Item 15. Exhibits and Financial Statement Schedules

(a) Exhibits and Financial Statement Schedules:

(1) Financial Statements

See the “Index to Financial Statements and Related Information” on page 56 of this Report, which is incorporated herein by reference.

(2) Financial Statement Schedules

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

(3) Exhibits

A list of exhibits filed with this Form 10-K or incorporated by reference is found in the Exhibit Index immediately following the certifications of this Report and incorporated herein by reference.

(b) Exhibits:

See Item 15(a)(3) above.

(c) Financial Schedules:

See Item 15(a)(2) above.

INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION

	Page
Financial Statements and Related Information:
Management Statement	57
Report of Independent Registered Public Accounting Firm	58
Report of Independent Registered Public Accounting Firm	59
Consolidated Statements of Income	60
Consolidated Statements of Comprehensive Income	60
Consolidated Balance Sheets	61
Consolidated Statements of Stockholders’ Equity	62
Consolidated Statements of Cash Flows	63
Notes to Consolidated Financial Statements	64
Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts	98

MANAGEMENT STATEMENT

RESPONSIBILITY FOR PREPARATION OF THE FINANCIAL STATEMENTS AND ESTABLISHING AND MAINTAINING ADEQUATE INTERNAL CONTROL OVER FINANCIAL REPORTING

We are responsible for the preparation of the financial statements included in this Annual Report. The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and include amounts that are based on the best estimates and judgments of management. The other financial information contained in this Annual Report is consistent with the financial statements.

Our internal control system is designed to provide reasonable assurance concerning the reliability of the financial data used in the preparation of Teledyne financial statements, as well as to safeguard the Company’s assets from unauthorized use or disposition.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement presentation.

REPORT OF MANAGEMENT ON TELEDYNE TECHNOLOGIES INCORPORATED’S INTERNAL CONTROL OVER FINANCIAL REPORTING

We are also responsible for establishing and maintaining adequate internal control over financial reporting. We conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 30, 2018. In making this evaluation, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria) in Internal Control - Integrated Framework. Our evaluation included reviewing the documentation of our controls, evaluating the design effectiveness of our controls and testing their operating effectiveness. Based on this evaluation we believe that, as of December 30, 2018, the Company’s internal controls over financial reporting were effective.

Deloitte and Touche LLP, our independent registered public accounting firm, has issued its report on the effectiveness of Teledyne’s internal control over financial reporting. Their report appears on page 58 of this Annual Report.

Date: February 22, 2019

/s/ ALDO PICHELLI
Aldo Pichelli
President and Chief Executive Officer

Date: February 22, 2019

/s/ SUSAN L. MAIN
Susan L. Main
Senior Vice President and Chief Financial Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Teledyne Technologies Incorporated

Thousand Oaks, California

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Teledyne Technologies Incorporated and subsidiaries (the “Company”) as of December 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 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 as of and for the year ended December 30, 2018, of the Company and our report dated February 22, 2019, expressed an unqualified opinion on those financial statements and financial statement schedule.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Teledyne Technologies Incorporated’s Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Los Angeles, California

February 22, 2019

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Teledyne Technologies Incorporated

Thousand Oaks, California

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Teledyne Technologies Incorporated and subsidiaries (the "Company") as of December 30, 2018 and December 31, 2017, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 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 30, 2018 and December 31, 2017 and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2018, in conformity with 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 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 22, 2019 expressed an unqualified opinion on the Company's internal control over financial reporting.

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.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Los Angeles, California

February 22, 2019

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

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per-share amounts)

		For the Fiscal Year
		2018				2017				2016
Net Sales		$	2,901.8			$	2,603.8			$	2,149.9
Costs and expenses
Cost of sales		1,791.0				1,624.0				1,329.5
Selling, general and administrative expenses		694.2				658.1				579.9
Total costs and expenses		2,485.2				2,282.1				1,909.4
Operating income		416.6				321.7				240.5
Interest and debt expense, net		(25.5		)		(33.1		)		(23.2		)
Non-service retirement benefit income		13.5				13.9				13.3
Other income/(expense), net		(10.7		)		(15.5		)		10.7
Income before income taxes		393.9				287.0				241.3
Provision for income taxes		60.1				59.8				50.4
Net income		$	333.8			$	227.2			$	190.9
Basic earnings per common share		$	9.32			$	6.45			$	5.52
Weighted average common shares outstanding		35.8				35.2				34.6
Diluted earnings per common share		$	9.01			$	6.26			$	5.37
Weighted average diluted common shares outstanding		37.0				36.3				35.5

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

		For the Fiscal Year
		2018				2017				2016
Net income		$	333.8			$	227.2			$	190.9
Other comprehensive income (loss):
Foreign exchange translation adjustment		(79.5		)		96.8				(24.6		)
Hedge activity, net of tax		(5.4		)		3.3				3.9
Pension and postretirement benefit adjustments, net of tax		(31.4		)		21.8				(17.3		)
Other comprehensive income (loss)(a)		(116.3		)		121.9				(38.0		)
Comprehensive income		$	217.5			$	349.1			$	152.9

(a) Net of income tax benefit of $10.6 million in 2018, income tax expense of $12.7 million for 2017 and income tax benefit of $8.0 million for 2016.

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED BALANCE SHEETS

For the Fiscal Years Ended December 30, 2018 and December 31, 2017

(In millions, except share amounts)

		2018				2017
Assets
Current Assets
Cash		$	142.5			$	70.9
Accounts receivable, net		416.5				388.3
Unbilled receivables, net		145.3				89.8
Inventories, net		364.3				400.2
Prepaid expenses and other current assets		45.8				62.7
Total Current Assets		1,114.4				1,011.9
Property, plant and equipment, net		442.6				442.8
Goodwill, net		1,735.2				1,776.7
Acquired intangibles, net		344.3				398.9
Prepaid pension assets		88.2				127.2
Other assets, net		84.6				88.9
Total Assets		$	3,809.3			$	3,846.4
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	227.8			$	191.7
Accrued liabilities		354.7				345.3
Current portion of long-term debt, capital leases and other debt		138.3				3.6
Total Current Liabilities		720.8				540.6
Long-term debt and capital leases		612.3				1,069.3
Other long-term liabilities		246.5				289.2
Total Liabilities		1,579.6				1,899.1
Commitments and Contingencies
Stockholders’ Equity
Preferred stock, $0.01 par value; outstanding shares-none		—				—
Common stock, $0.01 par value; authorized 125 million shares; Issued shares: 37,697,865 at December 30, 2018, and December 31, 2017; outstanding shares: 36,087,297 at December 30, 2018, and 35,540,233 at December 31, 2017		0.4				0.4
Additional paid-in capital		343.7				337.3
Retained earnings		2,523.7				2,139.6
Treasury stock, 1,610,568 at December 30, 2018 and 2,157,632 at December 31, 2017		(144.9		)		(200.7		)
Accumulated other comprehensive loss		(493.2		)		(329.3		)
Total Stockholders’ Equity		2,229.7				1,947.3
Total Liabilities and Stockholders’ Equity		$	3,809.3			$	3,846.4

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

		Common Stock				Additional Paid-in Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total
Balance, January 3, 2016		$	0.4			$	345.3			$	(309.9	)		$	1,721.5			$	(413.2	)		$	1,344.1
Net income		—				—				—				190.9				—				190.9
Other comprehensive loss, net of tax		—				—				—				—				(38.0		)		(38.0		)
Treasury stock issued		—				(67.0		)		67.0				—				—				—
Stock-based compensation		—				21.3				—				—				—				21.3
Exercise of stock options and other		—				36.1				—				—				—				36.1
Balance, January 1, 2017		0.4				335.7				(242.9		)		1,912.4				(451.2		)		1,554.4
Net income		—				—				—				227.2				—				227.2
Other comprehensive income, net of tax		—				—				—				—				121.9				121.9
Treasury stock issued		—				(42.2		)		42.2				—				—				—
Stock-based compensation		—				24.9				—				—				—				24.9
Exercise of stock options and other		—				18.9				—				—				—				18.9
Balance, December 31, 2017		0.4				337.3				(200.7		)		2,139.6				(329.3		)		1,947.3
Net income		—				—				—				333.8				—				333.8
Other comprehensive loss, net of tax		—				—				—				—				(116.3		)		(116.3		)
Treasury stock issued		—				(55.8		)		55.8				—				—				—
Stock-based compensation		—				37.2				—				—				—				37.2
Exercise of stock options and other		—				25.0				—				(0.6		)		—				24.4
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

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

		For the Fiscal Year
		2018				2017				2016
Operating Activities
Net income		$	333.8			$	227.2			$	190.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		113.0				113.0				87.3
Stock-based compensation		25.1				18.8				16.2
Change in fair value of derivative instruments		—				6.0				5.5
Gain on sale of facility		—				—				(17.9		)
Changes in operating assets and liabilities, excluding the effect of businesses acquired:
Accounts receivable		(66.7		)		(19.6		)		(11.4		)
Inventories		(1.7		)		(7.4		)		(9.1		)
Prepaid expenses and other assets		7.6				(3.6		)		(1.7		)
Accounts payable		39.9				12.4				2.1
Accrued liabilities		17.8				16.2				26.8
Deferred and Income taxes payable, net		(26.4		)		28.1				15.9
Long-term assets		4.9				(13.8		)		1.0
Other long-term liabilities		(14.3		)		18.3				11.4
Pension benefits		1.2				(19.7		)		4.0
Postretirement benefits		(0.6		)		(0.8		)		(0.9		)
Other operating, net		13.3				(0.4		)		(3.1		)
Net cash provided by operating activities		446.9				374.7				317.0
Investing Activities
Purchases of property, plant and equipment		(86.8		)		(58.5		)		(87.6		)
Purchase of businesses and other investments, net of cash acquired		(3.1		)		(774.1		)		(93.4		)
Proceeds from the sale of businesses and disposal of fixed assets		1.3				1.4				30.0
Sales proceeds transferred to escrow as restricted cash		—				—				(19.5		)
Sales proceeds transferred from escrow to cash		—				—				19.5
Net cash used in investing activities		(88.6		)		(831.2		)		(151.0		)
Financing Activities
Net proceeds (payments) on credit facility		(136.0		)		165.0				(147.0		)
Proceeds from other debt		11.5				100.0				6.1
Payments on other debt		(182.0		)		(139.3		)		(22.2		)
Proceeds from issuance of senior notes		—				268.0				—
Proceeds from stock options exercised		37.2				24.9				36.1
Purchase of option contract		—				—				(11.6		)
Other financing		(2.0		)		(4.5		)		(6.4		)
Net cash provided by (used in) financing activities		(271.3		)		414.1				(145.0		)
Effect of exchange rate changes on cash		(15.4		)		14.7				(7.5		)
Change in cash		71.6				(27.7		)		13.5
Cash—beginning of period		70.9				98.6				85.1
Cash—end of period		$	142.5			$	70.9			$	98.6

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 30, 2018

Note 1. Description of Business

Teledyne Technologies Incorporated (“Teledyne” or the “Company”) became an independent, public company effective November 29, 1999. Teledyne provides enabling technologies for industrial growth markets that require advanced technology and high reliability. These markets include aerospace and defense, factory automation, air and water quality environmental monitoring, electronics design and development, oceanographic research, deepwater oil and gas exploration and production, medical imaging and pharmaceutical research. The products include digital imaging sensors, cameras and systems within the visible, infrared and X-ray spectra, monitoring and control instrumentation for marine and environmental applications, harsh environment interconnects, electronic test and measurement equipment, aircraft information management systems, and defense electronics and satellite communication subsystems. Teledyne also supplies engineered systems for defense, space, environmental and energy applications. Teledyne differentiates itself from many of its direct competitors by having a customer and company-sponsored applied research center that augments our product development expertise.

Teledyne consists of the Instrumentation segment with principal operations in the United States, the United Kingdom and Denmark; the Digital Imaging segment with principal operations in the United States, Canada, France, the Netherlands and the United Kingdom: the Aerospace and Defense Electronics segment with principal operations in the United States and the United Kingdom; and the Engineered Systems segment with principal operations in the United States and the United Kingdom.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Teledyne and all wholly-owned and majority-owned domestic and foreign subsidiaries. Intercompany accounts and transactions have been eliminated.

Fiscal Year

The Company operates on a 52- or 53-week fiscal year convention ending on the Sunday nearest to December 31. Fiscal year 2018 was a 52-week fiscal year and ended on December 30, 2018. Fiscal year 2017 was a 52-week fiscal year and ended on December 31, 2017. Fiscal year 2016 was a 52-week fiscal year and ended on January 1, 2017. References to the years 2018, 2017 and 2016 are intended to refer to the respective fiscal year unless otherwise noted.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to sales returns and allowances, allowance for doubtful accounts, inventories, goodwill, intangible assets, asset valuations, income taxes, warranty obligations, pension and other postretirement benefits, long-term contracts, environmental, workers’ compensation and general liability, employee benefits and other contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at the time, the results of which form the basis for making its judgments. Actual results may differ materially from these estimates under different assumptions or conditions. Management believes that the estimates are reasonable.

Accumulated Other Comprehensive Income/(Loss)

The following table summarizes the changes in accumulated balances of other comprehensive income/(loss) (“AOCI”) for the fiscal years ended December 30, 2018, and December 31, 2017 (in millions):

	Foreign Currency Translation				Cash Flow Hedges and other				Pension and Postretirement Benefits				Total
Balance as of January 1, 2017	$	(198.8	)		$	(2.8	)		$	(249.6	)		$	(451.2	)
Other comprehensive income (loss) before reclassifications	96.8				(3.0		)		—				93.8
Amounts reclassified from AOCI	—				6.3				21.8				28.1
Net other comprehensive income	96.8				3.3				21.8				121.9
Balance as of December 31, 2017	(102.0		)		0.5				(227.8		)		(329.3		)
Other comprehensive income (loss) before reclassifications	(79.5		)		1.0				—				(78.5		)
Amounts reclassified from AOCI	—				(6.4		)		(31.4		)		(37.8		)
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	)

The reclassification out of AOCI for the fiscal years ended December 30, 2018, and December 31, 2017, are as follows (in millions):

	December 30, 2018				December 31, 2017
	Amount reclassified from AOCI				Amount reclassified from AOCI			Financial Statement Presentation
(Gain) loss on cash flow hedges:
(Gain) loss recognized in income on derivatives	$	(8.7	)		$	8.5		See Note 2
Income tax impact	2.3				(2.2		)	Provision for income taxes
Total	$	(6.4	)		$	6.3
Amortization of defined benefit pension and postretirement plan items:
Amortization of prior service cost	$	(6.1	)		$	(6.1	)	See Note 11
Amortization of net actuarial loss	31.5				29.2			See Note 11
Pension adjustments	(66.6		)		10.2			See Note 11
Total before tax	(41.2		)		33.3
Income tax impact	9.8				(11.5		)
Net of tax	$	(31.4	)		$	21.8

Revenue Recognition

We determine the appropriate method by which we recognize revenue by analyzing the nature of the products or services being provided as well as the terms and conditions of contracts or arrangements entered into with our customers. 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

cannot objectively demonstrate that the product meets those specifications prior to the shipment, the revenue is deferred until customer acceptance is obtained. 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.

