filings.toolsItem 15. Exhibits and Financial Statement Schedules
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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 42 of this Report, which is incorporated herein by reference.
(2) Financial Statement Schedules
See Schedule II captioned “Valuation and Qualifying Accounts” on page 87 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 | 43 | ||||
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | 44 | ||||
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | 45 | ||||
| Consolidated Statements of Income (Loss) | 47 | ||||
| Consolidated Statements of Comprehensive Income (Loss) | 48 | ||||
| Consolidated Balance Sheets | 49 | ||||
| Consolidated Statements of Stockholders’ Equity | 50 | ||||
| Consolidated Statements of Cash Flows | 51 | ||||
| Notes to Consolidated Financial Statements | 52 | ||||
| Financial Statement Schedule: | |||||
| Schedule II - Valuation and Qualifying Accounts | 87 |
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 on Form 10-K. The financial statements were prepared in accordance with U.S. GAAP and include amounts that are based on the best estimates and judgments of management. The other financial information contained in this Annual Report on Form 10-K 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 28, 2025. 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. Our evaluation of internal control over financial reporting excluded the internal control activities of the Optical Systems (“OS”) business and Advanced Electronics Systems (“AES”) business (collectively, “OS and AES businesses”, or “Qioptiq”) which we acquired in February 2025. We have included the financial results of this acquisition in our consolidated financial statements from the date of acquisition. Total assets (excluding goodwill and intangible assets) and total net sales subject to Qioptiq’s internal control over financial reporting represented approximately 1% and 3% of our consolidated total assets and total net sales as of and for the fiscal year ended December 28, 2025, respectively. We did not assess the effectiveness of internal control over financial reporting at this newly acquired entity due to the insufficient time between the date acquired and year end and the complexity associated with assessing internal controls during integration efforts making the process impractical. Based on this evaluation we believe that, as of December 28, 2025, 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 44 of this Annual Report.
Date: February 20, 2026
| /s/ GEORGE C. BOBB III | ||
| George C. Bobb III | ||
| President and Chief Executive Officer |
Date: February 20, 2026
| /s/ STEPHEN F. BLACKWOOD | ||
| Stephen F. Blackwood | ||
| Executive Vice President and Chief Financial Officer |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors 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 28, 2025, 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 28, 2025, 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 28, 2025, of the Company and our report dated February 20, 2026, expressed an unqualified opinion on those financial statements.
As described in the Report of Management on Teledyne Technologies Incorporated’s Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at the Optical Systems and Advanced Electronics Systems (“Qioptiq”) businesses, which were acquired on February 3, 2025, and whose financial statements (excluding goodwill and intangible assets) constitute approximately 1% of total assets and 3% of net sales of the consolidated financial statement amounts as of and for the year ended December 28, 2025. Accordingly, our audit did not include the internal control over financial reporting at Qioptiq.
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 20, 2026
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors 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 28, 2025 and December 29, 2024, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended December 28, 2025, 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 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2025, 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 28, 2025, 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 20, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.
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.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indefinite-Lived Trademarks - Refer to Notes 2 and 6 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of indefinite-lived trademarks for impairment involves the comparison of the fair value of indefinite-lived trademark to the respective carrying value. For indefinite-lived trademark impairment testing using the quantitative approach, the Company estimated the fair value of its trademarks primarily through the use of a relief from royalty approach based on its best estimate of amounts and timing of projected revenues and compared the estimated fair value to the carrying value of the corresponding trademark. The FLIR indefinite-lived trademark balance was $635.8 million as of December 28, 2025, which is a component of the Company’s acquired intangible assets, net, balance of $2,100.1 million as of December 28, 2025. The application of the relief from royalty method requires management to make significant estimates and assumptions related to projected revenues and the selected discount rate.
Given the significant estimates and assumptions made by management to estimate the fair value of the FLIR indefinite-lived trademark and the difference between the FLIR indefinite-lived trademark’s fair value and carrying value, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions, specifically related to the projected revenues and the selected discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to (1) revenue projections and (2) the selection of the discount rate used to estimate the fair value of the FLIR indefinite-lived trademarks included the following, among others:
-
We tested the effectiveness of management’s controls over FLIR indefinite-lived intangible assets, including those over the revenue projections and discount rate used to estimate the fair value of the FLIR indefinite-lived trademark.
-
We evaluated the reasonableness of the revenue projections by comparing them to (1) FLIR historical financial data, (2) current economic factors and analyst reports of the Company and companies in its peer group, (3) industry reports, (4) assumptions used by the Company in its budgeting process, (5) newly executed contracts and (6) order backlog.
-
We evaluated management’s ability to accurately forecast future revenue by comparing actual results to prior year forecasts in the respective years.
-
With the assistance of our fair value specialists, we performed an analysis comparing applicable industry forecasted long-term revenue growth rate to management’s projected revenues used within the valuation model.
-
With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by developing a range of independent estimates and comparing those to the discount rate selected by management.
/s/ Deloitte & Touche LLP
Los Angeles, California
February 20, 2026
We have served as the Company’s auditor since 2015.
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Amounts in millions, except per-share amounts)
| For the Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net sales | $ | 6,115.4 | $ | 5,670.0 | $ | 5,635.5 | |||||||||||
| Costs and expenses | |||||||||||||||||
| Cost of sales | 3,500.6 | 3,235.2 | 3,196.1 | ||||||||||||||
| Selling, general and administrative | 931.1 | 902.6 | 852.0 | ||||||||||||||
| Research and development | 317.3 | 292.6 | 356.3 | ||||||||||||||
| Acquired intangible asset amortization | 216.6 | 198.0 | 196.7 | ||||||||||||||
| Impairment of acquired intangible assets | — | 52.5 | — | ||||||||||||||
| Total costs and expenses | 4,965.6 | 4,680.9 | 4,601.1 | ||||||||||||||
| Operating income (loss) | 1,149.8 | 989.1 | 1,034.4 | ||||||||||||||
| Interest and debt expense, net | (59.6) | (57.9) | (77.3) | ||||||||||||||
| Non-service retirement benefit income | 10.9 | 10.8 | 12.4 | ||||||||||||||
| Gain (loss) on debt extinguishment | 15.0 | — | 1.6 | ||||||||||||||
| Other income (expense), net | (21.6) | (4.1) | (12.2) | ||||||||||||||
| Income (loss) before income taxes | 1,094.5 | 937.9 | 958.9 | ||||||||||||||
| Provision (benefit) for income taxes | 198.8 | 117.2 | 72.3 | ||||||||||||||
| Net income (loss) including noncontrolling interest | 895.7 | 820.7 | 886.6 | ||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 0.9 | 1.5 | 0.9 | ||||||||||||||
| Net income (loss) attributable to Teledyne | $ | 894.8 | $ | 819.2 | $ | 885.7 | |||||||||||
| Basic earnings per common share | $ | 19.12 | $ | 17.43 | $ | 18.80 | |||||||||||
| Weighted average common shares outstanding | 46.8 | 47.0 | 47.1 | ||||||||||||||
| Diluted earnings per common share | $ | 18.88 | $ | 17.21 | $ | 18.49 | |||||||||||
| Weighted average diluted common shares outstanding | 47.4 | 47.6 | 47.9 |
The accompanying notes are an integral part of these financial statements.
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in millions)
| For the Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income (loss) including noncontrolling interest | $ | 895.7 | $ | 820.7 | $ | 886.6 | |||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign exchange translation adjustment | 376.8 | (209.6) | 79.6 | ||||||||||||||
| Hedge activity, net of tax | 2.7 | (10.4) | 6.9 | ||||||||||||||
| Pension and postretirement benefit adjustments, net of tax | 35.0 | 14.2 | 5.9 | ||||||||||||||
| Other comprehensive income (loss) (a) | 414.5 | (205.8) | 92.4 | ||||||||||||||
| Comprehensive income (loss) including noncontrolling interest | 1,310.2 | 614.9 | 979.0 | ||||||||||||||
| Less: Comprehensive income (loss) attributable to noncontrolling interest | 0.9 | 1.5 | 0.9 | ||||||||||||||
| Comprehensive income (loss) attributable to Teledyne | $ | 1,309.3 | $ | 613.4 | $ | 978.1 |
(a) Net of income tax expense of $12.2 million in 2025, income tax expense of $0.6 million for 2024 and income tax expense of $3.8 million for 2023.
The accompanying notes are an integral part of these financial statements.
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Amounts in millions, except share amounts)
| December 28, 2025 | December 29, 2024 | ||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 352.4 | $ | 649.8 | |||||||
| Accounts receivable, net | 992.4 | 901.1 | |||||||||
| Unbilled receivables, net | 374.6 | 312.1 | |||||||||
| Inventories, net | 1,043.3 | 914.4 | |||||||||
| Prepaid expenses and other current assets | 292.9 | 167.2 | |||||||||
| Total Current Assets | 3,055.6 | 2,944.6 | |||||||||
| Property, plant and equipment, net | 839.1 | 745.2 | |||||||||
| Goodwill | 8,687.6 | 7,990.5 | |||||||||
| Acquired intangible assets, net | 2,100.1 | 2,012.9 | |||||||||
| Prepaid pension assets | 286.2 | 227.6 | |||||||||
| Other assets, net | 316.7 | 279.7 | |||||||||
| Total Assets | $ | 15,285.3 | $ | 14,200.5 | |||||||
| Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 486.6 | $ | 416.4 | |||||||
| Accrued liabilities | 923.4 | 844.9 | |||||||||
| Current portion of long-term debt and other debt | 450.1 | 0.3 | |||||||||
| Total Current Liabilities | 1,860.1 | 1,261.6 | |||||||||
| Long-term debt | 2,025.3 | 2,648.7 | |||||||||
| Long-term deferred tax liabilities | 369.6 | 354.0 | |||||||||
| Other long-term liabilities | 516.4 | 380.8 | |||||||||
| Total Liabilities | 4,771.4 | 4,645.1 | |||||||||
| Commitments and Contingencies | |||||||||||
| Redeemable Noncontrolling Interest | — | 6.0 | |||||||||
| Stockholders’ Equity | |||||||||||
| Preferred stock, $0.01 par value; authorized 15,000,000 shares; outstanding shares-none | — | — | |||||||||
| Common stock, $0.01 par value; authorized 125,000,000 shares; Issued shares: 47,424,847 at December 28, 2025, and 47,432,888 at December 29, 2024; Outstanding shares: 46,185,578 at December 28, 2025, and 46,706,612 at December 29, 2024 | 0.5 | 0.5 | |||||||||
| Additional paid-in capital | 4,383.2 | 4,414.5 | |||||||||
| Retained earnings | 7,140.8 | 6,266.7 | |||||||||
| Treasury stock, 1,239,269 at December 28, 2025, and 726,276 at December 29, 2024 | (585.2) | (292.4) | |||||||||
| Accumulated other comprehensive income (loss) | (425.4) | (839.9) | |||||||||
| Total Stockholders’ Equity | 10,513.9 | 9,549.4 | |||||||||
| Total Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity | $ | 15,285.3 | $ | 14,200.5 |
The accompanying notes are an integral part of these financial statements.
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in millions)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | 0.5 | $ | 4,353.4 | $ | 4,561.8 | $ | (20.0) | $ | (726.5) | $ | 8,169.2 | |||||||||||||||||||||||
| Net income (loss) | — | — | 885.7 | — | — | 885.7 | |||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | 92.4 | 92.4 | |||||||||||||||||||||||||||||
| Treasury stock issued | — | (20.0) | — | 20.0 | — | — | |||||||||||||||||||||||||||||
| Stock-based compensation and other | — | 28.5 | — | — | — | 28.5 | |||||||||||||||||||||||||||||
| Exercise of stock options | — | 45.4 | — | — | — | 45.4 | |||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 0.5 | 4,407.3 | 5,447.5 | — | (634.1) | 9,221.2 | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | 819.2 | — | — | 819.2 | |||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | — | (205.8) | (205.8) | |||||||||||||||||||||||||||||
| Treasury stock issued | — | (61.6) | — | 61.6 | — | — | |||||||||||||||||||||||||||||
| Treasury stock repurchased | — | — | — | (354.0) | — | (354.0) | |||||||||||||||||||||||||||||
| Stock-based compensation and other | — | 30.9 | — | — | — | 30.9 | |||||||||||||||||||||||||||||
| Exercise of stock options | — | 37.9 | — | — | — | 37.9 | |||||||||||||||||||||||||||||
| Balance, December 29, 2024 | 0.5 | 4,414.5 | 6,266.7 | (292.4) | (839.9) | 9,549.4 | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | 894.8 | — | — | 894.8 | |||||||||||||||||||||||||||||
| Acquisition of redeemable noncontrolling interest | — | — | (20.7) | — | — | (20.7) | |||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | — | — | — | — | 414.5 | 414.5 | |||||||||||||||||||||||||||||
| Treasury stock issued | — | (110.1) | — | 110.1 | — | — | |||||||||||||||||||||||||||||
| Treasury stock repurchased, including excise tax | — | — | — | (402.9) | — | (402.9) | |||||||||||||||||||||||||||||
| Stock-based compensation and other | — | 30.0 | — | — | — | 30.0 | |||||||||||||||||||||||||||||
| Exercise of stock options | — | 48.8 | — | — | — | 48.8 | |||||||||||||||||||||||||||||
| Balance, December 28, 2025 | $ | 0.5 | $ | 4,383.2 | $ | 7,140.8 | $ | (585.2) | $ | (425.4) | $ | 10,513.9 |
The accompanying notes are an integral part of these financial statements.
