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What changed in Teledyne Technologies's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Teledyne Technologies's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+374 added−427 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in Teledyne Technologies's 2024 10-K

374 paragraphs added · 427 removed · 171 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

49 edited+2 added−8 removed29 unchanged
Biggest changeWe also provide instruments for the measurement of physical properties and maritime products for recreational and commercial customers globally. We provide research and engineering capabilities primarily in the areas of electronics, materials, optical systems, and information science to military, aerospace and industrial customers, as well as to various businesses throughout Teledyne.
Biggest changeWe provide research and engineering capabilities primarily in the areas of electronics, materials, optical systems, and information science to military, aerospace and industrial customers, as well as to various businesses throughout Teledyne. 1 Table of Contents For defense applications, we also develop and manufacture multi-spectrum electro-optic/infrared imaging systems and associated products such as lasers, optics, and radars, CBRNE (“Chemical, Biological, Radiological, Nuclear and Explosive detectors”) and unmanned air and ground systems.
Such applications include aircraft, radar, electronic countermeasures, weapon systems, space, wireless and satellite communications and terminals and test equipment. We provide onboard avionics systems and ground-based applications that allow civil and military aircraft software operators to access, manage and utilize their data more efficiently.
Such applications include aircraft, radar, electronic countermeasures, weapon systems, space, wireless and satellite communications and terminals and test equipment. We provide onboard avionics systems and ground-based applications that allow civil and military aircraft operators to access, manage and utilize their data more efficiently.
Aerospace and Defense Electronics Segment Our Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems, data acquisition and communications components and equipment, harsh environment interconnects, general aviation batteries and other components for a variety of commercial and defense applications that require high performance and high reliability.
Aerospace and Defense Electronics Segment Our Aerospace and Defense Electronics segment provides sophisticated electronic and optical components and subsystems, data acquisition and communications components and equipment, harsh environment interconnects, general aviation batteries and other components for a variety of commercial and defense applications that require high performance and high reliability.
On an annual basis, we conduct an organization and leadership review for all segment, business unit, and function leaders, focusing on our high performing and high potential talent, diversity and succession for our most critical roles. From this review, individualized development and retention programs are implemented or revised as needed.
On an annual basis, we conduct an organization and leadership review for segment, business unit, and function leaders, focusing on our high performing and high potential talent and succession for our most critical roles. From this review, individualized development and retention programs are implemented or revised as needed.
Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do. Intellectual Property We own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights.
Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do. 4 Table of Contents Intellectual Property We own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights.
The majority of our employees (including all full-time employees in the U.S., Canada and the United Kingdom) have access to our employee assistance program which includes third-party counseling and mental health services at no cost to the employee when life events impact an employee. We are committed to identifying and developing the talents of our next generation of leaders.
The majority of our employees (including all full-time employees in the United States, Canada and the United Kingdom) have access to our employee assistance program which includes third-party counseling and mental health services at no cost to the employee when life events impact an employee. We are committed to identifying and developing the talents of our next generation of leaders.
Our leadership in USB and video technologies provides a unique base to service the mobile, internet of things, automotive and consumer electronics test markets. We also produce protocol validation and test tools for high-performance solid-state storage devices used in both enterprise- 2 Table of Contents grade data centers and in consumer computing applications.
Our leadership in USB and video technologies provides a unique base to service the mobile, internet of things, automotive and consumer electronics test markets. We also produce protocol validation and test tools for high-performance solid-state storage devices used in both enterprise-grade data centers and in consumer computing applications.
Design and test engineers use our protocol analysis solutions to monitor accurately and reliably high data-rate communication interfaces and diagnose operational problems in a wide range of systems and devices to ensure that they comply with industry standards, including in the areas of cloud computing, storage and networks.
Design and test engineers use our protocol analysis solutions, including traffic generators and emulators, to accurately and reliably monitor and test high data-rate communication interfaces and diagnose operational problems in a wide range of systems and devices to ensure that they comply with industry standards, including in the areas of cloud computing, data storage and networks.
When contracts are terminated for convenience, we can recover costs incurred or committed, settlement expenses and profit on work completed prior to termination. During 2023 and 2022, contracts terminated by the U.S. Government did not materially impact our results of operations.
When contracts are terminated for convenience, we can recover costs incurred or committed, settlement expenses and profit on work completed prior to termination. During 2024 and 2023, contracts terminated by the U.S. Government did not materially impact our results of operations. Many of our U.S.
Such contracts are typically not subject to renegotiation of profits if we fail to anticipate technical problems, estimate costs accurately or control costs during performance. Additionally, U.S. Government contracts are subject 3 Table of Contents to termination by the U.S. Government at its convenience, without identification of any default.
Such contracts are typically not subject to renegotiation of profits if we fail to anticipate technical problems, estimate costs accurately or control costs during performance. Additionally, U.S. Government contracts are subject to termination by the U.S. Government at its convenience, without identification of any default.
Glider applications range from oceanographic research to persistent surveillance systems for the U.S. Navy. We also design and manufacture remotely operated underwater vehicles used in maritime security, military, search and rescue, aquaculture, and scientific research applications. Environmental Instrumentation We offer a wide range of products used for environmental monitoring.
We manufacture complete autonomous-operated underwater vehicles systems, including underwater gliders. Glider applications range from oceanographic research to persistent surveillance systems for the U.S. Navy. We also design and manufacture remotely operated underwater vehicles used in maritime security, military, search and rescue, aquaculture, and scientific research applications. Environmental Instrumentation We offer a wide range of products used for environmental monitoring.
With the exception of the Engineered Systems segment, no U.S Government program in 2023 or 2022 accounted for more than 10% of net sales for any of our segments or for the total Company. In 2023, the largest program with the U.S.
With the exception of the Engineered Systems segment, no U.S Government program in 2024 or 2023 accounted for more than 10% of net sales for any of our segments or for the total Company. In 2024 and 2023, the largest program with the U.S.
Percentage of Total Net Sales Segment contribution to total net sales: 2023 2022 2021 Digital Imaging 56 % 57 % 52 % Instrumentation 23 % 23 % 25 % Aerospace and Defense Electronics 13 % 12 % 14 % Engineered Systems 8 % 8 % 9 % 100 % 100 % 100 % Digital Imaging Segment Our Digital Imaging segment includes high-performance sensors, cameras, and systems, within the visible, infrared, ultraviolet and X-ray spectra for use in industrial, scientific, government, space, defense, security, medical and other applications.
Percentage of Total Net Sales Segment contribution to total net sales: 2024 2023 2022 Digital Imaging 54 % 56 % 57 % Instrumentation 24 % 23 % 23 % Aerospace and Defense Electronics 14 % 13 % 12 % Engineered Systems 8 % 8 % 8 % Total 100 % 100 % 100 % Digital Imaging Segment Our Digital Imaging segment includes high-performance sensors, cameras, and systems, within the visible, infrared, ultraviolet and X-ray spectra for use in industrial, scientific, government, space, defense, security, medical and other applications.
Our waterproof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies are used in underwater equipment, submerged monitoring systems and other industrial and defense applications. Other marine products used by the U.S. Navy and commercial customers include acoustic modems for networked underwater communication and optical underwater cameras and LED lighting sources. We manufacture complete autonomous-operated underwater vehicles systems.
Our waterproof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies are used in underwater equipment, submerged monitoring systems and other industrial and defense applications. Other marine products used by the U.S. Navy and commercial customers include acoustic modems for networked underwater communication and optical underwater cameras and LED lighting sources.
We have included our website addresses throughout this report as inactive textual references only. The information contained on the websites referenced herein is not incorporated into this Form 10-K.
We have included our website addresses throughout this report as inactive textual references only. The information contained on the websites referenced herein is not incorporated into this Form 10-K. 6 Table of Contents
Given the technical nature of our products, we conduct our marketing activities through a direct internal sales force as well as third-party sales representatives and distributors. Several Teledyne businesses, including across our segments, have been marketing and selling products collaboratively to similar customers.
Given the technical nature of our products, we conduct our marketing activities through a direct internal sales force as well as third-party sales representatives and distributors. Several Teledyne businesses, including across our segments, are marketing and selling products collaboratively to certain customers.
The CSR Report and its supplement includes data on Teledyne’s combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”), workplace safety, water usage, waste generation and recycling and workplace demographics.
The CSR Report and its supplements include data on Teledyne’s combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”), workplace safety, water usage, waste generation and recycling and workplace demographics.
Our goal is to maintain a safe, hospitable and inclusive work environment in which every employee is encouraged to contribute to the success of the company. We are focused on attracting, developing, and retaining employees through competitive compensation and benefits, workforce and management development, diversity and inclusion initiatives, succession planning, corporate culture and leadership quality.
Our goal is to maintain a safe, hospitable and inclusive work environment in which every employee is encouraged to contribute to the success of the company. We are focused on attracting, developing, and retaining employees through competitive compensation and benefits, workforce and management development, succession planning, corporate culture and leadership quality, in compliance with applicable regulations.
No commercial customer in 2023 or 2022 accounted for more than 10% of net sales for any of our segments or for the total Company. Total sales to international customers were $2,740.1 million in 2023 and $2,586.0 million in 2022.
No commercial customer in 2024 or 2023 accounted for more than 10% of net sales for any of our segments or for the total Company. Total sales to international customers were $2,731.1 million in 2024 and $2,740.1 million in 2023.
Of these net sales to international customers, our businesses in the United States accounted for $900.5 million in 2023 and $837.9 million in 2022. In both 2023 and 2022, we sold products to customers in over 100 foreign countries. Approximately 90% of our net sales to international customers during 2023 were made to customers in 30 foreign countries.
Of these net sales to international customers, our businesses in the United States accounted for $950.0 million in 2024 and $900.5 million in 2023. In both 2024 and 2023, we sold products to customers in over 100 foreign countries. Approximately 90% of our net sales to international customers during 2024 were made to customers in 30 foreign countries.
We advertise vacancies and strive to recruit the best possible candidate for each role. We monitor diversity metrics on a global basis. The health and wellness of our employees is a critical component to the success of our business. Many of our larger facilities have on-site fitness centers and encourage healthy choices with various wellness challenge programs.
We strive to recruit the best possible candidate for each role. The health and wellness of our employees is a critical component to the success of our business. Many of our larger facilities have on-site fitness centers and encourage healthy choices with various wellness challenge programs.
Government sales as a percent of total net sales 24.5 % 24.9 % 25.9 % Our principal U.S. Government customer is the U.S. Department of Defense, with total net sales of $1,081.3 million and $1,065.1 million in 2023 and 2022, respectively.
Government sales as a percent of total net sales 24.3 % 24.5 % 24.9 % Our principal U.S. Government customer is the U.S. Department of Defense, with total net sales of $1,062.7 million and $1,081.3 million in 2024 and 2023, respectively.
Pursuant to the mandate in their respective charters, the Audit Committee of our Board of Directors (the “Board”) regularly reviews matters related to compliance with environmental laws and the health and safety of employees, and the Nominating and Governance Committee of our Board reviews and evaluates our policies and practices and monitors our efforts in areas of legal and social responsibility, diversity and sustainability, and other ESG matters.
Pursuant to the mandate in their respective charters, the Audit Committee of our Board of Directors (the “Board”) regularly reviews matters related to compliance with environmental laws and the health and safety of employees, and the Nominating and Governance Committee of our Board reviews and evaluates our policies and practices and monitors our efforts in areas of legal and social responsibility, sustainability and other ESG matters. 5 Table of Contents Human Capital We consider our relations with our employees to be good.
Government prime contracts and subcontracts were fixed-price type contracts, compared to 80% in 2022, with the remaining U.S. Government contracts related to cost-reimbursable contracts (“cost-type”) contracts. Under fixed-price type contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price.
In 2024, approximately 78% of our U.S. Government prime contracts and subcontracts were fixed-price type contracts, compared to 79% in 2023, with the remaining U.S. Government contracts related to cost-reimbursable contracts (“cost-type”) contracts. Under fixed-price type contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price.
Government within the Engineered Systems segment was the Mission Operations and Integration contract with the NASA Marshall Space Flight Center, which represented approximately 11% of Engineered Systems net sales. As described in greater detail under Item 1A. Risk Factors, there are risks associated with doing business with the U.S. Government. In 2023, approximately 79% of our U.S.
Government within the Engineered Systems segment was the Marshall Operations, Systems, Services, and Integration II (“MOSSI II”) contract with the NASA Marshall Space Flight Center, which represented approximately 16% and approximately 17% of Engineered Systems net sales, respectively. As described in greater detail under Item 1A. Risk Factors, there are risks associated with doing business with the U.S. Government.
We became an independent public company effective November 29, 1999. The following description of our business should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K. Recent Developments Consistent with our strategy, we completed two acquisitions each in 2023 and in 2022.
The following description of our business should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K. Recent Developments Consistent with our strategy, we completed two acquisitions each in 2024 and in 2023.
In 2023, our voluntary employee turnover (excluding reductions in force) was approximately 10%. As of December 31, 2023, the average years of service of our employees was approximately 10 years. Employees are vital to the success of our growth strategy.
In 2024, our voluntary employee turnover was approximately 8%. As of December 29, 2024, the average years of service of our employees was approximately 10 years. Employees are vital to the success of our growth strategy.
The CSR report together with its supplement, which is not incorporated by reference in this document, is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.
We published supplements to the CSR report in 2023 and 2024 to include updated financial information and other information in the report. The CSR report together with its supplements, which is not incorporated by reference in this document, is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.
Workforce demographics for various regions are provided below: Gender (Self-Reported) Percent of Total Employees Average Age Average Years of Service Male Female Not Specified Americas 69% 48.4 10.0 62% 32% 6% Europe, the Middle East and Africa 28% 43.3 9.9 62% 25% 13% Asia-Pacific Region 3% 40.7 8.0 52% 23% 25% We have a stable and long-tenured workforce.
Workforce demographics for various regions are provided below: Gender (Self-Reported) Percent of Total Employees Average Age Average Years of Service Male Female Not Specified Americas 67% 48.5 10.2 64% 33% 3% Europe, the Middle East and Africa 30% 44.3 9.8 66% 26% 8% Asia-Pacific Region 3% 43.0 8.0 65% 25% 10% We have a stable and long-tenured workforce.
We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments. Below is a description of the product lines that comprise the Instrumentation segment.
Instrumentation Segment Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, and electronic test and measurement equipment. We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments. Below is a description of the product lines that comprise the Instrumentation segment.
Government sales by segment: 2023 2022 2021 Digital Imaging $ 570.7 $ 619.1 $ 515.9 Instrumentation 95.9 108.1 91.6 Aerospace and Defense Electronics 330.3 266.3 227.2 Engineered Systems 384.8 366.4 358.4 Total U.S. Government sales $ 1,381.7 $ 1,359.9 $ 1,193.1 Total U.S.
Government sales by segment: 2024 2023 2022 Digital Imaging $ 557.1 $ 570.7 $ 619.1 Instrumentation 123.5 95.9 108.1 Aerospace and Defense Electronics 307.5 330.3 266.3 Engineered Systems 389.0 384.8 366.4 Total U.S. Government sales $ 1,377.1 $ 1,381.7 $ 1,359.9 Total U.S.