Revenue recognized over time relates primarily to contracts to design, develop and/or manufacture highly engineered products used in both defense and commercial applications. 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. We generally use the cost-to-cost measure of progress as this measure best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The transaction price in these arrangements may include estimated amounts of variable consideration, including award fees, incentive fees, contract amounts not yet funded, or other provisions that can either increase or decrease the transaction price. We estimate variable consideration at the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved. The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

The majority of our over time contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. Over time contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications on over time contracts are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

For over time contracts using cost-to-cost, we have an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and cost, and making assumptions for schedule and technical issues. This EAC process requires management’s judgment to make reasonably dependable cost estimates. Since certain contracts extend over a longer period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings through a cumulative catch-up basis. This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters. Additionally, if the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly. The majority of revenue recognized over time uses an EAC process. The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in 2018 was approximately $4.4 million of favorable operating income, primarily related to changes in estimates that favorably impacted revenue. None of the effects of changes in estimates on any individual contract were material to the consolidated statements of income for any period presented.

While extended or non-customary warranties do not represent a significant portion of our revenue, we recognize warranty services as a separate performance obligations when it is material to the contract. When extended or non-customary warranties represents a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities, which are included in accrued liabilities and other long-term liabilities) on the Consolidated Balance Sheet. Under the typical payment terms of our over time contracts, the customer pays us either performance-based payments or progress payments. Amounts billed and due from our customers are classified as receivables on the Consolidated Balance Sheet. We may receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. We recognize a liability for these interim and advance payments in excess of revenue recognized and present it as a contract liability which is

included within accrued liabilities and other long-term liabilities on the Consolidated Balance Sheet, which represented $111.5 million and $15.3 million as of December 30, 2018, and $110.3 million and $15.5 million as of January 1, 2018, respectively. Contract liabilities typically are not considered a significant financing component because these cash advances are used to meet working capital demands that can be higher in the early stages of a contract, and these cash advances protect us from the other party failing to adequately complete some or all of its obligations under the contract. When revenue recognized exceeds the amount billed to the customer, we record an unbilled receivable (contract asset) for the amount we are entitled to receive based on our enforceable right to payment. The unbilled receivable balance increased from the beginning of the year by $26.5 million, or 22.4%, primarily due to work performed ahead of billings on certain over time revenue contracts primarily in our Aerospace and Defense Electronics and Instrumentation operating segments. Contract liabilities increased slightly from the beginning of the year by $1.0 million, or 0.8%. The Company recognized revenue of $79.7 million during the year ended December 30, 2018 from contract liabilities that existed at the beginning of year. The Company recognizes the incremental costs of obtaining or fulfilling a contract as expense when incurred if the amortization period of the asset is one year or less. Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material.

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of December 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,716.6 million. The Company expects approximately 72% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 28% recognized thereafter.

Shipping and Handling

Shipping and handling fees reimbursed by customers are classified as revenue while shipping and handling costs incurred by Teledyne are classified as cost of sales in the accompanying consolidated statements of income.

Product Warranty Costs

Some of the Company’s products are subject to standard warranties and the Company reserves for the estimated cost of product warranties on a product-specific basis. Facts and circumstances related to a product warranty matter and cost estimates to return, repair and/or replace the product are considered when establishing a product warranty reserve. The adequacy of the preexisting warranty liabilities is assessed regularly and the reserve is adjusted as necessary based on a review of historic warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year. The product warranty reserve is included in current accrued liabilities and long-term liabilities on the balance sheet.

Warranty Reserve (in millions):	2018				2017				2016
Balance at beginning of year	$	21.1			$	18.4			$	17.1
Accruals for product warranties charged to expense	10.0				6.0				7.4
Cost of product warranty claims	(10.1		)		(6.4		)		(6.7		)
Acquisitions	—				3.1				0.6
Balance at end of year	$	21.0			$	21.1			$	18.4

Research and Development

Selling, general and administrative expenses include Company-funded research and development and bid and proposal costs which are expensed as incurred and were $185.6 million in 2018, $177.7 million in 2017 and $167.7 million in 2016.

Income Taxes

We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for temporary differences between the tax basis of assets and liabilities and their reported amount in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state, federal and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative

operating income. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.

Income tax positions must meet a more-likely-than-not recognition in order to be recognized in the financial statements. We recognize potential accrued interest and penalties related to unrecognized tax benefits within operations as income tax expense. As new information becomes available, the assessment of the recognition threshold and the measurement of the associated tax benefit of uncertain tax positions may result in financial statement recognition or derecognition.

Net Income Per Common Share

Basic and diluted earnings per share were computed based on net income. The weighted average number of common shares outstanding during the period was used in the calculation of basic earnings per share. This number of shares was increased by contingent shares that could be issued under various compensation plans as well as by the dilutive effect of stock options based on the treasury stock method in the calculation of diluted earnings per share.

The following table sets forth the computations of basic and diluted earnings per share (amounts in millions, except per share data):

Net Income Per Common Share:	2018				2017				2016
Net income	$	333.8			$	227.2			$	190.9
Basic earnings per common share:
Weighted average common shares outstanding	35.8				35.2				34.6
Basic earnings per common share	$	9.32			$	6.45			$	5.52
Diluted earnings per share:
Weighted average common shares outstanding	35.8				35.2				34.6
Effect of diluted securities	1.2				1.1				0.9
Weighted average diluted common shares outstanding	37.0				36.3				35.5
Diluted earnings per common share	$	9.01			$	6.26			$	5.37

For 2018, 2,580 stock options were excluded in the computation of diluted earnings per share because they had exercise prices that were greater than the weighted average market price of the Company’s common stock during the year. For 2017 and 2016, no stock options were excluded in the computation of diluted earnings per share.

For 2018, 2017 and 2016, stock options to purchase 2.1 million, 2.3 million and 2.2 million shares of common stock, respectively, had exercise prices that were less than the average market price of the Company’s common stock during the respective periods and are included in the computation of diluted earnings per share.

In addition, no contingent shares of the Company’s common stock under the restricted stock or performance share compensation plans were excluded from fully diluted shares outstanding for 2018, 2017 or 2016.

Accounts Receivable

Accounts receivables are presented net of an allowance for doubtful accounts of $6.8 million at December 30, 2018, and $10.3 million at December 31, 2017. Expense recorded for the allowance for doubtful accounts was $0.6 million, $4.2 million and $0.7 million for 2018, 2017 and 2016, respectively. An allowance for doubtful accounts is established for losses expected to be incurred on accounts receivable balances. Judgment is required in the estimation of the allowance and is based upon specific identification, collection history and creditworthiness of the debtor. Trade credit is extended based upon evaluations of each customer’s ability to perform its obligations, which are updated periodically.

Cash

Cash totaled $142.5 million at December 30, 2018, of which $126.6 million was held by foreign subsidiaries of Teledyne.

Inventories

Inventories are stated at the lower of cost or net realizable value, less progress payments. The majority of inventory values are valued on an average cost or first-in, first-out method, while the remainder are stated at cost based on the last-in, first-out method. Costs include direct material, direct labor, applicable manufacturing and engineering overhead, and other direct costs. Additionally, certain inventory costs are also reflective of the estimates used in applying the percentage-of-completion revenue recognition method. Judgment is required when establishing reserves to reduce the carrying amount of inventory to market or net realizable value. Inventory reserves are recorded when inventory is considered to be excess or

obsolete based upon an analysis of actual on-hand quantities on a part-level basis to forecasted product demand and historical usage.

Property, Plant and Equipment

Property, plant and equipment is capitalized at cost. Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are determined using a combination of accelerated and straight-line methods over the estimated useful lives of the various asset classes. Buildings and building improvements are depreciated over periods not exceeding 45 years, equipment over 5 to 18 years, computer hardware and software over 3 to 7 years and leasehold improvements over the shorter of the estimated remaining lives or lease terms. Significant improvements are capitalized while maintenance and repairs are charged to expense as incurred. Depreciation expense on property, plant and equipment, including assets under capital leases, was $73.5 million in 2018, $65.9 million in 2017 and $57.6 million in 2016.

Goodwill and Other Intangible Assets

Business acquisitions are accounted for under the acquisition method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill.

Goodwill and intangible assets with indefinite lives are not amortized, but tested at least annually for impairment. The Company performs an annual impairment test for goodwill and other indefinite-lived intangible assets in the fourth quarter of each year, or more often as circumstances require. The Company uses qualitative and quantitative approaches when testing goodwill for impairment. For selected reporting units under the qualitative approach, the Company performs a qualitative evaluation of events and circumstances impacting the reporting unit to determine the likelihood of goodwill impairment. Based on that qualitative evaluation, if the Company determine it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, no further evaluation is necessary. Otherwise the Company performs a quantitative impairment test. The Company performs quantitative tests for reporting units at least once every three years. However, for certain reporting units the Company may perform a quantitative impairment test every year.

The two-step quantitative impairment test is used to first identify potential goodwill impairment and then measure the amount of goodwill impairment loss, if any. When it is determined that an impairment has occurred, an appropriate charge to operations is recorded. The results of our annual impairment tests of goodwill indicated that no impairment existed in 2018, 2017 or 2016.

The Company reviews intangible assets subject to amortization for impairment whenever events or circumstances indicate that the carrying value of the asset may not be recoverable. Acquired intangible assets with finite lives are amortized and reflected in the segment’s operating income over their estimated useful lives. The Company assesses the recoverability of the carrying value of assets held for use based on a review of projected undiscounted cash flows. Impairment losses, where identified, are determined as the excess of the carrying value over the estimated fair value of the long-lived asset. Recorded impairment charges to acquired intangibles assets were not material in 2018, 2017 or 2016.

Deferred Compensation Plan

The Company has a non-qualified executive deferred compensation plan that provides supplemental retirement income benefits for a select group of management. This plan permits eligible employees to make salary and bonus deferrals that are 100% vested. We have an unsecured obligation to pay in the future the value of the deferred compensation adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. As of December 30, 2018 and December 31, 2017, $52.4 million and $55.3 million, respectively, is included in other long-term liabilities related to these deferred compensation liabilities. Additionally, the Company purchased life insurance policies on certain participants to potentially offset these unsecured obligations. These policies are recorded at their cash surrender value as determined by the insurance carrier. The cash surrender value of these policies was $56.1 million and $57.2 million, as of December 30, 2018 and December 31, 2017, respectively, and are recorded in other non-current assets.

Environmental

Costs that mitigate or prevent future environmental contamination or extend the life, increase the capacity or improve the safety or efficiency of property utilized in current operations are capitalized. Other costs that relate to current operations or an existing condition caused by past operations are expensed in the period incurred. Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable, which is generally not later than the completion of the feasibility study or the Company’s recommendation of a remedy or commitment to an appropriate plan of action. The accruals are reviewed periodically and, as investigations and remediations proceed, adjustments are made as necessary. Accruals for losses from environmental remediation obligations do not consider the

effects of inflation, and anticipated expenditures are not discounted to their present value. The accruals are not reduced by possible recoveries from insurance carriers or other third parties, but do reflect anticipated allocations among potentially responsible parties at federal Superfund sites or similar state-managed sites and an assessment of the likelihood that such parties will fulfill their obligations at such sites. The measurement of environmental liabilities by the Company is based on currently available facts, present laws and regulations, and current technology. Such estimates take into consideration the Company’s prior experience in site investigation and remediation, the data concerning cleanup costs available from other companies and regulatory authorities, and the professional judgment of the Company’s environmental personnel in consultation with outside environmental specialists, when necessary. The Company’s reserves for environmental remediation obligations totaled $6.0 million and $5.1 million at December 30, 2018 and December 31, 2017, respectively.

Foreign Currency Translation

The Company’s foreign entities’ accounts are generally measured using local currency as the functional currency. Assets and liabilities of these entities are translated at the exchange rate in effect at year-end. Revenues and expenses are translated at average month end rates of exchange prevailing during the year. Unrealized translation gains and losses arising from differences in exchange rates from period to period are included as a component of AOCI.

Hedging Activities/Derivative Instruments

Teledyne transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in Canadian dollars for our Canadian companies, including DALSA and in British pounds for our U.K. companies, including e2v. These contracts are designated and qualify as cash flow hedges. The Company has also converted a U.S. dollar denominated, variable rate debt obligation into a euro fixed rate obligation using a receive-float, pay fixed cross currency swap. This cross currency swap is designated as a cash flow hedge.

The effectiveness of the cash flow hedge forward contracts, excluding time value, is assessed prospectively and retrospectively on a monthly basis using regression analysis, as well as using other timing and probability criteria. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows on hedged transactions. The effective portion of the cash flow hedge contracts’ gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of AOCI in stockholders’ equity until the underlying hedged item is reflected in our consolidated statements of income, at which time the effective amount in AOCI is reclassified to cost of sales in our consolidated statements of income. Net deferred losses recorded in AOCI, net of tax, for forward contracts that will mature in the next 12 months total $2.8 million. These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item. Amounts related to the cross currency swap expected to be reclassified from AOCI into income in the coming 12 months total $0.1 million.

In the event that the gains or losses in AOCI are deemed to be ineffective, the ineffective portion of gains or losses resulting from changes in fair value, if any, is reclassified to other income and expense. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they will occur, within the defined hedge period, the gains or losses on the related cash flow hedges will be reclassified from AOCI to other income and expense. During the current reporting period, all forecasted transactions occurred and, therefore, there were no such gains or losses reclassified to other income and expense. As of December 30, 2018, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and to sell U.S. dollars totaling $81.6 million. These foreign currency forward contracts have maturities ranging from March 2019 to February 2020. Teledyne had foreign currency forward contracts designated as cash flow hedges to buy British pounds and to sell U.S. dollars totaling $17.2 million. These foreign currency forward contracts have maturities ranging from March 2019 to April 2020. The cross currency swap has notional amounts of 93.0 million euros equivalent to $100.0 million, matures in October 2019.

In addition, the Company utilizes foreign currency forward contracts which are not designated as hedging instruments for accounting purposes to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. As of December 30, 2018, Teledyne had foreign currency contracts of this type in the following pairs (in millions):

Contracts to Buy					Contracts to Sell
Currency	Amount				Currency	Amount
Canadian Dollars	C$	77.0			U.S. Dollars	US$	57.1
Euros	€	28.5			U.S. Dollars	US$	32.7
Great Britain Pounds	£	1.2			Australian Dollars	A$	2.1
Great Britain Pounds	£	35.4			U.S. Dollars	US$	44.9
Canadian Dollars	C$	23.7			Euros	€	15.2
U.S. Dollars	US$	0.9			Japanese Yen	¥	100.0
Singapore Dollars	S$	2.3			U.S. Dollars	US$	1.7
Danish Krone	Kr.	65.0			U.S. Dollars	US$	10.0
Great Britain Pounds	£	9.0			Euros	€	10.0

The above table includes non-designated hedges derived from terms contained in triggered or previously designated cash flow hedges. The gains and losses on these derivatives which are not designated as hedging instruments, are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.