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in millions)
| For the Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating Activities | |||||||||||||||||
| Net income (loss) including noncontrolling interest | $ | 895.7 | $ | 820.7 | $ | 886.6 | |||||||||||
| Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by (used in) operating activities: | |||||||||||||||||
| Depreciation and amortization | 336.3 | 309.9 | 316.4 | ||||||||||||||
| Stock-based compensation | 39.6 | 37.7 | 32.3 | ||||||||||||||
| Gain (loss) on debt extinguishment | (15.0) | — | (1.6) | ||||||||||||||
| Impairment of acquired intangible assets | — | 52.5 | — | ||||||||||||||
| Changes in operating assets and liabilities excluding the effect of businesses acquired: | |||||||||||||||||
| Accounts receivable and unbilled receivables | (36.6) | (22.8) | (21.7) | ||||||||||||||
| Inventories | (42.8) | (10.4) | (14.3) | ||||||||||||||
| Accounts payable | 35.6 | 33.7 | (124.9) | ||||||||||||||
| Deferred taxes and income taxes receivable (payable), net | (86.6) | (120.7) | (230.9) | ||||||||||||||
| Prepaid expenses and other assets | (47.1) | (7.5) | (42.6) | ||||||||||||||
| Accrued expenses and other liabilities | 71.2 | 89.4 | 49.7 | ||||||||||||||
| Other operating, net | 41.0 | 9.4 | (12.9) | ||||||||||||||
| Net cash provided by (used in) operating activities | 1,191.3 | 1,191.9 | 836.1 | ||||||||||||||
| Investing Activities | |||||||||||||||||
| Purchases of property, plant and equipment | (117.3) | (83.7) | (114.9) | ||||||||||||||
| Purchase of businesses, net of cash acquired | (821.4) | (123.7) | (77.7) | ||||||||||||||
| Other investing, net | 0.8 | 0.2 | 2.3 | ||||||||||||||
| Net cash provided by (used in) investing activities | (937.9) | (207.2) | (190.3) | ||||||||||||||
| Financing Activities | |||||||||||||||||
| Net proceeds (repayments) from credit facility | — | — | (125.0) | ||||||||||||||
| Proceeds from (payments on) fixed rate senior notes | (162.0) | (450.0) | (308.4) | ||||||||||||||
| Proceeds from (payments on) other debt | (1.8) | (150.6) | (245.5) | ||||||||||||||
| Purchase of treasury stock, including excise tax | (402.9) | (354.0) | — | ||||||||||||||
| Liquidations (maturities) of cross currency swap | — | (18.7) | (13.5) | ||||||||||||||
| Acquisition of redeemable noncontrolling interest | (27.2) | — | — | ||||||||||||||
| Proceeds from exercise of stock options | 48.8 | 37.9 | 45.4 | ||||||||||||||
| Other financing, net | (10.1) | (10.4) | (4.5) | ||||||||||||||
| Net cash provided by (used in) financing activities | (555.2) | (945.8) | (651.5) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 4.4 | (37.4) | 15.9 | ||||||||||||||
| Change in cash and cash equivalents | (297.4) | 1.5 | 10.2 | ||||||||||||||
| Cash and cash equivalents—beginning of period | 649.8 | 648.3 | 638.1 | ||||||||||||||
| Cash and cash equivalents—end of period | $ | 352.4 | $ | 649.8 | $ | 648.3 |
The accompanying notes are an integral part of these financial statements.
TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 28, 2025
Note 1. Description of Business
Teledyne Technologies Incorporated (“Teledyne” or the “Company”) 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. Teledyne’s 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. The Company also supplies engineered systems for defense, space, environmental and energy applications. The Company believes that its technological capabilities, innovation and ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in the markets and industries in which it competes.
The Company’s businesses are aligned in four segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
Note 2. Summary of Significant Accounting Policies
Fiscal Year
The Company operates on a 52- or 53-week fiscal year convention ending on the Sunday nearest to December 31. Fiscal year 2025 was a 52-week fiscal year and ended on December 28, 2025. Fiscal year 2024 was a 52-week fiscal year and ended on December 29, 2024. Fiscal year 2023 was a 52-week fiscal year and ended on December 31, 2023. References to the years 2025, 2024 and 2023 are intended to refer to the respective fiscal year unless otherwise noted.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Teledyne and its majority-owned subsidiaries. Intercompany accounts and intercompany transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current period presentation, including the presentation of the proceeds from (payments on) fixed rate senior notes and proceeds from (payments on) other debt on separate cash flow statement lines.
Business Acquisitions
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.
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 gains and losses arising from the translation of financial statements, including certain intercompany foreign currency transactions that are deemed to be of a long-term investment nature, are included as a component of accumulated other comprehensive income (loss) (“AOCI”).
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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 used are reasonable.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and highly liquid money-market mutual funds with maturities of three months or less when purchased.
Accounts Receivable, Contract Assets and Contract Liabilities
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). Under the typical payment terms of the Company’s over time contracts, the customer pays the Company either performance-based payments or progress payments. Amounts billed and due from the Company’s customers are classified as receivables on the consolidated balance sheets. The Company may receive interim payments as work progresses, although for some contracts, the Company may be entitled to receive an advance payment. The Company recognizes a liability for these interim and advance payments in excess of revenue recognized and present it as a contract liability. 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 the Company 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, the Company records an unbilled receivable (contract asset) for the amount entitled to be received based on an enforceable right to payment.
The Company evaluates the collectability of its accounts receivable and contract assets based on a combination of factors, and judgment is required in the estimation process. If the Company becomes aware of a customer’s inability to meet its financial obligations, a specific allowance is recorded to reduce the net receivable to the amount reasonably believed to be collectible from the customer. For all other customers, the Company uses an aging schedule and recognizes allowances for doubtful accounts based on the creditworthiness of the debtor, the age and status of outstanding receivables, the current business environment, and historical collection experience adjusted for current expectations for the customers or industry. Accounts receivable are written off against the allowance for uncollectible accounts when the Company determines amounts are no longer collectible. Trade credit is extended based upon evaluations of each customer’s ability to perform its obligations, which are updated periodically.
Inventories
Inventories are stated at the lower of cost or net realizable value and primarily valued on an average cost or first-in, first-out method. Inventory adjustments 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 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 was $119.2 million in 2025, $111.3 million in 2024 and $119.1 million in 2023.
Goodwill, Acquired Intangible Assets and Other Long-Lived Assets
Goodwill and acquired 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 determines 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. A quantitative impairment test, if applicable, is used to identify potential goodwill impairment and then measure the amount of goodwill impairment loss, if any. 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 more frequently. The Company performed a quantitative impairment test for FLIR and qualitative impairment tests for all other reporting units in 2025.
The Company reviews intangible and other long-lived assets subject to depreciation or 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, and reflected in impairment of acquired intangible assets at the respective business segment.
Pension and Postretirement Costs
The Company’s accounting for its defined benefit pension plans requires that amounts recognized in financial statements be determined on an actuarial basis, rather than as contributions are made to the plan. In consultation with actuaries, the Company determines the appropriate assumptions for use in determining the liability for future pension benefits. Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor. The accounting corridor is a defined range within which amortization of net gains and losses is not required and is equal to 10% of the greater of the market-related value of assets or benefit obligations. Gains or losses outside of the corridor are subject to amortization.
Product Warranties
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 preexisting warranty reserves is assessed regularly, and the reserve is adjusted as necessary based on a review of historical 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 consolidated balance sheets.
Environmental Liabilities
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.
Revenue Recognition
The Company determines the appropriate method by which it recognizes 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 the Company’scustomers. The Company accounts 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, the Company typically uses the expected cost plus a margin approach to estimate the standalone selling price for that performance obligation.
Prior to the acquisition of Qioptiq, approximately 70% of the Company’s revenue was recognized at a point in time, with the remaining 30% of revenue recognized over time. The majority of Qioptiq’s revenue is recognized over time. In 2025, approximately 60% of revenue was recognized at a point in time, with the remaining 40% recognized over time.
Revenue recognized at a point in time primarily relates 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 commercial contracts within the Digital Imaging, Instrumentation, and Aerospace and Defense Electronics segments. In limited circumstances, customer specified acceptance criteria exist. If the Company cannot objectively demonstrate that the product meets those specifications prior to the shipment, the revenue is deferred until customer acceptance is obtained. The transaction price in these arrangements 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 anticipated performance and all information (historical, current and forecasted) that is reasonably available to the Company.
Revenue recognized over time primarily relates 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 the Company’s 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 a 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. The Company generally uses the cost-to-cost measure of progress as this measure best depicts the transfer of control to the customer which occurs as the Company incurs costs on 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. The Company estimates variable consideration at the amount to which it expects to be entitled, and the Company includes 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 the anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.
The majority of the Company’s 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. The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the contract modifications on the Company’s 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 the 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 the cost-to-cost method, the Company has an EAC process in which management reviews the progress and execution of the Company’s performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue, determining reasonably dependable cost estimates, and making assumptions for schedule and technical issues. 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 2025 and 2024 was approximately $12.7 million of favorable operating income and $2.5 million of unfavorable operating income, respectively. The 2025 amount related to favorable changes in estimates that impacted revenue, and, to a lesser degree, cost of sales within the Digital Imaging and Aerospace and Defense Electronics operating segments. None of the effects of changes in estimates on any individual contract were material to the consolidated statements of income (loss) for any period presented.
While extended or non-customary warranties do not represent a significant portion of the Company’s revenue, the Company recognizes warranty services as a separate performance obligation 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 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.
Shipping and Handling
Shipping and handling fees reimbursed by customers are classified as revenue while shipping and handling costs incurred by the Company are classified as cost of sales in the consolidated statements of income (loss).
Research and Development
R&D costs are expensed as incurred.
Leases
The Company determines if an arrangement is a lease at inception. Operating leases are recorded as right-of-use assets in non-current other assets, net and the related lease liabilities in accrued liabilities and other long-term liabilities. The Company does not have material finance leases or subleases.
Operating lease right-of-use assets represent a right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and use an implicit rate when readily available. Since most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate to determine the present value of lease payments. The rate will take into consideration the underlying asset’s economic environment, including the length of the lease term and currency that the lease is payable in. The Company’s lease agreements may include options to extend or early terminate the lease term at either a fixed cost, fixed increase or market value adjustment. The Company evaluates the likelihood of exercising each renewal option based on many factors, including the length of the renewal option and the future new lease cost, if known, or the estimated future new lease cost if it is not a fixed amount and will include those renewal options that are reasonably certain to be exercised for purposes of calculating the lease liability and corresponding right-of-use asset. Lease expense for operating leases is recognized on a straight-line basis over the lease term.
Stock Incentive Plans
Teledyne has long-term incentive plans which provide its Board the flexibility to grant restricted stock, restricted stock units, non-qualified stock options, incentive stock options and stock appreciation rights to officers and employees of Teledyne. During 2025, 2024 and 2023, the Company has granted time-based stock options, time-based restricted stock unit awards, and performance-based restricted stock unit awards. 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. Employee time-based restricted stock units vest in one-third increments on the first, second and third anniversary of the grant. Performance-based restricted stock awards granted during 2025, 2024 and 2023 may be earned based upon a time-based component and the performance of the Company’s return to stockholders over a three-year period.
In 2021, the Company discontinued the Performance Share Plan (“PSP”), with an immaterial amount of compensation expense recorded in 2023 and 2024. No compensation expense related to the PSP was recorded in 2025. Teledyne’s PSP provided grants of performance share units, which key officers and executives could earn if Teledyne met specified performance objectives over a three-year period. Awards were payable in cash and to the extent available, shares of Teledyne common stock.
Stock-based Compensation Costs
The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock and restricted stock units. The fair value of share-based compensation is determined at the grant date and the recognition of the related expense is generally recorded over the period in which the share-based compensation vests. Since 2019, stock options granted to the Company’s Executive Chairman are expensed immediately, as stock options continue to vest after retirement. The Company issues shares of common stock upon the exercise of stock options.
The fair value of stock options granted through 2022 was determined by using a lattice-based option pricing model, and the Company did not grant stock options in 2023. In recent years, the Company began granting stock options to a smaller group of employees, as the Company began granting restricted stock units to a larger group of employees. In 2024, the Company began using the Black-Scholes option pricing model to determine the fair value of stock options. The adoption of the Black-Scholes option pricing model was driven by a review of option exercise history, which more closely aligned with the methodology of the Black-Scholes option pricing model, and the adoption of the Black-Scholes option pricing model did not materially change the grant-date fair value calculation. 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 Separate Trading of Registered Interest and Principal of Securities (“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.
Treasury Stock
In July 2025, the Board approved a stock repurchase program authorizing the Company to repurchase up to $2.0 billion of Teledyne’s common stock. This authorization superseded the remaining prior open stock repurchase programs authorized by the Board. The newly authorized stock repurchase program does not have a stated expiration date. Shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions or via an accelerated stock repurchase program. Shares could be repurchased in a plan pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The repurchase program is expected to remain open continuously, and the number of shares purchased will depend on a variety of factors, such as share price, levels of cash available, acquisitions and alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. The Company currently intends to fund future share repurchases, if any, with cash on hand and available borrowings under the Company's credit facility.
