the Company recognized at a point in time versus over time is as follows for the years ended December 31:

(in millions)

Revenue recognized at a point in time

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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.

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.

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The balance of contract assets as of December 31, 2021 and December 31, 2020 was $ 46.1 million and $ 41.8 million, respectively.

Contract liabilities— The Company often receives cash payments from customers in advance of the Company’s performance, resulting in contract liabilities.

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.

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,

individually and collectively, on revenues, net income and total assets is not material.

As of December 31, 2021 and December 31, 2020, the contract liabilities were

$ 430.8 million and $ 399.4 million, respectively.

The increase in the contract liability balance during the year ended

December 31, 202 1

is primarily a result of new performance obligations entered into during the period in

addition to delays in instrument installations due to customer facility closures or reduced operations as a result of COVID-19.

Approximately

$ 270.0 million of the contract liability balance on December 31, 2020 was recognized as revenue during the year ended December 31, 2021.

Pro forma financial information reflecting all acquisitions has not been presented because the impact, individually and collectively, on revenues and net income is not material.

Amounts allocated to goodwill that are attributable to expected synergies are not expected to be deductible for tax purposes.

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):

In the year ended December 31, 2021, the Company completed various acquisitions that collectively complemented its existing product offerings of to the Company’s existing businesses.

The following table reflects the consideration transferred and the respective reportable segment for each of the 2021 acquisitions (in millions):

SCI Instruments

Consideration Transferred:

Contingent consideration

Cash acquired

Fair value of contingent consideration

Working capital adjustment

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Accounts receivable

Other current and non-current assets

Other current assets

Property, plant and equipment

Operating lease assets

Intangible assets:

Customer relationships

Deferred taxes, net

Deferred taxes

Liabilities assumed

Total consideration allocated

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.

SCI Instruments

On August 24, 2021, the Company acquired SCI Instruments (“SCI”), a privately held company, for a purchase price of $ 28.0 million with the potential for additional consideration of up to $ 4.0 million based on revenue and gross margin achievements in the calendar years 2022 and 2023.

SCI is a manufacturer of advanced metrology systems and analysis software and serves major companies in the semiconductor, optoelectronics, data storage, display, MEMS, and optical coating industries.

SCI will be integrated into the BSI Nano Segment.

The acquisition is being accounted for under the acquisition method.

The preliminary fair value allocation included contingent consideration in the amount

million, which represented the estimated fair value of future payments to the former shareholders of SCI based on achieving revenue and gross margin targets for the calendar years 2022 and 2023.

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.

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

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):

The amortization period for the intangible assets acquired is

ten years for the trade name and technology, and

for the customer relationships.

The backlog intangible asset will be amortized through March 31, 2022.

On November 17, 2021, the Company acquired Molecubes NV (“Molecubes”),

a privately held company, for a purchase price of EUR 18.7 million (approximately $ 21.1 million) with the potential for additional consideration of up to EUR 3.0 million (approximately $ 3.4 million) based on revenue and gross margin achievements.

Molecubes manufactures and sells preclinical imaging CUBES that enable researchers to perform high-performance SPECT/CT and PET/CT studies without the need for complex system handling.

The acquisition is being accounted for under the acquisition method.

The preliminary fair value allocation included contingent consideration in the amount of EUR 0.4 million (approximately $ 0.4 million), which represented the estimated fair value of future payments to the former shareholders of Molecubes based on achieving revenue and gross margin targets in 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 trade name, technology, and customer relationships.

The backlog intangible asset was fully amortized as of December 31, 2021.

In addition to the SCI and Molecubes acquisitions, in 2021 the Company completed various other acquisitions accounted for under the acquisition method that complemented the Company’s existing product offerings.

The following table reflects the consideration transferred and the respective reportable segment for these acquisitions (in millions):

Name of Acquisition

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Consideration

SmartTip B.V.

April 1, 2020

Integrated Proteomics Applications, Inc.

August 7, 2020

Creative Instruments

BSI Life Science

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:

Contingent consideration

Working capital adjustment

Total consideration transferred

Allocation of Consideration Transferred:

Accounts receivable

Other current and non current assets

Property, plant and equipment

Operating lease assets

Intangible assets:

Customer relationships

Liabilities assumed

Total consideration transferred

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

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

September 9, 2021

In addition to the acquisitions noted above, in 2021 the Company completed minority investments 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):

Acquisition /

Classification

Date Acquired

Consideration

Cash Consideration

March 4, 2019

Consideration

Glycopath Inc.