All derivatives are recorded on the balance sheet at fair value. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. Teledyne does not use foreign currency forward contracts for speculative or trading purposes.

The effect of derivative instruments designated as cash flow hedges for 2018 and 2017 was as follows (in millions):

		2018				2017
Net gain (loss) recognized in AOCI (a)		$	1.2			$	(3.8	)
Net gain (loss) reclassified from AOCI into cost of sales (a)		$	2.1			$	(0.9	)
Net gain reclassified from AOCI into interest expense		$	2.4			$	1.3
Net gain (loss) reclassified from AOCI into other income and expense, net (b)		$	4.2			$	(10.7	)
Net foreign exchange loss recognized in other income and expense, net (c)		$	(0.5	)		$	(0.7	)

(a)Effective portion

(b)Amount reclassified to offset earnings impact of liability hedged by cross currency swap

(c)Amount excluded from effectiveness testing

The effect of derivative instruments not designated as cash flow hedges recognized in other income and expense for 2018 and 2017 was a loss of $24.8 million and $2.9 million, respectively.

The Company has elected to use the income approach to value the derivatives, using observable Level 2 market expectations at measurement date and standard valuation techniques to convert future amounts to a single present amount. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR and EURIBOR) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and EURIBOR cash and swap rates, foreign currency forward rates and cross currency basis spreads). Mid-market pricing is used as a practical expedient for fair value measurements. The fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty. Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position has also been factored into the fair value measurement of the derivative instruments and did not have a material impact on the fair value of these derivative instruments. Both the counterparty and the Company are expected to continue to perform under the contractual terms of the instruments.

The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy (in millions):

Asset/(Liability) Derivatives	Balance sheet location		December 30, 2018				December 31, 2017
Derivatives designated as hedging instruments:
Cash flow forward contracts	Other assets		$	—			$	3.8
Cash flow cross currency swaps	Other assets		—				2.2
Cash flow forward contracts	Accrued liabilities		(4.2		)		—
Cash flow cross currency swaps	Accrued liabilities		(6.3		)		—
Cash flow cross currency swaps	Other long-term liabilities		—				(13.9		)
Total derivatives designated as hedging instruments			(10.5		)		(7.9		)
Derivatives not designated as hedging instruments:
Non-designated forward contracts	Other current assets		—				4.9
Non-designated forward contracts	Accrued liabilities		(0.6		)		(1.2		)
Total derivatives not designated as hedging instruments			(0.6		)		3.7
Total liability derivatives			$	(11.1	)		$	(4.2	)

Supplemental Cash Flow Information

Cash payments for federal, foreign and state income taxes were $64.7 million for 2018, which are net of $7.6 million in tax refunds. Cash payments for federal, foreign and state income taxes were $36.7 million for 2017, which are net of $8.5 million in tax refunds. Cash payments for federal, foreign and state income taxes were $24.6 million for 2016, which are net of $1.4 million in tax refunds. Cash payments for interest and credit facility fees totaled $28.1 million, $32.4 million and $23.6 million for 2018, 2017 and 2016, respectively.

Fair Value Measurements

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The Company uses the following three levels of inputs in determining the fair value of the Company’s assets and liabilities, focusing on the most observable inputs when available:

•	Level 1-Quoted prices in active markets for identical assets or liabilities.

•

Level 2-Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

•	Level 3-Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.

Related Party Transactions

For all periods presented, the Company had no material related party transactions that required disclosure.

Recent Accounting Standards

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, to address a specific consequence of the Tax Cuts and Jobs Act (“Tax Act”) by allowing a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Act reduction of the U.S. federal corporate income tax rate. The guidance is effective for all entities for annual periods

beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. In the third quarter of 2018, Teledyne elected to early adopt this ASU and elected to reclassify, in the period of enactment, stranded tax effects totaling $47.6 million from AOCI to retained earnings in its consolidated balance sheet. The reclassification amount primarily included income tax effects related to our pension and postretirement benefit plans. Income tax effects remaining in AOCI will be released into earnings as the related pretax amounts are reclassified to earnings.

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities.” This ASU better aligns an entity’s risk management activities and financial reporting for hedging relationships. This ASU expands and refines hedge accounting for both nonfinancial and financial risk components, and this ASU simplifies and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This ASU is effective for fiscal years beginning after December 15, 2018 and for interim periods therein, with early adoption permitted. Teledyne is currently evaluating the impact this guidance will have on the consolidated financial statements and footnote disclosures.

In March 2017, the FASB issued ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU requires the service cost component of net benefit costs to be disaggregated from all other components and be reported in the same line item or items as other compensation costs and allow only the service cost component to be eligible for capitalization when applicable. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and before income from operations. The Company adopted the requirements of this ASU as of January 1, 2018 on a retrospective basis. As such, the Company recast its 2017 and 2016 financial statements to conform to the current period presentation. The adoption of this standard did not impact pre-tax income or earnings per share reported for the years ended December 31, 2017 and January 1, 2017 and did not have a material impact on our Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which eliminates the computation of the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record a goodwill impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The new standard, will be effective for the Company prospectively for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We expect the adoption of this standard will reduce the complexity surrounding the evaluation of goodwill for impairment. The impact of this new standard for the Company will depend on the outcomes of future goodwill impairment tests.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted for any entity in any interim or annual period. Teledyne elected to adopt early this ASU in the third quarter of 2016, therefore Teledyne is required to report the material impacts of this standard as though the ASU had been adopted at the beginning of the fiscal year. Accordingly, Teledyne recognized additional income tax benefits as an increase to net income of $8.5 million for 2016. Teledyne has elected to record forfeitures as they occur, which did not have a material impact on the consolidated financial results. The new guidance did not impact any periods prior to our 2016 fiscal year, as the changes were applied on a prospective basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new guidance requires lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. The new guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new guidance can be adopted using either a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented or a transition method whereby companies could continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption rather than in the earliest period presented without adjusting historical financial statements. We adopted the new standard on December 31, 2018, the beginning of our 2019 fiscal year using the modified retrospective transition option of applying the new standard at the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of a right-of-use asset and a lease liability of less than 4% of our total assets at December 30, 2018. The adoption of this standard did not have a material impact related to existing leases and as a result, a cumulative-effect adjustment was not recorded. The new standard also requires expanded disclosure

regarding the amounts, timing and uncertainties of cash flows related to a company’s lease portfolio. We are evaluating these disclosure requirements and are incorporating the collection of relevant data into our processes in preparation for disclosure in 2019. We do not expect the new standard to have a material impact on our results of operations and/or cash flows. Please refer to Note 13 of the Notes to Consolidated Financial Statements included in this Form 10-K for additional information about the Company’s leases, including the future minimum lease payments of the Company’s operating leases at December 30, 2018.

In May 2014, the FASB issued ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseded most current revenue recognition guidance under Topic 605, Revenue Recognition. Under the new standard, an entity recognizes revenue when or as it satisfies a performance obligation by transferring control of a good or service to the customer, either at a point in time or over time. The new standard requires expanded disclosures, including how and when we satisfy performance obligations as well as additional disaggregated revenue information to be provided more frequently in the reporting process.

The Company adopted the requirements of Topic 606 as of January 1, 2018, using the modified retrospective transition method which required a cumulative-effect adjustment as of the date of adoption. Adoption of Topic 606 primarily impacted contracts for which revenue prior to fiscal year 2018 was recognized using the percentage of completion (“POC”), units-of-delivery or milestone methods, as these contracts are now recognized primarily using the POC cost-to-cost method to depict the transfer of control of the good or service to the customer as the work on the contract is performed. Also, to a much lesser extent, certain contracts for customized goods and services, certain products sold to the U.S. Government, and product repair contracts are now recognized over time, as control of the good or service produced transfers to the customer over time in accordance with the guidance in Topic 606. For impacted contracts that were in process at December 31, 2017, we calculated the difference in the life to date revenue (and related costs and expenses) between legacy accounting standards and Topic 606, with the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of retained earnings, as shown below. The prior year comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. While Topic 606 includes additional disclosures, as discussed within these Notes to the consolidated financial statements, comparative disclosures with prior periods are not required in the year of adoption due to our use of the modified retrospective transition method. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of Topic 606 were as follows (in millions):

		Balance at December 31, 2017				Topic ASC 606 Adjustments			Balance at January 1, 2018
Assets
Accounts receivable, net		$	388.3			1.0			$	389.3
Unbilled receivables, net		$	89.8			29.0			$	118.8
Inventories, net		$	400.2			(24.8	)		$	375.4
Liabilities
Accrued liabilities		$	345.3			1.9			$	347.2
Stockholders’ Equity
Retained earnings		$	2,139.6			3.3			$	2,142.9

In accordance with the requirements of Topic 606, the disclosure of the impact of adoption on the consolidated income statement and balance sheet for the year ended December 30, 2018 was as follows (in millions):

	For the year ended December 30, 2018
	As Reported				Topic ASC 606 Adjustments			Without ASC 606 Adoption
Net sales	$	2,901.8			(52.3	)		$	2,849.5
Cost of sales	$	1,791.0			(35.9	)		$	1,755.1
Provision for income taxes	$	60.1			(4.1	)		$	56.0
Net income	$	333.8			(12.3	)		$	321.5

		As of December 30, 2018
		Balance as Reported				Topic ASC 606 Adjustments			Balance Without ASC 606 Adoption
Assets
Accounts receivable, net		$	416.5			(1.4	)		$	415.1
Unbilled receivables, net		$	145.3			(67.1	)		$	78.2
Inventories, net		$	364.3			46.3			$	410.6
Liabilities
Accrued liabilities		$	354.7			(6.6	)		$	348.1
Stockholders' Equity
Retained earnings		$	2,523.7			(15.6	)		$	2,508.1

Note 3. Business Acquisitions, Goodwill and Acquired Intangible Assets

The Company spent $3.1 million, $774.1 million and $93.4 million on acquisitions and other investments in 2018, 2017 and 2016, respectively, net of any cash acquired.

2017 Acquisitions

On March 28, 2017, Teledyne completed the acquisition of all of the outstanding common stock of e2v technologies plc (“e2v”) for $770.7 million, including stock options and assumed debt, net of $24.4 million of cash acquired. e2v provides high performance image sensors and custom camera solutions and application specific standard products for the machine vision market. In addition, e2v provides high performance space qualified imaging sensors and arrays for space science and astronomy. e2v also produces components and subsystems that deliver high reliability radio frequency power generation for healthcare, industrial and defense applications. Finally, e2v provides high reliability semiconductors and board-level solutions for use in aerospace, space and communications applications. Teledyne funded the acquisition of e2v with borrowings under its credit facility and cash on hand as well as $100.0 million in a newly issued term loan.

Most of e2v’s operations are included in the Digital Imaging and Aerospace and Defense Electronics segments. The Instrumentation segment includes a small portion of e2v’s operations. Principally located in Chelmsford, United Kingdom and Grenoble, France, e2v had sales of approximately £236 million for its fiscal year ended March 31, 2016. e2v’s results have been included since the date of the acquisition and include $274.2 million in net sales and operating income of $37.3 million, which included $8.3 million in acquisition-related costs and $11.2 million in additional intangible asset amortization expense for 2017.

Fiscal year 2017 includes pretax charges of $27.0 million related to the acquisition of e2v, which included $13.0 million in transaction costs, including stamp duty, advisory, legal and other consulting fees and other costs recorded to selling, general and administrative expenses, $5.7 million in inventory fair value step-up amortization expense recorded to cost of sales, $2.3 million in bank bridge facility commitment expense recorded to interest expense and $6.0 million related to a foreign currency option contract expense to hedge the e2v purchase price recorded as other expense. Of these amounts, $8.0 million impacted the Digital Imaging segment and $0.3 million impacted the Aerospace and Defense segment operating results. Fiscal year 2016 includes pretax charges of $7.9 million related to the acquisition of e2v, of which, $1.9 million was recorded to selling, general and administrative expenses, $0.5 million was recorded to interest expense and $5.5 million was recorded as other expense.

On July 20, 2017, a subsidiary of Teledyne acquired assets of Scientific Systems, Inc. (“SSI”) for an initial cash payment of $31.0 million. A subsequent cash payment of $0.3 million related to a purchase price adjustment was made in 2017. Headquartered in State College, PA, SSI manufactures precision components and specialized subassemblies used primarily in analytical and diagnostic instrumentation, such as High Performance Liquid Chromatography systems and specific medical devices and is part of the Instrumentation segment.

2016 Acquisitions

On December 6, 2016, Teledyne Instruments, Inc. acquired Hanson Research Corporation (“Hanson Research”) for $25.0 million in cash. Hanson Research, headquartered in Chatsworth, California, specializes in analytical instrumentation for the pharmaceutical industry.

On November 2, 2016, Teledyne Instruments, Inc. acquired assets of IN USA, Inc. (“IN USA”) for $10.2 million in cash. IN USA, headquartered in Norwood, Massachusetts, manufactures a range of ozone generators, ozone analyzers and other gas monitoring instruments utilizing ultraviolet and infrared based technologies. Teledyne relocated and consolidated manufacturing into the owned facility of Teledyne Advanced Pollution Instrumentation in San Diego, California.

On May 3, 2016, Teledyne DALSA, Inc., a Canadian-based subsidiary, acquired the assets and business of CARIS, Inc. (“CARIS”) for an initial cash payment of $26.2 million, net of cash acquired. Based in Fredericton, New Brunswick, Canada, CARIS is a leading developer of geospatial software designed for the hydrographic and marine community.

On April 15, 2016, Teledyne LeCroy, Inc., a U.S.-based subsidiary, acquired assets of Quantum Data, Inc. (“Quantum Data”) for $17.3 million in cash. Based in Elgin, Illinois, Quantum Data provides electronic test and measurement instrumentation and is a market leader in video protocol analysis test tools. On April 6, 2016, Teledyne LeCroy, Inc. also acquired Frontline Test Equipment, Inc. (“Frontline”) for $13.7 million in cash. Based in Charlottesville, Virginia, Frontline provides electronic test and measurement instrumentation and is a market leader in wireless protocol analysis test tools. Each of the 2016 acquisitions are part of the Instrumentation segment except for CARIS which is part of the Digital Imaging segment.

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

Other

The primary reasons for the above acquisitions were to strengthen and expand our core businesses through adding complementary product and service offerings, allowing greater integrated products and services, enhancing our technical capabilities or increasing our addressable markets. The significant factors that resulted in recognition of goodwill were: (a) the purchase price was based on cash flow and return on capital projections assuming integration with our businesses and (b) the calculation of the fair value of tangible and intangible assets acquired that qualified for recognition. Teledyne funded the acquisitions primarily from borrowings under its credit facilities, issuance of senior notes and term loans and cash on hand.

