UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 1-15295

TELEDYNE TECHNOLOGIES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware		25-1843385
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification Number)
1049 Camino Dos Rios
Thousand Oaks	California	91360-2362
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (805)-373-4545

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	TDY	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒   No  ☐ 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes  ☐ No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated file	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant section 13(a) of the Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of June 28, 2019, the aggregate market value of Common Stock (based upon closing price of the stock on the New York Stock Exchange) of the registrant held by non-affiliates was approximately $9.7 billion.

At February 19, 2020, there were 36,630,917 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's proxy statement to be filed subsequently with the Securities and Exchange Commission pursuant to Regulation 14A for the 2020 Annual Meeting of Shareholders are incorporated by reference in Part III of this Report on Form 10-K. Except as expressly incorporated by reference, the registrant’s proxy statement shall not be deemed to be part of this report.

INDEX

		Page Number
PART I
	Item 1. Business	1
	Item 1A. Risk Factors	14
	Item 1B. Unresolved Staff Comments	27
	Item 2. Properties	28
	Item 3. Legal Proceedings	28
	Item 4. Mine Safety Disclosures	28
PART II
	Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	29
	Item 6. Selected Financial Data	29
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Item 7A. Quantitative and Qualitative Disclosure About Market Risk	51
	Item 8. Financial Statements and Supplementary Data	51
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	51
	Item 9A. Controls and Procedures	51
	Item 9B. Other Information	52
Part III
	Item 10. Directors, Executive Officers and Corporate Governance	52
	Item 11. Executive Compensation	52
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	53
	Item 13. Certain Relationships and Related Transactions, and Director Independence	53
	Item 14. Principal Accountant Fees and Services	53
PART IV
	Item 15. Exhibits and Financial Statement Schedules	54
	INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION	55
	Item 16. Form 10-K Summary	98
	EXHIBIT INDEX	99
	SIGNATURES	103

Explanatory Notes

In this Annual Report on Form 10-K, Teledyne Technologies Incorporated is sometimes referred to as the “Company” or “Teledyne”.

For a discussion of risk factors and uncertainties associated with Teledyne and any forward looking statements made by us, see the discussion beginning on page 14 of this Annual Report on Form 10-K.

i

PART I

Item 1. Business

Who We Are

Teledyne Technologies Incorporated 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. Our products include digital imaging sensors, cameras and systems within the visible, infrared and X-ray spectra, monitoring and control instrumentation for marine and environmental applications, harsh environment interconnects, electronic test and measurement equipment, aircraft information management systems, and defense electronics and satellite communication subsystems. We also supply engineered systems for defense, space, environmental and energy applications. We differentiate ourselves from many of our direct competitors by having a customer and company-sponsored applied research center that augments our product development expertise.

Our principal executive offices are located at 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362. Our telephone number is (805) 373-4545. Our website address is www.teledyne.com. We are a Delaware corporation that was spun-off as an independent company on November 29, 1999.

Strategy

Our strategy continues to emphasize growth in our core markets of instrumentation, digital imaging, aerospace and defense electronics and engineered systems. Our core markets are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our core businesses with targeted acquisitions and through product development. We continue to focus on balanced and disciplined capital deployment among capital expenditures, product development, acquisitions and share repurchases. We aggressively pursue operational excellence to continually improve our margins and earnings by emphasizing cost containment and cost reductions in all aspects of our business. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire. Using complementary technology across our businesses and internal research and development, we seek to create new products to grow our company and expand our addressable markets. We continue to evaluate our businesses to ensure that they are aligned with our strategy.

Our Recent Acquisitions

Consistent with our strategy, during 2019, 2018 and 2017, we made acquisitions and investments totaling $1,261.2 million, net of cash acquired. Our 2019 and 2017 acquisitions, as well as our most recent 2020 acquisition, include the following:

2020 Acquisition

To extend our protocol test solution and products to the electronic storage industry and data centers:

OakGate Technology, Inc., based in Loomis, California, a provider of software and hardware designed to test electronic data storage devices from development through manufacturing and end-use applications. We paid $28.0 million, net of cash acquired.

2019 Acquisitions

To expand our range of digital imaging capabilities for life sciences, academic research and customized original equipment manufacturer (“OEM”) industrial imaging solutions:

Scientific imaging businesses of Roper Technologies, Inc., principally located in the United States and Canada and including Princeton Instruments, Photometrics and Lumenera. Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging. Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence. Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications. We paid $224.8 million for these scientific camera businesses, net of cash acquired.

To add complementary industrial gas and flame detection capabilities to our environmental instrumentation businesses:

Gas and flame detection businesses of 3M Company, primarily located in France, the United Kingdom and the United States and including Oldham, Simtronics, Gas Measurement Instruments, Detcon and select Scott Safety products. The gas and flame detection business provides a portfolio of 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 waste water treatment. The rugged gas analyzers feature fast response time, intrinsically safe sensors and satisfy multiple international certification standards. We paid $233.5 million for these gas and flame detection businesses, net of cash acquired.

1

To expand our digital imaging foundry capacity and capabilities for biotech applications:

Micralyne Inc., (“Micralyne”) based in Edmonton, Alberta, Canada, a foundry providing micro electromechanical systems (“MEMS”) devices. In particular, Micralyne possesses unique microfluidic technology for biotech applications, as well as capabilities in non-silicon-based MEMS (e.g., gold, polymers) often required for human body compatibility. We paid $25.7 million for Micralyne, net of cash acquired.

2017 Acquisitions:

To expand our digital imaging, space science, semiconductor and microwave solutions capabilities:

e2v technologies plc (“e2v”) principally located in Chelmsford, United Kingdom and Grenoble, France, which provides high performance image sensors and custom camera solutions and application specific standard products for the machine vision market. In addition, e2v provides high performance space qualified imaging sensors and arrays for space science and astronomy. e2v also produces components and subsystems that deliver high reliability radio frequency power generation for healthcare, industrial and defense applications. Finally, the company provides high reliability semiconductors and board-level solutions for use in aerospace, space and communications applications. We paid $740.6 million for e2v, net of cash acquired.

To expand our environmental and laboratory instrumentation capabilities:

Assets of Scientific Systems, Inc. (“SSI”), located in State College, PA, which manufactures precision components and specialized subassemblies used primarily in analytical and diagnostic instrumentation, such as high performance liquid chromatography systems and specific medical devices. We paid $31.3 million for SSI.

Our Business Segments

Our businesses are aligned in four segments: Instrumentation, Digital Imaging, Aerospace and Defense Electronics and Engineered Systems. Financial information about our business segments can be found in Note 12 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Instrumentation

Our Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, as well as electronic test and measurement equipment. We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments.

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, and sensors that determine the geologic structure below the bottom. We also design and manufacture vehicles that utilize and transport these sensors over and beneath the water’s surface.

We design and manufacture geophysical streamer cables, hydrophones, seismic energy sources and specialty products used in offshore hydrocarbon exploration to locate oil and gas reserves beneath the ocean floor. Our Acoustic Doppler Current Profilers (“ADCPs”) precisely measure currents at varying depths in oceans and rivers, and our Doppler Velocity Logs (“DVLs”) are used for navigation by civilian and military surface ships, unmanned underwater vehicles and naval divers. We design and manufacture inertial sensing and navigation products, as well as subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets. We also design and manufacture remotely controlled and tethered instrumentation deployment vehicles used for current measurement, seafloor mapping and measurement of physical parameters such as salinity.

Additionally, we design and manufacture single and multibeam hydrographic survey instrumentation used in port surveys, dredging, pre- and post-installation of offshore energy infrastructure and other challenging underwater applications. Our multibeam sonar systems range from portable high-resolution systems used on tripods, autonomous and remotely operated underwater vehicles (“AUVs” and “ROVs”) to full ocean depth vessel-mounted oceanographic systems as well as sub bottom profilers that can survey structures beneath the seafloor. Our multibeam sonar systems can be used to create highly accurate maps of underwater offshore constructions, wrecks or quay walls in harbors, and in particular, high-quality maps of the seafloor. Our products are being utilized in both commercial and defense applications where we provide systems for detecting mines in the water. We provide solutions that are ready-to-operate and fully installed, including a comprehensive software package that ties together the variety of sensors that may be configured on an AUV or ROV platform.

We provide a broad range of end-to-end undersea interconnect solutions to the offshore oil and gas, naval defense, oceanographic and telecom markets. We manufacture subsea, wet-mateable electrical and fiber-optic interconnect systems and subsea pressure vessel penetrators and connector systems with glass-to-metal seals. Our waterproof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies are used in underwater equipment and submerged monitoring systems. Our Teledyne Marine group and Teledyne Scientific Company continue to work collaboratively to improve the

2

reliability of materials exposed to ultra-deep-sea conditions. We also manufacture rugged cable assemblies for land-based energy and other industrial applications.

Other marine products used by the U.S. Navy and commercial customers include acoustic modems for networked underwater communication and optical underwater cameras and LED lighting sources.

We manufacture complete AUV systems. Our marine gliders use a silent buoyancy engine for propulsion that takes advantage of changes in buoyancy in conjunction with wings and tail steering to convert vertical motion to horizontal displacement, thereby propelling the system on a programmed route with low power consumption. Glider applications range from oceanographic research to persistent surveillance systems for the U.S. Navy. The modular design of our battery-powered, man-portable Gavia™ AUV allows for rapid sensor bay reconfiguration and battery replacement capability. Our SeaRaptor™ AUV will permit deep water survey with operational depths of 6000 meters. Our Slocum^® gliders, as well as our ADCPs, are being used as part of the National Science Foundation’s Ocean Observatories Initiative to collect physical, chemical, geological and biological data from the ocean and the seafloor on coastal, regional and global scales. We design and manufacture Inspection Class ROVs used in maritime security, military, search and rescue, aquaculture, and scientific research applications.

Using our acoustic technology, we also provide quality control and package integrity systems under the Taptone® brand to the food and beverage, personal care and pharmaceutical industries.

Environmental Instrumentation

We offer a wide range of products used for environmental monitoring, instruments that enable measurement and monitoring of key air environmental parameters as well as gas purity and content for industrial and manufacturing applications, sensors for the measurement and monitoring of the physical and chemical properties of untreated water, and laboratory systems that improve sample acquisition, handling and preparation for analysis. We also provide instruments to measure toxic and combustible gases for personnel and site safety.

Our instrumentation monitors trace levels of gases such as sulfur dioxide, carbon monoxide, oxides of nitrogen and ozone, as well as particulate pollution, in order to measure the quality of the air we breathe. We also supply monitoring systems for the detection, measurement and automated reporting of air pollutants from industrial stack emissions, ozone generators and other process gas monitoring instruments. We serve the process control and monitoring needs of industrial plants with instruments that include gas analyzers, and vacuum and flow measurement devices. We were a pioneer in the development of precision trace oxygen analyzers, and we now manufacture a wide range of process gas and liquid analysis products for the measurement of process contaminants, hydrocarbons, combustibles, oil-in-water, moisture, pH and many other parameters. Our instrumentation is also used to detect a variety of water quality parameters. Our sampler products include portable, refrigerated and specialty samplers used in hazardous location applications and water samplers that utilize both peristatic and vacuum technologies. Flow meters include ultrasonic, submerged probe, bubbler and area velocity models. Laser technology is now part of our flow capabilities. Our custom analyzer systems provide turn-key solutions to complex process monitoring and/or control applications found in petrochemical and refinery facilities.

We provide laboratory instrumentation that complements our process or field environmental instrumentation. We manufacture laboratory instrumentation that automates the preparation and concentration of organic samples for the analysis of trace levels of volatile organic compounds by a gas chromatograph and mass spectrometer. We also provide laboratory instrumentation for the detection of total organic carbon and total nitrogen in water and wastewater samples. In addition, we provide inductively coupled plasma laboratory spectrometers, atomic absorption spectrometers, mercury analyzers and calibration standards. We provide laboratory automation and sample introduction systems. Our advanced elemental analysis products are used by environmental and quality control laboratories to detect trace levels of inorganic contaminants in water, foods, soils and other environmental and geological samples. Our high-precision, high pressure syringe pumps measure process extraction rates of fluids ranging from liquefied gases to viscous tars. We manufacture and sell positive-displacement piston pumps utilized in a wide variety of analytical, clinical, preparative and fluid-metering applications. In addition, we manufacture liquid chromatography instruments and accessories for the purification of organic compounds, which include highly sensitive evaporative light scanning detectors. Our liquid chromatography customers include pharmaceutical laboratories involved in drug discovery and development. Finally, we manufacture instruments that are used by pharmaceutical scientists to evaluate the release rate characteristics and physical properties of various dosage forms to ensure the safety and efficacy of medicines worldwide.

As a result of a 2019 acquisition, we manufacture a wide range of gas detection and measurement instruments, both portable and fixed installation, to monitor toxic gases such as hydrogen sulfide and chlorine and to detect combustible gases. These instruments are used at industrial sites such as paper mills and automobile factories as well as in the oil and gas sector at refineries. In addition, utility companies for natural gas and water supply use portable instruments to ensure the safety of their technicians.

3

Test and Measurement Instrumentation

We develop, manufacture, sell and license high-performance oscilloscopes and high-speed protocol analyzers for various communication links. We also provide related test and measurement equipment, probes, accessories and application solutions. With these additional capabilities, we are able to configure our platforms to provide high-value-testing solutions for customers, developing products in all industry sectors, that rely on increasingly complex electronic signals. To a lesser extent, we provide extended warranty contracts, maintenance contracts and repairs and calibrations on our instruments after their warranties expire.

We believe our test and measurement products provide unique, world-class capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly. Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in broad range of industry end markets, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics and power electronics.

