Teledyne Technologies (TDY) 10-K risk factor changes: FY2017 vs FY2017

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K and in Teledyne’s [removed: 2016] [added: 2017] Annual Report to Stockholders.

Some of our businesses serve industries such as power generation and petrochemical refining, which may be negatively impacted [removed: by] [added: in the event of future] reductions in global capital expenditures and manufacturing capacity.

One of our largest commercial customers is in the offshore oil and gas industry and accounted for 2.3% [removed: and 2.8%] of total sales in [removed: 2015 and 2014, respectively.][added: 2015.]

In [added: 2017 and] 2016, no commercial customer in the offshore oil and gas industry accounted for more than [removed: 1%] [added: 2%] of total sales.

[removed: In 2014] and [removed: again in 2015 and] 2016, the price of Brent crude oil experienced dramatic declines, from a high of $116 [added: per barrel] in June 2014, to a low of $27 [added: per barrel] in January [removed: 2016.][added: 2016 and was approximately $67 per barrel at the end of 2017.]

With the [removed: pending] [added: 2017] acquisition of e2v, the risk profile of Teledyne may differ materially from prior years, which could materially change our results of operations.

[removed: e2v is] [added: On March 28, 2017, Teledyne acquired e2v,] a leading designer, developer and manufacturer of radio frequency (“RF”) power systems, imaging solutions and semiconductors to the aerospace, security and defense, space, medical, scientific and industrial markets.

[removed: With this acquisition,] [added: As] a [added: result of the acquisition of e2v, a] greater percentage of Teledyne’s revenues and expenses [removed: will] arise from international sources.

The acquisition [removed: will] also significantly [removed: expand] [added: expands] Teledyne’s international employee base and manufacturing footprint.

As a result of the acquisition of e2v, the financial results of [removed: the combined company will be] [added: Teledyne are] more exposed to currency exchange rate fluctuations and an increased proportion of assets, liabilities and earnings [removed: will be] [added: are] denominated in non-U.S. dollar currencies.

[removed: The combined company will present its financial statements in U.S. dollars and will have] [added: Following the acquisition,] a significant proportion of [added: Teledyne’s] net assets, expenses and income [added: are] in non-U.S. dollar currencies, primarily the British pound, the Canadian dollar and the [removed: euro.][added: euro, while Teledyne’s financial results are presented in U.S. dollars.]

[removed: The combined company’s] [added: Teledyne’s] financial results and capital ratios [removed: will] [added: are] therefore [removed: be] [added: more] sensitive to movements in foreign exchange [removed: rates.][added: rates as a result of the acquisition.]

While most of the products made and markets served by e2v are complementary to Teledyne, the acquisition of e2v [removed: will expand] [added: expanded] the size of Teledyne’s Digital Imaging segment relative to its other segments.

Approximately [removed: one quarter] [added: 20 percent] of e2v’s revenue relates to long-term contracts, many of which involve advancements in technology and are fixed price.

We may not realize all of the anticipated benefits of the [removed: proposed] acquisition of e2v, or those benefits may take longer to realize than expected.

[removed: In addition, even] [added: Even] if the operations of the businesses of the Teledyne and e2v are integrated successfully, we may not realize the full benefits of the [removed: proposed] acquisition, including the synergies, cost savings or sales or growth opportunities that we expect, or the full benefits may not be achieved within the anticipated time frame, or at all.

All of these factors could adversely affect our earnings, decrease or delay the expected accretive effect of the [removed: proposed] acquisition, or negatively impact the price of our common stock.

As a result, we cannot assure that the combination of Teledyne’s and e2v’s businesses will result in the realization of the full benefits anticipated from the [removed: proposed] acquisition.

During [removed: 2016,] [added: 2017,] sales to international customers accounted for approximately [removed: 43%] [added: 46%] of our total revenues, compared with [removed: 44%] [added: 43%] in [removed: 2015] [added: 2016] and [removed: 45%] [added: 44%] in [removed: 2014.][added: 2015.]

In [removed: 2016,] [added: 2017,] we sold products to customers in over 100 countries.

In [removed: 2016,] [added: 2017,] the top five countries for international sales were China, the United Kingdom, Germany, [removed: South Korea] [added: Japan] and [removed: Japan,] [added: South Korea,] constituting approximately [removed: 20%] [added: 21%] of our total sales.

The announcement of Brexit and the [removed: potential] [added: pending] 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.

Given our several U.K.-based businesses, including our [removed: pending] [added: 2017] acquisition of e2v, 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 UK-based businesses.

Attempts by the [removed: new] Presidential Administration to withdraw from or materially modify international trade [removed: agreements, which were raised as a possibility in the 2016 Presidential campaign,] [added: agreements] could adversely affect our business, financial condition and results of operations.

As noted above, our [removed: pending] [added: 2017] acquisition of e2v increases our international presence and the percentage of sales related to the Digital Imaging segment.

Additionally, the businesses of [removed: e2v, DALSA] [added: e2v] and [removed: LeCroy] [added: DALSA] are more capital intensive than other Teledyne businesses, which could result in increasing Teledyne’s capital requirements.

Our [removed: 2016] [added: 2017] management’s report specifically excludes from its scope and coverage our [removed: 2016] [added: 2017] acquisitions of [removed: CARIS, Quantum Data, Frontline, IN USA] [added: e2v] and [removed: Hanson,] [added: SSI assets,] allowing us additional time to evaluate existing internal controls and implement additional controls as appropriate.

Further, the acquisitions of U.S. public companies, such as Bolt and LeCroy, [removed: now] routinely trigger purported class action lawsuits, filed by shareholders of the target companies, the defense of which has increased transaction costs, among other things.

On [removed: January 1,] [added: December 31,] 2017, Teledyne’s goodwill was [removed: $1,193.5] [added: $1,776.7] million and net acquired intangible assets were [removed: $234.6] [added: $398.9] million.

United States and global responses to terrorism, [removed: continuing turmoil in Middle Eastern countries,] concerns regarding nuclear proliferation and the safety of nuclear energy, [added: continuing turmoil in Middle Eastern countries, increasing tension between the U.S. and Russia,] potential [added: hostilities involving North Korea, potential] epidemics, [added: potential future] financial issues [removed: facing] [added: 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.

[removed: While travel by our sales and service personnel to various regions has been affected by such factors, additional] [added: Additional] declines in air travel resulting from such 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.

[removed: The 2015 Paris terrorist] [added: Terrorist] attacks [added: in Spain in 2017 and Paris in 2015] or the Syrian refugee crisis could result in governments in Europe imposing greater restrictions on the movement of personnel or goods, which could adversely impact our businesses located within the European Union or our ability to sell products in that region.

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 [added: facilities, disruptions in our supply chain, travel restrictions on our employees, and other disruptions to our businesses.]

[removed: Deterioration] [added: A future deterioration] of financial performance of airlines could result in a reduction of discretionary spending for upgrades of avionics and in-flight communications equipment, which would adversely affect our Aerospace and Defense Electronics segment.

Sales under contracts with the U.S. Government as a whole, including sales under contracts with the U.S. Department of Defense, as prime contractor or subcontractor, represented approximately [removed: 27%] [added: 24%] of our total revenue in [removed: 2016,] [added: 2017,] compared with [removed: 26%] [added: 27%] in [removed: 2015] [added: 2016] and [removed: 25%] [added: 26%] in [removed: 2014.][added: 2015.]

[removed: A continued] [added: Any renewed] emphasis on Federal deficit and debt reduction could lead to a further decrease in overall defense spending.

On November 2, 2015, the Bipartisan Budget Act of 2015 (the [removed: Budget Act)] [added: “Budget Act”)] was signed into law.

The President signed a continuing resolution in September 2016, which was extended in December 2016, and [removed: provides] [added: provided] funding for the U.S. Government at fiscal [removed: 2016 levels through April 28, 2017.]

[removed: Continued] [added: Although the President has indicated his desire for increased] defense [added: 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.

Our [added: Turbine Engines business, which is part of our] Engineered Systems [removed: segment may be further] [added: segment, is being] impacted by delays in production runs under the [removed: JASSM and] Harpoon missile programs, [removed: as well as] [added: and may be impacted by] U.S. Department of Defense directives to introduce competitive bidding for programs on which we have previously served as sole source.

In 2014 and again in 2015

Our acquisitions, including e2v in 2017 contributed to greater international sales and operations.

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.

Regional independence movements in Scotland and Spain could also adversely impact our businesses located in those jurisdictions.

The E.U. adopted a comprehensive General Data Privacy Regulation (the “GDPR”) in May 2016 and which will become fully effective in May 2018.

The GDPR requires companies to satisfy new requirements regarding the handling of personal and sensitive data, including its use, protection and the ability of persons whose data is stored to correct or delete such data about themselves.

Failure to comply with GDPR requirements could result in penalties of up to 4% of worldwide revenue.

The GDPR and other similar laws and regulations, as well as any associated inquiries or investigations or any other government actions, may be costly to comply with, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices.

Increasing tensions with Russia or the evolving nuclear threat from North Korea could disrupt the global economic recovery.

Travel by our sales and service personnel to various regions has been affected by such factors.

2016 levels through April 28, 2017.

In May 2017, the President signed the Consolidated Appropriations Act of 2017 for appropriations through September 30, 2017.

Congress has yet to pass a budget for the U.S. Government’s fiscal year 2018, but, to date, the Government has continued to operate through continuing resolutions.

Uncertainty around the budget process delays new programs.

The JASSM missile program comes to an end in mid-2018.

The MUSES platform provides opportunities for imaging, technology demonstrations, and space qualification of payloads supporting research, scientific studies, humanitarian efforts for both government and commercial customers.

While MUSES is now operational on the ISS, the delay in launch of equipment for use on the MUSES platform could have an adverse impact on the investment return on the platform.

The launch of MUSES was delayed in 2017 by launch failures of SpaceX.

Future launch failures could impact future instruments designed for this platform.

2015.

In addition, we have sold approximately $46.1 million in pension liability to third parties in recent years.

To the extent any of these counterparties are unable to fulfill their obligations to retirees, we may have residual liability.

