Segment Information

9 Months Ended

Oct. 02, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

Teledyne is a leading provider of sophisticated digital imaging products and software, instrumentation, aerospace and defense electronics, and engineered systems. Our customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies and airlines. The Company has four reportable segments: Digital Imaging; Instrumentation; Aerospace and Defense Electronics; and Engineered Systems.

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

On May 14, 2021, the Company completed the acquisition of FLIR. The financial results of FLIR have been included since the date of the acquisition and are part of the Digital Imaging segment. See Note 2 to these Notes to Condensed Consolidated Financial Statements for information regarding the FLIR acquisition.

The following table presents Teledyne’s segment disclosures (dollars in millions):

	Third Quarter				%		Nine Months				%
	2022		2021		Change		2022		2021		Change
Net sales(a):
Digital Imaging (b)	$	777.9	$	760.6	2.3	%	$	2,304.2	$	1,603.4	43.7	%
Instrumentation	306.4		287.1		6.7	%	927.8		864.7		7.3	%
Aerospace and Defense Electronics	169.5		161.8		4.8	%	504.5		465.4		8.4	%
Engineered Systems	109.8		102.4		7.2	%	303.9		305.1		(0.4)	%
Total net sales	$	1,363.6	$	1,311.9	3.9	%	$	4,040.4	$	3,238.6	24.8	%
Operating income:
Digital Imaging (b)	$	133.7	$	94.9	40.9	%	$	367.3	$	231.5	58.7	%
Instrumentation	71.1		63.0		12.9	%	216.3		187.0		15.7	%
Aerospace and Defense Electronics	44.3		35.9		23.4	%	131.3		92.6		41.8	%
Engineered Systems	11.9		11.5		3.5	%	29.9		37.4		(20.1)	%
Corporate expense (c)	(15.8)		(15.7)		0.6	%	(46.6)		(119.3)		(60.9)	%
Operating income	$	245.2	$	189.6	29.3	%	$	698.2	$	429.2	62.7	%
(a) Net sales excludes inter-segment sales of $4.8 million and $15.4 million for the third quarter and first nine months of 2022, respectively, and $5.4 million and $14.7 million for the third quarter and first nine months of 2021, respectively.
(b) On May 14, 2021, the Company completed the acquisition of FLIR, and the financial results of FLIR have been included since the date of the acquisition. The first nine months of 2022 includes $620.2 million in incremental net sales from FLIR.
(c) Corporate expense for the third quarter and first nine months of 2021 includes $0.3 million and $76.7 million, respectively, in acquisition-related transaction and purchase accounting expenses related to the FLIR acquisition.

Identifiable assets are those assets used in the operations of the segments. Corporate assets primarily consist of cash and cash equivalents, deferred taxes, net pension assets/liabilities and other assets (in millions):

Identifiable assets:	October 2, 2022		January 2, 2022
Digital Imaging	$	10,973.1	$	11,756.8
Instrumentation	1,579.3		1,640.3
Aerospace and Defense Electronics	528.5		536.3
Engineered Systems	195.7		179.2
Corporate	549.8		317.7
Total identifiable assets	$	13,826.4	$	14,430.3

Product Lines

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

The following table provides a summary of the net sales by product line for the Instrumentation segment (in millions):

	Third Quarter				Nine Months
Instrumentation	2022		2021		2022		2021
Environmental Instrumentation	$	114.8	$	108.0	$	344.3	$	335.6
Marine Instrumentation	110.0		104.7		337.2		311.6
Test and Measurement Instrumentation	81.6		74.4		246.3		217.5
Total	$	306.4	$	287.1	$	927.8	$	864.7

We also disaggregate our revenue from contracts with customers by customer type and geographic region for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. With the exception of the Engineered Systems segment, net sales in our segments is primarily derived from fixed price contracts. Net sales in the Engineered Systems segment is typically between 45% and 55% fixed price contracts in a given reporting period, with the balance of net sales derived from cost type contracts. For the nine months ended October 2, 2022, approximately 47% of net sales in the Engineered Systems segment were derived from fixed price contracts.

	Third Quarter Ended October 2, 2022						Nine Months Ended October 2. 2022
	Customer Type						Customer Type
(in millions)	United States Government (a)		Other, Primarily Commercial		Total		United States Government (a)		Other, Primarily Commercial		Total
Net Sales:
Digital Imaging	$	156.3	$	621.6	$	777.9	$	463.4	$	1,840.8	$	2,304.2
Instrumentation	29.5		276.9		306.4		79.1		848.7		927.8
Aerospace and Defense Electronics	62.8		106.7		169.5		184.3		320.2		504.5
Engineered Systems	99.1		10.7		109.8		274.4		29.5		303.9
	$	347.7	$	1,015.9	$	1,363.6	$	1,001.2	$	3,039.2	$	4,040.4
(a) Includes sales as a prime contractor or subcontractor.

	Third Quarter Ended October 2, 2022								Nine Months Ended October 2, 2022
	Geographic Region (a)								Geographic Region (a)
(in millions)	United States		Europe		All other		Total		United States		Europe		All other		Total
Net sales:
Digital Imaging	$	365.6	$	215.6	$	196.7	$	777.9	$	1,102.4	$	620.9	$	580.9	$	2,304.2
Instrumentation	234.5		55.6		16.3		306.4		708.1		167.3		52.4		927.8
Aerospace and Defense Electronics	145.1		24.4		—		169.5		430.3		74.2		—		504.5
Engineered Systems	109.8		—		—		109.8		303.9		—		—		303.9
	$	855.0	$	295.6	$	213.0	$	1,363.6	$	2,544.7	$	862.4	$	633.3	$	4,040.4
(a) Net sales by geographic region of origin.

	Third Quarter Ended October 3, 2021						Nine Months Ended October 3, 2021
	Customer Type						Customer Type
(in millions)	United States Government (a)		Other, Primarily Commercial		Total		United States Government (a)		Other, Primarily Commercial		Total
Net Sales:
Digital Imaging	$	182.3	$	578.3	$	760.6	$	327.2	$	1,276.2	1,603.4
Instrumentation	22.8		264.3		287.1		66.2		798.5		864.7
Aerospace and Defense Electronics	60.4		101.4		161.8		169.0		296.4		$	465.4
Engineered Systems	92.1		10.3		102.4		279.7		25.4		305.1
	$	357.6	$	954.3	$	1,311.9	$	842.1	$	2,396.5	$	3,238.6
(a) Includes sales as a prime contractor or subcontractor.

	Third Quarter Ended October 3, 2021								Nine Months Ended October 3, 2021
	Geographic Region (a)								Geographic Region (a)
(in millions)	United States		Europe		All other		Total		United States		Europe		All other		Total
Net sales:
Digital Imaging	$	383.0	$	198.4	$	179.2	$	760.6	$	729.0	$	433.7	$	440.7	$	1,603.4
Instrumentation	213.5		58.1		15.5		287.1		645.3		177.2		42.2		864.7
Aerospace and Defense Electronics	134.7		27.1		—		161.8		387.1		78.3		—		465.4
Engineered Systems	102.4		—		—		102.4		305.1		—		—		305.1
	$	833.6	$	283.6	$	194.7	$	1,311.9	$	2,066.5	$	689.2	$	482.9	$	3,238.6
(a) Net sales by geographic region of origin.