Other long-term

February 18, 2021

BSI Life Science

Ampegon PPT GmbH

Other long-term

March 18, 2021

PMOD Technologies GmbH

BSI Life Science

Magnettech GmbH

October 2, 2019

BSI Life Science

BioVendor Instruments a.s.

November 1, 2019

Other long-term

September 23, 2021

BSI Life Science

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):

2022—Subsequent Event Acquisitions

On January 1 7

, 2022, the Company completed

a share purchase agreement to acquire 100 % of the outstanding stock of Prolab Instruments GmbH (“Prolab”)

for a purchase price of CHF 5.0 million (approximately $ 5.5 million) with the potential for additional consideration of up to CHF 3.0 million (approximately $ 3.3 million).

Prolab is located in Basel, Switzerland and will be integrated into the Bruker CALID Group.

On January 1 8

, 2022, the Company completed

a share purchase agreement to acquire 74.15 % of the outstanding stock of PreOmics GmbH (“PreOmics”)

for EUR 44.7 million (approximately $ 50.6 million).

PreOmics is located in Munich, Germany and will be integrated into the Bruker CALID Group.

February 1, 2022

, the Company

a share purchase agreement to acquire 100 % of the outstanding stock of PepSep Holding

ApS (“PepSep”)

for EUR 2.5 M (approximately $ 2.8 million) with the potential for additional consideration of up to EUR $ 1.5 million (approximately $ 1.7 million).

PepSep is located in Odense, Denmark and will be integrated into the Bruker CALID Group.

On February 15, 2022, the Company completed an additional $ 12.0 million minority interest investment in PrognomIQ, Inc.

(“PrognomIQ”).

PrognomIQ is located in Redwood City, California and is reported within the Bruker CALID Group.

Canopy Biosciences

On September 10, 2020, Bruker acquired Canopy Biosciences, LLC (“Canopy”) for a purchase price of

million with the potential for additional consideration of up to

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 was integrated into the BSI Nano Segment.

The acquisition was 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 acquired

Contingent consideration

Cash acquired

Working capital adjustment

Total consideration transferred

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Accounts receivable

Other current and non-current assets

Other current and non-current

Property, plant and equipment

Operating lease assets

Intangible assets:

Customer relationship

Customer relationships

Deferred taxes, net

Liabilities assumed

Redeemable noncontrolling interest

Hybrid instrument liability

Total consideration transferred

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

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 .

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 .

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.

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

detection of microbial and viral pathogens, as well as for molecular antibiotic resistance testing.

Total consideration allocated

The 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 completed the fair value allocation during 2021.

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.

During the year ended December 31,

2021, the revenue targets were not achieved and the $ 0.5 million contingent consideration liability was reduced to zero resulting in

a reduction to selling, general and administrative expenses.

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.

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.

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.

On January 31, 2020, the Company acquired the 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 various other acquisitions that complemented the Company’s existing product offerings.

The following table reflects the consideration transferred and the respective reportable segment for these acquisitions

(in millions):

Name of Acquisition

Date Acquired

Consideration

SmartTip B.V.

April 1, 2020

Integrated Proteomics Applications, Inc.

August 7, 2020

BSI Life Science

Allowance for Doubtful Accounts

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Demonstration units

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.

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, 2021 and 2020, inventory-in-transit

was $ 49.5 million and $ 67.8 million, respectively.

Property, Plant and Equipment, Net

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Goodwill and Intangible Assets

The following table sets forth the changes in the carrying amount of goodwill by segment (in millions):

The following table sets forth the changes in the carrying amount of goodwill by segment

(in millions):

Balance at December 31, 2018

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Balance at December 31, 2021

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

units were significantly greater than their carrying amounts, and therefore, no impairment is required.

performed its annual impairment evaluation using both a quantitative and qualitative approach at December 31, 2021, 2020 and 2019, 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.

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 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.

has recorded $ 3.1

million of accumulated impairment losses of goodwill as of December 31, 2021.