The financial results of these acquisitions have been included since the respective date of each acquisition. Our 2023 acquisitions were within the Digital Imaging and Instrumentation segments, and both acquisitions in 2022 were part of the Digital Imaging segment. See Note 3 for additional information about our recent business acquisitions.
The financial results of these acquisitions have been included since the respective date of each acquisition. Our 2024 and 2023 acquisitions were within the Digital Imaging and Instrumentation segments. See Note 3 for additional information about our 2024 and 2023 business acquisitions. Subsequent to the end of the year, we have completed two acquisitions. See Note 18 for additional information.
In 2023, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom, China, Japan, Germany and Norway and represented approximately 21% of our total net sales. There were no sales to individual countries outside of the United States in excess of 10% of the Company’s sales.
In 2024, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom, China, Germany, Japan and France and represented approximately 19% of our total net sales.
Information on our net sales to the U.S. Government, including direct sales to agencies as a prime contractor and indirect sales as a subcontractor, was as follows (in millions): U.S.
There were no sales to individual countries outside of the United States in excess of 10% of our sales. 3 Table of Contents Information on our net sales to the U.S. Government, including direct sales to agencies as a prime contractor and indirect sales as a subcontractor, was as follows (in millions): U.S.
Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in a broad range of industries, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics mobile and power electronics.
Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in a broad range of industries, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics mobile and power electronics. 2 Table of Contents We develop, manufacture, sell and license high-performance oscilloscopes, high-speed protocol analyzers, generators and emulators, and related test and measurement solutions for a wide range of industries.
Specialized training in a job-related field gives employees new skills and a strong 5 Table of Contents foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible positions at Teledyne. Our employees have access to Teledyne University, a learning platform.
Specialized training in a job-related field gives employees new skills and a strong foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible positions at Teledyne. We provide courses, webinars, and certification programs and targeted training programs on management, technical competencies, soft skills development, and compliance.
We also produce and provide manufacturing services for micro electromechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters, as well as unmanned aerial and ground systems. This segment also includes our customer- and Company-sponsored applied research center.
We also produce and provide manufacturing services for micro electromechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters, as well as unmanned aerial and ground systems. Through this segment, we provide visible spectrum sensors and digital cameras for industrial machine vision and automated quality control, as well as for medical, research and scientific applications.
In November 2022, we published our second Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of our most recent efforts focused on sustainability and ESG. We published a supplement to the CSR report in November 2023 to include updated financial information and other information in the report.
The prominence and importance of sustainability and Environmental, Social and Governance (“ESG”) initiatives have dramatically increased. In November 2022, we published our second Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of our most recent efforts focused on sustainability and ESG.
We develop, manufacture, sell and license high-performance oscilloscopes, high-speed protocol analyzers, and related test and measurement solutions for a wide range of industries. Our oscilloscopes are used by designers and engineers to measure and analyze complex electronic signals to develop high-performance systems, validate high data-rate communication interfaces, qualify their electronic designs, and improve time-to-market.
Our oscilloscopes are used by designers and engineers to measure and analyze complex electronic signals to develop high-performance systems, validate high data-rate communication interfaces, qualify their electronic designs, and improve time-to-market. We also make high-speed, high-resolution modular analog-to-digital conversion systems for applications, including test and measurement, scientific instruments, medical imaging, and distributed sensing systems.
Many of our government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions.
Government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions. Raw Materials and Suppliers Most raw materials used in our operations are readily available. Some raw materials are purchased from a limited set of suppliers, including international sources, due to technical capability, price, and other factors.
While some of our businesses provide services, for those businesses that sell products, a portion of the value that we provide is labor-oriented, such as design, engineering, assembly and test activities. In manufacturing our products, we use our own production capabilities and third-party suppliers and subcontractors, including international sources.
We leverage our existing supplier relationships and are not dependent on any one supplier for a material amount of our purchases. While some of our businesses provide services, for those businesses that sell products, a portion of the value that we provide is labor-oriented, such as design, engineering, assembly and test activities.
Human Capital We consider our relations with our employees to be good. At December 31, 2023, our total workforce consisted of approximately 14,900 employees in 36 countries.
At December 29, 2024, our total workforce consisted of approximately 14,900 employees in 36 countries.
We differentiate ourselves from many of our direct competitors by having a customer- and Company-sponsored applied research center that augments our product development expertise. We believe our technological capabilities, innovation and ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.
We believe our technological capabilities, innovation and ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete. We became an independent public company effective November 29, 1999.
Applications of our instruments provide scientists information that spans 4 Table of Contents time from the origin of the universe to providing real-time data regarding air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis. The prominence and importance of sustainability and Environmental, Social and Governance (“ESG”) initiatives have dramatically increased.
They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling the Earth’s oceans. Applications of our instruments provide scientists information that spans time from the origin of the universe to providing real-time data regarding air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.
Our torque sensors are also used in other markets, including automotive and power tools.
We also manufacture torque sensors and automatic data acquisition systems that are used to test critical control valves in nuclear power and industrial plants. Our torque sensors are also used in other markets, including automotive and power tools.
Our recently introduced interposers and software options allow engineers to get a complete picture when testing the PCI Express interface standard by enabling a link between an oscilloscope and a protocol analyzer. We also manufacture torque sensors and automatic data acquisition systems that are used to test critical control valves in nuclear power and industrial plants.
Our interposers and software options allow engineers to get a complete picture when testing the PCI Express interface standard by enabling a link between an oscilloscope and a protocol analyzer to show a synchronized view of both the physical and protocol layers.
Products and applications include space-based imaging, factory condition monitoring, optical and acoustic-based gas leak detection, laboratory research and maritime thermal imaging. We develop high-resolution, low-dose X-ray sensors as well as high-power microwave and high-energy X-ray subsystems for medical, dental and industrial applications.
We develop high-resolution, low-dose X-ray sensors as well as high-power microwave and high-energy X-ray subsystems for medical, dental and industrial applications. We also provide instruments for the measurement of physical properties and maritime products for recreational and commercial customers globally.
Through this segment, we provide visible spectrum sensors and digital cameras for industrial machine vision and automated quality control, as well as for medical, research and scientific applications. We provide a range of cooled and uncooled infrared or thermal products, including sensors, camera cores and camera systems based on long wave infrared, mid-wave infrared, and short wave infrared technologies.
We provide a range of cooled and uncooled infrared or thermal products, including sensors, camera cores and camera systems based on long wave infrared, mid-wave infrared, and short-wave infrared technologies. Products and applications include space-based imaging, factory condition monitoring, optical and acoustic-based gas leak detection, laboratory research and maritime thermal imaging.
We provide solutions for threat protection, military maneuver and force protection, border controls and homeland security, law enforcement, public safety, and commercial applications worldwide. 1 Table of Contents Instrumentation Segment Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, and electronic test and measurement equipment.
These sensors and instruments can be deployed as integrated solutions and with advanced target detection, identification and classification capabilities. We provide solutions for threat protection, military maneuver and force protection, border controls and homeland security, law enforcement, public safety, and commercial applications worldwide.
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For defense applications, we also develop and manufacture multi-spectrum electro-optic/infrared imaging systems and associated products such as lasers, optics, and radars, CBRNE (“Chemical, Biological, Radiological, Nuclear and Explosive detectors”) and unmanned air and ground systems. These sensors and instruments can be deployed as integrated solutions and with advanced target detection, identification and classification capabilities.
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In manufacturing our products, we use our own production capabilities and third-party suppliers and subcontractors, including international sources. At times we have experienced difficulty in procuring raw materials, components, sub-assemblies and other supplies required in our manufacturing processes due to shortages and supplier-imposed allocation of components.
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We also make high-speed, high-resolution modular analog-to-digital conversion systems for applications, including test and measurement, scientific instruments, medical imaging, and distributed sensing systems.
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Select, high-potential employees also receive strategic and operational leadership skills development through our leadership development program. Available Information Teledyne’s website is www.teledyne.com.
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Government within the Engineered Systems segment was the Marshall Operations, Systems, Services, and Integration II (“MOSSI II”) contract with the NASA Marshall Space Flight Center, which represented approximately 17% of Engineered Systems net sales. In 2022, the largest program with the U.S.
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Raw Materials and Suppliers Most raw materials used in our operations are readily available; however, we have experienced supply chain challenges in recent years, including increased lead times, as well as cost inflation for parts and components, logistics and labor due to availability constraints and high demand.
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Some raw materials are purchased from a limited set of suppliers, including international sources, due to technical capability, price, and other factors. We leverage our existing supplier relationships and are not dependent on any one supplier for a material amount of our purchases.
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They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling the Earth’s oceans.
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Teledyne has a Corporate-led committee to oversee our diversity, equity and inclusion efforts. The committee focuses on activities and initiatives to increase diverse representation and progression within our company. Various initiatives include developing relationships with universities with higher underrepresentation, creating more diverse and larger talent pools, and increasing networking and referrals with diverse professional organizations.
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The database of courses, webinars, and certification programs has hundreds of targeted training programs on management, technical competencies, soft skills development, and compliance. Available Information Teledyne’s website is www.teledyne.com.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

103 edited+25 added−62 removed101 unchanged
Biggest changeForeign Corrupt Practices Act; • changes in legal and regulatory requirements, including complex trade compliance regulations; • U.S. and foreign government policy changes affecting the markets for our products; • changes in tax laws and tariffs; • additional deterioration in U.S. - China and U.S. - Russia relations; • difficulties in protection and enforcement of intellectual property rights; • failure to comply with the foreign data protection laws, including the EU General Data Protection Regulation (“GDPR”) in the European Union and the Personal Information Protection Law in China; • new and emerging non-U.S. regulations relating to ESG and CSR matters, which could be costly to comply with; • inadvertent transfers of export-controlled information due to increased cross-border technology transfers and the use of offshore computer servers; • transportation, including piracy in international waters; • currency exchange rate fluctuations; and • challenges relating to managing a global workforce with diverse cultures, backgrounds and labor laws.
Biggest changeForeign Corrupt Practices Act and the UK Bribery Act; • changes in tax laws and tariff rates; • protection and enforcement of intellectual property rights; • compliance with non-U.S. data protection laws, including the EU General Data Protection Regulation (“GDPR”) in the European Union and the Personal Information Protection Law in China; • new and emerging non-U.S. regulations relating to ESG and CSR matters, which could be costly to comply with; • international terrorism; • transportation, including piracy in international waters; • currency exchange rate fluctuations; and • challenges relating to managing a global workforce with diverse cultures, backgrounds and labor laws.
Additionally, many countries, including China, India and Saudi Arabia, have bolstered laws or regulations requiring the use of local suppliers and in-country manufacturing, which has had a negative impact on Teledyne’s revenues of instrumentation, commercial aerospace, marine and digital imaging products, as we currently have limited manufacturing operations in these countries.
Many countries, including China, India and Saudi Arabia, have bolstered laws or regulations requiring the use of local suppliers and in-country manufacturing, which has had a negative impact on Teledyne’s revenues of instrumentation, commercial aerospace, marine and digital imaging products, as we currently have limited manufacturing operations in these countries.
These and other tariffs, trade restrictions and retaliatory measures could result in revenue reduction, price increases on material used in our products or production delays, which could adversely affect our business, financial condition, operational results and cash flows.
These and other tariffs, trade restrictions and retaliatory measures could result in revenue reduction, price increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, operational results and cash flows.
In November 2018, wildfires impacted areas near our headquarters and principal research and development center in Thousand Oaks, California, resulting in temporary disruptions and evacuations of employees who lived nearby. Local utilities may impose blackouts during high fire risk weather conditions, which could result in disruptions to our businesses located in California, including our headquarters.
In November 2018 and again in 2024, wildfires impacted areas near our headquarters and principal research and development center in Thousand Oaks, California, resulting in temporary disruptions and evacuations of employees who lived nearby. Local utilities may impose blackouts during high fire risk weather conditions, which could result in disruptions to our businesses located in California, including our headquarters.
For example, Teledyne Battery Products unit makes lead acid batteries in California and is subject to a variety of environmental regulations and inspections, which have increased over time. Also, some of our sites conduct electroplating, metal finishing and other operations that utilize hazardous materials that are subject to similar regulations.
Our Teledyne Battery Products unit makes lead acid batteries in California and is subject to a variety of environmental regulations and inspections, which have increased over time. Also, some of our sites conduct electroplating, metal finishing and other operations that utilize hazardous materials that are subject to similar regulations.
The theft, corruption, unauthorized use or publication of our intellectual property or confidential business information due to a cyber-attack could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. We are subject to U.S.
The theft, corruption, unauthorized use or publication of our intellectual property or confidential business information due to a cyber-attack could harm our competitive position, damage our reputation, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. We are subject to U.S.
If any of our California facilities were to experience a catastrophic earthquake or wildfire loss, or if any of our Alabama, Florida, Nebraska, Tennessee or Texas facilities were to experience a catastrophic hurricane, storm, tornado or other natural disaster, or if Teledyne’s facilities in Quebec experience long-term loss of electrical power, such event could disrupt our operations, delay production, shipments and revenue, result in large expenses to repair or replace the facility or facilities and could have a material adverse effect on our business.
If any of our California facilities were to experience a catastrophic earthquake or wildfire loss, or if any of our Alabama, Florida, Nebraska, 17 Table of Contents Tennessee or Texas facilities were to experience a catastrophic hurricane, storm, tornado or other natural disaster, or if Teledyne’s facilities in Quebec experience long-term loss of electrical power, such event could disrupt our operations, delay production, shipments and revenue, result in large expenses to repair or replace the facility or facilities and could have a material adverse effect on our business.
Additionally, beginning in 2023, the U.S. has adopted a 15% corporate alternative minimum tax for certain large corporations. Teledyne does not expect to be subject to this tax in 2023 or 2024; however, Teledyne is closely monitoring the potential impact of the U.S. corporate minimum tax.
Additionally, beginning in 2023, the United States has adopted a 15% corporate alternative minimum tax for certain large corporations. Teledyne does not expect to be subject to this tax in 2023 or 2024; however, Teledyne is closely monitoring the potential impact of the U.S. corporate minimum tax.
We may not have sufficient resources to fund all future research and development and capital expenditures or possible acquisitions. In order to remain competitive, we must make substantial investments in research and development of new or enhanced products and continuously upgrade our process technology and manufacturing capabilities.
We may not have sufficient resources to fund all future research and development and capital expenditures. In order to remain competitive, we must make substantial investments in research and development of new or enhanced products and continuously upgrade our process technology and manufacturing capabilities.
Increases in the United States on the taxation of foreign income and expense may harm our results of operations and cash flow. The relative amount of income we earn in jurisdictions outside the U.S. could reduce our net income and increase our cash payments.
Increases in the United States on the taxation of foreign income and expense may harm our results of operations and cash flow. The relative amount of income we earn in jurisdictions outside the United States could reduce our net income and increase our cash payments.
Inflation and recent supply chain constraints have resulted in sustained increases in the prices we pay for many of the components and raw materials used in our products.
In recent years, inflation and supply chain constraints resulted in sustained increases in the prices we pay for many of the components and raw materials used in our products.
