Teledyne Technologies (TDY) 10-K risk factor changes: FY2018 vs FY2017

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K and in Teledyne’s [removed: 2017] [added: 2018] Annual Report to Stockholders.

It is not possible for management to predict all such factors, and new factors may [removed: emerge.][added: emerge or existing factors diverge.]

A new global [removed: recession, continued economic uncertainty in Europe] [added: recession] or an economic downturn in China may adversely affect us.

We develop and manufacture products for customers in the energy exploration and production markets, domestic and international commercial aerospace markets, the semiconductor industry, the consumer electronics, telecommunications and [removed: automotive industries, each of which has been cyclical, exhibited rapid changes and suffered from fluctuating market demands.]

| • | the ability of oil and gas companies to generate [added: or raise] funds for capital expenditures; |

In addition, a decline in the level of capital spending by oil and natural gas companies may result in a reduced pace of development of new energy reserves, which could adversely affect demand for our products related to energy production, and, in certain instances, result in the cancellation, modification or rescheduling of existing [removed: orders.][added: orders and a reduction in customer-funded research and development related to next generation products.]

As of December [removed: 31, 2017,] [added: 30, 2018,] we had [removed: $1,068.2] [added: $748.8] million in total outstanding indebtedness.

This indebtedness included $325.0 million in senior unsecured [added: fixed rate] notes, [removed: $300.0] [added: $286.0] million in Euro denominated [added: fixed rate] notes, [removed: $175.5] [added: $100.0] million in term loans and [removed: $165.0] [added: $29.0] million outstanding under our $750.0 million [removed: 2015-amended] [added: floating rate] credit facility.

During [removed: 2017,] [added: 2018,] sales to international customers accounted for approximately [removed: 46%] [added: 47%] of our total revenues, compared with [removed: 43%] [added: 46%] in [removed: 2016] [added: 2017] and [removed: 44%] [added: 43%] in [removed: 2015.][added: 2016.]

In [removed: 2017,] [added: 2018,] we sold products to customers in over 100 countries.

In [removed: 2017,] [added: 2018,] the top five countries for international sales were China, [added: Germany,] the United Kingdom, [removed: Germany,] Japan and South Korea, constituting approximately 21% of our total sales.

Given our several [removed: Canada-based] [added: U.K.-based] businesses, volatility in the value of the [removed: Canadian dollar] [added: British pound] relative to the U.S. dollar, or other foreign currencies, could [added: 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 [removed: Digital Imaging segment.][added: U.K.-based businesses.]

[removed: In June 2016, the United Kingdom (“U.K.”) held a referendum in which voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit.”] The announcement of Brexit caused significant volatility in global stock markets and currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business.

[removed: The announcement of Brexit and the 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.

[added: Potential Brexit-related risks for our U.K.-based businesses also] include increased import duties, loss of customers in the [removed: E.U.] [added: 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.

We are required to expense, as incurred, such transaction costs, which may have a material adverse impact on our [removed: quarterly] financial results.

On December [removed: 31, 2017,] [added: 30, 2018,] Teledyne’s goodwill was [removed: $1,776.7] [added: $1,735.2] million and net acquired intangible assets were [removed: $398.9] [added: $344.3] million.

As a result, the amount of any annual or interim impairment could be significant and could have a material adverse effect on our reported financial results for [removed: the period in which the charge is taken.]

United States and global responses to terrorism, concerns regarding nuclear proliferation and the safety of nuclear energy, continuing turmoil in Middle Eastern countries, increasing tension between the U.S. and [removed: Russia, potential hostilities involving North Korea,] [added: Russia and China,] potential epidemics, potential future financial issues impacting airlines and volatile energy prices increase uncertainties with respect to many of our businesses and may adversely affect our business and results of operations.

Increasing tensions with [removed: Russia or the evolving nuclear threat from North Korea] [added: Russia, as well as China,] could disrupt the global economic recovery.

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: 24%] [added: 23%] of our total revenue in [removed: 2017,] [added: 2018,] compared with [removed: 27%] [added: 24%] in [removed: 2016] [added: 2017] and [removed: 26%] [added: 27%] in [removed: 2015.][added: 2016.]

The [removed: U.S. Government shutdown during 2013 negatively affected many of our businesses, and the] failure by Congress to approve future budgets on a timely basis could delay procurement of our products and services and cause us to lose future revenues.

Although the [added: U.S.] President has indicated his desire for increased defense spending, continued defense spending does not necessarily correlate to continued business for us, because not all of the programs in which we participate or have current capabilities may be provided with continued funding.

There have also been significant reductions in [added: the past in] missile defense budgets.

Our Aerospace and Defense Electronics segment may be impacted by volume and/or price reductions in connection with [removed: this] [added: the F-34 Joint Strike Fighter] program, to the extent they are imposed.

Uncertainty over budgets or priorities with the Presidential Administration could result in delays in funding, changes [removed: in funded programs and the timing of awards that could have a material impact on our revenues in 2018.]

The prior [added: U.S. Presidential] Administration introduced significant changes to the national space policy, including the cancellation of the NASA’s Constellation Program which includes Ares launch vehicles.

[removed: In addition, delayed] [added: Delayed] funding and changes in support for NASA’s current space policy could negatively impact our business.

We had [removed: nine] [added: 15] U.S. Government contracts terminated for convenience in [removed: 2017,] [added: 2018,] compared with [removed: one] [added: nine] in [removed: 2016] [added: 2017] and [removed: eight] [added: one] in [added: 2016.]

A number of our U.S. Government prime contracts and subcontracts are fixed-price type contracts [removed: (58%] [added: (67%] of our total U.S. Government contracts were fixed-price in [removed: 2017, 54%] [added: 2018, 58%] in [removed: 2016] [added: 2017] and 54% in [removed: 2015).][added: 2016).]

Our business is subject to government contracting regulations, including increasingly complex regulations on [removed: cybersecurity] [added: cybersecurity,] and our failure to comply with such laws and regulations could harm our operating results and prospects.

We have a domestic qualified defined benefit pension plan covering most of our U.S. employees hired prior to 2004 or approximately [removed: 13%] [added: 12%] of our active employees.

We also have several [removed: smaller] [added: small] domestic [added: non-qualified] and foreign-based pension plans.

As of December [removed: 31, 2017,] [added: 30, 2018,] the value of the combined pension assets is greater than our combined pension benefit obligations.

In 2013, we made a voluntary pretax cash contribution of $83.0 million to the domestic [added: qualified] pension plan.

No contributions were made to the domestic [added: qualified] pension plan since the 2013 contribution.

In addition, we have sold approximately [removed: $46.1] [added: $63.9] 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 [removed: liability.][added: liability, particularly to the extent state guarantee funds are inadequate.]

We continue to [added: train our personnel and] update our infrastructure, security tools and processes to protect against security incidents, including both external and internal threats, and to prevent their recurrence.

Our Teledyne Scientific Company subsidiary, which serves as our primary research center, has been actively promoting and funding joint research and development projects with other Teledyne businesses, including our Teledyne Oil & [removed: Gas businesses,] [added: Gas,] Teledyne [removed: Reynolds, Inc.,] [added: Defense Electronics and] Teledyne [removed: Brown Engineering, Inc., DALSA] [added: Digital Imaging] and [removed: LeCroy.][added: Test and Measurement businesses.]

Our sales to China-based customers represented 6.7% of total revenues in 2018, 6.3% of total revenue in 2017 and 5.7% of total revenue in 2016.

In recent months, economic growth in China has moderated.

Continued growth in many of our businesses, including those in the Environmental and Electronic Measurement Instrumentation group and our commercial aviation-related business units, could be negatively impacted if this trend proves to be long-lasting or systematic rather than cyclical in nature.

automotive industries, each of which has been cyclical, exhibited rapid changes and suffered from fluctuating market demands.

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

The U.S. Government has recently announced tariffs on steel and aluminum products and materials imported into the United States.

The U.S. Government has also implemented or announced plans to impose tariffs on a wide-range of goods imported from China.

Various countries and economic regions have announced plans or intentions to impose retaliatory tariffs on a wide-range of products they import from the U.S. These newly imposed or threatened U.S. tariffs and retaliatory tariffs could have the effect of increasing the cost of materials for our products, which could result in our products becoming less competitive or generating lower margins.

Sales to customers in China are particularly important for businesses in our Environmental and Electronic Measurement Instrumentation group.

The tariffs could also result in disruptions to our supply chain, as suppliers struggle to fill orders from companies trying to purchase goods in bulk ahead of announced tariffs.

We may also need to find new suppliers and components for our products, which could result in production delays.

To the extent our products are the subject of retaliatory tariffs, customers in some countries or regions, such as China, may begin to seek domestic or non-U.S. sources for products that we sell, or be pressured or incentivized by foreign governments not to purchase U.S.-origin goods, which could harm our future sales in these markets.

Further, in July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.

The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to USD-LIBOR for use in debt instruments, derivatives and other financial contracts that are currently indexed to USD-LIBOR.

ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives, debt and cash markets exposed to USD-LIBOR.

It is unclear as to the new method of calculating LIBOR that may evolve and this new method could adversely affect the Company’s interest rates on its indebtedness.

The Company is monitoring the ARRC transition plan and is evaluating potential related risks.

As of December 30, 2018 approximately four percent of the Company’s long-term debt is variable and can be indexed to USD-LIBOR.