Teledyne’s goodwill was $1,735.2 million at December 30, 2018, and $1,776.7 million at December 31, 2017. The decrease in the balance of goodwill in 2018 resulted from the impact of exchange rate changes, partially offset by adjustments for the purchase accounting allocation for the e2v and SSI acquisitions. Teledyne’s net acquired intangible assets were $344.3 million at December 30, 2018, and $398.9 million at December 31, 2017. The decrease in the balance of acquired intangible assets in 2018 primarily resulted from the amortization of acquired intangible assets, partially offset by the impact of exchange rate changes. The Company’s cost to acquire the 2017 acquisitions has been allocated to the assets acquired and liabilities assumed based upon their respective fair values as of the date of the completion of the acquisition. The differences between the fair value of the consideration paid and the estimated fair value of the assets and liabilities acquired has been recorded as goodwill. The Company completed the process of specifically identifying the amount to be assigned to certain assets, including acquired intangible assets, and liabilities and the related impact on taxes and goodwill for the e2v and SSI acquisitions, resulting in an increase to goodwill of $3.9 million for e2v and $4.8 million for SSI in 2018.

The following table presents proforma net sales, net income and earnings per share data assuming e2v was acquired at the beginning of the 2016 fiscal year:

	Fiscal Year (a)
(unaudited - in millions, except per share amounts)	2017				2016
Net sales	$	2,696.8			$	2,491.8
Net income	$	209.8			$	183.6
Basic earnings per common share	$	5.96			$	5.31
Diluted earnings per common share	$	5.78			$	5.17
a) The above unaudited proforma information is presented for the e2v acquisition as it is considered a material acquisition.

The following tables show the purchase price (net of cash acquired), goodwill acquired and intangible assets acquired for the acquisitions made in 2017 (in millions):

		2017
Acquisitions		Acquisition Date		Cash Paid (a)				Goodwill Acquired				Acquired Intangible Assets
e2v		March 28, 2017		$	740.6			$	494.3			$	172.3
SSI		July 20, 2017		31.3				18.6				4.8
Other Investments				2.2				0.6				0.4
				$	774.1			$	513.5			$	177.5
(a) Net of any cash acquired.

Fair values allocated to the assets acquired and liabilities assumed (in millions):		2017
Current assets, excluding cash acquired		$	149.6
Property, plant and equipment		94.5
Goodwill		513.5
Acquired intangible assets		177.5
Other long-term assets		9.8
Total assets acquired		944.9
Current liabilities		(82.6		)
Long-term liabilities		(88.2		)
Total liabilities assumed		(170.8		)
Cash paid, net of cash acquired		$	774.1

The following table is a summary at the acquisition date of the acquired intangible assets and weighted average useful life in years for the acquisitions made in 2017 (dollars in millions):

		2017
Intangibles subject to amortization:		Intangible Assets				Weighted average useful life in years
Proprietary technology		$	102.5			11.7
Customer list/relationships		25.2				12.9
Backlog		3.0				0.8
Trademarks		—				n/a
Total intangibles subject to amortization		130.7				11.6
Intangibles not subject to amortization:
Trademarks		46.8				n/a
Total acquired intangible assets		$	177.5			n/a
Goodwill		$	513.5			n/a

Goodwill resulting from the SSI acquisition will be deductible for tax purposes. Goodwill resulting from the e2v acquisition will not be deductible for tax purposes.

Goodwill (in millions):		Instrumentation				Digital Imaging				Aerospace and Defense Electronics				Engineered Systems				Total
Balance at January 1, 2017		$	713.3			$	317.4			$	139.4			$	23.4			$	1,193.5
Current year acquisitions		25.8				441.3				37.7				—				504.8
Foreign currency changes		17.3				56.9				4.9				(0.7		)		78.4
Balance at December 31, 2017		756.4				815.6				182.0				$	22.7			1,776.7
Current year acquisitions		1.8				—				—				—				1.8
Foreign currency changes and other (a)		(3.5		)		(5.9		)		(33.5		)		(0.4		)		(43.3		)
Balance at December 30, 2018		$	754.7			$	809.7			$	148.5			$	22.3			$	1,735.2

(a)	Certain prior period balances have been recast due to a business realignment between the Aerospace and Defense Electronics segment and the Digital Imaging segment. Please refer to Note 12 Business Segments of the Notes to Consolidated Financial Statements included in this Form 10-K for further information.

		2018												2017
		Gross carrying amount				Accumulated amortization				Net carrying amount				Gross carrying amount				Accumulated amortization				Net carrying amount
Other acquired intangible assets (in millions):
Proprietary technology		$	313.7			$	179.8			$	133.9			$	329.6			$	159.4			$	170.2
Customer list/relationships		148.8				90.9				57.9				153.2				82.7				70.5
Patents		0.7				0.6				0.1				0.7				0.6				0.1
Non-compete agreements		0.9				0.9				—				0.9				0.9				—
Trademarks		3.9				3.0				0.9				3.9				2.7				1.2
Backlog		15.6				15.6				—				16.3				15.9				0.4
Other acquired intangible assets subject to amortization		483.6				290.8				192.8				504.6				262.2				242.4
Other acquired intangible assets not subject to amortization:
Trademarks		151.5				—				151.5				156.5				—				156.5
Total other acquired intangible assets		$	635.1			$	290.8			$	344.3			$	661.1			$	262.2			$	398.9

Amortizable other intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from one to 15 years. Consistent with Teledyne’s growth strategy, we seek to acquire companies in markets characterized by high barriers to entry and that include specialized products not likely to be commoditized. Given our markets and highly engineered nature of our products, the rates of new technology development and customer acquisition and/or attrition are often not volatile. As such, we believe the value of acquired intangible assets decline in a linear, as opposed to an accelerated fashion, and we believe amortization on a straight-line basis is appropriate.

The Company recorded $39.5 million, $41.4 million and $28.3 million in amortization expense in 2018, 2017 and 2016, respectively, for other acquired intangible assets. The expected future amortization expense for the next five years is as follows (in millions): 2019 - $29.1; 2020 - $27.5; 2021 - $26.5; 2022 - $23.7; 2023 - $19.8.

The estimated remaining useful lives by asset category as of December 30, 2018, are as follows:

Intangibles subject to amortization		Weighted average remaining useful life in years
Proprietary technology		6.5
Customer list/relationships		6.8
Patents		3.6
Backlog		n/a
Trademarks		5.5
Total intangibles subject to amortization		6.5

Note 4. Financial Instruments

The Company had no cash equivalents at December 30, 2018 or December 31, 2017. The fair value of the Company’s forward currency contracts as of December 30, 2018 and December 31, 2017, are disclosed in Note 2, “Hedging Activities/Derivative Instruments,” of the Notes to Consolidated Financial Statements below and are based on Level 2 inputs. The fair value of the Company’s senior unsecured notes as described in Note 9, “Long-Term Debt,” of the Notes to Consolidated Financial Statements approximated the carrying value based upon Level 2 inputs at December 30, 2018 and December 31, 2017. The fair value of the Company’s credit facility, term loans and other debt, also described in Note 9, at December 30, 2018 and December 31, 2017, approximates the carrying value due to the variable market rate used to calculate interest payments. The Company does not have any other significant financial assets or liabilities that are measured at fair value. The carrying value of other on-balance-sheet financial instruments approximates fair value, and the cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.

Note 5. Accounts Receivable

Accounts Receivable and Unbilled Receivables (in millions):		Balance at year-end
		2018				2017
Commercial and other billed receivables		$	381.9			$	372.4
Commercial and other unbilled receivables		96.4				47.4
U.S. Government and prime contractors contract receivables:
Billed receivables		41.3				26.2
Unbilled receivables		48.9				42.4
		568.5				488.4
Allowance for doubtful accounts		(6.7		)		(10.3		)
Total accounts receivable and unbilled receivable, net		$	561.8			$	478.1

Unbilled contract receivables represent accumulated costs and profits earned but not yet billed to customers. The Company believes that substantially all such amounts will be billed and collected within one year.

Note 6. Inventories

Inventories (in millions):		Balance at year-end
		2018				2017
Raw materials and supplies		$	205.6			$	200.2
Work in process		117.5				157.9
Finished goods		50.5				54.1
		373.6				412.2
Progress payments		—				(1.4		)
Reduction to LIFO cost basis		(9.3		)		(10.6		)
Total inventories, net		$	364.3			$	400.2

Inventories at cost determined on the LIFO method were $42.3 million at December 30, 2018, and $63.6 million at December 31, 2017. The remainder of the inventories using average cost or the FIFO methods, were $331.3 million at December 30, 2018, and $348.6 million at December 31, 2017. Certain inventory costs are also reflective of the estimates used in applying the percentage-of-completion revenue recognition method.

The Company recorded $0.1 million in LIFO income in 2018, $2.9 million in LIFO income in 2017 and $0.7 million of LIFO income in 2016.

Note 7. Supplemental Balance Sheet Information

Property, plant and equipment (in millions):		Balance at year-end
		2018				2017
Land		$	59.6			$	61.4
Buildings		254.7				256.6
Equipment and software		694.3				656.4
		1,008.6				974.4
Accumulated depreciation and amortization		(566.0		)		(531.6		)
Total property, plant and equipment, net		$	442.6			$	442.8

The following table presents the balance of selected components of Teledyne’s balance sheet (in millions):

Balance sheet items	Balance sheet location		December 30, 2018				December 31, 2017
Salaries and wages	Accrued liabilities		$	116.5			$	121.6
Customer related accruals, deposits and credits	Accrued liabilities		$	111.6			$	109.6
Deferred tax liabilities	Other long-term liabilities		$	51.2			$	61.8

Note 8. Stockholders’ Equity

Common stock and treasury stock activity:		Common Stock			Treasury Stock
Balance, January 3, 2016		37,697,865			3,183,266
Acquired		—			138,831
Issued		—			(734,994	)
Balance, January 1, 2017		37,697,865			2,587,103
Issued		—			(429,471	)
Balance, December 31, 2017		37,697,865			2,157,632
Issued		—			(547,064	)
Balance, December 30, 2018		37,697,865			1,610,568

Shares issued include stock options exercised as well as shares issued under certain compensation plans.

Treasury Stock

On January 27, 2015, the Company’s Board of Directors authorized a stock repurchase program authorizing the Company to repurchase up to 2,500,000 shares of its common stock. On January 26, 2016, the Company’s Board of Directors authorized an additional stock repurchase program authorizing the Company to repurchase up to an additional 3,000,000 shares of its common stock. In 2015, the Company spent $243.8 million to repurchase a total of 2,561,815 shares of its common stock. The 2015 and 2016 stock repurchase authorizations are expected to remain open continuously, with respect to the shares remaining thereunder, and the number of shares repurchased will depend on a variety of factors, such as share price, levels of cash and borrowing capacity available, alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. Future repurchases are expected to be funded with cash on hand and borrowings under the Company’s credit facility. No repurchases were made since 2015. Up to approximately three million shares may be repurchased under the stock repurchase programs.

Preferred Stock

Authorized preferred stock may be issued with designations, powers and preferences designated by the Board of Directors. There were no shares of preferred stock issued or outstanding in 2018, 2017 or 2016.

Stock Incentive Plan

Teledyne has long-term incentive plans which provide its Board of Directors the flexibility to grant restricted stock, restricted stock units, performance shares, non-qualified stock options, incentive stock options and stock appreciation rights to officers and employees of Teledyne. Employee stock options become exercisable in one-third increments on the first, second and third anniversary of the grant and have a maximum 10-year life.

Stock option compensation expense is recorded on a straight line basis over the appropriate vesting period, generally three years. The Company recorded $19.8 million, $14.2 million, and $11.6 million for stock option expense, for 2018, 2017 and 2016, respectively. The Company issues shares of common stock upon the exercise of stock options. On January 22, 2019, the Company granted 388,507 stock options to its employees at an exercise price of $217.39 per share.

The total pretax intrinsic value of options exercised during 2018 and 2017 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $69.6 million and $33.1 million, respectively. At December 30, 2018, the intrinsic value of stock options outstanding was $202.6 million and the intrinsic value of stock options exercisable was $156.6 million. During 2018 and 2017, the amount of cash received from the exercise of stock options was $37.2 million and $24.9 million, respectively.

At December 30, 2018, there was $26.0 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 1.3 years.

The fair value of stock options is determined by using a lattice-based option pricing model. The Company uses a combination of its historical stock price volatility and the volatility of exchange traded options, if any, on the Company stock to compute the expected volatility for purposes of valuing stock options granted. The period used for the historical stock price corresponded to the expected term of the options. The period used for the exchange traded options, if any, included the longest-dated options publicly available, generally three months. The expected dividend yield is based on Teledyne’s practice of not paying dividends. The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the options as of the grant date. The expected life in years is based on historical actual stock option exercise experience.

Stock option valuation assumptions:	2018			2017			2016
Expected dividend yield	—			—			—
Expected volatility	31.0	%		32.3	%		32.7	%
Risk-free interest rate	1.99% to 2.58%			1.0% to 2.5%			1.5	%
Expected life in years	6.8			7.2			7.2

Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2018, 2017 and 2016 was $71.89, $48.45 and $29.95, respectively.

Stock option transactions for Teledyne’s stock option plans are summarized as follows:

	2018							2017							2016
	Shares			Weighted Average Exercise Price				Shares			Weighted Average Exercise Price				Shares			Weighted Average Exercise Price
Beginning balance	2,285,703			$	83.73			2,175,442			$	70.44			2,383,870			$	63.74
Granted	376,065			$	192.28			543,880			$	123.40			520,310			$	78.46
Exercised	(516,927	)		$	71.95			(390,835	)		$	63.96			(687,018	)		$	52.54
Canceled or expired	(80,101	)		$	129.85			(42,784	)		$	92.79			(41,720	)		$	82.49
Ending balance	2,064,740			$	104.66			2,285,703			$	83.73			2,175,442			$	70.44
Options exercisable at end of period	1,257,766			$	78.26			1,443,241			$	70.35			1,530,847			$	65.52

The following table provides certain information with respect to stock options outstanding and stock options exercisable at December 30, 2018, under the stock option plans:

		Stock Options Outstanding									Stock Options Exercisable
Range of Exercise Prices		Shares			Weighted Average Exercise Price				Remaining life in years		Shares			Weighted Average Exercise Price
$20.70-$49.99		230,366			$	43.29			1.8		230,366			$	43.29
$50.00-$99.99		1,032,206			$	80.13			5.5		892,430			$	80.40
$100.00-$149.99		447,694			$	123.40			8.2		134,248			$	123.39
$150.00-$199.99		351,894			$	192.01			9.2		722			$	192.00
Over $199.99		2,580			$	231.98			9.7		—			$	—
		2,064,740			$	104.66			6.3		1,257,766			$	78.26

Performance Shares

Teledyne’s Performance Share Plan (“PSP”) provides grants of performance share units, which key officers and executives may earn if Teledyne meets specified performance objectives over a three-year period. Awards are payable in cash and to the extent available, shares of Teledyne common stock. Awards are generally paid to the participants in three annual installments after the end of the performance cycle so long as they remain employed by Teledyne (with an exception for retirement). Participants in the PSP program can elect to receive a cash payment in lieu of awarded shares to pay income taxes due with respect to an installment payment. The cash payment in lieu of awarded shares is based on the then current market value of Teledyne stock.