Unauthorized access to or control of our products, devices or systems could impact the safely or 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 GDPR, 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 are currently upgrading infrastructure at Teledyne e2v’s facility in Chelmsford, U.K. and subject to customer and governmental support, we are planning to expand Teledyne DALSA’s MEMS foundry in Bromont, Quebec.

Failure to comply CE marking directives may prevent some of our products from being sold into Europe and the cost to comply with these directives may make our products non-competitive.

A change in China's recent economic policies promoting pollution reduction could result in lower sales or slower sales growth for our pollution monitoring and laboratory instrumentation to that country.

In particular, we face increased competition with respect to the sale of our flight data acquisition systems, which may intensify as certain of our patents related to these products expire in 2018 and upcoming years.

We also face new competition for our protocol analyzers products.

major acquisition programs and also require significant expansion in small business participation to meet Government contracting goals.

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

Weaker demand for coal and gas-fired power plants, as evidenced by recent restructurings at power asset divisions of General Electric and Siemens, could result in lower sales of our instruments, systems and services for liquid and air analysis, process management and emissions compliance.

Competitors could also block our access to key distributors.

Some of our businesses, including those in traveling wave tube design and development, draw from a pool of specialized engineering talent that is small and currently shrinking.

Over the years we have also consolidated some of our business units and facilities, including to deal with downturns in the defense and oil and gas industries, among other reasons.

The operations of Teledyne Cormon are currently being relocated from the United Kingdom to Daytona Beach, Florida.

In 2017, we closed our remaining relays operations in Tijuana, Mexico, and relocated them to our owned Teledyne Relays’ facility in Hawthorne, California.

In 2017 our businesses located in Houston were impacted by Hurricane Harvey and our business in Florida was threatened by Hurricanes Irma and Matthew.

Teledyne Brown Engineering, Inc. has developed, built, and launched a multi user system for earth sensing that is affixed to the ISS.

For example, in 2014 several of our major customers reduced their marine seismic operations in connection with a general slowdown in the marine seismic exploration industry.

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Risks related to the proposed acquisition of e2v:

On December 12, 2016, Teledyne and e2v reached agreement on the terms of a recommended cash acquisition to be made by Teledyne for the ordinary share capital of e2v by means of a Scheme of Arrangement.

At announcement, the aggregate enterprise value for the transaction is expected to be approximately £627.1 million (or approximately $788.9 million) taking into account e2v stock options and net debt.

It is expected that, subject to the satisfaction or waiver of all relevant conditions, the acquisition will be completed in the first half of calendar 2017.

As discussed below, while there are risks associated with acquisitions generally, including closing and integration risks, there are additional risks associated with owning and operating businesses internationally, including those arising from U.S. and foreign policy changes, political instability, and exchange rate fluctuations.

We may also encounter significant unexpected difficulties in integrating the two businesses.

Our ability to realize the anticipated benefits of the pending acquisition of e2v will depend, to a large extent, on our ability to integrate our business with e2v’s business.

Combining two independent businesses is a complex, costly and time-consuming process.

As a result, we will be required to devote significant management attention and resources to integrating the business practices and operations of the company and e2v.

The integration process may disrupt the combined business and, if implemented ineffectively, could preclude the realization of the full benefits of the acquisition that are currently expected.

Our failure to meet the challenges involved in integrating the two businesses and to realize the anticipated benefits of the proposed acquisition could cause an interruption of, or a loss of momentum in, the activities of e2v and Teledyne and could adversely affect our results of operations.

In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships, and diversion of management’s attention.

In order to close the proposed acquisition of e2v, we will need to incur a significant level of debt that could have significant consequences for our business and any investment in our securities.

The proposed acquisition of e2v will be Teledyne’s largest acquisition to date.

In connection with the announcement of the proposed acquisition, in December 2016, we entered into a £625.0 million bridge credit facility to fund the acquisition and related transaction costs, in order to meet the requirement under the U.K. City Code on Takeovers and Mergers that we have sufficient and certain resources available to fund the consideration for the acquisition.

In January 2017, we amended our revolving credit agreement to allow us to use that facility to fund part of the consideration in lieu of the bridge credit facility.

We intend to use the proceeds of the term loans and the senior notes to fund the consideration and transaction costs for the proposed acquisition.

The indebtedness we have incurred and expect to incur to fund the proposed acquisition could have significant consequences for our business and any investment in our common stock, including:

| • | increasing our vulnerability to adverse economic, industry or competitive developments; |

| • | reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities and stock repurchases; |

| • | limiting our ability to making large acquisitions; |

| • | limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and |

| • | limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting. |

The pending acquisition of e2v is subject to various closing conditions, as well as other uncertainties, and there can be no assurances as to whether and when it may be completed.

Failure to consummate the proposed acquisition could negatively impact our stock price and our future business and financial results.

The consummation of the proposed acquisition of e2v is subject to certain customary conditions.

A number of the remaining conditions are not within our or e2v’s control, and it is possible that such conditions may prevent, delay or otherwise materially adversely affect the completion of the acquisition.

At meetings held in January 2017, e2v shareholders voted in favor of the resolution to approve the scheme of arrangement and voted to pass a special resolution to approve the implementation of the scheme.

The waiting periods required under both the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and in respect of the e2v’s U.S. State Department’s ITAR registration have expired.

Clearance or expiration of the waiting period under German merger control laws remains outstanding.

After discussions with the German authorities, e2v and Teledyne submitted a revised application for clearance on February 24, 2017 in respect of the acquisition.

The German authorities have one month to review such revised submission.

Clearance from the French Ministry of Economy and Finance and the French Ministry of Defense in respect of the acquisition also remains outstanding.

Under the U.K. City Code on Takeovers and Mergers, we may in certain cases invoke a condition to the acquisition to cause the acquisition not to proceed only if the U.K. Panel on Takeovers and Mergers, is satisfied that the circumstances giving rise to that condition not being satisfied are of material significance to the company in the context of the acquisition.

Because of this consent requirement, the conditions, may provide us less protection than the customary conditions in an offer for a U.S. domestic company.

We therefore may be required to proceed with the acquisition in the event of a material adverse change at e2v.

We cannot predict with certainty whether and when any of the remaining required conditions will be satisfied or if another uncertainty may arise.

Teledyne Technologies Incorporated provides enabling technologies for industrial growth [removed: markets.][added: markets that require advanced technology and high reliability.]

These markets include [removed: deepwater oil and gas exploration] [added: aerospace] and [removed: production, oceanographic research,] [added: defense, factory automation,] air and water quality environmental monitoring, [removed: factory automation] [added: oceanographic research, deepwater oil] and [added: gas exploration and production,] medical [removed: imaging.][added: imaging and pharmaceutical research.]

Our products include [added: 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, [removed: digital imaging sensors and cameras,] aircraft information management systems, and defense electronics and satellite communication subsystems.

We differentiate ourselves from many of our direct competitors by having a [removed: customer] [added: customer-] and [removed: company sponsored] [added: company-sponsored] applied research center that augments our product development expertise.

[removed: On December 6, 2016, Teledyne Instruments, Inc. acquired] Hanson Research [removed: Corporation (“Hanson Research”) which] specializes in analytical instrumentation for the pharmaceutical industry.

[removed: On November 2, 2016, Teledyne Instruments, Inc. acquired assets of] IN [removed: USA, Inc. (“IN USA”),] [added: USA is] a manufacturer of a range of ozone generators, ozone analyzers and other gas monitoring instruments utilizing ultraviolet and infrared based technologies.

[removed: On May 3, 2016, Teledyne DALSA, Inc., a Canadian-based subsidiary, acquired the assets and business of CARIS, Inc. (“CARIS”)] [added: CARIS is] a leading developer of geospatial software designed for the hydrographic and marine community.

On April 15, 2016, Teledyne LeCroy, Inc., a U.S.-based subsidiary, acquired assets of Quantum Data, Inc. (“Quantum [removed: Data”) a market leader] [added: Data”), based] in [removed: video protocol analysis test tools.][added: Elgin, Illinois, for $17.3 million in cash.]

[removed: On April 6, 2016, Teledyne LeCroy, Inc. also acquired] Frontline [removed: Test Equipment, Inc. (“Frontline”)] [added: is] a market leader in wireless protocol analysis test tools.

[removed: For the machine vision market,] e2v provides high performance image sensors and custom camera solutions and application specific standard [removed: products.][added: products for the machine vision market.]

Finally, the company provides high reliability semiconductors and board-level solutions for use in aerospace, space and [removed: radio frequency] communications applications.

[removed: For] [added: Principally located in Chelmsford, United Kingdom and Grenoble, France, e2v had sales of approximately £236 million for] its fiscal year ended March 31, [removed: 2016, e2v had sales of approximately £236.4 million.][added: 2016.]

In [removed: connection with our strategy, in] the third quarter of 2016, Teledyne completed the disposition of the net assets of its Printed Circuit Technology (“PCT”) business for $9.3 million in cash, resulting in no gain or loss.

In connection with the sale, we entered into a transition services agreement, effective July 8, 2016, to provide certain administrative services to facilitate the orderly transfer of the business operations to the [removed: buyer, with the transition services agreement expected to continue through the first half of 2017.][added: buyer.]

[removed: In addition,] [added: We also recorded a gain] in 2016 [removed: we sold] [added: of $17.9 million on the sale of] a former operating facility in [removed: California and recorded a pretax gain of $17.9 million,] [added: California,] and incurred pretax charges totaling $7.9 million related to the [removed: pending] e2v acquisition.

