Business Segments

12 Months Ended

Dec. 29, 2019

The Company has four reportable segments: Instrumentation; Digital Imaging; Aerospace and Defense Electronics; and Engineered Systems. The Company manages, evaluates and aggregates its operating segments for segment reporting purposes primarily on the basis of product and service type, production process, distribution methods, type of customer, management organization, sales growth potential and long-term profitability. The Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, electronic test and measurement equipment and harsh environment interconnect products. The 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 micro electro-mechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters. It also includes our sponsored and centralized research laboratories benefiting government programs and businesses. The 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 and components and subsystems for wireless and satellite communications, as well as general aviation batteries. The Engineered Systems segment provides innovative systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. The Engineered Systems segment also designs and manufactures electrochemical energy systems and small turbine engines.

In the third quarter of 2019, we realigned the segment reporting structure for certain business units, primarily related to certain refinements of our management reporting structure. This change primarily related to moving certain electronic manufacturing services products from the Aerospace and Defense Electronics segment to the Engineered Systems segment. Total net sales for these products were $76.2 million for fiscal year 2018. Other immaterial changes included moving certain United Kingdom (U.K.) microwave product lines (previously within the Digital Imaging segment) and certain U.K. manufactured composite parts (previously within the Engineered Systems segment) into the Aerospace and Defense Electronics segment. Total net sales for these U.K. product lines was less than $20.0 million for fiscal year 2018. The realignment had no impact on the Instrumentation segment or the Consolidated Financial Statements. Previously reported segment data has been adjusted to reflect these changes.

Segment results include net sales and operating income by segment but excludes noncontrolling interest, equity income or loss, unusual non-recurring legal matter settlements, interest income and expense, gains and losses on the disposition of assets, sublease rental income and non-revenue licensing and royalty income, domestic and foreign income taxes and corporate office expenses. Corporate expense includes various administrative expenses relating to the corporate office and certain nonoperating expenses not allocated to our segments.

As part of a continuing effort to reduce costs and improve operating performance, the Company may take and has taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weak end markets and high cost locations. At December 29, 2019, $1.5 million remains to be paid related to these actions.

The following pre-tax charges were incurred related to severance and facility consolidations (in millions):


	2019		2018		2017
Instrumentation	$	1.5	$	5.6	$	2.1
Digital Imaging	1.1		0.7		—
Aerospace and Defense Electronics	0.5		1.3		2.1
Engineered Systems	0.1		0.2		—
Total	$	3.2	$	7.8	$	4.2

Information on the Company’s business segments was as follows (in millions):



Net sales:	2019		2018		2017
Instrumentation	$	1,105.1	$	1,021.2	$	953.9
Digital Imaging	992.9		875.3		710.4
Aerospace and Defense Electronics	690.1		640.2		591.2
Engineered Systems	375.5		365.1		348.3
Total net sales	$	3,163.6	$	2,901.8	$	2,603.8

Operating income:	2019		2018		2017
Instrumentation	$	200.4	$	147.4	$	126.0
Digital Imaging	176.5		155.5		110.2
Aerospace and Defense Electronics	143.4		131.8		113.0
Engineered Systems	36.5		37.9		35.5

Corporate expense	(65.1)		(56.0)		(63.0)
Total operating income	$	491.7	$	416.6	$	321.7



Depreciation and amortization:	2019		2018		2017
Instrumentation	$	35.9	$	37.0	$	38.2
Digital Imaging	48.5		50.8		49.6
Aerospace and Defense Electronics	14.3		13.8		14.0
Engineered Systems	6.0		4.3		4.6
Corporate	7.2		7.1		6.6
Total depreciation and amortization	$	111.9	$	113.0	$	113.0


Capital expenditures:	2019		2018		2017
Instrumentation	$	18.9	$	14.8	$	13.7
Digital Imaging	45.2		35.8		23.4
Aerospace and Defense Electronics	19.0		18.7		9.3
Engineered Systems	3.6		13.6		7.4
Corporate	1.7		3.9		4.7
Total capital expenditures	$	88.4	$	86.8	$	58.5

Identifiable assets are those assets used in the operations of the segments. Corporate assets primarily consist of cash, deferred taxes, pension assets and other assets.