The Company expects to amend the $750.0 million credit facility in the first quarter of 2019 in order to extend the maturity date from December 2020 to March 2024.

In anticipation of the expected elimination of LIBOR in 2021, this credit facility amendment will include the procedure to switch to LIBOR alternative replacement rates in the future.

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

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

In June 2016, the United Kingdom (“U.K.”) held a referendum in which voters approved an exit from the European Union (“E.U.”), commonly referred to as “Brexit.” The U.K. is currently scheduled to leave the E.U. on May 29, 2019, unless this date is extended.

To date there has been no agreement between the E.U. and the U.K. on the terms of the exit.

The announcement of Brexit, and subsequent high-profile failures of the U.K. to agree on an exit strategy, and the pending withdrawal of the U.K.

the period in which the charge is taken.

The partial U.S. Government shutdown that began in December 2018 resulted in delays in anticipated contract awards and delayed payments of invoices for several of our businesses.

The U.S. Government shutdown in 2013 negatively affected many of our businesses, as did prior shutdowns of the U.S. Government and any new shutdown could have similar or worse effects.

in funded programs and the timing of awards that could have a material impact on our revenues.

Our research and development efforts primarily involve engineering and design related to improving existing products and developing new products and technologies in the same or similar fields.

Additionally, some of our businesses are actively pursuing governmental support and funding for some of their research and development initiatives,

received indemnities from some of our customers.

In 2018, a fire at a Netherlands-based facility of a key supplier of printed circuit boards resulted in delivery disruptions to the electronics industry, including to businesses in our Digital Imaging segment.

Low unemployment in the United States has made it more difficult for some of our businesses to attract and retain direct labor in certain markets.

In November 2018, wildfires impacted areas near our headquarters and principal research and development center in Thousand Oaks, California, resulting in temporary disruptions and evacuations of employees who lived nearby.

Local utilities may impose blackouts during high fire risk weather conditions, which could result in disruptions to our businesses located in California, including our headquarters.

For example, in 2018, a fire at a Netherlands-based facility of a key supplier of printed circuit boards resulted in delivery disruptions to the electronics industry, including to businesses in our Digital Imaging segment.

Management Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K under “Critical Accounting Estimates.”

In 2018, the closing price of our common stock ranged from $175.56 to $247.77.

| --- | --- |

In 2015 and 2016, for example, our revenue and income were negatively impacted by the downturn in energy markets.

One of our largest commercial customers is in the offshore oil and gas industry and accounted for 2.3% of total sales in 2015.

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

In 2014 and again in 2015

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

Worldwide political, economic and military events have contributed to oil and gas price volatility and are likely to continue to do so in the future.

With the 2017 acquisition of e2v, the risk profile of Teledyne may differ materially from prior years, which could materially change our results of operations.

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.

e2v is headquartered in the United Kingdom, with key operations in the United Kingdom, France, the United States and Spain.

As a result of the acquisition of e2v, a greater percentage of Teledyne’s revenues and expenses arise from international sources.

The acquisition also significantly expands Teledyne’s international employee base and manufacturing footprint.

As a result of the acquisition of e2v, the financial results of Teledyne are more exposed to currency exchange rate fluctuations and an increased proportion of assets, liabilities and earnings are denominated in non-U.S. dollar currencies.

Following the acquisition, a significant proportion of Teledyne’s net assets, expenses and income are in non-U.S. dollar currencies, primarily the British pound, the Canadian dollar and the euro, while Teledyne’s financial results are presented in U.S. dollars.

Teledyne’s financial results and capital ratios are therefore more sensitive to movements in foreign exchange rates as a result of the acquisition.

A depreciation of non-U.S. dollar currencies relative to the U.S. dollar could have an adverse impact on the combined company’s financial results.

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

Continued innovation and research and development efforts will be required to maintain e2v’s leadership position in imaging products and semiconductor production.

e2v’s business also may be more capital intensive than many of Teledyne’s other businesses, increasing Teledyne’s capital requirements.

Approximately 20 percent of e2v’s revenue relates to long-term contracts, many of which involve advancements in technology and are fixed price.

As discussed below, an inherent risk in fixed price contracts is that actual performance costs may exceed the projected costs on which the contracts are agreed.

The failure to anticipate technical problems, estimate costs accurately or control costs during the performance of a fixed price contract can reduce its profitability or result in a loss.

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

Even if the operations of the businesses of the Teledyne and e2v are integrated successfully, we may not realize the full benefits of the 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.

Additional unanticipated costs may be incurred in the integration of the two businesses.

All of these factors could adversely affect our earnings, decrease or delay the expected accretive effect of the 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 acquisition.

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

Potential Brexit-related risks for our U.K.-based businesses also

Given our several U.K.-based businesses, including our 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.

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

Sales of our products and services internationally are subject to U.S. and local government regulations and procurement policies and practices including regulations relating to import-export control.

Violations of export control rules could result in the impositions of fines and penalties or the suspension of our ability to export items from one or more businesses or the entire corporation.

Depending on the scope of the suspension, this could have a material effect on our ability to perform certain international contracts.

Attempts by the Presidential Administration to withdraw from or materially modify international trade agreements could adversely affect our business, financial condition and results of operations.

Among other things, we are subject to the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits U.S. companies and their intermediaries from bribing foreign officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment.

Further, in 2011, the United Kingdom also implemented the U.K. Bribery Act, which increased the level of anti-bribery law enforcement and compliance relative to the FCPA.

Any determination that we had violated the FCPA, the U.K. Bribery Act, or equivalent anti-bribery and corruption laws in countries in which we do business could result in sanctions that could have a material adverse effect on our business, financial condition and results of operations.

While we have procedures and compliance programs in place and conduct FCPA and other trainings, we cannot provide assurance that our internal controls will always protect us from misconduct by our employees, agents or business partners.

Our international operations are subject to risks customarily encountered in foreign operations, including interruption to transportation flows for delivery of parts to us and finished goods to our customers, changes in a specific country’s or region’s political or economic conditions, trade protection measures, import or export licensing requirements, consequences from changes in tax laws and regulatory requirements, difficulty in staffing and managing widespread operations, differing labor regulations, differing protection of intellectual property and geopolitical turmoil, including terrorism and war.

We are also exposed to foreign currency exchange rate risk inherent in our sales commitments, anticipated sales and expenses, and assets and liabilities denominated in currencies other than the local functional currency, and may also become subject to interest rate risk inherent in any debt we incur, or financial investments we hold.

We continue to focus on balanced and disciplined capital deployment among capital expenditures, [removed: acquisitions] [added: acquisitions, product development] and share repurchases.

We aggressively pursue operational excellence to continually improve our margins and [removed: earnings.][added: earnings by emphasizing cost containment and cost reductions in all aspects of our business.]

Finally, [removed: the company] [added: e2v] provides high reliability semiconductors and board-level solutions for use in aerospace, space and communications applications.

[removed: We] [added: No material acquisitions were] made [added: in 2018,] one other acquisition [removed: in 2017, five acquisitions] [added: was made] in [removed: 2016] [added: 2017] and [removed: three] [added: five] acquisitions [added: were made] in [removed: 2015.][added: 2016.]

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

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Instrumentation | | $ | [removed: 2.1] [added: 5.6] | | | $ | [removed: 10.6] [added: 2.1] | | | $ | [removed: 3.9] [added: 10.6] | |

| Digital Imaging | | [removed: —] [added: 0.7] | | | | [removed: 2.0] [added: —] | | | | [removed: 3.2] [added: 2.0] | | |

| Aerospace and Defense Electronics | | [removed: 2.1] [added: 1.3] | | | | [removed: 4.6] [added: 2.1] | | | | [removed: 1.2] [added: 4.6] | | |

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

| Total | | $ | [removed: 4.2] [added: 7.8] | | | $ | [removed: 17.3] [added: 4.2] | | | $ | [removed: 8.4] [added: 17.3] | |

| Severance | | $ | [removed: 3.8] [added: 5.6] | | | $ | [removed: 9.5] [added: 3.8] | | | $ | [removed: 8.4] [added: 9.5] | |

| Facility consolidations | | [removed: 0.4] [added: 2.2] | | | | [removed: 7.8] [added: 0.4] | | | | [removed: —] [added: 7.8] | | |

| Cost of sales | | $ | [removed: 2.8] [added: 4.9] | | | $ | [removed: 6.8] [added: 2.8] | | | $ | [removed: 3.7] [added: 6.8] | |

| Selling, general and administrative expenses | | [removed: 1.4] [added: 2.9] | | | | [removed: 10.5] [added: 1.4] | | | | [removed: 4.7] [added: 10.5] | | |

At December [removed: 31, 2017, $1.5] [added: 30, 2018, $2.8] million remains to be paid related to these actions.

The Company spent [removed: $774.1] [added: $3.1] million, [removed: $93.4] [added: $774.1] million and [removed: $66.7] [added: $93.4] million on acquisitions and [added: other] investments in [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively, net of any cash acquired.

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 [removed: expense.][added: expense for fiscal year 2017.]

On July 20, [removed: 2017] [added: 2017,] Teledyne Instruments, Inc. completed the acquisition of assets of Scientific Systems, Inc. (“SSI”) for $31.0 million in cash.

Headquartered in State College, Pa., SSI is a manufacturer of precision components and specialized subassemblies used primarily in analytical and diagnostic instrumentation, such as high performance liquid chromatography [removed: (HPLC)] systems and specific medical devices.