As part of a continuing effort to reduce costs and improve operating performance, we [removed: took] [added: may take] actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weak end markets and high cost locations.

| | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Instrumentation | | $ | [removed: 10.6] [added: 2.1] | | | $ | [removed: 3.9] [added: 10.6] | | | $ | [removed: 1.0] [added: 3.9] | |

| Digital Imaging | | [removed: 2.0] [added: —] | | | | [removed: 3.2] [added: 2.0] | | | | [removed: 2.7] [added: 3.2] | | |

| Aerospace and Defense Electronics | | [removed: 4.6] [added: 2.1] | | | | [removed: 1.2] [added: 4.6] | | | | [removed: 0.9] [added: 1.2] | | |

| Engineered Systems | | [removed: 0.1] [added: —] | | | | 0.1 | | | | [removed: (0.2] [added: 0.1] | | [removed: )] |

| Total | | $ | [removed: 17.3] [added: 4.2] | | | $ | [removed: 8.4] [added: 17.3] | | | $ | [removed: 4.4] [added: 8.4] | |

| Severance | | $ | [removed: 9.5] [added: 3.8] | | | $ | [removed: 8.4] [added: 9.5] | | | $ | [removed: 4.2] [added: 8.4] | |

| Facility consolidations | | [removed: 7.8] [added: 0.4] | | | | [removed: —] [added: 7.8] | | | | [removed: 0.2] [added: —] | | |

| Cost of sales | | $ | [removed: 6.8] [added: 2.8] | | | $ | [removed: 3.7] [added: 6.8] | | | $ | [removed: 1.0] [added: 3.7] | |

| Selling, general and administrative expenses | | [removed: 10.5] [added: 1.4] | | | | [removed: 4.7] [added: 10.5] | | | | [removed: 3.4] [added: 4.7] | | |

At [removed: January 1,] [added: December 31,] 2017, [removed: $3.7] [added: $1.5] million remains to be paid related to these actions.

The Company spent [removed: $93.4] [added: $774.1] million, [removed: $66.7] [added: $93.4] million and [removed: $195.8] [added: $66.7] million on acquisitions and investments in [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014, respectively.][added: 2015, respectively, net of any cash acquired.]

On November 2, 2016, Teledyne Instruments, Inc. acquired assets of IN USA, [added: Inc. (“IN USA”),] headquartered in Norwood, Massachusetts, for $10.2 million in cash.

Teledyne [removed: intends to relocate] [added: relocated] and [removed: consolidate] [added: consolidated] manufacturing into the new, owned facility of Teledyne Advanced Pollution Instrumentation in San Diego, California.

[removed: On] December 6, 2016, Teledyne Instruments, Inc. acquired Hanson [removed: Research,] [added: Research Corporation (“Hanson Research”),] headquartered in Chatsworth, California, for $25.0 million, net of cash acquired.

On May 3, 2016, Teledyne DALSA, Inc., a Canadian-based subsidiary, acquired the assets and business of CARIS, [added: Inc. (“CARIS”),] based in Fredericton, New Brunswick, Canada, for $26.2 million, net of cash acquired.

On April [removed: 15,] [added: 6,] 2016, Teledyne LeCroy, [removed: Inc., a U.S.-based subsidiary,] [added: Inc. also] acquired [removed: assets of Quantum Data,] [added: Frontline Test Equipment, Inc. (“Frontline”),] based in [removed: Elgin, Illinois,] [added: Charlottesville, Virginia,] for [removed: $17.3] [added: $13.7] million in cash.

Teledyne funded the [removed: purchases] [added: acquisitions primarily] from borrowings under its credit [removed: facility] [added: facilities, issuance of senior notes] and [added: term loans and] cash on hand.

All [removed: of the 2014] [added: other] acquisitions [added: in 2017, 2016 and 2015] are part of the Instrumentation segment.

Fiscal year [removed: 2016] [added: 2017] contained 52 weeks, fiscal year [removed: 2015] [added: 2016] contained [removed: 53] [added: 52] weeks and fiscal year [removed: 2014] [added: 2015] contained [removed: 52] [added: 53] weeks.

The following are selected financial highlights for [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] (in millions, except per-share amounts):

| [removed: Sales] [added: Net sales] | | $ | [removed: 2,149.9] [added: 2,603.8] | | | $ | [removed: 2,298.1] [added: 2,149.9] | | | $ | [removed: 2,394.0] [added: 2,298.1] | |

| Cost of sales | | [removed: 1,318.0] [added: 1,612.2] | | | | [removed: 1,427.8] [added: 1,318.0] | | | | [removed: 1,487.1] [added: 1,427.8] | | |

| Selling, general and administrative expenses | | [removed: 578.1] [added: 656.0] | | | | [removed: 588.6] [added: 578.1] | | | | [removed: 612.4] [added: 588.6] | | |

Consistent with this strategy, in March 2017, we made our largest acquisition to date, e2v technologies plc (“e2v”).

We made one other acquisition in 2017, five acquisitions in 2016 and three acquisitions in 2015.

The transition services agreement terminated in 2017.

In addition, in 2016 we sold a former operating facility in California and recorded a pretax gain of $17.9 million.

| | | 2017 | | | | 2016 | | | | 2015 | | |

| Total | | $ | 4.2 | | | $ | 17.3 | | | $ | 8.4 | |

| | | 2017 | | | | 2016 | | | | 2015 | | |

| Total | | $ | 4.2 | | | $ | 17.3 | | | $ | 8.4 | |

On March 28, 2017, Teledyne 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.

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.

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.

A subsequent cash payment of $0.3 million related to a purchase price adjustment was made in 2017.

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 (HPLC) 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 Instrumentation segment.

On

Quantum Data is a market leader in video protocol analysis test tools.

| | | 2017 | | | | 2016 | | | | 2015 | | |

2017 compared with 2016

| Net sales (dollars in millions) | | | 2017 | | | | 2016 | | | | % Change | |

| Instrumentation | | | $ | 953.9 | | | $ | 876.7 | | | 8.8 | % |

| Digital Imaging | | | 693.5 | | | | 398.7 | | | | 73.9 | % |

| Engineered Systems | | | 286.2 | | | | 258.6 | | | | 10.7 | % |

| Total net sales | | | $ | 2,603.8 | | | $ | 2,149.9 | | | 21.1 | % |

| Results of operations (dollars in millions) | | | 2017 | | | | 2016 | | | | % Change | |

| Instrumentation | | | $ | 127.4 | | | $ | 109.8 | | | 16.0 | % |

| Digital Imaging | | | 108.4 | | | | 45.9 | | | | 136.2 | % |

| Engineered Systems | | | 37.7 | | | | 32.1 | | | | 17.4 | % |

| Corporate expense | | | (62.8 | | ) | | (46.1 | | ) | | 36.2 | % |

| Operating income | | | 335.6 | | | | 253.8 | | | | 32.2 | % |

| Other income/(expense), net | | | (15.5 | | ) | | 10.7 | | | | * | |

| Income before income taxes | | | 287.0 | | | | 241.3 | | | | 18.9 | % |

| Net income | | | $ | 227.2 | | | $ | 190.9 | | | 19.0 | % |

| | 2017 | | | | 2016 | | | | Change | | |

| Instrumentation | | | | | | | | | | | |

| Net sales | $ | 953.9 | | | $ | 876.7 | | | $ | 77.2 | |

| Net sales | $ | 693.5 | | | $ | 398.7 | | | $ | 294.8 | |

We have evolved from a company that was primarily focused on aerospace and defense to one that serves multiple markets that require advanced technology and high reliability.

Consistent with this strategy, we made five acquisitions in 2016, three acquisitions in 2015 and four acquisitions in 2014.

On June 5, 2015, Teledyne DALSA B.V., a Netherlands-based subsidiary, acquired Industrial Control Machines SA (“ICM”) a leading supplier of portable X-ray generators for non-destructive testing applications, as well as complete X-ray imaging systems for on-site security screening.

On February 2, 2015, Teledyne acquired Bowtech Products Limited (“Bowtech”) through a U.K.-based subsidiary.

Bowtech designs and manufactures harsh underwater environment vision systems.

In 2015, Teledyne made an additional investment in Ocean Aero, Inc. (“Ocean Aero”) and we acquired a product line.

On December 12, 2016, Teledyne and e2v technologies plc (“e2v”) reached agreement on the terms of a recommended cash acquisition to be made by Teledyne for the ordinary share capital of e2v by means of a Scheme of Arrangement (the “Offer”).

Under the terms of the Offer, e2v’s ordinary shareholders (“e2v Shareholders”) will receive 275 pence in cash for each e2v share valuing the entire issued and to be issued ordinary share capital of e2v at approximately £619.6 million on a fully diluted basis.

It is expected that, subject to the satisfaction or waiver of all relevant conditions, the acquisition will be completed in the first half of calendar 2017.

At meetings held in January 2017, e2v shareholders voted in favor of the resolution to approve the scheme of arrangement and voted to pass a special resolution to approve the implementation of the scheme.

The waiting periods required under both the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and in respect of the e2v’s U.S. State Department’s ITAR registration have expired.

Clearance or expiration of the waiting period under German merger control laws remains outstanding.

After discussions with the German authorities, e2v and Teledyne submitted a revised application for clearance on February 24, 2017 in respect of the acquisition.

The German authorities have one month to review such revised submission.

Clearance from the French Ministry of Economy and Finance and the French Ministry of Defense in respect of the acquisition also remains outstanding.

Teledyne expects to fund the acquisition from cash on hand and its credit facility, as well as the anticipated proceeds from the issuance of senior unsecured notes and term loans.

At announcement, the aggregate enterprise value for the transaction is expected to be approximately £627.1 million (or approximately $788.9 million) taking into account e2v stock options and net debt.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

On April 6, 2016, Teledyne LeCroy, Inc. also acquired Frontline, based in Charlottesville, Virginia, for $13.7 million in cash.

The balance of the noncontrolling interest of $47.0 million at December 29, 2013 decreased by $2.1 million for the net loss and $3.7 million in translation adjustments, resulting in a balance of $41.2 million at December 28, 2014.

The 2014 acquisitions included, Bolt Technology Corporation (“Bolt”) which expanded our capabilities related to offshore oil and natural gas exploration, as well as increased our offerings of remotely operated robotic vehicles systems.

We acquired the assets of The Oceanscience Group Ltd. (“Oceanscience”) to enhance our capabilities related to marine sensor platforms and unmanned surface vehicles.

We also acquired assets of Atlas Hydrographic GmbH (“Atlas”) to add marine sonar systems for mid and deep water applications and we acquired Photon Machines, Inc. (“Photon”) to supplement our offerings of laser-based sample introduction equipment for laboratory instrumentation.