Preferred Stock
Authorized preferred stock may be issued with designations, powers and preferences designated by the Board. There were no shares of preferred stock issued or outstanding in 2025, 2024 or 2023.
Redeemable Noncontrolling Interest
The minority ownership interest in shares of NL Acoustics was classified as a redeemable noncontrolling interest on the consolidated balance sheets until the third quarter of 2025 due to a put option under which the minority owners required the Company to purchase the remaining ownership interest. Adjustments for the acquisition of the redeemable noncontrolling interest were recorded through retained earnings.
Income Taxes
The Company is subject to income taxes in the United States and numerous foreign jurisdictions. The provision for income taxes is computed 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 the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers 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, the Company begins 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 the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, the Company considers 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. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits 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.
Earnings Per Common Share
Basic and diluted earnings per common share are computed based on net income (loss) attributable to Teledyne. The weighted average number of common shares outstanding during the period is used in the calculation of basic earnings per share. This number of shares is 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 common share.
Derivative Instruments and Hedging Activities
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 reduce the volatility of reported earnings. The Company’s foreign currency objective is achieved through the following:
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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 the Company’s Canadian companies, and in British pounds for the Company’s U.K. companies. These contracts are designated and qualify as cash flow hedges.
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The Company utilizes foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables.
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The Company utilizes cross-currency swaps to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar.
The effectiveness of the cash flow hedge forward contracts 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 the Company’s consolidated statements of income (loss), at which time the effective amount in AOCI is reclassified to revenue in the consolidated statements of income (loss).
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, due to missed forecasts.
The effectiveness of net investment hedge contracts is assessed using the spot method. For derivative instruments that are designated and qualify as a net investment hedge, changes in the value of the effective portion of the derivative instrument are recognized in AOCI – Foreign currency translation adjustment to offset the effects of foreign currency changes on the related net investments in foreign subsidiaries. This amount is reclassified to the income statement when the net investment in the foreign subsidiary is sold or substantially liquidated. Changes in the fair value of the ineffective portion of derivative instruments are recognized in earnings in the current period. The Company elected to amortize the interest accrual for periodic cash settlements of cross-currency swaps (excluded components) in interest expense. Cash flows of such derivative financial instruments are classified as an investing activity, which is consistent with a derivative’s nature and the nature of the underlying hedged item.
Fair Value Measurements
Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The Company considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. The fair value hierarchy comprises three levels. Level 1 relates to quoted prices in active markets for identical assets or liabilities. Level 2 relates to 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 are 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; 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 December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction focuses on the rate reconciliation and income taxes paid. ASU 2023-09 was effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU as of December 30, 2024, and applied the amendments in this ASU prospectively to the 2025 period presented in the financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires public entities, on an interim and annual basis, to provide disclosure of specified information about costs and expenses in the notes to the financial statements. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The ASU establishes guidance for the recognition, measurement, and presentation of government grants received by business entities. ASU No. 2025-10 retains the existing disclosure requirements in FASB Accounting Standards Codification (ASC) Topic 832, Government Assistance. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2028, and for interim reporting periods within those annual reporting periods, with early adoption permitted. Entities may adopt the amendments using a modified-prospective, modified-retrospective, or full-retrospective approach for all government grants. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.
Other ASU’s issued but not effective until after December 28, 2025 are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.
Note 3. Business Acquisitions
2025 Acquisitions
TransponderTech
During the fourth quarter of 2025, the Company acquired the TransponderTech business headquartered in Linkoping, Sweden from Saab AB for approximately $57.9 million in cash, net of cash acquired. The TransponderTech business includes a portfolio of connected commercial maritime products, including Automatic Identification System, Very High Frequency Data Exchange System and Global Navigation Satellite System technologies. TransponderTech is part of the Digital Imaging segment. The Company funded the acquisition from cash on hand. Goodwill resulting from the TransponderTech acquisition will not be deductible for tax purposes.
NL Acoustics
During the third quarter of 2025, the Company acquired the redeemable noncontrolling interest of NL Acoustics for $27.2 million in cash, with the acquisition of the noncontrolling interest treated as an equity transaction during the period.
Maretron
During the third quarter of 2025, the Company acquired the assets of Maretron, including the brand’s Octoplex, MPower and MConnect product lines from Littelfuse, Inc. The Maretron business is part of the Digital Imaging segment, and the acquisition is not material for further disclosure.
Micropac
During the first quarter of 2025, the Company acquired Micropac Industries, Inc. (“Micropac”) for approximately $51.2 million in cash, net of cash acquired. Micropac, founded in 1963 and headquartered in Garland, Texas, designs and manufactures microelectronic circuits, optoelectronic components and sensor and display assemblies primarily for military, aerospace and medical applications. Micropac is part of the Aerospace and Defense Electronics segment. The Company funded the acquisition from cash on hand. Goodwill resulting from the Micropac acquisition will not be deductible for tax purposes.
Optical Systems and Advanced Electronics Systems (“Qioptiq”) businesses
During the first quarter of 2025, the Company acquired select aerospace and defense electronics businesses of Excelitas Technologies Corp. for approximately $702.8 million in cash, net of cash acquired, and subject to certain adjustments. The acquisition includes the OS business which is based in Northern Wales, UK, as well as the U.S.-based AES business (collectively, Qioptiq). Qioptiq is part of the Aerospace and Defense Electronics segment. The Company funded the acquisition from available borrowings on the credit facility as well as from cash on hand. Goodwill resulting from the acquisition of the UK operations will not be deductible for tax purposes, but goodwill resulting from the acquisition of the U.S. operations will be deductible for tax purposes.
2024 Acquisitions
Adimec
During the second quarter of 2024, the Company acquired Adimec Holding B.V. and its subsidiaries (“Adimec”) for $88.7 million in cash, net of cash acquired, and subject to certain adjustments. Adimec, founded in 1992 and headquartered in Eindhoven, Netherlands, develops customized high-performance industrial and scientific cameras. Adimec is part of the Digital Imaging segment. Goodwill resulting from the Adimec acquisition will not be deductible for tax purposes.
Valeport
During the second quarter of 2024, the Company acquired Valeport Holdings 2019 Limited and its affiliates (“Valeport”) for $35.0 million in cash, net of cash acquired, subject to certain adjustments. Valeport, founded in 1969 and headquartered in Totnes, UK, designs and manufactures underwater sensors for environmental, energy, construction and defense applications. Valeport is part of the Marine Instrumentation product line within the Instrumentation segment. Goodwill resulting from the Valeport acquisition will not be deductible for tax purposes.
2023 Acquisitions
Xena Networks
During the fourth quarter of 2023, the Company acquired Xena Networks ApS and affiliates (“Xena Networks”) for $24.2 million in cash, net of cash acquired, and subject to certain adjustments. Xena Networks, headquartered in Denmark, is a leading provider of high-speed terabit ethernet validation, quality assurance, and production test solutions. Xena Networks is part of the Test and Measurement Instrumentation product line within the Instrumentation segment. Goodwill resulting from the Xena Networks acquisition will not be deductible for tax purposes.
ChartWorld
During the first quarter of 2023, the Company acquired ChartWorld International Limited and affiliates (“ChartWorld”) for $53.5 million in cash, net of cash acquired, and subject to certain adjustments. ChartWorld, headquartered in Cyprus, with additional locations in Germany, Singapore, Canada and Japan, is a provider of digital marine navigation hardware and software provided through an affordable subscription-based model. ChartWorld is part of the Digital Imaging segment. Goodwill resulting from the ChartWorld acquisition will not be deductible for tax purposes.
The following tables show the purchase price (net of cash acquired), goodwill acquired, and acquired intangible assets for the acquisitions made in 2025 and 2024 (in millions):
| 2025 | |||||||||||||||||||||||
| Acquisitions | Acquisition Date | Cash Paid (a) | Goodwill Acquired | Acquired Intangible Assets | |||||||||||||||||||
| TransponderTech | October 31, 2025 | $ | 57.2 | $ | 42.1 | $ | 7.9 | ||||||||||||||||
| Qioptiq | February 3, 2025 | 702.8 | 428.7 | 208.2 | |||||||||||||||||||
| Micropac | December 30, 2024 | 51.2 | 5.0 | 8.1 | |||||||||||||||||||
| Total | $ | 811.2 | $ | 475.8 | $ | 224.2 |
(a) Net of cash acquired
| 2024 | |||||||||||||||||||||||
| Acquisitions | Acquisition Date | Cash Paid (a) | Goodwill Acquired | Acquired Intangible Assets | |||||||||||||||||||
| Adimec | June 4, 2024 | $ | 88.7 | $ | 65.6 | $ | 17.9 | ||||||||||||||||
| Valeport | April 10, 2024 | 35.0 | 23.6 | 7.8 | |||||||||||||||||||
| Total | $ | 123.7 | $ | 89.2 | $ | 25.7 |
(a) Net of cash acquired
The following table is a summary at the acquisition date of the acquired intangible assets and weighted average useful life in years for the Qioptiq, Micropac and TransponderTech acquisitions made in 2025 (dollars in millions):
| Acquired intangible assets: | Acquired Intangible Assets | Weighted Average Useful Life In Years | |||||||||
| Proprietary technology | $ | 70.7 | 8.3 | ||||||||
| Customer list/relationships/backlog | 140.1 | 15.6 | |||||||||
| Trademarks | 13.4 | 6.6 | |||||||||
| Total acquired intangible assets subject to amortization | $ | 224.2 | 12.8 |
The Company’s cost to acquire these 2025 and 2024 acquisitions was 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 was recorded as goodwill. The fair value of the acquired identifiable assets and liabilities for the TransponderTech acquisition is provisional pending finalization of the Company’s acquisition accounting, as the acquisition occurred in the fourth quarter of 2025.
Pro forma results of operations, the revenue and net income subsequent to the acquisition date, and a more detailed breakout of the major classes of assets and liabilities acquired for the 2025 and 2024 acquisitions have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to the Company’s financial results. The significant factors that resulted in recognition of goodwill for the 2025 and 2024 acquisitions included the acquired businesses’ market positions, growth opportunities in the markets in which they operate, their experienced work force and established operating infrastructures. The results of these acquisitions have been included in Teledyne’s results since the dates of their respective acquisition.
Note 4. Business Segments
Teledyne’s businesses are aligned in four reportable segments: Digital Imaging, Instrumentation, 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 Company’s Executive Chairman, who has been identified as the Chief Operating Decision Maker, uses operating income (loss) as the measure of profit or loss to assess the performance of each segment by comparing actual results to the budget and prior year, and to allocate resources.
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 MEMS and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters. 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 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. 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.
Business segment results include net sales and operating income by segment but excludes corporate office expenses. Corporate expense primarily includes various administrative expenses relating to the corporate office not allocated to the segments and is included within SG&A expense.
Information for the Company’s business segments was as follows (in millions):
| Fiscal Year Ended December 28, 2025 | |||||||||||||||||||||||||||||
| Digital Imaging | Instrumentation | Aerospace and Defense Electronics | Engineered Systems | Total | |||||||||||||||||||||||||
| Net sales (a) | $ | 3,163.9 | $ | 1,457.1 | $ | 1,058.7 | $ | 435.7 | $ | 6,115.4 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||||||||
| Cost of sales | 1,771.4 | 742.5 | 624.6 | 362.1 | 3,500.6 | ||||||||||||||||||||||||
| Selling, general and administrative | 491.5 | 201.9 | 123.8 | 26.4 | 843.6 | ||||||||||||||||||||||||
| Research and development | 187.5 | 99.4 | 29.8 | 0.6 | 317.3 | ||||||||||||||||||||||||
| Acquired intangible asset amortization | 185.3 | 12.9 | 18.4 | — | 216.6 | ||||||||||||||||||||||||
| Segment Operating income (loss) | $ | 528.2 | $ | 400.4 | $ | 262.1 | $ | 46.6 | $ | 1,237.3 | |||||||||||||||||||
| Reconciliation to Income (loss) before income taxes | |||||||||||||||||||||||||||||
| Corporate expense | (87.5) | ||||||||||||||||||||||||||||
| Interest and debt expense, net | (59.6) | ||||||||||||||||||||||||||||
| Non-service retirement benefit income | 10.9 | ||||||||||||||||||||||||||||
| Gain (loss) on debt extinguishment | 15.0 | ||||||||||||||||||||||||||||
| Other income (expense), net | (21.6) | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 1,094.5 |
(a) Net sales exclude inter-segment sales of $23.3 million for the fiscal year ended 2025.
