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What changed in Teledyne Technologies's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Teledyne Technologies's 2024 and 2025 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 2025 report.

+304 added−306 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in Teledyne Technologies's 2025 10-K

304 paragraphs added · 306 removed · 241 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur 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.
Biggest changeWe 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. 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 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.
We 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.
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.
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 the areas of legal and social responsibility, sustainability, and other governance matters. 5 Table of Contents Human Capital We consider our relations with our employees to be good.
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.
Such contracts are typically not subject to renegotiation 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.
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. 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.
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. 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 aerial and ground systems.
We do not expect the expiration or termination of these patents, patent applications and license agreements to have a material adverse effect on our business, results of operations or financial condition. Environment and Other Government Regulations Information with respect to environmental matters is set forth under “Other Matters – Environmental” of “ Item 7 .
We do not expect the expiration or termination of these patents, patent applications and license agreements to have a material adverse effect on our business, results of operations or financial condition. Environment and Other Government Regulations Information with respect to environmental matters is set forth under “ Other Matters – Environmental ” of “ Item 7 .
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.
The majority of our employees (including all full-time employees in the United States, Canada and the UK) 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.
This segment also designs and manufactures electrochemical energy systems and manufactures specialty electronics for demanding military applications. Our core business base includes National Aeronautics and Space Administration (“NASA”), the U.S. Department of Defense, the U.S. Department of Energy, foreign militaries and commercial customers. Customers We have a broad and diversified customer base in the various markets we serve.
This segment also designs and manufactures electrochemical energy systems and manufactures specialty electronics for demanding military applications. Our core business base includes the National Aeronautics and Space Administration (“NASA”), the U.S. Department of War, the U.S. Department of Energy, foreign militaries and commercial customers. Customers We have a broad and diversified customer base in the various markets we serve.
Marine Instrumentation We offer a variety of products designed for use in harsh underwater environments, instruments that measure currents and other physical properties in the water column, systems that create acoustic images of objects beneath the water’s surface, including the bottom of a body of water, instruments for navigation and sensors that determine the geologic structure below the bottom.
Marine Instrumentation We offer a variety of products designed for use in harsh underwater environments, instruments that measure currents and other physical properties in the water column, systems that create acoustic images of objects beneath the water’s surface, including the bottom of a body of water, instruments for navigation and sensors that determine the geological structure below the bottom.
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.
When contracts are terminated for convenience, we can recover costs incurred or committed, settlement expenses and profit on work completed prior to termination. During 2025 and 2024, contracts terminated by the U.S. Government did not materially impact our results of operations. Many of our U.S.
More information about our carbon footprint and GHG emission reduction efforts and goals, and the contributions that Teledyne products make to carbon monitoring and environmental and climate science, can be found in our CSR report.
More information about our carbon footprint and GHG emission reduction efforts and goals, and the contributions that Teledyne products make to carbon monitoring and environmental and climate science can be found in our CSR report and its supplements.
Competition Because of the diversity of products sold and the number of markets we serve, we encounter a wide variety of competitors, none of which we believe offer the same product and service lines or serve all of the same markets as we do.
Competition Because of the diversity of products we sell and the number of markets we serve, we encounter a wide variety of competitors, none of which we believe offer the same product and service lines or serve all of the same markets as we do.
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.
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 four acquisitions in 2025 and two acquisitions in 2024.
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.
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 light-emitting diode (“LED”) lighting sources.
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.
Our leadership in Universal Serial Bus (“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.
Going forward, we will continue to evaluate our emission reduction goals, while at the same time providing the tools and technologies enabling environmental science and climatology across the globe.
Going forward, we will continue to evaluate our emission reduction goals, while at the same time providing the tools and technologies that enable environmental science and climatology across the globe.
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.
Percentage of Total Net Sales Segment contribution to total net sales: 2025 2024 2023 Digital Imaging 52 % 54 % 56 % Instrumentation 24 % 24 % 23 % Aerospace and Defense Electronics 17 % 14 % 13 % Engineered Systems 7 % 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.
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 prime contracts and subcontracts were fixed-price type contracts, compared with 78% in 2024, 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.
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.
Our interposers and software options allow engineers to get a complete picture when testing the Peripheral Component Interconnect (“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.
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.
No commercial customer in 2025 or 2024 accounted for more than 10% of net sales for any of our segments or for the total Company. Total sales to international customers were $2,932.6 million in 2025 and $2,731.1 million in 2024.
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.
In 2025, our voluntary employee turnover was approximately 8%. As of December 28, 2025, the average years of service of our employees was approximately 10 years. Employees are vital to the success of our growth strategy.
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.
Of these net sales to international customers, our businesses in the United States accounted for $978.4 million in 2025 and $950.0 million in 2024. In both 2025 and 2024, we sold products to customers in over 100 foreign countries. Approximately 90% of our net sales to international customers during 2025 were made to customers in 30 foreign countries.
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.
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 64% 48.9 10.1 65% 33% 2% Europe, the Middle East and Africa 33% 44.6 10.4 70% 24% 6% Asia-Pacific Region 3% 43.7 8.5 67% 25% 8% We have a stable and long-tenured workforce.
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.
In 2025, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom (“UK”), Germany, Japan, China and France and represented approximately 20% of our total net sales.
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.
The financial results of these acquisitions have been included since the respective date of each acquisition. Our 2025 and 2024 acquisitions were within the Digital Imaging, Instrumentation, and Aerospace and Defense Electronics segments. See Note 3 for additional information about our 2025 and 2024 business acquisitions.
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”.
The CSR report together with its supplements, which is not incorporated by reference in this document, is available at the CSR link on our website at www.teledyne.com under the tab “Who We Are”.
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.
Government sales as a percent of total net sales 25.5 % 24.3 % 24.5 % Our principal U.S. Government customer is the U.S. Department of War (formerly referred to as the U.S. Department of Defense), with total net sales of $1,203.6 million and $1,062.7 million in 2025 and 2024, respectively. With the exception of the Engineered Systems segment, no U.S.
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.
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 environmental social and governance (“ESG”). We published supplements to the CSR report in 2023, 2024 and 2025, which included updated information.
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.
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.
In 2021, we compiled the first global inventory of our greenhouse gas (“GHG”) emissions (starting with fiscal year 2020) and have developed a GHG monitoring and management plan. We have set a goal to reduce our combined Scope 1 and Scope 2 in company operations, normalized for revenue, by 40% from 2020 levels by the end of 2040.
We have set a goal to reduce our combined Scope 1 and Scope 2 emissions in company operations, normalized for revenue, by 40% from 2020 levels by the end of 2040.
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.
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 Business Segments Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems. Additional financial information about our business segments can be found in Note 4 .
Subsequent to the end of the year, we completed one acquisition which will be included within the Instrumentation segment. See Note 18 for additional information. Our Business Segments Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems. Additional financial information about our business segments can be found in Note 4 .
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.
Applications of our instruments provide scientists with 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 warnings of hurricanes and tsunamis.
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.
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. In 2021, we compiled the first global inventory of our GHG emissions (starting with fiscal year 2020) and have developed a GHG monitoring and management plan.
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.
Government, including direct sales to agencies as a prime contractor and indirect sales as a subcontractor, was as follows (in millions): 2025 2024 2023 Digital Imaging $ 645.5 $ 557.1 $ 570.7 Instrumentation 125.5 123.5 95.9 Aerospace and Defense Electronics 420.1 307.5 330.3 Engineered Systems 368.3 389.0 384.8 Total U.S. Government sales $ 1,559.4 $ 1,377.1 $ 1,381.7 Total U.S.
At December 29, 2024, our total workforce consisted of approximately 14,900 employees in 36 countries.
At December 28, 2025, our total workforce consisted of approximately 15,800 employees in 38 countries.
Item 1. Business Who We Are Teledyne Technologies Incorporated is a Delaware corporation that provides enabling technologies for industrial growth markets that require advanced technology and high reliability. These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, deepwater oil and gas exploration and production, medical imaging and pharmaceutical research.
These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, deepwater oil and gas exploration and production, medical imaging and pharmaceutical research.
Finally, we manufacture fixed and portable industrial gas and flame detection instruments used in a variety of industries including petrochemical, power generation, oil and gas, food and beverage, mining and wastewater treatment.
Finally, we manufacture fixed and portable industrial gas and flame detection instruments used in a variety of industries, including petrochemical, power generation, oil and gas, food and beverage, mining, and wastewater treatment. 2 Table of Contents Test and Measurement Instrumentation Our test and measurement products provide capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly.
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.
Government program in 2025 or 2024 accounted for more than 10% of net sales for any of our segments or for the total Company. As described in greater detail under Item 1A. “ Risk Factors ”, there are risks associated with doing business with the U.S. Government. In 2025, approximately 81% of our U.S.
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Test and Measurement Instrumentation Our test and measurement products provide capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly.
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Item 1. Business Who We Are Teledyne Technologies Incorporated is a Delaware corporation that provides enabling technologies to sense, analyze and distribute information for industrial growth markets that require advanced technology and high reliability.