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

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

Fiscal [removed: year] [added: years 2018,] 2017 [removed: contained 52 weeks, fiscal year] [added: and] 2016 [added: each] contained 52 [removed: weeks and fiscal year 2015 contained 53] weeks.

The following are selected financial highlights for [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (in millions, except per-share amounts):

| Net sales | | $ | [removed: 2,603.8] [added: 2,901.8] | | | $ | [removed: 2,149.9] [added: 2,603.8] | | | $ | [removed: 2,298.1] [added: 2,149.9] | |

| Selling, general and administrative expenses | | [removed: 656.0] [added: 694.2] | | | | [removed: 578.1] [added: 658.1] | | | | [removed: 588.6] [added: 579.9] | | |

| Total costs and expenses | | [removed: 2,268.2] [added: 2,485.2] | | | | [removed: 1,896.1] [added: 2,282.1] | | | | [removed: 2,016.4] [added: 1,909.4] | | |

| Interest and debt expense, net | | [removed: (33.1] [added: (25.5] | | ) | | [removed: (23.2] [added: (33.1] | | ) | | [removed: (23.9] [added: (23.2] | | ) |

| Other income/(expense), net | | [removed: (15.5] [added: (10.7] | | ) | | [removed: 10.7] [added: (15.5] | | [added: )] | | [removed: 0.4] [added: 10.7] | | |

| Income before income taxes | | [removed: 287.0] [added: 393.9] | | | | [removed: 241.3] [added: 287.0] | | | | [removed: 258.2] [added: 241.3] | | |

| Provision for income taxes | | [removed: 59.8] [added: 60.1] | | | | [removed: 50.4] [added: 59.8] | | | | [removed: 62.7] [added: 50.4] | | |

| Net income | | [removed: 227.2] [added: $] | [added: 333.8] | | | [removed: 190.9] [added: $] | [added: 227.2] | | | [removed: 195.5] [added: $] | [added: 190.9] | |

| Basic earnings per common share | | $ | [removed: 6.45] [added: 9.32] | | | $ | [removed: 5.52] [added: 6.45] | | | $ | [removed: 5.55] [added: 5.52] | |

| Diluted earnings per common share | | $ | [removed: 6.26] [added: 9.01] | | | $ | [removed: 5.37] [added: 6.26] | | | $ | [removed: 5.44] [added: 5.37] | |

Our four business segments and their respective percentage contributions to our total sales in [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] are summarized in the following table:

| Segment contribution to total sales: | | [removed: 2017] [added: 2018] | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | |

| Instrumentation | | [removed: 36] [added: 35] | % | | [removed: 41] [added: 36] | % | | [removed: 46] [added: 41] | % |

| Digital Imaging | | [removed: 27] [added: 31] | % | | [removed: 18] [added: 28] | % | | [removed: 16] [added: 18] | % |

| Aerospace and Defense Electronics | | [removed: 26] [added: 24] | % | | [removed: 29] [added: 25] | % | | [removed: 26] [added: 29] | % |

| Engineered Systems | | [removed: 11] [added: 10] | % | | [removed: 12] [added: 11] | % | | 12 | % |

On February 5, 2019, we acquired the scientific imaging businesses of Roper for $225.0 million in cash.

The scientific imaging businesses include Princeton Instruments, Photometrics and Lumenera, as well as other brands.

These businesses provide a range of imaging solutions, primarily for life sciences, academic research and customized OEM industrial imaging solutions.

Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging.

Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence.

Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications.

In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings.

These products, acquired with the acquisition of e2v were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Digital Imaging segment.

Previously reported segment data has been adjusted to reflect this change.

Total sales for these products were $24.2 million for fiscal year 2017.

| | | 2018 | | | | 2017 | | | | 2016 | | |

| Total | | $ | 7.8 | | | $ | 4.2 | | | $ | 17.3 | |

| | | 2018 | | | | 2017 | | | | 2016 | | |

| Total | | $ | 7.8 | | | $ | 4.2 | | | $ | 17.3 | |

| | | 2018 | | | | 2017 | | | | 2016 | | |

| Cost of sales | | 1,791.0 | | | | 1,624.0 | | | | 1,329.5 | | |

| Operating Income | | 416.6 | | | | 321.7 | | | | 240.5 | | |

| Non-service retirement benefit income | | 13.5 | | | | 13.9 | | | | 13.3 | | |

2018 compared with 2017

| Instrumentation | | | $ | 1,021.2 | | | $ | 953.9 | | | 7.1 | % |

| Engineered Systems | | | 298.9 | | | | 286.2 | | | | 4.4 | % |

| Total net sales | | | $ | 2,901.8 | | | $ | 2,603.8 | | | 11.4 | % |

| Instrumentation | | | $ | 147.4 | | | $ | 126.0 | | | 17.0 | % |

| Digital Imaging | | | 157.3 | | | | 110.4 | | | | 42.5 | % |

| Engineered Systems | | | 32.7 | | | | 32.0 | | | | 2.2 | % |

| Corporate expense | | | (56.0 | | ) | | (63.0 | | ) | | (11.1 | )% |

| Operating income | | | 416.6 | | | | 321.7 | | | | 29.5 | % |

| Non-service retirement benefit income | | | 13.5 | | | | 13.9 | | | | (2.9 | )% |

| Other expense, net | | | (10.7 | | ) | | (15.5 | | ) | | (31.0 | )% |

| Income before income taxes | | | 393.9 | | | | 287.0 | | | | 37.2 | % |

| Net income | | | $ | 333.8 | | | $ | 227.2 | | | 46.9 | % |

| | 2018 | | | | 2017 | | | | Change | | |

| Cost of sales | $ | 575.2 | | | $ | 547.2 | | | $ | 28.0 | |

| Net sales | $ | 885.2 | | | $ | 717.7 | | | $ | 167.5 | |

| Cost of sales | $ | 536.0 | | | $ | 448.6 | | | $ | 87.4 | |

| Net sales | $ | 696.5 | | | $ | 646.0 | | | $ | 50.5 | |

| Cost of sales | $ | 437.3 | | | $ | 398.3 | | | $ | 39.0 | |

| Cost of sales | $ | 242.5 | | | $ | 229.9 | | | $ | 12.6 | |

| Net sales | $ | 2,901.8 | | | $ | 2,603.8 | | | $ | 298.0 | |

| Cost of sales | $ | 1,791.0 | | | $ | 1,624.0 | | | $ | 167.0 | |

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.

On

On June 5, 2015, Teledyne DALSA B.V., a Netherlands-based subsidiary, acquired Industrial Control Machines SA (“ICM”) for $21.8 million, net of cash acquired.

In December 2016, an additional $2.5 million was paid by Teledyne related to an indemnification holdback.

Based in Liège, Belgium, ICM is 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 and is part of the Digital Imaging segment.

On April 29, 2015, Teledyne DALSA, Inc. acquired the remaining 49% noncontrolling interest in the parent company of Optech Incorporated (“Optech”).

As a result of the purchase of the remaining interest in Optech in 2015, the difference between the cash paid and the balance of noncontrolling interest was recorded to additional paid-in capital.

The balance of the noncontrolling interest of $41.2 million at December 28, 2014 decreased by $0.3 million for the net loss and $1.3 million in translation adjustments prior to the purchase which eliminated the remaining balance.

Teledyne no longer has any noncontrolling interests.

On February 2, 2015, Teledyne acquired Bowtech Products Limited (“Bowtech”) through a U.K.-based subsidiary for $18.9 million in cash, net of cash acquired and including an estimated working capital adjustment.

Based in Aberdeen, Scotland, Bowtech designs and manufactures harsh underwater environment vision systems and is part of the Instrumentation segment.

| Cost of sales | | 1,612.2 | | | | 1,318.0 | | | | 1,427.8 | | |

| Operating Income | | 335.6 | | | | 253.8 | | | | 281.7 | | |

| Noncontrolling interest | | — | | | | — | | | | 0.3 | | |

| Net income attributable to Teledyne | | $ | 227.2 | | | $ | 190.9 | | | $ | 195.8 | |

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

| 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 | % |

| Cost of sales | $ | 546.0 | | | $ | 494.6 | | | $ | 51.4 | |

| Cost of sales | $ | 431.1 | | | $ | 239.4 | | | $ | 191.7 | |

| Cost of sales | $ | 410.1 | | | $ | 377.5 | | | $ | 32.6 | |

| Cost of sales | $ | 1,612.2 | | | $ | 1,318.0 | | | $ | 294.2 | |

The increase in corporate administrative expense reflected

Pension expense determined under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted.

As a result of the Tax Act, Teledyne incurred provisional charges of $4.7 million in the fourth quarter of 2017 primarily due to the repatriation tax and the remeasurement of U.S. deferred tax assets and liabilities.

In accordance with the Tax Act, the Company will elect to pay the repatriation tax liability over a period of eight years, with the first installment of $3.1 million due in 2018.

The remainder of the tax liability is recorded in non-current income tax payable.

The impacts of the Tax Act may differ from this estimate, possibly materially (and the amount of the provisional charge may accordingly be adjusted over the course of 2018), due to changes in interpretations and assumptions Teledyne has made, guidance that may be issued, and actions Teledyne may take as a result of the Tax Act.

These adjustments to the provisional charge related to the Tax Act will be recorded quarterly until the computations are complete which is expected no later than the fourth quarter of 2018.