Our oscilloscopes are tools used by designers and engineers to measure and analyze complex electronic signals in order to develop high-performance systems, validate electronic designs and improve time to market. We offer a broad range of real-time oscilloscopes addressing different end user needs. Our five high-definition oscilloscope (“HD”) product families address needs from the lower-bandwidth bench top sector to the mid-range general-purpose sector of the market. The HD families offer superior signal fidelity for the ultimate in measurement accuracy and repeatability. Our LabMaster and WaveMaster product families are industry leading high-end oscilloscopes with bandwidths extending to 65GHz. Our WaveProHD product family covers the mid-to high-range performance and the WaveRunner product family covers the mid-range performance and general purpose and bench-top sector. Our WaveSurfer product-line is designed for users in the lower bandwidth bench-top sector of the market and value-oriented users in the economy sector. We also make high-speed, high-resolution modular analog-to-digital conversion systems. These systems are used in many applications including test and measurement, medical imaging, Light Detection and Ranging (“LIDAR”) and software defined radio. We recently introduced the WavePulser, using Teledyne InP technology which enables hardware designers and test engineers to characterize and analyze interconnects and cables for high-speed serial protocols such as PCI Express, HDMI, USB, SAS, SATA, Fibre Channel, InfiniBand, Gigabit Ethernet and Automotive Ethernet.

Design and test engineers use our protocol analysis solutions to monitor accurately and reliably high data-rate communication interfaces and diagnose operational problems in a wide range of systems and devices to ensure that they comply with industry standards, including the area of Cloud computing and networks, where PCI Express and related standards are required for high performance data centers. Our protocol test portfolio also covers wireless technologies, including Bluetooth and 802.11 (Wi-Fi), and modern video technologies, such as HDMI and DisplayPort. Both product lines, along with our leadership in USB technology, provide a unique base to service the mobile, internet of things, automotive and consumer electronics test market. Our most recent acquisition of OakGate Technology, Inc. provides protocol validation and test tools for disk drives, both spinning and solid state, and servers used for cloud-based storage.

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.

Digital Imaging

Our Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared, ultraviolet 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. In 2019, we acquired a second MEMS foundry that specializes in BioMedical MEMS, Optical MEMS, industrial sensors and microfabrication. This segment also includes our sponsored and centralized research laboratories benefiting government programs and businesses.

We design, develop and manufacture image capture products, primarily consisting of high-performance image sensors and digital cameras for use in industrial, scientific, academic research and medical applications. We also design, develop and manufacture image processing products, primarily consisting of hardware and software for image processing and automatic data collection in industrial, academic research and medical applications. We develop high-resolution, low-dose X-ray sensors for medical, dental and industrial applications. Our high-performance image sensors utilize both charge coupled device (“CCD”) and complementary metal-oxide semiconductor (“CMOS”) technology. In particular, our CMOS image sensing technology is used in our large flat panel detectors for X-ray imaging and in most of our sensors used for industrial machine vision applications. Our image processing software allows OEMs and systems integrators to develop vision applications using our image acquisition and processing hardware. Our smart camera products are user-friendly, cost-effective vision appliances for task-specific factory floor applications such as gauging, high-precision alignment, inspection, assembly verification and machine guidance. Our smart cameras are designed to be quickly deployed by technicians on the factory floor. We provide lightweight X-ray sources for the inspection of materials and structures and for the analysis of suspicious objects. We design and manufacture 3D time of flight sensors and modules for industrial robots, warehouse robots and ADAS (Advanced Driver Assistance Systems) for automobiles. Through our 2019 acquisition of the scientific imaging businesses of Roper Technologies, Inc., we manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging for applications and markets that include materials analysis, quantum

4

technology and cell biology imaging using fluorescence and chemiluminescence. We also provide rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications.

We produce and provide manufacturing services for MEMS. The majority of our semiconductor manufacturing capacity is consumed by external customers with the remaining capacity applied towards supplying unique CCD and microbolometer (for long-wave infrared detection) fabrication services for our internal image sensor requirements.

Additionally, we produce components and sub-systems that deliver high performance and high reliability radio frequency power generation for healthcare, transportation and industrial applications. Such products include critical components used in radiotherapy applications for cancer treatment, magnetrons and thyratrons for X-ray cargo scanning systems and microwave sources for marine and airborne radar.

We also provide high performance semiconductors, sub-systems, and signal and data processing solutions. As a partner of choice for high performance signal and data conditioning solutions for professional applications, we provide solutions that meet the demanding specifications of our customers. Our design capability enables us to partner with customers and ascend the value chain by providing multi-chip modules and boards. Our proprietary high-speed analog-to-digital and digital-to-analog data converters provide market leading performance for space and radio frequency communications.

We provide space and quantum technology products and services, including space-qualified imaging and quantum subsystems, radiation hardened imaging sensors for high radiation and space environments, cold atom quantum technology devices and system development services. We also provide atomic clocks and gravity sensing and ground based astronomical telescope sensors and subsystems.

In addition, our Digital Imaging segment provides LIDAR systems for airborne terrestrial mapping, mobile mapping, bathymetry and laser-based 3D imaging applications through our Optech business.  These imaging and mapping systems are used by commercial and government customers serving energy, natural resources and infrastructure applications. We also provide geospatial software designed for the hydrographic and marine community.

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. We receive funding from the Defense Advanced Research Products Agency (“DARPA”) and various other U.S. Department of Defense funding agencies, and we collaborate with researchers at universities and national laboratories to stay at the forefront of emerging technologies. We have developed high-speed electronics, precision timing and navigation devices, advanced functional and structural materials, liquid-crystal based optical devices, and image processing algorithms.

We are a leader in the development and production of large format focal plane array sensors for astronomy, defense and space science markets. Our advanced focal plane arrays, sensors, and subsystems cover a broad spectrum of frequencies from X-ray wavelengths to 15 micron long-wave infrared wavelengths. We deliver advanced imaging solutions to the U.S. Department of Defense, National Aeronautics and Space Administration (“NASA”), the European Space Agency (“ESA”), prime system integrators, other foreign space agencies and commercial customers. Our sensor technologies are on many of NASA’s major astronomy missions and can be found operating at nearly every major ground-based observatory telescope. Our image sensors also play a critical role in defense applications in airborne and satellite systems. We have developed sensors, subassemblies and cameras for air- and ground-based applications, including hyperspectral sensors for long-wave infrared and for simultaneous visible-shortwave infrared applications. We also produce a wide variety of infrared photodiodes for the commercial market. Our photodiodes are used in laboratory instrumentation and industrial equipment. In addition, we design and manufacture advanced military laser eye protection spectacles and sensor protection filters.

Aerospace and Defense Electronics

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, and components and subsystems for wireless and satellite communications, as well as general aviation batteries.

We provide a range of microwave products to our customers ranging from components to highly integrated subsystems and solutions. Our helix traveling wave tubes, commonly called TWTs, are used to provide broadband power amplification of microwave signals. Military applications include radar, electronic warfare and satellite communication. We make TWTs for commercial applications as well, such as electromagnetic compatibility test equipment and satellite communication terminals. We also provide high-power solid-state TWT replacement amplifiers and complete amplifiers that incorporate a TWT and a power supply.

We design and manufacture solid state radio frequency (“RF”) and microwave components and subassemblies used in a wide variety of applications.  As components which form the building blocks for electronic systems, we produce amplifiers, voltage-controlled oscillators, YIGs, BAWs, low-noise amplifiers (“LNAs”), microwave mixers, and detectors using LDMOS, GaAs, GaN, and SiC technologies.  These components form the basis for our line of solid state power amplifiers, RF converters, and modems which are used in systems that provide communications links between ground stations, mobile units,

5

UAVs, and orbiting satellites. Such products are also used in TV broadcast and commercial data communications networks.  In addition, we also provide higher level microwave subsystems and systems for electronic warfare, UAV, radar and military communication applications.

We supply a variety of connectors and cable assemblies, including specialized high voltage connectors and subassemblies and coax microwave interconnects, for defense, aerospace and high-end industrial applications. Additionally, we produce pilot helmet mounted display quick disconnect harnesses for the Joint Helmet Mounted Cueing System (“JHMCS”) used in the F-15, F-16 and F-18 aircrafts. The JHMCS system is a multi-role system designed to enhance pilot situational awareness and provides visual control of aircraft targeting systems and sensors. We manufacture microprocessor-controlled aircraft ejection seat sequencers and related support elements to military aircraft programs. We also provide initiators and electronic safe and arm devices for use in military applications.

We provide high performance, high reliability semiconductor solutions which address critical functions of the complete signal chain and RF signal path, including design, assembly and test, packaging, qualification and long-term support for customer’s program life cycle management.

We supply electromechanical relays, solid state power relays and coaxial switching devices to military, aerospace and other industrial markets. Applications include microwave and wireless communication infrastructure, RF and general broadband test equipment, test equipment used in semiconductor manufacturing, and industrial and commercial machinery and control equipment. On commercial aircraft, our solid state and electromechanical relays are used in a variety of applications, including jet engine fuel control, management of control surfaces and other on-board applications.

We are a supplier of digital flight data acquisition and analysis systems to the civil aviation and military aircraft markets. These systems acquire data for use by the aircraft’s flight data recorder as well as record additional data for the airline’s operation. We provide the means to transfer this data, using Teledyne’s wireless technology, from the aircraft to the airline operation center. We also design and manufacture airborne networking products, including servers, wireless access points and aircraft interface device software, as well as aircraft data loading equipment, flight data analysis software, and data distribution software used by commercial airlines and the U.S. military, and we provide services related to our products. We also provide lead acid aircraft batteries for general aviation, business and light jet, and U.S. military applications.

Engineered Systems

Our Engineered Systems segment provides innovative systems engineering and integration and advanced technology development as well as complex manufacturing solutions for defense, space, environmental and energy applications. This segment also designs and manufactures electrochemical energy systems and manufactures specialty electronics for demanding military applications.

Teledyne Brown Engineering, Inc. is a well-recognized engineering and manufacturing company providing advanced solutions across the whole lifecycle of systems in space, missile defense, maritime, environmental and energy markets.

We lead and support air and missile defense programs, including the Optical Signatures Code (“OSC”) and Optical Signature In-Line Generator (“OPTISIG”) tools for modeling, simulation and analysis of next-generation hypersonic weapons. In addition, our patent-pending test and evaluation solutions can enable ground test facilities to produce more effectively simulated conditions a hypersonic vehicle, engine or subsystem may encounter to include; temperature and time of flight. We are also the prime contractor for the Extended Air Defense Simulation (“EADSIM”) contract providing analysis, training, test, and operational planning in a single integrated package for the U. S. Army Space and Missile Defense Command (“SMDC”). Under the Naval Health Research contract, we provide medical modeling and simulation tools. We are the prime contractor for SMDC’s Design, Development, and Integration (“D3I”) Domain 1 - Space/High Altitude and Missile Defense contract. Under this contract we provide a suite of threat-realistic ballistic target missiles (“Zombie” targets) used for testing missile defense systems. We recently joined with Raytheon to produce several large systems in direct support of the missile defense radar systems.

We specialize in marine systems design, development, and manufacturing. For the U.S. Special Operations Command, contracted through Naval Sea Systems Command (“NAVSEA”), we are the prime contractor for the design, development, test, manufacture and sustainment of the Shallow Water Combat Submersible (“SWCS”) vehicle which will replace the current SEAL Delivery Vehicle. With the design and development test phase of the SWCS engineering development model completed, we began low-rate initial production in late 2016 with production scheduled through 2023. We are responsible for the production, test and training of maintenance and operation crews for the Pluto Gigas remotely operated mine countermeasure system sold to the Egyptian Navy through the NAVSEA Foreign Military Sales Office. We are producing the Littoral Battlespace Sensing Glider (“LBS-G”) system for the U.S. Navy Program Executive Office - Command, Control, Communications, Computers, and Intelligence. Teledyne Webb Research is the Glider developer and manufacturer on the LBS-G program. For Northrop Grumman, we manufacture gun mounts and surface to surface mission modules for the Littoral Combat Ship program. Under contract to Raytheon, we continue to manufacture advanced mine detection and neutralization systems.

6

We are active in U.S. space programs and continue to play a vital role in the science operations area of the International Space Station (“ISS”). We provide 24-hour-per-day payload operations in the ISS Payload Operations and Integration Center, located at NASA’s Marshall Space Flight Center (“MSFC”). Under contract with MSFC, we have designed and are manufacturing the Launch Vehicle Stage Adapter, a critical element of NASA’s Space Launch System. Flight Unit 1 will be delivered by June 2020 with Flight Unit 2 under contract and delivery scheduled for 2022. Flight Unit 3 is scheduled for contract finalization in the first half of 2020 with anticipated delivery in 2024. We have developed a commercial platform that hosts payloads for earth imaging and other scientific applications known as the Multi-User System for Earth Sensing (“MUSES”). The first instrument affixed to MUSES was built in cooperation with the German Aerospace Center (“DLR”). This DLR Earth Sensing Imaging Spectrometer (“DESIS”) was declared fully operational in September 2019, achieving revolutionary spectral resolution of 2.55 nanometers and demonstrating the ability to detect ocean-borne plastics as well as surface deposits of rare earth elements from space. DLR retains the scientific rights to the imagery while Teledyne has the commercial rights. Hyperspectral imagery from the DESIS instrument will be sold to U.S. Government and industrial customers for scientific research and commercial applications. We also design, develop, and manufacture components for scientific payloads and human space flight vehicles.

We provide specialty electronic manufacturing services. We develop and manufacture custom microelectronic modules that provide both high reliability and extremely dense packaging for military applications. We also develop custom tamper-resistant microcircuits designed to provide enhanced security in military communication. We serve the market for high-mix, low-volume manufacturing of sophisticated military electronics equipment.

We have delivered a prototype for a new method of processing enriched uranium at the U.S. Department of Energy Y-12 National Security Complex and have begun manufacture of production units with delivery through 2021. We also operate a facility that supports test and development of nuclear technology.

We operate a full-service radiological analysis laboratory in Knoxville, Tennessee, which principally supports nuclear power plants in the United States. We also manage and operate a separation, purification, and analysis of atmospheric samples laboratory for the U.S. Government. Additionally, we provide engineering and manufacturing for customers in the commercial nuclear market. Continuing our historic facilities and plant management services to the commercial chemical industry, we currently lead on-site and off-site management and support of research services and facility management at several sites.

We manufacture high quality machined components that we integrate into complex products and systems for customers across the spectrum of our core business base, including NASA, the U.S. Department of Defense, the U.S. Department of Energy, foreign militaries and commercial customers.