Removed
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.
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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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They operate around the clock, measuring greenhouse gases (“GHGs”) from space, precisely monitoring air and water quality throughout the world, and continuously profiling the Earth’s oceans.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks 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.
Biggest changeWe anticipate that future sales to international customers will continue to account for a significant and increasing percentage of our revenues. 8 Table of Contents Risks associated with international sales and operations include, but are not limited to: • political and economic instability; • 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 and sanctions related to Russia; • 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.
Uncertainty over budgets or priorities with the U.S. Presidential Administration could result in further delays in funding and the timing of awards, and changes in funded programs that could have a material impact on our revenues. Further, most of our U.S. Government contracts are subject to termination by the U.S.
Government could impact our revenues. Uncertainty over budgets or priorities with the U.S. Presidential Administration could result in further delays in funding and the timing of awards, and changes in funded programs that could have a material impact on our revenues. Further, most of our U.S. Government contracts are subject to termination by the U.S.
Government contracting businesses, like other government contractors, are subject to various audits, reviews and investigations (including private party “whistleblower” lawsuits) relating to our compliance with applicable federal and state laws and regulations. More routinely, the U.S. Government may audit the costs we incur on our U.S. Government contracts, including allocated indirect costs.
Our U.S. Government contracting businesses, like other government contractors, are subject to various audits, reviews and investigations (including private party “whistleblower” lawsuits) relating to our compliance with applicable federal and state laws and regulations. More routinely, the U.S. Government may audit the costs we incur on our U.S. Government contracts, including allocated indirect costs.
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.
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, including cybersecurity 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.
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, personnel 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.
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.
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. 13 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.
Any of the risk factors discussed below could by itself, or combined with other factors, materially and adversely affect our business, results of operations, financial condition, competitive position or reputation, including by materially increasing expenses or decreasing revenues, which could result in material losses or a decrease in earnings.
Any risk factor discussed below could by itself, or combined with other factors, materially and adversely affect our business, results of operations, financial condition, competitive position or reputation, including by materially increasing expenses or decreasing revenues, which could result in material losses or a decrease in earnings.
Our ability to make acquisitions depends on a number of factors, including the availability of potential acquisition candidates at reasonable prices, competition from other bidders, the ability to obtain regulatory approvals, including under merger control and foreign direct investment laws, and the availability of debt and equity financing, among other factors.
Our ability to make acquisitions depends on a number of factors, including the availability of potential acquisition candidates at reasonable prices, competition from other bidders, the ability to obtain regulatory approvals, including under increasingly stringent merger control and foreign direct investment laws, and the availability of debt and equity financing, among other factors.
Department of Defense, Department of Homeland Security, and Department of Energy regulations applicable to certain types of data residing on or transiting through our information systems, and these regulations have been and will continue to be incorporated into certain U.S. Government contracts that we hold.
Department of War, Department of Homeland Security, and Department of Energy regulations applicable to certain types of data residing on or transiting through our information systems, and these regulations have been and will continue to be incorporated into certain U.S. Government contracts that we hold.
The extent and duration of increased tariffs and the resulting impact on general economic conditions 9 Table of Contents and on our business are uncertain and depend on various factors, such as negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
However, there is no assurance we will not face product liability claims related to such products or that our exposure will not exceed the amounts for which we have liability coverage or protection. Failing to comply with increasing environmental regulations, as well as the effects of potential environmental liabilities, could have a material adverse financial effect on us.
However, there is no assurance we will not face product liability claims related to such products or that our exposure will not exceed the amounts for which we have liability coverage or protection. 15 Table of Contents Failing to comply with increasing environmental regulations, as well as the effects of potential environmental liabilities, could have a material adverse financial effect on us.
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.
Our Restated Certificate of Incorporation, our Fifth 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.
Disapproval could significantly impact cash flow, as up to 10% may be withheld from payments, as well as significantly impact potential contract awards and increase audit oversight of individual contract proposals. The Department of Defense as well as other U.S.
Disapproval could significantly impact cash flow, as up to 10% may be withheld from payments, as well as significantly impact potential contract awards and increase audit oversight of individual contract proposals. The Department of War as well as other U.S.
Failing to manage risks related to our use of third party intermediaries may reduce sales, increase expenses, and weaken our competitive position, and result in sanctions against us. 19 Table of Contents We may not be able to sell or reconfigure businesses, facilities or product lines that we determine no longer meet with our growth strategy or that should be consolidated.
Failing to manage risks related to our use of third party intermediaries may reduce sales, increase expenses, and weaken our competitive position, and result in sanctions against us. We may not be able to sell or reconfigure businesses, facilities or product lines that we determine no longer meet with our growth strategy or that should be consolidated.
In addition, we could expend substantial amounts defending against such charges and in damages, fines and penalties if such charges were proven or were to result in negotiated settlements. Routine audits by U.S. Government agencies of Teledyne’s various procurement and accounting systems have the potential to result in disapproval of the audited systems by the administrative contracting officer.
In addition, we could expend substantial amounts defending against such charges or face damages, fines and penalties if such charges were proven. Routine audits by U.S. Government agencies of Teledyne’s various procurement and accounting systems have the potential to result in disapproval of the audited systems by the administrative contracting officer.
Security breaches also could result in a violation of applicable U.S. and international privacy and other laws, including GDPR, Health Insurance Portability and Accountability Act, Payment Card Industry Data Security Standard, and California Consumer Privacy Act, or SEC regulations, and subject us to private consumer or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.
Security breaches also could result in a violation of applicable U.S. and international privacy and other laws, including General Data Protection Regulation, Health Insurance Portability and Accountability Act, Payment Card Industry Data Security Standard, and California Consumer Privacy Act, or SEC regulations, and subject us to private consumer or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.
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.
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.
Starting in December 2022, a series of direct-action protests by political extremists on several of our facilities in the United Kingdom have resulted in trespass and vandalism and in some cases caused damage to our facilities and interrupted some productions lines for a period of time.
Starting in December 2022, a series of direct-action protests by political extremists on several of our facilities in the UK have resulted in trespass and vandalism and in some cases caused damage to our facilities and interrupted some productions lines for a period of time.
In addition, because of the prominent “Teledyne” name, we may continue to be mistakenly joined in lawsuits involving a company or business that was not assumed by us as part of our 1999 spin-off. To date, we have not incurred material liabilities in connection with these lawsuits.
In addition, because of the prominent “Teledyne” name, we may continue to be mistakenly joined in lawsuits involving a company or business that was not assumed by us as part of our 1999 spin-off from Allegheny Teledyne Incorporated. To date, we have not incurred material liabilities in connection with these lawsuits.
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.
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 R&D and other strategic initiatives or otherwise adversely affect our business. We are subject to U.S.
Management’s Discussion and Analysis of Operations and Financial Condition” and Note 3 . Risks related to climate change Climate change may disrupt or adversely impact our business. Climate change may have an increasingly adverse impact on our business and those of our customers, partners and suppliers.
Management’s Discussion and Analysis of Operations and Financial Condition” and Notes 3 and 6 . Risks related to climate change Climate change may disrupt or adversely impact our business. Climate change may have an increasingly adverse impact on our business and those of our customers, partners and suppliers.
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; • instability in the Middle East and oil-producing regions of Latin America, including Venezuela; • 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.
We have in the past experienced cyber-attacks including some loss of confidentiality and some loss of availability, although these attacks have not had material impact on our business. Our customers and suppliers have also experienced successful cyber-attacks, which in some cases resulted in payments by or to us being unlawfully diverted.
We have in the past experienced cyber-attacks including some loss of confidentiality and some loss of availability and integrity, although these attacks have not had material impact on our business. Our customers and suppliers have also experienced successful cyber-attacks, which in some cases resulted in payments by or to us being 16 Table of Contents unlawfully diverted.
Effective April 24, 2022, the United States Department of State’s Office of Defense Trade Controls Compliance (“DDTC”) closed the four-year Consent Agreement that had been entered into by FLIR Systems, Inc., to resolve various export allegations under the International Traffic in Arms Regulations (“ITAR”).
Effective April 24, 2022, the United States Department of State’s Office of Defense Trade Controls Compliance (“DDTC”) closed the four-year Consent Agreement that had been entered into by FLIR Systems, Inc., to resolve various export allegations under the International Traffic in Arms Regulations (“ITAR”). Teledyne FLIR has enhanced its trade compliance program.
The inconsistent international, regional and/or national requirements associated with climate change regulations also create economic and regulatory uncertainty. 15 Table of Contents Investor sentiment towards climate change and sustainability could adversely affect our business and the market price for our common stock.
The inconsistent international, regional and/or national requirements associated with climate change regulations also create economic and regulatory uncertainty. Investor sentiment towards climate change and sustainability could adversely affect our business and the market price for our common stock.
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.
We cannot ensure that, for 2026 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.