| Fiscal Year Ended December 29, 2024 | |||||||||||||||||||||||||||||
| Digital Imaging | Instrumentation | Aerospace and Defense Electronics | Engineered Systems | Total | |||||||||||||||||||||||||
| Net sales (a) | $ | 3,070.8 | $ | 1,382.6 | $ | 776.8 | $ | 439.8 | $ | 5,670.0 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||||||||
| Cost of sales | 1,708.0 | 706.4 | 441.3 | 379.5 | 3,235.2 | ||||||||||||||||||||||||
| Selling, general and administrative | 510.7 | 196.4 | 91.2 | 26.5 | 824.8 | ||||||||||||||||||||||||
| Research and development | 177.3 | 92.6 | 21.8 | 0.9 | 292.6 | ||||||||||||||||||||||||
| Acquired intangible asset amortization | 183.3 | 13.9 | 0.8 | — | 198.0 | ||||||||||||||||||||||||
| Impairment of acquired intangible assets | 49.5 | 3.0 | — | — | 52.5 | ||||||||||||||||||||||||
| Segment Operating income (loss) | $ | 442.0 | $ | 370.3 | $ | 221.7 | $ | 32.9 | $ | 1,066.9 | |||||||||||||||||||
| Reconciliation to Income (loss) before income taxes | |||||||||||||||||||||||||||||
| Corporate expense | (77.8) | ||||||||||||||||||||||||||||
| Interest and debt expense, net | (57.9) | ||||||||||||||||||||||||||||
| Non-service retirement benefit income | 10.8 | ||||||||||||||||||||||||||||
| Other income (expense), net | (4.1) | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 937.9 |
(a) Net sales exclude inter-segment sales of $24.6 million for the fiscal year ended 2024.
| Fiscal Year Ended December 31, 2023 | |||||||||||||||||||||||||||||
| Digital Imaging | Instrumentation | Aerospace and Defense Electronics | Engineered Systems | Total | |||||||||||||||||||||||||
| Net sales (a) | $ | 3,144.1 | $ | 1,326.2 | $ | 726.5 | $ | 438.7 | $ | 5,635.5 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||||||||
| Cost of sales | 1,711.4 | 692.6 | 424.6 | 367.5 | 3,196.1 | ||||||||||||||||||||||||
| Selling, general and administrative | 489.6 | 188.2 | 83.7 | 24.9 | 786.4 | ||||||||||||||||||||||||
| Research and development | 244.0 | 92.9 | 17.8 | 1.6 | 356.3 | ||||||||||||||||||||||||
| Acquired intangible asset amortization | 181.7 | 14.2 | 0.8 | — | 196.7 | ||||||||||||||||||||||||
| Segment Operating income (loss) | $ | 517.4 | $ | 338.3 | $ | 199.6 | $ | 44.7 | $ | 1,100.0 | |||||||||||||||||||
| Reconciliation to Income (loss) before income taxes | |||||||||||||||||||||||||||||
| Corporate expense | (65.6) | ||||||||||||||||||||||||||||
| Interest and debt expense, net | (77.3) | ||||||||||||||||||||||||||||
| Non-service retirement benefit income | 12.4 | ||||||||||||||||||||||||||||
| Gain (loss) on debt extinguishment | 1.6 | ||||||||||||||||||||||||||||
| Other income (expense), net | (12.2) | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | 958.9 |
(a) Net sales exclude inter-segment sales of $29.4 million for the fiscal year ended 2023.
Depreciation and amortization for the Company’s business segments was as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Digital Imaging | $ | 262.5 | $ | 261.2 | $ | 268.9 | |||||||||||
| Instrumentation | 27.7 | 29.2 | 27.7 | ||||||||||||||
| Aerospace and Defense Electronics | 35.9 | 10.5 | 11.5 | ||||||||||||||
| Engineered Systems | 4.6 | 4.6 | 4.4 | ||||||||||||||
| Total segment depreciation and amortization | 330.7 | 305.5 | 312.5 | ||||||||||||||
| Corporate | 5.6 | 4.4 | 3.9 | ||||||||||||||
| Total Teledyne depreciation and amortization | $ | 336.3 | $ | 309.9 | $ | 316.4 |
Capital expenditures for the Company’s business segments was as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Digital Imaging | $ | 67.7 | $ | 54.7 | $ | 78.2 | |||||||||||
| Instrumentation | 15.1 | 15.0 | 14.0 | ||||||||||||||
| Aerospace and Defense Electronics | 19.4 | 7.2 | 10.9 | ||||||||||||||
| Engineered Systems | 4.7 | 2.4 | 3.4 | ||||||||||||||
| Total segment capital expenditures | 106.9 | 79.3 | 106.5 | ||||||||||||||
| Corporate | 10.4 | 4.4 | 8.4 | ||||||||||||||
| Total Teledyne capital expenditures | $ | 117.3 | $ | 83.7 | $ | 114.9 |
Identifiable assets are those assets used in the operations of the segments. Corporate assets primarily consist of cash and cash equivalents, deferred taxes, pension assets and other assets.
Identifiable assets for the Company’s business segments was as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Digital Imaging | $ | 11,303.3 | $ | 10,942.4 | $ | 11,382.2 | |||||||||||
| Instrumentation | 1,794.3 | 1,750.9 | 1,692.3 | ||||||||||||||
| Aerospace and Defense Electronics | 1,498.2 | 576.2 | 569.1 | ||||||||||||||
| Engineered Systems | 184.1 | 180.3 | 184.8 | ||||||||||||||
| Total segment identifiable assets | 14,779.9 | 13,449.8 | 13,828.4 | ||||||||||||||
| Corporate | 505.4 | 750.7 | 699.5 | ||||||||||||||
| Total Teledyne identifiable assets | $ | 15,285.3 | $ | 14,200.5 | $ | 14,527.9 |
Long-lived assets consist of property, plant and equipment. The all other countries category primarily consists of Teledyne’s other operations in Europe, primarily in Sweden, Estonia, Spain and the Netherlands.
Long-lived assets for the Company’s business segments was as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | 527.3 | $ | 492.4 | $ | 503.4 | |||||||||||
| United Kingdom | 121.5 | 84.3 | 86.0 | ||||||||||||||
| Canada | 83.9 | 74.2 | 86.2 | ||||||||||||||
| Sweden | 27.6 | 25.5 | 29.8 | ||||||||||||||
| France | 25.1 | 22.4 | 27.2 | ||||||||||||||
| All other countries | 53.7 | 46.4 | 44.4 | ||||||||||||||
| Total long-lived assets | $ | 839.1 | $ | 745.2 | $ | 777.0 |
Product Lines
The Instrumentation segment includes three product lines: Marine Instrumentation, Environmental Instrumentation and Test and Measurement Instrumentation. All other segments each contain one product line.
The tables below provide a summary of the net sales by product line for the Instrumentation segment (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Marine Instrumentation | $ | 680.1 | $ | 631.5 | $ | 529.7 | |||||||||||
| Environmental Instrumentation | 466.6 | 447.4 | 458.1 | ||||||||||||||
| Test and Measurement Instrumentation | 310.4 | 303.7 | 338.4 | ||||||||||||||
| Total | $ | 1,457.1 | $ | 1,382.6 | $ | 1,326.2 |
Severance and Facility Consolidation Costs
As part of a continuing effort to reduce costs and improve operating performance, the Company may take and has taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing its exposure to weaker end markets. For 2025, 2024 and 2023, the Company recorded costs of $18.6 million, $15.6 million and $12.0 million, respectively, related to these actions, with the majority of the costs included within SG&A expense and within the Digital Imaging segment. At December 28, 2025, $2.7 million remains to be paid related to actions taken in 2025.
Note 5. Revenue Recognition and Contract Balances
The Company disaggregates its revenue from contracts with customers by customer type and geographic region for each segment, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. With the exception of the Engineered Systems segment, net sales in each segment is primarily derived from fixed-price contracts. Net sales in the Engineered Systems segment are typically between 45% and 55% fixed-price contracts in a given reporting period, with the balance of net sales related to cost-reimbursable type contracts. For 2025, 2024 and 2023, approximately 46%, 50%, and 49%, respectively, of net sales in the Engineered Systems segment was derived from fixed-price contracts.
| Fiscal Year Ended December 28, 2025 | Fiscal Year Ended December 28, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Customer Type | Geographic Region (c) | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | U.S. Govt. (a) | Other (b) | Total | United States | Europe | Asia | All other | Total | |||||||||||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||||||||||||||
| Digital Imaging | $ | 645.5 | $ | 2,518.4 | $ | 3,163.9 | $ | 1,462.1 | $ | 833.3 | $ | 552.7 | $ | 315.8 | $ | 3,163.9 | |||||||||||||||||||||||||||||||
| Instrumentation | 125.5 | 1,331.6 | 1,457.1 | 619.0 | 438.7 | 245.7 | 153.7 | 1,457.1 | |||||||||||||||||||||||||||||||||||||||
| Aerospace and Defense Electronics | 420.1 | 638.6 | 1,058.7 | 671.5 | 253.7 | 93.7 | 39.8 | 1,058.7 | |||||||||||||||||||||||||||||||||||||||
| Engineered Systems | 368.3 | 67.4 | 435.7 | 430.2 | 0.1 | 2.3 | 3.1 | 435.7 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,559.4 | $ | 4,556.0 | $ | 6,115.4 | $ | 3,182.8 | $ | 1,525.8 | $ | 894.4 | $ | 512.4 | $ | 6,115.4 |
(a) U.S. Government sales include sales as a prime contractor or subcontractor.
(b) Primarily commercial sales
(c) Geographic region by destination
| Fiscal Year Ended December 29, 2024 | Fiscal Year Ended December 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Customer Type | Geographic Region (c) | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | U.S. Govt. (a) | Other (b) | Total | United States | Europe | Asia | All other | Total | |||||||||||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||||||||||||||
| Digital Imaging | $ | 557.1 | $ | 2,513.7 | $ | 3,070.8 | $ | 1,365.9 | $ | 830.1 | $ | 565.9 | $ | 308.9 | $ | 3,070.8 | |||||||||||||||||||||||||||||||
| Instrumentation | 123.5 | 1,259.1 | 1,382.6 | 611.7 | 389.0 | 249.9 | 132.0 | 1,382.6 | |||||||||||||||||||||||||||||||||||||||
| Aerospace and Defense Electronics | 307.5 | 469.3 | 776.8 | 525.9 | 136.0 | 79.9 | 35.0 | 776.8 | |||||||||||||||||||||||||||||||||||||||
| Engineered Systems | 389.0 | 50.8 | 439.8 | 435.4 | — | 1.9 | 2.5 | 439.8 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,377.1 | $ | 4,292.9 | $ | 5,670.0 | $ | 2,938.9 | $ | 1,355.1 | $ | 897.6 | $ | 478.4 | $ | 5,670.0 |
(a) U.S. Government sales include sales as a prime contractor or subcontractor.
(b) Primarily commercial sales
(c) Geographic region by destination
| Fiscal Year Ended December 31, 2023 | Fiscal Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Customer Type | Geographic Region (c) | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | U.S. Govt. (a) | Other (b) | Total | United States | Europe | Asia | All other | Total | |||||||||||||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||||||||||||||||||
| Digital Imaging | $ | 570.7 | $ | 2,573.4 | $ | 3,144.1 | $ | 1,406.9 | $ | 808.7 | $ | 622.9 | $ | 305.6 | $ | 3,144.1 | |||||||||||||||||||||||||||||||
| Instrumentation | 95.9 | 1,230.3 | 1,326.2 | 566.2 | 386.8 | 253.0 | 120.2 | 1,326.2 | |||||||||||||||||||||||||||||||||||||||
| Aerospace and Defense Electronics | 330.3 | 396.2 | 726.5 | 492.0 | 137.2 | 67.1 | 30.2 | 726.5 | |||||||||||||||||||||||||||||||||||||||
| Engineered Systems | 384.8 | 53.9 | 438.7 | 430.3 | — | 3.8 | 4.6 | 438.7 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,381.7 | $ | 4,253.8 | $ | 5,635.5 | $ | 2,895.4 | $ | 1,332.7 | $ | 946.8 | $ | 460.6 | $ | 5,635.5 |
(a) U.S. Government sales include sales as a prime contractor or subcontractor.
(b) Primarily commercial sales
(c) Geographic region by destination
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 28, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $4,611.7 million. The Company expects approximately 71% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 29% recognized thereafter.
The unbilled receivable balance increased from the beginning of the year by $62.5 million, or 20.0%, primarily due to recognizing revenue ahead of achieving billing milestones on certain contracts within the Aerospace and Defense Electronics segment. Contract liabilities increased from the beginning of the year by $60.1 million or 17.5%, primarily due to an increase in customer advances in the Digital Imaging segment and the Aerospace and Defense Electronics segment. The Company recognized revenue of $201.9 million during the year ended December 28, 2025, from contract liabilities that existed at the beginning of year.