Intangible Assets

2 unchanged sentences

Customer relationships

Non-compete contracts

Intangible assets

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The Company’s debt obligations consist of the following (in millions):

US Dollar notes under the 2012 Note Purchase Agreement

EUR notes (in dollars) under the 2021 Note Purchase Agreement

CHF notes (in dollars) under the 2021 Note Purchase Agreement

US Dollar notes under the 2019 Term Loan

CHF notes (in dollars) under the 2019 Note Purchase Agreement

Dollar notes under the 2019 Term Loan

Dollar notes under the 2012 Note Purchase Agreement

Unamortized debt issuance costs

Capital lease obligations and other loans

Total notes and loans outstanding

Finance lease obligations

Current portion of long-term debt

Total long-term debt, less current portion

2021 Note Purchase Agreement

On December 7, 2021, the Company entered into a note purchase agreement, referred to as the 2021 Note Purchase Agreement, with a group of institutional accredited investors.

Pursuant to the 2021 Note Purchase Agreement, the Company issued and sold CHF 300 million aggregate principal amount of 0.88 % series

A senior notes and EUR 150 million aggregate principal amount of 1.03 % series B senior notes due December 8, 2031 , referred to as the 2021 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 2021 Senior Notes is payable semi-annually on June 7 and December 7 of each year , commencing June 7, 2022 .

The Company may prepay some or all of the 2021 Senior Notes at any time in an

amount not less than 10 % of the aggregate principal amount of the

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 2021 Note Purchase Agreement) of the Company, the Company may be required to prepay the 2021 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 2021 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 certain mergers and consolidations, enter into transactions with affiliates, and engage or permit any subsidiary to engage in certain lines of business.

The 2021 Note Purchase Agreement also includes customary representations and warranties and events of default.

Additionally, so long as any 2021 Senior Notes are outstanding, the Company may not permit (i) its leverage ratio (as determined pursuant to the 2021 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 2021 Note Purchase Agreement, (ii) its interest coverage ratio (as determined pursuant to the 2021 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 2021 Note Purchase Agreement).

2019 Transactions

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;

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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.

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.

3 unchanged sentences

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.

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.

2 unchanged sentences

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.

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 1⁄2 of 1%, (ii) the

prime rate announced by Bank of America, N.A., and (iii) LIBOR, as

adjusted , plus

each case, a margin rate ranging from

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

0.200 %, 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.

1 unchanged sentence

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.

primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly (dollars in millions):

Committed and

Uncommitted by

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 primarily in Germany and Switzerland that are unsecured and typically due upon demand with interest payable monthly (dollars i n

Interest Rate

7 unchanged sentences

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.

Amounts outstanding under the Term Loan Agreement bear interest at a rate equal to, at the Company’s option, (a) the U .

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 1

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.

1 unchanged sentence

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.

Pursuant to the 2019 Note

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.

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.

1 unchanged sentence

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.

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 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 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.

7 unchanged sentences

$ 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.

Principal amounts of Tranches A, B and C together with any accrued interest theron were paid on their respective due dates in accordance with 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.

1 unchanged sentence

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.

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.

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.

4 unchanged sentences

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

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.

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, 2021, 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):

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.

Annual maturities of notes and loans outstanding are as follows (in millions):

As of December 31, 2021, the Company has several cross-currency and interest rate swap agreements with a notional value of $ 149.6 million of U.S.

to Swiss Franc and a notional value of $ 354.7 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.

These agreements qualify for hedge accounting and accordingly the change in fair value of the derivative is

recorded in other comprehensive income as part of foreign currency translation adjustments and remains

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 $ 5.5 million and $ 7.2 million during 2021 and 2020, 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.

The gains related to hedges of net asset investments in international operations that were recorded within the cumulative

adjustment section of other comprehensive income were $ 36.4 million for the year ended December 31, 202 1

The losses related to hedges of net asset investments in international operations that were recorded within the cumulative

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

was $ 14.3 million, $ 14.4 million and $ 16.0 million, respectively.