Uncertainty around whether and the extent to which new tariffs will be imposed could also impact our supply chain and the cost of our products. We have significant operations in Canada and in member states of the European Union, which could be negatively impacted by a trade war with the United States.
Uncertainty about whether and the extent to which new tariffs will be imposed could also impact our supply chain and the cost of our products. We have significant operations in Canada and in member states of the EU, which could be negatively impacted by a trade war with the United States.
Changes in production rates for major aircraft manufacturers, like Boeing and Airbus, impact our commercial aerospace businesses. Boeing and Airbus recently have struggled to meet delivery targets due to supply chain issues and other challenges.
Changes in production rates for major aircraft manufacturers, like Boeing and Airbus, impact our commercial aerospace businesses. Boeing and Airbus have in the recent past struggled to meet delivery targets due to supply chain issues and other challenges.
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 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 28, 2025, we had $2,488.0 million total outstanding indebtedness in senior notes. As of December 28, 2025, no borrowings were outstanding under our $1.20 billion credit facility.
Furthermore, sole source supply is more common among our businesses that are heavily involved in research and development because there can be few suppliers in the world capable of producing the products or providing the services with the right highly specialized technology.
Furthermore, sole source supply is more common among our businesses that are heavily involved in R&D because there can be few suppliers in the world capable of producing the products or providing the services with the right highly specialized technology.
Government, and, accordingly, we have the risk that funding for our existing contracts may be canceled or diverted to other uses or delayed or that funding for new programs will not be available. Similarly, sales to the European defense market depends on continued funding from European governments. We perform work on a number of contracts with the U.S.
Government contracts depends on the continued availability of funding from the U.S. Government, and, accordingly, we have the risk that funding for our existing contracts may be canceled or diverted to other uses or delayed or that funding for new programs will not be available. Similarly, sales to the European defense market depends on continued funding from European governments.
If European government funding on defense programs declines, or if defense spending priorities of the North Atlantic Treaty Organization (“NATO”)-member countries change with respect to Ukraine, existing and potential future sales would be negatively impacted. 11 Table of Contents Our U.S.
If European government funding on defense programs declines, or if defense spending priorities of the North Atlantic Treaty Organization (“NATO”)-member countries change with respect to Ukraine, existing and potential future sales would be negatively impacted.
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.
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.
Foreign 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.
Foreign 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; • existing 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.
These events could result in potential damage to our physical assets as well as disruptions in manufacturing activities. Severe weather and wildfire events may impair the ability of our employees to work effectively.
These events could result in potential damage to our physical assets and may result in disruptions in manufacturing activities and impair the ability of our employees to work effectively.
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.
If any of our facilities were to experience a catastrophic earthquake, wildfire, hurricane, storm, tornado or other natural disaster, or if Teledyne’s major facilities 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.
These factors have negatively impacted our sales to Airbus and Boeing and any future pauses or reductions in manufacturing could negatively impact our business. 13 Table of Contents A change in policy direction related to environmental regulations and green energy could negatively impact demand for our monitoring instruments and energy systems products.
Any future pauses or reductions in manufacturing from Boeing or Airbus could negatively impact our business. 12 Table of Contents A change in policy direction related to environmental regulations and green energy could negatively impact demand for our monitoring instruments and energy systems products.
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.
Additionally, leveraging AI capabilities to potentially improve internal functions and operations presents further risks and challenges. 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.
Continued economic slowdown in China may adversely affect us. Our net sales to China-based customers represented approximately 4% of total revenues in 2024 and 2023, respectively. Economic growth in China has slowed since the COVID pandemic.
An economic slowdown in China may adversely affect us. Our net sales to China-based customers represented approximately 4% of total revenues in 2025 and 2024, respectively. Economic growth in China has slowed since the coronavirus disease (“COVID”) pandemic.
Our Fourth Amended and Restated Bylaws (“Bylaws”) designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain lawsuits between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum that it finds favorable for such lawsuits and make it more costly for our stockholders to bring such lawsuits, which may have the effect of discouraging such lawsuits.
These provisions may prevent or discourage attempts to acquire our Company. 18 Table of Contents Our Fifth Amended and Restated Bylaws (“Bylaws”) designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain lawsuits between us and our stockholders, which could limit our stockholders’ ability to obtain a judicial forum that it finds favorable for such lawsuits and make it more costly for our stockholders to bring such lawsuits, which may have the effect of discouraging such lawsuits.
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.
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.
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.
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.
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.
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.
Regulatory changes or failure by a business to meet applicable requirements could disrupt that business or force a closure or relocation of the business. Our products are subject to various regulations that prohibit or restrict the use of certain hazardous substances.
Regulatory changes or failure by a business to meet applicable requirements could disrupt that business or force a closure or relocation of the business. Our products are subject to various regulations that prohibit or restrict the use of certain hazardous substances. Future hazardous substance restrictions or prohibitions may limit our ability to market some products in certain countries.
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.
We cannot provide assurances as to our common stock price, which during fiscal 2025 ranged from a low of $419.00 to a high of $595.99. 19 Table of Contents Item 1B. Unresolved Staff Comments None.
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.
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.
The skilled manufacturing and specialized engineering labor market is currently very competitive. A significant portion of our revenue depends on the availability of a highly skilled technical workforce. It is critical that we retain, develop, and grow our workforce to protect future revenue and improve our competitive advantage. We also have a mature workforce.
A significant portion of our revenue depends on the availability of a highly skilled technical workforce, the market for which is competitive. It is critical that we retain and develop our workforce to protect future revenue and improve our competitive advantage. 17 Table of Contents We also have a mature workforce.
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.
On December 28, 2025, Teledyne’s goodwill was $8,687.6 million and net acquired intangible assets were $2,100.1 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.
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.
Defending against malicious use of these new disruptive technologies could result in significant expense. Issues in the development and use of AI may result in reputational harm or liability, and failure to introduce new and innovative products that have AI capabilities could put us at a competitive disadvantage.
Further escalation of the “trade war” between the United States and China, or new trade wars between the United States and other countries, could result in continued or increased tariffs. New and expanding economic sanctions and export restrictions could impact our ability to sell our products. Recent export restrictions have had a significant impact on business.
Further escalation of the “trade war” between the United States and China, or new trade wars between the United States and other countries, could result in continued or increased tariffs. Efforts to avoid tariffs are also under increased scrutiny. New and expanding economic sanctions and export restrictions could impact our ability to sell our products.
We have been experiencing increased competition for some of our key products. Furthermore, some of our patents have expired or are expiring, which could open up further competition. Additionally, some of our customers have been developing competing products or electing to vertically integrate and replace our products with their own.
Furthermore, some of our patents have expired or are expiring, which could open up further competition. Additionally, some of our customers have been developing competing products or electing to vertically integrate and replace our products with their own. Low-cost competition from China and other developing countries could also result in decreased demand for our products.
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.
In order to remain competitive, we must make substantial investments in research and development (“R&D”) of new or enhanced products and continuously upgrade our process technology and manufacturing capabilities. We may be unable to fund all of our R&D and capital investment needs.
We have also outsourced from time to time the manufacturing of certain parts, components, subsystems and even finished products to single or limited sources, including international sources.
Both factors limit the ability to rapidly address supply chain issues when they occur. We have also outsourced from time to time the manufacturing of certain parts, components, subsystems and even finished products to single or limited sources, including international sources.
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.
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; however, Teledyne continues to monitor the potential impact of the U.S. corporate minimum tax. Many other jurisdictions have also enacted corporate global 15% minimum tax rules, which apply to Teledyne.
Many of our production facilities and our headquarters are located in California and thus are in areas with above average seismic activity and may also be at risk of damage due to wildfire or mudslides.
Many of our production facilities and our headquarters are located in California and thus are in areas with above average seismic activity and may also be at risk of damage due to wildfire or mudslides. 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.
We may not be able to realize efficiencies and cost savings from our consolidation activities. There is no assurance that our efforts will be successful.
We may not be able to realize efficiencies and cost savings from our consolidation activities.
Presidential administration announced significant new tariffs on foreign imports into the United States, specifically from Mexico and Canada, all of which were subsequently postponed prior to becoming effective, and China, and has proposed additional new tariffs that may be implemented in the future, including on member states of the European Union and on commodities like steel, aluminum and titanium.
Presidential administration has announced significant new tariffs on foreign imports into the United States, particularly with respect to imports from China, and has proposed additional new tariffs that may be implemented in the future, including on member states of the European Union (“EU”) and on Canada and Mexico.
We have also entered into Change in Control Severance Agreements with seven members of our current management, which could have an anti-takeover effect. These provisions may prevent or discourage attempts to acquire our Company.
We have also entered into Change in Control Severance Agreements with eight members of our current management, which could have an anti-takeover effect.
The cybersecurity requirements also impact our supply base which could impact cost, schedule and performance on programs if suppliers do not meet the requirements and therefore, do not qualify to support the programs. We also are required to procure certain materials and parts from supply sources approved by the U.S. Government.