In February 2015, the performance cycle for the three-year period ending December 31, 2017, was set. Under the plan, and based on actual performance, the Company issued 6,481 shares in 2018 and 8,586 shares in 2019. A total of 15,578 remain to be issued in 2020.

In February 2018, the performance cycle for the three-year period ending December 31, 2020, was set. Under the plan, and based on actual performance, the maximum number of shares that could be issued in three equal installments in 2021, 2022 and 2023, is 51,123.

The calculated expense for each plan year was based on the expected cash payout and the expected shares to be issued, valued at the share price at the inception of the performance cycle, except for the shares that can be issued based on a market comparison. The expected expense for these shares was calculated using a lattice-based simulation which takes into consideration several factors including volatility, risk free interest rates and correlation of Teledyne’s stock price with the comparator, the Russell 2000 Index (for the 2018 performance cycle, the comparator is the Russell 1000). No adjustment to the calculated expense for the shares issued based on a market based comparison will be made regardless of the actual

performance. The Company recorded $5.1 million, $4.6 million and $2.1 million in compensation expense related to the PSP program for fiscal years 2018, 2017 and 2016, respectively.

Restricted Stock

Under Teledyne’s restricted stock award program selected officers and key executives receive a grant of stock equal to a specified percentage of the participant’s annual base salary at the date of grant. The restricted stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”. The restrictions have both time-based and performance-based components. The restricted period expires (and the restrictions lapse) on the third anniversary of the date of grant, subject to the achievement of stated performance objectives over a specified three-year performance period. If employment is terminated (other than by death, retirement or disability) during the restricted period, the stock grant is forfeited.

The calculated expense for restricted stock awards to employees is based on a lattice-based simulation which takes into consideration several factors including volatility, risk free interest rates and the correlation of Teledyne’s stock price with the comparator, the Russell 2000 Index (for the 2018 awards the comparator is the Russell 1000). No adjustment to the calculated expense will be made regardless of actual performance. The Company recorded $4.4 million, $2.7 million and $2.7 million in compensation expense related to restricted stock awards to employees, for fiscal years 2018, 2017 and 2016, respectively. At December 30, 2018, there was $2.7 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.5 years.

The following table shows restricted stock award activity for grants made to employees:

Restricted stock:		Shares			Weighted average fair value per share
Balance, January 3, 2016		99,636			$	81.15
Granted		37,104			$	72.91
Issued		(39,357	)		$	67.15
Forfeited/Canceled		(339	)		$	79.93
Balance, January 1, 2017		97,044			$	83.68
Granted		24,232			$	114.42
Issued		(30,704	)		$	87.98
Forfeited/Canceled		(2,136	)		$	82.53
Balance, December 31, 2017		88,436			$	90.63
Granted		16,733			$	171.80
Issued		(28,855	)		$	92.74
Forfeited/Canceled		(2,094	)		$	133.20
Balance, December 30, 2018		74,220			$	106.92

Non-employee directors each receive restricted stock units valued at $110,000 (or valued at $55,000 for a person who becomes a director for the first time after the date of the Annual Meeting). The restricted stock units generally vest one year following the date of grant and are settled in shares of common stock on the date of vesting unless a director has elected to defer settlement of the award until his or her separation from Board service. The annual expense related to non-employee director’s restricted stock units was approximately $1.0 million for each of 2018, 2017 and 2016.

The following table shows restricted stock award activity for grants made to non-employee directors:

Directors Restricted stock:		Shares			Weighted average fair value per share
Balance, January 3, 2016		9,534			$	108.95
Granted		10,305			$	96.00
Issued		(8,532	)		$	108.93
Balance, January 1, 2017		11,307			$	97.16
Granted		7,371			$	134.26
Issued		(10,305	)		$	96.00
Balance, December 31, 2017		8,373			$	131.25
Granted		5,112			$	193.39
Issued		(5,733	)		$	134.26
Balance, December 30, 2018		7,752			$	170.00

In December 2016, Teledyne granted 16,045 restricted stock units with a grant date fair value of $2.0 million to Teledyne’s then Chief Executive Officer, which vest in equal annual installments over three years. The calculated expense for restricted stock units is based on the market price of a share of Teledyne common stock at the grant date, which is recognized over the vesting period and was $0.7 million in 2018, $0.7 million in 2017 and less than $0.1 million in 2016. In December 2018, we issued 2,697 shares under the plan and 2,651 shares were withheld to pay income taxes. In December 2017, we issued 2,389 shares under the plan and 2,960 shares were withheld to pay income taxes.

Note 9. Long-Term Debt

Long-Term Debt (in millions):	December 30, 2018				December 31, 2017
$750.0 million revolving credit facility, due December 2020, weighted average rate of 5.50% at December 30, 2018 and 2.72% at December 31, 2017	$	29.0			$	165.0
Term Loans, weighted average rate of 2.94% at December 31, 2017	—				175.5
Term loan due October 2019, variable rate of 3.63% at December 30, 2018 and 2.8% at December 31, 2017, swapped to a Euro fixed rate of 0.7055% at December 31, 2017	100.0				100.0
2.61% Fixed Rate Senior Notes due December 2019	30.0				30.0
5.30% Fixed Rate Senior Notes due September 2020	75.0				75.0
2.81% Fixed Rate Senior Notes due November 2020	25.0				25.0
3.09% Fixed Rate Senior Notes due December 2021	95.0				95.0
3.28% Fixed Rate Senior Notes due November 2022	100.0				100.0
0.70% €50 Million Fixed Rate Senior Notes due April 2022	57.2				60.0
0.92% €100 Million Fixed Rate Senior Notes due April 2023	114.4				120.0
1.09% €100 Million Fixed Rate Senior Notes due April 2024	114.4				120.0
Other debt	8.8				2.7
Total long-debt	748.8				1,068.2
Current portion of long-term debt and debt issue costs	(138.7		)		(4.3		)
Total long-term debt, net of current portion	$	610.1			$	1,063.9

Future minimum principal payments on long-term debt are as follows: 2019 - $137.4 million; 2020 - $129.5 million; 2021 - $95.0 million; 2022 - $157.1 million; 2023 - $114.3 million; 2024 and beyond - $115.5 million. The Company has no sinking fund requirements.

In March 2017, Teledyne entered into a $100.0 million term loan with a maturity date of October 30, 2019. Subsequently, in March 2017, Teledyne entered into a cross currency swap to effectively convert the $100.0 million term loan to a €93.0 million denominated instrument with a fixed euro interest rate of 0.7055%. The proceeds from the term loan were used in connection with the acquisition of e2v. On April 18, 2017, Teledyne entered into a note purchase agreement for a private placement of €250.0 million of senior unsecured notes due through April 2024. Teledyne used the proceeds of the private placement, among other things, to repay indebtedness and for general corporate purposes.

The Company has a $750.0 million credit facility (“credit facility”) that matures in December 2020. The other material terms of the credit facility, including covenants, remain unchanged. Excluding interest and fees, no payments are due under the credit facility until it matures. The credit agreements require the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios. Borrowings under our credit facility and term loans are at variable rates which are, at our option, tied to a Eurocurrency rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as defined in our credit agreements. Eurocurrency rate loans may be denominated in U.S. dollars or an alternative currency as defined in the agreement. Eurocurrency or LIBOR-based loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. The Company has not drawn any loans with a term longer than three months under the credit facility. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate. Interest rates are also subject to change based on our consolidated leverage ratio as defined in the credit agreement. The credit agreement also provides for facility fees that vary between 0.12% and 0.25% of the credit line, depending on our consolidated leverage ratio as calculated from time to time. Available borrowing capacity under the credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $686.3 million at December 30, 2018. The credit agreement and term loans requires the Company to comply with various financial and operating covenants and at December 30, 2018, the Company was in compliance with these covenants. At year-end 2018, Teledyne had $41.3 million in outstanding letters of credit.

Total interest expense including credit facility fees and other bank charges was $29.2 million in 2018, $35.5 million in 2017 and $23.6 million in 2016.

Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates. The Company’s long-term debt was considered a level 2 fair value hierarchy and is valued based on observable market data. The estimated fair value of Teledyne’s long-term debt at December 30, 2018, and December 31, 2017, approximated the carrying value.

Note 10. Income Taxes

On December 22, 2017, the Tax Act was enacted, which significantly revised the U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing the territorial tax system and imposing a tax on deemed repatriation of non-U.S. earnings. The repatriation tax resulted in a net tax expense of $26.2 million and the remeasurement of U.S. deferred tax assets and liabilities resulted in a net tax benefit of $21.5 million, for a net provisional charge of $4.7 million recorded in the fourth quarter of 2017. The Company finalized its assessment of the Tax Act during the fourth quarter of 2018, resulting in a decrease of $0.8 million to the provisional charge and the repatriation tax. At December 30, 2018, $12.0 million of the repatriation tax remained to be paid. In February 2019, the remaining balance of $12.0 million was paid.

Income before income taxes included income from domestic operations of $243.7 million for 2018, $187.2 million for 2017 and $195.2 million for 2016. Income before taxes included income from foreign operations of $150.2 million for 2018, $99.8 million for 2017 and $46.1 million for 2016.

Income tax provision/(benefit) - (in millions):		2018				2017				2016
Current
Federal		$	22.9			$	54.0			$	43.0
State		8.1				6.4				3.9
Foreign		31.8				22.8				3.4
Total current		62.8				83.2				50.3
Deferred
Federal		2.3				(10.7		)		4.3
State		0.6				(3.6		)		(4.8		)
Foreign		(5.6		)		(9.1		)		0.6
Total deferred		(2.7		)		(23.4		)		0.1
Provision for income taxes		$	60.1			$	59.8			$	50.4

The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate:

Tax rate reconciliation:		2018			2017			2016
U.S. federal statutory income tax rate		21.0	%		35.0	%		35.0	%
State and local taxes, net of federal benefit		1.9			1.8			1.6
Research and development tax credits		(2.3	)		(3.2	)		(2.0	)
Investment tax credits		(1.2	)		(1.5	)		(1.8	)
Qualified production activity deduction		—			(1.3	)		(1.6	)
Foreign rate differential		1.1			(4.2	)		(2.7	)
Net reversals for unrecognized tax benefits		(0.3	)		(0.8	)		(1.5	)
Stock-based compensation (ASU No. 2016-09)		(3.3	)		(3.1	)		(3.5	)
Provisional charges related to U.S. tax reform		(0.2	)		1.6			—
Other		(1.4	)		(3.5	)		(2.6	)
Effective income tax rate		15.3	%		20.8	%		20.9	%

Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse.

The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense were as follows (in millions):

Deferred income tax assets:		2018				2017
Long-term:
Accrued liabilities		$	20.3			$	16.9
Inventory valuation		11.9				14.3
Accrued vacation		7.8				7.6
Deferred compensation and other benefit plans		20.0				11.6
Postretirement benefits other than pensions		2.5				3.0
Tax credit and net operating loss carryforward		43.8				49.8
Valuation allowance		(5.4		)		(8.8		)
Total deferred income tax assets		100.9				94.4
Deferred income tax liabilities:
Long-term:
Property, plant and equipment differences		20.5				28.6
Intangible amortization		112.0				113.4
Other		7.1				3.4
Total deferred income tax liabilities		139.6				145.4
Net deferred income tax liabilities		$	38.7			$	51.0

We intend to reinvest indefinitely the earnings of our material foreign subsidiaries in our operations outside of the United States. The cash that the Company's foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. We estimate that future domestic cash generation will be sufficient to meet future domestic cash requirements. Due to the Tax Act, U.S. federal and applicable state income taxes have been accrued for the deemed repatriation. At December 30, 2018, the amount of undistributed foreign earnings was $381.1 million, for which we have not recorded a deferred tax liability of approximately $2.1 million for state corporate income taxes which would be due if reinvested foreign earnings were repatriated. Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that we would no longer indefinitely reinvest the earnings outside the United States.

In assessing the need for a valuation allowance, we consider all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences, projected future taxable income, availability of taxable income in carryback periods and tax planning strategies. Based on a review of such information, management believes that it is possible that some portion of deferred tax assets will not be realized as a future benefit and therefore has recorded a valuation allowance. The valuation allowance for deferred tax assets decreased by $3.4 million in 2018, primarily related to the evidence for future utilization of the remaining investment tax credits.

At December 30, 2018, the Company had approximately $50.1 million of net operating loss carryforward from foreign entities primarily from the Company’s Danish entity, which has no expiration date. The Company had foreign capital loss carryforward in the amount of $2.0 million which has no expiration date. The Company also has federal capital loss carryforward in the amount of $1.3 million which expires in 2023. Also the Company had aggregate Canadian federal and provincial investment tax credits of $11.9 million, which have expiration dates of 2030 to 2039. In addition, the Company had domestic federal and state net operating loss carryforward of $3.5 million and $122.8 million, respectively. Generally, federal net operating loss carryforward amounts are limited in their use by earnings of certain acquired subsidiaries, and have expiration dates ranging from 2030 to 2037 and the state net operating loss carryforward amounts have expiration dates ranging from 2020 to 2038. Finally, the Company had federal research and development credit carryforward in the amount of $1.2 million which will expire between 2032 and 2035 and state tax credits of $11.8 million, of which $10.3 million have no expiration date and $1.5 million have expiration dates ranging from 2023 to 2033.

Unrecognized tax benefits (in millions):		2018				2017				2016
Beginning of year		$	26.0			$	24.5			$	28.8
Increase in prior year tax positions (a)		2.3				0.5				1.6
Increase for tax positions taken during the current period		2.1				9.8				1.6
Reduction related to settlements with taxing authorities		(0.1		)		—				—
Reduction related to lapse of the statute of limitations		(5.2		)		(8.8		)		(7.5		)
Impact of exchange rate changes		(0.1		)		—				—
End of year		$	25.0			$	26.0			$	24.5
a) Includes the impact of acquisitions in all years.

The Company anticipates the total unrecognized tax benefit for various federal, state and foreign tax items may be reduced by $4.4 million due to the expiration of statutes of limitation for various federal, state and foreign tax issues in the next 12 months.

We recognized net tax benefits and expense for interest and penalties related to unrecognized tax benefits within the provision for income taxes in our statements of operations of $0.3 million of expense, $0.5 million of benefit and $0.2 million of expense, for 2018, 2017 and 2016, respectively. Interest and penalties in the amount of $1.7 million, $1.4 million and $1.9 million were recognized in the 2018, 2017 and 2016 statement of financial position, respectively. Substantially all of the unrecognized tax benefits as of December 30, 2018, if recognized would affect our effective tax rate.

We file income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions. The Company has substantially concluded on all U.S. federal income tax matters for all years through 2014, United Kingdom and France tax matters for all years through 2014 and Canadian income tax matters for all years through 2010.

Note 11. Pension Plans and Postretirement Benefits

Pension Plans

Teledyne has a defined benefit pension plan covering substantially all U.S. employees hired before January 1, 2004, or approximately 12% of Teledyne’s active employees. As of January 1, 2004, new hires participate in a defined contribution plan only. The Company also has several small domestic non-qualified and foreign-based defined benefit pension plans.