In addition, in 2014 we made an initial investment in Ocean Aero, Inc.

The CARIS, ICM, Bowtech and Optech acquisitions were funded with cash held by foreign subsidiaries.

The results of the acquisitions have been included in Teledyne’s results since the dates of the respective acquisition.

On November 18, 2014, Teledyne acquired all of the outstanding common shares of Bolt for $22.00 per share payable in cash.

The aggregate value for the transaction was $171.0 million, excluding transaction costs and taking into account Bolt’s stock options, other liabilities and net cash on hand.

Bolt is a developer and manufacturer of marine seismic data acquisition equipment used for offshore oil and natural gas exploration.

Bolt is also a developer and manufacturer of remotely operated robotic vehicles systems used for a variety of underwater tasks.

Bolt had sales of $67.5 million for its fiscal year ended June 30, 2014.

On October 22, 2014, a subsidiary of Teledyne acquired the assets of Oceanscience for $14.7 million, net of cash acquired.

On August 18, 2014, a subsidiary of Teledyne acquired assets of Atlas for $5.2 million.

On March 31, 2014, a subsidiary of Teledyne acquired Photon Machines, Inc. (“Photon”) for an initial payment of $3.3 million.

| | | (in millions) | | | | | | | | | | |

| Instrumentation | (dollars in millions) | | | | | | | | | | |

Total year 2015 included net discrete tax benefits of $9.8 million primarily related to the remeasurement of uncertain tax positions which were mainly due to the expiration of statute of limitations and the release of valuation allowances.

2015 Compared with 2014

| Sales | | | 2015 | | | | 2014 | | | | % Change | |

Teledyne Technologies Incorporated provides enabling technologies for industrial growth [removed: markets.][added: markets that require advanced technology and high reliability.]

These markets include [removed: deepwater oil and gas exploration] [added: aerospace] and [removed: production, oceanographic research,] [added: defense, factory automation,] air and water quality environmental monitoring, electronics design and development, [removed: factory automation] [added: oceanographic research, deepwater oil] and [added: gas exploration and production,] medical [removed: imaging.][added: imaging and pharmaceutical research.]

Our products include [added: 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, [removed: digital imaging sensors and cameras,] aircraft information management systems, and defense electronics and satellite communication subsystems.

We differentiate ourselves from many of our direct competitors by having a customer and [removed: company sponsored] [added: company-sponsored] applied research center that augments our product development expertise.

Total sales in [removed: 2016] [added: 2017] were [removed: $2,149.9] [added: $2,603.8] million, compared with [removed: $2,298.1] [added: $2,149.9] million in [removed: 2015] [added: 2016] and [removed: $2,394.0] [added: $2,298.1] million in [removed: 2014.][added: 2015.]

Approximately [removed: 73%] [added: 24%] of our total sales in [removed: 2016] [added: 2017] were to [removed: commercial and international customers and 27% was to] the U.S. Government, as a prime contractor or subcontractor.

Of the [removed: 27%] [added: 24%] U.S. Government sales, approximately [removed: 54%] [added: 58%] were attributable to fixed-price type contracts with the balance attributable to cost-plus-fee type contracts.

Sales to international customers accounted for approximately [removed: 43%] [added: 46%] of total sales in [removed: 2016.][added: 2017.]

Our Recent [removed: and Pending] Acquisitions

Consistent with our strategy, during [removed: 2016,] [added: 2017,] we made acquisitions and investments totaling [removed: $93.4] [added: $774.1] million, [added: net of cash acquired,] which included the following:

To [removed: broaden] [added: expand] our [removed: test] [added: environmental] and [removed: measurement] [added: laboratory] instrumentation capabilities:

To expand our digital [removed: imaging] [added: imaging, space science, semiconductor and microwave solutions] capabilities:

Our businesses are aligned in four segments: Instrumentation, Digital Imaging, Aerospace and Defense [removed: Electronics,] [added: Electronics] and Engineered Systems.

The respective percentage contributions of our four business segments to our total sales [removed: in 2016, 2015 and 2014] are summarized in the following table:

| Segment contribution to total sales (a) | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | |

| Instrumentation | | [removed: 41] [added: 36] | % | | [removed: 46] [added: 41] | % | | [removed: 47] [added: 46] | % |

| Digital Imaging | | [removed: 18] [added: 27] | % | | [removed: 16] [added: 18] | % | | [removed: 17] [added: 16] | % |

| Aerospace and Defense Electronics | | [removed: 29] [added: 26] | % | | [removed: 26] [added: 29] | % | | [removed: 25] [added: 26] | % |

| Engineered Systems | | [removed: 12] [added: 11] | % | | 12 | % | | [removed: 11] [added: 12] | % |

[removed: Through our 2014 acquisition of Bolt Technology Corporation (“Bolt”), we] [added: We] are [removed: now] a leading supplier of marine seismic energy sources and replacement parts for offshore energy exploration.

Additionally, we design and manufacture [added: 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 [added: tripods,] autonomous [added: and remotely-operated] underwater vehicles [removed: (“AUVs”)] [added: (“AUVs” and “ROVs”)] to full ocean depth vessel-mounted oceanographic [removed: systems.][added: systems as well as sub bottom profilers that can survey structures beneath the seafloor.]

Our multibeam sonar systems [removed: are] [added: can be] used [removed: for creating] [added: to create] highly accurate maps of underwater offshore constructions, wrecks or quay walls in harbors, and in particular, high-quality maps of the seafloor.

With advanced imaging capabilities, our sonars create images of hidden structures on the seafloor and are also used to create real-time images of the environment in the oceans and enable precise navigation of [removed: AUVs.][added: AUVs and ROVs.]

[removed: Our] Teledyne Marine group and Teledyne Scientific Company continue to work collaboratively to improve the reliability of materials exposed to ultra deep-sea conditions.

We manufacture complete [removed: AUVs.][added: 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 [removed: very] low power consumption.

Glider applications range from oceanographic research to [removed: military] persistent surveillance systems [removed: as part of a mobile underwater sensing and communication network.][added: for the U.S. Navy.]

[removed: Through the SeaBotix business, we] [added: We] design and manufacture Inspection Class [removed: remotely operated vehicles (“ROVs”)] [added: ROVs] used in maritime security, military, search and rescue, aquaculture, and scientific research applications.

In November 2016, we acquired assets of IN USA, [added: Inc.,] which expanded our product portfolio to include a range of ozone generators, ozone analyzers and other gas monitoring instruments.

Our sampler products include portable, refrigerated and specialty samplers used in hazardous location [removed: applications.][added: applications and water samplers that utilize vacuum technology.]

We [removed: also] provide laboratory automation and sample introduction systems.

In addition, we manufacture liquid chromatography instruments and accessories for the purification of organic compounds, which [removed: since our 2015 acquisition of a product line] include highly sensitive evaporative light scanning detectors.

In December 2016, we acquired Hanson [removed: Research,] [added: Research Corporation,] a [removed: leading] manufacturer of the systems used in testing of pharmaceutical products, including FDA-mandated dissolution rates of oral dosage forms and systems used in the research and development of topical creams, ointments, and gels containing active pharmaceutical ingredients.

[removed: Since our August 2012 acquisition of LeCroy Corporation (“LeCroy”), we] [added: We] develop, manufacture, sell and license high-performance oscilloscopes and high-speed protocol analyzers for various [removed: computer] communication links.

[removed: Our protocol analyzers are used by designers] [added: Designers] and engineers [added: use our protocol analyzers] to [removed: reliably and] accurately [added: and reliably] monitor communications traffic and diagnose operational problems in a variety of communications devices to ensure that they comply with industry [removed: standards.][added: standards, including the area of internet infrastructure, where PCI Express and related standards are required to enable high performance data centers that support cloud networks.]

[removed: In April 2016, we acquired] [added: Our 2016 acquisitions of] Frontline, [removed: which] allowed us to expand our protocol test portfolio into [removed: important] wireless [removed: technologies like] [added: technologies, including] Bluetooth and 802.11 [removed: (Wi-Fi);] [added: (Wi-Fi)] and [added: the 2016 acquisition of] assets of Quantum [removed: Data, which] [added: Data] broadened our protocol [removed: product] offering to penetrate emerging video [removed: technologies like] [added: technologies, such as] HDMI, SDI and other [added: important] digital video [removed: technologies.][added: standards.]

We [added: also] manufacture torque sensors and automatic data acquisition systems that are used to test critical control valves in nuclear power and industrial plants.

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 micro electro-mechanical systems [removed: (“MEMS”).][added: (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters.]

[removed: It] [added: This segment] also includes our sponsored and centralized research laboratories benefiting government programs and businesses.

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.

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, which includes a $0.3 million purchase price adjustment.

They can also be used to detect objects in front of the mounted system.

They can also be used to detect objects in front of the mounted system.

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.

Our

Our SeaRaptor™ AUV will permit deep water survey with operational depths of 6000 meters.

Since our July 2017 acquisition of assets of SSI, we manufacture and sell positive-displacement piston pumps utilized in a wide variety of analytical, clinical, preparative and fluid-metering applications.

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.

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.

We offer a broad range of real-time oscilloscopes addressing different end user needs.

Our four high-definition oscilloscope product families address needs from the lower-bandwidth bench top sector to the mid-range general-purpose sector of the market.

The HDO 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 100GHz.

Our WavePro product family covers the mid-to high-range performance and the WaveRunner product family, which was enhanced and extended to higher bandwidths in 2016, covers the mid-range performance and general purpose and bench-top sector.

Our WaveSurfer and WaveJet product-lines are designed for users in the lower bandwidth bench-top sector of the market and value-oriented users in the economy sector.

In March 2017, as part of the acquisition of e2v, we also added Sweden-based SP Devices, a manufacturer of high-speed, high-resolution analog-to-digital conversion systems.

These systems are used in many applications including test and measurement, medical imaging, LIDAR and software defined radio.

SP Devices extends our leadership and complements our oscilloscope offering in the market sectors that require high-speed, high-resolution, digitizing capabilities.

Our torque sensors are also used in other markets, including automotive and power tools.