The cybersecurity requirements also impact our supply base which could impact cost, schedule and performance on programs if suppliers do not meet the requirements and therefore, do not qualify to support the programs.
We have chosen to perform our annual impairment reviews of goodwill and other indefinite-lived intangible assets during the fourth quarter of each fiscal year. We are also required to test goodwill for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our enterprise fair value below its book value.
We are also required to test goodwill for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our enterprise fair value below its book value.
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.
In response, China has unveiled restrictions on exports from China of certain materials and components, including gallium and germanium and which are used in semiconductor manufacturing and permanent magnets and which have impacted 9 Table of Contents the production and pricing of some of our digital imaging and aerospace and defense products.
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.
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.
Any future indebtedness incurred under our credit facility will expose us to interest rate risk. We may not be able to service our debt obligations.
Any future indebtedness incurred under our credit facility will expose us to interest rate risk. We may not be able to service our debt obligations, which could have a material and adverse effect on our business, financial condition or operating results.
Performance under government contracts has inherent risks that could have a material effect on our business, results of operations, and financial condition. Government contracts are conditioned upon the continuing availability of Congressional appropriations, and the failure of Congress to appropriate funds for programs in which we participate could negatively affect our results of operations. U.S.
Government contracts are conditioned upon the continuing availability of Congressional appropriations, and the failure of Congress to appropriate funds for programs in which we participate could negatively affect our results of operations. U.S. 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.
If we are unable to meet our debt service obligations or should we fail to comply with our financial and other negative covenants contained in the agreements governing our indebtedness, we may be required to refinance all or part of our debt, sell strategic assets at unfavorable prices, incur additional indebtedness or issue common stock or other equity securities.
If we are unable to meet our debt service obligations we may be required to refinance all or part of our debt, sell strategic assets at unfavorable prices, incur additional indebtedness or issue common stock or other equity securities and we may not be able to take such actions on terms acceptable to us and in amounts sufficient to meet our needs.
The administration has announced additional tariffs on steel and aluminum imports and has threatened to raise tariffs on semiconductors, pharmaceuticals and other products. High tariffs generally increase the cost of materials for our products, which could result in our products becoming less competitive or generating lower margins.
High tariffs generally increase the cost of materials for our products, which could result in our products becoming less competitive or generating lower margins.
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.
The agreements we entered into with respect to our indebtedness 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. Our ability to comply with these negative covenants can be affected by events beyond our control.
If we are unable to meet the sustainability standards set by these investors, or if we are unable meet GHG reduction targets we communicate to the public, we may lose investors, our stock price may be negatively impacted, and our reputation may be negatively affected.
If we are unable to meet the sustainability standards set by these investors, or if we are unable to meet GHG reduction targets we communicate to the public, we may lose investors, our stock price may be negatively impacted, and our reputation may be negatively affected. 14 Table of Contents Risks related to Legal and Compliance Matters Adverse findings in matters related to export control practices, including FLIR’s historical practices, could materially impact us.
Presidential Administration for various defense and NASA programs could impact our Engineered Systems, Aerospace and Defense Electronics and Digital Imaging segments. It is also not uncommon for the U.S. Department of Defense to delay the timing of awards or change orders for major programs for six to twelve months. These delays by the U.S. Government could impact our revenues.
Budget cuts at NASA have negatively impacted the revenues of Engineered Systems in 2025 and are expected to further impact revenues in 2026. It is also not uncommon for the U.S. Department of War to delay the timing of awards or change orders for major programs for six to twelve months. These delays by the U.S.
However, an unfavorable outcome could result in substantial fines and penalties or loss or suspension of export privileges or of particular authorizations that could be material to our financial position, results of operations or cash flows in and following the period in which such outcome becomes estimable or known.
We have made voluntary disclosures to export authorities in jurisdictions outside the United States for certain potential violations of local export laws. An unfavorable outcome could result in substantial fines and penalties or loss or suspension of export privileges or of particular authorizations that could be material to our financial position, results of operations or cash flows.
Higher interest rates may reduce capital spending by our existing and potential customers, which could result in lower sales of our products. 7 Table of Contents Increased prices for components and raw materials used in our products and higher labor and shipping costs could adversely impact our profitability.
Higher interest rates and other factors could cause our customers to reduce capital spending, which could adversely impact us. Higher interest rates may reduce capital spending by our existing and potential customers, which could result in lower sales of our products.
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.
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. We may not have sufficient resources to fund all future research and development and capital expenditures.
Government contracting business is subject to government contracting regulations, including increasingly complex regulations on cybersecurity, and our failure to comply with such laws and regulations could harm our operating results and prospects. Our U.S.
New EU cybersecurity requirements are expected to come into effect in 2026, which may impact our ability to market our products and services in the EU. Our U.S. Government contracting businesses are subject to government contracting regulations, including increasingly complex regulations on cybersecurity, and our failure to comply with such laws and regulations could harm our operating results and prospects.
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.
In both 2025 and 2024, we sold products to customers in over 100 foreign countries. In 2025, the top five countries for sales to international customers, ranked by net sales, were the UK, Germany, Japan, China and France and represented approximately 20% of our total net sales.
If we are unable to increase our product prices enough to offset these increased costs, our gross margins and profitability could decrease, perhaps significantly over a sustained period of time.
If we are unable to increase our product prices enough to offset these increased costs, our gross margins and profitability could decrease, perhaps significantly over a sustained period of time. 7 Table of Contents We have experienced component and raw material shortages in the past that impacted our ability to manufacture and ship all the product for which we have demand, and these constraints may continue in the future.
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.
The credit ratings of Teledyne’s debt could be subject to a downgrade below investment grade which could result in higher borrowing costs and more restrictive debt covenants in the future. Higher tax rates may harm our results of operations and cash flow.
The new Presidential Administration has signaled its intent to scale back many of these regulations, which could result in decreased demand for our products. The new Presidential Administration has also signaled its intent to roll back green energy initiatives, which could harm our energy systems business that manufactures hydrogen-based energy generation systems.
The Presidential Administration has also rolled back green energy initiatives, which could harm our energy systems business that manufactures hydrogen-based energy generation systems and which also is likely to reduce the number of federally funded hydrogen generation projects, which lowers demand for our process instrumentation products.
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.
The systemic cybersecurity risk environment is elevated, in part by geopolitical conflicts and tensions, including the war between Ukraine and Russia, and increased supply chain-related cyber-risks. 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.
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.
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. Ongoing instability in the Middle East and the conflict between Russia and Ukraine could result in supply chain and other business disruptions.
For additional discussion of business acquisition, see the discussion under “Item 7 . Management’s Discussion and Analysis of Operations and Financial Condition” and Note 3 . Higher interest rates and other factors could cause our customers to reduce capital spending, which could adversely impact us.
For additional discussion of business acquisition, see the discussion under “Item 7 . Management’s Discussion and Analysis of Operations and Financial Condition” and Note 3 . Increased prices for components and raw materials used in our products and higher labor and shipping costs could adversely impact our profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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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.
Biggest changeOur Vice President of Information Technology and Chief Information Officer (“CIO”) and our Chief Information Security Officer (“CISO”) presents to the Audit Committee on cybersecurity status, outcomes and risks at each quarterly meeting. These presentations include assessments of cyber risks and threats landscape, updates on incidents, and our investments and plans in cybersecurity risk mitigation and governance.
While prior incidents have not materially affected our business, results of operations or financial condition, there is no guarantee that a future cyber incident would not affect our business strategy, results of operations or financial condition. See Item 1A . Risk Factors for more information on our cybersecurity risks.
While prior incidents have not materially affected our business, results of operations or financial condition, there is no guarantee that a future cyber-incident would not affect our business strategy, results of operations or financial condition. See Item 1A . “ Risk Factors ” for more information on our cybersecurity risks.
The Chair of the Enterprise Risk Management Committee periodically reports to the Audit Committee and the Board of Directors on the progress and results of the actions taken by the committee. Our management team, including our Enterprise Risk Management Committee, CIO and CISO, is responsible for assessing and managing our cybersecurity risks and threats.
The Chair of the Enterprise Risk Management Committee periodically reports to the Audit Committee and the Board on the progress and results of the actions taken by the committee. Our management team, including our Enterprise Risk Management Committee, CIO and CISO, is responsible for assessing and managing our cybersecurity risks and threats.
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
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.
We work with government, customer, industry and/or supplier partners, such as the National Defense Cyber Alliance to gather and develop best practices and share information to address cyber threats, and we contribute to overall cyber-safety of the defense industrial base through contributions of threat intelligence to law enforcement agencies.
We work with government, customer, industry and/or supplier partners, such as the National Defense Cyber Alliance and the Canadian Center for Cybersecurity, to gather and develop best practices and share information to address cyber threats, and we contribute to overall cyber-safety of the defense industrial base through contributions of threat intelligence to law enforcement agencies.
As such, our CISO has extensive experience and expertise in developing, implementing, and operating security policies and procedures covering our protective defenses of our network and critical data.