Fair Value of Financial Instruments

1 unchanged sentence

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

December 31, 2021

Quoted Prices

Time deposits and money market funds

1 unchanged sentence

Interest rate and cross currency swap agreements

Foreign exchange contracts

Forward currency contracts

Embedded derivatives in purchase and delivery contracts

4 unchanged sentences

Hybrid instrument liability

Forward currency contracts

Interest rate and cross currency swap agreements

Foreign exchange contracts

Long-term fixed interest rate debt

Total liabilities recorded at fair value

Quoted Prices

December 31, 2020

Quoted Prices

Time deposits and money market funds

1 unchanged sentence

Interest rate and cross currency swap agreements

Foreign exchange contracts

Foreign currency contracts

Embedded derivatives in purchase and delivery contracts

Fixed price commodity contracts

Debt securities available for sale

Total assets recorded at fair value

2 unchanged sentences

Interest rate and cross currency swap agreements

Foreign exchange contracts

Embedded derivatives in purchase and delivery contracts

Forward currency contracts

Long-term fixed interest rate debt

Total liabilities recorded at fair value

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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, 2021 or 2020.

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.

The fair value of the long-term fixed interest rate debt, which has been classified as Level 2, was based on market and observable sources with similar maturity dates.

The remaining long-term debt has variable interest rates and the carrying value 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.

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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.

Contingent consideration recorded within other liabilities represents the estimated fair value of future payments to the former shareholders as part of certain acquisitions.

These contingent consideration amounts 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

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 income approach method involves calculating the earnout payment based on the forecasted cash flows, adjusting the future earnout payment for the risk of reaching the projected financials, and then discounting the future payments to present value by the counterparty risk.

The counterparty risk considers the risk of the buyer having the cash to make the earnout payments and is commensurate with a cost of debt over an appropriate term.

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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.

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) within short-term and long-term liabilities on the consolidated balance sheet.

3 unchanged sentences

Current period additions

Foreign currency effect

Balance at December 31, 2020

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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.

6 unchanged sentences

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

Forward Currency Contracts (1):

Cross-Currency and Interest Rate Swap Agreements (2):

Derivatives not designated as accounting hedges.

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.

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 contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $ 8.5 million and

for the purchase of products at December 31, 2021 and 2020, respectively.

The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $ 0.0 million and $ 7.5 million for the delivery of products at December 31, 2021 and 2020, respectively.

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.

The fair value of the derivative instruments described above were recorded in the consolidated balance sheets as follows (in millions):

The Company had the following notional amounts outstanding under foreign exchange contracts, cross-currency interest rate swap agreements and long-term debt designated as net investment hedges (in millions) and the respective fair value of the instruments recorded in the consolidated balance sheets as follows (in millions):

Derivatives designated as hedging instruments

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Other long-term liabilities

Long-term debt

Long-term Debt

Total derivatives designated as hedging instruments

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Other current assets

Other current liabilities

Fixed price commodity contracts

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Total derivatives

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):

The following is a summary of the gain (loss) included in th e

consolidated statements of income and comprehensive income related to the

derivative instruments described above (in millions):

Years Ended December 31,

Financial Statement Classification

3 unchanged sentences

Embedded derivatives in purchase and delivery contracts

Interest and other income (expense), net

Derivatives designated as Cash Flow hedging instruments

Interest and other income

(expense), net

Derivatives designated as cash flow hedging

Interest rate cross-currency swap agreements

Interest incurred

Interest and other income (expense), net

Unrealized gains (losses) on contracts

Accumulated other comprehensive income

Interest and other income

(expense), net

Derivatives designated as net investment hedging instruments

Interest rate cross-currency swap agreements

Interest earned

Interest and other income (expense), net

Unrealized losses on contracts

Accumulated other comprehensive income

The domestic and foreign components of income before taxes are as follows (in millions):

Years Ended December 31,

Financial Statement Classification

Derivatives designated as cash flow hedging instruments

Interest rate cross-currency swap agreements

Accumulated other

comprehensive income,

Derivatives designated as net investment hedging

Interest rate cross-currency swap agreements

Accumulated other

comprehensive income,

Long-term debt

Accumulated other

comprehensive income,

The domestic and foreign components of income before income taxes are as follows (in millions):

Total income before provision for income taxes

The components of the income tax provision are as follows (in millions):

Current income tax expense:

Current income tax expense (benefit):

Total current income tax expense

Deferred income tax (benefit) expense:

Total deferred income tax (benefit) expense

Deferred income tax expense (benefit):

Total deferred income tax benefit

Income tax provision

4 unchanged sentences

Permanent differences

tax on foreign earnings

Stock compensation

Mandatory repatriation

4 unchanged sentences

State income taxes, net of federal benefits

Purchase accounting

Change in valuation allowance for unbenefitted losses

Research and development credits

Change in valuation allowance for unbenefited losses

Effective tax rate

7 unchanged sentences

Unrealized currency gain/loss

Hedge unrealized FX gain/loss

Lease obligations

7 unchanged sentences

Accrued withholding tax

Right of use asset

Total deferred tax liabilities

Net deferred tax assets

Net deferred tax asset s

The Company uses the liability method to account for income taxes.

6 unchanged sentences

Balance at December 31, 2018

Increases recorded as a loss to income tax provision

Increases recorded as part of acquisition purchase accounting

Balance at December 31, 2018

Decreases recorded as a benefit to income tax provision

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Balance at December 31, 2020

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.

Increases recorded as

an expense to income tax provision

Balance at December 31, 2021

As of December 31, 2021, the Company had approximately $ 89.4 million net operating loss carryforwards available to reduce state taxable income that are expected to expire at various times beginning in 2022.

The Company also has approximately $ 86.1 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.

Additionally, the Company has $ 6.4 million of other foreign net operating losses that are expected to expire at various times in the future.

federal foreign tax credit carried forwards in the amount of $ 6.3 million.

We also had U.S.

federal and state research and development tax credit of $ 4.6 million and $ 7.8 million respectively.

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.

Additionally, the Company has $ 40.2 million of gross interest expense carryforward as provided by Code Section 163(j) that can be carried forward indefinitely.

At December 31, 2021 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.

1 unchanged sentence

This figure is comprised of $ 1.4 billion in unremitted earnings as well as $ 546 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.

If this E&P is ultimately distributed to the United States in the form of dividends 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 $

69 million at December 31, 2021.

The Company had gross unrecognized tax benefits, excluding interest, of approximately $ 51.4 million as of December 31, 2021, that if recognized, would reduce the Company’s effective tax rate.

3 unchanged sentences

Gross increases—tax positions in prior periods

Gross increases—current period tax positions

Lapse of statutes

2 unchanged sentences

Gross increases—current period tax positions

Lapse of statutes

Gross unrecognized tax benefits at December 31, 2020

4 unchanged sentences

At December 31, 2021 and 2020, the Company had approximately $ 3.1 million and $ 1.8 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.

The Company recorded expense of $

1.5 million for penalties and interest related to unrecognized tax benefits in the provision for income taxes during the year ended

December 31, 2021.

There was no benefit recognized during the year ended December 31, 2020.

The Company has been subject to a tax examination in Germany for the years 2009 through 2012 whereby the German tax authorities had imposed additional tax assessments for those years.

Due to the nature of the

additional tax assessments, the Company filed for competent authority relief from those assessments under the Mutual Agreement Procedures (“MAP”) of the United States-Germany income tax treaty.

The Company expects the competent authorities to present a resolution for the 2009 through 2012 tax years during 2022.

The Company does not expect a material impact to the results of operations for the year ending December 31, 2022 as a result of the resolution of this matter.

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.

1 unchanged sentence

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.

Accounting for the various federal and local taxing authorities, the statutory rates for 2021 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 5.7 % from the U.S.

statutory rate of 21 % in 202 1

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.

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.

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.

This tax holiday had an immaterial impact to earnings per share for the year ended December 31, 2021.

In connection with the Tax Cuts and Jobs Act (“TCJA”) of 2017, the Company recorded a toll charge liability of $ 35.4 million.

Of that amount, approximately $ 11.3 million has already been paid as of December 31, 2021.

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.

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 for the period ended December 31, 2021.

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.

1 unchanged sentence

The components of lease expense were as follows (in millions):

Amortization of right-of-use assets

Amortization of right-of-use

Interest on lease liabilities

5 unchanged sentences

Total lease cost

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):

16 unchanged sentences

Financing cash flows from finance leases

Right-of-use assets obtained in exchange for lease liabilities

assets obtained in exchange for lease liabilities

Operating leases

13 unchanged sentences

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.