Total year 2017 also includes $8.8 million in net discrete tax benefits related to share-based accounting.

Total year 2016 reflected $10.9 million in net discrete income tax benefits.

2016 Compared with 2015

| Instrumentation | | | $ | 876.7 | | | $ | 1,051.1 | | | (16.6 | )% |

| Digital Imaging | | | 398.7 | | | | 379.0 | | | | 5.2 | % |

| Total sales | | | $ | 2,149.9 | | | $ | 2,298.1 | | | (6.4 | )% |

Sales to international customers accounted for approximately [removed: 46%] [added: 47%] of total sales in [removed: 2017.][added: 2018, compared with 46% in 2017 and 43% in 2016.]

We continue to focus on balanced and disciplined capital deployment among capital expenditures, [added: product development,] acquisitions and share repurchases.

We aggressively pursue operational excellence to continually improve our margins and [removed: earnings.][added: earnings by emphasizing cost containment and cost reductions in all aspects of our business.]

Consistent with our strategy, during [added: 2018 and] 2017, we made acquisitions and investments totaling [removed: $774.1] [added: $777.2] million, net of cash acquired, which included the [removed: following:][added: following acquisitions in 2017:]

| [removed: Segment contribution to total] [added: U.S. Government] sales [removed: (a)] [added: by segment:] | | [removed: 2017] [added: 2018] | | | [removed: 2016] | [added: 2017] | | [removed: 2015] | | [added: 2016 | | |]

| Digital Imaging | | [removed: 27] [added: 90.5] | [removed: %] | | [removed: 18] | [removed: %] [added: 85.6] | | [removed: 16] | [removed: %] | [added: 73.1 | | |]

| Aerospace and Defense Electronics | | [removed: 26] [added: 252.5] | [removed: %] | | [removed: 29] | [removed: %] [added: 225.0] | | [removed: 26] | [removed: %] | [added: 210.4 | | |]

| Engineered Systems | | [removed: 11] [added: 244.0] | [removed: %] | | [removed: 12] | [removed: %] [added: 243.9] | | [removed: 12] | [removed: %] | [added: 219.8 | | |]

[removed: In addition to our DVLs, which are acoustic navigation devices, we] [added: We] design and manufacture inertial sensing and navigation products, as well as subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets.

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

Our [removed: Slocum] [added: Slocum®] gliders, as well as our ADCPs, are being used as part of the National Science Foundation’s Ocean Observatories Initiative to collect physical, chemical, geological and biological data from the ocean and the seafloor on coastal, regional and global scales.

Our instrumentation monitors trace levels of gases such as sulfur dioxide, carbon monoxide, oxides of nitrogen and [removed: ozone] [added: ozone, as well as particulate pollution,] in order to measure the quality of the air we breathe.

[removed: Our instrumentation] [added: We] also [removed: monitors particulate air pollution, and we] supply [removed: environmental] monitoring systems for the detection, measurement and automated reporting of air pollutants from industrial stack [removed: emissions.][added: emissions, ozone generators and other process gas monitoring instruments.]

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

Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in broad range of industry end markets, [removed: including,] [added: including] aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics and power electronics.

Our four high-definition oscilloscope [added: (“HDO”)] product families address needs from the lower-bandwidth bench top sector to the mid-range general-purpose sector of the market.

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

Our WaveSurfer [removed: and WaveJet product-lines are] [added: product-line is] designed for users in the lower bandwidth bench-top sector of the market and value-oriented users in the economy sector.

These systems are used in many applications including test and measurement, medical imaging, [removed: LIDAR] [added: Light Detection] and [added: Ranging (“LIDAR”) and] software defined radio.

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

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

We design, develop and manufacture image capture products, primarily consisting of high-performance image sensors and digital cameras for use in industrial, [removed: scientific, medical] [added: scientific] and [removed: photogrammetry] [added: medical] applications.

Our Digital Imaging segment also provides [removed: Light Detection and Ranging (“LIDAR”)] [added: LIDAR] systems for airborne terrestrial mapping, mobile mapping, bathymetry and laser-based 3D imaging applications through our Optech business.

[removed: As a result of our acquisition of CARIS in April 2016, we] [added: We] also provide geospatial software designed for the hydrographic and marine community.

We have developed high-speed electronics, [removed: MEMS sensors] [added: precision timing] and [removed: actuators,] [added: navigation devices,] advanced functional and structural materials, liquid-crystal based optical devices, and image processing algorithms.

[removed: We produce] [added: Our] advanced focal plane arrays, sensors, and subsystems [removed: that] cover a broad spectrum of frequencies from X-ray wavelengths to [removed: 18] [added: 15] micron long-wave infrared wavelengths.

We are a leader in the development and production of large format focal plane array sensors for astronomy, [removed: defense, commercial] [added: defense] and space science markets.

Our sensor technologies are on many of NASA’s major astronomy missions [removed: (including Hubble, James Webb Space Telescope] and [removed: are on Earth science and weather satellites, are orbiting Mars, are on spacecraft involved in missions to Jupiter and on asteroids, and] can be found operating at nearly every major ground-based observatory telescope.

Our image sensors [added: also] play a critical role in defense applications in airborne and satellite systems.

As components which form the building blocks for electronic systems, we produce amplifiers, voltage-controlled oscillators, YIGs, BAWs, low-noise amplifiers (“LNAs”), microwave mixers, and detectors using LDMOS, GaAs, GaN, [removed: InP,] and SiC technologies.

Such products are also used in [removed: mobile telephone,] TV broadcast and commercial data communications networks.

We supply a variety of connectors and cable assemblies, including specialized high voltage connectors and subassemblies and coax microwave [removed: cable and connectors,] [added: interconnects,] for defense, aerospace and [added: high-end] industrial applications.

Additionally, we produce pilot helmet mounted display [removed: components and subsystems] [added: quick disconnect harnesses] for the Joint Helmet Mounted Cueing System (“JHMCS”) used in the F-15, F-16 and F-18 aircrafts.

We are a supplier of digital flight data acquisition and analysis systems to the civil aviation [removed: market.][added: and military aircraft markets.]

These systems acquire data for use by the aircraft’s flight data recorder as well as record additional data for the airline’s [removed: operation, such as aircraft and engine condition monitoring.][added: operation.]

We provide the means to transfer this data, using Teledyne’s [removed: patented] wireless technology, from the aircraft to the airline operation center.

We also design and manufacture airborne networking products, including servers, [added: wireless access points and aircraft interface device software,] as well as aircraft data loading equipment, flight [removed: line maintenance terminals] [added: data analysis software,] and data distribution software used by commercial airlines and the U.S. [removed: military.][added: military, and provide services related to our products.]

We also provide lead acid aircraft batteries for general aviation, [removed: and] business and light [removed: jet] [added: jet, and U.S. military] applications.

This segment also designs and manufactures electrochemical energy systems and [added: manufactures] small [added: gas] turbine engines.

Teledyne Brown Engineering, Inc. is a well-recognized [added: engineering and manufacturing company providing advanced solutions across the] whole life-cycle [added: of systems in] space, missile defense, [removed: marine systems,] [added: maritime,] environmental and energy [removed: company.][added: markets.]

2019 acquisition:

On February 5, 2019, we acquired the scientific imaging businesses of Roper Technologies, Inc. for $225.0 million in cash.

The scientific imaging businesses include Princeton Instruments, Photometrics and Lumenera, as well as other brands.

These businesses provide a range of imaging solutions, primarily for life sciences, academic research and customized OEM industrial imaging solutions.

Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging.

Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence.

Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic

management, as well as life sciences applications.

Located primarily in the United States and Canada, the acquisition is part of the Digital Imaging segment.

We also manufacture rugged cable assemblies for land-based energy and other industrial applications.

Finally, we manufacture instruments that are used by pharmaceutical scientists to evaluate the release rate characteristics and physical properties of various dosage forms to ensure the safety and efficacy of medicines worldwide.

We also make high-speed, high-

resolution analog-to-digital conversion systems.

We provide lightweight X-ray sources for the inspection of materials and structures and for the analysis of suspicious objects.

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

We are also the prime contractor for the Extended Air Defense Simulation (“EADSIM”) contract providing analysis, training, test, and operational planning in a single integrated package for the U. S. Army Space and Missile Defense Command (“SMDC”).

Under the Naval Health Research contract we provide medical modeling and simulation tools.

We are the prime contractor for the U.S. Army Space and Missile Defense Command’s Design, Development, and Integration (“D3I”) Domain 1 - Space/High Altitude and Missile Defense contract.

Under this contract we provide a suite of threat-realistic ballistic target missiles (“Zombie” targets) used for testing missile defense systems.

We are responsible for the production, test, and training of maintenance and operation crews for the Pluto Gigas remotely operated mine countermeasure system sold to the Egyptian Navy through the U.S. Navy Sea Systems Command Foreign Military Sales.

Flight Unit 1 was delivered in February 2018 with Flight Units 2 and 3 under contract with deliveries scheduled for 2021 and 2022, respectively.

The first instrument to be affixed to MUSES was built in cooperation with the German Aerospace Center (“DLR”).

We expect the DLR Space Imaging Spectrometer (“DESIS”) to be declared operational in the first quarter of 2019.

DLR retains the scientific rights to the imagery while Teledyne has the commercial rights.

Hyperspectral imagery from the DESIS instrument will be sold to U.S. Government and industrial customers for scientific research and commercial applications.