As such, our CISO has substantial experience in developing, implementing and operating security policies and procedures covering our protective defenses of our network and critical data.
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.
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 20 Table of Contents Counsel, Chief Compliance Officer and Secretary, Associate General Counsel and Senior Vice President, Human Resources, Vice President and CIO, CISO, and individuals representing the business operations.
Risk Management and Strategy Our cybersecurity strategy prioritizes risk identification, quantification, communication, and mitigation, and this strategy is aligned with our overall Enterprise Risk Management strategy. Our strategy focuses on the deterrence, early detection, interception, and interruption of potential cyber-attacks. We strive to continuously monitor, evaluate, prioritize and mitigate vulnerabilities and attacks.
Risk Management and Strategy Our cybersecurity risk management strategy prioritizes risk identification, quantification, communication and mitigation, and this strategy is aligned with our overall Enterprise Risk Management strategy. Our strategy focuses on the deterrence, early detection, interception, and interruption of potential cyber-attacks early, before loss or damage occurs.
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.
Item 1C. Cybersecurity We face multiple cybersecurity threats, including ransomware, advanced persistent threats from state-affiliated groups, insider threats, business e-mail compromise fraud attempts including variants using other messaging systems, and partner compromises. We have experienced cyber-attacks in the past and may experience cybersecurity incidents going forward. Our customers, development partners and suppliers face similar cybersecurity threats.
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.
At the management level, our Enterprise Risk Management Committee identifies and communicates company-wide risks, including those related to cybersecurity.
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 engage third-party expertise and utilize threat intelligence feeds to supplement and enhance our internal team of cybersecurity professionals. We deploy layered defenses, and connect them, to allow automated responses to urgent threats. This connected defensive structure aims to provide continued protection for mobile computing systems when they are outside the Company perimeter.
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.
We conduct active threat hunting and vulnerability scanning to anticipate and pro-actively mitigate risks, prior to alarms. We utilize third-party risk scoring services to quantify cybersecurity risks associated with our supply chain, service providers and potential acquisition candidates. We also use cybersecurity vetting procedures to maintain lists of approved and disallowed applications and services.
“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.
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.
Our policies and processes are compliant with applicable control frameworks provided by the U.S. National Institute of Standards and Technology (“NIST”) and other applicable standards. Our employees are required to take cybersecurity-related training which promotes awareness of how to detect and respond to cybersecurity threats.
We strive to routinely monitor, evaluate, prioritize and mitigate vulnerabilities, in order to deter attacks. Our policies and processes are compliant with applicable control frameworks provided by the U.S. National Institute of Standards and Technology (“NIST”), the Cybersecurity Maturity Model Certification (“CMMC”) and other applicable standards. Where appropriate, we obtain certifications including ISO27001, and Cyber Essentials Plus.
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Our employees are required to take cybersecurity-related training which promotes awareness of how to detect and respond to cybersecurity threats. Additional training may be provided following near-miss events or when otherwise indicated. In certain circumstances, we require certain development partners and suppliers to conduct similar training programs, to reduce the risk of partner compromise or third-party risk exposure arising.
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Teledyne subscribes to third-party cyber-risk reporting services for use in third-party cyber-risk management. Teledyne provides training for its procurement, contracts and staff on the use of these reports to help identify and manage cyber threat exposure associated with suppliers, contractors and other business partners.
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We endeavor to keep our systems secure and manage vulnerabilities, including those introduced by generative AI, to ensure that our attack surface is managed and kept within acceptable risk tolerances. 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.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeAt December 28, 2025, 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 UK and the United States ◦ The United States includes principal operating facilities in California, Indiana, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, Oklahoma, Oregon, Pennsylvania and Tennessee • Instrumentation - Denmark, France, Iceland, UK 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 UK and the United States ◦ The United States includes principal operating facilities in California, Illinois, Ohio and Texas • Engineered Systems - the United States ◦ The United States includes principal operating facilities in Alabama, Maryland and Tennessee Subsequent to the end of fiscal year 2025, we completed one acquisition that is part of the Instrumentation segment, with principal operating facilities in the UK.
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 2. Properties At December 28, 2025, we had 81 principal operating facilities in 20 states and 11 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 changeShare 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.
Biggest changeShare Repurchase Program The following table sets forth the shares repurchased during each fiscal month during the fourth quarter of 2025: Fiscal Month 2025 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 29 – November 2 70,618 $ 523.91 70,618 $ 1,963.0 November 3 – November 30 506,436 $ 505.47 506,436 $ 1,707.1 December 1 – December 28 211,050 $ 506.96 211,050 $ 1,600.0 Total 788,104 $ 507.52 788,104 (a) In July 2025, the Company’s Board approved a new stock repurchase program authorizing the Company to repurchase up to $2.0 billion of the Company’s common stock.
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]
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 2026 Proxy Statement under the caption and “Securities Authorized for Issuance Under Equity Compensation Plans” and is incorporated herein by reference. Item 6. [Reserved]
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.
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 11, 2026, there were 1,898 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeAdditional 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.
Biggest changeAdditional financial information about our business segments can be found in Note 4 . 2025 compared with 2024 Net sales (dollars in millions) 2025 2024 $ Change % Change Digital Imaging $ 3,163.9 $ 3,070.8 $ 93.1 3.0 % Instrumentation 1,457.1 1,382.6 74.5 5.4 % Aerospace and Defense Electronics 1,058.7 776.8 281.9 36.3 % Engineered Systems 435.7 439.8 (4.1) (0.9) % Total net sales $ 6,115.4 $ 5,670.0 $ 445.4 7.9 % Results of operations (dollars in millions) 2025 2024 $ Change % Change Operating income (loss): Digital Imaging $ 528.2 $ 442.0 $ 86.2 19.5 % Instrumentation 400.4 370.3 30.1 8.1 % Aerospace and Defense Electronics 262.1 221.7 40.4 18.2 % Engineered Systems 46.6 32.9 13.7 41.6 % Corporate expense (87.5) (77.8) (9.7) 12.5 % Total operating income (loss) 1,149.8 989.1 160.7 16.2 % Interest and debt expense, net (59.6) (57.9) (1.7) 2.9 % Non-service retirement benefit income 10.9 10.8 0.1 0.9 % Gain (loss) on debt extinguishment 15.0 — 15.0 * Other income (expense), net (21.6) (4.1) (17.5) 426.8 % Income (loss) before income taxes 1,094.5 937.9 156.6 16.7 % Provision (benefit) for income taxes 198.8 117.2 81.6 69.6 % Net income (loss) including noncontrolling interest 895.7 820.7 75.0 9.1 % Less: Net income (loss) attributable to noncontrolling interest 0.9 1.5 (0.6) (40.0) % Net income (loss) attributable to Teledyne $ 894.8 $ 819.2 $ 75.6 9.2 % * Not meaningful Net Sales Net sales increased across three of our four business segments.
Revenue recognized at a point in time relates primarily to the sale of standard or minimally customized products, with control transferring to the customer generally upon the transfer of title. See Note 5 for additional revenue recognition disclosures.
Revenue recognized at a point in time primarily relates to the sale of standard or minimally customized products, with control transferring to the customer generally upon the transfer of title. See Note 5 for additional revenue recognition disclosures.
Based on current information, we do not believe that future environmental costs, in excess of those already accrued, will materially and adversely affect our financial condition or liquidity. See also our environmental risk factor disclosure in Item 1A . Risk Factors as well as additional discussion in Notes 2 and 1 7. U. S.
Based on current information, we do not believe that future environmental costs, in excess of those already accrued, will materially and adversely affect our financial condition or liquidity. See also our environmental risk factor disclosure in Item 1A . “ Risk Factors ” as well as additional discussion in Notes 2 and 1 7. U. S.
Our primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings, primarily achieved through the following: • We utilize foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in Canadian dollars for our Canadian companies, and in British pounds for our U.K. companies.
Our primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and reduce the volatility of reported earnings, primarily achieved through the following: • We utilize foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in Canadian dollars for our Canadian companies, and in British pounds for our U.K. companies.
While the company’s growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management and customers and achieve identified financial and operating synergies.
While our growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management and customers, and achieve identified financial and operating synergies.
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.
Estimates beyond 2026 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.
During its fourth quarter annual assessment and as part of finalizing its strategic plan in December 2024, the Company also included an additional 50 basis points of risk premium in the discount rate when considering FLIR’s historical and expected future performance of achieving sales forecast projections.
During its fourth quarter annual assessment and as part of finalizing its strategic plan in December 2025, the Company also included an additional 50 basis points of risk premium in the discount rate when considering FLIR’s historical and expected future performance of achieving sales forecast projections.
We do not believe that any discrete event or adjustment to an individual contract within the aggregate changes in contract estimates for 2024 and 2023 was material to the consolidated statement of income (loss) for such annual periods.
We do not believe that any discrete event or adjustment to an individual contract within the aggregate changes in contract estimates in 2025 and 2024 was material to the consolidated statement of income (loss) for such annual periods.