Company personnel and third parties have been tasked to prevent, deter, detect, respond to, and investigate such incidents; however, it is possible that we might not prevent or be aware of or be able to react to an incident or its magnitude and effects.
Company personnel and third parties have been tasked to prevent, deter, detect, respond to, and investigate such incidents; however, it is possible that we might not prevent or be aware of or be able to react to an incident or to fully mitigate its effects.
We develop and manufacture products for customers in the energy exploration and production markets, commercial aerospace markets, the semiconductor industry, and the consumer electronics, telecommunications and automotive industries; each of which has been cyclical, exhibited rapid changes and suffered from fluctuating market demands. A cyclical downturn in these markets may materially affect future operating results.
We develop and manufacture products for customers in the energy exploration and production markets, commercial aerospace markets, the semiconductor industry, and the consumer electronics, telecommunications, automotive and healthcare industries; each of which has been cyclical, exhibited rapid changes and suffered from fluctuating market demands. A cyclical downturn in one or more of these markets may materially affect future operating results.
Our Restated Certificate of Incorporation, our Fourth Amended and Restated Bylaws and the General Corporation Law of the State of Delaware contain several provisions, such as our classified Board, that could make the acquisition of control of Teledyne, in a transaction not approved by our Board, more difficult.
Our Restated Certificate of Incorporation, our Fourth Amended and Restated Bylaws and the General Corporation Law of the State of Delaware contain several provisions, that could make the acquisition of control of Teledyne, in a transaction not approved by our Board, more difficult.
The conflict in Israel and neighboring regions could have a material impact on our business, especially if it escalates into a wider regional conflict.
The conflict in Israel and neighboring region could have a material impact on our business, especially if it escalates into a wider regional conflict.
In addition to general economic, political and market conditions, such volatility may be related to: (i) changes from analysts’ expectations in revenues, earnings and other financial results; (ii) strategic actions by other competitors; (iii) changes to budgets or policies of the U.S. and other governments; and (iv) other risks described in this report.
In addition to general economic, political and market conditions, such volatility may be related to: (i) changes from analysts’ expectations in revenues, earnings and other financial results; (ii) strategic actions by other competitors; (iii) changes to budgets or policies of the United States and other governments; and (iv) other risks described in this report.
We face risks related to sales through distributors and other third parties which could harm our business. We sell a portion of our products through third parties such as distributors, sales representatives, value-added resellers and OEMs (collectively, “distributors”).
We face risks related to sales through distributors and other third parties which could harm our business. We sell a portion of our products through third parties such as distributors, sales representatives and value-added resellers.
The Federal Aviation Administration (“FAA”) and equivalent regulatory agencies have increasingly focused on the need to assure that airline industry products are designed with sufficient cybersecurity controls to protect against unauthorized access or other unwanted compromise. A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability.
The FAA and equivalent regulatory agencies have increasingly focused on the need to assure that airline industry products are designed with sufficient cybersecurity controls to protect against unauthorized access or other unwanted compromise. A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability.
Many other jurisdictions have also enacted corporate global 15% minimum tax rules, which will apply to Teledyne beginning in 2024. Teledyne is monitoring the impact of these foreign minimum tax rules.
Many other jurisdictions have also enacted corporate global 15% minimum tax rules, which applied to Teledyne beginning in 2024. Teledyne is monitoring the impact of these foreign minimum tax rules.
Department of Defense and other agencies and departments of the U.S. Government including subcontracts with government prime contractors. Sales under contracts with the U.S. Government, including sales under contracts with the U.S. Department of Defense, as prime contractor or subcontractor, represented 24.5% and 24.9% of our total net sales in 2023 and 2022, respectively.
Department of Defense and other agencies and departments of the U.S. Government including subcontracts with government prime contractors. Sales under contracts with the U.S. Government, including sales under contracts with the U.S. Department of Defense, as prime contractor or subcontractor, represented 24.3% and 24.5% of our total net sales in 2024 and 2023, respectively.
Proposed rules under the Federal Acquisition Regulation and similar rules in other jurisdictions such as the United 16 Table of Contents Kingdom require or will require major contractors to disclose enhanced information on GHG emissions and commit to GHG emission reduction targets.
Proposed rules under the Federal Acquisition Regulation and similar rules in other jurisdictions such as the United Kingdom require or will require major contractors to disclose enhanced information on GHG emissions and commit to GHG emission reduction targets.
We cannot ensure that, for 2024 and in future years, insurance carriers will be willing to renew coverage or provide new coverage for product liability. Product recalls can be expensive and tarnish our reputation and have a material adverse effect on the sales of our products.
We cannot ensure that, for 2025 and in future years, insurance carriers will be willing to renew coverage or provide new coverage for product liability. 16 Table of Contents Product recalls can be expensive and tarnish our reputation and have a material adverse effect on the sales of our products.
Increased tax due to corporate minimum taxes in the U.S. or in other jurisdictions could reduce our net income and increase our cash payments. 9 Table of Contents Changes in future business conditions could cause business investments, goodwill and other long-lived assets to become impaired, resulting in significant losses and write-downs that would reduce our operating income.
Increased tax due to corporate minimum taxes in the United States or in other jurisdictions could reduce our net income and increase our cash payments. 14 Table of Contents Changes in future business conditions could cause business investments, goodwill and other long-lived assets to become impaired, resulting in significant losses and write-downs that would reduce our operating income.
The agreements we entered into with respect to our indebtedness, including the agreements we entered into to finance the FLIR acquisition and in connection with the assumption of FLIR’s existing senior 15 Table of Contents notes, contain negative covenants, that, subject to certain exceptions, include limitations on indebtedness related to our bank term loans and credit facility, liens, dispositions, investments and mergers and other fundamental changes.
The agreements we entered into with respect to our indebtedness, including the agreements we entered into to finance the FLIR acquisition and in connection with the assumption of FLIR’s existing senior notes, contain negative covenants, that, subject to certain exceptions, include limitations on indebtedness related to our credit facility, liens, dispositions, investments and mergers and other fundamental changes.
To the extent our products are the subject of retaliatory tariffs, customers in some countries or regions, such as China, may begin to seek domestic or non-U.S. sources for products that we sell, or be pressured or incentivized by foreign governments not to purchase U.S.-origin goods, which could harm our future sales in these markets.
To the extent our products are the subject of retaliatory tariffs, customers may begin to seek domestic or non-U.S. sources for products that we sell, or be pressured or incentivized by foreign governments not to purchase U.S.-origin goods, which could harm our future sales in these markets.
New technologies, including generative AI, quantum computing, new uses of QR codes and other innovations in digital communications, introduce new attack vectors, and new potential compromise scenarios, which malicious adversaries can exploit.
New technologies, including generative artificial intelligence (“AI”), quantum computing, new uses of QR codes and other innovations in digital communications, introduce new attack vectors, and new potential compromise scenarios, which malicious adversaries can exploit.
Furthermore, the U.S. 7 Table of Contents has imposed certain sectoral sanctions to limit Chinese development and manufacturing of semiconductor and supercomputer technology and have imposed comprehensive restrictions of both U.S.-origin items as well as non-U.S. items manufactured from U.S.-origin equipment.
Furthermore, the United States has imposed certain sectoral sanctions to limit Chinese development and manufacturing of semiconductor and supercomputer technology and have imposed comprehensive restrictions of both U.S.-origin items as well as non-U.S. items manufactured from U.S.-origin equipment.
Actions taken by these groups have the potential to disrupt activity and temporarily halt production at the sites targeted. A military conflict between China and Taiwan would likely have a material adverse impact on our ability to sell products to customers in these areas and on our supply chain.
Actions taken by these groups have the potential to disrupt activity and temporarily halt production at the sites targeted. A military conflict between China and Taiwan would likely have a material adverse impact on our ability to sell products to customers in these areas and on our supply chain. In-country manufacturing could result in lower demand for our products.
While we have engaged in succession planning, the loss of the services of one or more of our key employees or our failure to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and results of operations. Higher tax rates may harm our results of operations and cash flow.
While we have engaged in succession planning, the loss of the services of one or more of our key employees or our failure to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and results of operations.
Any prolonged reduction in the overall level of offshore oil and gas exploration and development activities, whether resulting from changes in oil and gas prices or otherwise, could materially and adversely affect our financial condition and the results of our businesses within our Instrumentation segment. 11 Table of Contents Some factors that have affected and are likely to continue affecting oil and gas prices and the level of demand for our products and services include the following: • worldwide demand for oil and gas; • the ability of the Organization of Petroleum Exporting Countries (“OPEC”), to set and maintain production levels; • the level of production by non-OPEC countries; • the war between Russia and Ukraine, including the implementation of price controls on Russian oil exports and restrictions on oil and gas exports imposed by Russia; • conflict in the Middle East, including disruption of shipping lanes in the Red Sea; • the ability of oil and gas companies to generate or raise funds for capital expenditures; • domestic and foreign tax policy; • laws and governmental regulations that restrict exploration and development of oil and gas in various offshore jurisdictions or the use of hydraulic fracturing; • laws and governmental regulation that restrict the use of hydraulic fracturing; • technological changes; • the political environment of oil-producing regions; • the price and availability of alternative fuels; and • climate change regulations that provide incentives to conserve energy, use electric vehicles or use alternative energy sources, or that impose restrictions on the development and extraction of oil and gas.
Some factors that have affected and are likely to continue affecting oil and gas prices and the level of demand for our products and services include the following: • worldwide demand for oil and gas; • the ability of the Organization of Petroleum Exporting Countries (“OPEC”), to set and maintain production levels; • the level of production by non-OPEC countries; • the war between Russia and Ukraine, including the implementation of price controls on Russian oil exports and restrictions on oil and gas exports imposed by Russia; • conflict in the Middle East, including disruption of shipping lanes in the Red Sea; • the ability of oil and gas companies to generate or raise funds for capital expenditures; • domestic and foreign tax policy; • laws and governmental regulations that restrict exploration and development of oil and gas in various offshore jurisdictions or the use of hydraulic fracturing; • laws and governmental regulation that restrict the use of hydraulic fracturing; • technological changes; • the political environment of oil-producing regions; • the price and availability of alternative fuels; and • climate change regulations that provide incentives to conserve energy, use electric vehicles or use alternative energy sources, or that impose restrictions on the development and extraction of oil and gas.
Sanctions on Russia imposed by multiple countries and related Teledyne policies have led to a comprehensive ban on commercial activity with that market. The continuing conflict between Russia and Ukraine could lead to further disruption, instability and volatility in global markets and industries that could negatively impact our operations.
Sanctions on Russia imposed by multiple countries and related Teledyne policies have led to a comprehensive ban on commercial activity with that market. Global conflicts could lead to disruption, instability and volatility in global markets and industries that could negatively impact our operations. Conflicts around the world could negatively impact our operations.
Acquisitions involve various inherent risks, such as: • our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of acquisition candidates; • difficulties in integrating acquired businesses, including the potential loss of key personnel from an acquired business, our potential inability to achieve identified financial, operating and other synergies anticipated to result from an acquisition, and integration issues associated with internal controls of acquired businesses; 6 Table of Contents • the diversion of management’s attention from our existing businesses; • the potential impairment of assets; • potential unknown liabilities associated with a business that we acquire or in which we invest, including environmental liabilities; • new and proposed regulations limiting the enforcement of noncompetition and nonsolicitation agreements; and • production delays associated with consolidating acquired facilities and manufacturing operations; • pre-existing vulnerabilities, undetected malware and access management issues at the acquired business and supply chain.
Acquisitions involve various inherent risks, such as: • our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of acquisition candidates; • difficulties in integrating acquired businesses, including the potential loss of key personnel from an acquired business, our potential inability to achieve identified financial, operating and other synergies anticipated to result from an acquisition, and integration issues associated with internal controls of acquired businesses; • the diversion of management’s attention from our existing businesses; • the potential impairment of assets; • potential unknown liabilities associated with a business that we acquire or in which we invest, including environmental liabilities; • new and proposed regulations limiting the enforcement of noncompetition and nonsolicitation agreements; • production delays associated with consolidating acquired facilities and manufacturing operations; • pre-existing vulnerabilities, undetected malware and access management issues at the acquired business and its supply chain; • the incurrence of significant transaction costs, including for acquisitions which we may not complete; and • the inadequacy of indemnification, insurance, escrows, holdbacks or other forms of protection for liabilities of the acquired company.
Termination for convenience provisions provides only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination. Termination for default clauses imposes liability on the contractor for excess costs incurred by the U.S. Government in re-procuring undelivered items from another source. During 2023 and 2022, contracts terminated by the U.S.
Government either at its convenience or upon the default of the contractor. Termination for convenience provisions provides only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination. Termination for default clauses imposes liability on the contractor for excess costs incurred by the U.S. Government in re-procuring undelivered items from another source.
We may be unable to successfully introduce new and enhanced products in a timely and cost-effective manner or increase our participation in new markets, which could harm our profitability and prospects. Our operating results depend in part on our ability to introduce new and enhanced products on a timely basis.
We may be unable to successfully introduce new and enhanced products in a timely and cost-effective manner or increase our participation in new markets, which could harm our profitability and prospects. Our operating results depend in part on our ability to introduce new and enhanced products on a timely basis. Some of our businesses are engaged in major development activities.
If another global recession emerges, or if economic growth in China continues to slow, we may experience declines in revenues, profitability and cash flows from reduced orders, payment delays, collection difficulties, increased price pressures for our products, increased risk of excess and obsolete inventories or other factors caused by the economic problems of our customers.
If another recession emerges, either globally or in the United States, we may experience declines in revenues, profitability and cash flows from reduced orders, payment delays, collection difficulties, increased price pressures for our products, increased risk of excess and obsolete inventories or other factors caused by the economic problems of our customers.
Using third parties for distribution exposes Teledyne to many risks, including concentration, credit risk and legal risk because under certain circumstances we may be held responsible for the actions of those third-party sales channels. We may rely on one or more key distributors for selling a product, and the loss of these distributors could reduce our revenue.
Use of third party sales channels expose Teledyne to risks, including concentration, credit risk and legal risk because under certain circumstances we may be held responsible for the actions of third party intermediaries. We may rely on one or more key third party intermediaries for selling a product, and the loss of these third party intermediaries could reduce our revenue.
Department of Commerce, including to the Bureau of Industry and Security (“BIS”) with respect to Teledyne FLIR shipments of products from non-U.S. jurisdictions which were not licensed due to incorrect de minimis calculation methodology under the Export Administration Regulations. We have made voluntary disclosures to export authorities in jurisdictions outside the U.S. for certain potential violations of local export laws.
We have made other voluntary disclosures to the U.S. Department of State and the U.S. Department of Commerce, including to the Bureau of Industry and Security (“BIS”) with respect to Teledyne FLIR shipments of products from non-U.S. jurisdictions which were not licensed due to incorrect de minimis calculation methodology under the Export Administration Regulations.
While we believe the risk of a court declining to enforce the forum selection provision contained in our Bylaws is low, if a court were to find the provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. 19 Table of Contents Risks Related to Our Securities An investment in Teledyne’s Common Stock and other securities involve risks, many of which are beyond our control.