In 2018, we were awarded and began the manufacture of four production units with delivery through 2020.

We also manage and operate a separation, purification and analysis of atmospheric samples laboratory for the U.S. Government.

In 2018, our largest program with the U.S. Government was the OSF program with the Missile Defense Agency (“Agency”), which represented 1.6% of our total net sales for 2018.

The OSF follow-on program, which was not awarded to Teledyne in November 2018, has been put on hold pending an investigation by the Agency and, in the meantime, Teledyne’s performance under the OSF contract continues.

Environment and Sustainability

Teledyne’s products contribute to understanding the environment and humankind’s impact to the health and sustainability of our planet.

We provide environmental and climate scientists with a broad portfolio of instruments and sensors, including space-based sensors for greenhouse gases, air and water monitoring instruments and autonomous systems and instruments that profile the world’s oceans.

Our precision visible and infrared sensors enable NASA’s s Orbital Carbon Observatories (in low Earth orbit) and GeoCarb (in geosynchronous orbit) satellite missions to make precise measurements of the sources and sinks of atmospheric carbon dioxide over seasonal and weekly cycles.

Our autonomous Slocum® gliders, APEX® drifting floats and our acoustic Doppler current profilers have been used by scientists to confirm warming trends and circulation conditions of the oceans.

Our instruments not only enhance climate research that spans decades, but they provided critical data for shorter timescales.

Our products measure seasonal variations in ocean temperatures and currents to aid fisheries and determine weather patterns.

On a shorter timescale, scientists employ our instruments to provide essential inputs for computer models of dangerous storms.

Scientists position our gliders directly in the path of developing storms to monitor real-time conditions via satellite links.

Additionally, Teledyne’s product portfolio includes sophisticated air and water quality monitoring instruments to help keep the air we breathe and the water we drink clean.

We design, produce and distribute sophisticated air quality instruments that measure hazardous gases and particulate matter in real-time.

Total sales in 2017 were $2,603.8 million, compared with $2,149.9 million in 2016 and $2,298.1 million in 2015.

Approximately 24% of our total sales in 2017 were to the U.S. Government, as a prime contractor or subcontractor.

Of the 24% U.S. Government sales, approximately 58% were attributable to fixed-price type contracts with the balance attributable to cost-plus-fee type contracts.

The respective percentage contributions of our four business segments to our total sales are summarized in the following table:

| | | | | | | | | | |

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

| | | Percentage of Sales | | | | | | | |

| Instrumentation | | 36 | % | | 41 | % | | 46 | % |

| Total | | 100 | % | | 100 | % | | 100 | % |

| (a) | For further discussion of our four segments see Note 12 to the Notes to Consolidated Financial Statements. |

We are a leading supplier of marine seismic energy sources and replacement parts for offshore energy exploration.

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

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 AUVs and ROVs.

We also manufacture subsea and topside pipeline corrosion and erosion monitoring detectors, subsea pressure and temperature sensors as well as flow integrity monitoring solutions for the oil and gas industry.

These flow assurance sensors and equipment rely on our wet-mateable interconnect systems and our sensor feed-through systems.

Our

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

In December 2016, we acquired Hanson Research Corporation, a 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.

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.

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

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

lightweight X-ray sources for the inspection of materials and structures, ranging from light aviation parts to thick steel pipelines in harsh and extreme environments.

ICM’s mobile X-ray inspection systems are provided to government, security and explosive ordinance disposal personnel for the analysis of suspicious objects.

We develop image processing algorithms and manufacture compact mid-wave and short-wave infrared camera systems.

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

In the U.S. defense arena, our sensors are integrated into several major systems for space surveillance, airborne surveillance, chemical detection and target identification.

We provide focal plane electronics for our own sensors and for sensors produced by other companies.

We integrate our low-noise, high-performance sensors into cameras for commercial laboratory instrumentation.

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.

As the Missile Defense Agency (“MDA”) prime contractor for the OSF contract, we design, develop, test, implement and maintain the OSF.

The OSF is being designed to support full scale simulations, ground tests and live fire events throughout the life cycle of the Ballistic Missile Defense System.

Under the 2013-awarded TESTLA contract, we continue development, manufacturing and integration of product solutions in support of the war-fighter.

In 2012, NASA awarded us a cooperative agreement to foster the commercial utilization of the ISS.

The platform known as the Multi-User System for Earth Sensing (“MUSES”) launched in June 2017 and was declared fully operational on the ISS in September 2017.

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

We currently lead on-site and off-site management and support of research services at three Dow Chemical research facilities in North America.

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.

Sales to international customers accounted for approximately 46% of total sales in 2017, compared with 43% in 2016 and 44% in 2015.

| U.S. Government sales by segment: | | 2017 | | | | 2016 | | | | 2015 | | |

10-K 1 [removed: tdy-2017x10k.htm] [added: tdy-2018x10k.htm] 10-K [removed: 2017] [added: 2018] FORM 10K

For the fiscal year ended December [removed: 31, 2017][added: 30, 2018]

The aggregate market value of the registrant’s Common Stock held by non-affiliates on June [removed: 30, 2017,] [added: 29, 2018,] was [removed: $4.2] [added: $6.8] 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: 23, 2018,] [added: 21, 2019,] there were [removed: 35,696,521] [added: 36,209,282] shares of the registrant’s Common Stock outstanding.

Selected portions of the registrant’s [added: definitive] proxy statement for its [removed: 2018] [added: 2019] Annual Meeting of Stockholders (the [removed: “2018] [added: “2019] Proxy [removed: Statement”)] [added: Statement”), filed not later than 120 days after the end of Teledyne Technologies Incorporated's fiscal year,] are incorporated by reference in Part III of this Report.

| | [Item 1. [removed: Business](#sBCDFFA7596435994B149ACA0ADB2A912)] [added: Business](#s6935DD5317135EA3A7E17AEE6C3C9891)] | [removed: [1](#sBCDFFA7596435994B149ACA0ADB2A912)] [added: [1](#s6935DD5317135EA3A7E17AEE6C3C9891)] |

| | [Item 1A. Risk [removed: Factors](#s4FE51C201F0E5245B0C34880EDC7A789)] [added: Factors](#s6E8EB4B982C557D28BF683627596C711)] | [removed: [13](#s4FE51C201F0E5245B0C34880EDC7A789)] [added: [14](#s6E8EB4B982C557D28BF683627596C711)] |

| | [Item 1B. Unresolved Staff [removed: Comments](#s837D812FCEB95D1BB1C9C13C4E94A402)] [added: Comments](#s50C08919782D56F9BDEE87F483F587B0)] | [removed: [28](#s837D812FCEB95D1BB1C9C13C4E94A402)] [added: [26](#s50C08919782D56F9BDEE87F483F587B0)] |

| | [Item 2. [removed: Properties](#sE1CB398273C45214AABADF66AE806F09)] [added: Properties](#sE5F32CD93BD95BFEB7AE833EC7D807A3)] | [removed: [28](#sE1CB398273C45214AABADF66AE806F09)] [added: [27](#sE5F32CD93BD95BFEB7AE833EC7D807A3)] |

| | [Item 3. Legal [removed: Proceedings](#s4D79D9D03BB055D48921CB1E99518ABD)] [added: Proceedings](#s5A6C46878C31571990B28F39A2A953A9)] | [removed: [28](#s4D79D9D03BB055D48921CB1E99518ABD)] [added: [27](#s5A6C46878C31571990B28F39A2A953A9)] |

| | [Item 4. Mine Safety [removed: Disclosures](#s21A70421BDDD5FC788E53F9C97157C00)] [added: Disclosures](#s50A4547A54E65DCCB2FAF11A34276E4C)] | [removed: [28](#s21A70421BDDD5FC788E53F9C97157C00)] [added: [27](#s50A4547A54E65DCCB2FAF11A34276E4C)] |

| | [Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s26D7B060696A500690A83A5F89BB4603)] [added: Securities](#s0CCD09A2CFCF5C2586533078E3DC896C)] | [removed: [29](#s26D7B060696A500690A83A5F89BB4603)] [added: [28](#s0CCD09A2CFCF5C2586533078E3DC896C)] |

| | [Item 6. Selected Financial [removed: Data](#s12647B4611E257629D680718DFF15DD9)] [added: Data](#s894E37B01F0259A189657484B9674704)] | [removed: [30](#s12647B4611E257629D680718DFF15DD9)] [added: [28](#s894E37B01F0259A189657484B9674704)] |

| | [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operation](#s1A94CBFFD9A05381BFE6CCC74A709E69)s] [added: Operation](#s4225ABCC4C9C59B9AACA73674D4049B1)s] | [removed: [30](#s1A94CBFFD9A05381BFE6CCC74A709E69)] [added: [29](#s4225ABCC4C9C59B9AACA73674D4049B1)] |

| | [Item 7A. Quantitative and Qualitative Disclosure About Market [removed: Risk](#s7973CDFDAC2F5D16BE7070CBCF018A87)] [added: Risk](#s9C92030D81F45DCB83EFEA6DECD1980F)] | [removed: [54](#s7973CDFDAC2F5D16BE7070CBCF018A87)] [added: [52](#s9C92030D81F45DCB83EFEA6DECD1980F)] |