The Company’s U.S. domestic qualified pension plan purchased group annuity contracts from insurance companies and paid a total annuity premium of $17.8 million in 2018 and $19.0 million in 2017. These annuity contracts transfer the obligation to the insurance companies to guarantee the full payment of all annuity payments to existing retired pension plan participants or their surviving beneficiaries. These annuity contracts assume all investment risk associated with the assets that were delivered as the annuity contract premiums. These annuity contracts covered 321 and 412 existing retired pension plan participants for 2018 and 2017, respectively at the time of purchase.

The domestic qualified pension plan was amended in 2015 to allow participants at retirement to elect a lump-sum payment. In 2018, 2017 and 2016, the Company made lump sum payments of $18.6 million, $21.7 million and $14.6 million, respectively, from the domestic qualified pension plan assets to certain participants in the plan as a result of these lump sum offers. Each year beginning with 2014, the Society of Actuaries released revised mortality tables, which updated life expectancy assumptions. In consideration of these tables, each year the Company reviews the mortality assumptions used in determining our pension and post-retirement obligations.

		Domestic												Foreign
		2018				2017				2016				2018				2017				2016
Service cost - benefits earned during the period (in millions)		$	9.8			$	10.2			$	10.4			$	0.9			$	1.0			$	0.8
		Domestic												Foreign
Pension non-service income (in millions):		2018				2017				2016				2018				2017				2016
Interest cost on benefit obligation		31.5				35.6				38.9				1.3				1.2				1.6
Expected return on plan assets		(70.0		)		(71.3		)		(72.9		)		(1.7		)		(2.1		)		(2.2		)
Amortization of prior service cost		(6.0		)		(6.0		)		(6.0		)		(0.1		)		(0.1		)		—
Amortization of actuarial loss		31.1				28.6				26.6				0.4				0.6				0.6
Curtailment		—				—				—				(0.1		)		(0.4		)		—
Pension non-service income		$	(13.4	)		$	(13.1	)		$	(13.4	)		$	(0.2	)		$	(0.8	)		$	—

The expected long-term rate of return on plan assets is reviewed annually, taking into consideration the Company’s asset allocation, historical returns on the types of assets held, the current economic environment, and prospective expectations. We determined the discount rate based on a model which matches the timing and amount of expected benefit payments to maturities of high-quality corporate bonds priced as of the pension plan measurement date. The yields on the bonds are used to derive a discount rate for the obligation.

The following assumptions were used to measure the net benefit income/cost within each respective year for the domestic qualified plan and the foreign plans:

Pension Plan Assumptions:		Weighted average discount rate		Weighted average increase in future compensation levels		Expected weighted-average long-term rate of return
Domestic plan - 2018		4.02%		2.75%		8.00%
Domestic plan - 2017		4.54%		2.75%		8.00%
Domestic plan - 2016		4.91%		2.75%		8.00%
Foreign plans - 2018		0.70% - 2.40%		1.00% - 2.50%		1.00% - 4.50%
Foreign plans - 2017		0.60% - 2.50%		1.00% - 2.50%		1.00% - 5.90%
Foreign plans - 2016		0.90% - 3.60%		1.00% - 2.43%		1.40% - 6.50%

For its domestic pension plan the Company is projecting a long-term rate of return on plan assets of 7.80% in 2019. For its foreign based pension plans the Company is projecting a long-term rate of return on plan assets will range from 1.00% to 3.80% in 2019.

		Domestic								Foreign
		2018				2017				2018				2017
Changes in benefit obligation (in millions):
Benefit obligation - beginning of year		$	812.3			$	810.9			$	57.8			$	51.4
Service cost - benefits earned during the year		9.8				10.2				0.9				1.0
Interest cost on projected benefit obligation		31.5				35.6				1.3				1.2
Actuarial (gain) loss		(41.2		)		41.9				(1.7		)		(1.6		)
Benefits paid(a)		(80.7		)		(86.3		)		(1.9		)		(2.4		)
Plan amendments		—				—				1.1				—
Settlements/curtailments		—				—				(2.4		)		(3.0		)
Other - including foreign currency		—				—				(2.8		)		5.7
Business combinations		—				—				—				5.5
Benefit obligation - end of year		$	731.7			$	812.3			$	52.3			$	57.8
Accumulated benefit obligation - end of year		$	728.5			$	809.4			$	49.1			$	53.7

(a)	The 2018, 2017 and 2016 amounts include lump sum payments to certain participants of $18.6 million, $21.7 million and $14.6 million, respectively.

The key assumptions used to measure the benefit obligation at each respective year-end were:

Key assumptions:		Domestic Plan									Foreign Plans
		2018			2017			2016			2018		2017		2016
Discount rate		4.59	%		4.02	%		4.54	%		0.90% - 2.60%		0.70% - 2.40%		0.60% - 2.50%
Salary growth rate		2.75	%		2.75	%		2.75	%		1.00% - 2.50%		1.00% - 2.50%		1.00% - 2.30%

		Domestic								Foreign
		2018				2017				2018				2017
Changes in plan assets (in millions):
Fair value of net plan assets - beginning of year		$	896.0			$	857.1			$	46.7			$	42.1
Actual return on plan assets		(37.0		)		123.1				0.8				2.5
Employer contribution - other benefit plan		2.0				2.1				2.2				2.6
Foreign currency changes		—				—				(2.5		)		4.3
Benefits paid		(80.7		)		(86.3		)		(1.9		)		(2.4		)
Other		—				—				(1.9		)		(2.4		)
Fair value of net plan assets - end of year		$	780.3			$	896.0			$	43.4			$	46.7

The measurement date for the Company’s pension plans is December 31.

The following tables sets forth the funded status and amounts recognized in the consolidated balance sheets at year-end 2018 and 2017 for the domestic qualified and nonqualified pension plans and the foreign-based pension plans for benefits provided to certain employees (in millions):

		Domestic								Foreign
		2018				2017				2018				2017
Funded status		$	48.6			$	83.7			$	(8.9	)		$	(11.1	)
Amounts recognized in the consolidated balance sheets:
Prepaid pension asset long-term		$	88.2			$	127.2			$	—			$	—
Accrued pension obligation long-term		(31.8		)		(35.4		)		(8.6		)		(11.1		)
Accrued pension obligation short-term		(2.6		)		(2.6		)		(0.3		)		—
Other long-term liabilities		(5.2		)		(5.5		)		—				—
Net amount recognized		$	48.6			$	83.7			$	(8.9	)		$	(11.1	)
Amounts recognized in accumulated other comprehensive loss:
Net prior service cost (credit)		$	(18.6	)		$	(24.7	)		$	0.8			$	(0.2	)
Net loss		417.6				383.0				6.4				8.2
Net amount recognized, before tax effect		$	399.0			$	358.3			$	7.2			$	8.0

Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows (in millions):

		2018			2017
Projected benefit obligation		$	91.9		$	101.3
Accumulated benefit obligation		$	88.8		$	97.3
Fair value of plan assets		$	43.4		$	46.7

At year-end 2018 and 2017 the Company had an accumulated non-cash reduction to stockholders’ equity of $306.8 million and $227.8 million, respectively, related to its pension and postretirement plans. The accumulated non-cash reductions to stockholders’ equity did not affect net income and were recorded net of accumulated deferred taxes of $96.9 million at year end 2018 and $135.8 million at year end 2017.

At December 30, 2018, the estimated amounts of the minimum liability adjustment that are expected to be recognized as components of net periodic benefit cost during 2019 for the pension plans are: net loss $31.0 million and net prior service credit $6.0 million.

Estimated future pension plan benefit payments (in millions):		Domestic				Foreign
2019		$	53.4			$	2.8
2020		54.9				1.9
2021		54.8				2.0
2022		55.9				2.1
2023		55.7				2.4
2024-2028		271.8				11.8
Total		$	546.5			$	23.0

The following table sets forth the percentage of year-end market value by asset class for the pension plans:

Market value by asset class:		Domestic Plan Assets % to Total						Foreign Plan Assets % to Total
		2018			2017			2018			2017
Equity instruments		51	%		58	%		53	%		46	%
Fixed income instruments		34			29			27			30
Alternatives and other		15			13			20			24
Total		100	%		100	%		100	%		100	%

The Company has an active management policy for the pension assets in the qualified domestic pension plan. The long term asset allocation target for the domestic plan consists of approximately 66% in equity instruments a portion in alternatives and approximately 34% in fixed income instruments.

The pension plan’s investments are stated at fair value. Plan investments that are considered a level 1 fair value hierarchy and are valued at quoted market prices in active markets. Plan investments that are considered a level 2 fair value hierarchy and are valued based on observable market data. Plan investments that would be considered a level 3 fair value hierarchy are valued based on management’s own assumption about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

Certain investments measured at fair value using net asset values as a practical expedient are not required to be categorized in the fair value hierarchy table listed below. As such, the total fair value of these net asset values based investments has been included in the table below to permit reconciliation to the plan asset amounts previously disclosed.

The fair values of the Company’s net pension assets, by fair value hierarchy, for both the U.S. and foreign pension plans as of December 30, 2018, by asset category are as follows (in millions):

Asset category:(a)		Level 1				Level 2				Level 3				Total
Cash and cash equivalents (b)		$	—			$	53.0			$	—			$	53.0
Equity securities		56.3				233.6				—				289.9
U.S. government securities and futures		99.3				—				—				99.3
Corporate bonds		—				34.3				—				34.3
Insurance contracts related to foreign plans		—				12.0				—				12.0
Fair value of net plan assets at the end of the year		$	155.6			$	332.9			$	—			$	488.5
Investments measured at net asset value:
Alternatives														$	204.1
Mutual funds (c)														63.0
Senior secured loans														0.2
Mortgage-backed securities														42.8
High yield bonds														25.2
Fair value of net plan assets at the end of the year														$	335.3

a) There were no transfers of plan assets between the three levels of the fair value hierarchy during the year.

b) Reflects cash and cash equivalents held in overnight cash investments.

c) 53% of mutual funds invest in fixed income types of securities; 47% invest in equity securities.

The fair values of the Company’s net pension assets, by fair value hierarchy, for both the U.S. and foreign pension plans as of December 31, 2017, by asset category are as follows (in millions):

Asset category: (a)		Level 1				Level 2				Level 3				Total
Cash and cash equivalents (b)		$	—			$	40.9			$	—			$	40.9
Equity securities		131.8				253.5				—				385.3
U.S. government securities and futures		69.5				—				—				69.5
Corporate bonds		—				86.7				—				86.7
Insurance contracts related to foreign plans		—				12.3				—				12.3
Fair value of net plan assets at the end of the year		$	201.3			$	393.4			$	—			$	594.7
Investments measured at net asset value:
Alternatives														$	159.5
Mutual funds (c)														157.0
Senior secured loans														0.2
Mortgage-backed securities														17.3
High yield bonds														14.0
Fair value of net plan assets at the end of the year														$	348.0

(a) There were no of transfers of plan assets between the three levels of the fair value hierarchy during the year.

(b) Reflects cash and cash equivalents held in overnight cash investments.

(c) 29% of mutual funds invest in fixed income types of securities; 71% invest in equity securities.

U.S. equities are valued at the closing price reported in an active market on which the individual securities are traded. U.S. equities and non-U.S. equities are also valued at the net asset value provided by the independent administrator or custodian

of the commingled fund. The net asset value is based on the value of the underlying equities, which are traded on an active market. Corporate bonds are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments. Fixed income investments are also valued at the net asset value provided by the independent administrator or custodian of the fund. The net asset value is based on the underlying assets, which are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments. Alternative investments are primarily valued at the net asset value as determined by the independent administrator or custodian of the fund. The net asset value is based on the underlying investments, which are valued using inputs such as quoted market prices of identical instruments or values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments.

The Company’s contributions associated with its 401(k) plans were $11.9 million, $9.8 million and $9.3 million, for 2018, 2017 and 2016, respectively.

Postretirement Plans

The Company sponsors several postretirement defined benefit plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for certain eligible retirees. No service cost was incurred for these plans in 2018 or in 2017. In 2016, service cost was less than $0.1 million.

Postretirement benefits non-service income (in millions):		2018				2017				2016
Interest cost on benefit obligation		0.4				0.4				0.5
Amortization of actuarial gain		(0.3		)		(0.4		)		(0.4		)
Postretirement benefits non-service income		$	0.1			$	—			$	0.1

Changes in benefit obligation (in millions):		2018				2017
Benefit obligation - beginning of year		$	9.7			$	9.8
Interest cost on projected benefit obligation		0.4				0.4
Actuarial loss		(0.1		)		0.8
Benefits paid		(1.3		)		(1.3		)
Benefit obligation - end of year		$	8.7			$	9.7

The measurement date for the Company’s postretirement plans is December 31.

Future postretirement plan benefit payments (in millions):
2019		$	1.0
2020		0.9
2021		0.9
2022		0.8
2023		0.8
2024-2028		3.3
Total		$	7.7

The following table sets forth the funded status and amounts recognized in Teledyne’s consolidated balance sheets for the postretirement plans at year-end 2018 and 2017 (in millions):

		2018				2017
Funded status:
Funded status		$	(8.7	)		$	(9.7	)
Unrecognized net gain		(2.5		)		(2.7		)
Accrued benefit cost		$	(11.2	)		$	(12.4	)
Amounts recognized in the consolidated balance sheets:
Accrued postretirement benefits (long-term)		$	(7.7	)		$	(8.7	)
Accrued postretirement benefits (short-term)		(1.0		)		(1.0		)
Accumulated other comprehensive income		(2.5		)		(2.7		)
Net amount recognized		$	(11.2	)		$	(12.4	)

At December 30, 2018, the amount in AOCI that has not yet been recognized as a component of net periodic benefit income for the retiree medical plans is a: net gain $2.5 million and no net prior service credit. At December 30, 2018, the estimated amortization from AOCI expected to be recognized as components of net periodic benefit income during 2019 for the retiree medical plans is a: net gain of $0.2 million and no net prior service cost.

The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans is 6.25% in 2019 and was assumed to decrease to 5.0% by the year 2024 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point increase in the assumed health care cost trend rates would result in an increase in the annual service and interest costs by less than $0.1 million for 2018 and would result in an increase in the postretirement benefit obligation by $0.2 million at December 30, 2018. A one percentage point decrease in the assumed health care cost trend rates would result in a decrease in the annual service and interest costs by less than $0.1 million for 2018 and would result in a decrease in the postretirement benefit obligation by $0.2 million at December 30, 2018.