Note 6. Goodwill and Acquired Intangible Assets
| Goodwill (in millions): | Digital Imaging | Instrumentation | Aerospace and Defense Electronics | Engineered Systems | Total | ||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 6,877.0 | $ | 944.8 | $ | 163.4 | $ | 17.6 | $ | 8,002.8 | |||||||||||||||||||
| Current year acquisitions | 65.6 | 23.6 | — | — | 89.2 | ||||||||||||||||||||||||
| Foreign currency changes and other | (88.0) | (13.1) | (0.4) | — | (101.5) | ||||||||||||||||||||||||
| Balance at December 29, 2024 | 6,854.6 | 955.3 | 163.0 | 17.6 | 7,990.5 | ||||||||||||||||||||||||
| Current year acquisitions | 47.5 | — | 433.7 | — | 481.2 | ||||||||||||||||||||||||
| Foreign currency changes and other | 163.7 | 31.6 | 20.6 | — | 215.9 | ||||||||||||||||||||||||
| Balance at December 28, 2025 | $ | 7,065.8 | $ | 986.9 | $ | 617.3 | $ | 17.6 | $ | 8,687.6 |
In the fourth quarter of 2025, the Company performed a quantitative impairment test for the FLIR reporting unit and qualitative impairment tests for all other reporting units. The results of the annual impairment tests of goodwill indicated that no impairment existed in 2025, 2024 or 2023.
| Balance at Year End | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||
| Acquired intangible assets (in millions): | Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | |||||||||||||||||||||||||||||
| Proprietary technology | $ | 1,838.1 | $ | 1,014.5 | $ | 823.6 | $ | 1,665.5 | $ | 796.6 | $ | 868.9 | |||||||||||||||||||||||
| Customer list/relationships/backlog | 788.8 | 326.9 | 461.9 | 615.3 | 268.9 | 346.4 | |||||||||||||||||||||||||||||
| Patents | 0.6 | 0.6 | — | 0.6 | 0.6 | — | |||||||||||||||||||||||||||||
| Non-compete agreements | 0.9 | 0.9 | — | 0.9 | 0.9 | — | |||||||||||||||||||||||||||||
| Definite-lived trademarks | 34.8 | 13.6 | 21.2 | 12.2 | 7.7 | 4.5 | |||||||||||||||||||||||||||||
| Total acquired intangible assets subject to amortization | 2,663.2 | 1,356.5 | 1,306.7 | 2,294.5 | 1,074.7 | 1,219.8 | |||||||||||||||||||||||||||||
| Acquired intangible assets not subject to amortization: | |||||||||||||||||||||||||||||||||||
| Indefinite-lived trademarks | 793.4 | — | 793.4 | 793.1 | — | 793.1 | |||||||||||||||||||||||||||||
| Total acquired intangible assets | $ | 3,456.6 | $ | 1,356.5 | $ | 2,100.1 | $ | 3,087.6 | $ | 1,074.7 | $ | 2,012.9 |
Amortizable acquired intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from one to 16 years. Consistent with Teledyne’s growth strategy, the Company seeks to acquire companies in markets characterized by high barriers to entry and that include specialized products not likely to be commoditized. Given the Company’s markets and the highly engineered nature of the Company’s products, the rates of new technology development and customer acquisition and/or attrition are often not volatile. As such, Teledyne believes the value of acquired intangible assets decline in a linear, as opposed to an accelerated, fashion. The Company also believes amortization on a straight-line basis is appropriate. Recorded impairment charges to intangible assets were not material in 2025 or 2023. As a result of our annual impairment tests, $52.5 million of impairment was recorded in 2024. The expected future amortization expense for the next five years is as follows (in millions): 2026 - $219.1; 2027 - $211.8; 2028 - $208.9; 2029 - $165.0; 2030 - $138.8.
The estimated remaining useful lives by asset category as of December 28, 2025, are as follows:
| Acquired intangible assets subject to amortization | Weighted Average Remaining Useful Life in Years | ||||
| Proprietary technology | 4.9 | ||||
| Customer list/relationships/backlog | 9.6 | ||||
| Trademarks | 4.8 | ||||
| Total acquired intangible assets subject to amortization | 6.0 |
Note 7. Supplemental Balance Sheet Information
| Balance at Year End | |||||||||||
| Accounts Receivable and Unbilled Receivables (in millions): | 2025 | 2024 | |||||||||
| Commercial and other billed receivables | $ | 794.1 | $ | 737.1 | |||||||
| U.S. Government and prime contractors billed receivables | 209.3 | 179.5 | |||||||||
| Total billed receivables | 1,003.4 | 916.6 | |||||||||
| Allowance for doubtful accounts | (11.0) | (15.5) | |||||||||
| Accounts receivable, net | $ | 992.4 | $ | 901.1 | |||||||
| Commercial and other unbilled receivables, net | $ | 238.0 | $ | 184.2 | |||||||
| U.S. Government and prime contractors unbilled receivables, net | 136.6 | 127.9 | |||||||||
| Unbilled receivables, net | $ | 374.6 | $ | 312.1 |
| Balance at Year End | |||||||||||
| Inventories (in millions): | 2025 | 2024 | |||||||||
| Raw materials and supplies | $ | 648.9 | $ | 559.2 | |||||||
| Work in process | 210.0 | 190.4 | |||||||||
| Finished goods | 184.4 | 164.8 | |||||||||
| Total inventories, net | $ | 1,043.3 | $ | 914.4 |
| Balance at Year End | |||||||||||
| Property, plant and equipment (in millions): | 2025 | 2024 | |||||||||
| Land | $ | 113.0 | $ | 106.3 | |||||||
| Buildings | 508.3 | 463.7 | |||||||||
| Equipment, software and other | 1,325.7 | 1,187.3 | |||||||||
| Total property, plant and equipment, gross | 1,947.0 | 1,757.3 | |||||||||
| Accumulated depreciation and amortization | (1,107.9) | (1,012.1) | |||||||||
| Total property, plant and equipment, net | $ | 839.1 | $ | 745.2 |
| Balance at Year End | |||||||||||
| Accrued liabilities (in millions): | 2025 | 2024 | |||||||||
| Contract liabilities | $ | 369.6 | $ | 312.6 | |||||||
| Compensation, benefit and other employee related accruals | 246.0 | 210.7 | |||||||||
| Warranty reserve | 45.6 | 41.1 | |||||||||
| Operating lease liabilities | 32.0 | 30.2 | |||||||||
| Derivative liabilities | 5.1 | 16.4 | |||||||||
| Other | 225.1 | 233.9 | |||||||||
| Total accrued liabilities | $ | 923.4 | $ | 844.9 |
| Balance at Year End | |||||||||||
| Other long-term liabilities (in millions): | 2025 | 2024 | |||||||||
| Operating lease liabilities | $ | 134.7 | $ | 109.6 | |||||||
| Deferred compensation liabilities | 118.2 | 111.3 | |||||||||
| Unrecognized tax benefits, including accrued interest and penalties | 75.2 | 28.0 | |||||||||
| Pension and postretirement related liabilities | 60.0 | 58.8 | |||||||||
| Derivative liabilities | 37.4 | 0.5 | |||||||||
| Contract liabilities | 33.6 | 30.5 | |||||||||
| Warranty reserve | 11.3 | 9.1 | |||||||||
| Other | 46.0 | 33.0 | |||||||||
| Total other long-term liabilities | $ | 516.4 | $ | 380.8 |
A rollforward of the warranty reserve, including both short and long-term reserve balances, for the years 2025, 2024 or 2023 was as follows (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 50.2 | $ | 49.1 | $ | 50.3 | |||||||||||
| Product warranty expense | 24.2 | 25.7 | 13.5 | ||||||||||||||
| Deductions | (18.0) | (25.0) | (14.9) | ||||||||||||||
| Assumed in business acquisitions | 0.5 | 0.4 | 0.2 | ||||||||||||||
| Balance at end of year | $ | 56.9 | $ | 50.2 | $ | 49.1 |
Note 8. Long-Term Debt
| Long-Term Debt (dollars in millions): | December 28, 2025 | December 29, 2024 | |||||||||
| $1.2 billion credit facility due June 2029 | $ | — | $ | — | |||||||
| 1.60% Fixed Rate Senior Notes due April 2026 | 450.0 | 450.0 | |||||||||
| 2.25% Fixed Rate Senior Notes due April 2028 | 700.0 | 700.0 | |||||||||
| 2.50% Fixed Rate Senior Notes due August 2030 | 427.3 | 485.0 | |||||||||
| 2.75% Fixed Rate Senior Notes due April 2031 | 910.7 | 1,030.0 | |||||||||
| Other debt | 1.0 | 1.2 | |||||||||
| Debt discount and debt issuance costs | (13.6) | (17.2) | |||||||||
| Total debt, net | 2,475.4 | 2,649.0 | |||||||||
| Less: Current portion of long-term debt | (450.1) | (0.3) | |||||||||
| Total long-term debt, net of current portion | $ | 2,025.3 | $ | 2,648.7 |
As of December 28, 2025, no borrowings were outstanding under the $1.20 billion credit facility. Excluding interest and fees, no payments are due under the $1.20 billion unsecured credit facility until it matures in June 2029. Borrowings under the credit facility and term loan are at variable rates which are, at the Company’s option, tied to a base rate, Eurocurrency rate or equivalent as defined in the Company’s credit agreements. Available borrowing capacity under the credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $1,171.0 million at December 28, 2025. The credit agreement requires the Company to comply with various financial and operating covenants and at December 28, 2025, the Company was in compliance with these covenants. At December 28, 2025, Teledyne had $53.4 million in outstanding letters of credit.
During 2025, the Company repurchased and retired $177.0 million of principal of its fixed rate senior notes for $162.0 million in cash.
During 2024, the Company repaid the $450.0 million Fixed Rate Senior Notes due April 2024 and the $150.0 million term loan due October 2024.
Maturities of long-term debt as of December 28, 2025 (in millions):
| Fiscal year | |||||
| 2026 | $ | 450.1 | |||
| 2027 | 0.1 | ||||
| 2028 | 700.1 | ||||
| 2029 | 0.1 | ||||
| 2030 | 427.4 | ||||
| Thereafter | 911.2 | ||||
| Total principal payments | 2,489.0 | ||||
| Debt issuance costs | (13.6) | ||||
| Total debt | $ | 2,475.4 |
The Company has no sinking fund requirements.
Total net interest expense, including credit facility fees and other bank charges, was $59.6 million, $57.9 million and $77.3 million for 2025, 2024 and 2023, respectively. Cash payments for interest and credit facility fees and other bank charges totaled $71.3 million, $73.4 million and $87.9 million for 2025, 2024 and 2023, respectively.
Note 9. Income Taxes
Income (loss) before income taxes included the following (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic operations | $ | 702.9 | $ | 527.4 | $ | 532.4 | |||||||||||
| Foreign operations | 391.6 | 410.5 | 426.5 | ||||||||||||||
| Total income (loss) before income taxes | $ | 1,094.5 | $ | 937.9 | $ | 958.9 |
The provision for income taxes included the following (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Current provision (benefit): | |||||||||||||||||
| Federal | $ | 144.4 | $ | 149.3 | $ | 91.2 | |||||||||||
| State | 29.7 | 25.5 | 21.4 | ||||||||||||||
| Foreign | 83.3 | 40.5 | 57.1 | ||||||||||||||
| Total current provision (benefit) | 257.4 | 215.3 | 169.7 | ||||||||||||||
| Deferred provision (benefit): | |||||||||||||||||
| Federal | (27.0) | (55.8) | (78.8) | ||||||||||||||
| State | (7.4) | (7.7) | (4.6) | ||||||||||||||
| Foreign | (24.2) | (34.6) | (14.0) | ||||||||||||||
| Total deferred provision (benefit) | (58.6) | (98.1) | (97.4) | ||||||||||||||
| Total provision (benefit) for income taxes: | |||||||||||||||||
| Federal | $ | 117.4 | $ | 93.5 | $ | 12.4 | |||||||||||
| State | $ | 22.3 | $ | 17.8 | $ | 16.8 | |||||||||||
| Foreign | $ | 59.1 | $ | 5.9 | $ | 43.1 | |||||||||||
| Total provision (benefit) for income taxes | $ | 198.8 | $ | 117.2 | $ | 72.3 |
The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate (dollars in millions):
| 2025 | |||||||||||
| Amount | % | ||||||||||
| U.S. federal statutory income tax rate | $ | 229.9 | 21.0 | % | |||||||
| Domestic Federal: | |||||||||||
| Tax Credits: | |||||||||||
| Research and development tax credits | (16.9) | (1.5) | |||||||||
| Other | (2.0) | (0.2) | |||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Other | (3.3) | (0.3) | |||||||||
| Cross-Border Taxes: | |||||||||||
| Foreign-derived intangible income | (25.1) | (2.3) | |||||||||
| Other | (3.8) | (0.3) | |||||||||
| Changes in valuation allowances | 2.0 | 0.2 | |||||||||
| Other | 15.5 | 1.4 | |||||||||
| Domestic state and local income taxes, net of federal effect (a) | 17.5 | 1.6 | |||||||||
| Foreign tax effects | |||||||||||
| Other foreign jurisdictions (b) | 17.5 | 1.6 | |||||||||
| Worldwide changes in unrecognized tax benefits | (32.5) | (3.0) | |||||||||
| Total | $ | 198.8 | 18.2 | % |
(a) In 2025, state taxes in California, Illinois, New Hampshire, and New Jersey made up the majority (greater than 50%) of the tax effect in this category.