We provide advanced thermoelectric material technology and generators for challenging applications. The NASA Curiosity rover is powered by a thermoelectric generator designed and built by Teledyne Energy Systems, Inc., and we are developing the next generation system based on advanced thermoelectric materials.

We provide leading edge battery and fuel cell energy technology solutions for use in U.S. Government programs and underwater power applications. These are lightweight compact systems are for underwater vehicles, aircraft, launch vehicles, spacecraft and umbilical replacements. Both technologies can be customized to meet challenging applications for extended duration missions.

We manufacture hydrogen/oxygen gas generators used worldwide in electrical power plant generation plants, semiconductor manufacturing and other industrial processes. Our sales of hydrogen generators have been primarily in developing countries and domestic applications where delivered merchant gas is not practical.

We manufacture small gas turbine engines for military markets. Our engines power the Boeing/U.S. Navy Harpoon Missile systems.

Customers

We have a large number of customers in the various industries we serve. No commercial customer accounted for more than 10% of any segment net sales during 2019, 2018 or 2017. No commercial customer in 2019, 2018 or 2017 accounted for more than 3.0% of total net sales.

Sales to international customers accounted for approximately 44% of total sales in 2019, compared with 47% in 2018 and 46% in 2017. In 2019, we sold products to customers in over 100 foreign countries. Approximately 90% of our sales to foreign-based customers were made to customers in 25 foreign countries. In 2019, the top five countries for international sales were China, the United Kingdom, Germany, Japan and South Korea and represented approximately 21% of our total sales.

7

Approximately 24%, 23% and 24% of our total net sales for 2019, 2018 and 2017, respectively, were derived from contracts with agencies of, and prime contractors to, the U.S. Government. Information on our sales to the U.S. Government, including direct sales as a prime contractor and indirect sales as a subcontractor, is as follows (in millions):

U.S. Government sales by segment:	2019		2018		2017
Instrumentation	$	80.4	$	68.3	$	65.2
Digital Imaging	107.4		90.5		85.7
Aerospace and Defense Electronics	225.3		177.2		157.2
Engineered Systems	346.7		319.3		311.6
Total U.S. Government sales	$	759.8	$	655.3	$	619.7

Our principal U.S. Government customer is the U.S. Department of Defense, which totaled $545.5 million, $494.9 million and $479.7 million of our total net sales for 2019, 2018 and 2017, respectively. In 2019 and 2017, our largest program with the U.S. Government was the Mission Operations and Integration contract with the NASA Marshall Space Flight Center, which represented 1.4% and 1.5% of our total net sales, respectively. In 2018, our largest program with the U.S. Government was the Objective Sim Framework program with the Missile Defense Agency, which represented 1.6% of our total net sales.

As described under risk factors, there are risks associated with doing business with the U.S. Government. In 2019, approximately 64% of our U.S. Government prime contracts and subcontracts were fixed-price type contracts, compared to 67% in 2018 and 58% in 2017. Under these types of contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price. 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. When contracts are terminated for convenience, we recover costs incurred or committed, settlement expenses and profit on work completed prior to termination. We had three U.S. Government contracts terminated for convenience in 2019, compared with 15 in 2018 and nine in 2017.

Our total backlog of confirmed and funded orders was approximately $1,699.3 million at December 29, 2019, compared with $1,568.8 million at December 30, 2018, and $1,250.2 million at December 31, 2017. We expect to fulfill a majority of such backlog of confirmed orders during 2020.

Seasonality

No material portion of our business is considered to be seasonal.

Raw Materials and Suppliers

Generally, our businesses have experienced minimal fluctuations in the supply of raw materials, but not without some price volatility. While some of our businesses provide services, for those businesses that sell hardware and product, a portion of the value that we provide is labor-oriented, such as design, engineering, assembly and test activities. In manufacturing our products, we use our own production capabilities and third-party suppliers and subcontractors, including international sources. Some of the items we use for the manufacture of our products, including certain gyro components for some marine navigation applications, certain magnets and helix wire for our traveling wave tubes, certain infrared detectors substrates and certain ceramics and molding compounds used in our sonar systems, as well as certain scintillator materials used in the production of our X-ray detectors, are purchased from limited or single sources, including international sources, due to technical capability, price and other factors. At times we have experienced difficulty in procuring raw materials, components, sub-assemblies and other supplies required in our manufacturing processes due to shortages and supplier-imposed allocation of components.

Sales and Marketing

Our sales and marketing approach varies by segment and by products within our segments. A shared fundamental tenet is the commitment to work closely with our customers to understand their needs, with an aim to secure preferred supplier and longer-term relationships.

Our segments use a combination of internal sales forces, third-party distributors and third-party commissioned sales representatives to market and sell our products and services. Our businesses have been working over the years to consolidate or share internal sales and servicing efforts. Several Teledyne businesses have been marketing and selling products collaboratively to similar customers to promote “one-stop” shopping under singular “brand” names, including Teledyne Marine, Teledyne Oil & Gas, Teledyne Defense Electronics, Teledyne Microwave Solutions, Teledyne HiRel Electronics and Teledyne Advanced Chemistry Systems.

Products are also advertised in trade journals and by means of various websites. To promote our products and other capabilities, our personnel regularly participate in trade shows and professional associations.

Many of our government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions in addition to competitive pricing.

8

Through Teledyne Technologies International Corp. and other subsidiaries, we have established offices in foreign countries to facilitate international sales for various businesses. Locations include Brazil, China, France, Germany, India, Italy, Japan, Malaysia, Singapore, South Korea and the United Arab Emirates.

Competition

We believe that technological capabilities and innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete. Although we have certain advantages that we believe help us compete effectively in our markets, each of our markets is highly competitive. With regard to our defense businesses, it is common in the defense industry for work on programs to be shared among several companies, including competitors. In any event, 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. Our businesses vigorously compete on quality, product performance and reliability, technical expertise, price and service. Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do.

Intellectual Property

While we own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights, which, in the aggregate, are of material importance to our business, we believe that our business as a whole is not materially dependent upon any one intellectual property or related group of such properties. We own several hundred active patents and are licensed to use certain patents, technology and other intellectual property rights owned and controlled by others. Similarly, other companies are licensed to use certain patents, technology and other intellectual property rights owned and controlled by us.

Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise. 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 Sustainability

Teledyne’s businesses continue to focus on developing solutions to address sustainability and climate challenges facing humanity today. We provide a broad range of precision measurement technologies for environmental monitoring and climate research. Our sensors and instruments are deployed everywhere, from pole to pole, in space, on aircraft and drones, on land, on the sea surface, in the water column, and on the seafloor. They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling all of Earth’s oceans. Applications of our instruments provide scientists information that spans time from the origin of the universe to providing real-time data to quality of air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.

More specific examples of our contributions to global environmental and climate science include the following:

•We provide sophisticated water samplers and flowmeters to monitor wastewater, irrigation flow, storm water, industrial discharge, construction site run-off and municipal wastewater collection, treatment and reuse.

•Our hazardous gas detection monitors are making industrial workplaces safer around the world.

•We build precision air quality instruments that measure common air pollutants (NOX, SO2, CO, ozone, PM10 and PM2.5) that are considered hazardous to human health and the environment. Our instruments enable government agencies around the world to detect and monitor the quality of the air we breathe in real-time to assess their compliance with air quality regulations and ultimately reduce air pollution. We provide the visible and infrared imaging sensors that enable NASA’s Orbiting Carbon Observatory 2 and GeoCarb missions that measure carbon dioxide and methane in the Earth’s atmosphere,

•Our floats, gliders and instruments assist climate research by providing access to accurate data, including subsurface temperatures and velocities of currents throughout the world’s oceans. On a shorter timescale, scientists are employing our instruments and in particular our ocean gliders to provide essential inputs for computer models of dangerous storms, providing real-time information to save lives. Our instruments enable scientists to forecast more accurately floods or droughts thereby allowing farmers to better plan for planting crops and providing irrigation.

•We work with maritime agencies around the world, preserving free and safe navigation of the world’s oceans.

•The oceans are increasingly threatened by floating plastics that are constantly moving. We support ocean cleanup agencies with both airborne and space-based instruments that track and analyze the debris.

•We have products designed to improve the efficiency of motors, motor drives and industrial automation systems to reduce energy consumption. Our line of motor drive analyzers measure performance dynamically. The high-

9

resolution display and sensitive software tools enable engineers to look inside the motor and motor drive to optimize performance and energy efficiency.

Pursuant to the mandate in their respective charters, the audit committee of our board regularly reviews matters related to compliance with environmental laws and the health and safety of employees, and the nominating and governance committee of our board reviews and evaluates our policies and practices and monitors our efforts in areas of legal and social responsibility, diversity and sustainability.

Employees

We consider our relations with our employees to be good. At December 29, 2019, our total workforce consisted of approximately 11,790 employees, of which approximately 7,150 employees were in the United States.

Information about our Executive Officers

Teledyne’s executive management includes:

Name and Title	Age	Principal Occupations Last 5 Years
Executive Officers:
Robert Mehrabian* Executive Chairman; Director	78	Dr. Mehrabian has served as Executive Chairman since January 1, 2019. Prior to January 1, 2019, he was Teledyne’s Chairman, President and Chief Executive Officer for more than five years.
Aldo Pichelli* President and Chief Executive Officer	68	Mr. Pichelli has been the President and Chief Executive Officer since January 1, 2019 and Chief Operating Officer of Teledyne since October 2015. Prior to his promotion to Chief Operating Officer, Mr. Pichelli had been an Executive Vice President of Teledyne having responsibility for the Instrumentation and Aerospace and Defense Electronics segments since July 2013.
Jason VanWees* Executive Vice President	48	Mr. VanWees has been Executive Vice President since January 1, 2019. Prior to his promotion he was Senior Vice President, Strategy and Mergers & Acquisitions for more than five years.
Stephen F. Blackwood* Senior Vice President, Strategic Sourcing, Tax and Treasurer	57	Mr. Blackwood has been Senior Vice President, Strategic Sourcing, Tax and Treasurer since January 1, 2019. Prior to his promotion, he was Vice President and Treasurer of Teledyne for more than five years.
Melanie S. Cibik* Senior Vice President, General Counsel, Chief Compliance Officer and Secretary	60	Miss Cibik has been Senior Vice President, General Counsel and Secretary since September 2012 and Chief Compliance Officer since August 2016. In August 2019, Miss Cibik became a director of OPUS Bank.
Susan L. Main* Senior Vice President and Chief Financial Officer	61	Ms. Main has been Senior Vice President and Chief Financial Officer of Teledyne since November 2012. In July 2017, Ms. Main became a director of Ashland Global Holdings, Inc., a specialty chemical company. In October 2018, Ms. Main became a director of Garrett Motion Inc., a technology provider to vehicles.
Cynthia Belak* Vice President and Controller	63	Ms. Belak has been Vice President and Controller of Teledyne since May 2015.  Prior to her promotion, Ms. Belak had been Vice President, Business Risk Assurance of Teledyne since January 2012.
George C. Bobb III* Vice President of Teledyne and President - Aerospace and Defense Electronics	45	Mr. Bobb has been Vice President of Teledyne for more than five years. Since July 29, 2019, he has been the President of the Aerospace and Defense Electronics segment. Prior to that, he had been and President - Teledyne Aerospace Electronics since August 2017. He has been President of Teledyne Controls LLC since April 2018. From January 2017 until April 2018 he was President of Teledyne Scientific & Imaging LLC. He was Vice President-Contracts, Information Technology and Selected Operations and Deputy General Counsel for Litigation of Teledyne from August 2016 to August 2017. Prior to that he was Chief Compliance Officer, Vice President-Information Technology and Deputy General Counsel for Litigation of Teledyne.
Edwin Roks* Vice President of Teledyne and Group President - Teledyne Digital Imaging - Teledyne DALSA and Teledyne e2v	55	Dr. Roks has been a Vice President of Teledyne since January 2014 and Group President - Teledyne Digital Imaging, Teledyne DALSA and Teledyne e2v, since March 2017. Dr. Roks has been President of Teledyne DALSA, Inc. since October 2015. From January 2014 to October 2015, Dr. Roks had been the Chief Technology Officer of Teledyne. Prior to that since April 2010, Dr. Roks served as Executive Vice President and General Manager of the professional imaging division of Teledyne DALSA, Inc. (formerly known as DALSA Corporation).

10

Name and Title	Age	Principal Occupations Last 5 Years
Other Executives:
Carl Adams Vice President, Business Risk Assurance	50	Mr. Adams has been Vice President, Business Risk Assurance of Teledyne since May 2015.  Prior to that, upon joining Teledyne in April 2015, he was Senior Director, Finance.  Prior to that, he was the Chief Financial Officer and Vice President of NeuroSigma, Inc. since March 2014.
Vicki Benne Vice President and General Manager of Teledyne Environmental Instrumentation	58	Ms. Benne has been Vice President and General Manager of Teledyne Environmental Instrumentation since September 2018. Prior to that she was Vice President and General Manager, Teledyne ISCO since April 2014.
Jason Connell Vice President - Human Resources and Associate General Counsel	44	Mr. Connell has been Vice President - Human Resources since December 2016. Prior to that he was and remains Associate General Counsel and General Counsel of the Engineered Systems segment.
Janice L. Hess President, Engineered Systems Segment	60	Ms. Hess has been the President of the Engineered Systems segment of Teledyne since May 2014.  Prior to her promotion, Ms. Hess was the Executive Vice President and Chief Financial Officer for the Engineered Systems segment and Teledyne Scientific and Imaging for more than five years.
Scott Hudson Vice President - Chief Information Officer	58	Mr. Hudson has been Vice President and Chief Information Officer since August 2017 and Chief Information Officer since June 2014.
Sean O’Connor Chief Operating Officer and Chief Financial Officer of Teledyne Environmental and Electronic Measurement Instrumentation (“EEMI”)	55	Mr. O’Connor has been Chief Operating Officer and Chief Financial Officer of Teledyne Environmental and Electronic Measurement Instrumentation since September 2018. Prior to that he was Vice President and Chief Financial Officer of Teledyne Environmental and Electronic Measurement Instrumentation, which included Teledyne LeCroy, Inc. for more than five years.
Kevin Prusso Vice President and General Manager of Teledyne Test and Measurement Instrumentation	56	Mr. Prusso has been Vice President and General Manager of Teledyne Test and Measurement Instrumentation since August 2018. Prior to that he was Vice President of Sales and Marketing for Teledyne LeCroy, Inc. since April 2018 and prior to that he was Vice President of Sales and Marketing for the Protocol Solutions Group of Teledyne LeCroy, Inc.
Michael Read President, Teledyne Marine Group	61	Mr. Read has been President, Teledyne Marine Group since August 2016. Prior to that since August 2009 he was President, Teledyne Oil & Gas.
Glenn A. Seemann Vice President, Contracts	62	Mr. Seemann has been Vice President - Contracts since August 2017. Prior to that since April 2015 he was Associate Vice President, Corporate Contracts, Procurement, and Property Management. Prior to that since July 2009 he was Vice President, Contracts - Teledyne Instruments, Inc.