These events or circumstances could include a significant change in the business climate, including a significant sustained decline in an entity’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment.
These events or circumstances could include a significant change in the business climate, including a significant sustained decline in an entity’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. 35 Table of Contents We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment.
Government Contracts We perform work on a number of contracts with the U.S. Department of Defense and other agencies and departments of the U.S. Government including sub-contracts with government prime contractors. Sales under these contracts with the U.S. Government, which included contracts with the U.S.
Government Contracts We perform work on a number of contracts with the U.S. Department of War and other agencies and departments of the U.S. Government including sub-contracts with government prime contractors. Sales under these contracts with the U.S. Government, which included contracts with the U.S.
Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained beginning on page 7 of this Form 10-K under the caption “Risk Factors; Cautionary Statement as to Forward-Looking Statements.” Forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believes” or “expect”, that convey the uncertainty of future events or outcomes.
Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained beginning on page 7 of this Form 10-K under the caption “Risk Factors” Forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believes” or “expect”, that convey the uncertainty of future events or outcomes.
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.
These unrecognized tax benefits, accrued interest and penalties are not included in the table above because $10.9 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.
The transaction price in these arrangements may include estimated amounts of variable consideration, including award fees, incentive fees, contract amounts not yet funded, or other provisions that can 34 Table of Contents either increase or decrease the transaction price.
The transaction price in these arrangements may include estimated amounts of variable consideration, including award fees, incentive fees, contract amounts not yet funded, or other provisions that can either increase or decrease the transaction price.
The royalty rate was driven by historical and estimated future profitability of the underlying FLIR business. The royalty rate may be impacted by significant adverse changes in long-term operating margins.
The royalty rate was driven by historical and estimated future profitability of the underlying FLIR business. The royalty rate may be impacted by significant adverse 36 Table of Contents changes in long-term operating margins.
At the annual assessment date, the FLIR indefinite-lived trademark had a carrying value of $685.3 million and a fair value of $635.8 million, or approximately 7% below its carrying value, and we recorded a $49.5 million non-cash impairment charge in fiscal year 2024, which is included within impairment of acquired intangible assets on the consolidated statement of income (loss).
At the annual assessment date, the FLIR indefinite-lived trademark had a carrying value of $635.8 million and a fair value of $657.4 million, or approximately 3% above its carrying value. In fiscal year 2024, we recorded a $49.5 million non-cash impairment charge, which is included within impairment of acquired intangible assets on the consolidated statement of income (loss).
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.
Our credit facility requires us to comply with various financial and operating covenants and at December 28, 2025, we were in compliance with these covenants and had a significant amount of margin between required financial covenant ratios and our actual ratios.
An increase of 100 basis points in our nominal tax rate would have resulted in additional income tax provision for the fiscal year ended December 29, 2024, of $9.4 million. Deferred tax assets and liabilities arise due to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax carryforwards.
An increase of 100 basis points in our nominal tax rate would have resulted in additional income tax provision for the fiscal year ended December 28, 2025, of $10.9 million. Deferred tax assets and liabilities arise due to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax carryforwards.
Using complementary technology across our businesses and through targeted research and development, we seek to create new products to grow our company and expand our addressable markets. We continually evaluate our businesses to ensure that they are aligned with our strategy.
Using complementary technology across our businesses and through targeted R&D, we seek to create new products to grow our company and expand our addressable markets. We continually evaluate our businesses and products to ensure that they are aligned with our strategy.
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.
Information about results of operations and financial conditions for 2023 and 2024 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 29, 2024. 22 Table of Contents Strategy Our strategy continues to emphasize growth in our four business segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems.
We regularly assess the adequacy of our pre-existing warranty liabilities and adjust amounts as necessary based on a review of historical warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year. See further discussion in Note 7 .
We regularly assess the adequacy of our pre-existing warranty liabilities and adjust amounts as necessary based on a review of historical warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year.
To the extent that the final tax outcome is 36 Table of Contents different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.
To the extent that the final tax outcome is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.
Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of our impairment analysis. As of December 29, 2024, we had ten reporting units for goodwill impairment testing.
Due to the many variables inherent in the estimation of a reporting unit’s fair value and the relative size of our recorded goodwill, differences in assumptions may have a material effect on the results of our impairment analysis. As of December 28, 2025, we had eleven reporting units for goodwill impairment testing.
As of December 29, 2024, we had $793.1 million of indefinite-lived trademark intangibles which were subject to an annual impairment test in the fourth quarter of 2024. With the exception of the FLIR indefinite-lived trademark, the estimated fair value of all material indefinite-lived trademarks significantly exceeded their respective carrying value.
As of December 28, 2025, we had $793.4 million of indefinite-lived trademark intangibles which were subject to an annual impairment test in the fourth quarter of 2025. With the exception of the FLIR indefinite-lived trademark, the estimated fair value of all material indefinite-lived trademarks significantly exceeded their respective carrying value.
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.
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 $29.0 million in outstanding letters of credit, was $1,171.0 million at December 28, 2025.
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.
Cost of sales as a percentage of net sales for 2025 was 57.2%, compared with 57.1% for 2024. 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 (“SG&A”) expense increased in 2025, primarily driven by higher sales across most segments.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at the time, the results of which form the basis for making our judgments. Actual results may differ materially from these estimates under different assumptions or conditions. See Critical Accounting Policies and Estimates for further information on key estimates.
We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at the time, the results of which form the basis for making our judgments. Actual results may differ materially from these estimates under different assumptions or conditions.
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.
We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments. 2025 compared with 2024 Our Instrumentation segment net sales for 2025 increased 5.4%. Operating income for 2025 increased 8.1%.
Revenue Recognition Approximately 30% of our revenue was recognized over time, with the remaining 70% recognized at a point in time. Revenue recognized over time relates primarily to contracts to design, develop and/or manufacture highly engineered products used in both defense and commercial applications.
Revenue Recognition Approximately 60% of our revenue is recognized at a point in time, with the remaining 40% recognized over time. Revenue recognized over time primarily relates to contracts to design, develop and/or manufacture highly engineered products used in both defense and commercial applications.
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.
At December 28, 2025, we were not required, and accordingly are not planning, to make any cash contributions to the domestic qualified pension plans for 2026. Our minimum funding requirements after 2025 as set forth by the Employee Retirement 31 Table of Contents Income Security Act, are dependent on several factors.
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.
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 $937.9 million and $207.2 million in 2025 and 2024, respectively.
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.
Approximately 25% and 24% of our total net sales in 2025 and 2024, respectively, were derived from contracts with agencies of, or prime contractors to, the U.S. Government. Cost of Sales Cost of sales increased in 2025, primarily driven by the impact of higher net sales.
Reserves for environmental investigation and remediation totaled $6.5 million and $5.4 million as of December 29, 2024 and December 31, 2023, respectively. As investigation and remediation of these sites proceed and new information is received, we will adjust reserves to reflect new information.
Reserves for environmental investigation and remediation totaled $6.0 million and $6.5 million as of December 28, 2025, and December 29, 2024, respectively. As investigation and remediation of these sites proceed and new information is received, we will adjust reserves to reflect new information.
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.
Free cash flow (cash provided by operating activities less capital expenditures) was as follows (in millions): 2025 2024 Cash provided by (used in) operating activities $ 1,191.3 $ 1,191.9 Less: Capital expenditures for property, plant and equipment (117.3) (83.7) Free cash flow (a) $ 1,074.0 $ 1,108.2 (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.
We bypassed the qualitative test for the FLIR reporting unit and performed a quantitative impairment test. At the assessment date, the FLIR reporting unit had $5,856.5 million of goodwill, and the estimated fair value of the FLIR reporting unit exceeded its carrying value by approximately $420 million or 5%.
We bypassed the qualitative test for the FLIR reporting unit and performed a quantitative impairment test. At the assessment date, the FLIR reporting unit had $5,193.4 million of goodwill, and the estimated fair value of the FLIR reporting unit exceeded its carrying value by approximately $619.2 million or 8%.
In the fourth quarter of 2024, a qualitative test was performed for nine of the ten reporting units, and the carrying value of goodwill included in these reporting units ranged from $20.4 million to $952.2 million. The results of our qualitative assessments indicated that no impairment existed in 2024.
In the fourth quarter of 2025, a qualitative test was performed for ten of the eleven reporting units, and the carrying value of goodwill included in these reporting units ranged from $20.4 million to $979.1 million. The results of our qualitative assessments indicated that no impairment existed in 2025.
The most significant assumptions utilized in the determination of the fair value of the FLIR indefinite-lived trademark are the net sales growth rates (including residual growth rates), discount rate and royalty rate.
No comparable charges were recorded in 2025. The most significant assumptions utilized in the determination of the fair value of the FLIR indefinite-lived trademark are the net sales growth rates (including residual growth rates), discount rate and royalty rate.
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.
Government sales % of net sales 20.4 % 18.1 % 2.3% 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. 2025 compared with 2024 Our Digital Imaging segment net sales for 2025 increased 3.0%.