(b) No jurisdictions or categories exceeded the 5% disaggregation threshold.
| 2024 | 2023 | ||||||||||
| U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | |||||||
| State and local taxes, net of federal benefit | 2.4 | 1.8 | |||||||||
| Research and development tax credits | (1.3) | (2.4) | |||||||||
| Investment tax credits | (0.8) | (0.5) | |||||||||
| Foreign rate differential | 2.6 | 1.8 | |||||||||
| Net accruals (reversals) for unrecognized tax benefits | (8.5) | (10.8) | |||||||||
| Stock-based compensation | (1.4) | (2.1) | |||||||||
| U.S. export sales | (1.9) | (2.2) | |||||||||
| Other | 0.4 | 0.9 | |||||||||
| Effective income tax rate | 12.5 | % | 7.5 | % | |||||||
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: | 2025 | 2024 | |||||||||
| Long-term: | |||||||||||
| Accrued liabilities | $ | 31.4 | $ | 33.9 | |||||||
| Inventory valuation | 27.8 | 22.4 | |||||||||
| Accrued vacation | 8.5 | 7.9 | |||||||||
| Deferred compensation and other benefit plans | 3.7 | 15.1 | |||||||||
| Operating lease liabilities | 19.4 | 21.6 | |||||||||
| Capitalization of research and development | 173.4 | 165.0 | |||||||||
| Tax credit and net operating loss carryforward | 47.2 | 33.2 | |||||||||
| Other | 16.8 | 30.0 | |||||||||
| Valuation allowance | (25.1) | (20.2) | |||||||||
| Total deferred income tax assets | 303.1 | 308.9 | |||||||||
| Deferred income tax liabilities: | |||||||||||
| Long-term: | |||||||||||
| Intangible amortization | 591.4 | 587.0 | |||||||||
| Property, plant and equipment differences | 27.0 | 28.4 | |||||||||
| Operating lease right-of-use assets | 16.9 | 18.9 | |||||||||
| Unremitted earnings of foreign subsidiaries | 13.7 | 7.4 | |||||||||
| Other | 9.3 | 9.5 | |||||||||
| Total deferred income tax liabilities | 658.3 | 651.2 | |||||||||
| Net deferred income tax liabilities | $ | 355.2 | $ | 342.3 |
There is no deferred tax liability recognized for unrepatriated prior year earnings of the Company’s material subsidiaries in Canada, which would become taxable if distributed to the United States. The unrecognized deferred tax liability for this is estimated between $23.0 million to $26.0 million of potential tax.
In assessing the need for a valuation allowance, the Company considers 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 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 increased by $4.9 million in 2025.
At December 28, 2025, the Company had approximately $26.4 million of net operating loss carryforward from the Company’s foreign entities including France, of which $19.9 million have no expiration dates and $6.5 million have expiration dates ranging from 2028 to 2044. The Company had approximately $3.7 million of capital loss carryforward from the Company’s foreign entities including Canada, which have no expiration dates. In addition, the Company had domestic federal and state net operating loss carryforward of $14.3 million and $233.6 million, respectively. Generally, federal net operating loss carryforward amounts are limited in their use by earnings of certain acquired subsidiaries. Of the $14.3 million federal net operating loss carryforward, $13.5 million have no expiration dates and $0.8 million have expiration dates in 2036. The state net operating loss carryforward amounts have expiration dates ranging from 2026 to 2044.
The Company had aggregate Canadian federal and provincial investment tax credits of $11.8 million, which have expiration dates ranging from 2042 to 2044. The Company had U.S. federal credit carryforward of $5.0 million which have expiration dates ranging from 2031 to 2042. The Company had Spanish federal R&D credit carryforward in the amount of $1.9 million, which have expiration dates ranging from 2036 to 2041. Finally, the Company had state tax credits of $18.3 million, of which $12.4 million have no expiration date and $5.9 million have expiration dates ranging from 2026 to 2049.
| Unrecognized tax benefits (in millions): | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning of year (a) | $ | 45.2 | $ | 96.5 | $ | 162.8 | |||||||||||
| Increase due to business combinations | — | — | 18.6 | ||||||||||||||
| Increase for tax positions taken during the current period | 2.8 | 1.8 | 3.4 | ||||||||||||||
| Increase in prior year tax positions | 65.6 | 1.0 | 3.0 | ||||||||||||||
| Reduction related to settlements with taxing authorities | (26.2) | (46.6) | — | ||||||||||||||
| Reduction related to lapse of the statute of limitations | (14.1) | (17.6) | (96.3) | ||||||||||||||
| Impact of exchange rate changes | 6.3 | 10.1 | 5.0 | ||||||||||||||
| End of year (a) | $ | 79.6 | $ | 45.2 | $ | 96.5 |
(a) Beginning and end of year balances include amounts offset by deferred tax and amounts offset by potential refunds in other taxing jurisdictions.
In the next 12 months, the Company anticipates the total unrecognized tax benefit for various federal, state and foreign tax items may be reduced by $2.4 million due to the expiration of statutes of limitation for various federal, state and foreign tax issues.
Teledyne recognized net tax benefits and expense for interest and penalties related to unrecognized tax benefits within the provision for income taxes in the statements of income (loss) of $2.4 million of expense, $15.8 million of benefits and $10.3 million of benefits, for 2025, 2024 and 2023, respectively. Interest and penalties in the amount of $11.4 million, $8.5 million and $36.9 million were recognized in the 2025, 2024 and 2023 balance sheets, respectively. Substantially all of the unrecognized tax benefits as of December 28, 2025, if recognized, would affect the Company’s effective tax rate.
Teledyne files income tax returns in the U.S. federal and state jurisdictions and in various foreign jurisdictions. The Company has substantially concluded income tax matters in the United States through 2016, in Canada through 2012, in the UK through 2022, and in France through 2020.
| Income taxes paid (in millions): | 2025 | ||||
| U.S. federal | $ | 128.6 | |||
| U.S. state and local | 35.9 | ||||
| Foreign: | |||||
| United Kingdom | 28.5 | ||||
| Canada - federal | 19.2 | ||||
| Sweden | 16.9 | ||||
| Other | 51.1 | ||||
| Total income taxes paid | $ | 280.2 |
Cash payments for federal, state and foreign income taxes were $213.2 million for 2024, which are net of $20.1 million in tax refunds. Cash payments for federal, state and foreign income taxes were $313.0 million for 2023, which are net of $14.7 million in tax refunds.
Note 10. Pension Plans and Postretirement Benefits
Pension Plans
Teledyne has two domestic qualified defined benefit pension plans covering substantially all U.S. employees hired before January 1, 2004. As of January 1, 2004, new Teledyne 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 measurement date for the Company’s pension plans is December 31.
The Company’s U.S. domestic qualified pension plans purchased group annuity contracts from insurance companies and paid a total annuity premium of $15.9 million and $17.8 million in 2025 and 2024, respectively. 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 211 and 286 of existing retired pension plan participants at the time of purchase in 2025 and 2024, respectively.
The domestic qualified pension plans allow participants to elect a lump-sum payment at retirement. In 2025, 2024 and 2023, the Company made lump sum payments of $12.3 million, $9.0 million and $17.3 million, respectively, from the domestic qualified pension plans assets to certain participants in the plan. 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 the pension and postretirement obligations.
| Net periodic benefit expense (income) allocation (in millions): | Domestic | Foreign | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Service cost | $ | 4.8 | $ | 5.1 | $ | 5.2 | $ | 1.1 | $ | 1.1 | $ | 0.9 |
| Domestic | Foreign | ||||||||||||||||||||||||||||||||||
| Pension non-service (income) expense (in millions): | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||
| Interest cost on benefit obligation | $ | 29.6 | $ | 30.3 | $ | 31.7 | $ | 2.1 | $ | 1.9 | $ | 1.9 | |||||||||||||||||||||||
| Expected return on plan assets | (51.9) | (52.3) | (52.6) | (1.8) | (1.9) | (1.6) | |||||||||||||||||||||||||||||
| Amortization of prior service cost | 0.2 | (0.4) | (1.8) | 0.1 | — | 0.1 | |||||||||||||||||||||||||||||
| Amortization of actuarial loss | 11.1 | 11.3 | 9.9 | 0.4 | 0.4 | 0.2 | |||||||||||||||||||||||||||||
| Settlements/Curtailment | (0.3) | — | — | — | — | — | |||||||||||||||||||||||||||||
| Pension non-service (income) expense | $ | (11.3) | $ | (11.1) | $ | (12.8) | $ | 0.8 | $ | 0.4 | $ | 0.6 |
Obligations and funded status
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. Teledyne determines 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 or expense within each respective year for the domestic qualified plans and the foreign plans:
| Pension Plan Assumptions: | Discount rates | Increase in future compensation levels | Expected long-term rate of return | ||||||||||||||
| Domestic plans - 2025 | 5.73% - 5.76% | 2.75% | 6.80% - 7.80% | ||||||||||||||
| Domestic plans - 2024 | 5.40% - 5.45% | 2.75% | 6.58% - 7.80% | ||||||||||||||
| Domestic plans - 2023 | 5.71% - 5.72% | 2.75% | 6.58% - 7.80% | ||||||||||||||
| Foreign plans - 2025 | 0.90% - 5.40% | 1.50% - 3.00% | 1.25% - 5.70% | ||||||||||||||
| Foreign plans - 2024 | 1.30% - 4.50% | 1.50% - 3.00% | 1.25% - 6.20% | ||||||||||||||
| Foreign plans - 2023 | 2.20% - 4.80% | 1.50% - 3.00% | 1.25% - 5.10% |
For its domestic and foreign pension plans the Company is projecting a weighted average long-term rate of return on plan assets of 7.14% and 4.71% in 2026, respectively.
| Domestic | Foreign | ||||||||||||||||||||||
| Changes in benefit obligation (in millions): | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Benefit obligation - beginning of year | $ | 541.2 | $ | 584.1 | $ | 46.7 | $ | 51.5 | |||||||||||||||
| Service cost | 4.8 | 5.1 | 1.1 | 1.1 | |||||||||||||||||||
| Interest cost on projected benefit obligation | 29.6 | 30.3 | 2.1 | 1.9 | |||||||||||||||||||
| Actuarial (gain) loss | 20.2 | (10.2) | (3.1) | (3.0) | |||||||||||||||||||
| Benefits paid | (68.4) | (68.1) | (5.5) | (2.3) | |||||||||||||||||||
| Other - including foreign currency, settlements/curtailments | — | — | 4.7 | (2.5) | |||||||||||||||||||
| Benefit obligation - end of year | $ | 527.4 | $ | 541.2 | $ | 46.0 | $ | 46.7 | |||||||||||||||
| Accumulated benefit obligation - end of year | $ | 525.9 | $ | 539.3 | $ | 42.8 | $ | 43.4 |
The key assumptions used to measure the benefit obligation at each respective year end were:
| Domestic Plans | Foreign Plans | ||||||||||||||||||||||||||||||||||
| Key assumptions: | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||
| Discount rate | 5.33% - 5.63% | 5.73% - 5.76% | 5.40% - 5.45% | 1.20% - 5.30% | 0.90% - 5.40% | 1.30% - 4.50% | |||||||||||||||||||||||||||||
| Salary growth rate | 2.75% | 2.75% | 2.75% | 1.50% - 3.00% | 1.50% - 3.00% | 1.50% - 3.00% |
Plan assets
| Domestic | Foreign | ||||||||||||||||||||||
| Changes in plan assets (in millions): | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Fair value of net plan assets - beginning of year | $ | 722.3 | $ | 740.4 | $ | 35.1 | $ | 38.6 | |||||||||||||||
| Actual return on plan assets | 106.0 | 47.4 | 0.2 | (1.2) | |||||||||||||||||||
| Employer contribution - other benefit plan | 2.3 | 2.6 | 1.4 | 1.5 | |||||||||||||||||||
| Foreign currency changes | — | — | 3.3 | (1.1) | |||||||||||||||||||
| Benefits paid | (68.4) | (68.1) | (5.5) | (2.3) | |||||||||||||||||||
| Other | — | — | 0.1 | (0.4) | |||||||||||||||||||
| Fair value of net plan assets - end of year | $ | 762.2 | $ | 722.3 | $ | 34.6 | $ | 35.1 |
The following tables sets forth the funded status and amounts recognized in the consolidated balance sheets at year end 2025 and 2024 for the domestic qualified and nonqualified pension plans and the foreign-based pension plans for benefits provided to certain employees (in millions):
| Domestic | Foreign | ||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||
| Funded (unfunded) status | $ | 234.8 | $ | 181.1 | $ | (11.4) | $ | (11.6) | |||||||||||||||||||||
| Amounts recognized in the consolidated balance sheets as a debit (credit): | |||||||||||||||||||||||||||||
| Balance sheet item | Balance sheet location | ||||||||||||||||||||||||||||
| Prepaid pension assets | Prepaid pension assets - non-current | $ | 286.0 | $ | 227.6 | $ | 0.2 | $ | — | ||||||||||||||||||||
| Accrued pension obligations short-term | Accrued liabilities | (2.8) | (2.9) | (0.5) | (0.5) | ||||||||||||||||||||||||
| Accrued pension obligations long-term | Other long-term liabilities | (48.4) | (43.6) | (11.1) | (11.1) | ||||||||||||||||||||||||
| Net amount recognized | $ | 234.8 | $ | 181.1 | $ | (11.4) | $ | (11.6) | |||||||||||||||||||||
| Amounts recognized in AOCI: | |||||||||||||||||||||||||||||
| Net prior service cost (credit) | $ | 0.1 | $ | 1.4 | $ | 0.3 | $ | 0.5 | |||||||||||||||||||||
| Net loss | 258.1 | 301.8 | 6.4 | 7.7 | |||||||||||||||||||||||||
| Net amount recognized, before tax effect | $ | 258.2 | $ | 303.2 | $ | 6.7 | $ | 8.2 |
Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows (in millions):
| 2025 | 2024 | ||||||||||
| Projected benefit obligation | $ | 75.5 | $ | 69.8 | |||||||
| Accumulated benefit obligation | $ | 72.3 | $ | 66.5 | |||||||
| Fair value of plan assets | $ | 12.7 | $ | 11.7 |
At year end 2025 and 2024, the Company had an accumulated non-cash reduction to stockholders’ equity of $200.4 million and $235.4 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 $62.9 million at year end 2025 and $74.3 million at year end 2024.
| Estimated future pension plan benefit payments (in millions): | Domestic | Foreign | |||||||||
| 2026 | $ | 53.8 | $ | 2.9 | |||||||
| 2027 | $ | 52.0 | $ | 2.7 | |||||||
| 2028 | $ | 51.1 | $ | 2.8 | |||||||
| 2029 | $ | 50.1 | $ | 2.7 | |||||||
| 2030 | $ | 51.2 | $ | 2.9 | |||||||
| 2031 - 2035 | $ | 214.1 | $ | 15.0 |
Investments
The Company has an active management policy for the pension assets in the qualified domestic pension plans. As of December 28, 2025, the long-term asset allocation target for the domestic plans consists of approximately 44% in equity instruments and approximately 56% in fixed income instruments.