While we believe the risk of a court declining to enforce the forum selection provision contained in our Bylaws is low, if a court were to find the provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
We generate revenue from companies in the oil and gas industry, especially the offshore oil and gas industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and gas prices, which has in the past impacted and can impact in the future our financial results.
Government between 2006 and 2018 in which the use of counterfeit parts is alleged. 12 Table of Contents We generate revenue from companies in the oil and gas industry, especially the offshore oil and gas industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and gas prices, which has in the past impacted and can impact in the future our financial results.
In particular, U.S. export enforcement agencies have placed several Chinese companies and many of their international subsidiaries on such lists, prohibiting the export to them of most commercial and dual-use items subject to the Export Administration Regulations.
A number of well-established customers and suppliers have become listed on government restricted party lists. In particular, U.S. export enforcement agencies have placed several Chinese companies and many of their international subsidiaries on such lists, prohibiting the export to them of most commercial and dual-use items subject to the Export Administration Regulations.
Additionally, leveraging AI capabilities to potentially improve internal functions and operations presents further risks and challenges. The use of artificial intelligence to support business operations carries inherent risks related to data privacy and security, such as intended, unintended, or inadvertent transmission of proprietary, sensitive or export-controlled information, as well as challenges related to implementing and maintaining AI tools.
The use of AI to support business operations carries inherent risks related to data privacy and security, such as intended, unintended, or inadvertent transmission of proprietary, sensitive or export-controlled information, as well as challenges related to implementing and maintaining AI tools.
Rising inflation may result in a shift in U.S. defense spending between various programs based on priorities, which may result in a reduction or loss of expected revenues on programs in which we participate.
Rising inflation and other factors also may result in a shift in U.S. defense spending between various programs based on priorities, which may result in a reduction or loss of expected revenues on programs in which we participate. Changes in policy and budget priorities by the U.S.
On December 31, 2023, Teledyne’s goodwill was $8,002.8 million and net acquired intangible assets were $2,278.1 million. We are required to test annually both acquired goodwill and other indefinite-lived intangible assets for impairment based upon a fair value approach, rather than amortizing the value over time.
On December 29, 2024, Teledyne’s goodwill was $7,990.5 million and net acquired intangible assets were $2,012.9 million. We are required to test annually both acquired goodwill and other indefinite-lived intangible assets for impairment based upon a fair value approach, rather than amortizing the value over time.
In connection with this Consent Agreement and other export matters, FLIR and its successor by mergers, Teledyne FLIR, has enhanced the trade compliance program more broadly, implemented remedial measures and have undergone external and internal audits of the trade compliance program.
In connection with this Consent Agreement and other export matters, FLIR and its successor by mergers, Teledyne FLIR, has enhanced the trade compliance program more broadly, implemented remedial measures and have undergone external and internal audits of the trade compliance program. Nonetheless, adverse disclosures and findings could cause additional expenses in connection with further remedial measures or potential penalties.
With high tariffs imposed on our products, we may also need to find new suppliers and components for our products, which could result in production delays.
With high tariffs imposed on our products, we may also need to find new suppliers and components for our products, which could result in production delays. These countries could impose retaliatory tariffs on imports from the United States.
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings.
While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings. 18 Table of Contents Additionally, leveraging AI capabilities to potentially improve internal functions and operations presents further risks and challenges.
We may face increasing pressure regarding our sustainability disclosures and practices. Additionally, members of the investment community may screen companies such as ours for sustainability performance before investing in our stock.
Additionally, members of the investment community may screen companies such as ours for sustainability performance before investing in our stock.
Other risks we face Natural and man-made disasters could adversely affect our business, results of operations and financial condition. Several of our facilities, as a result of their locations, could be subject to a catastrophic loss caused by earthquakes, hurricanes, tornados, floods, ice storms, rising sea levels, droughts or other natural disasters.
Several of our facilities, as a result of their locations, could be subject to a catastrophic loss caused by earthquakes, hurricanes, tornados, floods, ice storms, rising sea levels, droughts or other natural disasters.
If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.
Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.
If a ratings downgrade were to occur, we could experience higher borrowing costs in the future and more restrictive debt covenants, which would reduce profitability and diminish operational flexibility. A ratings downgrade could also limit our access to certain sources of debt financing. Risks related to climate change Climate change may disrupt or adversely impact our business.
If a ratings downgrade were to occur, we could experience higher borrowing costs in the future and more restrictive debt covenants, which would reduce profitability and diminish operational flexibility. A ratings downgrade could also limit our access to certain sources of debt financing. Higher tax rates may harm our results of operations and cash flow.
Such consolidations can also cause delays in business as the newly consolidated organization undergoes integration. Low-cost competition from China and other developing countries could also result in decreased demand for our products. Increasing competition could reduce the volume of our sales or the prices we may charge, which would negatively impact our 13 Table of Contents revenues.
Low-cost competition from China and other developing countries could also result in decreased demand for our products. Increasing competition could reduce the volume of our sales or the prices we may charge, which would negatively impact our revenues.
Distributors may face financial difficulties, including bankruptcy, which could harm our collection of 14 Table of Contents accounts receivables and financial results. Violations of the Foreign Corrupt Practices Act or similar anti-bribery laws by distributors or other third-party intermediaries could have a material impact on our business. Competitors could also block our access to such parties.
Third party intermediaries may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivables and financial results. Violations of anti-corruption laws, trade compliance regulations, procurement regulations and other laws and regulations by third party intermediaries could have a material impact on our business. Competitors could also block our access to such parties.
We have major development activities at some of our businesses, for which a failure to execute in a timely manner could negatively impact those businesses. Some products, especially those sold by our Test and Measurement group, have short lifecycles that require frequent updating and new product innovation.
If we fail to execute on these development activities in a timely manner, our business could be negatively impacted. Some products, especially those sold by our Test and Measurement group, have short lifecycles that require frequent updating and new product innovation.
The impact of these factors is difficult to predict, but one or more of them could have a material adverse effect on our financial position, results of operations, or cash flows.
The impact of these factors is difficult to predict, but one or more of them could have a material adverse effect on our financial position, results of operations, or cash flows. Currency exchange rate fluctuations may increase the cost of our products to international customers and therefore reduce our competitive position.
The oil and gas industry has historically been cyclical and characterized by significant changes in the levels of exploration and development activities. Oil and gas prices, and market expectations of potential changes in those prices, significantly affect the levels of those activities.
Teledyne manufactures seismic energy sources, interconnects and data acquisition products that are used in offshore energy exploration. The oil and gas industry has historically been cyclical and characterized by significant changes in the levels of exploration and development activities. Oil and gas prices, and market expectations of potential changes in those prices, significantly affect the levels of those activities.
Some items we purchase for the manufacture of our products are purchased from limited or single sources of supply due to technical capability, price and other factors.
Our business and financial results could be adversely affected by conditions and other factors associated with our suppliers and subcontractors. Some items we purchase for the manufacture of our products are purchased from limited or single sources of supply due to technical capability, price and other factors.
Our manufacturing operations, including former operations, could expose us to material environmental liabilities. Additionally, companies that we acquire may have environmental liabilities that might not be accurately assessed or brought to our attention at the time of the acquisition. The U.S.
We, like other industry participants, are subject to various federal, state, local and international environmental laws and regulations. Our manufacturing operations, including former operations, could expose us to material environmental liabilities. Additionally, companies that we acquire may have environmental liabilities that might not be accurately assessed or brought to our attention at the time of the acquisition.
We cannot provide assurances as to our Common Stock price, which during fiscal 2023 ranged from a low of $364.98 to a high of $448.71. Item 1B. Unresolved Staff Comments None.
We cannot provide assurances as to our Common Stock price, which during fiscal 2024 ranged from a low of $355.41 to a high of $492.00. 20 Table of Contents Item 1B. Unresolved Staff Comments None.
Energy market disruptions and shortages caused by the war could result in the shutdown of or slowdowns at our manufacturing facilities, particularly those located in Europe, and may result in substantial increases in the cost of energy. The U.S.
The continuing conflict between Russia and Ukraine has led to energy market disruptions and shortages which could result in the shutdown of or slowdowns at our manufacturing facilities, particularly those located in Europe, and may result in substantial increases in the cost of energy.
In addition, we are experiencing higher labor costs due to increased competition for personnel in many regions in which we operate as well as general inflationary conditions, and higher shipping costs due to labor and rising energy prices. We expect inflationary pressures to persist in 2024, albeit at a lower rate than in 2023.
In addition, we have experienced higher labor costs due to increased competition for personnel in many regions in which we operate as well as general inflationary conditions, and higher shipping costs due to labor and rising energy prices.
Issues in the development and use of artificial intelligence may result in reputational harm or liability, and failure to introduce new and innovative products that have artificial intelligence capabilities could put us at a competitive disadvantage. 18 Table of Contents We currently incorporate machine learning and artificial intelligence capabilities (“AI”) into certain of our products and solutions and may seek to expand the use of AI in our offerings in the future.
Issues in the development and use of artificial intelligence may result in reputational harm or liability, and failure to introduce new and innovative products that have artificial intelligence capabilities could put us at a competitive disadvantage.
Government have not materially impacted our results of operations. We have begun to see increased sales into the European defense market as European defense budgets increase as a result of the conflict in Ukraine, threats from Russia and other geopolitical instability. If European government funding on defense programs declines, existing and potential future sales would be negatively impacted. Our U.S.
During 2024 and 2023, contracts terminated by the U.S. Government have not materially impacted our results of operations. We are seeing increased sales into the European defense market as European defense budgets increase as a result of the conflict in Ukraine, threats from Russia and other geopolitical instability.
For additional discussion of environmental matters, see the discussion under the caption “Other Matters – Environmental” of “Item 7. Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 17.
For additional discussion of environmental matters, see the discussion under the caption “Other Matters – Environmental” of “Item 7 . Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 17 . Other risks we face Natural and man-made disasters could adversely affect our business, results of operations and financial condition.
In addition, we have manufacturing facilities in the southeastern United States and Texas that have been threatened or struck by major hurricanes. In 2017, our businesses located in Houston, Texas were impacted by Hurricane Harvey and our business in Florida was threatened by Hurricanes Irma and Matthew.
In addition, we have manufacturing facilities in the southeastern United States and Texas that have been threatened or struck by major hurricanes. Our businesses located in Houston, Texas and Daytona Beach, Florida have been impacted in the past by hurricanes. Our facilities in Alabama, Florida, Nebraska, Tennessee and Virginia have also been threatened by tornados.
Climate change may have an increasingly adverse impact on our business and those of our customers, partners and suppliers. While we seek to mitigate the risks associated with climate change on our operations, there are inherent climate-related risks globally.
While we seek to mitigate the risks associated with climate change on our operations, there are inherent climate-related risks globally.
Our research and development efforts primarily involve engineering and design related to improving existing products and developing new products and technologies in the same or similar fields.
Our research and development efforts primarily involve engineering and design related to improving existing products and developing new products and technologies in the same or similar fields. We may be unable to fund all of our research and development and capital investment needs or possible strategic acquisitions of businesses or product lines.
For example, in 2018, a fire at a Netherlands-based facility of a key supplier of printed circuit boards resulted in delivery disruptions to the electronics industry, including to businesses in our Digital Imaging segment. Adverse findings in matters related to export control practices, including FLIR ’ s historical practices, could materially impact us.
For example, in 2018, a fire at a Netherlands-based facility of a key supplier of printed circuit boards resulted in delivery disruptions to the electronics industry, including to businesses in our Digital Imaging segment. Our business and operations could suffer in the event of cybersecurity breaches.
Each of our markets is highly competitive. Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources.
Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources. New or existing competitors may also develop new technologies that could adversely affect the demand for our products and services.
Investor sentiment towards climate change and sustainability could adversely affect our business and the market price for our common stock. Increased investor focus and activism related to climate change and sustainability may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our sustainability practices.
Increased investor focus and activism related to climate change and sustainability may hinder our access to capital, as investors may reconsider their capital investment as a result of their assessment of our sustainability practices. We may face increasing pressure regarding our sustainability disclosures and practices.
Risks related to our indebtedness Our indebtedness, and any failure to comply with our covenants that apply to our indebtedness, could materially and adversely affect our business. As of December 31, 2023, we had $3,115.0 million total outstanding indebtedness in senior notes and $150.0 million outstanding in term loans.
Risks related to Finance and Tax Matters Our indebtedness, and any failure to comply with our covenants that apply to our indebtedness, could materially and adversely affect our business. As of December 29, 2024, we had $2,665.0 million total outstanding indebtedness in senior notes. As of December 29, 2024, no borrowings were outstanding under our $1.20 billion credit facility.
Risks associated with international sales and operations include, but are not limited to: • political and economic instability, including the war between Ukraine and Russia, the conflict in Israel and neighboring regions and potential hostilities between China and Taiwan; • international terrorism; • global economic sanctions and export controls, including U.S. export controls related to China, sanctions related to Russia, and increased scrutiny of exports of marine instruments, digital imaging and other products; • failure to comply with anti-bribery legislation, including the U.S.
Risks associated with international sales and operations include, but are not limited to: • political and economic instability, including the war between Ukraine and Russia, the conflict in Israel and neighboring region and potential hostilities between China and Taiwan; • additional deterioration in United States - China and United States - Russia relations; • existing and intensifying global economic sanctions and export controls, including export controls related to China, sanctions related to Russia, and increasingly complex regulations related to exports of marine instruments, digital imaging and other products; • our ability to obtain export licenses in a timely manner; • unauthorized release of export-controlled or otherwise protected information; • compliance with anti-corruption laws, including the U.S.
Government shutdowns have resulted in delays in anticipated contract awards and delayed payments of invoices for several of our businesses and any new shutdown could have similar or worse effects.
Government operation under a continuing resolution could impact the business by preventing new programs from starting as planned and by limiting funding on existing programs. U.S. Government shutdowns have resulted in delays in anticipated contract awards and delayed payments of invoices for several of our businesses, and any new shutdown or increase in shutdowns could have similar or worse effects.
Continuing or new supply shortages could result in delays in shipments to our customers during the period of such shortages. Any such delays would reduce our revenue and margins for the periods affected and would also result in an increase in our inventory of other components, which would reduce our operating cash flow.
As a result, we experienced delivery delays and shortages of certain components and raw materials needed for many of the products we manufacture. Any such delays in the future would reduce our revenue and margins for the periods affected and would also result in an increase in our inventory of other components, which would reduce our operating cash flow.
Our business may suffer if we are unable to attract and retain key personnel. Our future success depends to a significant extent upon the continued service of our executive officers and other key management and technical personnel and on our ability to continue to attract, retain and motivate qualified personnel.
Our future success depends to a significant extent upon the continued service of our executive officers and other key management and technical personnel and on our ability to continue to attract, retain and motivate qualified personnel. The lack of human capital due to very competitive labor market conditions in certain regions could impact our ability to deliver products and services.
Our competitors may be faster or more successful than we are in incorporating AI and other disruptive technology into their offerings, which would impair our ability to compete successfully. Provisions of our governing documents, applicable law, and our Change in Control Severance Agreements could make an acquisition of Teledyne more difficult.