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.
Government sales % of net sales 84.5 % 88.4 % (3.9) % 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. 2025 compared with 2024 Our Engineered Systems segment net sales for 2025 decreased 0.9%.
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.
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 $1,191.3 million and $1,191.9 million in 2025 and 2024, respectively.
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.
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 $2,475.4 million at December 28, 2025, compared with $2,649.0 million at December 29, 2024.
Changes in the policies of the United States and foreign governments, including economic sanctions or in regard to support for Ukraine, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.
In addition, financial market fluctuations affect the value of the Company’s pension assets. Changes in the policies of the United States and foreign governments, including economic sanctions or in regard to support for Ukraine, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the Company participates.
Safe Harbor Cautionary Statement Regarding Forward-Looking Information This Annual Report on Form 10-K contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations, acquisitions, capital expenditures and product synergies, integration costs, tax matters and businesses of Teledyne in the future.
Recent Accounting Standards For a discussion of recent accounting standards see Note 2 . 37 Table of Contents Safe Harbor Cautionary Statement Regarding Forward-Looking Information This Annual Report on Form 10-K contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations, acquisitions, capital expenditures, stock repurchases, product synergies, integration costs, tax matters and businesses of Teledyne in the future.
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.
Government sales % of net sales 8.6 % 8.9 % (0.3)% Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement applications.
Department of Defense, were 24.3% and 24.5% of our total net sales in 2024 and 2023, respectively. For a summary of sales to the U.S. Government by segment, see Note 4 . Sales to the U.S. Department of Defense represented approximately 19% of total net sales for both 2024 and 2023, respectively.
Department of War, were 25% and 24% of our total net sales in 2025 and 2024, respectively. For a summary of sales to the U.S. Government by segment, see Note 5 . Sales to the U.S. Department of War represented approximately 20% of total net sales for both 2025 and 2024.
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.
Government sales % of net sales 39.7 % 39.6 % 0.1% * Not meaningful 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. 2025 compared with 2024 Our Aerospace and Defense Electronics segment net sales for 2025 increased 36.3%.
Unrecognized tax benefits, including accrued penalties and interest, increased in 2021 due to the acquisition of FLIR. To the extent we prevail in matters for which reserves have been established or are required to pay amounts in excess of reserves, there could be a significant impact on our consolidated financial position and annual results of operations.
To the extent we prevail in matters for which reserves have been established or are required to pay amounts in excess of reserves, there could be a significant impact on our consolidated financial position and annual results of operations.
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.
SG&A expense as a percentage of net sales was 15.2% for 2025, compared with 15.9% for 2024. Corporate expense in 2025 was $87.5 million, compared with $77.8 million in 2024, with the increase primarily related to higher compensation expense, including higher stock-based compensation as well as higher consulting and legal costs.
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.
See Note 18 for additional information. 23 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 2025 and 2024 each contained 52 weeks.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amount in the financial statements, which will result in taxable or deductible amounts in the future.
The unrecognized deferred tax liability for this is estimated between $23 million to $26 million of potential tax. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amount in the financial statements, which will result in taxable or deductible amounts in the future.
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.
Total year 2025 net sales included $270.1 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. In both 2025 and 2024, sales to international customers represented approximately 48% of total net sales.
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.
Unrecognized tax benefits of $79.6 million and accrued interest and penalties on these tax matters of $11.4 million are not included in the table above.
GAAP and related standards; disruptions in the global economy; the ongoing conflict in Israel and neighboring regions, including related protests, attacks on defense contractors and suppliers and the disruption to global shipping routes; the ongoing conflict between Russia and Ukraine, including the impact to energy prices and availability, especially in Europe; customer and supplier bankruptcies; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by inflation, rising interest costs, and economic conditions; the imposition and expansion of, and responses to, trade sanctions and tariffs; the continuing review and resolution of FLIR’s trade compliance and tax matters; escalating economic and diplomatic tension between China and the United States; threats to the security of our confidential and proprietary information, including cybersecurity threats; risks related to AI; natural and man-made disasters, including those related to or intensified by climate change; and our ability to achieve emission reduction targets and decrease our carbon footprint.
GAAP and related standards; disruptions in the global economy; global conflicts including the ongoing conflict between Russia and Ukraine; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor, and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by inflation, and economic conditions; the continuing review and resolution of FLIR’s trade compliance and tax matters; threats to the security of our confidential and proprietary information, including cybersecurity threats; risks related to AI; natural and man-made disasters; and our ability to achieve emission reduction targets and decrease our carbon footprint.
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.
The effective tax rate increased in 2025 compared with 2024, primarily due to lower reversals of unrecognized tax benefits in 2025. See Note 9 for further information regarding our income taxes.
Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including those implemented in response to climate change, could further negatively affect our businesses that supply the oil and gas industry.
Lower oil and natural gas prices, as well as instability in the Middle East, Latin America or other oil producing regions, and new regulations or restrictions relating to energy production could further negatively affect our businesses that supply the oil and gas industry. Weakness in the commercial aerospace industry negatively affects the markets of our commercial aviation businesses.
Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements.
See further discussion in Note 7 . 34 Table of Contents Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements.
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.
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. During 2025, we repurchased and retired $177.0 million in principal of our fixed rate senior notes for $162.0 million in cash.
Many factors could change anticipated results, including: changes in relevant tax and other laws; foreign currency exchange risks; rising interest rates; risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof; the impact of policies of the new Presidential Administration, especially with respect to new and higher tariffs, cutbacks in the funding of government agencies and programs, and the scaling back of environmental and green energy policies; the impact of semiconductor and other supply chain shortages; higher inflation, including wage competition and higher shipping costs; labor shortages and competition for skilled personnel; the inability to develop and market new competitive products; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S.
Government shutdowns, which in the past have resulted in delays in anticipated contract awards, delayed payments of invoices and delays in the issuance of export and other licenses; the inability to develop and market new competitive products; changes in relevant tax and other laws; foreign currency exchange risks; rising interest rates; risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof; the impact of semiconductor and other supply chain shortages; higher inflation, including wage competition and higher shipping costs; labor shortages and competition for skilled personnel; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S.
These contracts are designated and qualify as cash flow hedges. • We utilize foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. All derivatives are recorded on the balance sheet at fair value.
These contracts are designated and qualify as cash flow hedges. • We utilize foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. • The Company utilizes cross-currency swaps to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. 33 Table of Contents All derivatives are recorded on the balance sheet at fair value.
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.
Digital Imaging (dollars in millions) 2025 2024 $ Change % Change Net sales $ 3,163.9 $ 3,070.8 $ 93.1 3.0% Cost of sales $ 1,771.4 $ 1,708.0 $ 63.4 3.7% Selling, general and administrative expense $ 491.5 $ 510.7 $ (19.2) (3.8)% Research and development expense $ 187.5 $ 177.3 $ 10.2 5.8% Acquired intangible asset amortization $ 185.3 $ 183.3 $ 2.0 1.1% Impairment of acquired intangible assets $ — $ 49.5 $ (49.5) (100.0)% Operating income $ 528.2 $ 442.0 $ 86.2 19.5% Cost of sales % of net sales 56.0 % 55.6 % 0.4% Selling, general and administrative expense % of net sales 15.5 % 16.6 % (1.1)% Research and development expense % of net sales 5.9 % 5.8 % 0.1% Acquired intangible asset amortization % of net sales 5.9 % 6.0 % (0.1)% Impairment of acquired intangible assets % of net sales — % 1.6 % (1.6)% Operating income % of net sales 16.7 % 14.4 % 2.3% International sales % of net sales 53.8 % 55.5 % (1.7)% U.S.
If actual results are below management’s estimates and assumptions, goodwill may be overstated, and an impairment loss might need to be recorded. 35 Table of Contents When using a quantitative approach to test goodwill, changes in our projections used in the discounted cash flow model could affect the estimated fair value of certain of our reporting units and could result in a goodwill impairment charge in a future period.
When using a quantitative approach to test goodwill, changes in our projections used in the discounted cash flow model could affect the estimated fair value of certain of our reporting units and could result in a goodwill impairment charge in a future period.
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.
Contractual Obligations The following table summarizes our expected cash outflows resulting from financial contracts and commitments at December 28, 2025: Contractual obligations (in millions): 2026 2027 2028 2029 2030 After 2031 Total Debt obligations $ 450.1 $ 0.1 $ 700.1 $ 0.1 $ 427.4 $ 911.2 $ 2,489.0 Interest expense (a) 54.8 53.0 41.2 36.5 32.2 6.3 224.0 Operating lease obligations (b) 40.9 37.2 29.1 22.1 18.7 51.7 199.7 Purchase obligations (c) 363.3 21.4 3.4 0.6 1.5 0.8 391.0 Total $ 909.1 $ 111.7 $ 773.8 $ 59.3 $ 479.8 $ 970.0 $ 3,303.7 (a) Interest expense related to the credit facility, including facility fees, is assumed to accrue at the rates in effect at year end 2025 and is assumed to be paid at the end of each quarter with the final payment in June 2029 when the credit facility expires.