Identifiable assets:	2019		2018		2017
Instrumentation	$	1,680.2	$	1,392.7	$	1,413.6
Digital Imaging	1,874.6		1,577.5		1,582.2
Aerospace and Defense Electronics	618.3		509.9		491.2
Engineered Systems	143.4		151.5		135.5
Corporate	263.3		177.7		223.9

Total identifiable assets	$	4,579.8	$	3,809.3	$	3,846.4

Information on the Company’s sales by country of origin and long-lived assets by major geographic area was as follows (in millions):


Sales by country of origin:	2019		2018		2017
United States	$	2,179.6	$	2,044.9	$	1,849.4
Canada	301.0		294.8		266.1
United Kingdom	251.7		178.8		197.5
The Netherlands	134.2		105.3		68.0
All other countries	297.1		278.0		222.8
Total sales	$	3,163.6	$	2,901.8	$	2,603.8


Long-lived assets:	2019		2018		2017
United States	$	1,839.4	$	1,402.3	$	1,495.4
Canada	355.0		264.6		288.2
United Kingdom	492.2		414.9		487.9
France	367.1		353.8		370.2
All other countries	195.6		246.7		182.0
Total long-lived assets	$	3,249.3	$	2,682.3	$2,823.7

Long-lived assets consist of property, plant and equipment, goodwill, acquired intangible assets, prepaid pension assets and other long-term assets including deferred compensation assets but excluding any deferred tax assets. The all other countries category primarily consists of Teledyne’s operations in Europe.

Product Lines

The Instrumentation segment includes three product lines: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation. All other segments each contain one product line.

The tables below provide a summary of the sales by product line for the Instrumentation segment (in millions):



Instrumentation:	2019		2018		2017
Environmental Instrumentation	$	391.4	$	339.6	$	314.3
Marine Instrumentation	450.2		433.0		430.7
Test and Measurement Instrumentation	263.5		248.6		208.9
Total	$	1,105.1	$	1,021.2	$	953.9

Sales to the U.S. Government included sales to the U.S. Department of Defense of $545.5 million in 2019, $494.9 million in 2018, and $479.7 million in 2017. Total sales to international customers were $1,391.6 million in 2019, $1,353.7 million in 2018, and $1,208.5 million in 2017. Of these amounts, sales by operations in the United States to customers in other countries were $638.0 million in 2019, $600.5 million in 2018, and $555.5 million in 2017. There were no sales to individual countries outside of the United States in excess of 10 percent of the Company’s sales. Sales between business segments generally were priced at prevailing market prices and were $30.3 million, $23.4 million and $22.8 million for 2019, 2018 and 2017, respectively.

We also disaggregate our revenue from contracts with customers by customer type, contract-type and geographic region for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. As we adopted Topic 606 during fiscal year 2018 using the modified retrospective transition method, prior period information was not adjusted for Topic 606 and comparative disclosures for disaggregated revenue are not required for the year prior to adoption.


	Twelve Months Ended December 29, 2019										Twelve Months Ended December 30, 2018
	Customer Type								Customer Type
(in millions)	United States Government (a)		Other, Primarily Commercial		Total		United States Government (a)		Other, Primarily Commercial		Total
Net Sales:
Instrumentation	$	80.4	$	1,024.7	$	1,105.1	$	68.3	$	952.9	$	1,021.2
Digital Imaging	107.4		885.5		992.9		90.5		784.8		875.3
Aerospace and Defense Electronics	225.3		464.8		690.1		177.2		463.0		640.2
Engineered Systems	338.9		36.6		375.5		319.3		45.8		365.1
Total	$	752.0	$	2,411.6	$	3,163.6	$	655.3	$	2,246.5	$	2,901.8

a) Includes sales as a prime contractor or subcontractor.


	Twelve Months Ended December 29, 2019										Twelve Months Ended December 30, 2018
	Contract Type								Contract Type
(in millions)	Fixed Price		Cost Type		Total		Fixed Price		Cost Type		Total
Net Sales:
Instrumentation	$	1,094.4	$	10.7	$	1,105.1	$	1,001.0	$	20.2	$	1,021.2
Digital Imaging	903.1		89.8		992.9		795.5		79.8		875.3
Aerospace and Defense Electronics	687.8		2.3		690.1		637.4		2.8		640.2
Engineered Systems	168.9		206.6		375.5		165.8		199.3		365.1
Total	$	2,854.2	$	309.4	$	3,163.6	$	2,599.7	$	302.1	$	2,901.8


	Twelve Months Ended December 29, 2019														Twelve Months Ended December 30, 2018
	Geographic Region (a)												Geographic Region (a)
(in millions)	United States		Europe		All other		Total		United States		Europe		All other		Total
Net sales:
Instrumentation	$	899.7	$	164.8	$	40.6	$	1,105.1	$	835.0	$	134.6	$	51.6	$	1,021.2
Digital Imaging	316.1		299.4		377.4		992.9		239.3		270.2		365.8		875.3
Aerospace and Defense Electronics	588.3		100.8		1.0		690.1		605.5		32.5		2.2		640.2
Engineered Systems	375.5		—		—		375.5		365.1		—		—		365.1
Total	$	2,179.6	$	565.0	$	419.0	$	3,163.6	$	2,044.9	$	437.3	$	419.6	$	2,901.8

a) Net sales by geographic region of origin.