Our competitors may be faster or more successful than we are in incorporating AI and other disruptive technology into their offerings, which would impair our ability to compete successfully. Our business may suffer if we are unable to attract and retain key personnel.
In response, China has unveiled restrictions on exports from China of certain materials and components, including gallium and germanium which are used in semiconductor manufacturing.
In response, China has unveiled restrictions on exports from China of certain materials and components, including gallium and germanium which are used in semiconductor manufacturing and which has impacted the production and pricing of some of our digital imaging products. Many key suppliers to our businesses, whether direct or indirect, are based in China.
If we are unable to comply with these rules, we may be ineligible to receive future contract awards from the U.S. and other governments. The inconsistent international, regional and/or national requirements associated with climate change regulations also create economic and regulatory uncertainty.
If we are unable to comply with these rules, we may be ineligible to receive future contract awards from the United States and other governments.
As with many innovations, AI presents risks, challenges, and unintended consequences that could affect our business. AI algorithms and training methodologies may be flawed. These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm.
These deficiencies and other failures of AI systems could subject us to competitive harm, regulatory action, legal liability, and brand or reputational harm.
In both 2023 and 2022, we sold products to customers in over 100 foreign countries. In 2023, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom, China, Japan, Germany and Norway and represented approximately 21% of our total net sales.
In 2024, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom, China, Germany, Japan and France and represented approximately 19% of our total net sales. We anticipate that future sales to international customers will continue to account for a significant and increasing percentage of our revenues.
Economic growth in China had slowed since the COVID pandemic. Continued growth in many of our businesses, including those in our Environmental Instrumentation group, could be negatively impacted if another economic downturn occurs in China.
Continued growth in many of our businesses, including those in our Environmental Instrumentation group, could be negatively impacted if another economic downturn occurs in China. Escalating global trade tensions and the adoption or expansion of tariffs and trade restrictions could negatively impact us. In early 2025, the new U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Vice President of Information Technology and Chief Information Officer (“CIO”) and our Chief Information Security Officer (“CISO”) provide presentations to the Audit Committee on cybersecurity status, outcomes, and risks at each quarterly meeting. These briefings include assessments of cyber risks and threats landscape, updates on incidents, and our investments and plans in cybersecurity risk mitigation and governance.
Biggest changeGovernance Pursuant to its charter, the Audit Committee of the Board is responsible for reviewing, discussing and making recommendations to the Board on cybersecurity matters. Our Vice President of Information Technology and Chief Information Officer (“CIO”) and our Chief Information Security Officer (“CISO”) provide presentations to the Audit Committee on cybersecurity status, outcomes, and risks at each quarterly meeting.
We deploy multiple defenses and connect them to allow automated responses to urgent threats, which aims to provide continued protection for mobile computing systems when they are outside the company perimeter. We conduct active threat hunting and vulnerability scanning to anticipate and pro-actively mitigate risks.
We deploy layered defenses and connect them to allow automated responses to urgent threats, which aims to provide continued protection for mobile computing systems when they are outside the company perimeter. We conduct active threat hunting and vulnerability scanning to anticipate and pro-actively mitigate risks.
We have established 20 Table of Contents processes by which the CISO routinely informs the management team and the Board of cybersecurity risks, threats and incidents that have been identified or are reasonably likely of occurring and how such matters are managed.
We have established processes by which the CISO routinely informs the management team and the Board of cybersecurity risks, threats and incidents that have been identified or are reasonably likely of occurring and how such matters are managed. 21 Table of Contents
The committee consists of our Vice President, Chief Audit Executive (“Chair”), Senior Vice President and Chief Financial Officer, Executive Vice President, General Counsel, Chief Compliance Officer and Secretary, Associate General Counsel, Human Resources, Vice President and CIO, and individuals representing the business operations.
The committee consists of our Vice President, Associate General Counsel and Assistant Secretary (“Chair”), Executive Vice President and Chief Financial Officer, Executive Vice President, General Counsel, Chief Compliance Officer and Secretary, Associate General Counsel and Senior Vice President, Human Resources, Vice President and CIO, and individuals representing the business operations.
Item 1C. Cybersecurity We face many cybersecurity threats including ransomware, denial-of-service attacks, and more advanced and persistent threats from state-affiliated groups. We have experienced cyber-attacks in the past and may experience cybersecurity incidents going forward. Our customers and suppliers face similar cybersecurity threats.
Item 1C. Cybersecurity We face many cybersecurity threats including ransomware and more advanced and persistent threats from state-affiliated groups. We have experienced cyber-attacks in the past and may experience cybersecurity incidents going forward. Our customers and suppliers face similar cybersecurity threats.
At the management level, our Enterprise Risk Management Committee identifies and drives mitigation of company-wide risks, including those related to cybersecurity.
These briefings include assessments of cyber risks and threats landscape, updates on incidents, and our investments and plans in cybersecurity risk mitigation and governance. At the management level, our Enterprise Risk Management Committee identifies and drives mitigation of company-wide risks, including those related to cybersecurity.
We have incident response plans and procedures, the goal of which is to enable the company to respond effectively and compliantly should a cyber-incident arise. ‘Tabletop’ exercises are held at both the technical and executive level to maintain readiness to respond and to identify any areas where improvements or updates are required.
“Tabletop” exercises are held at both the technical and executive level to maintain readiness to respond and to identify any areas where improvements or updates are required. We engage third-party expertise and utilize threat intelligence feeds to supplement and enhance our internal team of cybersecurity professionals.
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We engage third-party expertise and utilize threat intelligence feeds to supplement and enhance our internal team of cybersecurity professionals. Governance Pursuant to its charter, the Audit Committee of the Board is responsible for reviewing, discussing and making recommendations to the Board on cybersecurity matters.
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We utilize third-party risk scoring services to quantify cybersecurity risks associated with our supply chain and service providers. We also use cybersecurity vetting procedures to maintain lists of approved and disallowed applications and services. We have incident response plans and procedures, the goal of which is to enable the company to respond effectively and compliantly should a cyber-incident arise.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAt December 31, 2023, our principal operating facilities by segment were located as follows (countries and states listed alphabetically): • Digital Imaging - Belgium, Canada, Estonia, France, the Netherlands, Norway, Spain, Sweden, the United Kingdom and the United States ◦ The United States includes principal operating facilities in California, Florida, Indiana, Maryland, Massachusetts, Montana, New Jersey, Oklahoma, Oregon, and Pennsylvania • Instrumentation - Denmark, France, United Kingdom and the United States ◦ The United States includes principal operating facilities in California, Colorado, Florida, Massachusetts, Nebraska, New Hampshire, New York, Ohio, Pennsylvania, Texas and Virginia • A erospace and Defense Electronics - the United Kingdom and the United States ◦ The United States includes principal operating facilities in California and Illinois • Engineered Systems - the United States, including principal operating facilities in Alabama, Maryland and Tennessee
Biggest changeAt December 29, 2024, our principal operating facilities by segment were located as follows (countries and states listed alphabetically): • Digital Imaging - Belgium, Canada, Estonia, France, the Netherlands, Norway, Spain, Sweden, the United Kingdom and the United States ◦ The United States includes principal operating facilities in California, Florida, Indiana, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, Oklahoma, Oregon, and Pennsylvania • Instrumentation - Denmark, France, United Kingdom and the United States ◦ The United States includes principal operating facilities in California, Colorado, Florida, Massachusetts, Nebraska, New Hampshire, New York, Ohio, Pennsylvania, Texas and Virginia • A erospace and Defense Electronics - the United Kingdom and the United States ◦ The United States includes principal operating facilities in California and Illinois • Engineered Systems - the United States, including principal operating facilities in Alabama, Maryland and Tennessee Subsequent to the end of fiscal year 2024, we have completed two acquisitions that are part of the Aerospace and Defense Electronics segment, with principal operating facilities in the United States (Texas and Ohio) as well as the United Kingdom.
Item 2. Properties The Company has 76 principal operating facilities in 20 states and 10 foreign countries. The Company’s executive offices are located in Thousand Oaks, California.
Item 2. Properties At December 29, 2024, we had 77 principal operating facilities in 20 states and 10 foreign countries. Our executive offices are located in Thousand Oaks, California.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTherefore, we do not anticipate paying any cash dividends in the foreseeable future. We have stock repurchase programs authorized by our Board of Directors to repurchase up to approximately three million shares. No repurchases were made since 2015.
Biggest changeTherefore, we do not anticipate paying any cash dividends in the foreseeable future.
Because many of our shares of common stock are held by brokers and institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our stock represented by these stockholders of record. We intend to use future earnings to fund the development and growth of our businesses.
Because many of our shares of common stock are held by brokers and institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our stock represented by these stockholders of record. Dividends We intend to use future earnings to fund the development and growth of our businesses.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our Common Stock is listed on the New York Stock Exchange and traded under the symbol “TDY”. As of February 16, 2024, there were 2,256 holders of record of the Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Common Stock Our Common Stock is listed on the New York Stock Exchange and traded under the symbol “TDY”. As of February 12, 2025, there were 2,073 holders of record of the Common Stock.
Additional information required by this item is set forth in the 2024 Proxy Statement under the caption and “Securities Authorized for Issuance Under Equity Compensation Plans” and is incorporated herein by reference. Item 6. [Reserved]
The authorized stock repurchase program does not have a stated expiration date. Securities Authorized for Issuance Under Existing Equity Compensation Plans Additional information required by this item is set forth in the 2025 Proxy Statement under the caption and “Securities Authorized for Issuance Under Equity Compensation Plans” and is incorporated herein by reference. Item 6. [Reserved]
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Although we have no current plans to repurchase stock, up to approximately three million shares may be repurchased under the stock repurchase program. See Note 2 for additional information about our stock repurchase program.
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Share Repurchase Program The following table sets forth the shares repurchased during each fiscal month during the fourth quarter of 2024: Fiscal Month 2024 Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Maximum dollar value of shares that may yet be purchased under the plans or programs (in millions) (a) September 30 - November 3 47,923 $ 445.85 47,923 $ 896.1 November 4 - December 1 — $ — — $ 896.1 December 2 - December 29 — $ — — $ 896.1 Total 47,923 $ 445.85 47,923 (a) On April 23, 2024, the Company’s Board of Directors authorized a new stock repurchase program to repurchase up to $1.25 billion of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAlthough perhaps to a lesser extent compared to recent years, we expect cost inflation impacts and supply chain constraints to continue into 2024. Sales recorded and costs incurred by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period.
Biggest changeTrends and Other Matters Affecting Our Business Sales recorded and costs incurred by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. See Item 7 A .
Information about results of operations and financial conditions for 2021 and 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in the Company’s Annual Report on Form 10-K for the year ended January 1, 2023. 21 Table of Contents Strategy/Overview Our strategy continues to emphasize growth in our four business segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
Information about results of operations and financial conditions for 2022 and 2023 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 23 Table of Contents Strategy/Overview Our strategy continues to emphasize growth in our four business segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
The markets in which we sell our enabling technologies are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our business with targeted acquisitions and through product development. We continue to focus on balanced and disciplined capital deployment among capital expenditures, acquisitions and product development.
The markets in which we sell our enabling technologies are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our business with targeted acquisitions and through product development.
We aggressively pursue operational excellence to continually improve our margins and earnings by emphasizing cost containment and evaluating cost reductions in all aspects of our business. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire.
We continue to focus on balanced and disciplined capital deployment among capital expenditures, acquisitions, stock repurchases and product development. We aggressively pursue operational excellence to continually improve our margins and earnings by emphasizing cost containment and evaluating cost reductions in all aspects of our business. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire.
We differentiate ourselves from many of our direct competitors by having a customer- and Company-sponsored applied research center that augments our product development expertise. We believe our technological capabilities, innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.
We believe our technological capabilities, innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.
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Trends and Other Matters Affecting Our Business We have experienced supply chain challenges, including long lead times, as well as cost inflation for parts and components, logistics and labor due to availability constraints and high demand. These supply chain challenges have also delayed our ability to timely convert backlog to revenue.
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Market Risk , Note 1 and Note 14 for additional discussion around our derivative instruments and hedging activities. In February 2025, the U.S. Presidential administration proposed certain orders directing the United States to potentially impose new tariffs on foreign imports impacting multiple countries, commodities and industries.
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As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. See
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We are currently evaluating the potential impact of the proposed tariffs to our business and financial condition. See our risks factor disclosure in Item 1A . Risk Factors for further information. Recent Acquisitions Consistent with our strategy, we completed two acquisitions each in 2024 and in 2023.
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The financial results of these acquisitions have been included since the respective date of each acquisition. Our 2024 and 2023 acquisitions were within the Digital Imaging and Instrumentation segments. See Note 3 for additional information about our 2024 and 2023 business acquisitions. Subsequent to the end of fiscal year 2024, we have completed two acquisitions.
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See Note 18 for additional information. 24 Table of Contents Selected Consolidated Operating Results Our fiscal year is determined based on a 52- or 53-week convention ending on the Sunday nearest to December 31. Fiscal years 2024 and 2023 each contained 52 weeks. Certain prior year amounts have been reclassified to conform to the current period presentation.
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We now disclose research and development expense on a separate income statement line. Research and development expense was previously included in selling, general and administrative expenses. In addition, we historically included bid and proposal expense as part of its annual research and development expense disclosures.
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We have not reclassified bid and proposal expense, which remains withing selling, general and administrative expense. We also now disclose impairment of acquired intangible assets on a separate income statement line item.
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Impairment of acquired intangible assets was previously included within selling, general and administrative expense. 2024 2023 $ Change % Change Net sales $ 5,670.0 $ 5,635.5 $ 34.5 0.6 % Costs and expenses Cost of sales 3,235.2 3,196.1 39.1 1.2 % Selling, general and administrative 902.6 852.0 50.6 5.9 % Research and development 292.6 356.3 (63.7) (17.9) % Acquired intangible asset amortization 198.0 196.7 1.3 0.7 % Impairment of acquired intangible assets 52.5 — 52.5 * Total costs and expenses 4,680.9 4,601.1 79.8 1.7 % Operating income (loss) 989.1 1,034.4 (45.3) (4.4) % Net income (loss) attributable to Teledyne $ 819.2 $ 885.7 $ (66.5) (7.5) % Diluted earnings per common share $ 17.21 $ 18.49 $ (1.28) (6.9) % * not meaningful 25 Table of Contents Consolidated Results of Operations Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
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Additional financial information about our business segments can be found in Note 4 . 2024 compared with 2023 Net sales (dollars in millions) 2024 2023 $ Change % Change Digital Imaging $ 3,070.8 $ 3,144.1 $ (73.3) (2.3) % Instrumentation 1,382.6 1,326.2 56.4 4.3 % Aerospace and Defense Electronics 776.8 726.5 50.3 6.9 % Engineered Systems 439.8 438.7 1.1 0.3 % Total net sales $ 5,670.0 $ 5,635.5 $ 34.5 0.6 % Results of operations (dollars in millions) 2024 2023 $ Change % Change Digital Imaging $ 442.0 $ 517.4 $ (75.4) (14.6) % Instrumentation 370.3 338.3 32.0 9.5 % Aerospace and Defense Electronics 221.7 199.6 22.1 11.1 % Engineered Systems 32.9 44.7 (11.8) (26.4) % Corporate expense (77.8) (65.6) (12.2) 18.6 % Operating income (loss) 989.1 1,034.4 (45.3) (4.4) % Interest and debt expense, net (57.9) (77.3) 19.4 (25.1) % Non-service retirement benefit income 10.8 12.4 (1.6) (12.9) % Gain (loss) on debt extinguishment — 1.6 (1.6) (100.0) % Other income (expense), net (4.1) (12.2) 8.1 (66.4) % Income (loss) before income taxes 937.9 958.9 (21.0) (2.2) % Provision (benefit) for income taxes 117.2 72.3 44.9 62.1 % Net income (loss) including noncontrolling interest 820.7 886.6 (65.9) (7.4) % Less: Net income (loss) attributable to noncontrolling interest 1.5 0.9 0.6 66.7 % Net income (loss) attributable to Teledyne $ 819.2 $ 885.7 $ (66.5) (7.5) % Net Sales: Net sales increased across three of our four business segments.