Note 12. Business Segments

The Company has four reportable segments: Instrumentation; Digital Imaging; Aerospace and Defense Electronics; and Engineered Systems. The Company manages, evaluates and aggregates its operating segments for segment reporting purposes primarily on the basis of product and service type, production process, distribution methods, type of customer, management organization, sales growth potential and long-term profitability. The Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, electronic test and measurement equipment and harsh environment interconnect products. The Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared and X-ray spectra, for use in industrial, government and medical applications, as well as micro electro-mechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters. It also includes our sponsored and centralized research laboratories benefiting government programs and businesses. The Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, harsh environment interconnects, data acquisition and communications equipment for aircraft and components and subsystems for wireless and satellite communications, as well as general aviation batteries. In the third quarter of 2016, Teledyne completed the disposition of the net assets of its PCT business for $9.3 million in cash resulting in no gain or loss. PCT, which was part of the Aerospace and Defense Electronics segment, had sales of $10.1 million for 2016. For 2016, PCT reported a pretax loss of $3.1 million. In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings. These products, acquired with the 2017 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. The Engineered Systems segment provides innovative systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. The Engineered Systems segment also designs and manufactures electrochemical energy systems and small turbine engines.

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

As part of a continuing effort to reduce costs and improve operating performance the Company may take and 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. At December 30, 2018, $2.8 million remains to be paid related to these actions.

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

		2018				2017				2016
Instrumentation		$	5.6			$	2.1			$	10.6
Digital Imaging		0.7				—				2.0
Aerospace and Defense Electronics		1.3				2.1				4.6
Engineered Systems		0.2				—				0.1
Total		$	7.8			$	4.2			$	17.3

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

Net sales:	2018				2017				2016
Instrumentation	$	1,021.2			$	953.9			$	876.7
Digital Imaging	885.2				717.7				398.7
Aerospace and Defense Electronics	696.5				646.0				615.9
Engineered Systems	298.9				286.2				258.6
Total net sales	$	2,901.8			$	2,603.8			$	2,149.9
Operating income:	2018				2017				2016
Instrumentation	$	147.4			$	126.0			$	109.4
Digital Imaging	157.3				110.4				44.1
Aerospace and Defense Electronics	135.2				116.3				106.7
Engineered Systems	32.7				32.0				26.5
Corporate expense	(56.0		)		(63.0		)		(46.2		)
Total operating income	$	416.6			$	321.7			$	240.5

Depreciation and amortization:		2018				2017				2016
Instrumentation		$	37.0			$	38.2			$	37.3
Digital Imaging		51.7				50.2				26.2
Aerospace and Defense Electronics		13.5				14.0				14.4
Engineered Systems		3.7				4.0				4.1
Corporate		7.1				6.6				5.3
Total depreciation and amortization		$	113.0			$	113.0			$	87.3

Capital expenditures:		2018				2017				2016
Instrumentation		$	14.8			$	13.7			$	50.9
Digital Imaging		36.3				23.6				12.5
Aerospace and Defense Electronics		19.6				10.7				12.6
Engineered Systems		12.2				5.8				5.9
Corporate		3.9				4.7				5.7
Total capital expenditures		$	86.8			$	58.5			$	87.6

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

Identifiable assets:		2018				2017				2016
Instrumentation		$	1,392.7			$	1,413.6			$	1,361.0
Digital Imaging		1,600.9				1,606.5				671.1
Aerospace and Defense Electronics		521.4				495.4				449.4
Engineered Systems		116.6				107.0				93.9
Corporate (a)		177.7				223.9				199.0
Total identifiable assets		$	3,809.3			$	3,846.4			$	2,774.4
(a) The amount for 2018, 2017 and 2016 includes $88.2 million, $127.2 million and $88.5 million prepaid pension asset, respectively.

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

Sales by country of origin:		2018				2017				2016
United States		$	2,044.9			$	1,834.6			$	1,645.7
Canada		294.8				266.1				209.2
United Kingdom		178.8				197.5				109.6
France		40.1				36.1				7.9
All other countries		343.2				269.5				177.5
Total sales		$	2,901.8			$	2,603.8			$	2,149.9

Long-lived assets:		2018				2017				2016
United States		$	1,402.3			$	1,495.4			$	1,404.9
Canada		264.6				288.2				273.5
United Kingdom		414.9				487.9				103.3
France		353.8				370.2				3.2
All other countries		246.7				182.0				138.1
Total long-lived assets		$	2,682.3			$	2,823.7			$1,923.0

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

Product Lines

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

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

Instrumentation:		2018				2017				2016
Environmental Instrumentation		$	339.6			$	314.3			$	270.1
Marine Instrumentation		433.0				430.7				418.7
Test and Measurement Instrumentation		248.6				208.9				187.9
Total		$	1,021.2			$	953.9			$	876.7

Sales to the U.S. Government included sales to the U.S. Department of Defense of $494.9 million in 2018, $479.7 million in 2017, and $449.4 million in 2016. Total sales to international customers were $1,353.7 million in 2018, $1,208.5 million in 2017, and $919.4 million in 2016. Of these amounts, sales by operations in the United States to customers in other countries were $600.5 million in 2018, $555.5 million in 2017, and $539.4 million in 2016. There were no sales to individual countries outside of the United States in excess of 10 percent of the Company’s sales. Sales between business segments generally were priced at prevailing market prices and were $23.4 million, $22.8 million and $20.2 million for 2018, 2017 and 2016, respectively.

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

		Twelve Months Ended December 30, 2018
		Customer Type
(in millions)		United States Government (a)				Other, Primarily Commercial				Total
Net Sales:
Instrumentation		$	68.3			$	952.9			$	1,021.2
Digital Imaging		90.5				794.7				885.2
Aerospace and Defense Electronics		252.5				444.0				696.5
Engineered Systems		244.0				54.9				298.9
Total		$	655.3			$	2,246.5			$	2,901.8

a) Includes sales as a prime contractor or subcontractor.

		Twelve Months Ended December 30, 2018
		Contract Type
(in millions)		Fixed Price				Cost Type				Total
Net Sales:
Instrumentation		$	1,001.0			$	20.2			$	1,021.2
Digital Imaging		805.4				79.8				885.2
Aerospace and Defense Electronics		693.7				2.8				696.5
Engineered Systems		99.6				199.3				298.9
Total		$	2,599.7			$	302.1			2,901.8

		Twelve Months Ended December 30, 2018
		Geographic Region (a)
(in millions)		United States				Europe				All other				Total
Net sales:
Instrumentation		$	835.0			$	134.6			$	51.6			$	1,021.2
Digital Imaging		239.3				280.1				365.8				885.2
Aerospace and Defense Electronics		681.7				12.6				2.2				696.5
Engineered Systems		288.9				10.0				—				298.9
Total		$	2,044.9			$	437.3			$	419.6			$	2,901.8

a) Net sales by geographic region of origin.

Note 13. Lease Commitments

Operating lease agreements, which include leases for manufacturing facilities and office space frequently include renewal options and require the Company to pay for utilities, taxes, insurance and maintenance expense. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements.

At December 30, 2018, future minimum lease payments for capital leases and for operating leases with non-cancelable terms of more than one year were as follows (in millions):

Lease Commitments:		Capital				Operating
2019		$	1.0			$	23.2
2020		0.5				20.6
2021		0.6				18.4
2022		0.6				18.4
2023		0.5				11.8
Thereafter		0.3				48.2
Total minimum lease payments		3.5				$	140.6
Less:
Imputed interest		(0.4		)
Current portion		(0.9		)
Present value of minimum capital lease payments, net of current portion		$	2.2

The 2018 property, plant and equipment accounts included $4.1 million of property leased under capital leases and $2.7 million of related accumulated depreciation. The 2017 property, plant and equipment accounts included $11.0 million of property leased under capital leases and $6.4 million of related accumulated depreciation. Rental expense under operating leases, net of immaterial sublease income, was $30.7 million in 2018, $26.9 million in 2017 and $28.1 million in 2016.

Note 14. Commitments and Contingencies

The Company is subject to federal, state and local environmental laws and regulations which require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations, including sites at which the Company has been identified as a potentially responsible party under the federal Superfund laws and comparable state laws.

In accordance with the Company’s accounting policy disclosed in Note 2, environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, investigations are not yet at a stage where the Company has been able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss, or certain components thereof. Estimates of the Company’s liability are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and estimates of appropriate cleanup technology, methodology and cost, the extent of corrective actions that may be required, and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation. Accordingly, as investigation and remediation of these sites proceeds, it is likely that adjustments in the Company’s accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the amounts, and the possible range of loss in excess of the amounts accrued, are not reasonably estimable. Based on currently available information, however, management does not believe that future environmental costs in excess of those accrued with respect to sites with which the Company has been identified are likely to have a material adverse effect on the Company’s financial condition or liquidity.

At December 30, 2018, the Company’s reserves for environmental remediation obligations totaled $6.0 million, of which $1.4 million is included in current accrued liabilities. The Company periodically evaluates whether it may be able to recover a portion of future costs for environmental liabilities from its insurance carriers and from third parties. The timing of expenditures depends on a number of factors that vary by site, including the nature and extent of contamination, the number of potentially responsible parties, the timing of regulatory approvals, the complexity of the investigation and remediation, and the standards for remediation. The Company expects that it will expend present accruals over many years, and will complete remediation of all sites with which it has been identified in up to thirty years.

Various claims (whether based on U.S. Government or Company audits and investigations or otherwise) may be asserted against the Company related to its U.S. Government contract work, including claims based on business practices and cost classifications and actions under the False Claims Act. Although such claims are generally resolved by detailed fact-finding and negotiation, on those occasions when they are not so resolved, civil or criminal legal or administrative proceedings may

ensue. Depending on the circumstances and the outcome, such proceedings could result in fines, penalties, compensatory and treble damages or the cancellation or suspension of payments under one or more U.S. Government contracts. Under government regulations, a company, or one or more of its operating divisions or units, can also be suspended or debarred from government contracts based on the results of investigations. However, although the outcome of these matters cannot be predicted with certainty, management does not believe there is any audit, review or investigation currently pending against the Company of which management is aware that is likely to result in suspension or debarment of the Company, or that is otherwise likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

A number of other lawsuits, claims and proceedings have been or may be asserted against the Company, including those pertaining to product liability, acquisitions, patent infringement, commercial contracts, employment and employee benefits. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition.

Note 15. Subsequent Event

On February 5, 2019, we acquired the scientific imaging businesses of Roper Technologies, Inc. for $225.0 million in cash. Located in the United States and Canada, the acquisition will be part of the Digital Imaging segment.

Note 16. Quarterly Financial Data (Unaudited)

Fiscal Year 2018 (a) (in millions, except per-share amounts)		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Net Sales		$	695.6			$	732.5			$	725.3			$	748.4
Costs and expenses
Cost of sales (b)		438.2				447.0				446.2				459.6
Selling, general and administrative expenses		169.0				174.0				173.6				177.6
Total costs and expenses		607.2				621.0				619.8				637.2
Operating income		88.4				111.5				105.5				111.2
Interest and debt expense, net		(7.1		)		(6.7		)		(6.0		)		(5.7		)
Non-service retirement benefit income		3.4				3.3				3.4				3.4
Other expense, net		(2.5		)		(3.7		)		(2.7		)		(1.8		)
Income before income taxes		82.2				104.4				100.2				107.1
Provision for income taxes (b)		15.7				18.5				9.9				16.0
Net income		$	66.5			$	85.9			$	90.3			$	91.1
Basic earnings per common share		$	1.87			$	2.40			$	2.52			$	2.53
Diluted earnings per common share		$	1.81			$	2.32			$	2.43			$	2.45

a) Fiscal year 2018 was a 52-week fiscal-year, each quarter contained 13 weeks.
b) Includes $2.1 million in net discrete income tax benefits in the first quarter, $3.4 million in net discrete income tax benefits in the second quarter, $11.4 million in net discrete income tax benefits the third quarter and $6.9 million in net discrete income tax benefits in the fourth quarter.

Fiscal Year 2018 (in millions)		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Net Sales:
Instrumentation		$	239.0			$	262.6			$	256.2			$	263.4
Digital Imaging		211.0				225.3				223.0				225.9
Aerospace and Defense Electronics		173.6				173.5				171.1				178.3
Engineered Systems		72.0				71.1				75.0				80.8
Total net sales		$	695.6			$	732.5			$	725.3			$	748.4
Operating income:
Instrumentation		$	27.8			$	40.9			$	35.7			$	43.0
Digital Imaging		34.6				43.3				42.3				37.1
Aerospace and Defense Electronics		31.7				33.7				33.3				36.5
Engineered Systems		7.2				7.4				9.3				8.8
Corporate expense		(12.9		)		(13.8		)		(15.1		)		(14.2		)
Total operating income		$	88.4			$	111.5			$	105.5			$	111.2

Fiscal Year 2017 (a) (in millions, except per-share amounts)		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Net Sales		$	566.1			$	671.1			$	662.2			$	704.4
Costs and expenses
Cost of sales		357.0				421.2				408.6				437.2
Selling, general and administrative expenses (b)		154.3				167.1				164.1				172.6
Total costs and expenses		511.3				588.3				572.7				609.8
Operating income		54.8				82.8				89.5				94.6
Interest and debt expense, net (b)		(8.2		)		(9.1		)		(8.2		)		(7.6		)
Non-service retirement benefit income		3.3				3.4				3.4				3.8
Other expense, net (b)		(9.3		)		(0.7		)		(3.0		)		(2.5		)
Income before income taxes		40.6				76.4				81.7				88.3
Provision for income taxes (c)		10.1				16.3				12.7				20.7
Net income		$	30.5			$	60.1			$	69.0			$	67.6
Basic earnings per common share		$	0.87			$	1.71			$	1.95			$	1.91
Diluted earnings per common share		$	0.84			$	1.66			$	1.90			$	1.84

a) Fiscal year 2017 was a 52-week fiscal-year, each quarter contained 13 weeks. The 2017 periods have been adjusted to reflect the adoption of ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”.
b) The first quarter of 2017 includes pretax charges of $21.2 million related to the acquisition of e2v, of which, $1.4 million was recorded to cost of sales, $11.5 million was recorded to selling, general and administrative expenses, $2.3 million was recorded to interest expense and $6.0 million was recorded as other expense. The second quarter of 2017 includes pretax charges of $4.0 million related to the acquisition of e2v, of which, $2.7 million was recorded to cost of sales and $1.3 million was recorded to selling, general and administrative expenses. The third quarter of 2017 includes pretax charges of $2.9 million related to the acquisition of e2v, of which, $2.7 million was recorded to cost of sales and $0.2 million was recorded to selling, general and administrative expenses. The fourth quarter of 2017 includes a $1.1 million reduction to estimated pretax charges recorded in 2017 related to the acquisition of e2v, which was recorded to cost of sales.
c) Includes $1.4 million in net discrete income tax benefits in the first quarter, $4.6 million in net discrete income tax benefits in the second quarter, $9.9 million in net discrete income tax benefits the third quarter and $1.3 million in net discrete income tax benefits in the fourth quarter. The net discrete income tax benefits in the fourth quarter includes provisional charges of $4.7 million due to the estimated impact of the Tax Act.