 * Such officers are subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 1934, as amended.

Dr. Robert Mehrabian and Teledyne are parties to a Sixth Amended and Restated Employment Agreement dated as of October 23, 2018 (the “Mehrabian Employment Agreement”). The Mehrabian Employment Agreement provides that effective January 1, 2019, Dr. Mehrabian shall be employed by the Company as Executive Chairman. The Executive Chairman shall have primary responsibility to manage the affairs of the Board and to manage and direct mergers and acquisition activities and strategic planning and margin expansion initiatives of Teledyne. Its term continues through December 31, 2023.

The Mehrabian Employment Agreement also provides that Dr. Mehrabian’s base salary of $995,000 continued through December 31, 2019, after which date his base salary was reduced to and remains $900,000. Such base salary may be increased annually at the discretion of the Personnel and Compensation Committee.

The Mehrabian Employment Agreement further provides, among other things: 

•Annual Incentive Plan (“AIP”): Dr. Mehrabian shall participate in the AIP with a target opportunity of 120% of base salary.

•Performance Share Plan (“PSP”): Through December 31, 2019, Dr. Mehrabian shall participate in the PSP at the target opportunity of 150% of base salary. Effective January 1, 2020, Dr. Mehrabian shall participate in the PSP at a target opportunity equal to 300% of base. The applicable percentage for Dr. Mehrabian’s current 2018-2020 PSP award is prorated, with this increased percentage effective as of January 1, 2020.

•Restricted Stock: Dr. Mehrabian shall participate in Teledyne’s restricted stock award program with annual grants of restricted stock equal to at least 100% of Base Salary as of the date of the grant subject to meeting targets set forth in the restricted stock award.

•Stock Options: Dr. Mehrabian’s stock option grant in 2019 shall have a fair value equal to the amount he received in 2018 (which was $2,422,000), and future annual grants thereafter, as determined by the Committee, shall have a fair value as of the grant date equal to $900,000. With respect to options granted to Dr. Mehrabian on or after the date of the Mehrabian Employment Agreement, the Mehrabian Employment Agreement provides that in the event of Dr. Mehrabian’s separation of service for any reason other than death, outstanding stock options shall continue to vest and

11

the right of Dr. Mehrabian to exercise vested stock options, when and as vested, shall continue, but in no event may any such vested options be exercised after the expiration of any applicable option period. With respect to options granted to Dr. Mehrabian on or after the date of the Mehrabian Employment Agreement, the Mehrabian Employment Agreement provides that in the event of the death of Dr. Mehrabian, all outstanding options shall vest in full and the right of Dr. Mehrabian’s beneficiary to exercise the stock options shall terminate upon the expiration of twelve months from the date of Dr. Mehrabian’s death, but in no event may such stock options be exercised after the expiration of any applicable option period.

•Supplemental Pension Benefit: With respect to Dr. Mehrabian’s Non-Qualified Pension Benefit, which provides for payments supplemental to any accrued pension under Teledyne’s qualified pension plan equal to 50% of his base salary for ten years following Dr. Mehrabian’s retirement, the Mehrabian Employment Agreement provides that the base salary rate to be used for calculating the payments shall be the rate in effect for 2018 (which was $995,000).

•Post-Retirement Medical Coverage: Commencing on Dr. Mehrabian’s separation from service (for any reason) and continuing for the longer to live of Dr. Mehrabian and his spouse, Dr. Mehrabian and his spouse shall be deemed participants in Teledyne’s medical benefit plan offered to all employees of Teledyne and be deemed to be eligible to receive the benefits under the medical plan. Dr. Mehrabian shall be charged for such deemed participation at a rate equal to the monthly rate the medical plan charges former participants and spouses eligible for continuation coverage under COBRA, plus the rate payable by the employer, as each such COBRA rate is adjusted from time to time.

Mr. Pichelli and Teledyne are parties to an Employment Agreement dated October 23, 2018 (the “Pichelli Employment Agreement”). The Pichelli Employment Agreement provides that Teledyne will employ Mr. Pichelli as President and Chief Executive Officer and is effective from January 1, 2019, through December 31, 2021. The Pichelli Employment Agreement provides that effective January 1, 2019, Mr. Pichelli’s annual base salary shall be $800,000. Such base salary may be increased annually at the discretion of the Personnel and Compensation Committee.

The Pichelli Employment Agreement further provides, among other things, that effective January 1, 2019: 

•AIP: Mr. Pichelli shall participate in the AIP at an opportunity of 110% of base salary if targets are reached at 100%, or such greater percentage if provided in the AIP for any year.

•PSP: Mr. Pichelli shall participate in the PSP at an opportunity equal to 300% of base salary if targets are reached at 100%. The applicable percentage for Mr. Pichelli’s current 2018-2020 PSP award will be prorated, with this increased percentage effective as of January 1, 2019. 

•Restricted Stock: Mr. Pichelli shall participate in Teledyne’s restricted stock award program with annual grants of restricted stock equal to at least 100% of Base Salary as of the date of the grant subject to meeting targets set forth in the restricted stock award.

•Stock Options: Mr. Pichelli will be eligible to receive future annual grants of options having a fair value of at least $800,000 as of the grant date, or such other higher value as determined by the Committee. With respect to options granted to Mr. Pichelli on or after the date of the Pichelli Employment Agreement, the Pichelli Employment Agreement provides that in the event of Mr. Pichelli’s separation of service for any reason other than death, outstanding stock options shall continue to vest and the right of Mr. Pichelli to exercise vested stock options, when and as vested, shall continue, but in no event may any such vested options be exercised after the expiration of any applicable option period. With respect to options granted to Mr. Pichelli on or after the date of the Pichelli Employment Agreement, the Pichelli Employment Agreement provides that in the event of Mr. Pichelli’s death, all outstanding options shall vest in full and the right of Mr. Pichelli’s beneficiary to exercise the stock options shall terminate upon the expiration of twelve months from the date of Mr. Pichelli’ death, but in no event may such stock options be exercised after the expiration of any applicable option period.

•Benefits: Mr. Pichelli will continue to be eligible to participate in other employee benefit plans and programs available to executive-level employees, including but not limited to an automobile allowance.

Ten current members of management have entered into change of control severance agreements. The agreements have a three-year, automatically renewing term, except as noted below. The executive is entitled to severance benefits if (1) there is a change in control of the Company and (2) within three months before or 24 months after the change in control, either we terminate the executive’s employment for reasons other than cause or the executive terminates the employment for good reason. “Severance benefits” currently consist of:

•A cash payment equal to three times in the case of Dr. Mehrabian or two times in the other cases the sum of (i) the executive’s highest annual base salary within the year preceding the change in control and (ii) the Annual Incentive Plan bonus target for the year in which the change in control occurs or the average actual bonus payout for the three years immediately preceding the change in control, whichever is higher.

•A cash payment for the current AIP bonus cycle based on the fraction of the year worked times the AIP target objectives at 100%.

12

•Payment in cash for unpaid performance share program awards, assuming applicable goals are met, at 120% of performance targets (100% of performance targets in some agreements).

•Continued equivalent health and welfare (e.g., medical, dental, vision, life insurance and disability) benefits at our expense for a period of up to 36 months (including Dr. Mehrabian) (24 months in some agreements, including Mr. Pichelli) after termination (with the executive bearing any portion of the cost the executive bore prior to the change in control); provided, however, such benefits would be discontinued to the extent the executive receives similar benefits from a subsequent employer.

•Removal of restrictions on restricted stock issued under our restricted stock award programs.

•Full vesting under the Company’s pension plans (within legal parameters) such that the executive shall be entitled to receive the full accrued benefit under all such plans in effect as of the date of the change in control, without any actuarial reduction for early payment.

•Up to $25,000 (including Dr. Mehrabian) ($15,000 in some agreements, including Mr. Pichelli) reimbursement for actual professional outplacement services.

•Immediate vesting of all stock options, with options being exercisable for the full remainder of the term.

•There is no “gross up payment” to hold the executive harmless against the impact, if any, of federal excise taxes imposed on executive as a result of “excess parachute” payments as defined in Section 280G of the Internal Revenue Code. The executive will receive the better of, on an after-tax basis, (a) the unreduced excess parachute payment with no tax gross up payment, or (b) a parachute payment reduced to a level below which an excise tax is imposed.

•Certain payments are deferred for six months following a separation of service to assure compliance with Section 409A of the Internal Revenue Code.

The Company has entered into individual Indemnification Agreements with directors and certain officers and executives of Teledyne, including those members of Executive Management listed above. The Indemnification Agreements provide the directors and executives who are parties to the agreements with a stand-alone contractual right to indemnification and expense advancement to the greatest extent allowable under Delaware law. The Indemnification Agreements also provide:

•In a third-party proceeding, an indemnitee is entitled to indemnification if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, if in a criminal action or proceeding, if the indemnitee had no reason to believe that his or her conduct was unlawful. In a third-party proceeding, the indemnification obligation covers reasonable expenses, judgment fines, and amounts paid in settlement actually and reasonably incurred by the indemnity.

•In proceedings by or in the name of the Company (e.g., derivative suits), an indemnitee is entitled to indemnification if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. In derivative suits, the indemnification obligation covers reasonable expenses, but in proceedings where the Company is alleging harm caused by the indemnitee, the indemnitee would generally not be entitled to be indemnified for judgments, fines and amounts paid in settlement (otherwise the Company would effectively not recover any damages), unless a Delaware or other court determines otherwise despite the finding of liability.

•The Company has an obligation to advance, on an unsecured and interest free basis, reasonable expenses incurred by the indemnitee within 30 days of the indemnitee’s request. The indemnitee does not need to meet any standard of conduct to be entitled to advancement of expenses and there is no determination requirement to be made by the Board in connection with the advancements of expenses. An indemnity must repay any amounts advanced if it ultimately determined that the indemnity is not entitled to indemnification.

Our indemnification obligations do not cover the following situations: (1) where indemnification payments have been made under director’s and officer’s insurance or other indemnification provisions; (2) where the claim is based on disgorgement of short-swing profits under Section 16(b) of the Exchange Act; (3) where the claim is based on reimbursement by the indemnitee to the Company of a bonus or other incentive-based or equity-based compensation if required under the Exchange Act (e.g., in connection with a restatement as a result of the Company’s noncompliance with the financial reporting requirements required by Section 304 of the Sarbanes-Oxley Act); or (4) where the proceeding is initiated by the indemnitee (other than proceedings that are consented to by the Board or that the indemnitee initiates against the Company to enforce the Agreement).

Under the Indemnification Agreements, in the event of a change in control or we reduce or do not renew our director’s and officer’s insurance coverage, we are required to purchase (or cause the acquirer or successor to the Company to purchase or maintain) a six-year tail policy, subject to a 200% premium cap. The agreements continue until the later of (i) 10 years after the indemnitee ceases to serve as a director or officer, and (ii) one year following the final termination of any proceeding subject to the agreement.

13

Available Information

Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K, and any amendments to these reports, are available free-of-charge on our website (www.teledyne.com) as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the “SEC”). The SEC also maintains a website that contains these reports and other information we file, including our proxy statements, at www.sec.gov. In addition, our Corporate Governance Guidelines, our Global Code of Ethical Business Conduct, our Codes of Ethics for Financial Executives, Directors and Service Providers and the Charters of the standing committees of our Board of Directors are available on our website. We intend to post any amendments to or waivers of these policies, guidelines and charters on our website. Alternatively, if you would like a paper copy of any report we file with the SEC (without exhibits) or other document, please write to Melanie S. Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, at Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362, and a copy of such requested document will be provided to you, free-of-charge.

Item 1A. Risk Factors

Risk Factors; Cautionary Statement as to Forward-Looking Statements

The following text highlights various risks and uncertainties associated with Teledyne. These factors could materially affect “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that we may make from time to time, including forward-looking statements contained in “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K and in Teledyne’s 2019 Annual Report to Stockholders. It is not possible for management to predict all such factors, and new factors may emerge or existing factors may change. Additionally, management cannot assess the impact of each such factor on Teledyne or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Escalating global trade tensions and the adoption or expansion of tariffs and trade restrictions could negatively impact us.  

Starting in 2018, the U.S. Government imposed tariffs on a wide range of goods imported from China and a trade war ensued between the two nations. Several countries affected by these tariffs imposed retaliatory tariffs. In January 2020, under a U.S.-China trade agreement, China agreed to purchase $200 billion in additional goods and services from the United States over the next two years, in exchange for the United States agreeing to reduce tariffs on $120 billion in Chinese products from 15% to 7.5%. It is not yet known what if any impact this deal may have on our businesses or what impact there may be if either party fails to live up to the terms of the deal, more so with China given the Coronavirus health crisis threatening its already slowing economic growth. In any event, high tariffs generally increase the cost of materials for our products, which could result in our products becoming less competitive or generating lower margins. With high tariffs imposed on our products, we may also need to find new suppliers and components for our products, which could result in production delays. To the extent our products are the subject of retaliatory tariffs, customers in some countries or regions, such as China, may begin to seek domestic or non-U.S. sources for products that we sell, or be pressured or incentivized by foreign governments not to purchase U.S.-origin goods, which could harm our future sales in these markets. Additionally, if China were to enact laws or regulations requiring the use of local suppliers, it could have a negative impact on Teledyne’s revenues.