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.

1 unchanged sentence

however, the level of benefits and terms of vesting varies among plans.

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 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):

2 unchanged sentences

Expected return on plan assets

Amortization of net loss

Settlement loss recognized

Amortization of prior service (credit) cost

Amortization of actuarial (gains) losses

Net periodic benefit costs

The Company measures its benefit obligation and the fair value of plan assets as of December 31st each year.

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):

20 unchanged sentences

Net under-funded status

Plan amendments relate to a reduction in the conversion rate for the pension plan in Switzerland that will be effective in 2022.

Plan amendments

relate to further reductions in the mandatory and the supplementary conversion rates for the pension plan in Switzerland that will be effective in 2022 and in 2023, respectively

The accumulated benefit obligation for the defined benefit pension plans is $ 225.8 million and $ 260.4 million at December 31, 2021 and 2020, respectively.

2 unchanged sentences

Current liabilities

Non-current liabilities

Net benefit obligation

The following pre-tax amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions):

The following pre-tax

amounts were recognized in accumulated other comprehensive income for the Company’s defined benefit plans (in millions):

Reconciliation of amounts recognized in the consolidated balance sheets:

Prior service cost

Prior service cost (credi t)

Net actuarial loss

5 unchanged sentences

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:

Discount rates

0.1 % - 1.3 %

0.3 % - 2.3 %

0.2 % - 2.3 %

The following assumptions were used for defined benefit pension plans reflects the

different economic environments within the various countries.

The assumptions used to determine the net periodic benefit costs and the projected benefit obligations are as follows:

Annual discount rate—defined benefit obligation

Annual discount rate—defined benefit cost

Expected return on plan assets

Expected rate of compensation increase

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.

Annual discount rate—defined benefit obligation

Annual discount rate—defined benefit cost

Expected return on plan assets

Expected rate of compensation increase

Annual discount rate—defined benefit obligation

Annual discount rate—defined benefit cost

Expected return on plan assets

Expected rate of compensation increase

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.

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):

December 31, 2021

Quoted Prices in

Significant Other

Active Markets

Available (Level 1)

Significant Other

Observable Inputs

Unobservable Inputs

December 31, 2020

Available (Level 1)

Group BPCE Life (a)

1 unchanged sentence

Total plan assets

December 31, 2020

Quoted Prices in

Significant Other

Active Markets

Available (Level 1)

Significant Other

Observable Inputs

Unobservable Inputs

December 31, 2019

Available (Level 1)

Group BPCE Life (a)

1 unchanged sentence

Total plan assets

(a) The Company’s pension plan in France is invested in a larger fund that invests in a variety of instruments.

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 Company’s pension plan in Switzerland is outsourced to Swiss Life AG, an o utsi

de insurance provider.

portion starting 2022

The Foundation utilizes plan administrators and investment managers to oversee the investment allocation process, set long-term strategic targets and monitor asset allocations.

3 unchanged sentences

Contributions and Estimated Future Benefit Payments

During 2021, the Company expects contributions to be consistent with 2020.

For all of our plans except Switzerland, we do not have plan assets to payout benefit payments.

Contributions are expected to be consistent with estimated benefit payments for the next fiscal year.

The estimated future benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2021.

1 unchanged sentence

Commitments and Contingencies

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

Litigation and Related Contingencies

1 unchanged sentence

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.

1 unchanged sentence

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, 2021 and 2020, no material accruals have been recorded for potential contingencies.

12 unchanged sentences

The Company does not expect additional losses to be incurred in excess of the amounts accrued.

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

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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

The maximum potential amount of future payments the Company could be required to make under these agreements is unlimited.

The Company believes the estimated fair value of these agreements is minimal based on historical experiences.

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Stock options

Unvested restricted stock awards

Unvested restricted stock units

1 unchanged sentence

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.

In May 2019, the Company’s Board of Directors approved a share repurchase plan (the “2019 Repurchase Program”) authorizing the purchase of the Company’s 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 555,602 shares at an aggregate cost of $ 34.5 million during the year ended December 31, 2021.

The Company purchased a total of 2,711,952 shares at an aggregate cost of $ 123.2 million during the year ended December 31, 2020.