| | [Item 8. Financial Statements and Supplementary [removed: Data](#s7D33938C5F9856BDA0A06AC48884042B)] [added: Data](#s6B239693F3165338B05F159B904FEBE9)] | [removed: [54](#s7D33938C5F9856BDA0A06AC48884042B)] [added: [53](#s6B239693F3165338B05F159B904FEBE9)] |

| | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s533C45F133EA55D898CD684431FCEFCD)] [added: Disclosure](#sEA092AB9EA355E7EB807A1E3760DD134)] | [removed: [54](#s533C45F133EA55D898CD684431FCEFCD)] [added: [53](#sEA092AB9EA355E7EB807A1E3760DD134)] |

| | [Item 9A. Controls and [removed: Procedures](#s1DC8B734C9A656788106ACAF583C4800)] [added: Procedures](#sBBFAD0337FF456D4B88BDF0FF8740D76)] | [removed: [54](#s1DC8B734C9A656788106ACAF583C4800)] [added: [53](#sBBFAD0337FF456D4B88BDF0FF8740D76)] |

| | [Item 9B. Other [removed: Information](#sEFA5BCB5A2C35747A42338DA61922CB4)] [added: Information](#s9A52DE402E4A52DD9F33E03FD3FBD4D0)] | [removed: [55](#sEFA5BCB5A2C35747A42338DA61922CB4)] [added: [53](#s9A52DE402E4A52DD9F33E03FD3FBD4D0)] |

| | [Item 10. Directors, Executive Officers and Corporate [removed: Governance](#s80CBC2C04F395AF1BA4228FD10CDF970)] [added: Governance](#s7E7B60F181995C7C9EADD2B6D322AED3)] | [removed: [55](#s80CBC2C04F395AF1BA4228FD10CDF970)] [added: [54](#s7E7B60F181995C7C9EADD2B6D322AED3)] |

| | [Item 11. Executive [removed: Compensation](#s83C7FCA93A8156209D3F8495D02D8FDC)] [added: Compensation](#s91DEC109883951A08AF68465AA951FAB)] | [removed: [55](#s83C7FCA93A8156209D3F8495D02D8FDC)] [added: [54](#s91DEC109883951A08AF68465AA951FAB)] |

| | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s616D6D55A0E956069AEEAB7C082CF628)] [added: Matters](#sFE6107CA8A8751B4A079594CE04F8AC7)] | [removed: [56](#s616D6D55A0E956069AEEAB7C082CF628)] [added: [54](#sFE6107CA8A8751B4A079594CE04F8AC7)] |

| | [Item 13. Certain Relationships and Related Transactions, and Director [removed: Independence](#s4A2ABE76E7D25D39B824FBA58ACD3837)] [added: Independence](#s23B9B530EC405389A7D1FD3CD6387D91)] | [removed: [57](#s4A2ABE76E7D25D39B824FBA58ACD3837)] [added: [54](#s23B9B530EC405389A7D1FD3CD6387D91)] |

| | [Item 14. Principal Accountant Fees and [removed: Services](#s809F0C3CE62958D0899CB6FD87AD9D96)] [added: Services](#s47660C44AD365F348FA0061B0A24B2B7)] | [removed: [57](#s809F0C3CE62958D0899CB6FD87AD9D96)] [added: [55](#s47660C44AD365F348FA0061B0A24B2B7)] |

| | [Item 15. Exhibits and Financial Statement [removed: Schedules](#sCA4177C1072E57B3873A87BBFCC94E15)] [added: Schedules](#s25513B70869852FB945A971D2B688EF2)] | [removed: [57](#sCA4177C1072E57B3873A87BBFCC94E15)] [added: [55](#s25513B70869852FB945A971D2B688EF2)] |

| | [INDEX TO FINANCIAL STATEMENTS AND RELATED [removed: INFORMATION](#s91EA00FDED2E5040833561B89C6574E6)] [added: INFORMATION](#sF4FA12D939FD5177B07AF31DEEF64645)] | [removed: [58](#s91EA00FDED2E5040833561B89C6574E6)] [added: [56](#sF4FA12D939FD5177B07AF31DEEF64645)] |

For a discussion of risk factors and uncertainties associated with Teledyne and any forward looking statements made by us, see the discussion beginning on page [removed: 13] [added: 14] of this Annual Report on Form 10-K.

| | [SIGNATURES](#s19E4852302E05CD88E7B9C850ADB2236) | [99](#s19E4852302E05CD88E7B9C850ADB2236) |

| | [EXHIBIT INDEX](#sEEC5E2545E845B3D9673425BD39C3E35) | [101](#sEEC5E2545E845B3D9673425BD39C3E35) |

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

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

The Company has [removed: 69] [added: 68] principal operating facilities in [removed: 16] [added: 18] states and six foreign countries.

Information on the number, ownership and location of principal operating facilities by segment was as follows at February [removed: 27, 2018:][added: 21, 2019:]

| Instrumentation | | [removed: 14] [added: 13] | | | | [removed: 14] [added: 11] | | | California, Colorado, Florida, Massachusetts, Nebraska, New Hampshire, New York, Ohio, Texas and Virginia | | United States, Canada, Denmark and United Kingdom |

| Digital Imaging | | [removed: 10] [added: 11] | | | | [removed: 5] [added: 8] | | | [added: Arizona,] California, Massachusetts, [added: New Jersey,] North Carolina and Pennsylvania | | United States, Belgium, Canada, France, The Netherlands and United Kingdom |

| Aerospace and Defense Electronics | | 7 | | | | [removed: 12] [added: 11] | | | California, Illinois, New Hampshire, Pennsylvania, Tennessee and Texas | | United States and United Kingdom |

| Total | | 32 | | | | [removed: 37] [added: 36] | | | | | |

As of February [removed: 23, 2018,] [added: 21, 2019,] there were [removed: 3,184] [added: 2,987] holders of record of the Common Stock.

We have [removed: a] stock repurchase [removed: program] [added: programs] authorized by our Board of [removed: Directors.][added: Directors to repurchase up to approximately three million shares.]

We repurchased 2,561,815 shares in 2015 under the [added: program and no shares were repurchased under the 2016] program.

Price Range of Common Stock and Dividend Policy

| | | | | | | | | |

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

| High and low stock price: | | High | | | | Low | | |

| 2016 | | | | | | | | |

| 1st Quarter | | $ | 90.85 | | | $ | 73.66 | |

| 2nd Quarter | | $ | 101.66 | | | $ | 85.29 | |

| 3rd Quarter | | $ | 110.61 | | | $ | 94.68 | |

| 4th Quarter | | $ | 129.36 | | | $ | 101.90 | |

| 2017 | | | | | | | | |

| 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 | | | | | | | | |

| 1st Quarter (through February 26, 2018) | | $ | 201.40 | | | $ | 172.80 | |

On February 26, 2018, the closing sale price of our Common Stock as reported by the New York Stock Exchange was $191.19 per share.

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net sales | | $ | [removed: 2,603.8] [added: 2,901.8] | | | $ | [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] | |

| Net income | | $ | [removed: 227.2] [added: 333.8] | | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.5] [added: 190.9] | | | $ | [removed: 217.7] [added: 195.5] | | | $ | [removed: 185.0] [added: 215.6] | |

| Net income attributable to Teledyne | | $ | [removed: 227.2] [added: 333.8] | | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.8] [added: 190.9] | | | $ | [removed: 217.7] [added: 195.8] | | | $ | [removed: 185.0] [added: 217.7] | |

| Basic earnings per common share | | $ | [removed: 6.45] [added: 9.32] | | | $ | [removed: 5.52] [added: 6.45] | | | $ | [removed: 5.55] [added: 5.52] | | | $ | [removed: 5.87] [added: 5.55] | | | $ | [removed: 4.96] [added: 5.87] | |

| Diluted earnings per common share | | $ | [removed: 6.26] [added: 9.01] | | | $ | [removed: 5.37] [added: 6.26] | | | $ | [removed: 5.44] [added: 5.37] | | | $ | [removed: 5.75] [added: 5.44] | | | $ | [removed: 4.87] [added: 5.75] | |

| Weighted average diluted common shares outstanding | | [removed: 36.3] [added: 37.0] | | | | [removed: 35.5] [added: 36.3] | | | | [removed: 36.0] [added: 35.5] | | | | [removed: 37.9] [added: 36.0] | | | | [removed: 38.0] [added: 37.9] | | |

| Total assets | | $ | [removed: 3,846.4] [added: 3,809.3] | | | $ | [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] | |

| Long-term debt and capital leases, less current portion | | $ | [removed: 1,069.3] [added: 612.3] | | | $ | [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] | |

| Total stockholders’ equity | | $ | [removed: 1,947.3] [added: 2,229.7] | | | $ | [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: 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.

Fiscal year 2017 includes the impact of the acquisition of e2v in March 2017.

The information required by this item is included in this Report on pages [removed: 59] [added: 56] through [removed: 100.][added: 98.]

See the “Index to Financial Statements and Related Information” on page [removed: 58.][added: 56.]

The [removed: Company’s Chairman,] [added: company’s] 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 December [removed: 31, 2017,] [added: 30, 2018,] of the [removed: Company’s] [added: 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 December [removed: 31, 2017,] [added: 30, 2018,] are effective.

See Management Statement on page [removed: 59] [added: 57] for management’s annual report on internal control over financial reporting.

See Report of Independent Registered Public Accounting Firm on page [removed: 60] [added: 58] for Deloitte & Touche LLP’s attestation report on the Report of Management on Teledyne Technologies Incorporated's Internal Control over Financial Reporting.