Furthermore, as global tensions increase, more countries are enhancing their export regulations. For example, the U.K. has recently limited the sale of certain defense equipment to Middle Eastern countries. We also have seen a recent increase in denial of export licenses for sales into Russia, Turkey and the Middle East.

Additionally, a number of well-established customers and suppliers have become listed on Government restricted party lists without much warning. In particular, U.S. export enforcement agencies have placed several Chinese and Russian companies and many of their international subsidiaries on such lists, prohibiting the export of most commercial and dual-use items subject to the Export Administration Regulations. Multiple Teledyne companies had large pending orders with some of those companies that had to be either cancelled or for which Teledyne submitted export license applications that have a low probability of approval. For example, Huawei Technologies, Co., Ltd. (“Huawei”), and its affiliates were added to the U.S. Department of Commerce Bureau of Industry and Security Entity list on May 16, 2019. Huawei was a customer of our test and measurement business, and pending license applications have not yet been approved. The U.S. Government has also made efforts to increase restrictions on some of those listed entities, including proposals to expand U.S. export jurisdiction over certain foreign made products containing U.S.-origin materials. For example, the U.S. Government had proposed modifying the minimum amount of U.S. content permitted within products before they become subject to U.S. export restrictions from 25% to 10% for anything sold to Huawei. While we will continue to work to mitigate the impact of tariffs and trade restrictions, they could result in reduction in our revenue, price increases on material used in our products or production delays, which could adversely affect our business, financial condition, operational results and cash flows.

14

A material amount of our total revenues is derived 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.

A material amount of our total revenues is derived from customers in or connected to oil and gas exploration, development and production, especially the offshore oil and gas industry. The oil and gas industry has historically been cyclical and characterized by significant changes in the levels of exploration and development activities. Oil and gas prices, and market expectations of potential changes in those prices, significantly affect the levels of those activities. Any prolonged reduction in the overall level of offshore oil and gas exploration and development activities, whether resulting from changes in oil and gas prices or otherwise, could materially and adversely affect our financial condition and the results of our businesses within our Instrumentation segment.

Some factors that have affected and are likely to continue affecting oil and gas prices and the level of demand for our services and products include the following:

•worldwide demand for oil and gas;

•general economic and business conditions and industry trends;

•the ability of the Organization of Petroleum Exporting Countries, or OPEC, to set and maintain production levels;

•the level of production by non-OPEC countries;

•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;

•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 or use alternative energy sources.

Teledyne manufactures seismic energy sources, interconnects and data acquisition products that are used in offshore energy exploration. When crude oil and natural gas prices are low, the level of marine seismic exploration activity typically decreases, potentially resulting in reduced demand for our products used in offshore energy exploration. In addition, a decline in the level of capital spending by oil and natural gas companies may result in a reduced rate of development of new energy reserves, which could adversely affect demand for our products related to energy production, and, in certain instances, result in the cancellation, modification or rescheduling of existing orders and a reduction in customer-funded research and development related to next generation products.

A new global recession or an economic downturn in China may adversely affect us.

If another global recession emerges, if economic uncertainty in Europe continues or worsens, or if economic growth in China substantially slows, we may experience declines in revenues, profitability and cash flows from reduced orders, payment delays, collection difficulties, increased price pressures for our products, increased risk of excess and obsolete inventories or other factors caused by the economic problems of our customers. Our sales to China-based customers represented 6.6% of total revenues in 2019, 6.7% of total revenue in 2018 and 6.3% of total revenue in 2017. Economic growth in China has moderated, with a health crisis threatening already slowing economic growth. Continued growth in many of our businesses, including those in our Environmental and Electronic Measurement Instrumentation group, could be negatively impacted if an economic downturn persists in China. If negative conditions in the global credit markets prevent our customers from having access to credit or render them insolvent, orders for our products may decrease, which would result in lower revenue. Likewise, if our suppliers face challenges in obtaining credit, in selling their products, or otherwise in operating their businesses or remaining solvent, they may become unable to offer the materials we use to manufacture our products. These events could adversely impact our ability to manufacture affected products and could also result in reductions in our revenue, increased price competition, and increased operating costs, which could adversely affect our business, financial condition, operational results, and cash flows.

We develop and manufacture products for customers in the energy exploration and production markets, domestic and international commercial aerospace markets, the semiconductor industry, and the consumer electronics, telecommunications and automotive industries; each of which has been cyclical, exhibited rapid changes and suffered from fluctuating market demands. A cyclical downturn in these markets may materially affect future operating results.

In addition, we sell products and services to customers in industries that are sensitive to the level of general economic activity and consumer spending habits and to customers in more mature industries that are sensitive to capacity constraints. Adverse economic conditions affecting these industries may reduce demand for our products and services, which may reduce our revenues, profits or production levels. Some of our businesses serve industries such as power generation and petrochemical

15

refining, which may be negatively impacted in the event of future reductions in global capital expenditures and manufacturing capacity.

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, 2019, we had $851.8 million total outstanding indebtedness, including $295.0 million in senior unsecured fixed rate notes, $279.8 million in Euro denominated fixed rate notes, $150.0 million in term loans and $125.0 million outstanding under our $750.0 million floating rate credit facility. Our indebtedness or a failure to comply with our covenants that apply to our indebtedness could harm our business by, among other things, reducing the funds available to make acquisitions, capital expenditures, stock repurchases, or reducing our flexibility in planning for or reacting to changes in our business or market conditions. Our indebtedness exposes us to interest rate risk since a portion of our debt obligations are at variable rates. Our indebtedness or a failure to comply with our covenants that apply to our indebtedness could also have a material adverse effect on our business by increasing our vulnerability to general adverse economic and industry conditions or a downturn in our business. General adverse economic and industry conditions or a downturn in our business could result in our inability to repay this indebtedness in a timely manner.

Further, the Financial Conduct Authority (the authority that regulates LIBOR) has announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to USD-LIBOR for use in debt instruments, derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives, debt and cash markets exposed to USD-LIBOR. It is unclear as to what the new method of calculating LIBOR that may evolve and this new method could adversely affect the Company’s interest rates on the Company’s indebtedness. The Company is monitoring the ARRC transition plan and is evaluating potential related risks. As of December 29, 2019, approximately 32.5% of the Company’s long-term debt is variable and can be indexed to USD-LIBOR. A 2019 amendment to our $750.0 million credit facility includes a procedure to switch to LIBOR alternative replacement rates in the future.

We are subject to the risks associated with international sales and international operations, which could harm our business or results of operations.

During 2019, sales to international customers accounted for approximately 44% of our total revenues, compared with 47% in 2018 and 46% in 2017. In 2019, we sold products to customers in over 100 countries. In 2019, the top five countries for international sales were China, Germany, the United Kingdom, Japan and South Korea, constituting approximately 21% of our total sales. We anticipate that future sales to international customers will continue to account for a significant and increasing percentage of our revenues, particularly since business and growth plans for many Teledyne businesses focus on sales outside of the United States, including to emerging markets such as China, India, Brazil and West Africa.

Risks associated with international sales and operations include, but are not limited to:

•political and economic instability;

•international terrorism;

•export controls, including U.S. export controls related to China, sanctions related to Russia, and increased scrutiny of exports of marine instruments, digital imaging and other products;

•failure to comply with anti-bribery legislation, including the U.S. Foreign Corrupt Practices Act;

•changes in legal and regulatory requirements;

•U.S. and foreign government policy changes affecting the markets for our products;

•changes in tax laws and tariffs;

•changes in U.S. - China and U.S. - Russia relations;

•difficulties in protection and enforcement of intellectual property rights;

•failure to comply with the foreign data protection laws, including the EU General Data Protection Regulation (“GDPR”) in the European Union;

•inadvertent transfers of export-controlled information due to increased cross-border technology transfers and the use of offshore computer servers;

•transportation, including piracy in international waters;

•currency exchange rate fluctuations; and

•challenges relating to managing a global workforce with diverse cultures and backgrounds.

Any of these factors could have a material adverse effect on our business, results of operations and financial condition. Exchange rate fluctuations may increase the cost of our products to international customers and therefore reduce our competitive position.

16

In June 2016, the United Kingdom (“U.K.”) held a referendum in which voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit.” The U.K. formally left the E.U. on January 31, 2020 and has entered a transition period until December 31, 2020. During the transition period, the U.K. and the E.U. will seek to negotiate a trade deal, and the U.K. will remain in both the E.U. customs union and single market. The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. The withdrawal of the U.K. from the E.U. may also create further global economic uncertainty, which may adversely impact the economies of the U.K., the E.U. countries and other nations, may cause our current and future customers to reduce their spending on our products and services, and may cause certain E.U.-based customers to source products from businesses based outside of the U.K. For example, Brexit-related uncertainty could lead to a reconsideration by Airbus as to future investment and spending in the U.K., which could reduce sales for our U.K.-based businesses that supply Airbus. Potential Brexit-related risks for our U.K.-based businesses also include increased import duties, loss of customers in the E.U., delays in the movement of goods between the U.K. and the E.U. and loss of access to the E.U. labor pool. Given our several U.K.-based businesses, volatility in the value of the British pound relative to the U.S. dollar, or other foreign currencies, could increase the cost of raw materials and components for our U.K.-based businesses and could otherwise adversely affect the business, operations and the financial condition of our U.K.-based businesses.

Acquisitions involve inherent risks that may adversely affect our operating results and financial condition.

Our growth strategy includes acquisitions. 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;

•the potential loss of key personnel of an acquired business;

•our ability to integrate acquired businesses and to achieve identified financial, operating and other synergies anticipated to result from an acquisition;

•our ability to assess, integrate and implement internal controls of acquired businesses in accordance with Section 404 of the Sarbanes-Oxley Act of 2002;

•the distraction of management resulting from the need to integrate acquired businesses;

•increased competition for acquisition targets, which may increase acquisition costs;

•the potential impairment of assets;

•potential unknown liabilities associated with a business that we acquire or in which we invest, including environmental liabilities;

•the risks associated with acquiring privately-held companies, which generally do not have the same formal or comprehensive internal controls and compliance systems in place as public companies;

•production delays associated with consolidating acquired facilities and manufacturing operations;

•risks associated with owning and operating businesses internationally, including those arising from U.S. and foreign government policy changes or actions and currency exchange rate fluctuations;

•unanticipated changes in business or economic conditions affecting an acquired business; and

•exposure to new and unfamiliar regulations in new jurisdictions.

While we conduct financial and other due diligence in connection with our acquisitions and generally seek some form of protection, such as indemnification from the seller, insurance coverage, and sometimes placing a portion of the purchase price in escrow to cover potential liabilities, such acquired companies may have weaknesses or liabilities that are not accurately assessed or brought to our attention at the time of the acquisition. Further, indemnities, insurance or escrow arrangements may not fully cover such matters.

In connection with our acquisitions, including those acquisitions that we do not complete, we may incur significant transaction costs. We are required to expense, as incurred, such transaction costs, which may have a material adverse impact on our financial results.

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.

On December 29, 2019, Teledyne’s goodwill was $2,050.5 million and net acquired intangible assets were $430.8 million. Under current accounting guidance, 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. 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 also are 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. 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. If the fair market value is less than the carrying value, including goodwill, we could be required to record an impairment charge. The valuation of reporting units requires judgment in estimating future cash flows, discount rates and estimated product life

17

cycles. In making these judgments, we evaluate the financial health of the business, including such factors as industry performance, changes in technology and operating cash flows. As we have grown through acquisitions, the amount of goodwill and net acquired intangible assets is a significant portion of our total assets. As a result, the amount of any annual or interim impairment could be significant and could have a material adverse effect on our reported financial results for the period in which the charge is taken. We also may be required to record an earnings charge or incur unanticipated expenses if, as a result of a change in strategy or other reason, we were to determine the value of other assets had been impaired.

For additional discussion of business investments, goodwill and other long-lived assets, see the discussion under “Item 7. Management’s Discussion and Analysis of Operations and Financial Condition” and Note 3 of the Notes to Consolidated Financial Statements.

United States and global responses to terrorism, increasing tension between the U.S., and Russia, China and Iran; concerns regarding nuclear proliferation and the safety of nuclear energy; potential epidemics such as the Coronavirus; continuing turmoil in Middle Eastern countries; and potential future financial issues impacting airlines and volatile energy prices increase uncertainties with respect to many of our businesses and may adversely affect our business and results of operations.

United States’ and global responses to terrorism, continuing turmoil in Middle Eastern countries and nuclear proliferation concerns increase uncertainties with respect to U.S. and other business and financial markets and could adversely affect our business and operations. Increasing tensions between the U.S. and Russia, and between the U.S. and China, as well as the U.S. and Iran, could disrupt the economy.

Air travel declines have occurred after terrorist attacks and heightened security alerts, as well as after the high-profile outbreaks of disease, including the recent outbreak and spread of the Wuhan, China-originated Coronavirus. Additional declines in air travel resulting from these factors and other factors could adversely affect the financial condition of many of our commercial airline and aircraft manufacturer customers and, in turn, could adversely affect our Aerospace and Defense Electronics segment. In addition, a prolonged virus epidemic or pandemic, or the threat thereof, could result in worker absences, lower productivity, voluntary closure of our offices and manufacturing facilities, disruptions in our supply chain, travel restrictions on our employees, and other disruptions to our businesses. Moreover, health epidemics may force local health and government authorities to mandate the temporary closure of our offices and manufacturing facilities.

With the outbreak of the Coronavirus, Chinese authorities quarantined many cities and restricted travel within the country. We asked our approximately 140 employees based in China not to report to our facilities and restricted travel to China. Similar actions have been taken by our China-based and other suppliers and customers. Many commercial airlines and countries have canceled flights and restricted travel to and from China. If the virus spreads further and Chinese business continue to be shutdown or delayed, it could adversely affect our business and results of operations.

Higher oil prices could adversely affect commercial airline-related customers of our Aerospace and Defense Electronics segment. Conversely, lower oil prices have decreased oil exploration and petrochemical refining activities and have hindered our Marine and other Instrumentation businesses. In addition, instability in the Middle East or other oil-producing regions could adversely affect expansion plans of the oil and gas industry customers of our Instrumentation businesses.