The Company completed the 2019 Repurchase Program in April 2021, after reaching the maximum cumulative spend.

In May 2021, the Company’s Board of Directors approved a share repurchase plan (the “2021 Repurchase Program”) authorizing the purchase of the Company’s common stock up to $ 500.0 million from time to time over a two-year

period, 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 1,537,217 shares at an aggregate cost of $ 118.9 million under the 2021 Repurchase Program during the year ended December 31, 2021.

The remaining authorization as of December 31, 2021 is $ 381.1 million.

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.

Under the policy, the Company targeted a

$ 0.16 per share cash dividend per annum to the Company’s shareholders payable in equal quarterly installments.

Beginning in 2022, the Company is targeting a cash dividend to our shareholders in the amount of $ 0.20 per share per annum, 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.

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Balance at December 31, 2018

Other comprehensive income

Realized loss on reclassification

Balance at December 31, 2018

Other comprehensive income (loss)

Realized loss on reclassification

Realized gain

on reclassification

Balance at December 31, 2019

Other comprehensive income

Realized loss on reclassification

Realized gain

on reclassification

Balance at December 31, 2020

Other comprehensive income (loss)

Realized gain

on reclassification

Balance at December 31, 2021

Stock Compensation Plans

1 unchanged sentence

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 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.

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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 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.

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At December 31, 2021, 821,464 options and 654,470 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 .

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 .

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Stock-based Compensation

The following presents the impact of stock-based compensation expense on our consolidated statements of income (in millions):

The following presents the impact of stock-based

compensation expense on our consolidated statements of income (in millions):

Stock options

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Total stock-based compensation

Costs of product revenue

of product revenue

Selling, general and administrative

1 unchanged sentence

Total stock-based compensation

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.

In addition to the awards above, the Company recorded stock-based compensation within other charges, net of $ 2.7 million and $ 2.6 million at December 31, 2021 and 2020, respectively, and a benefit of $ 2.3 million in the year ended December 31, 2019 related to the 2018 acquisition of Mestrelab Research, S.L.

At December 31, 2021, the Company expects to recognize pre-tax stock-based

compensation expense of $ 3.0 million associated with outstanding stock option awards granted under the Company’s stock plans over the weighted average remaining service period of 2.5 years.

The Company also expects to recognize additional pre-tax stock-based

compensation expense of $ 27.1 million associated with outstanding restricted stock units granted under the Company’s 2016 Incentive Compensation Plan over the weighted average remaining service period of 2.4 years.

Stock Option Awards

Stock option activity is as follows:

Stock option activity for the year ended December 31, 2021 is as follows

Average Price

Intrinsic Value

Term (in Years)

Intrinsic Value

(in millions) (a)

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Exercisable and expected to vest at December 31, 2021 (b)

(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.

Represents the number of vested options at December 31, 2021, plus

the number of unvested options at December 31, 2021 that are ultimately

expected to vest based on our estimated forfeiture rate.

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, 2021

The total intrinsic value of options exercised was $ 35.7 million, $ 6.1 million and $ 15.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Unvested Restricted Stock Units

Unvested restricted stock unit activity is presented below:

Restricted Stock Units

Restricted stock unit activity is presented below:

Average Grant

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

Acquisition-related expenses (income), net

Acquisition-related expenses ,

Professional fees incurred in connection with investigation matters and other legal matters

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Cash payments

Non-cash adjustments

Foreign currency impact

2 unchanged sentences

Cash payments

Non-cash adjustments

Foreign currency impact

2 unchanged sentences

Cash payments

Non-cash adjustments

Foreign currency impact

1 unchanged sentence

Interest and Other Income (Expense), Net

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

The components

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

Interest income

Interest expense

Exchange gains (losses) on foreign currency transactions

losses on foreign currency transactions

Pension components

1 unchanged sentence

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.

reportable segments, BSI Life Science, BSI N

and BEST, as discussed in Note 1 to the consolidated

financial statements.

Selected reportable segment information is presented below (in millions):

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Total operating income

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

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

Represents product and service revenue between reportable segments.

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

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

BSI Life Science, BSI NANO & Corporate

BSI Life Science, BSI N ano

Eliminations and other (a)

(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.

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):

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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.

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data