Some of our products are subject to standard warranties, and we provide for the estimated cost of product warranties.
See “ Critical Accounting Policies and Estimates ” for further information on key estimates. Some of our products are subject to standard warranties, and we provide for the estimated cost of product warranties.
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.
(dollars in millions) 2025 2024 $ Change % Change Net sales $ 6,115.4 $ 5,670.0 $ 445.4 7.9 % Costs and expenses Cost of sales 3,500.6 3,235.2 265.4 8.2 % Selling, general and administrative 931.1 902.6 28.5 3.2 % Research and development 317.3 292.6 24.7 8.4 % Acquired intangible asset amortization 216.6 198.0 18.6 9.4 % Impairment of acquired intangible assets — 52.5 (52.5) (100.0) % Total costs and expenses 4,965.6 4,680.9 284.7 6.1 % Operating income (loss) 1,149.8 989.1 160.7 16.2 % Net income (loss) attributable to Teledyne $ 894.8 $ 819.2 $ 75.6 9.2 % Diluted earnings per common share $ 18.88 $ 17.21 $ 1.67 9.7 % 24 Table of Contents Consolidated Results of Operations Our businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems.
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.
As a result, operating income as a percentage of net sales increased during the period. 27 Table of Contents Instrumentation (dollars in millions) 2025 2024 $ Change % Change Net sales $ 1,457.1 $ 1,382.6 $ 74.5 5.4% Cost of sales $ 742.5 $ 706.4 $ 36.1 5.1% Selling, general and administrative expense $ 201.9 $ 196.4 $ 5.5 2.8% Research and development expense $ 99.4 $ 92.6 $ 6.8 7.3% Acquired intangible asset amortization expense $ 12.9 $ 13.9 $ (1.0) (7.2)% Impairment of acquired intangible assets $ — $ 3.0 $ (3.0) (100.0)% Operating income $ 400.4 $ 370.3 $ 30.1 8.1% Cost of sales % of net sales 50.9 % 51.1 % (0.2)% Selling, general and administrative expense % of net sales 13.9 % 14.2 % (0.3)% Research and development expense % of net sales 6.8 % 6.7 % 0.1% Acquired intangible asset amortization % of net sales 0.9 % 1.0 % (0.1)% Impairment of acquired intangible assets % of net sales — % 0.2 % (0.2)% Operating income % of net sales 27.5 % 26.8 % 0.7% International sales % of net sales 57.5 % 55.8 % 1.7% U.S.
Costs and Pricing Inflation exists in certain markets in which we operate. Current inventory costs, the costs of labor, materials, equipment and other costs are considered in establishing sales pricing policies. In addition, we emphasize cost containment and cost reductions in all aspects of our business.
Current inventory costs, the costs of labor, materials, equipment and other costs are considered in establishing sales pricing policies. In addition, we emphasize cost containment and cost reductions in all aspects of our business. Market Risk Disclosures Our primary exposure to market risk relates to changes in interest rates and foreign currency exchange rates.
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.
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. 32 Table of Contents 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 file income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions. We have substantially concluded income tax matters in the United States through 2016, in Canada through 2012, in Sweden through 2018, in Norway through 2018, in Belgium through 2019, in France through 2019 and in the United Kingdom through 2015.
We file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. We have substantially concluded income tax matters in the United States through 2016, in Canada through 2012, in the UK through 2022, and in France through 2020. Costs and Pricing Inflation exists in certain markets in which we operate.
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.
See Note 3 for additional information about our 2025 and 2024 business acquisitions. Subsequent to the end of the year, we have completed one acquisition which will be included within the Instrumentation segment.
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.
Investing activities used cash for business acquisitions of $821.4 million and $123.7 million in 2025 and 2024, respectively (see “ Recent Developments ”). We funded the acquisitions from cash on hand.
Market Risk Disclosures Our primary exposure to market risk relates to changes in interest rates and foreign currency exchange rates. We periodically evaluate these risks and have taken measures to mitigate these risks. We own assets and operate facilities in countries that have been politically stable.
We periodically evaluate these risks and have taken measures to mitigate these risks. We own assets and operate facilities in countries that have been politically stable. Interest Rate Risk We are exposed to market risk through the interest rate on our borrowings under our $1.20 billion credit facility.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Teledyne provides enabling technologies for industrial growth markets that require advanced technology and high reliability. These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, deepwater oil and gas exploration and production, medical imaging and pharmaceutical research.
These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, deepwater oil and gas exploration and production, medical imaging, and pharmaceutical research.
A hypothetical 10% price change of the U.S. dollar from its value on December 29, 2024, would result in a decrease or increase in the fair value of our foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and sell U.S. dollars by approximately $8.7 million. 33 Table of Contents Environmental We are subject to various federal, state, local and international environmental laws and regulations which require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations.
A hypothetical 10% price change of the U.S. dollar from its value on December 28, 2025, would result in a decrease or increase in the fair value of our foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and sell U.S. dollars by approximately $3.2 million.
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.
Operating income increased primarily due to increased net sales, and operating income as a percentage of net sales decreased primarily due to higher transaction and integration costs, higher acquired intangible asset amortization and unfavorable product mix including lower gross margins on sales from 2025 acquisitions. 29 Table of Contents Engineered Systems (dollars in millions) 2025 2024 $ Change % Change Net sales $ 435.7 $ 439.8 $ (4.1) (0.9)% Cost of sales $ 362.1 $ 379.5 $ (17.4) (4.6)% Selling, general and administrative expense $ 26.4 $ 26.5 $ (0.1) (0.4)% Research and development expense $ 0.6 $ 0.9 $ (0.3) (33.3)% Operating income $ 46.6 $ 32.9 $ 13.7 41.6% Cost of sales % of net sales 83.1 % 86.3 % (3.2) % Selling, general and administrative expense % of net sales 6.1 % 6.0 % 0.1 % Research and development expense % of net sales 0.1 % 0.2 % (0.1) % Operating income % of net sales 10.7 % 7.5 % 3.2 % International sales % of net sales 1.3 % 1.0 % 0.3 % U.S.
Foreign Currency Exchange Rate Risk Teledyne transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk.
As of December 28, 2025, no borrowings are outstanding under our credit facility. Future indebtedness incurred under our credit facility will expose us to interest rate risk. Foreign Currency Exchange Rate Risk Teledyne transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk.
See also our government contracts risks factor disclosure in Item 1A . Risk Factors. For information on accounts receivable from the U.S. Government, see Note 7 .
See also our government contracts risks factor disclosure in Item 1A . “ Risk Factors ”. For information on accounts receivable from the U.S. Government, see Note 7 . Estimates and Reserves Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
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.
Operating income as a percentage of net sales increased primarily due slower SG&A growth as compared with stronger net sales growth as well as an impairment of intangible assets in 2024 with no comparable amount recorded in 2025. 28 Table of Contents Aerospace and Defense Electronics (dollars in millions) 2025 2024 $ Change % Change Net sales $ 1,058.7 $ 776.8 $ 281.9 36.3% Cost of sales $ 624.6 $ 441.3 $ 183.3 41.5% Selling, general and administrative expense $ 123.8 $ 91.2 $ 32.6 35.7% Research and development expense $ 29.8 $ 21.8 $ 8.0 36.7% Acquired intangible asset amortization $ 18.4 $ 0.8 $ 17.6 * Operating income $ 262.1 $ 221.7 $ 40.4 18.2% Cost of sales % of net sales 59.0 % 56.8 % 2.2% Selling, general and administrative expenses % of net sales 11.7 % 11.8 % (0.1)% Research and development expense % of net sales 2.8 % 2.8 % —% Acquired intangible asset amortization % of net sales 1.7 % 0.1 % 1.6% Operating income % of net sales 24.8 % 28.5 % (3.7)% International sales % of net sales 36.6 % 32.3 % 4.3% U.S.
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.
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 2025. Pension Service Expense Pension service expense is included in both cost of sales and SG&A expense. In 2025 and 2024, pension service expense was $5.9 million and $6.2 million, respectively.
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.
Sales of commercial infrared imaging components and subsystems increased by $55.9 million, sales of unmanned air systems increased by $35.1 million, sales of surveillance systems increased by $28.7 million, sales of commercial infrared imaging systems decreased by $25.2 million, sales of X-ray products decreased by $14.2 million, sales of geospatial products decreased by $7.4 million, and sales of industrial automation imaging systems decreased by $5.6 million.
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.
It is anticipated that cash on hand, operating cash flow, together with available borrowings under our $1.2 billion credit facility, will be sufficient to meet these requirements during the next 12 months and during the period thereafter covered by our current longer-term business plan. To support acquisitions, we may need to raise additional capital.
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.
Operating income increased, primarily due to higher net sales and lower SG&A as well as an impairment of intangible assets of $49.5 million in 2024 with no comparable amount in 2025, partially offset by unfavorable product mix during the period.

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