Our revenue from government contracts subjects us to many risks:

Our revenue from 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.

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 subcontracts with government prime contractors. Sales under contracts with the U.S. Government, including sales under contracts with the U.S. Department of Defense, as prime contractor or subcontractor, represented approximately 24% of our total revenue in 2019, compared with 23% in 2018 and 24% in 2017. 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 shutdowns have resulted in delays in anticipated contract awards and delayed payments of invoices for several of our businesses and any new shutdown could have similar or worse effects. The failure by Congress to approve future budgets on a timely basis could delay procurement of our products and services and cause us to lose future revenues. Any renewed emphasis on Federal deficit and debt reduction could lead to a further decrease in overall defense spending. Budgetary concerns could result in future contracts being awarded more on price than on other competitive factors, and smaller defense budgets could result in government in-sourcing of programs and more intense competition on programs that are not in-sourced, which could result in lower revenues and profits.

18

Although the U.S. President has indicated his desire for increased defense spending, continued defense spending does not necessarily correlate to continued business for us, because not all of the programs in which we participate or have current capabilities may be provided with continued funding. Changes in policy and budget priorities by the President, his Administration and the U.S. Congress for various defense and National Aeronautics and Space Administration (“NASA”) programs could continue to impact our Engineered Systems, Aerospace and Defense Electronics and Digital Imaging segments. Our Aerospace and Defense Electronics segment may be impacted by volume or price reductions in connection with the F-35 Joint Strike Fighter program, to the extent they are imposed. The timing of program cycles can affect our results of operations for a quarter or year, and cancellations of significant programs such as the Space Launch System (“SLS”), Launch Vehicle Stage Adapter (“LVSA”), International Space Station (“ISS”), Mission Operations and Integration (“MO&I”), or the Shallow Water Combat Submersible (“SWCS”) would affect our results. It is also not uncommon for the U.S. Department of Defense to delay the timing of awards for major programs for six to twelve months. Reductions and delays in research and development funding by the U.S. Government could impact our revenues. Uncertainty over budgets or priorities with the existing or a different U.S. Presidential Administration following the 2020 election could result in delays in funding and the timing of awards, and changes in funded programs that could have a material impact on our revenues.

Our participation in government programs may decrease as those programs evolve over time.

Over time, and for a variety of reasons, programs can evolve and affect the extent of our participation. We have been a significant participant in NASA programs, primarily through our Engineered Systems segment and through Teledyne Scientific and Imaging, LLC. The prior U.S. Presidential Administration introduced significant changes to the national space policy, including the cancellation of NASA’s Constellation Program which includes Ares launch vehicles. Delayed funding and changes in support for NASA’s current space policy, including the Space Launch System (“SLS”), International Space Station (“ISS”), or Artemis Mission to the Moon could negatively impact our business. Furthermore, while funding for national space has been more positive under the current U.S. Presidential Administration, a different U.S. Presidential Administration following the 2020 election could make changes to funding for national space that could be less favorable.

Furthermore, the U.S. Government continues to place emphasis on small business quotas and may continue to increase small business contract set asides and minimum work percentages. In some cases, prime contractors are required to reduce participation by large subcontractors like Teledyne in order to fill small business quotas and be responsive to proposals and bids. As a result, our Engineered Systems segment could lose participation in some government programs.

Our contracts with the U.S. Government are subject to termination rights that could adversely affect us.

Most of our U.S. Government contracts are subject to termination by the U.S. Government either at its convenience or upon the default of the contractor. Termination for convenience provisions provide only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination. Termination for default clauses impose liability on the contractor for excess costs incurred by the U.S. Government in re-procuring undelivered items from another source. We had three U.S. Government contracts terminated for convenience in 2019, compared with 15 in 2018 and nine in 2017. No contracts were terminated for default during such three-year period.

We may lose money or generate less than expected profits on our fixed-price and other government contracts; and if we fail to meet certain pre-specified targets in government contracts, we may lose money.

There is no guarantee that U.S. Government contracts will be profitable. A number of our U.S. Government prime contracts and subcontracts are fixed-price type contracts (64% of our total revenue from U.S. Government contracts came from fixed-price in 2019, 67% in 2018 and 58% in 2017). Under these types of contracts, we bear the financial risk that actual performance cost may exceed the fixed contract price. Under such contracts, we must absorb cost overruns, notwithstanding the difficulty of estimating all of the costs we will incur in performing these contracts. We cannot assure that our contract loss provisions in our financial statements will be adequate to cover all actual future losses. As the technological complexity and required performance levels for our products increase, which is occurring in many of our businesses, it becomes more challenging to estimate costs. We may lose money or generate lower profits on some contracts if we fail to meet these estimates. We may also lose money on non-fixed price, cost-reimbursement contracts that contain penalties related to cost, schedule or performance. Furthermore, some of our research and development programs for the government may get canceled or descoped should we fail to meet certain technical goals.

Additionally, as we continue to support legacy defense programs certain components become more difficult to source, there is a risk that we may not be able to source critical components which could lead to cost overruns.

19

Our U.S. 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. 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. Such audits could result in adjustments to our contract costs. Any costs found to be improperly allocated to a specific contract will not be reimbursed, and such costs already reimbursed would need to be refunded. We have recorded contract revenues based upon costs we expect to realize after final audit. In a worst case scenario, should a business or division involved be charged with wrongdoing, or should the U.S. Government determine that the business or division is not a “presently responsible contractor”, that business or division, and conceivably our Company as a whole, could be temporarily suspended or, in the event of a conviction, could be debarred for up to three years from receiving new government contracts or government-approved subcontracts. 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.

The Department of Defense as well as other U.S. Government contracting agencies have adopted rules and regulations requiring contractors to implement a set of cyber security measures to attain the safeguarding of contractor systems that process, store, or transmit certain information. Implementation and compliance with these cyber security requirements is complex and costly, and could result in unforeseen expenses, lower profitability and, in the case of non-compliance, penalties and damages, all of which could have an adverse effect on our business.

Our pension expense and the value of our pension assets are affected by factors outside of our control, including the performance of plan assets, the stock market, interest rates and actuarial experience.

Our domestic qualified defined benefit pension plans cover most of our U.S. employees hired prior to 2004 or approximately 10% of our active employees. We also have several small domestic non-qualified and foreign-based pension plans. As of December 29, 2019, the value of the combined pension assets is greater than our combined pension benefit obligations. The accounting rules applicable to our pension plans require that amounts recognized in the financial statements be determined on an actuarial basis, rather than as contributions are made to the plan. Two significant elements in determining our pension income or pension expense are the expected return on plan assets and the discount rate used in projecting pension benefit obligations. Declines in the stock market and lower rates of return could increase required contributions to our qualified pension plan and/or result in a change to shareholders’ equity. Our investment strategy may not produce the expected returns if the credit, financial or stock markets deteriorate. Any decreases or increases in market interest rates will affect the discount rate assumption used in projecting pension benefit obligations. In addition, changes in other actuarial assumptions such as mortality assumptions or change due to legislative or regulatory actions could impact our pension income or expense as well as funding obligations. Each year, beginning in 2014, the Society of Actuaries has released revised mortality tables, which updated life expectancy assumptions. In consideration of these tables, each year we review the mortality assumptions used in determining our pension and post-retirement benefit obligations. The impact of these mortality assumptions could increase our pension obligation and increase future pension expense. No contributions have been made to the domestic qualified pension plan since 2013. If, and to the extent, decreases in our pension assets are not offset by voluntary contributions, recovered through future asset returns, mitigated by an increase in the rate at which the benefit obligation is discounted, or other actions, our required cash contributions and pension expense could increase under the plans. In addition, we have sold approximately $63.9 million in pension liability to third parties. To the extent any of these counterparties are unable to fulfill their obligations to retirees, we may have residual liability, particularly to the extent state guarantee funds are inadequate. For additional discussion of pension matters, see the discussion under “Item 7. Management’s Discussion and Analysis of Operations and Financial Condition” and Notes 2, 11 and 15 of the Notes to Consolidated Financial Statements.

Our business and operations could suffer in the event of cyber security breaches.

Attempts by others to gain unauthorized access to our information technology systems have become more sophisticated and are sometimes successful. These attempts, which might be related to industrial or foreign government espionage, crime, activism, or other motivations, include covertly introducing malware into our computers and computer networks, performing reconnaissance, impersonating authorized users, extortion, stealing, corrupting or restricting our access to data, among other activities. We continue to train our personnel and update our infrastructure, security tools and processes to protect against security incidents, including both external and internal threats, and to prevent their recurrence. Company personnel and third parties have been tasked to detect, respond to, and investigate such incidents, but it is possible that we might not prevent or be aware of or be able to react to an incident or its magnitude and effects. The theft, corruption, unauthorized use or publication of our intellectual property or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. We are subject to U.S. Department of Defense 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. Department of

20

Defense contracts that we hold. To the extent that any security breach results in inappropriate disclosure of confidential or controlled information of employees, third parties or the U.S. Government, or any of the deployed security controls are deemed insufficient, we may incur liability or the loss of contracts or security clearances. As a result, we expect to continue to devote additional resources to the security of our information technology systems. More resources may be required in the defense arena to the extent the U.S. Government increases its cyber security mandates. Unauthorized access to or control of our products, devices or systems could impact the safety of our customers and other third parties which could result in legal claims against us. Security breaches also could result in a violation of applicable U.S. and international privacy and other laws, including the EU General Data Protection Regulation (“GDPR”), Health Insurance Portability and Accountability Act (“HIPAA”), Payment Card Industry Data Security Standard (“PCI”) and California Consumer Privacy Act (“CCPA”) 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.

We may not have sufficient resources to fund all future research and development and capital expenditures or possible acquisitions.

In order to remain competitive, we must make substantial investments in research and development of new or enhanced products and continuously upgrade our process technology and manufacturing capabilities. Our research and development efforts primarily involve engineering and design related to improving existing products and developing new products and technologies in the same or similar fields. Our Teledyne Scientific Company subsidiary, which serves as our primary research center, has been actively promoting and funding joint research and development projects with other Teledyne businesses, including Teledyne Oil & Gas, Teledyne Defense Electronics, Teledyne Digital Imaging and our Test and Measurement businesses. The business of e2v, for which the design and development of specialized technology for high performance systems and equipment is integral, also requires substantial investments in research and development. Additionally, some of our businesses have sought or are actively pursuing governmental support and funding for some of their research and development initiatives, including funding in 2019 for DALSA’s semiconductor foundry in Bromont, Quebec. Nonetheless, we may be unable to fund all of our research and development and capital investment needs or possible strategic acquisitions of businesses or product lines. Our ability to raise additional capital will depend on a variety of factors, some of which will not be within our control, including the existence of bank and capital markets, investor perceptions of us, our businesses and the industries in which we operate, and general economic conditions. Failure to successfully raise needed capital or generate cash flow on a timely or cost-effective basis could have a material adverse effect on our business, results of operations and financial condition. In addition, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products that do not lead to significant revenue, which would adversely affect our profitability.

Limitations in customer funding for applied research and development and limitations in government support for research and development expenditures may reduce our ability to apply our ongoing investments in some market areas.

We may be unable to successfully introduce new and enhanced products in a timely and cost-effective manner or increase our participation in new markets, which could harm our profitability and prospects.

Our operating results depend in part on our ability to introduce new and enhanced products on a timely basis. We have major development activities at some of our businesses, for which a failure to execute in a timely manner could negatively impact those businesses. In order to improve our product development capabilities, we purchased the research center that is now Teledyne Scientific Company in 2006 and in 2011 we purchased DALSA to gain access to a well-equipped MEMS research and development center. In 2013, we opened a 52,000-square-foot technology development center in Daytona Beach, Florida primarily to serve the offshore oil and gas production and exploration industries. We are currently upgrading infrastructure at Teledyne e2v’s facility in Chelmsford, U.K. and have expanded Teledyne DALSA’s MEMS foundry in Bromont, Quebec, as well as acquired a second MEMS foundry in Edmonton, Alberta as part of the Micralyne acquisition. Successful product development and introduction depend on numerous factors, including our ability to anticipate customer and market requirements, changes in technology and industry standards, our ability to differentiate our product offerings from the product offerings of our competitors, and market acceptance. We may not be able to develop and introduce new or enhanced products in a timely and cost-effective manner or to develop and introduce products that satisfy customer requirements.

Our new products also may not achieve market acceptance or correctly address new industry standards and technological changes. We may also lose any technological advantage to competitors if we fail to develop new products in a timely manner.

Additionally, new products may trigger increased warranty costs as information on such products is augmented by actual usage. Accelerated entry of new products to meet heightened market demand and competitive pressures may cause additional warranty costs as development and testing time periods might be accelerated or condensed.

We intend to both adapt our existing technologies and develop new products to expand into new market segments. We may be unsuccessful in accessing these and other new markets if our products do not meet our customers’ requirements, as a result of changes in either technology and industry standards or because of actions taken by our competitors.

21

Technological change and evolving industry and regulatory standards could cause some of our products or services to become obsolete or non-competitive.

The markets for some of our products and services are characterized by rapid technological development, evolving industry standards, changes in customer requirements and new product introductions and enhancements. A faster than anticipated change in one or more of the technologies related to our products or services, or in market demand for products or services based on a particular technology, could result in faster than anticipated obsolescence of certain of our products or services and could lead to reduced sales of those products, which could have a material adverse effect on our business, results of operations and financial condition. Currently accepted industry and regulatory standards are also subject to change, which may contribute to the obsolescence of our products or services. The political agenda of the U.S. Presidential Administration may affect the level of environmental regulations and enforcement and government spending on scientific research, which could adversely impact the sales of our products and services, including sales of pollution monitoring instruments and instruments used to measure the Earth’s climate and climate change, such as undersea gliders and space-based imaging sensors. A change in China’s economic policies promoting pollution reduction could result in lower sales or slower sales growth for our pollution monitoring and laboratory instrumentation to China.

We may not be able to reduce the costs of our products to satisfy customers’ cost reduction mandates, which could harm our sales or margins.