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Total year 2024 net sales included $49.4 million in incremental net sales from current and prior year acquisitions. Refer to “Business Segment Operating Results” later in this section for additional discussion of changes in net sales. Sales to international customers represented approximately 48% of net sales in 2024 and 49% of net sales in 2023.
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Approximately 24% and 25% of our total net sales for 2024 and 2023, respectively, were derived from contracts with agencies of, or prime contractors to, the U.S. Government. Cost of Sales Cost of sales increased in 2024, primarily driven by the impact of higher net sales as well as higher engineering costs.
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Cost of sales as a percentage of net sales for 2024 was 57.1%, compared with 56.7% for 2023. Refer to “Business Segment Operating Results” later in this section for additional discussion of changes in cost of sales. Selling, General and Administrative Expense Selling, general and administrative expense increased in 2024, primarily driven by higher sales across most segments.
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Selling, general and administrative expense as a percentage of net sales was 15.9% for 2024, compared with 15.1% for 2023. Corporate expense in 2024 was $77.8 million, compared with $65.6 million in 2023, with the increase primarily related to higher compensation expense, including higher stock-based compensation as well as higher consulting and legal costs.
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Research and Development Expense Research and development expense decreased in 2024, primarily driven by a decrease within the Digital Imaging segment.
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Acquired Intangible Asset Amortization Acquired intangible asset amortization for 2024 was $198.0 million, compared with $196.7 million for 2023. 26 Table of Contents Impairment of Acquired Intangible Assets We recorded $52.5 million of pretax, non-cash trademark impairments in 2024 in the Digital Imaging and Instrumentation segments. No comparative amounts were recorded in 2023.
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Operating Income Operating income decreased in 2024 primarily driven by $52.5 million of pretax, non-cash trademark impairments recorded in 2024. No comparative amounts were recorded in 2023. Non-operating Income and Expense Interest expense, including credit facility fees and other bank charges and net of interest income, was $57.9 million in 2024, compared with $77.3 million in 2023.
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The decrease was due primarily to reduced outstanding borrowings with lower weighted average interest rates compared to 2023. In 2023, we repurchased and retired $10 million of its Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt.
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The other expense, net in other income and expense, net, in 2024 was driven primarily by lower foreign exchange losses compared to the 2023 other expense, net amount. Income Taxes The income tax provision considers income, permanent items, tax credits, and various statutory tax rates.
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The effective tax rate decreased in 2024 compared to 2023 primarily due to lower reversals of unrecognized tax benefits in 2024 as well as lower research and development tax credits in 2024. See Note 9 for further information regarding our income taxes.
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(dollars in millions) 2024 2023 Provision (benefit) for income taxes $ 117.2 $ 72.3 Income (loss) before income taxes $ 937.9 $ 958.9 Effective tax rate 12.5% 7.5% Business Segment Operating Results The following discussion of our four segments should be read in conjunction with Note 4.
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Digital Imaging (dollars in millions) 2024 2023 $ Change % Change Net sales $ 3,070.8 $ 3,144.1 $ (73.3) (2.3)% Cost of sales $ 1,708.0 $ 1,711.4 $ (3.4) (0.2)% Selling, general and administrative expense $ 510.7 $ 489.6 $ 21.1 4.3% Research and development expense $ 177.3 $ 244.0 $ (66.7) (27.3)% Acquired intangible asset amortization $ 183.3 $ 181.7 $ 1.6 0.9% Impairment of acquired intangible assets $ 49.5 $ — $ 49.5 * Operating income $ 442.0 $ 517.4 $ (75.4) (14.6)% Cost of sales % of net sales 55.6 % 54.4 % 1.2% Selling, general and administrative expense % of net sales 16.6 % 15.6 % 1.0% Research and development expense % of net sales 5.8 % 7.7 % (1.9)% Acquired intangible asset amortization % of net sales 6.0 % 5.8 % 0.2% Impairment of acquired intangible assets % of net sales 1.6 % — % * Operating income % of net sales 14.4 % 16.5 % (2.1)% International sales % of net sales 55.5 % 55.3 % 0.2% U.S.
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Government sales % of net sales 18.1 % 18.2 % (0.1)% * not meaningful Our Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared and X-ray spectra for use in industrial, government and medical applications, as well as MEMS and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters. 27 Table of Contents 2024 compared with 2023 Our Digital Imaging segment net sales for 2024 decreased 2.3%, compared with 2023.
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Operating income for 2024, which included a $49.5 million impairment of acquired intangible assets, decreased 14.6%, compared with 2023. Total year 2024 net sales included $27.1 million in incremental net sales from current and prior year acquisitions.
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Sales of industrial automation vision systems decreased $134.7 million, sales of X-ray products decreased $31.9 million, sales of unmanned ground systems decreased $17.8 million, sales of unmanned air systems increased $56.7 million, sales of commercial and defense infrared detectors and subsystems increased $7.5 million and sales of surveillance systems increased $27.4 million.
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Cost of sales for 2024 decreased compared with 2023 and reflected the impact of lower net sales partially offset by unfavorable product mix and higher engineering costs. The cost of sales percentage in 2024 increased compared with 2023 and reflected the impact of product mix.
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Selling, general and administrative expense and the selling, general and administrative expense percentage for 2024 increased compared with 2023 and included incremental selling, general and administrative expense from current and prior year acquisitions, higher bad debt expense in 2024 compared to a bad debt recovery in 2023 on previously reserved amounts and higher third party sales commissions.
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Research and development expense and the research and development expense percentage for 2024 decreased 27.3% compared with 2023, with the decrease driven primarily by the completion of certain unmanned air systems product development activities in 2023 that moved to commercialization in early 2024, FLIR integration-related cost-reduction efforts implemented in the second half of 2023 and a larger percentage of labor focused on customer-funded research and development projects in 2024 as compared to 2023.
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The decrease in operating income in 2024 reflected the impact of lower net sales, unfavorable product mix, higher engineering costs and $49.5 million impairment of acquired intangible assets, partially offset by lower research and development expense.
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Instrumentation (dollars in millions) 2024 2023 $ Change % Change Net sales $ 1,382.6 $ 1,326.2 $ 56.4 4.3% Cost of sales $ 706.4 $ 692.6 $ 13.8 2.0% Selling, general and administrative expense $ 196.4 $ 188.2 $ 8.2 4.4% Research and development expense $ 92.6 $ 92.9 $ (0.3) (0.3)% Acquired intangible asset amortization expense $ 13.9 $ 14.2 $ (0.3) (2.1)% Impairment of acquired intangible assets $ 3.0 $ — $ 3.0 * Operating income $ 370.3 $ 338.3 $ 32.0 9.5% Cost of sales % of net sales 51.1 % 52.2 % (1.1)% Selling, general and administrative expense % of net sales 14.2 % 14.2 % —% Research and development expense % of net sales 6.7 % 7.0 % (0.3)% Acquired intangible asset amortization % of net sales 1.0 % 1.1 % (0.1)% Impairment of acquired intangible assets % of net sales 0.2 % — % * Operating income % of net sales 26.8 % 25.5 % 1.3% International sales % of net sales 55.8 % 57.3 % (1.5)% U.S.
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Government sales % of net sales 8.9 % 7.2 % 1.7% * not meaningful Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement applications.
Added
We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments. 2024 compared with 2023 Our Instrumentation segment net sales for 2024 increased 4.3%, compared with 2023. Operating income for 2024 increased 9.5%, compared with 2023.
Added
Total year 2024 net sales included $22.3 million in incremental net sales from current and prior year acquisitions. In 2024 compared with 2023, net sales of marine instrumentation increased $101.8 million which included $13.3 million in incremental net sales from current and prior year acquisitions.
Added
Net sales of test and measurement instrumentation decreased $34.7 million, which included $9.0 million in incremental net sales from current and prior year acquisitions. Net sales of environmental instrumentation decreased $10.7 million. 28 Table of Contents Cost of sales increased in 2024, compared with 2023, and primarily reflected the impact of higher net sales.
Added
The cost of sales percentage decreased in 2024 compared with 2023 primarily driven by favorable product mix and improved product margins. Selling, general and administrative expense increased in 2024 compared with 2023, primarily driven by higher net sales. Selling, general and administrative expenses for 2024, as a percentage of sales, decreased slightly from 2023.
Added
Research and development expense as well as research and development expense as a percentage of revenue decreased slightly compared with 2023. Acquisition intangible asset amortization expense decreased slightly, and we recorded a $3.0 million impairment of acquired intangible assets in 2024.
Added
The increase in operating income in 2024 reflected the impact of higher net sales, favorable product mix and improved product margins.
Added
Aerospace and Defense Electronics (dollars in millions) 2024 2023 $ Change % Change Net sales $ 776.8 $ 726.5 $ 50.3 6.9% Cost of sales $ 441.3 $ 424.6 $ 16.7 3.9% Selling, general and administrative expense $ 91.2 $ 83.7 $ 7.5 9.0% Research and development expense $ 21.8 $ 17.8 $ 4.0 22.5% Acquired intangible asset amortization $ 0.8 $ 0.8 $ — —% Operating income $ 221.7 $ 199.6 $ 22.1 11.1% Cost of sales % of net sales 56.8 % 58.4 % (1.6)% Selling, general and administrative expenses % of net sales 11.8 % 11.5 % 0.3% Research and development expense % of net sales 2.8 % 2.5 % 0.3% Acquired intangible asset amortization % of net sales 0.1 % 0.1 % —% Operating income % of net sales 28.5 % 27.5 % 1.0% International sales % of net sales 32.3 % 32.3 % —% U.S.
Added
Government sales % of net sales 39.6 % 45.5 % (5.9)% Our Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, harsh environment interconnects, data acquisition and communications equipment for aircraft, components and subsystems for wireless and satellite communications and general aviation batteries. 2024 compared with 2023 Our Aerospace and Defense Electronics segment net sales for 2024 increased 6.9%, compared with 2023.
Added
Operating income for 2024 increased 11.1%, compared with 2023. The 2024 net sales increase compared with 2023 reflected $34.7 million of higher sales for defense electronics and $15.6 million of higher sales for aerospace electronics. Cost of sales for 2024 increased compared with 2023 and reflected the impact of higher net sales partially offset by favorable product mix.
Added
Cost of sales as a percentage of net sales for 2024 decreased compared with 2023 and primarily reflected product mix. Selling, general and administrative expense increased in 2024 compared with 2023, and primarily related to higher net sales. Research and development expense increased in 2024 compared with 2023 primarily due to higher aerospace electronics spending.
Added
The selling, general and administrative expense and research and development expense percentages in 2024 increased slightly compared with 2023.
Added
The increase in operating income for 2024 primarily reflected the impact of higher net sales and favorable product mix. 29 Table of Contents Engineered Systems (dollars in millions) 2024 2023 $ Change % Change Net sales $ 439.8 $ 438.7 $ 1.1 0.3% Cost of sales $ 379.5 $ 367.5 $ 12.0 3.3% Selling, general and administrative expense $ 26.5 $ 24.9 $ 1.6 6.4% Research and development expense $ 0.9 $ 1.6 $ (0.7) (43.8)% Operating income $ 32.9 $ 44.7 $ (11.8) (26.4)% Cost of sales % of net sales 86.3 % 83.8 % 2.5 % Selling, general and administrative expense % of net sales 6.0 % 5.7 % 0.3 % Research and development expense % of net sales 0.2 % 0.3 % (0.1) % Operating income % of net sales 7.5 % 10.2 % (2.7) % International sales % of net sales 1.0 % 1.9 % (0.9) % U.S.
Added
Government sales % of net sales 88.4 % 87.7 % 0.7 % Our Engineered Systems segment provides innovative systems engineering and integration, advanced technology development, and manufacturing solutions for defense, space, environmental and energy applications, including the design and manufacture of electrochemical energy systems. 2024 compared with 2023 Our Engineered Systems segment net sales for 2024 increased 0.3%, compared with 2023.
Added
Operating income for 2024 decreased 26.4%, compared with 2023. The 2024 net sales increase primarily reflected $2.4 million of higher sales for engineered products, partially offset by $1.3 million of lower sales for energy systems. Operating income in 2024 primarily reflected the impact of unfavorable contract estimate changes related to electronic manufacturing services products.
Added
Cost of sales for 2024 increased compared with 2023, and primarily reflected the impact of unfavorable contract estimate changes related to electronic manufacturing services products. Cost of sales as a percentage of net sales for 2024 increased compared with 2023. Selling, general and administrative expense in 2024 increased slightly compared with 2023.
Added
The selling, general and administrative expense as a percentage of net sales increased slightly compared with 2023. Operating income in 2024 primarily reflected the impact of unfavorable contract estimate changes related to electronic manufacturing services products.
Added
Financial Condition, Liquidity and Capital Resources Principal Cash and Capital Requirements Our principal cash and capital requirements are to fund working capital needs, capital expenditures, income tax payments and debt service requirements, as well as acquisitions. We may deploy cash for the stock repurchase program.
Added
It is anticipated that operating cash flow, together with available borrowings under the credit facility and the debt financing arrangements described below, will be sufficient to meet these requirements. To support acquisitions, we may need to raise additional capital. Our liquidity is not dependent upon the use of off-balance sheet financial arrangements.
Added
We have no off-balance sheet financing arrangements that incorporate the use of special purpose or unconsolidated entities. Cash and Cash Equivalents Cash and cash equivalents totaled $649.8 million at December 29, 2024, of which $314.4 million was held by foreign subsidiaries.
Added
Cash equivalents consist of highly liquid money-market mutual funds with maturities of three months or less when purchased. 30 Table of Contents Long-term Debt Long-term debt, including unamortized debt issuance costs was $2,649.0 million at December 29, 2024 compared to $3,244.9 million at December 31, 2023.
Added
During 2024, we repaid $450.0 million Fixed Rate Senior Notes due April 2024 and $150.0 million for a term loan due October 2024. At December 29, 2024, we had $52.9 million in outstanding letters of credit, including $29.3 million against our credit facility.
Added
Our credit facility requires us to comply with various financial and operating covenants and at December 29, 2024, we were in compliance with these covenants and had a significant amount of margin between required financial covenant ratios and our actual ratios.