The pension plans’ 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 are measured at fair value by using net asset value as a practical expedient and are not required to be categorized in the fair value hierarchy table listed below. As such, the balance of these investments measured at net asset value 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 28, 2025, by asset category are as follows (in millions):
| Asset category:(a) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Cash and cash equivalents (b) | $ | — | $ | 25.8 | $ | — | $ | 25.8 | |||||||||||||||
| Equity securities | 4.5 | 207.5 | — | 212.0 | |||||||||||||||||||
| U.S. Government securities and futures | 181.3 | — | — | 181.3 | |||||||||||||||||||
| Corporate bonds | — | 25.1 | — | 25.1 | |||||||||||||||||||
| Insurance contracts related to foreign plans | — | 12.7 | — | 12.7 | |||||||||||||||||||
| Fair value of net plan assets at the end of the year | $ | 185.8 | $ | 271.1 | $ | — | $ | 456.9 | |||||||||||||||
| Investments measured at net asset value: | |||||||||||||||||||||||
| Alternatives | $ | 242.2 | |||||||||||||||||||||
| Mutual funds (c) | 9.0 | ||||||||||||||||||||||
| Mortgage-backed securities | 49.7 | ||||||||||||||||||||||
| High yield bonds | 39.0 | ||||||||||||||||||||||
| Fair value of net plan assets at the end of the year | $ | 339.9 |
(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) The mutual funds are invested 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 29, 2024, by asset category are as follows (in millions):
| Asset category: (a) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Cash and cash equivalents (b) | $ | — | $ | 18.6 | $ | — | $ | 18.6 | |||||||||||||||
| Equity securities | 4.1 | 185.3 | — | 189.4 | |||||||||||||||||||
| U.S. Government securities and futures | 234.7 | — | — | 234.7 | |||||||||||||||||||
| Corporate bonds | — | 17.1 | — | 17.1 | |||||||||||||||||||
| Insurance contracts related to foreign plans | — | 11.7 | — | 11.7 | |||||||||||||||||||
| Fair value of net plan assets at the end of the year | $ | 238.8 | $ | 232.7 | $ | — | $ | 471.5 | |||||||||||||||
| Investments measured at net asset value: | |||||||||||||||||||||||
| Alternatives | $ | 199.6 | |||||||||||||||||||||
| Mutual funds (c) | 5.2 | ||||||||||||||||||||||
| Mortgage-backed securities | 45.6 | ||||||||||||||||||||||
| High yield bonds | 35.5 | ||||||||||||||||||||||
| Fair value of net plan assets at the end of the year | $ | 285.9 |
(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) The mutual funds are invested 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.
Defined Benefit 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. Total cost for these plans was less than $1.0 million for each fiscal year 2025, 2024 and 2023.
Deferred Contribution Plans
The Company’s contributions associated with its 401(k) plans were $24.3 million, $30.3 million and $31.4 million, for 2025, 2024 and 2023, respectively.
Deferred Compensation Plans
The Company has non-qualified executive deferred compensation plans that provide 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. Teledyne has 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. In addition, the Company has separate deferred compensation plans acquired in connection with the FLIR and ETM acquisitions, and these plans were frozen at the end of fiscal years 2021 and 2022, respectively.
As of December 28, 2025, and December 29, 2024, $118.2 million and $111.3 million, respectively, is included in other long-term liabilities related to deferred compensation liabilities on the consolidated balance sheets. 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 $111.0 million as of both December 28, 2025, and December 29, 2024, and is primarily included in other non-current assets on the consolidated balance sheets.
Note 11. Stockholders’ Equity
| Common stock and treasury stock activity: | Common Stock | Treasury Stock | |||||||||
| Balance, December 31, 2023 | 47,331,845 | — | |||||||||
| Acquired | — | 885,321 | |||||||||
| Issued | 101,043 | (159,045) | |||||||||
| Balance, December 29, 2024 | 47,432,888 | 726,276 | |||||||||
| Acquired | — | 788,104 | |||||||||
| Issued | — | (275,111) | |||||||||
| Forfeitures | (8,041) | — | |||||||||
| Balance, December 28, 2025 | 47,424,847 | 1,239,269 |
Shares issued from treasury stock include stock options exercised as well as shares issued under certain other compensation plans.
Treasury Stock
During 2025, the Company repurchased approximately 0.8 million shares for $400.0 million, with a weighted average price of $507.52 per share. All of the Company’s 2025 share repurchases were settled between October 2025 and December 2025. During 2024, the Company repurchased approximately 0.9 million shares for $354.0 million, with a weighted average price of $399.78 per share. All of the Company’s 2024 share repurchases were settled between April 2024 and October 2024.
Stock Options
The Company recorded $8.9 million, $12.3 million, and $12.4 million for stock option expense for 2025, 2024 and 2023, respectively. The Company issues shares of common stock upon the exercise of stock options.
During 2025 and 2024, the amount of cash received from the exercise of stock options was $48.8 million and $37.9 million, respectively. The total pretax intrinsic value of options exercised during 2025 and 2024 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $73.7 million and 72.4 million, respectively. At December 28, 2025, the intrinsic value of stock options outstanding was $199.9 million and the intrinsic value of stock options exercisable was $194.1 million.
At December 28, 2025, there was $10.5 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 2.0 years. This amount can be impacted by employee retirements or terminations.
| Stock option valuation assumptions: | 2025 | ||||
| Expected dividend yield | n/a | ||||
| Expected volatility | 30.6% | ||||
| Risk-free interest rate | 3.96% - 4.08% | ||||
| Expected life in years | 6.3 |
The Company did not grant stock options in 2023. Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2025 and 2024 was $181.72 and $171.20, respectively.
Stock option transactions for Teledyne’s stock option plans are summarized as follows:
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||
| Beginning balance | 1,135,749 | $ | 278.34 | 1,337,972 | $ | 249.76 | 1,726,731 | $ | 223.43 | ||||||||||||||||||||||||||
| Granted | 67,722 | $ | 467.63 | 67,003 | $ | 441.98 | — | $ | — | ||||||||||||||||||||||||||
| Exercised | (235,248) | $ | 207.23 | (244,130) | $ | 155.26 | (372,739) | $ | 121.73 | ||||||||||||||||||||||||||
| Canceled or expired | (21,441) | $ | 418.75 | (25,096) | $ | 388.82 | (16,020) | $ | 389.85 | ||||||||||||||||||||||||||
| Ending balance | 946,782 | $ | 306.37 | 1,135,749 | $ | 278.34 | 1,337,972 | $ | 249.76 | ||||||||||||||||||||||||||
| Options exercisable at end of period | 850,857 | $ | 289.23 | 1,032,102 | $ | 264.98 | 1,190,838 | $ | 232.10 |
The following table provides certain information with respect to stock options outstanding and stock options exercisable at December 28, 2025, 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 | ||||||||||||||||||||||||
| $40.70-$99.99 | 9,290 | $ | 78.40 | 0.1 | 9,290 | $ | 78.40 | ||||||||||||||||||||||
| $100.00-$199.99 | 239,913 | $ | 156.67 | 1.6 | 239,913 | $ | 156.67 | ||||||||||||||||||||||
| $200.00-$299.99 | 181,345 | $ | 217.60 | 3.1 | 181,345 | $ | 217.60 | ||||||||||||||||||||||
| $300.00-$399.99 | 252,295 | $ | 373.56 | 5.2 | 252,295 | $ | 373.56 | ||||||||||||||||||||||
| $400.00-$499.99 | 259,279 | $ | 445.29 | 6.9 | 168,014 | $ | 440.84 | ||||||||||||||||||||||
| $500.00 and over | 4,660 | $ | 555.95 | 9.6 | — | $ | — | ||||||||||||||||||||||
| 946,782 | $ | 306.37 | 4.3 | 850,857 | $ | 289.23 |
Restricted Stock
The following table shows restricted stock award activity:
| Employee Time-Based Restricted Stock Units | Employee Performance-Based Restricted Stock Awards | Non-Employee Directors Restricted Stock Units | |||||||||||||||||||||||||||||||||
| Restricted Stock: | Shares | Weighted average fair value per share | Shares | Weighted average fair value per share | Shares | Weighted average fair value per share | |||||||||||||||||||||||||||||
| Balance, January 1, 2023 | 117,472 | $ | 372.51 | 39,401 | $ | 386.76 | 9,522 | $ | 345.57 | ||||||||||||||||||||||||||
| Granted | 2,316 | $ | 418.20 | 14,139 | $ | 361.08 | 4,190 | $ | 404.92 | ||||||||||||||||||||||||||
| Vested | (39,705) | $ | 376.99 | (9,106) | $ | 360.33 | (1,880) | $ | 451.16 | ||||||||||||||||||||||||||
| Forfeited/Canceled | (10,644) | $ | 369.60 | (2,616) | $ | 346.08 | — | $ | — | ||||||||||||||||||||||||||
| Balance, December 31, 2023 | 69,439 | $ | 371.90 | 41,818 | $ | 357.43 | 11,832 | $ | 349.81 | ||||||||||||||||||||||||||
| Granted | 70,341 | $ | 441.86 | 19,103 | $ | 397.78 | 4,680 | $ | 362.50 | ||||||||||||||||||||||||||
| Vested | (38,198) | $ | 378.01 | (7,692) | $ | 334.92 | (2,095) | $ | 404.92 | ||||||||||||||||||||||||||
| Forfeited/Canceled | (7,986) | $ | 399.90 | (898) | $ | 334.92 | — | $ | — | ||||||||||||||||||||||||||
| Balance, December 29, 2024 | 93,596 | $ | 419.76 | 52,331 | $ | 375.86 | 14,417 | $ | 345.92 | ||||||||||||||||||||||||||
| Granted | 74,693 | $ | 464.48 | 17,688 | $ | 437.17 | 4,395 | $ | 448.52 | ||||||||||||||||||||||||||
| Vested | (44,833) | $ | 400.45 | (15,397) | $ | 364.71 | (3,376) | $ | 334.05 | ||||||||||||||||||||||||||
| Forfeited/Canceled | (10,666) | $ | 432.56 | (9,121) | $ | 389.81 | — | $ | — | ||||||||||||||||||||||||||
| Balance, December 28, 2025 | 112,790 | $ | 455.87 | 45,501 | $ | 400.67 | 15,436 | $ | 377.73 |
Employee Time-based Restricted Stock Units
The Company recorded $22.9 million, $15.6 million and $14.2 million in compensation expense related to restricted stock units to employees for fiscal years 2025, 2024 and 2023, respectively. At December 28, 2025, there was $35.3 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 2.0 years. This amount can be impacted by employee retirements or terminations.
Employee Performance-based Restricted Stock Awards
Under Teledyne’s restricted stock award program, key officers and 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 estimated expense for restricted stock awards with both time-based and performance-based components 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, which has been the S&P 500 Index for awards granted since 2021. The Company recorded $6.8 million, $6.6 million and $5.2 million in compensation expense related to restricted stock awards to employees for fiscal years 2025, 2024 and 2023, respectively. At December 28, 2025, there was $7.7 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 1.4 years.
Non-Employee Directors Restricted Stock
Non-employee directors each received restricted stock units valued at $210,000 in 2025 and $170,000 in 2024 and 2023 or valued at half the amount 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 $2.0 million for 2025 and $1.7 million for both 2024 and 2023, with an immaterial amount of unrecognized compensation cost that will be recognized over the first half of 2026.
Note 12. Earnings Per Share
The following table sets forth the computations of basic and diluted earnings per common share (amounts in millions, except per share data):
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income attributable to Teledyne | $ | 894.8 | $ | 819.2 | $ | 885.7 | |||||||||||
| Basic earnings per common share: | |||||||||||||||||
| Weighted average common shares outstanding | 46.8 | 47.0 | 47.1 | ||||||||||||||
| Basic earnings per common share | $ | 19.12 | $ | 17.43 | $ | 18.80 | |||||||||||
| Diluted earnings per share: | |||||||||||||||||
| Weighted average common shares outstanding | 46.8 | 47.0 | 47.1 | ||||||||||||||
| Effect of diluted securities (primarily stock options) | 0.6 | 0.6 | 0.8 | ||||||||||||||
| Weighted average diluted common shares outstanding | 47.4 | 47.6 | 47.9 | ||||||||||||||
| Diluted earnings per common share | $ | 18.88 | $ | 17.21 | $ | 18.49 |
In 2024 and 2023, the Company excluded 0.2 million of stock options in the computation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive. In 2025, the amount of excluded stock options in the computation of diluted earnings per share was not material.