Our 2017 acquisition of e2v has added further depth in the design and supply of specialist components and sub-systems within the medical, aerospace and defense and commercial and industrial markets.

The 2015 acquisition of Belgium-based Industrial Control Machines SA (“ICM”) added

Additionally, e2v produces components and sub-systems that deliver high performance and high reliability radio frequency power generation for healthcare, transportation and industrial applications.

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 are a leading supplier of space-grade image sensors for low light imaging applications.

Our image sensors play a critical role in defense applications in airborne and satellite systems.

We also design and manufacture advanced military laser eye protection spectacles and sensor protection filters, and we are developing advanced technologies and components for assured position, navigation, and timing applications, such as Chip-Scale Atomic Clocks and MEMS resonators for compact gyroscopes.

Since our acquisition of e2v, we provide high performance, high reliability semiconductor solutions which address critical functions of the complete signal chain, including assembly and test, packaging, qualification and long term support for customer's semiconductor life cycle management.

The first instrument to be affixed to MUSES is scheduled to launch in mid-2018.

In addition, we manage and support the maintenance of Dow’s Collegeville, Pennsylvania facility which is made up of over 1 million square feet of floor space.

We have evolved from a company that was primarily focused on aerospace and defense to one that serves multiple markets that require advanced technology and high reliability.

| | |

| --- | --- |

| • | Assets of Quantum Data, Inc. (“Quantum Data”) based in Elgin, Illinois, which provides electronic test and measurement instrumentation and is a market leader in video protocol analysis test tools. |

| • | Frontline Test Equipment, Inc. (“Frontline”) based in Charlottesville, Virginia, which provide electronic test and measurement instrumentation and is a market leader in wireless protocol analysis test tools. |

| • | CARIS, Inc. (“CARIS”) based in Fredericton, New Brunswick, Canada, is a leading developer of geospatial software designed for the hydrographic and marine community. |

To expand our environmental instrumentation capabilities:

| • | Hanson Research Corporation (“Hanson Research”) headquartered in Chatsworth, California, which specializes in analytical instrumentation for the pharmaceutical industry. |

| • | Assets of IN USA, Inc. (“IN USA”) headquartered in Norwood, Massachusetts, which manufactures a range of ozone generators, ozone analyzers and other gas monitoring instruments utilizing ultraviolet and infrared based technologies. |

On December 12, 2016, Teledyne and e2v technologies plc (LSE:E2V.L) (“e2v”) reached agreement on the terms of a recommended cash acquisition to be made by Teledyne for the ordinary share capital of e2v by means of a Scheme of Arrangement (the “Offer”).

Under the terms of the Offer, e2v’s ordinary shareholders (“e2v Shareholders”) will receive 275 pence in cash for each e2v share valuing the entire issued and to be issued ordinary share capital of e2v at approximately £619.6 million on a fully diluted basis.

It is expected that, subject to the satisfaction or waiver of all relevant conditions, the acquisition will be completed in the first half of 2017.

We offer eight families of real-time oscilloscopes, which address different needs: HDO4000/HDO6000/HDO8000/HDO9000, our 12-bit, high-definition oscilloscopes; LabMaster and WaveMaster, our industry leading high-end oscilloscope family; WavePro, which is targeted at the mid-to high-range performance sector; WaveRunner, designed for the general purpose and bench-top sector; WaveSurfer designed for users in the lower bandwidth bench-top sector of the market; WaveJet, designed for value-oriented users in the economy sector of the market; and WaveAce, our entry-level oscilloscope products.

In 2014, we released the world’s first 100GHz real-time scope, aimed at applications such as high-speed optical communications, and we extended our line of 12-bit oscilloscopes to include an eight channel product with specialized capabilities for analyzing power and efficiency of motors and the associated drive circuitry.

In 2015, we introduced the IQS series of Coherent Optical Receivers, featuring the industry’s highest bandwidth - these products extend our technology leadership in optical modulation analysis.

Our test and measurement products are sold into a broad range of industry sectors, including computer, semiconductor, consumer electronics, power electronics, data storage, automotive, industrial, military, aerospace and telecommunications.

We believe our test and measurement products address the needs of designers in all of these industry sectors in developing products that rely on increasingly complex electronic signals.

We also design and manufacture advanced military laser eye protection spectacles and sensor protection filters.

In 2013, the Boeing Company awarded us a single source contract to develop and supply the next generation of aircraft data acquisition and information management systems for the majority of future Boeing commercial aircraft.

The first of these products, a network file server, was certified in January 2016 and production deliveries have begun.

An enhanced digital flight data acquisition unit for the new Boeing 737MAX aircraft is expected to be certified in the first quarter of 2017, with production deliveries to follow soon after.

Our engines power the Boeing/U.S. Navy Harpoon and Standoff Land Attack Missile systems, and we are the sole source provider of engines for the baseline Lockheed Martin/U.S. Air Force Joint Air-to-Surface Standoff Missile (“JASSM”).

We also continue to work on advanced technology for small turbine engines and components for programs sponsored by the U.S. Air Force Research Laboratory.

In 2015 and 2014, our largest commercial customer, a customer of our Instrumentation segment, accounted for 2.3% and 2.8% of total sales, respectively.

In 2014, our largest program with the U.S. Government was the Objective Simulation Framework contract with the Missile Defense Agency, which represented 1.3% of our total sales.

While over the years we have not experienced much difficulty in procuring raw materials, components, sub-assemblies and other supplies required in our manufacturing processes, disruption in the global economy and financial markets could trigger increased pricing or otherwise affect our suppliers and negatively impact our ability to procure such supplies.

10-K 1 [removed: tdy-2016x10k.htm] [added: tdy-2017x10k.htm] 10-K [removed: 2016] [added: 2017] FORM 10K

For the fiscal year ended [removed: January 1,] [added: December 31,] 2017

The aggregate market value of the registrant’s Common Stock held by non-affiliates on June 30, [removed: 2016,] [added: 2017,] was [removed: $3.2] [added: $4.2] billion, based on the closing price of a share of Common Stock on such date, which is the last business day of the registrant’s most recently completed fiscal second quarter.

At February [removed: 28, 2017,] [added: 23, 2018,] there were [removed: 35,216,739] [added: 35,696,521] shares of the registrant’s Common Stock outstanding.

Selected portions of the registrant’s proxy statement for its [removed: 2017] [added: 2018] Annual Meeting of Stockholders (the [removed: “2017] [added: “2018] Proxy Statement”) are incorporated by reference in Part III of this Report.

| | | Page Number | [removed: |]

| PART I | | | [removed: |]

| | [Item 1. [removed: Business](#sA16F8E0C1DB05BF2ADD34B99B81AC283) | [1](#s605DEACB22325F3E901EDB0A6AA64BE7)] [added: Business](#sBCDFFA7596435994B149ACA0ADB2A912)] | [added: [1](#sBCDFFA7596435994B149ACA0ADB2A912)] |

| | [removed: Item] [added: [Item] 1A. Risk [removed: Factors | 13] [added: Factors](#s4FE51C201F0E5245B0C34880EDC7A789)] | [added: [13](#s4FE51C201F0E5245B0C34880EDC7A789)] |

| | [Item 1B. Unresolved Staff [removed: Comments](#sC2EE5D153D0E56D8908B0E1F4A64A14E) | 29] [added: Comments](#s837D812FCEB95D1BB1C9C13C4E94A402)] | [added: [28](#s837D812FCEB95D1BB1C9C13C4E94A402)] |

| | [Item 2. [removed: Properties](#s5EC23E7221D451D8B44B555EB6819F7E) | 29] [added: Properties](#sE1CB398273C45214AABADF66AE806F09)] | [added: [28](#sE1CB398273C45214AABADF66AE806F09)] |

| | [Item 3. Legal [removed: Proceedings](#s43A8C54F622F582D977F06F1A610A216) | [29](#s936373E289505BB681C244B99B30B7C4)] [added: Proceedings](#s4D79D9D03BB055D48921CB1E99518ABD)] | [added: [28](#s4D79D9D03BB055D48921CB1E99518ABD)] |

| | [Item 4. Mine Safety [removed: Disclosures](#s5CCC77328E9E51B0AD25DF1AC5B8BE65) | [29](#s15164200C9635F8C94A27E7C9ACA3F6A)] [added: Disclosures](#s21A70421BDDD5FC788E53F9C97157C00)] | [added: [28](#s21A70421BDDD5FC788E53F9C97157C00)] |

| PART II | | | [removed: |]

| | [Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sB6D14F13CF345A06A0870DC246378BB4) | 30] [added: Securities](#s26D7B060696A500690A83A5F89BB4603)] | [added: [29](#s26D7B060696A500690A83A5F89BB4603)] |

| | [Item 6. Selected Financial [removed: Data](#s77CCB541C1E55F288559A7BDCD9430AA) | [31](#s9E04F727D42D5AB4878056809BCEA49E)] [added: Data](#s12647B4611E257629D680718DFF15DD9)] | [added: [30](#s12647B4611E257629D680718DFF15DD9)] |

| | [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operation](#sCAC3B9458CA15AA1AF2CE958076BD9F6)s | [31](#sB6D14F13CF345A06A0870DC246378BB4)] [added: Operation](#s1A94CBFFD9A05381BFE6CCC74A709E69)s] | [added: [30](#s1A94CBFFD9A05381BFE6CCC74A709E69)] |

| | [Item 7A. Quantitative and Qualitative Disclosure About Market [removed: Risk](#s77CCB541C1E55F288559A7BDCD9430AA) | [56](#s77CCB541C1E55F288559A7BDCD9430AA)] [added: Risk](#s7973CDFDAC2F5D16BE7070CBCF018A87)] | [added: [54](#s7973CDFDAC2F5D16BE7070CBCF018A87)] |

| | [Item 8. Financial Statements and Supplementary [removed: Data](#s77CCB541C1E55F288559A7BDCD9430AA) | [56](#s3345BD588A9050D0B7883E5B9CFD3E31)] [added: Data](#s7D33938C5F9856BDA0A06AC48884042B)] | [added: [54](#s7D33938C5F9856BDA0A06AC48884042B)] |

| | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s77CCB541C1E55F288559A7BDCD9430AA) | 57] [added: Disclosure](#s533C45F133EA55D898CD684431FCEFCD)] | [added: [54](#s533C45F133EA55D898CD684431FCEFCD)] |

| | [Item 9A. Controls and [removed: Procedures](#s77CCB541C1E55F288559A7BDCD9430AA) | [57](#sCAC3B9458CA15AA1AF2CE958076BD9F6)] [added: Procedures](#s1DC8B734C9A656788106ACAF583C4800)] | [added: [54](#s1DC8B734C9A656788106ACAF583C4800)] |

| | [Item 9B. Other [removed: Information](#s77CCB541C1E55F288559A7BDCD9430AA) | [57](#s558262A1BCD858C68206BB7C8D6A53CD)] [added: Information](#sEFA5BCB5A2C35747A42338DA61922CB4)] | [added: [55](#sEFA5BCB5A2C35747A42338DA61922CB4)] |

| Part III | | | [removed: |]

| | [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#s4A5E4F698B8C524B9295CE424833DE7F) | [58](#sEEE0AF6501B155AC82F0DB53F660DD21)] [added: Governance](#s80CBC2C04F395AF1BA4228FD10CDF970)] | [added: [55](#s80CBC2C04F395AF1BA4228FD10CDF970)] |

| | [Item 11. Executive [removed: Compensation](#sB680903CB839564BBDEB04B3DDDE208C) | [58](#s702684D5D26659AEA98E77CBC39CC0CE)] [added: Compensation](#s83C7FCA93A8156209D3F8495D02D8FDC)] | [added: [55](#s83C7FCA93A8156209D3F8495D02D8FDC)] |

| | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s68BAA265BE5B5DE5B896DEC4D83ED22B) | 58] [added: Matters](#s616D6D55A0E956069AEEAB7C082CF628)] | [added: [56](#s616D6D55A0E956069AEEAB7C082CF628)] |

| | [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#s3395FC820A2559D09E2B483E45121726) | [58](#sEF35C01593565A50973D2705F85AC3C4)] [added: Independence](#s4A2ABE76E7D25D39B824FBA58ACD3837)] | [added: [57](#s4A2ABE76E7D25D39B824FBA58ACD3837)] |

| | [Item 14. Principal Accountant Fees and [removed: Services](#sB680903CB839564BBDEB04B3DDDE208C) | [58](#s1258A0F7C35655CCA46930494BC5D01B)] [added: Services](#s809F0C3CE62958D0899CB6FD87AD9D96)] | [added: [57](#s809F0C3CE62958D0899CB6FD87AD9D96)] |

| PART IV | | | [removed: |]

| | [Item 15. Exhibits and Financial Statement [removed: Schedules](#s77CCB541C1E55F288559A7BDCD9430AA) | [58](#sA16F8E0C1DB05BF2ADD34B99B81AC283)] [added: Schedules](#sCA4177C1072E57B3873A87BBFCC94E15)] | [added: [57](#sCA4177C1072E57B3873A87BBFCC94E15)] |

| | [INDEX TO FINANCIAL STATEMENTS AND RELATED [removed: INFORMATION](#sB680903CB839564BBDEB04B3DDDE208C) | [59](#s1A7CA1AFE724526288CF398A270C8FD6)] [added: INFORMATION](#s91EA00FDED2E5040833561B89C6574E6)] | [added: [58](#s91EA00FDED2E5040833561B89C6574E6)] |

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| | [SIGNATURES](#s7E2CDAA782AD5ECCB3FFA116ED5E2DBA) | [101](#s7E2CDAA782AD5ECCB3FFA116ED5E2DBA) |

| | | |

| | [EXHIBIT INDEX](#s3AC80188543E5555B0F27A7024A00C41) | [103](#s3AC80188543E5555B0F27A7024A00C41) |

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| --- | --- | --- | --- |

| | [SIGNATURES](#s77CCB541C1E55F288559A7BDCD9430AA) | [103](#sE5868AC8727F5A198D6F904CE377FCD6) | |

| | [EXHIBIT INDEX](#s77CCB541C1E55F288559A7BDCD9430AA) | [105](#s68F9BEDD7AEC52C8ACD147FD61245D0B) | |

The Company has [removed: 61] [added: 69] principal operating facilities in 16 states and [removed: five] [added: six] foreign countries.

[removed: Our] [added: 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 [removed: 28, 2017:][added: 27, 2018:]

| [removed: Principal operating facilities by segment:] | | | | | | | | | Location of Facilities | | |

| Instrumentation | | [removed: 13] [added: 14] | | | | [removed: 12] [added: 14] | | | California, Colorado, Florida, Massachusetts, Nebraska, New Hampshire, New York, Ohio, Texas and Virginia | | United States, Canada, Denmark and United Kingdom |

| Digital Imaging | | [removed: 8] [added: 10] | | | | [removed: 4] [added: 5] | | | California, Massachusetts, North Carolina and Pennsylvania | | United States, Belgium, [removed: Canada and] [added: Canada, France,] The Netherlands [added: and United Kingdom] |

| Engineered Systems | | 1 | | | | [removed: 4] [added: 6] | | | Alabama, Colorado, Maryland, Ohio and Tennessee | | United States and United Kingdom |

| Total | | [removed: 29] [added: 32] | | | | [removed: 32] [added: 37] | | | | | |

| 1st Quarter (through February [removed: 28, 2017)] [added: 26, 2018)] | | $ | [removed: 134.79] [added: 201.40] | | | $ | [removed: 119.67] [added: 172.80] | |

On February [removed: 28, 2017,] [added: 26, 2018,] the closing sale price of our Common Stock as reported by the New York Stock Exchange was [removed: $131.41] [added: $191.19] per share.

As of February [removed: 28, 2017,] [added: 23, 2018,] there were [removed: 3,574] [added: 3,184] holders of record of the Common Stock.

[removed: In January 2016, our Board of Directors authorized] [added: We have] a stock repurchase program [removed: to repurchase 3,000,000 shares of] [added: authorized by] our [removed: common stock.][added: Board of Directors.]

| 1st Quarter | | $ | 135.89 | | | $ | 119.67 | |

| 2nd Quarter | | $ | 137.00 | | | $ | 121.58 | |

| 3rd Quarter | | $ | 161.58 | | | $ | 127.75 | |

| 4th Quarter | | $ | 186.54 | | | $ | 159.73 | |

| 2018 | | | | | | | | |

We repurchased 2,561,815 shares in 2015 under the program.

No repurchases were made since 2015.

| 2015 | | | | | | | | |

| 1st Quarter | | $ | 105.77 | | | $ | 93.19 | |

| 2nd Quarter | | $ | 110.08 | | | $ | 100.29 | |

| 3rd Quarter | | $ | 111.81 | | | $ | 91.13 | |

| 4th Quarter | | $ | 94.35 | | | $ | 83.08 | |

In January 2015, our Board of Directors authorized a stock repurchase program to repurchase 2,500,000 shares of our common stock.

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 [removed: the] Consolidated Financial Statements.

| | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| [removed: Sales] [added: Net sales] | | $ | [removed: 2,149.9] [added: 2,603.8] | | | $ | [removed: 2,298.1] [added: 2,149.9] | | | $ | [removed: 2,394.0] [added: 2,298.1] | | | $ | [removed: 2,338.6] [added: 2,394.0] | | | $ | [removed: 2,127.3] [added: 2,338.6] | |

| Net income [removed: from continuing operations] [added: attributable to Teledyne] | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.8] [added: 190.9] | | | $ | [removed: 217.7] [added: 195.8] | | | $ | [removed: 185.0] [added: 217.7] | | | $ | [removed: 161.8] [added: 185.0] | |

| Net income [removed: attributable to Teledyne] | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.8] [added: 190.9] | | | $ | [removed: 217.7] [added: 195.5] | | | $ | [removed: 185.0] [added: 217.7] | | | $ | [removed: 164.1] [added: 185.0] | |

| Basic earnings per common share [removed: - continuing operations] | | $ | [removed: 5.52] [added: 6.45] | | | $ | [removed: 5.55] [added: 5.52] | | | $ | [removed: 5.87] [added: 5.55] | | | $ | [removed: 4.96] [added: 5.87] | | | $ | [removed: 4.41] [added: 4.96] | |

| Diluted earnings per common share [removed: - continuing operations] | | $ | [removed: 5.37] [added: 6.26] | | | $ | [removed: 5.44] [added: 5.37] | | | $ | [removed: 5.75] [added: 5.44] | | | $ | [removed: 4.87] [added: 5.75] | | | $ | [removed: 4.33] [added: 4.87] | |

| Weighted average diluted common shares outstanding | | [removed: 35.5] [added: 36.3] | | | | [removed: 36.0] [added: 35.5] | | | | [removed: 37.9] [added: 36.0] | | | | [removed: 38.0] [added: 37.9] | | | | [removed: 37.4] [added: 38.0] | | |

| Total assets | | $ | [removed: 2,774.4] [added: 3,846.4] | | | $ | [removed: 2,717.1] [added: 2,774.4] | | | $ | [removed: 2,862.2] [added: 2,717.1] | | | $ | [removed: 2,751.1] [added: 2,862.2] | | | $ | [removed: 2,406.4] [added: 2,751.1] | |

| Long-term debt and capital [removed: lease obligations, net of] [added: leases, less] current portion | | $ | [removed: 515.8] [added: 1,069.3] | | | $ | [removed: 761.5] [added: 515.8] | | | $ | [removed: 618.9] [added: 761.5] | | | $ | [removed: 549.0] [added: 618.9] | | | $ | [removed: 556.2] [added: 549.0] | |

| Total [added: stockholders’] equity | | $ | [removed: 1,554.4] [added: 1,947.3] | | | $ | [removed: 1,344.1] [added: 1,554.4] | | | $ | [removed: 1,468.5] [added: 1,344.1] | | | $ | [removed: 1,518.7] [added: 1,468.5] | | | $ | [removed: 1,203.4] [added: 1,518.7] | |

Fiscal year 2017 includes the impact of the acquisition of e2v in March 2017, See Note 3 to our Consolidated Financial Statements for additional information about the e2v acquisition.