Fiscal Year 2017 (a) (in millions)		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Net Sales:
Instrumentation		$	232.8			$	233.8			$	232.5			$	254.8
Digital Imaging		113.8				200.2				197.0				206.7
Aerospace and Defense Electronics		151.9				161.1				159.6				173.4
Engineered Systems		67.6				76.0				73.1				69.5
Total net sales		$	566.1			$	671.1			$	662.2			$	704.4
Operating income:
Instrumentation		$	30.2			$	30.5			$	34.6			$	30.7
Digital Imaging (b)		15.1				28.0				31.4				35.9
Aerospace and Defense Electronics (b)		24.8				29.2				28.2				34.1
Engineered Systems		7.4				7.7				8.6				8.3
Corporate expense (b)		(22.7		)		(12.6		)		(13.3		)		(14.4		)
Total operating income		$	54.8			$	82.8			$	89.5			$	94.6

a) The 2017 periods have been adjusted to reflect the adoption of ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”.

b) The first quarter of 2017 includes pretax charges of $12.9 million related to the acquisition of e2v, of which, $10.4 million was recorded to corporate expense and $2.5 million was recorded in the Digital Imaging segment. The second quarter of 2017 includes pretax charges of $4.0 million related to the acquisition of e2v, of which, $3.7 million was recorded in the Digital Imaging segment and $0.3 million was recorded in the Aerospace and Defense Electronics segment. The third quarter of 2017 includes pretax charges of $2.9 million related to the acquisition of e2v which was recorded in the Digital Imaging segment. The fourth quarter of 2017 includes a $1.1 million reduction to estimated pretax charges recorded in 2017 related to the acquisition of e2v which was recorded in the Digital Imaging segment.

.

Schedule II VALUATION AND QUALIFYING ACCOUNTS

Schedule II

VALUATION AND QUALIFYING ACCOUNTS

For the Fiscal Years Ended December 30, 2018, December 31, 2017 and January 1, 2017

(In millions)

						Additions
Description		Balance at beginning of period				Charged to costs and expenses			Acquisitions			Deductions and other (a)			Balance at end of period
Fiscal Year 2018
Allowance for doubtful accounts		$	10.3			0.6			—			(4.2	)		$	6.7
Environmental reserves		$	5.1			1.6			—			(0.7	)		$	6.0
Fiscal Year 2017
Allowance for doubtful accounts		$	5.2			4.2			1.6			(0.7	)		$	10.3
Environmental reserves		$	7.0			2.3			0.3			(4.5	)		$	5.1
Fiscal Year 2016
Allowance for doubtful accounts		$	6.3			0.7			0.2			(2.0	)		$	5.2
Environmental reserves		$	8.7			0.5			—			(2.2	)		$	7.0
(a) Represents payments except the amounts for allowance for doubtful accounts primarily represents uncollectible accounts written-off, net of recoveries.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of February 22, 2019.

Teledyne Technologies Incorporated (Registrant)
By:		/s/ Aldo Pichelli
		Aldo Pichelli
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Aldo Pichelli				President and Chief Executive Officer
Aldo Pichelli				Chief Executive Officer (Principal Executive Officer)		February 22, 2019
/s/ Susan L. Main				Senior Vice President and
Susan L. Main				Chief Financial Officer (Principal Financial Officer)		February 22, 2019
/s/ Cynthia Belak				Vice President and
Cynthia Belak				Controller (Principal Accounting Officer)		February 22, 2019
/s/ Robert Mehrabian				Executive Chairman and Director
Robert Mehrabian						February 22, 2019
*				Director		February 22, 2019
Roxanne S. Austin
*				Director		February 22, 2019
Charles Crocker
*				Director		February 22, 2019
Kenneth C. Dahlberg
*				Director		February 22, 2019
Simon M. Lorne
*				Director		February 22, 2019
Robert A. Malone
*				Director		February 22, 2019
Paul D. Miller
*				Director		February 22, 2019
Jane C. Sherburne
*				Director		February 22, 2019
Michael T. Smith
*				Director		February 22, 2019
Wesley W. von Schack
*By:		/s/ Melanie S. Cibik
		Melanie S. Cibik Pursuant to Power of Attorney filed as Exhibit 24.1

EXHIBIT INDEX

Exhibit No.		Description
2.1		Separation and Distribution Agreement dated as of November 29, 1999 by and among Allegheny Teledyne Incorporated, TDY Holdings, LLC, Teledyne Industries, Inc. and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated as of November 29, 1999 (File No. 1-15295))
2.2		Rule 2.7 Announcement, dated December 12, 2016 , related to the recommend cash offer for e2v technologies plc (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated December 11, 2016 (File No. 1-15295))
3.1		Restated Certificate of Incorporation of Teledyne Technologies Incorporated (including Certificate of Designation of Series A Junior Participating Preferred Stock) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295))
3.2		Amended and Restated Bylaws of Teledyne Technologies Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 29, 2014 (File No. 1-15295))
10.1		Employee Benefits Agreement between Allegheny Teledyne Incorporated and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K/A (Amendment No. 1) dated as of November 29, 1999 (File No. 1-15295))†

10.2		Teledyne Technologies Incorporated 2008 Incentive Award Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed March 7, 2008 (File No. 1-15295))†
10.3		Teledyne Technologies Incorporated Administrative Rules of the 2008 Incentive Award Plan Related to Non-Employee Director Stock Compensation (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2008 (File No. 1-15295))†
10.4		Administrative Rules for the Teledyne Technologies Incorporated Restricted Stock Award Program under the 2008 Incentive Award Plan, effective as of January 20, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 20, 2009 (File No. 1-15295))†
10.5		Form of Stock Option Agreement under the 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 19, 2010 (File No.1-15295))†
10.6		Summary Plan Description for the Teledyne Technologies Incorporated Performance Service Plan under the 2008 Incentive Award Plan for the 2012-2014 performance cycle (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2012 (File No. 1-15295))†
10.7		Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed March 8, 2012 (File No. 1-15295))†
10.8		Administrative Rules of the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan Related to Non-Employee Director Stock Compensation (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2012 (File No. 1-15295))†
10.9		Form of Stock Option Agreement under the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 1, 2012 (File No. 1-15295))†

10.10		Administrative Rules related to the Restricted Stock Award Program under the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 22, 2013 (File No. 1-15295))†
10.11		Form of Restricted Stock Award Agreement under the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report Form 10-K for the year ended December 30, 2012) (File No. 1-15295))†
10.12		Restricted Stock Award Agreement, dated October 22, 2013, by and between Teledyne Technologies Incorporated and Dr. Robert Mehrabian (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated October 22, 2013) (File No. 1-15295))†
10.13		Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed March 5, 2014 (File No. 1-15295))†
10.14		Form of stock option agreement and conditions under the Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 23, 2014 File No. 1-15295))†
10.15		Administrative Rules of the Teledyne Technologies Incorporated 2014 Incentive Plan Related to Non-Employee Director Stock Compensation (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 23, 2014 (File No. 1-15295))†
10.16		Standing resolutions of the Nominating and Governance Committee related to non-employee director compensation (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated December 31, 2014 (File No. 1-15295))†
10.17		Administrative Rules of the 2014 Incentive Award Plan Related to Non-Employee Director Restricted Stock Unit Awards and Fees (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated December 31, 2014 (File No. 1-15295))†
10.18		Administrative Rules for the Restricted Stock Award Program under the 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 17, 2015 (File No. 1-15295))†
10.19		Form of Restricted Stock Award Agreement under the 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated February 17, 2015 (File No. 1-15295))†
10.20		Form of Restricted Stock Unit Agreement under the 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated February 17, 2015 (File No. 1-15295))†
10.21		Restricted Stock Unit Agreement, dated December 20, 2016, by and among Teledyne Technologies Incorporated and Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A dated December 20, 2016 (File No. 1-15295))†
10.22		Summary Plan Description for the 2015-2017 Performance Share Program incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated February 17, 2015 (File No. 1-15295)†
10.23		Summary Plan Description for the 2015-2017 Performance Share Program (Canadian Participants) (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated February 17, 2015) (File No. 1-15295)†
10.24		Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed March 10, 2017)†
10.25		Standing resolutions of the Nominating and Governance Committee related to non-employee director compensation (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 26, 2017).†

10.26		Administrative Rules of the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan Related to Non-Employee Director Restricted Stock Unit Awards and Fees (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 26, 2017).†
10.27		Administrative Rules for the Restricted Stock Award Program under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 23, 2018)†
10.28		Form of Restricted Stock Award Agreement under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 23, 2018)†
10.29		Form of Stock Option Award Agreement under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 23, 2018)†
10.30		Summary Plan Description for the Performance Share Plan 2018-2020 Cycle under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated January 23, 2018)†
10.31		Fifth Amended and Restated Employment Agreement, dated October 22, 2013, by and between Teledyne Technologies Incorporated and Dr. Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 22, 2013) (File No. 1-15295)†
10.32		Amendment One, dated as of September 28, 2015, to the Fifth Amended and Restated Employment Agreement between Teledyne Technologies Incorporated and Robert Mehrabian. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 28, 2015) (File No. 1-15295))†
10.33		Amendment Two to Fifth Amended and Restated Agreement between Robert Mehrabian and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the period ended April 1, 2018) (File No. 1-15295)†
10.34		Sixth Amended and Restated Employment Agreement, by and between Teledyne Technologies Incorporated and Robert Mehrabian, dated as of October 23, 2018. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 23, 2018) (File No. 1-15295)†
10.35		Employment Agreement, by and between Teledyne Technologies Incorporated and Aldo Pichelli, dated as of October 23, 2018. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 23, 2018) (File No. 1-15295)†
10.36		Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No. 1-15295))†
10.37		Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Al Pichelli (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No. 1-15295))†
10.38		Amended and Restated change in Control Severance Agreement dated January 31, 2011, by and between Teledyne Technologies Incorporated and Susan L. Main (incorporated by reference to Exhibit 10.12 to Company’s Annual Report on Form 10-K for the fiscal years ended December 29, 2013 (File No. 1-15295))†
10.39		Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Melanie Cibik (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year end December 29, 2013 (File No. 1-15295))†

10.40		Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Edwin Roks *
10.41		Teledyne Technologies Incorporated Executive Deferred Compensation Plan, as originally effective as of November 29, 1999, as amended and restated effective December 31, 2004 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 31, 2008)(File No. 1-15295)†
10.42		Teledyne Technologies Incorporated Pension Equalization/Benefit Restoration Plan, as originally effective as of November 29, 1999, as amended and restated effective December 31, 2004 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 31, 2008(File No. 1-15295))†
10.43		Teledyne Technologies Pension Equalization/Benefit Restoration Plan - Resolutions of the Plan Administration Committee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 31, 2014 (File No. 1-15295))†
10.44		Form of Amendment to Stock Options, dated October 1, 2007, by and between Teledyne Technologies Incorporated and directors Charles Crocker, Simon M. Lorne, Paul D. Miller and Michael T. Smith (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007 (File No. 1-15295))†

10.45		Note Purchase Agreement, dated May 12, 2010, by and among Teledyne Technologies Incorporated and the Purchasers identified therein (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 2010 (File No. 1-15295))
10.46		Amendment to Note Purchase Agreement, dated as of April 18, 2017, between Teledyne Technologies Incorporated and the noteholders under that certain Note Purchase Agreement dated as of May 12, 2010 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 18, 2017)
10.47		Amended and Restated Credit Agreement, dated as of March 1, 2013, by and among Teledyne Technologies Incorporated (Teledyne), certain subsidiaries of Teledyne as Designated Borrowers, certain subsidiaries of Teledyne as Guarantors, the Lender parties thereto and Bank of America, N.A. as Administrative Agent, Swing-Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 1, 2013) (File No. 1-15295))
10.48		First Amendment to Amended and Restated Credit Facility, dated as of December 4, 2015, by and among Teledyne, certain subsidiaries of Teledyne, the lender parties thereto and Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 4, 2015 (File No. 1-15295))
10.49		Second Amendment, dated as of January 17, 2017, to Amended and Restated Credit Agreement, dated as of March 1, 2013, as supplemented by the First Amendment dated as of December 4, 2015, by and among Teledyne, certain subsidiaries of Teledyne, the lender parties thereto and Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 17, 2017 (File No. 1-15295))
10.50		Third Amendment, dated as of March 17, 2017, to Amended and Restated Credit Agreement dated as of March 1, 2013, by and among Teledyne Technologies Incorporated, certain subsidiaries of Teledyne as Designated Borrowers, certain subsidiaries of Teledyne as Guarantors, the Lender parties thereto and Bank of America, N.A. as Administrative Agent, Swing-Line Lender and L/C Issuer, as amended by that certain First Amendment to Amended and Restated Credit Agreement dated as of December 4, 2015 and that certain Second Amendment to Amended and Restated Credit Agreement dated as of January 17, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 17, 2017)
10.51		Note Purchase Agreement, dated September 23, 2014, by and among Teledyne Technologies Incorporated and the Purchasers identified therein (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on September 23, 2014 (File No. 1-15295))

10.52		Amendment to Note Purchase Agreement, dated as of April 18, 2017, between Teledyne Technologies Incorporated and the noteholders under that certain Note Purchase Agreement dated as of August 27, 2015 (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated April 18, 2017).
10.53		Note Purchase Agreement, dated August 27, 2015, by and among Teledyne Technologies Incorporated and the Purchasers identified therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 27, 2015) (File No. 1-15295))
10.54		Amendment to Note Purchase Agreement, dated as of April 18, 2017, between Teledyne Technologies Incorporated and the noteholders under that certain Note Purchase Agreement dated as of September 23, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 18, 2017).
10.55		Term Loan Credit Agreement, dated as of March 17, 2017, by and among Teledyne Technologies Incorporated and Teledyne Netherlands B.V., as borrowers, the several banks and other financial institutions from time to time parties thereto as lenders, Bank of America, N.A., as administrative agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, sole lead arranger and sole book manager (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 17, 2017).
10.56		Note Purchase and Guaranty Agreement, dated as of April 18, 2017, by and among Teledyne Technologies Incorporated, Teledyne Netherlands B.V. and the purchasers identified therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 18, 2017).
10.57		Guaranty Agreement to Note Purchase Agreement, dated as of April 18, 2017, made by the Subsidiary Guarantors (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated April 18, 2017).
10.58		Form of Indemnification Agreement executed by each of the Company’s directors and named executive officers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 22, 2009 (File No. 1-15295))†
14.1		Teledyne Technologies Incorporated Global Code of Ethical Conduct - this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.pdf
14.2		Code of Ethics for Financial Professionals - this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.asp
14.3		Directors, Code of Business Conduct and Ethics - this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.asp
21		Subsidiaries of Teledyne Technologies Incorporated*
23.1		Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm *
24.1		Power of Attorney - Directors*
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema Document**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB		XBRL Taxonomy Extension Label Linkbase Document**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

*	Submitted electronically herewith.

**	Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language) for the year ended December 30, 2018: (i) the Consolidated Statement of Income, (ii) the Consolidated Balance Sheet, (iii) the Consolidated Statement of Shareholders’ Equity, (iv) the Consolidated Statement of Comprehensive Income (Loss), (v) the Consolidated Statement of Cash Flows, (vi) Notes to Consolidated Financial Statements and (vii) Financial Schedule of Valuation and Qualifying Accounts.

†	Denotes management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Form 10-K.