Added
Currently, we do not believe our ability to undertake additional debt financing, if needed, is reasonably likely to be materially impacted by debt restrictions under our credit agreements. Available borrowing capacity under the $1.20 billion credit facility, which is reduced by borrowings and $29.3 million in outstanding letters of credit, was $1,170.7 million at December 29, 2024.
Added
See Note 8 for additional information regarding our credit facility and long-term debt.
Added
Contractual Obligations The following table summarizes our expected cash outflows resulting from financial contracts and commitments at December 29, 2024: Contractual obligations (in millions): 2025 2026 2027 2028 2029 After 2030 Total Debt obligations $ 0.4 $ 450.1 $ — $ 700.1 $ 0.1 $ 1,515.5 $ 2,666.2 Interest expense (a) 64.9 59.5 57.7 45.9 41.2 43.5 312.7 Operating lease obligations (b) 37.6 31.2 26.3 18.9 14.2 31.6 159.8 Purchase obligations (c) 406.7 9.8 2.3 0.9 0.8 1.8 422.3 Total $ 509.6 $ 550.6 $ 86.3 $ 765.8 $ 56.3 $ 1,592.4 $ 3,561.0 (a) Interest expense related to the credit facility, including facility fees, is assumed to accrue at the rates in effect at year-end 2023 and is assumed to be paid at the end of each quarter with the final payment in June 2029 when the credit facility expires.
Added
(b) Includes imputed interest and the short-term portion of lease obligations.
Added
(c) Purchase obligations generally include contractual obligations for the purchase of goods and services and capital commitments that are enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
Added
Unrecognized tax benefits of $45.2 million and accrued interest and penalties on these tax matters of $8.5 million are not included in the table above.
Added
These unrecognized tax benefits, accrued interest and penalties are not included in the table above because $25.7 million is offset by deferred tax assets, and the remainder cannot be reasonably estimated to be settled in cash due to a lack of prior settlement history and offsetting credits.
Added
At December 29, 2024, we were not required, and accordingly are not planning, to make any cash contributions to the domestic qualified pension plans for 2025. Our minimum funding requirements after 2024 as set forth by the Employee Retirement Income Security Act, are dependent on several factors.
Added
Estimates beyond 2025 have not been provided due to the significant uncertainty of these amounts, which are subject to change until the Company’s pension assumptions can be updated at the appropriate times. In addition, certain pension contributions are eligible for future recovery through the pricing of products and services to the U.S.
Added
Government under certain government contracts, therefore, future cash contributions are not necessarily indicative of the impact these contributions may have on our liquidity. We also have payments due under our other postretirement benefit plans. These plans are not required to be funded in advance but are pay as you go. See further discussion in Note 10 .
Added
We monitor and manage our defined benefit pension plans obligation and may take additional actions to manage risk in the future. 31 Table of Contents Operating Activities Net cash provided by operating activities was $1,191.9 million and $836.1 million in 2024 and 2023, respectively.
Added
The higher cash provided by operating activities in 2024, compared with 2023 primarily resulted from lower income tax payments, a higher amount of customer advances received in 2024 as well as the of accounts payable payments.
Added
Free cash flow (cash provided by operating activities less capital expenditures) was as follows (in millions): Free Cash Flow (a) 2024 2023 Cash provided by (used in) operating activities $ 1,191.9 $ 836.1 Less: Capital expenditures for property, plant and equipment (83.7) (114.9) Free cash flow $ 1,108.2 $ 721.2 (a) We define free cash flow as cash provided by operating activities (a measure prescribed by U.S. generally accepted accounting principles “GAAP”) less capital expenditures for property, plant and equipment.
Added
We believe that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing the company’s ability to generate cash flow. Investing Activities Net cash used in investing activities was $207.2 million and $190.3 million for 2024 and 2023, respectively.
Added
Investing activities used cash for acquisitions and other investments of $123.7 million and $77.7 million in 2024 and 2023, respectively (see “Recent Acquisitions”). We funded the acquisitions from cash on hand. Cash flows relating to investing activities for capital expenditures.
Added
Capital expenditures (in millions): 2024 2023 Digital Imaging $ 54.7 $ 78.2 Instrumentation 15.0 14.0 Aerospace and Defense Electronics 7.2 10.9 Engineered Systems 2.4 3.4 Corporate 4.4 8.4 Total $ 83.7 $ 114.9 During 2025, we plan to invest approximately $130 million in capital expenditures, principally to upgrade facilities and manufacturing equipment, and this amount includes estimated post-acquisition capital expenditures relates to 2025 acquisitions described in Note 18 .
Added
Financing Activities Net cash used in financing activities reflected net payments from debt of $600.6 million, share repurchases of $354.0 million and net proceeds from the exercise of stock options of $37.9 million in 2024.
Added
Net cash used in financing activities reflected net payments from debt of $678.9 million and proceeds from the exercise of stock options of $45.4 million in 2023. During 2024, we repaid $450.0 million Fixed Rate Senior Notes due April 2024 and $150.0 million for a term loan due October 2024.
Added
During 2023, we repaid $125.0 million of amounts outstanding on our credit facility, the $300.0 million Fixed Rate Senior Notes due April 2023, and the remaining $245.0 million on our term loan due May 2026.
Added
We also repurchased and retired $10.0 million of our Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt. Other Matters Income Taxes Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid.
Added
We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense. We continually evaluate our global cash needs and have historically asserted that most of our unremitted foreign earnings are permanently reinvested, and we did not generally record deferred taxes on such amounts.
Added
During 2022, we determined that we could no longer make the assertion foreign earnings are permanently reinvested, as cash from most foreign subsidiaries may be remitted without incurring additional U.S. federal income tax.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−182 removed0 unchanged
Biggest changeWe assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or otherwise. 33 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by this item is included in this Report under the caption “Other Matters - Market Risk Disclosures” of “Item 7.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by this item is included in this Report under the caption “Other Matters - Market Risk Disclosures” of “Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
Removed
Item 7a. Market Risk , Note 1 and Note 1 4 for additional discussion around our derivative instruments and hedging activities. To date, we have not been materially impacted by the conflict in Israel and its effect on neighboring regions. We do not have material assets in Israel.
Removed
Our total sales from Israel in 2023 and 2022 was less than 1.0% of total net sales, respectively. See Item 1a. Risk Factors for additional discussion.
Removed
As part of a continuing effort to reduce costs and improve operating performance, we may take and have taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weaker end markets. We continue to seek cost reductions in our businesses.
Removed
For 2023, 2022 and 2021, we recorded $12.0 million of costs, $0.5 million of benefits and $26.4 million of costs, respectively, related to these actions, with the majority of the costs included within selling, general and administrative expense within the Digital Imaging segment. At December 31, 2023, $2.9 million remains to be paid related to actions taken in 2023.
Removed
In 2022, we, recorded a net benefit of $0.5 million, which related to $3.5 million of costs related to headcount or facility consolidation costs, partially offset by $4.0 million of income related to the favorable resolution of a facility consolidation charge within the Digital Imaging segment.
Removed
Recent Acquisitions Consistent with our strategy, we completed two acquisitions each in 2023 and in 2022. The financial results of these acquisitions have been included since the respective date of each acquisition. Our 2023 acquisitions were within the Digital Imaging and Instrumentation segments, and both acquisitions in 2022 were part of the Digital Imaging segment.
Removed
See Note 3 for additional information about our recent business acquisitions. Selected Consolidated Operating Results Our fiscal year is determined based on a 52- or 53-week convention ending on the Sunday nearest to December 31.
Removed
Fiscal years 2023 and 2022 each contained 52 weeks. 2023 2022 $ Change % Change Net sales $ 5,635.5 $ 5,458.6 $ 176.9 3.2 % Costs and expenses Cost of sales 3,196.1 3,128.3 67.8 2.2 % Selling, general and administrative 1,208.3 1,156.6 51.7 4.5 % Acquired intangible asset amortization 196.7 201.7 (5.0) (2.5) % Total costs and expenses 4,601.1 4,486.6 114.5 2.6 % Operating income (loss) 1,034.4 972.0 62.4 6.4 % Net income (loss) attributable to Teledyne $ 885.7 $ 788.6 $ 97.1 12.3 % Diluted earnings per common share $ 18.49 $ 16.53 $ 1.96 11.9 % Total year 2023 net sales included $99.8 million in incremental net sales from current and prior year acquisitions. 22 Table of Contents Net income for 2023 and 2022 also included net discrete tax benefits of $137.5 million and $86.7 million, respectively.
Removed
Consolidated Results of Operations Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
Removed
Additional financial information about our business segments can be found in Note 4 . 2023 compared with 2022 Net sales (dollars in millions) 2023 2022 $ Change % Change Digital Imaging $ 3,144.1 $ 3,110.9 $ 33.2 1.1 % Instrumentation 1,326.2 1,254.0 72.2 5.8 % Aerospace and Defense Electronics 726.5 682.4 44.1 6.5 % Engineered Systems 438.7 411.3 27.4 6.7 % Total net sales $ 5,635.5 $ 5,458.6 $ 176.9 3.2 % Results of operations (dollars in millions) 2023 2022 $ Change % Change Digital Imaging $ 517.4 $ 519.3 $ (1.9) (0.4) % Instrumentation 338.3 295.3 43.0 14.6 % Aerospace and Defense Electronics 199.6 184.1 15.5 8.4 % Engineered Systems 44.7 39.2 5.5 14.0 % Corporate expense (65.6) (65.9) 0.3 (0.5) % Operating income (loss) 1,034.4 972.0 62.4 6.4 % Interest and debt expense, net (77.3) (89.3) 12.0 (13.4) % Non-service retirement benefit income 12.4 11.4 1.0 8.8 % Gain (loss) on debt extinguishment 1.6 10.6 (9.0) (84.9) % Other income (expense), net (12.2) 3.4 (15.6) * Income (loss) before income taxes 958.9 908.1 50.8 5.6 % Provision (benefit) for income taxes 72.3 119.2 (46.9) (39.3) % Net income (loss) including noncontrolling interest 886.6 788.9 97.7 12.4 % Less: Net income (loss) attributable to noncontrolling interest 0.9 0.3 0.6 200.0 % Net income (loss) attributable to Teledyne $ 885.7 $ 788.6 $ 97.1 12.3 % * not meaningful Net Sales: Net sales increased across all business segments.
Removed
Total year 2023 net sales included $99.8 million in incremental net sales from current and prior year acquisitions. Refer to the “Business Segment Operating Results” discussion later in this section for additional discussion of changes in net sales. Sales to international customers represented approximately 49% of net sales in 2023 and 47% of net sales in 2022.
Removed
Approximately 25% and 25% of our total net sales 2023 and 2022, respectively, were derived from contracts with agencies of, or prime contractors to, the U.S. Government. Cost of Sales Cost of sales increased in 2023, primarily driven by the impact of higher net sales.
Removed
Cost of sales as a percentage of net sales for 2023 was 56.7%, compared with 57.3% for 2022. Refer to the “Business Segment Operating Results” discussion later in this section for additional discussion of changes in cost of sales.
Removed
Selling, General and Administrative Expenses Selling, general and administrative expenses, including research and development expense, were higher in 2023, primarily driven by higher net sales in 2023. Selling, general and administrative expenses as a percentage of net sales was 21.4% for 2023, compared with 21.2% for 2022. Corporate expense in 2023 was $65.6 million, compared with $65.9 million in 2022.
Removed
Acquired Intangible Asset Amortization Acquired intangible asset amortization for 2023 was $196.7 million, compared with $201.7 million for 2022, primarily related to decreased expense within the Digital Imaging and Instrumentation segments. Operating Income Operating income increased in 2023 due to higher operating income in each segment except the Digital Imaging segment.
Removed
Non-operating Income and Expenses Interest expense, including credit facility fees and other bank charges and net of interest income, was $77.3 million in 2023, compared with $89.3 million in 2022. The decrease was due primarily to reduced outstanding borrowings with lower weighted average interest rates compared to 2022.
Removed
In 2023, the Company repurchased and retired $10.0 million of its Fixed 23 Table of Contents Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt.
Removed
In 2022, the Company repurchased and retired $75.0 million of its Fixed Rate Senior Notes due August 2030 and April 2031, recording a $10.6 million non-cash gain on the extinguishment of this debt.
Removed
The other expense, net in other income and expense, net, in 2023 was driven primarily by foreign exchange losses, net as well as higher expense from deferred compensation plan activity, compared to the 2022 other income, net amount, which included foreign exchange gains, net as well as higher income from deferred compensation plan activity.
Removed
Income Taxes The income tax provision considers income, permanent items, tax credits, and various statutory tax rates. Both the current and prior year discrete impact includes the resolution of uncertain tax positions which are primarily acquisition related and tax benefits on stock-based compensation. See Note 9 for further information regarding our income taxes.
Removed
(Dollars in millions) 2023 2022 Provision (benefit) for income taxes $ 72.3 $ 119.2 Discrete event expense (benefit) $ 137.5 $ 86.7 Provision (benefit) for income taxes without discrete event expense (benefit) $ 209.8 $ 205.9 Income (loss) before income taxes $ 958.9 $ 908.1 Effective tax rate 7.5% 13.1% Effective tax rate without discrete events 21.9% 22.7% Business Segment Operating Results The following discussion of our four segments should be read in conjunction with Note 4.
Removed
Digital Imaging (Dollars in millions) 2023 2022 $ Change % Change Net sales $ 3,144.1 $ 3,110.9 $ 33.2 1.1% Cost of sales $ 1,711.4 $ 1,705.6 $ 5.8 0.3% Selling, general and administrative expenses $ 733.6 $ 702.3 $ 31.3 4.5% Acquired intangible asset amortization $ 181.7 $ 183.7 $ (2.0) (1.1)% Operating income $ 517.4 $ 519.3 $ (1.9) (0.4)% Cost of sales % of net sales 54.4 % 54.8 % (0.4)% Selling, general and administrative expenses % of net sales 23.3 % 22.6 % 0.7% Acquired intangible asset amortization % of net sales 5.8 % 5.9 % (0.1)% Operating income % of net sales 16.5 % 16.7 % (0.2)% International sales % of net sales 55.3 % 54.5 % 0.8% U.S.
Removed
Government sales % of net sales 18.2 % 19.9 % (1.7)% Our Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared and X-ray spectra for use in industrial, government and medical applications, as well as MEMS and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters.
Removed
It also includes our customer- and Company-sponsored applied research center which benefits government programs and commercial businesses. 2023 compared with 2022 Our Digital Imaging segment net sales for 2023 increased 1.1%, compared with 2022. Operating income for 2023 decreased 0.4%, compared with 2022.
Removed
Total year 2023 net sales included $97.3 million in incremental net sales from current and prior year acquisitions as well as organic sales growth from X-ray products, infrared imaging detectors and surveillance systems, offset by lower sales of unmanned air and ground systems for defense applications, MEMS, and commercial maritime and commercial infrared products.
Removed
The decrease in operating income in 2023 reflected the impact of higher employee severance and facility consolidation costs, which included $9.4 million of expense in 2023 compared with $1.9 million of income in 2022. The 2022 severance and facility consolidation costs amount included $4.0 million of income related to the favorable resolution of a facility consolidation charge in 2022.