The Company’s Form 10-Qs for the second and third quarters of 2016 classified our Printed Circuit Technology (“PCT”) business, which was sold in July 2016, as discontinued operations.

Based on further review we have determined that the sale and impact to the Company’s operations were insignificant and therefore the results of PCT are no longer presented within discontinued operations.

| | | | | | | | | | | | | | | | | | | | | |

| Net income from discontinued operations | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2.3 | |

| Basic earnings per common share | | $ | 5.52 | | | $ | 5.55 | | | $ | 5.87 | | | $ | 4.96 | | | $ | 4.47 | |

| Diluted earnings per common share | | $ | 5.37 | | | $ | 5.44 | | | $ | 5.75 | | | $ | 4.87 | | | $ | 4.39 | |

The information required by this item is included in this Report on pages [removed: 60] [added: 59] through [removed: 102.][added: 100.]

See the “Index to Financial Statements and Related Information” on page [removed: 59.][added: 58.]

The Company’s Chairman, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, with the participation and assistance of other members of management, have evaluated the effectiveness, as of [removed: January 1,] [added: December 31,] 2017, of the Company’s “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended (“the Exchange Act”).

Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures as of [removed: January 1,] [added: December 31,] 2017, are effective.

See Management Statement on page [removed: 60] [added: 59] for management’s annual report on internal control over financial reporting.

See Report of Independent Registered Public Accounting Firm on page [removed: 61] [added: 60] for Deloitte & Touche LLP’s attestation report on [removed: management’s assessment] [added: the Report] of [removed: internal control] [added: Management on Teledyne Technologies Incorporated's Internal Control] over [removed: financial reporting.][added: Financial Reporting.]

There was no change in the Company’s “internal control over financial reporting” (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended [removed: January 1,] [added: December 31,] 2017, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Tyler Vernon, [removed: Senior Manager,] [added: Director,] SEC/GAAP Compliance [removed: & External Reporting]

In addition to the information set forth under the caption “Executive Management” beginning on page 10 in Part I of this Report, the information required by this item is set forth in the [removed: 2017] [added: 2018] Proxy Statement under the captions “Item 1 on Proxy Card - Election of Directors,” “Board Composition and Practices,” “Corporate Governance,” “Committees of Our Board of Directors - Audit Committee” and “Report of the Audit Committee” and “Stock Ownership - Sections 16(a) Beneficial Ownership Reporting Compliance.” This information is incorporated herein by reference.

The information required by this item is set forth in the [removed: 2017] [added: 2018] Proxy Statement under the captions “Executive and Director Compensation” “Compensation Committee Interlocks and Insider Participation” and “Personnel and Compensation Committee Report.” This information is incorporated herein by reference.

[removed: The] [added: Except for the table below, the] information required by this item is set forth in the [removed: 2017] [added: 2018] Proxy Statement under the caption “Stock Ownership Information” and [removed: under Item 2 “Approval of Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan” and] is incorporated herein by reference.

The following table summarizes information about our common stock that may be issued upon the exercise of options, warrant and rights under all of our equity compensation plans, as of December 31, 2017:

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| Plan Category | Number of Securities to be issued upon Exercise of Outstanding Options, Warrants and Rights (a) | | | | Weighted-Average Exercise Price of Outstanding Options, Warrants or Rights (b) | | | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans \[excluding securities reflected in column (a)\] | | | |

| Equity compensation plans approved by security holders: | | | | | | | | | | | | | |

| 1999 Incentive Plan(1) | 13,903 | | | | 50.79 | | | | | — | | | |

| 1999 Non-Employee Director Stock Compensation Plan(1) | 272 | | | | 33.13 | | | | | — | | | |

| 2002 Stock Incentive Plan(1) | 12,714 | | | | 52.66 | | | | | — | | | |

| Amended and Restated 2008 Incentive Award Plan(2) | 910,368 | | | | 59.98 | | | | | — | | | |

| Amended and Restated 2014 Incentive Award Plan(3) | 1,348,446 | | (4 | ) | 100.40 | | | (5 | ) | 3,713,434 | | (6 | ) |

| Employee Stock Purchase Plan(6) | — | | | | — | | | | | 1,000,000 | | (7 | ) |

| Equity Compensation plans not approved by security holders | — | | | | — | | | | | — | | | |

| Total | 2,285,703 | | | | $ | 83.73 | | | | 4,713,434 | | | |

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| --- | --- |

| | |

| 1) | The 1999 Incentive Plan, the 2002 Stock Incentive Plan and the 1999 Non-Employee Director Stock Compensation Plan terminated following stockholder approval of the 2008 Incentive Award Plan at our 2008 Annual Meeting of Stockholders. No additional awards may be granted under these plans. |

| 2) | No additional awards may be granted under the Amended and Restated 2008 Incentive Award Plan (2008 Plan). Any shares available under the 2008 Plan on the effective date of the 2014 Plan or that were subject to awards under the 2008 Plan that were forfeited or lapsed following the effective date of the 2014 Plan are automatically transferred to the Amended and Restated 2014 Plan. |

| 3) | On April 26, 2017, the stockholders of Teledyne approved the amendment and restatement of the 2014 Incentive Award Plan, which increased the shares available by 2,500,000. |

| 4) | Does not include (i) 93,642 shares of stock reserved for issuance under the 2015-2017 cycle of our PSP, of which 6,481 shares were issued as part of the first installment payment in February 2018 and; and (ii) 22,682 shares subject to restricted stock unit awards issued to employees and directors. |

| 5) | Does not include the securities described in footnote (4) above, which do not have an exercise price . |

| 6) | The number of shares available for future issuance (i) includes shares transferred from the 2008 Plan (see footnote (2) above); (ii) assumes the issuance of (i) 93,642 shares of stock reserved for issuance under the 2015-2017 cycle of our PSP, of which 6,481 shares were issued as part of the first installment payment in February 2018, and; and (ii) 22,682 shares subject to restricted stock unit awards issued to employees and directors. |

| 7) | We maintain an Employee Stock Purchase Plan (commonly known as The Stock Advantage Plan) for eligible employees. It enables employees to invest in our common stock through automatic, after-tax payroll deductions, within specified limits. We add a 25% matching Company contribution up to $1,200 annually. Our contribution is currently paid in cash and the plan administrator purchases shares of our common stock in the open market. Historically, all shares used to fund the Employee Stock Purchase Plan have been purchased on the open market and no new shares have been issued. |

The information required by this item is set forth in the [removed: 2017] [added: 2018] Proxy Statement under the captions “Corporate Governance” and “Certain Transactions” and is incorporated herein by reference.

The information required by this item is set forth in the [removed: 2017] [added: 2018] Proxy Statement under the captions “Fees Billed by Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policies” under “Item [removed: 3] [added: 2] on Proxy Card - Ratification of Appointment of Independent Registered Public Accounting Firm” and is incorporated herein by reference.

See the “Index to Financial Statements and Related Information” on page [removed: 60] [added: 58] of this Report, which is incorporated herein by reference.

See Schedule II captioned “Valuation and Qualifying Accounts” on page [removed: 102] [added: 100] of this Report, which is incorporated herein by reference.

| Management Statement | [removed: [60](#s2AEF0720700E5931BCA91F38DC9E837B)] [added: [59](#s19DC4B404FA759E5A7AEA3A814CD421E)] | |

| Report of Independent Registered Public Accounting Firm | [removed: [61](#sBA548BC63F3455F599F0D0A2E5294C65)] [added: [60](#s5918BF061A145BF2B423B4C97696539C)] | |

| Report of Independent Registered Public Accounting Firm | [removed: [62](#s4F6330843B8D535D9AE541B386E1D6BC)] [added: [61](#s39C022D78A0D5B70B1B29C4FA9142C2D)] | |

| Consolidated Statements of Income | [removed: [64](#sF839821920D75171B7FA8221E4E5E5FC)] [added: [62](#s2F4166E7E95D574D944B0DCD23AC6B12)] | |

| Consolidated Statements of Comprehensive Income | [removed: [64](#sC2EE5D153D0E56D8908B0E1F4A64A14E)] [added: [62](#s710949B69A295A14AA8F9AC6E201F8DD)] | |

| Consolidated Balance Sheets | [removed: 65] [added: [63](#s4461A3D843B95F04A1D093E44C9A01AB)] | |

| Consolidated Statements of Stockholders’ Equity | [removed: [66](#s3D2481149B475E569CFE68C19B38E272)] [added: [64](#s4F2005C4E2085A9AB620BCC416D949FE)] | |

| Consolidated Statements of Cash Flows | [removed: [67](#s43A8C54F622F582D977F06F1A610A216)] [added: [65](#sAD7B03539E6258ACBDCA1AB1C0B7AC02)] | |

| Notes to Consolidated Financial Statements | [removed: [68](#s5CCC77328E9E51B0AD25DF1AC5B8BE65)] [added: [66](#s7895BD5666775B39B8A3BAC19CE660DF)] | |

| Schedule II - Valuation and Qualifying Accounts | [removed: 102] [added: 100] | |

We conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2017.

Our evaluation did not include assessing the effectiveness of internal control over financial reporting for the [removed: CARIS, Quantum Data, Frontline, IN USA] [added: e2v acquisition] and [removed: Hanson Research acquisitions] [added: the SSI asset acquisition] in [removed: 2016.][added: 2017.]

These acquisitions, which are included in the [removed: 2016] [added: 2017] consolidated financial statements of the Company, constituted [removed: less than 4%] [added: approximately 26%] of total [removed: assets and less than 2%] [added: assets, 11%] of [removed: both] total revenues and [added: 12% of] net income of the Company as of and for the year ended [removed: January 1,] [added: December 31,] 2017.

Based on this evaluation we believe that, as of [removed: January 1,] [added: December 31,] 2017, the Company’s internal controls over financial reporting were effective.

Their report appears on page [removed: 61] [added: 60] of this Annual Report.

We have audited the internal control over financial reporting of Teledyne Technologies Incorporated and subsidiaries (the “Company”) as of [removed: January 1,] [added: December 31,] 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission (COSO).]