There was no change in the [removed: Company’s] [added: 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 December [removed: 31, 2017,] [added: 30, 2018,] that has materially affected, or is reasonably likely to materially affect, the [removed: Company’s] [added: company’s] internal control over financial reporting.

Blackwood, [added: Senior] Vice [removed: President] [added: President, Strategic Sourcing, Tax] and Treasurer

[removed: Standafer,] [added: Duncan Forsythe,] Senior [removed: Director] [added: Director,] Taxation and Associate Treasurer

Jason VanWees, [removed: Senior] [added: Executive] Vice [removed: President, Strategy and Mergers & Acquisitions][added: President]

Tyler Vernon, [added: Senior] Director, SEC/GAAP Compliance [added: and External Reporting]

Caleb B.

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: 2018] [added: 2019] 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: 2018] [added: 2019] 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.

Except for the table below, the information required by this item is set forth in the [removed: 2018] [added: 2019] Proxy Statement under the caption “Stock Ownership Information” 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 [removed: 31, 2017:][added: 30, 2018:]

| Amended and Restated 2008 Incentive Award [removed: Plan(2)] [added: Plan(1)] | [removed: 910,368] [added: 602,957] | | | | [removed: 59.98] [added: $] | [added: 60.19] | | | | — | | | |

| Amended and Restated 2014 Incentive Award [removed: Plan(3)] [added: Plan(2)] | [removed: 1,348,446] [added: 1,461,783] | | [removed: (4] [added: (3] | ) | [removed: 100.40] [added: $] | [added: 123.00] | | [removed: (5] [added: (4] | ) | [removed: 3,713,434] [added: 3,269,025] | | [removed: (6] [added: (5] | ) |

| Employee Stock Purchase Plan(6) | — | | | | — | | | | | 1,000,000 | | [removed: (7] | [removed: )] |

| Equity Compensation plans not approved by security [removed: holders] [added: holders:] | [removed: —] | | | | [removed: —] | | | | | [removed: —] | | | |

| [removed: 2)] [added: 1)] | 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. |

| [removed: 3)] [added: 2)] | 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. |

| [removed: 4)] [added: 3)] | Does not include (i) [removed: 93,642] [added: 31,156] shares of stock reserved for issuance under the 2015-2017 cycle of our PSP, of which [removed: 6,481] [added: 8,586] shares were issued as part of the first installment payment in February [removed: 2018 and; and] [added: 2019;] (ii) [removed: 22,682] [added: 17,753] shares subject to restricted stock unit awards issued to employees and [removed: directors.] [added: directors; and (iii) 51,123 shares reserved for issuance under the 2018-2020 cycle of our PSP.] |

| [removed: 5)] [added: 4)] | Does not include the securities described in footnote [removed: (4)] [added: (3)] above, which do not have an exercise price . |

| [removed: 6)] [added: 5)] | The number of shares available for future issuance (i) includes shares transferred from the 2008 Plan (see footnote [removed: (2)] [added: (1)] above); [added: and] (ii) assumes the issuance of [removed: (i) 93,642] [added: (a) 31,156] shares of stock reserved for issuance under the 2015-2017 cycle of our PSP, of which [removed: 6,481] [added: 8,586] shares were issued as part of the first installment payment in February [removed: 2018, and; and (ii) 22,682] [added: 2019;(b) 17,753] shares subject to restricted stock unit awards issued to employees and [removed: directors.] [added: directors; and (c) 51,123 shares reserved for issuance under the 2018-2020 cycle of our PSP.] |

| [removed: 7)] [added: 6)] | 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. |

| Total | 2,064,740 | | | | $ | 104.66 | | | | 4,269,025 | | | |

| 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 | | | | | — | | | |

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

| 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. |

The information required by this item is set forth in the [removed: 2018] [added: 2019] 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: 2018] [added: 2019] Proxy Statement under the captions “Fees Billed by Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policies” under “Item 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: 58] [added: 56] of this Report, which is incorporated herein by reference.

See Schedule II captioned “Valuation and Qualifying Accounts” on page [removed: 100] [added: 98] of this Report, which is incorporated herein by reference.

| Management Statement | [removed: [59](#s19DC4B404FA759E5A7AEA3A814CD421E)] [added: [57](#s8AD855F20BF65551BDEAB8930E614553)] | |

| Report of Independent Registered Public Accounting Firm | [removed: [60](#s5918BF061A145BF2B423B4C97696539C)] [added: [58](#s02C511D86B465E608A4390C6BDDB2BD3)] | |

| Report of Independent Registered Public Accounting Firm | [removed: [61](#s39C022D78A0D5B70B1B29C4FA9142C2D)] [added: [59](#s3C93BCC95B775F039A2D1F02D1E01855)] | |

| Consolidated Statements of Income | [removed: [62](#s2F4166E7E95D574D944B0DCD23AC6B12)] [added: [60](#sA73818E2B6795032BE3474168F51B422)] | |

| Consolidated Statements of Comprehensive Income | [removed: [62](#s710949B69A295A14AA8F9AC6E201F8DD)] [added: [60](#s96AE961C07CF5F288E551DEB71B6A69F)] | |

| Consolidated Balance Sheets | [removed: [63](#s4461A3D843B95F04A1D093E44C9A01AB)] [added: [61](#sBF8804874BF0536B8578E906D10B8BAF)] | |

| Consolidated Statements of Stockholders’ Equity | [removed: [64](#s4F2005C4E2085A9AB620BCC416D949FE)] [added: [62](#sA94659B50613599CA2DFBFC9E4F26926)] | |

| Consolidated Statements of Cash Flows | [removed: [65](#sAD7B03539E6258ACBDCA1AB1C0B7AC02)] [added: [63](#s7BB659BDF95F5608B4BA6828691A666F)] | |

| Notes to Consolidated Financial Statements | [removed: [66](#s7895BD5666775B39B8A3BAC19CE660DF)] [added: [64](#s3FA26483952B52F9B3C3B549CC63E441)] | |

| Schedule II - Valuation and Qualifying Accounts | [removed: 100] [added: 98] | |

We conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December [removed: 31, 2017.][added: 30, 2018.]

Based on this evaluation we believe that, as of December [removed: 31, 2017,] [added: 30, 2018,] the Company’s internal controls over financial reporting were effective.

Their report appears on page [removed: 60] [added: 58] of this Annual Report.

Date: February [removed: 27, 2018][added: 22, 2019]

| [removed: /s/ ROBERT MEHRABIAN] [added: Robert Mehrabian] | [added: | | | | | February 22, 2019 |]

| [removed: Chairman,] President and Chief Executive Officer |

We have audited the internal control over financial reporting of Teledyne Technologies Incorporated and subsidiaries (the “Company”) as of December [removed: 31, 2017,] [added: 30, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2017,] [added: 30, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements [removed: and financial statement schedule] as of and for the year ended December [removed: 31, 2017,] [added: 30, 2018,] of the Company and our report dated February [removed: 27, 2018,] [added: 22, 2019,] 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 [removed: “Company”)] [added: "Company")] as of December [removed: 31, 2017] [added: 30, 2018] and [removed: January 1,] [added: December 31,] 2017, the related consolidated statements of income, comprehensive income, [removed: shareholders'] [added: stockholders'] equity, and cash flows, for [added: each of] the three years [added: in the period] ended December [removed: 31, 2017, January 1, 2017, and January 3, 2016,] [added: 30, 2018,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December [removed: 31, 2017] [added: 30, 2018] and [removed: January 1,] [added: December 31,] 2017 and the results of its operations and its cash flows for [added: each of the three] years [added: in the period] ended December [removed: 31, 2017, January 1, 2017, and January 3, 2016,] [added: 30, 2018,] in conformity with [removed: 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 States) (PCAOB), the Company's internal control over financial reporting as of December [removed: 31, 2017,] [added: 30, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 27, 2018,] [added: 22, 2019] expressed an unqualified opinion on the Company's internal control over financial reporting.