Cost conscious customers may seek price reductions of our products. While we continually work to reduce our manufacturing and other costs of our products, without affecting product quality and reliability, there is no assurance that we will be able to do so or to do so in a timely manner to satisfy the pricing pressures of our customers. Prices of raw materials and other components used in our products may be beyond our control depending on market conditions. As a result, customers may seek lower cost products from China or other developing countries where manufacturing costs are lower.

The airline industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer.

The Federal Aviation Administration (“FAA”) and equivalent regulatory agencies have increasingly focused on the need to assure that airline industry products are designed with sufficient cybersecurity controls to protect against unauthorized access or other unwanted compromise. A failure to meet these evolving expectations could negatively impact sales into the industry and expose us to legal or contractual liability.

Governmental agencies throughout the world, including the FAA, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. If any material authorization or approval qualifying us to supply our products is revoked or suspended, then sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.

From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which often are more stringent than existing regulations. If such proposals are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations. Recent trends by China’s aviation authority to relax restrictions on airspace may be reversed, and anticipated new regulations loosening airspace restrictions may not materialize, which could impact sales prospects in China for our commercial aerospace businesses.

The FAA and the U.S. Department of Justice’s Fraud Section, among other agencies and countries, are investigating two Boeing 737 Max 8 aircraft crashes that occurred in October 2018 and March 2019, which resulted in the groundings of such aircraft across the world. While the investigations continue, Boeing announced in December 2019 that it will temporarily suspend production of the 737 Max starting in January 2020. While the impact of this decision has been factored into our business plans, there is a risk that the decision will have further negative impact on our Teledyne Controls’ business, particularly if the suspension lasts longer than expected.

Increasing competition could reduce the demand for our products and services.

Each of our markets is highly competitive. Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources. New or existing competitors may also develop new technologies that could adversely affect the demand for our products and services. We have been experiencing increased competition for some of our key products. Furthermore, some of our patents have or are expiring which could open up further competition. For example, our U.S. patent related to our Wireless GroundLink product expired in 2018, allowing several competitors to enter the market. Additionally, some of our customers have been developing competing products or electing to vertically integrate and replace our products with their own. For example, Airbus has developed its own wireless product, FOMAX, that now competes directly with Teledyne Controls hardware and services. Furthermore, Boeing has announced a vertical integration program, which include avionics. Lastly, some of our products face increasing competition from alternative technologies. For example, the lead acid batteries that Teledyne Battery Products sells face competition from lithium ion batteries, among other competing technologies.

22

Industry acquisition and consolidation trends, particularly among aerospace and defense contractors, have adversely impacted demand for our aerospace and defense related engineering services as large prime contractors elect to in-source major acquisition programs and expand small business participation to meet Government contracting goals. Such consolidations can also cause delays in business as the newly consolidated organization undergoes integration.

Low-cost competition from China and other developing countries could also result in decreased demand for our products. Increasing competition could reduce the volume of our sales or the prices we may charge, which would negatively impact our revenues. Smaller defense budgets both in the United States and Europe could result in additional competition for new and existing defense programs.

Product liability claims, product recalls and field service actions could have a material adverse effect on our reputation, business, results of operations and financial condition and we may have difficulty obtaining product liability and other insurance coverage.

As a manufacturer and distributor of a wide variety of products, including monitoring instruments, products used in offshore oil and gas production, products used in transportation and commercial aviation and products used in medical devices (including X-ray detectors), our results of operations are susceptible to adverse publicity regarding the quality or safety of our products. In part, product liability claims challenging the safety of our products may result in a decline in sales for a product, which could adversely affect our results of operations. This could be the case even if the claims themselves are proven to be untrue or settled for immaterial amounts.

While we have general liability and other insurance policies concerning product liabilities and errors and omissions, we have self-insured retentions or deductibles under such policies with respect to a portion of these liabilities. Awarded damages could be more than our accruals. We could incur losses above the aggregate annual policy limit as well. We cannot assure that, for 2020 and in future years, insurance carriers will be willing to renew coverage or provide new coverage for product liability.

Product recalls can be expensive and tarnish our reputation and have a material adverse effect on the sales of our products. We cannot assure that we will not have additional product liability claims or that we will not recall any products.

We have been joined, among a number of defendants (often over 100), in lawsuits alleging injury or death as a result of exposure to asbestos. 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. However, our historic insurance coverage, including that of our predecessors, may not fully cover such claims and the defense of such matters. Coverage typically depends on the year of purported exposure and other factors. Nonetheless, we intend to vigorously defend our position against these claims.

Teledyne Brown Engineering, Inc. and other Teledyne companies manufacture components for customers in the nuclear power market, including utilities and certain governmental entities. Certain liabilities associated with such products are covered by the Price-Anderson Nuclear Industries Indemnity Act and other statutory and common law defenses, and we have received indemnities from some of our customers. 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.

Our business and financial results could be adversely affected by conditions and other factors associated with our suppliers.

Some items we purchase for the manufacture of our products are purchased from limited or single sources of supply due to technical capability, price and other factors. For example, Teledyne Digital Imaging has an internal single source of supply for CCD semiconductor wafers used to assemble image sensors and an external single source of supply for CMOS semiconductor wafers used to assemble X-ray panel products. Furthermore, sole source supply is more common among our research and development businesses because there can be few suppliers in the world capable of producing the products or providing the services with the right highly specialized technology. LeCroy continues to outsource a portion of its research and development activities to third-party engineering firms in Malaysia and India where it may be more difficult for us to enforce our intellectual property rights. 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. Disruption of these sources or supplier-imposed rationing of scarce components could cause delays or reductions in shipments of our products or increases in our costs, which could have an adverse effect on our financial condition or operations. We could experience global supply chain disruptions if the Coronavirus heath crisis continues and widens. International sources possess additional risks, some of which are similar to those described above regarding international sales. With any continuing disruption in the global economy and financial markets, some of our suppliers may also continue to face issues gaining access to sufficient credit and materials to maintain their businesses, which could reduce the availability of some components and, to the extent such suppliers are single source suppliers, could adversely affect our ability to continue to manufacture and sell our products.

23

We face risks related to sales through distributors and other third parties that we do not control, which could harm our business.

We sell a portion of our products through third parties such as distributors, value-added resellers and OEMs (collectively “distributors”). Using third parties for distribution exposes Teledyne to many risks, including concentration, credit risk and legal risk because under certain circumstances we may be held responsible for the action of those third-party sales channels even though we exercise less control over them than we do our directly employed sales personnel. We may rely on one or more key distributors for a product, and the loss of these distributors could reduce our revenue. Distributors may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivables and financial results. Violations of the Foreign Corrupt Practices Act (“FCPA”) or similar anti-bribery laws by distributors or other third-party intermediaries could have a material impact on our business. Competitors could also block our access to key distributors. Failing to manage risks related to our use of distributors may reduce sales, increase expenses, and weaken our competitive position, and could result in sanctions against us.

Compliance with increasing environmental and climate change regulations, as well as the effects of potential environmental liabilities, could have a material adverse financial effect on us.

We, like other industry participants, are subject to various federal, state, local and international environmental laws and regulations. We may be subject to increasingly stringent environmental standards in the future, particularly as greenhouse gas emissions and climate change regulations and initiatives increase. Future developments, administrative actions or liabilities relating to environmental and climate change matters could have a material adverse effect on our business, results of operations or financial condition. Environmental regulations on hydraulic fracturing and the use of seismic energy sources for offshore energy exploration could adversely affect some product lines of our Instrumentation segment.

Our manufacturing operations, including former operations, could expose us to material environmental liabilities. Additionally, companies that we acquire may have environmental liabilities that might not be accurately assessed or brought to our attention at the time of the acquisition.

The U.S. Environmental Protection Agency (“EPA”) has focused on greenhouse gases (“GHGs”), maintaining GHGs threaten the public health and welfare of the American people. The EPA also maintains that GHG emissions from on-road vehicles contribute to that threat. The EPA’s endangerment finding covers emissions of six greenhouse gases. The EPA’s continuing efforts to limit GHG emissions could adversely affect our U.S. manufacturing operations, increase prices for energy, fuel and transportation, require us to accommodate changes in parameters, such as the way parts are manufactured, and may, in some cases, require us to redesign certain of our products. This, or other federal or state regulations, could lead to increased costs, which we may not be able to recover from customers, delays in product shipments and loss of market share to competitors. For example, Teledyne Battery Products unit makes lead acid batteries in California and is subject to a variety of environmental regulations and inspections, which have increased over time. Also, some of our sites conduct electroplating, metal finishing and other operations that utilize hazardous materials that are subject to similar regulations. Regulatory changes or failure 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. For example, our products placed on the European market are subject to the Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”) and the restriction of the use of certain hazardous substances in electrical and electronic equipment (“ROHS”) Directives. Future hazardous substance restrictions or prohibitions may limit our ability to market some products in certain countries.

For additional discussion of environmental matters, see the discussion under the caption “Other Matters – Environmental” of “Item 7. Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 14 of the Notes to Consolidated Financial Statements. For a discussion of our products that contribute to the environment, sustainability and climate science, see “Item 1. Business – Environment and Sustainability”.

Our inability to attract and retain key personnel could have a material adverse effect on our future success.

Our future success depends to a significant extent upon the continued service of our executive officers and other key management and technical personnel and on our ability to continue to attract, retain and motivate qualified personnel. We also have a maturing workforce. Some of our businesses, including our businesses in traveling wave tube and integrated microwave module design and development, draw from a pool of specialized engineering talent that is small and currently shrinking. Some of our businesses have a need for employees with a certain level of security clearance, and competition for such employees has increased. While we have engaged in succession planning, the loss of the services of one or more of our key employees or our failure to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and results of operations. Low unemployment in the United States has made it more difficult for some of our businesses to attract and retain direct labor in certain markets.

24

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.

Consistent with our strategy to emphasize growth in our core markets, we continually evaluate our businesses to ensure that they are aligned with our strategy and objectives. Over the years we have also consolidated some of our business units and facilities, in some cases to respond to downturns in the defense and oil and gas industries, among other reasons. We are currently in the process of closing our Teledyne Paradise Datacom facility in State College, Pennsylvania and moving its operations to our Teledyne Microwave Solutions facility in Rancho Cordova, California. 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. If we do not successfully manage our current consolidation activities, or any other similar activities that we may undertake in the future, expected efficiencies and benefits might be delayed or not realized, and our operations and business could be disrupted. Our ability to dispose of, exit or reconfigure businesses that may no longer be aligned with our growth strategy will depend on many factors, including the terms and conditions of any asset purchase and sale agreement or lease agreement, as well as industry, business and economic conditions. We cannot provide any assurance that we will be able to sell non-strategic businesses on terms that are acceptable to us, or at all. In addition, if the sale of any non-strategic business cannot be consummated or is not practical, alternative courses of action, including relocation of product lines or closure, may not be available to us or may be more costly than anticipated.

Natural and man-made disasters could adversely affect our business, results of operations and financial condition.

Several of our facilities, as a result of their locations, could be subject to a catastrophic loss caused by earthquakes, hurricanes, tornados, floods, ice storms or other natural disasters. 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 wildfires. In November 2018, wildfires impacted areas near our headquarters and principal research and development center in Thousand Oaks, California, resulting in temporary disruptions and evacuations of employees who lived nearby. Local utilities may impose blackouts during high fire risk weather conditions, which could result in disruptions to our businesses located in California, including our headquarters. Teledyne DALSA’s semiconductor facilities in Quebec, Canada have been impacted by loss of electrical power caused by severe ice storms. In addition, we have manufacturing facilities in the southeastern United States and Texas that have been threatened or struck by major hurricanes. In 2017, our businesses located in Houston, Texas were impacted by Hurricane Harvey and our business in Florida was threatened by Hurricanes Irma and Matthew. Our facilities in Alabama, Florida, Nebraska, Tennessee and Virginia have also been threatened by tornados. If any of our California facilities, including our California headquarters, were to experience a catastrophic earthquake or wildfire loss or if any of our Alabama, Florida, Nebraska, Tennessee or Texas facilities were to experience a catastrophic hurricane, storm, tornado or other natural disaster, or if DALSA’s facilities in Quebec experience long-term loss of electrical power, such event could disrupt our operations, delay production, shipments and revenue, and result in large expenses to repair or replace the facility or facilities. While Teledyne has property insurance to partially reimburse it for losses caused by windstorm and earth movement, such insurance would not cover all possible losses. In addition, our existing disaster recovery and business continuity plans (including those relating to our information technology systems) may not be fully responsive to, or minimize losses associated with, catastrophic events.

Disasters also have an indirect adverse impact on our business. For example, in 2018, a fire at a Netherlands-based facility of a key supplier of printed circuit boards resulted in delivery disruptions to the electronics industry, including to businesses in our Digital Imaging segment.

Teledyne Brown Engineering, Inc. has developed, built, and launched a multiuser system for earth sensing that is affixed to the International Space Station (“ISS”). For the program to continue to be financially successful, the 20-year-old ISS must continue to fly in a safe and human tended condition. While certain spaceflight risks, such as a high-velocity debris impact to the station causing significant structural damage or necessitating the evacuation of the ISS, have been regarded as small, if such event were to occur, the ISS program continuation could be threatened, jeopardizing our investment and potential revenue generation from ISS-based Earth imaging.

We may not be able to enforce or protect our intellectual property rights, or third parties may claim we infringe their intellectual rights, each which may harm our ability to compete and thus harm our business.

Our ability to enforce and protect our patents, copyrights, software licenses, trade secrets, know-how, and other intellectual property rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our intellectual property rights in various countries. When we seek to enforce our rights, we have found that various claims may be asserted against us, including claims that our intellectual property right is invalid, is otherwise not enforceable or is licensed to the party against whom we are asserting a claim. In addition, we may be the target of aggressive and opportunistic enforcement of patents by third parties. If we are not ultimately successful in defending ourselves against these claims in litigation, we may not be able to sell a product or family of products due to an injunction, or we may have to pay damages that could, in turn, harm our results of operations. Our inability to enforce our intellectual property rights under these circumstances may harm our competitive position and our business.

25

Higher tax rates may harm our results of operations and cash flow.