Removed
Cost of sales for 2023 increased compared with 2022, and reflected the impact of higher net sales, partially offset by product mix, including lower sales of unmanned ground systems offset by sales of higher margin products. The cost of sales percentage in 2023 decreased compared with 2022 and reflected the impact of product mix.
Removed
Selling, general and administrative expenses for 2023 increased 4.5% compared with 2022 and reflected the impact of higher net sales and higher severance and facility consolidation expense.
Removed
The selling, general and administrative expense percentage increased in 2023 compared with 2022, driven by higher employee compensation costs as well as higher employee severance and facility consolidation costs. 24 Table of Contents Instrumentation (Dollars in millions) 2023 2022 $ Change % Change Net sales $ 1,326.2 $ 1,254.0 $ 72.2 5.8% Cost of sales $ 692.6 $ 668.7 $ 23.9 3.6% Selling, general and administrative expenses $ 281.1 $ 272.8 $ 8.3 3.0% Acquired intangible asset amortization $ 14.2 $ 17.2 $ (3.0) (17.4)% Operating income $ 338.3 $ 295.3 $ 43.0 14.6% Cost of sales % of net sales 52.2 % 53.3 % (1.1)% Selling, general and administrative expenses % of net sales 21.2 % 21.8 % (0.6)% Acquired intangible asset amortization % of net sales 1.1 % 1.4 % (0.3)% Operating income % of net sales 25.5 % 23.5 % 2.0% International sales % of net sales 57.3 % 55.8 % 1.5% U.S.
Removed
Government sales % of net sales 7.2 % 8.6 % (1.4)% Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement applications.
Removed
We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments. 2023 compared with 2022 Our Instrumentation segment net sales for 2023 increased 5.8%, compared with 2022. Operating income for 2023 increased 14.6%, compared with 2022.
Removed
In 2023, net sales of marine instrumentation increased $69.0 million, and net sales of test and measurement instrumentation increased $10.1 million compared with 2022. Net sales of environmental instrumentation decreased $6.9 million compared with 2022. The increase in operating income in 2023 reflected the impact of higher net sales, improved product margins and lower acquired intangible asset amortization.
Removed
Cost of sales increased in 2023, compared with 2022, and primarily reflected the impact of higher net sales. The cost of sales percentage decreased in 2023 compared with 2022 primarily driven by product mix and improved product margins. Selling, general and administrative expenses, including research and development expense increased in 2023 compared with 2022, primarily driven by higher net sales.
Removed
Selling, general and administrative expenses for 2023, as a percentage of sales, decreased from 2022, primarily due to the impact of higher net sales while maintaining focus on cost control. Acquisition intangible asset amortization expense decreased primarily to lower intangible amortization for the test and measurement instrumentation product line, as certain historical acquisition intangibles became fully amortized in late 2022.
Removed
Aerospace and Defense Electronics (Dollars in millions) 2023 2022 $ Change % Change Net sales $ 726.5 $ 682.4 $ 44.1 6.5% Cost of sales $ 424.6 $ 407.8 $ 16.8 4.1% Selling, general and administrative expenses $ 101.5 $ 89.7 $ 11.8 13.2% Acquired intangible asset amortization $ 0.8 $ 0.8 $ — —% Operating income $ 199.6 $ 184.1 $ 15.5 8.4% Cost of sales % of net sales 58.4 % 59.8 % (1.4)% Selling, general and administrative expenses % of net sales 14.0 % 13.1 % 0.9% Acquired intangible asset amortization % of net sales 0.1 % 0.1 % —% Operating income % of net sales 27.5 % 27.0 % 0.5% International sales % of net sales 32.3 % 27.5 % 4.8% U.S.
Removed
Government sales % of net sales 45.5 % 39.0 % 6.5% Our Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, harsh environment interconnects, data acquisition and communications equipment for aircraft, components and subsystems for wireless and satellite communications and general aviation batteries. 2023 compared with 2022 Our Aerospace and Defense Electronics segment net sales for 2023 increased 6.5%, compared with 2022.
Removed
Operating income for 2023 increased 8.4%, compared with 2022. The 2023 net sales increase compared with 2022 reflected $25.2 million of higher sales for aerospace electronics and 25 Table of Contents $18.9 million of higher sales for defense electronics.
Removed
The increase in operating income for 2023 primarily reflected the impact of higher net sales and favorable product mix, partially offset by higher research and development expense. Cost of sales for 2023 increased compared with 2022 and reflected the impact of higher net sales partially offset by favorable product mix.
Removed
Cost of sales as a percentage of net sales for 2023 decreased compared with 2022 and primarily reflected product mix, including the increased sales of aerospace electronics which carry a higher margin than most defense electronics products.
Removed
Selling, general and administrative expenses, including research and development expense, increased in 2023 compared with 2022 and included $3.2 million of higher research and development expense in 2023. The higher research and development expense primarily reflected higher spending for aerospace electronics.
Removed
The selling, general and administrative expense percentage in 2023 increased compared with 2022 and reflected the higher research and development expense.
Removed
Engineered Systems (Dollars in millions) 2023 2022 $ Change % Change Net sales $ 438.7 $ 411.3 $ 27.4 6.7% Cost of sales $ 367.5 $ 346.2 $ 21.3 6.2% Selling, general and administrative expenses $ 26.5 $ 25.9 $ 0.6 2.3% Operating income $ 44.7 $ 39.2 $ 5.5 14.0 Cost of sales % of net sales 83.8 % 84.2 % (0.4) % Selling, general and administrative expenses % of net sales 6.0 % 6.3 % (0.3) % Operating income % of net sales 10.2 % 9.5 % 0.7 % International sales % of net sales 1.9 % 1.1 % 0.8 % U.S.
Removed
Government sales % of net sales 87.7 % 89.1 % (1.4) % Our Engineered Systems segment provides innovative systems engineering and integration, advanced technology development, and manufacturing solutions for defense, space, environmental and energy applications, including the design and manufacture of electrochemical energy systems. 2023 compared with 2022 Our Engineered Systems segment net sales for 2023 increased 6.7%, compared with 2022.
Removed
Operating income for 2023 increased 14.0%, compared with 2022. The 2023 net sales increase primarily reflected $17.9 million of higher sales for engineered products and $9.5 million of higher sales for energy systems.
Removed
The higher net sales for engineered products primarily reflected increased sales from space and electronic manufacturing services programs products, partially offset by decreased sales in missile defense, maritime, and other manufacturing programs. Operating income in 2023 primarily reflected the impact of favorable product mix, primarily driven by higher electronic manufacturing services products.
Removed
Cost of sales for 2023 increased compared with 2022, and primarily reflected the impact of higher net sales. Cost of sales as a percentage of net sales for 2023 decreased compared with 2022. Selling, general and administrative expenses in 2023, including research and development and bid and proposal expense, increased slightly compared with 2022.
Removed
The selling, general and administrative expense as a percentage of net sales decreased slightly compared with 2022. Financial Condition, Liquidity and Capital Resources Principal Cash and Capital Requirements Our principal cash and capital requirements are to fund working capital needs, capital expenditures, income tax payments and debt service requirements, as well as acquisitions.
Removed
It is anticipated that operating cash flow, together with available borrowings under the credit facility and the debt financing arrangements described below, will be sufficient to meet these requirements. To support acquisitions, we may need to raise additional capital. Our liquidity is not dependent upon the use of off-balance sheet financial arrangements.
Removed
We have no off-balance sheet financing arrangements that incorporate the use of special purpose or unconsolidated entities. Cash and Cash Equivalents Cash and cash equivalents totaled $648.3 million at December 31, 2023, of which $369.1 million was held by foreign subsidiaries. Cash equivalents consist of highly liquid money-market mutual funds with maturities of three months or less when purchased.
Removed
Long-term Debt Long-term debt, including unamortized debt issuance costs was $3,244.9 million at December 31, 2023 compared to $3,920.6 million at January 1, 2023. During 2023, we repaid $125.0 million of amount on its credit facility, the $300.0 million Fixed Rate Senior Notes due April 2023, and the remaining $245.0 million on our term loan due May 2026.
Removed
We also 26 Table of Contents repurchased and retired $10.0 million of our Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt. At December 31, 2023, we had $41.9 million in outstanding letters of credit.
Removed
The credit agreement and term loans require us to comply with various financial and operating covenants and at December 31, 2023, the Company was in compliance with these covenants and had a significant amount of margin between required financial covenant ratios and our actual ratios.
Removed
Currently, we do not believe our ability to undertake additional debt financing, if needed, is reasonably likely to be materially impacted by debt restrictions under our credit agreements. Available borrowing capacity under the $1.15 billion credit facility, which is reduced by borrowings and $20.9 million in outstanding letters of credit, was $1,129.1 million at December 31, 2023.
Removed
See Note 8 for additional information regarding our credit facility and long-term debt.
Removed
Contractual Obligations The following table summarizes our expected cash outflows resulting from financial contracts and commitments at December 31, 2023: Contractual obligations (in millions): 2024 2025 2026 2027 2028 After 2029 Total Debt obligations $ 600.1 $ 0.2 $ 450.2 $ 0.2 $ 700.1 $ 1,515.2 $ 3,266.0 Interest expense (a) 73.1 65.1 59.7 57.9 44.8 105.2 405.8 Operating lease obligations (b) 36.4 33.2 27.3 22.3 15.9 39.4 174.5 Purchase obligations (c) 269.5 28.9 2.2 0.8 0.8 1.8 304.0 Total $ 979.1 $ 127.4 $ 539.4 $ 81.2 $ 761.6 $ 1,661.6 $ 4,150.3 (a) Interest expense related to the credit facility, including facility fees, is assumed to accrue at the rates in effect at year-end 2023 and is assumed to be paid at the end of each quarter with the final payment in March 2026 when the credit facility expires.
Removed
(b) Includes imputed interest and the short-term portion of lease obligations.
Removed
(c) Purchase obligations generally include contractual obligations for the purchase of goods and services and capital commitments that are enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
Removed
Unrecognized tax benefits of $96.5 million and accrued interest and penalties on these tax matters of $36.9 million are not included in the table above.
Removed
The remaining unrecognized tax benefits and accrued interest and penalties are not included in the table above because $28.9 million is offset by deferred tax assets, and the remainder cannot be reasonably estimated to be settled in cash due to a lack of prior settlement history and offsetting credits.
Removed
At December 31, 2023, we were not required, and accordingly are not planning, to make any cash contributions to the domestic qualified pension plans for 2024. Our minimum funding requirements after 2023 as set forth by the Employee Retirement Income Security Act, are dependent on several factors.
Removed
Estimates beyond 2024 have not been provided due to the significant uncertainty of these amounts, which are subject to change until the Company’s pension assumptions can be updated at the appropriate times. In addition, certain pension contributions are eligible for future recovery through the pricing of products and services to the U.S.
Removed
Government under certain government contracts, therefore, future cash contributions are not necessarily indicative of the impact these contributions may have on our liquidity. We also have payments due under our other postretirement benefit plans. These plans are not required to be funded in advance but are pay as you go. See further discussion in Note 10 .
Removed
We monitor and manage our defined benefit pension plans obligation and may take additional actions to manage risk in the future. Operating Activities Net cash provided by operating activities was $836.1 million and $486.8 million in 2023 and 2022, respectively.
Removed
The higher cash provided by operating activities in 2023, compared with 2022 primarily resulted from a payment of $296.4 million to the Swedish Tax Authority in the first quarter of 2022, related to a disputed pre-acquisition 2018 tax reassessment issued to a FLIR subsidiary in Sweden as well as lower inventory purchases and stronger accounts receivable collections in 2023 compared with 2022.
Removed
These changes were partially offset by higher accounts payable and income tax payments in 2023 as compared with 2022.
Removed
Free cash flow (cash provided by operating activities less capital expenditures) and adjusted free cash flow (both non-GAAP measures) were as follows (in millions): Free Cash Flow(a) 2023 2022 Cash provided by (used in) operating activities $ 836.1 $ 486.8 Less: Capital expenditures for property, plant and equipment (114.9) (92.6) Free cash flow 721.2 394.2 Add back: Payment for acquisition-related tax matter — 296.4 Adjusted free cash flow $ 721.2 $ 690.6 27 Table of Contents (a) We define free cash flow as cash provided by operating activities (a measure prescribed by GAAP) less capital expenditures for property, plant and equipment.
Removed
Adjusted free cash flow eliminates the impact of cash paid for transaction related expenses for the FLIR acquisition on a net of tax basis as well as the payment of a pre-acquisition 2018 tax reassessment issued to a FLIR subsidiary in Sweden.
Removed
We believe that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing the company’s ability to generate cash flow. Investing Activities Net cash used in investing activities was $190.3 million and $175.4 million for 2023 and 2022, respectively.
Removed
Investing activities used cash for acquisitions and other investments of $77.7 million and $99.6 million in 2023 and 2022, respectively (see “Recent Acquisitions”). We funded the acquisitions from borrowings under our credit facilities and cash on hand. Cash flows relating to investing activities for capital expenditures.
Removed
Capital expenditures (in millions): 2023 2022 Digital Imaging $ 78.2 $ 63.9 Instrumentation 14.0 9.3 Aerospace and Defense Electronics 10.9 8.0 Engineered Systems 3.4 5.3 Corporate 8.4 6.1 $ 114.9 $ 92.6 During 2024, we plan to invest approximately $105 million in capital expenditures, principally to upgrade facilities and manufacturing equipment.
Removed
Financing Activities Financing activities reflected net payments from debt of $678.9 million in 2023 and $174.8 million in 2022. Fiscal years 2023 and 2022 reflect proceeds from the exercise of stock options of $45.4 million and $23.6 million, respectively.
Removed
During 2023, we repaid $125.0 million of amounts outstanding on its credit facility, the $300.0 million Fixed Rate Senior Notes due April 2023, and the remaining $245.0 million on its term loan due May 2026.
Removed
We also repurchased and retired $10.0 million of its Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt. During 2022, we repaid $185.0 million of debt. We made $110.0 million of floating rate debt payments on its term loan due May 2026.
Removed
We also repurchased and retired $75.0 million of its Fixed Rate Senior Notes due August 2030 and April 2031, recording a $10.6 million non-cash gain on the extinguishment of this debt.
Removed
Other Matters Income Taxes Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in both the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in determining the consolidated income tax expense.
Removed
The Company continually evaluates its global cash needs and has historically asserted that most of its unremitted foreign earnings are permanently reinvested and did not generally record deferred taxes on such amounts.
Removed
During 2022, the Company determined that it could no longer make the assertion foreign earnings are permanently reinvested, as cash from most foreign subsidiaries may be remitted without incurring additional U.S. federal income tax.
Removed
As a result, the Company changed its indefinite reinvestment assertion of unremitted earnings and certain other aspects of outside basis differences on a majority of its foreign subsidiaries. The Company continues to make an indefinite reinvestment assertion on the historic excess of the financial reporting bases over tax bases in its material foreign subsidiaries in Canada.
Removed
The unremitted earnings of the Company’s Canadian foreign subsidiaries held for indefinite reinvestment are used to finance Canadian operations and investments. The Company estimate that future cash generation from non-Canadian operations will be sufficient to meet future domestic cash requirements.

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