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net Sales | | $ | [removed: 2,603.8] [added: 2,901.8] | | | $ | [removed: 2,149.9] [added: 2,603.8] | | | $ | [removed: 2,298.1] [added: 2,149.9] | |

| Selling, general and administrative expenses | | [removed: 656.0] [added: 694.2] | | | | [removed: 578.1] [added: 658.1] | | | | [removed: 588.6] [added: 579.9] | | |

| Total costs and expenses | | [removed: 2,268.2] [added: 2,485.2] | | | | [removed: 1,896.1] [added: 2,282.1] | | | | [removed: 2,016.4] [added: 1,909.4] | | |

| Interest and debt expense, net | | [removed: (33.1] [added: (25.5] | | ) | | [removed: (23.2] [added: (33.1] | | ) | | [removed: (23.9] [added: (23.2] | | ) |

| Other income/(expense), net | | [removed: (15.5] [added: (10.7] | | ) | | [removed: 10.7] [added: (15.5] | | [added: )] | | [removed: 0.4] [added: 10.7] | | |

| Income before income taxes | | [removed: 287.0] [added: 393.9] | | | | [removed: 241.3] [added: 287.0] | | | | [removed: 258.2] [added: 241.3] | | |

| Provision for income taxes | | [removed: 59.8] [added: 60.1] | | | | [removed: 50.4] [added: 59.8] | | | | [removed: 62.7] [added: 50.4] | | |

| Net income | | [removed: 227.2] [added: $] | [added: 333.8] | | | [removed: 190.9] [added: $] | [added: 227.2] | | | [removed: 195.5] [added: $] | [added: 190.9] | |

| Net income [removed: attributable to Teledyne] | | $ | [removed: 227.2] [added: 333.8] | | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.8] [added: 190.9] | |

| Basic earnings per common share | | $ | [removed: 6.45] [added: 9.32] | | | $ | [removed: 5.52] [added: 6.45] | | | $ | [removed: 5.55] [added: 5.52] | |

| Weighted average common shares outstanding | | [removed: 35.2] [added: 35.8] | | | | [removed: 34.6] [added: 35.2] | | | | [removed: 35.3] [added: 34.6] | | |

| Diluted earnings per common share | | $ | [removed: 6.26] [added: 9.01] | | | $ | [removed: 5.37] [added: 6.26] | | | $ | [removed: 5.44] [added: 5.37] | |

| Weighted average diluted common shares outstanding | | [removed: 36.3] [added: 37.0] | | | | [removed: 35.5] [added: 36.3] | | | | [removed: 36.0] [added: 35.5] | | |

| Net income | | $ | [removed: 227.2] [added: 333.8] | | | $ | [removed: 190.9] [added: 227.2] | | | $ | [removed: 195.5] [added: 190.9] | |

| Foreign exchange translation adjustment | | [removed: 96.8] [added: (79.5] | | [added: )] | | [removed: (24.6] [added: 96.8] | | [removed: )] | | [removed: (83.6] [added: (24.6] | | ) |

| /s/ ALDO PICHELLI |

| Aldo Pichelli |

Date: February 22, 2019

February 22, 2019

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for revenue from contracts with customers in 2018 due to adoption of FASB ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective approach.

February 22, 2019

| Cost of sales | | 1,791.0 | | | | 1,624.0 | | | | 1,329.5 | | |

| Operating income | | 416.6 | | | | 321.7 | | | | 240.5 | | |

| Non-service retirement benefit income | | 13.5 | | | | 13.9 | | | | 13.3 | | |

| | | 2018 | | | | 2017 | | |

| Accounts receivable, net | | 416.5 | | | | 388.3 | | |

| Unbilled receivables, net | | 145.3 | | | | 89.8 | | |

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

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

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

| Net income | | — | | | | — | | | | — | | | | 333.8 | | | | — | | | | 333.8 | | | |

| Treasury stock issued | | — | | | | (55.8 | | ) | | 55.8 | | | | — | | | | — | | | | — | | | |

| Cumulative effect of new accounting standards | | — | | | | — | | | | — | | | | 50.9 | | | | (47.6 | | ) | | 3.3 | | | |

| Balance, December 30, 2018 | | $ | 0.4 | | | $ | 343.7 | | | $ | (144.9 | ) | | $ | 2,523.7 | | | $ | (493.2 | ) | | $ | 2,229.7 | | |

| Deferred and Income taxes payable, net | | (26.4 | | ) | | 28.1 | | | | 15.9 | | |

December 30, 2018

| Net other comprehensive loss | (79.5 | | ) | | (5.4 | | ) | | (31.4 | | ) | | (116.3 | | ) |

| Reclassification of income tax effects for ASU 2018-02 | — | | | | — | | | | (47.6 | | ) | | (47.6 | | ) |

| Balance as of December 30, 2018 | $ | (181.5 | ) | | $ | (4.9 | ) | | $ | (306.8 | ) | | $ | (493.2 | ) |

We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

A contract’s transaction price is allocated to each distinct good or service (i.e., performance obligation) identified in the contract, and each performance obligation is valued based on its estimated relative standalone selling price.

For standard products or services, list prices generally represent the standalone selling price.

For performance obligations where list price is not available, we typically use the expected cost plus a margin approach to estimate the standalone selling price for that performance obligation.

Approximately 60% of our revenue is recognized at a point in time, with the remaining 40% recognized over time.

Revenue recognized at a point in time relates primarily to the sale of standard or minimally customized products, with control transferring to the customer generally upon the transfer of title.

This type of revenue arrangement is typical for our commercial contracts within the Instrumentation, Digital Imaging, and Aerospace and Defense Electronics segments, and to a lesser extent for certain commercial contracts within the Engineered Systems segment relating to the sale of standard hydrogen/oxygen gas generators.

In limited circumstances, customer specified acceptance criteria exist.

If we

Performance obligations recognized at a point in time can include variable consideration, such as product returns and sales allowances.

The estimation of this variable consideration and determination of whether to include estimated amounts as a reduction in the transaction price is based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

This type of revenue arrangement is typical of our U.S. government contracts and to a lesser extent for certain commercial contracts, with both contract types occurring across all segments.

The customer typically controls the work in process as evidenced either by contractual termination clauses or by our right to payment for costs incurred to date plus a reasonable profit for products or services that do not have an alternative use.

As control transfers continuously over time on these contracts, revenue is recognized based on the extent of progress towards completion of the performance obligation.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided.

| | | |

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

Our evaluation did not include assessing the effectiveness of internal control over financial reporting for the e2v acquisition and the SSI asset acquisition in 2017.

These acquisitions, which are included in the 2017 consolidated financial statements of the Company, constituted approximately 26% of total assets, 11% of total revenues and 12% of net income of the Company as of and for the year ended December 31, 2017.

We did not assess the effectiveness of internal control over financial reporting at these newly acquired entities due to the insufficient time between the date acquired and year-end and the complexity associated with assessing internal controls during integration efforts making the process impractical.

| Robert Mehrabian |

As described in 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 e2v technologies plc acquisition and the Scientific Systems, Inc. asset acquisition (“the 2017 acquisitions”), which were acquired in March and July, respectively, and whose financial statements constitute approximately 26% of total assets, 11% of total revenues and 12% of net income of the consolidated financial statement amounts as of and for the year ended December 31, 2017.

Accordingly, our audit did not include the internal control over financial reporting for the 2017 acquisitions.

February 27, 2018

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

| Cost of sales | | 1,612.2 | | | | 1,318.0 | | | | 1,427.8 | | |

| Operating income | | 335.6 | | | | 253.8 | | | | 281.7 | | |

| Noncontrolling interest | | — | | | | — | | | | 0.3 | | |

| Comprehensive income attributable to Teledyne, net of tax | | $ | 349.1 | | | $ | 152.9 | | | $ | 105.8 | |

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

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

| Balance, December 28, 2014 | | $ | 0.4 | | | $ | 326.5 | | | | $ | (102.1 | ) | | $ | 1,525.7 | | | $ | (323.2 | ) | | $ | 1,427.3 | | | $ | 41.2 | | | $ | 1,468.5 | |

| Net income (loss) | | — | | | | — | | | | | — | | | | 195.8 | | | | — | | | | 195.8 | | | | (0.3 | | ) | | 195.5 | | |

| Purchase of noncontrolling interest | | — | | | | 17.6 | | | | | — | | | | — | | | | — | | | | 17.6 | | | | (39.6 | | ) | | (22.0 | | ) |

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

| Treasury stock purchases, net | | — | | | | (36.0 | | ) | | | (207.8 | | ) | | — | | | | — | | | | (243.8 | | ) | | — | | | | (243.8 | | ) |

| Deferred income taxes | | (12.3 | | ) | | (7.9 | | ) | | (7.9 | | ) |

| Income taxes payable, net | | 40.4 | | | | 23.8 | | | | (21.3 | | ) |

| Purchase of treasury stock | | — | | | | — | | | | (243.8 | | ) |

| Balance as of January 3, 2016 | $ | (174.2 | ) | | $ | (6.7 | ) | | $ | (232.3 | ) | | $ | (413.2 | ) |

| Net other comprehensive income (loss) | (24.6 | | ) | | 3.9 | | | | (17.3 | | ) | | (38.0 | | ) |

| | December 31, 2017 | | | | January 1, 2017 | | | |

Revenue is recognized when the earnings process is substantially complete and all of the following criteria are met: 1) persuasive evidence of an arrangement exists; 2) delivery has occurred or services have been rendered; 3) our price to our customer is fixed or determinable; and 4) collectability is reasonably assured.

The majority of our revenue relates to product sales and is recognized upon shipment to the customer, at fixed or determinable prices and with a reasonable assurance of collection, passage of title to the customer and fulfillment of all significant obligations.

Revenue is recognized net of estimated sales returns and other allowances.

The Company does not offer substantial sales incentives and credits to customers.

Such contracts are generally accounted for using contract accounting, percentage-of-completion (“POC”) method.

The Company’s standard terms of sale are FOB shipping point.

For a small percentage of sales where title and risk of loss passes at destination point, and assuming all other criteria for revenue recognition are met, the Company recognizes revenue upon delivery to the customer.

If any significant obligation to the customer with respect to a sales transaction remains following shipment, revenue recognition is deferred until such obligations have been fulfilled.

In general, our revenue arrangements do not involve acceptance provisions based on customer specified acceptance criteria.

In those

We have a few contracts that require the Company to warehouse certain goods, for which revenue is recognized when all risks of loss are borne by the customer and all other criteria for revenue recognition are met.

We also have a small number of multiple elements arrangements (i.e., free product, training, installation, additional parts, etc.).

If contract accounting does not apply, we allocate the contract price among the deliverables based on vendor-specific objective evidence of fair value to each element in the arrangement.