Our effective tax rate for 2019 was 15.1%, compared with 15.3% for 2018 and 20.8% for 2017. While in December 2017, the Tax Cuts and Jobs Act of 2017 was signed into law, which in general lowered corporate tax rates in the United States, a number of factors may impact our effective tax rates, which could reduce our net income and increase our tax payments, including:

•the relative amount of income we earn in other jurisdictions;

•changes in tax laws or their interpretation, including changes in the United States to the taxation of foreign income and expenses, changes in tax laws in foreign jurisdictions, and changes in U.S. generally accepted accounting principles and governing body pronouncements and interpretations;

•the resolution of issues arising from tax audits;

•changes in valuation of our deferred tax assets and liabilities, including deferred tax valuation allowances;

•adjustments to income taxes upon finalization of tax returns;

•increases in expense not deductible for tax purposes;

•changes in available tax credits; and

•any decision to repatriate non-U.S. earnings for which we have not made provision for U.S. taxes.

Our financial statements are based on estimates required by Generally Accepted Accounting Principles in the United States (“GAAP”), and actual results may differ materially from those estimated under different assumptions or conditions.

Our financial statements are prepared in conformity with GAAP. These principles require our management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. For example, estimates are used when accounting for items such as revenue, asset valuations, allowances for doubtful accounts, allowance for excess and obsolete inventory, depreciation and amortization, impairment assessments, employee benefits, taxes, recall and warranty costs, product and general liability and contingencies. While we base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances at the time made, actual results may differ materially from those estimated. Our most critical accounting estimates are described in “Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K under “Critical Accounting Estimates.”

There are inherent limitations in internal control systems, and misstatements resulting from error or fraud may occur and may not be detected.

We continue to act to assure compliance with the internal controls, disclosure controls and other requirements of the Sarbanes-Oxley Act of 2002. Our management, including our Chief Executive Officer and Chief Financial Officer, cannot guarantee that our internal controls and disclosure controls will prevent all possible errors or all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements resulting from error or fraud may occur and may not be detected.

Provisions of our governing documents, applicable law, and our Change in Control Severance Agreements could make an acquisition of Teledyne more difficult.

Our Restated Certificate of Incorporation, our 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 of Directors, more difficult. We have also entered into Change in Control Severance Agreements with ten members of our current management, which could have an anti-takeover effect. These provisions may prevent or discourage attempts to acquire our company.

26

The market price of our Common Stock has fluctuated significantly since we became a public company, and could continue to do so.

The market price of our Common Stock has fluctuated substantially and fluctuations in our stock price could continue. In 2019, the price of our Common Stock ranged from $198.15 to $351.53. Subsequent to year-end 2019, our Common Stock hit a high of $398.99 on January 22, 2020. On February 21, 2020, the closing price of our Common Stock was $385.66.

Among the factors that could affect our stock price are:

•quarterly variations in our operating results;

•strategic actions by us or our competitors;

•acquisitions;

•divestitures;

•stock repurchases;

•adverse business developments;

•war in the Middle East or elsewhere;

•terrorists' activities;

•military or homeland defense activities;

•changes to the U.S. Federal budget or other government budgets;

•changes in the energy exploration or production, semiconductor, digital imaging, telecommunications, commercial aviation, and electronic manufacturing services markets;

•general market conditions;

•changes in tax laws;

•general economic factors unrelated to our performance;

•changes from analysts’ expectations in revenues, earnings or other financial results; and

•one or more of the risk factors described in this report.

Stock markets in general, and the markets for high-technology companies in particular, have experienced a high degree of volatility that is not necessarily related to the operating performance of these companies. We cannot provide assurances as to our stock price. We have in the past repurchased shares of our stock pursuant to board-approved stock repurchase programs. We cannot provide assurances that we will continue to repurchase shares under those programs, or that our board will authorize new repurchase programs.

Item 1B.    Unresolved Staff Comments

None.

27

Item 2. Properties

The Company has 70 principal operating facilities in 17 states and six foreign countries. The Company’s executive offices are located in Thousand Oaks, California. Its principal research and development center is also located in Thousand Oaks, California. We maintain our facilities in good operating condition, and we believe they are suitable and adequate for the purposes for which they are intended and overall have sufficient capacity to conduct business as currently conducted.

Information on the number, ownership and location of principal operating facilities by segment was as follows at February 21, 2020:

				Location of Facilities
Segment	Owned	Leased		States	Countries
Instrumentation	16		13	California, Colorado, Florida, Massachusetts, Nebraska, New Hampshire, New York, Ohio, Pennsylvania, Texas and Virginia	United States, Canada, Denmark, France and United Kingdom
Digital Imaging	13		7	California, Massachusetts, New Jersey and North Carolina	United States, Belgium, Canada, France, The Netherlands and United Kingdom
Aerospace and Defense Electronics	6		8	California, Illinois, Pennsylvania and Texas	United States and United Kingdom
Engineered Systems	2		5	Alabama, Maryland, Ohio and Tennessee	United States
Total	37		33

Item 3. Legal Proceedings

From time to time, we become involved in various lawsuits, claims and proceedings arising out of, or incident to, our ordinary course of business including lawsuits, claims or proceedings pertaining to product liability, patent infringement, commercial contracts, employment and employee benefits. While we cannot predict the outcome of any lawsuit, claim or proceeding, our management does not believe that the disposition of any pending matters is likely to have a material adverse effect on our business, financial condition or liquidity.

Item 4. Mine Safety Disclosures

No information is required in response to this item.

28

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Our Common Stock is listed on the New York Stock Exchange and traded under the symbol “TDY”. The following table sets forth, for the periods indicated, the high and low sale prices for the Common Stock as reported by the New York Stock Exchange.

As of February 18, 2020, there were 2,791 holders of record of the Common Stock. Because many of our shares of common stock are held by brokers and institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our stock represented by these stockholders of record.

We intend to use future earnings to fund the development and growth of our businesses, including through potential acquisitions. We may also deploy cash to fund share repurchases. Therefore, we do not anticipate paying any cash dividends in the foreseeable future.

We have stock repurchase programs authorized by our Board of Directors to repurchase up to approximately three million shares. No repurchases were made since 2015. See Note 8 of the Notes to Consolidated Financial Statements for additional information about our stock repurchase program.

Information relating to compensation plans under which our equity securities are outstanding for issuance is set forth in Part III, Item 12 of this Annual Report on Form 10-K.

In each of December 2019, December 2018 and December 2017, we withheld shares upon the vesting of restricted stock unit awards to satisfy tax withholding obligations in the amounts of 2,651 shares, 2,651 shares and 2,960 shares, respectively

Item 6. Selected Financial Data

The following table presents our summary consolidated financial data. We derived the following historical selected financial data from our audited consolidated financial statements. Our fiscal year is determined based on a 52- or 53-week convention ending on the Sunday nearest to December 31. Each fiscal year presented below contained 52 weeks except for fiscal year 2015 which contained 53 weeks. The five-year summary of selected financial data should be read in conjunction with the discussion under “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operation” and the Notes to Consolidated Financial Statements.

Five-Year Summary of Selected Financial Data 

	2019		2018		2017		2016		2015
	(In millions, except per-share amounts)
Net sales	$	3,163.6	$	2,901.8	$	2,603.8	$	2,149.9	$	2,298.1
Net income	$	402.3	$	333.8	$	227.2	$	190.9	$	195.5
Net income attributable to Teledyne	$	402.3	$	333.8	$	227.2	$	190.9	$	195.8
Basic earnings per common share	$	11.08	$	9.32	$	6.45	$	5.52	$	5.55
Diluted earnings per common share	$	10.73	$	9.01	$	6.26	$	5.37	$	5.44
Weighted average diluted common shares outstanding	37.5		37.0		36.3		35.5		36.0
Total assets	$	4,579.8	$	3,809.3	$	3,846.4	$	2,774.4	$	2,717.1
Long-term debt, less current portion	$	750.0	$	610.1	$	1,063.9	$	509.7	$	754.1
Total stockholders’ equity	$	2,714.7	$	2,229.7	$	1,947.3	$	1,554.4	$	1,344.1

29

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Teledyne Technologies Incorporated 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, oceanographic research, deepwater oil and gas exploration and production, medical imaging and pharmaceutical research. Our products include digital imaging sensors, cameras and systems within the visible, infrared and X-ray spectra, monitoring instrumentation for marine and environmental applications, harsh environment interconnects, electronic test and measurement equipment, aircraft information management systems, and defense electronics and satellite communication subsystems. We also supply engineered systems for defense, space, environmental and energy applications. We differentiate ourselves from many of our direct competitors by having a customer- and company-sponsored applied research center that augments our product development expertise.

Strategy/Overview

Our strategy continues to emphasize growth in our core markets of instrumentation, digital imaging, aerospace and defense electronics and engineered systems. Our core markets are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our core businesses with targeted acquisitions and through product development. We continue to focus on balanced and disciplined capital deployment among capital expenditures, acquisitions, product development and share repurchases. We aggressively pursue operational excellence to continually improve our margins and earnings by emphasizing cost containment and cost reductions in all aspects of our business. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire. Using complementary technology across our businesses and internal research and development, we seek to create new products to grow our company and expand our addressable markets. We continue to evaluate our businesses to ensure that they are aligned with our strategy.

Consistent with this strategy, we made three acquisitions in 2019 and in March 2017, we made our largest acquisition to date, e2v technologies plc (“e2v”). See the Recent Acquisitions section following this section.

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. See Note 12 of the Notes to Consolidated Financial Statements for additional information on the realignment. Previously reported segment data has been adjusted to reflect these changes.

As part of a continuing effort to reduce costs and improve operating performance, we may take and have taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weak end markets and high cost locations. We continue to seek cost reductions in our businesses. 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

	2019		2018		2017
Severance	$	3.5	$	5.6	$	3.8
Facility consolidations (a)	(0.3)		2.2		0.4
Total	$	3.2	$	7.8	$	4.2

(a) 2019 includes the reversal of certain amounts recorded in 2018 no longer needed.

30

	2019		2018		2017
Cost of sales	$	0.8	$	4.9	$	2.8
Selling, general and administrative expenses	2.4		2.9		1.4
Total	$	3.2	$	7.8	$	4.2

Recent Acquisitions

The Company spent $484.0 million, $3.1 million and $774.1 million on acquisitions and other investments, net of cash acquired in 2019, 2018 and 2017, respectively.

2019 Acquisitions

On February 5, 2019, we acquired the scientific imaging businesses of Roper Technologies, Inc. for $224.8 million in cash. The acquired businesses include Princeton Instruments, Photometrics and Lumenera. The acquired businesses provide a range of imaging solutions, primarily for life sciences, academic research and customized OEM industrial imaging solutions. Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging. Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence. Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications. Principally located in the United States and Canada, the acquired businesses are part of the Digital Imaging segment.

On August 1, 2019, we acquired the gas and flame detection businesses of 3M Company for $233.5 million in cash. The gas and flame detection businesses includes Oldham, Simtronics, Gas Measurement Instruments, Detcon and select Scott Safety products. The gas and flame detection businesses provides a portfolio of 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 waste water treatment. Principally located in France, the United Kingdom and the United States, the acquired businesses are part of the Environmental Instrumentation product line of the Instrumentation segment.

On August 30, 2019, we acquired Micralyne Inc. (“Micralyne”) for $25.7 million in cash. Micralyne provides micro electromechanical systems (“MEMS”) devices. In particular, Micralyne possesses unique microfluidic technology for biotech applications, as well as capabilities in non-silicon-based MEMS (e.g. gold, polymers) often required for human body compatibility. Based in Edmonton, Alberta, Canada, the acquired business is part of the Digital Imaging segment.

2017 Acquisitions

On March 28, 2017, we completed the acquisition of all of the outstanding common stock of e2v for $770.7 million, including stock options and assumed debt, net of $24.4 million of cash acquired. Most of e2v’s operations are included in the Digital Imaging and Aerospace and Defense Electronics segments. The Instrumentation segment includes a small portion of e2v’s operations. Principally located in Chelmsford, United Kingdom and Grenoble, France, e2v’s results have been included since the date of the acquisition and include $273.7 million in net sales and operating income of $37.3 million, which included $8.3 million in acquisition-related costs and $11.2 million in additional intangible asset amortization expense for fiscal year 2017.

Fiscal year 2017 includes pretax charges of $27.0 million related to the acquisition of e2v, which included $13.0 million in transaction costs, including stamp duty, advisory, legal and other consulting fees and other costs recorded to selling, general and administrative expenses, $5.7 million in inventory fair value step-up amortization expense recorded to cost of sales, $6.0 million related to a foreign currency option contract expense to hedge the e2v purchase price recorded as other expense and $2.3 million in bank bridge facility commitment expense recorded to interest expense. Of these amounts, $8.3 million impacted segment operating income.

On July 20, 2017, Teledyne Instruments, Inc. completed the acquisition of assets of Scientific Systems, Inc. (“SSI”) for $31.0 million in cash. Headquartered in State College, Pa., SSI is a manufacturer of precision components and specialized subassemblies used primarily in analytical and diagnostic instrumentation, such as high performance liquid chromatography systems and specific medical devices. SSI designs and manufactures high pressure positive-displacement piston pumps for a wide variety of analytical, clinical, sample prep and fluid-metering applications and is part of the Environmental Instrumentation product line of the Instrumentation segment.

See Note 3 of the Notes to Consolidated Financial Statements for additional information about our recent acquisitions.

31

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 2019, 2018 and 2017 each contained 52 weeks. The following are selected financial highlights for 2019, 2018 and 2017 (in millions, except per-share amounts):

	2019		2018		2017
Net sales	$	3,163.6	$	2,901.8	$	2,603.8
Costs and expenses
Cost of sales	1,920.3		1,791.0		1,624.0
Selling, general and administrative expenses	751.6		694.2		658.1
Total costs and expenses	2,671.9		2,485.2		2,282.1
Operating income	491.7		416.6		321.7
Interest and debt expense, net	(21.0)		(25.5)		(33.1)
Non-service retirement benefit income	8.0		13.5		13.9
Other expense, net	(5.0)		(10.7)		(15.5)
Income before income taxes	473.7		393.9		287.0
Provision for income taxes	71.4		60.1		59.8
Net income	$	402.3	$	333.8	$	227.2