As described in [removed: the] Report of Management on Teledyne Technologies Incorporated’s Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting for [removed: CARIS, Inc., Frontline Test Equipment, Inc., Quantum Data, Inc., IN USA, Inc.,] [added: e2v technologies plc acquisition] and [removed: Hanson Research Corporation] [added: the Scientific Systems, Inc. asset acquisition] (“the [removed: 2016] [added: 2017] acquisitions”), which were acquired in [removed: April, May, November,] [added: March] and [removed: December,] [added: July,] respectively, and whose financial statements constitute [removed: less than 4%] [added: approximately 26%] of total [removed: assets and less than 2%] [added: assets, 11%] of [removed: both] total revenues and [added: 12% of] net income of the consolidated financial statement amounts as of and for the year ended [removed: January 1,] [added: December 31,] 2017.

Accordingly, our audit did not include the internal control over financial reporting for the [removed: 2016] [added: 2017] acquisitions.

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

A company’s internal control over financial reporting is a process designed [removed: by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Also, projections of any evaluation of [removed: the] effectiveness [removed: of the internal control over financial reporting] to future periods are subject to the risk that [removed: the] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2017, based on [removed: the] criteria established in Internal Control - Integrated Framework (2013) issued by [removed: the Committee of Sponsoring Organizations of the Treadway Commission.][added: COSO.]

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the consolidated financial statements and financial statement schedule as of and for the year ended [removed: January 1, 2017] [added: December 31, 2017,] of the Company and our report dated [removed: March 2, 2017] [added: February 27, 2018,] expressed an unqualified opinion on those financial statements and financial statement schedule.

We have audited the accompanying consolidated balance sheets of Teledyne Technologies Incorporated and subsidiaries (the “Company”) as of [removed: January 1,] [added: December 31,] 2017 and January [removed: 3, 2016, and] [added: 1, 2017,] the related consolidated statements of income, comprehensive income, [removed: stockholders’] [added: shareholders'] equity, and cash [removed: flows] [added: flows,] for the [added: three] years ended [added: December 31, 2017,] January 1, [removed: 2017] [added: 2017,] and January 3, [removed: 2016.][added: 2016, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").]

These [removed: consolidated] financial statements [removed: and financial statement schedule] are the responsibility of the [removed: Company’s] [added: Company's] management.

Our responsibility is to express an opinion on the [removed: consolidated] [added: Company's] financial statements [removed: and financial statement schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, [removed: such consolidated] [added: the] financial statements [removed: as of and for the years ended January 1, 2017 and January 3, 2016,] present fairly, in all material respects, the financial position of [removed: Teledyne Technologies Incorporated and subsidiaries] [added: the Company] as of [removed: January 1,] [added: December 31,] 2017 and January [removed: 3, 2016,] [added: 1, 2017] and the results of [removed: their] [added: its] operations and [removed: their] [added: its] cash flows for [removed: the] years [removed: then ended,] [added: ended December 31, 2017, January 1, 2017, and January 3, 2016,] in conformity with [added: the] accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [removed: Company’s] [added: Company's] internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2017, based on [removed: the] criteria established in Internal [removed: Control-Integrated] [added: Control - Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated [removed: March 2, 2017] [added: February 27, 2018,] expressed an unqualified opinion on the [removed: Company’s] [added: Company's] internal control over financial reporting.

| | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net Sales | | $ | [removed: 2,149.9] [added: 2,603.8] | | | $ | [removed: 2,298.1] [added: 2,149.9] | | | $ | [removed: 2,394.0] [added: 2,298.1] | |

| Cost of sales | | [removed: 1,318.0] [added: 1,612.2] | | | | [removed: 1,427.8] [added: 1,318.0] | | | | [removed: 1,487.1] [added: 1,427.8] | | |

| Selling, general and administrative expenses | | [removed: 578.1] [added: 656.0] | | | | [removed: 588.6] [added: 578.1] | | | | [removed: 612.4] [added: 588.6] | | |

| Total costs and expenses | | [removed: 1,896.1] [added: 2,268.2] | | | | [removed: 2,016.4] [added: 1,896.1] | | | | [removed: 2,099.5] [added: 2,016.4] | | |

| Operating income | | [removed: 253.8] [added: 335.6] | | | | [removed: 281.7] [added: 253.8] | | | | [removed: 294.5] [added: 281.7] | | |

Date: February 27, 2018

Date: February 27, 2018

Opinion on Internal Control over Financial Reporting

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

February 27, 2018

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

February 27, 2018

We have served as the Company's auditor since 2015.

| | | For the Fiscal Year | | | | | | | | | | |

| | | For the Fiscal Year | | | | | | | | | | |

For the Fiscal Years Ended December 31, 2017 and January 1, 2017

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | — | | | | — | | | — | | — | | | | 227.2 | | | | — | | | | 227.2 | | | | — | | | | 227.2 | | |

| Treasury stock issued | | — | | | | (42.2 | | ) | | | 42.2 | | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Stock-based compensation | | — | | | | 24.9 | | | | | — | | | | — | | | | — | | | | 24.9 | | | | — | | | | 24.9 | | |

| Balance, December 31, 2017 | | $ | 0.4 | | | $ | 337.3 | | | | $ | (200.7 | ) | | $ | 2,139.6 | | | $ | (329.3 | ) | | $ | 1,947.3 | | | $ | — | | | $ | 1,947.3 | |

| | | For the Fiscal Year | | | | | | | | | | |

| Net income | | $ | 227.2 | | | $ | 190.9 | | | $ | 195.5 | |

| Stock-based compensation | | 18.8 | | | | 16.2 | | | | 12.2 | | |

| Other operating, net | | (0.4 | | ) | | (3.1 | | ) | | (4.9 | | ) |

| Change in cash | | (27.7 | | ) | | 13.5 | | | | (56.3 | | ) |

December 31, 2017

| Net other comprehensive income | 96.8 | | | | 3.3 | | | | 21.8 | | | | 121.9 | | |

| Balance as of December 31, 2017 | $ | (102.0 | ) | | $ | 0.5 | | | $ | (227.8 | ) | | $ | (329.3 | ) |

| Income tax impact | (11.5 | | ) | | 9.3 | | | |

In those

The net aggregate effects of these changes in estimates on contracts accounted for under the POC accounting method for 2017 and 2016, were $7.5 million and $1.9 million of unfavorable operating income, respectively, and $3.1 million of favorable operating income for 2015.

| Weighted average common shares outstanding | 35.2 | | | | 34.6 | | | | 35.3 | | |

The Company has also converted a US dollar denominated, variable rate debt obligation into a euro fixed rate obligation using a receive-float, pay fixed cross currency swap.

This cross currency swap is designated as a cash flow hedge.

Amounts related to the cross currency swap expected to be reclassified from AOCI into income in the coming 12 months total $2.2 million.

Teledyne had foreign currency forward contracts designated as cash flow hedges to buy British pounds and to sell U.S. dollars totaling $0.6 million.

| Report of Independent Registered Public Accounting Firm | 63 | |

Date: March 2, 2017

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Teledyne Technologies Incorporated

We believe that our audit provides a reasonable basis for our opinion.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.

Los Angeles, California

March 2, 2017

Our audits also included the financial statement schedule as of and for the years ended January 1, 2017 and January 3, 2016 listed in the Index at Item 15.

Also, in our opinion, such financial statement schedule as of and for the years ended January 1, 2017 and January 3, 2016, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have audited the accompanying consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows of Teledyne Technologies Incorporated for the period ended December 28, 2014.

Our audit also included the financial statement schedule listed in the index at Item 15(a)(2) for the year ended December 28, 2014.

These financial statements and schedule are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flows of Teledyne Technologies Incorporated for the year ended December 28, 2014, in conformity with U.S. generally accepted accounting principles.

Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein for the year ended December 28, 2014.

/s/ Ernst & Young LLP

February 26, 2015

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance, December 29, 2013 | | $ | 0.4 | | | $ | 328.8 | | | $ | — | | | $ | 1,308.0 | | | $ | (165.5 | ) | | $ | 1,471.7 | | | $ | 47.0 | | | $ | 1,518.7 | |

| Net income (loss) | | — | | | | — | | | | — | | | | 217.7 | | | | — | | | | 217.7 | | | | (2.1 | | ) | | 215.6 | | |

| Treasury stock purchases | | — | | | | (20.0 | | ) | | (102.1 | | ) | | — | | | | — | | | | (122.1 | | ) | | — | | | | (122.1 | | ) |

| Stock option compensation expense | | — | | | | 14.0 | | | | — | | | | — | | | | — | | | | 14.0 | | | | — | | | | 14.0 | | |

| Foreign currency translation adjustment - noncontrolling interest | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1.3 | | ) | | (1.3 | | ) |

| Stock option expense | | 11.6 | | | | 12.2 | | | | 14.0 | | |

| Excess tax benefits from stock options exercised | | — | | | | (4.3 | | ) | | (6.2 | | ) |

| Other operating, net | | 1.5 | | | | (0.3 | | ) | | (6.3 | | ) |

| Excess tax benefits from stock options exercised | | — | | | | 4.3 | | | | 6.2 | | |

| Increase (decrease) in cash | | 13.5 | | | | (56.3 | | ) | | 75.4 | | |

| | | | | | | | | | | | | | | | |

| Balances as of December 28, 2014 | $ | (90.6 | ) | | $ | (5.3 | ) | | $ | (227.3 | ) | | $ | (323.2 | ) |

| Net other comprehensive loss | (83.6 | | ) | | (1.4 | | ) | | (5.0 | | ) | | (90.0 | | ) |

| Loss on cash hedges: | | | | | | | | |

| Tax effect | 9.3 | | | | 3.0 | | | |

| (dollars in millions) | | 2016 | | | | 2015 | | | | 2014 | | |

| Percent of revenue - POC Method | | 30.5 | | % | | 31.2 | | % | | 28.7 | | % |

| Favorable changes in estimate | | $ | 27.7 | | | $ | 38.6 | | | $ | 22.9 | |