Note 13. Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in AOCI for the fiscal years ended December 28, 2025, and December 29, 2024 (in millions):
| Foreign Currency Translation | Cash Flow Hedges | Pension and Postretirement Benefits | Total | ||||||||||||||||||||
| Balance as of December 31, 2023 | $ | (392.7) | $ | 8.2 | $ | (249.6) | $ | (634.1) | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | (209.6) | (6.0) | — | (215.6) | |||||||||||||||||||
| Amounts reclassified from AOCI | — | (4.4) | 14.2 | 9.8 | |||||||||||||||||||
| Net other comprehensive income (loss) | (209.6) | (10.4) | 14.2 | (205.8) | |||||||||||||||||||
| Balance as of December 29, 2024 | (602.3) | (2.2) | (235.4) | (839.9) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 376.8 | 2.7 | — | 379.5 | |||||||||||||||||||
| Amounts reclassified from AOCI | — | — | 35.0 | 35.0 | |||||||||||||||||||
| Net other comprehensive income (loss) | 376.8 | 2.7 | 35.0 | 414.5 | |||||||||||||||||||
| Balance as of December 28, 2025 | $ | (225.5) | $ | 0.5 | $ | (200.4) | $ | (425.4) |
The reclassification out of AOCI for the fiscal years ended December 28, 2025, and December 29, 2024, are as follows (in millions):
| 2025 | 2024 | |||||||||||||
| Amount reclassified from AOCI | Amount reclassified from AOCI | Financial Statement Presentation | ||||||||||||
| (Gain) loss on cash flow hedges: | ||||||||||||||
| (Gain) loss recognized in income on derivatives | $ | — | $ | (6.0) | See Note 14 | |||||||||
| Income tax impact | — | 1.6 | Provision for income taxes | |||||||||||
| Total | $ | — | $ | (4.4) | ||||||||||
| Amortization of defined benefit pension and postretirement plan items: | ||||||||||||||
| Amortization of net prior service cost (income) | $ | 0.3 | $ | (0.4) | Cost and expenses | |||||||||
| Amortization of net actuarial loss | 11.5 | 11.7 | Cost and expenses | |||||||||||
| Pension adjustments | 34.5 | 7.3 | See Note 10 | |||||||||||
| Total before tax | 46.3 | 18.6 | ||||||||||||
| Income tax impact | (11.3) | (4.4) | Provision for income taxes | |||||||||||
| Total | $ | 35.0 | $ | 14.2 |
Note 14. Derivative Instruments and Hedging Activities
The Company’s primary exposure to market risk relates to changes in foreign currency exchange rates and interest rates. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and reduce the volatility of reported earnings. During 2025, the Company entered into certain derivative contracts to reduce the volatility from translation of the Company’s euro denominated net investments. The Company does not use derivative contracts for speculative or trading purposes.
The Company mitigates exposure to foreign currency exchange rates and interest rates primarily through the following:
Designated Hedging Activities
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 the Canadian companies and in British pounds for the UK companies. As of December 28, 2025, foreign currency forward contracts in Canadian dollars designated as cash flow hedges have maturities ranging from March 2026 to May 2026. As of December 28, 2025, foreign currency forward contracts in British pounds designated as cash flow hedges have maturities ranging from March 2026 to February 2027.
The Company utilizes cross-currency swaps to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. In 2025, the Company entered cross-currency swaps designated as net investment hedges with a total notional amount of €450.0 million to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. These cross-currency swaps mature between September 2026 and September 2030.
The Company converted a U.S. dollar denominated, variable rate debt obligation of a European subsidiary into a euro fixed rate obligation using a receive float, pay fixed cross-currency swap to reduce the variability of interest rates. This cross-currency swap matured in October 2024.
Non-Designated Hedging Activities
The Company utilizes foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. These foreign currency forward contracts are not designated as accounting hedges. The gain or loss resulting from a change in fair value of a derivative instrument that is not designated an accounting hedge is recognized immediately in earnings and is intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.
Derivative Instruments
The following is a summary of the gain (loss) included in the consolidated statements of income (loss) and comprehensive income (loss) related to the derivative instruments described above (in millions):
| 2025 | 2024 | ||||||||||
| Net gain (loss) recognized in AOCI—Foreign Exchange Contracts (a) | $ | 3.5 | $ | (8.2) | |||||||
| Net gain (loss) recognized in AOCI—Cross-Currency Swap Contracts (a) | $ | (36.1) | $ | — | |||||||
| Net gain (loss) reclassified from AOCI into revenue/cost of sales—Foreign Exchange Contracts (a) | $ | — | $ | 1.1 | |||||||
| Net gain (loss) reclassified from AOCI into other income and expense, net—Foreign Exchange Contracts (b) | $ | — | $ | 22.7 | |||||||
| Net gain (loss) reclassified from AOCI into interest expense—Foreign Exchange Contracts | $ | — | $ | (17.9) | |||||||
| Net gain (loss) recognized in other income and expense, net—Foreign Exchange Contracts | $ | 37.8 | $ | (43.6) |
(a) Effective portion, pre-tax
(b) Amount reclassified to offset earnings impact of liability hedged by cross-currency swap, used to hedge debt
Net deferred gains recorded in AOCI for the forward contracts that will mature in the next 12 months total $0.5 million, net of taxes. These gains are expected to be offset by anticipated losses in the value of the forecasted underlying hedged item.
The following is a summary of notional amounts and fair values of the Company’s derivatives recorded in the consolidated balance sheets presented by instrument type and use (in millions):
| Notional Amount | Fair Value Asset | Fair Value Liability | |||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 52.2 | $ | 83.3 | $ | 0.5 | $ | — | $ | — | $ | (3.0) | |||||||||||||||||
| Cross-currency swap agreements | 530.0 | — | 6.0 | — | (40.4) | — | |||||||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | 582.2 | $ | 83.3 | $ | 6.5 | $ | — | $ | (40.4) | $ | (3.0) | |||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | 815.6 | 974.8 | 15.5 | 1.0 | (1.4) | (13.9) | |||||||||||||||||||||||
| Total derivatives | $ | 1,397.8 | $ | 1,058.1 | $ | 22.0 | $ | 1.0 | $ | (41.8) | $ | (16.9) |
All derivative assets are presented in Other current assets or Other non-current assets. All derivative liabilities are presented in Accrued liabilities or Other non-current liabilities.
Note 15. Fair Value Measurements
The Company’s financial assets and liabilities carried at fair value are primarily comprised of derivative contracts used to hedge the Company’s foreign currency risk. The Company has not elected to measure any additional financial instruments or other items at fair value.
Financial Instruments Recorded at Fair Value
The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 hierarchy information as defined by the accounting policies (in millions):
| December 28, 2025 | December 29, 2024 | ||||||||||
| Assets: | |||||||||||
| Foreign currency forward contracts | $ | 16.0 | $ | 1.0 | |||||||
| Cross-currency swaps | 6.0 | — | |||||||||
| Total assets recorded at fair value | $ | 22.0 | $ | 1.0 | |||||||
| Liabilities: | |||||||||||
| Foreign currency forward contracts | $ | (1.4) | $ | (16.9) | |||||||
| Cross-currency swaps | (40.4) | — | |||||||||
| Total liabilities recorded at fair value | $ | (41.8) | $ | (16.9) | |||||||
| Net derivatives at fair value | $ | (19.8) | $ | (15.9) |
Gross derivative assets and liabilities are subject to legally enforceable master netting agreements, for which the Company has not elected to present net amounts on the consolidated balance sheets. The effect of such right of setoff on the Company’s financial position were $0.4 million and $0.2 million, as of December 28, 2025, and December 29, 2024, respectively.
Financial Instruments Not Recorded at Fair Value
The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturities of these assets and liabilities.
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 is considered a Level 2 and is valued based on observable market data. As of December 28, 2025, and December 29, 2024, the aggregate fair values of borrowings were $2,359.5 million and $2,395.0 million, respectively, and the carrying values were $2,489.0 million and $2,666.2 million, respectively.
The cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.
Note 16. Leases
Operating Leases
Teledyne has more than 150 long-term operating lease agreements for manufacturing facilities and office space. These agreements frequently include one or more renewal options and may require the Company to pay for non-lease components such as utilities, taxes, insurance and maintenance expense. The Company accounts for lease and non-lease components as a single lease component when the payments are fixed. Variable payments included in the lease agreement are expensed as incurred. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements. At December 28, 2025, and December 29, 2024, Teledyne has right-of-use assets of $156.1 million and $128.6 million, respectively, included in non-current other assets, net, on the consolidated balance sheets.
At December 28, 2025, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in millions):
| 2026 | $ | 40.9 | |||
| 2027 | 37.2 | ||||
| 2028 | 29.1 | ||||
| 2029 | 22.1 | ||||
| 2030 | 18.7 | ||||
| Thereafter | 51.7 | ||||
| Total minimum lease payments | 199.7 | ||||
| Less: | |||||
| Imputed interest | (33.0) | ||||
| Current portion (included in current accrued liabilities) | (32.0) | ||||
| Present value of minimum lease payments, net of current portion (included in other long-term liabilities) | $ | 134.7 |
The weighted average remaining lease term for operating leases is approximately 6.6 years, and the weighted average discount rate is approximately 4.93%. Rental expense under operating leases, including leases with a term of 12 months or less, net of immaterial sublease income, was $46.1 million in 2025, $47.9 million in 2024 and $43.9 million in 2023. Variable lease expense was $0.9 million in 2025, $1.3 million in 2024 and $1.6 million in 2023. Cash paid for amounts included in the measurement of lease liabilities was $43.7 million for 2025 and $39.5 million for 2024. Right-of-use assets obtained in exchange for lease obligations was $48.5 million for 2025 and $13.8 million for 2024.
Finance Leases and Subleases
The Company’s finance leases and subleases are not material.
Note 17. Commitments and Contingencies
Trade Compliance Matters
The Company has made voluntary disclosures to the U.S. Department of State and the U.S. Department of Commerce, including to the BIS, with respect to Teledyne FLIR shipments of products from non-U.S. jurisdictions which were not licensed due to an incorrect de minimis calculation methodology under the Export Administration Regulations. The Company has also made voluntary disclosures to export authorities in jurisdictions outside the United States for certain potential violations of local export laws. The Company accrues amounts associated with potential violations to the extent a loss, penalty or other government action becomes probable and can be reasonably estimated. An unfavorable outcome could result in substantial fines and penalties or loss or suspension of export privileges or of particular authorizations that could be material to the Company’s financial position, results of operations or cash flows in and following the period in which such outcome becomes estimable or known.
Environmental Remediation Obligations
At December 28, 2025, the Company’s reserves for environmental remediation obligations totaled $6.0 million, of which $2.9 million is included in current accrued liabilities and the remainder included in other long-term liabilities. The Company 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 pay the amounts recorded over many years and will complete remediation of all sites with which it has been identified in up to 30 years.
Other Claims and Legal Matters
In December 2025, Teledyne RISI, Inc. d/b/a Teledyne Electronic Safety Products (“TESP”) reached a final settlement agreement with U.S. Department of Justice, on behalf of the Department of the Air Force and the Department of the Navy, regarding a civil false claims investigation relating to certain electronic modules manufactured between November 2011 and June 2012 for an ejection seat sequencer program. By entering a negotiated settlement, which included the payment by TESP of $1.5 million, TESP admitted no wrongdoing and sought to avoid the costs and expense of potential protracted litigation.
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 has knowledge 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 18. Subsequent Events
In the first quarter of 2026, the Company acquired DD-Scientific Holdings Limited and its subsidiary DD-Scientific Limited (together, “DD-Scientific”) for approximately $53.0 million in cash, net of cash acquired and subject to certain adjustments. DD-Scientific, founded in 2011 and headquartered in Fareham, UK, develops and manufactures high-performance gas sensors for critical applications in industries including industrial safety, healthcare and environmental compliance. DD-Scientific will be included within the Instrumentation segment.
Schedule II VALUATION AND QUALIFYING ACCOUNTS
Schedule II
VALUATION AND QUALIFYING ACCOUNTS
For the Fiscal Years Ended December 28, 2025, December 29, 2024 and December 31, 2023
(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 2025 | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 15.5 | (0.4) | — | (4.1) | $ | 11.0 | |||||||||||||||||||||||||
| Environmental reserves | $ | 6.5 | 0.2 | — | (0.7) | $ | 6.0 | |||||||||||||||||||||||||
| Fiscal Year 2024 | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 11.5 | 6.4 | — | (2.4) | $ | 15.5 | |||||||||||||||||||||||||
| Environmental reserves | $ | 5.4 | 1.6 | — | (0.5) | $ | 6.5 | |||||||||||||||||||||||||
| Fiscal Year 2023 | ||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | 11.7 | 0.7 | — | (0.9) | $ | 11.5 | |||||||||||||||||||||||||
| Environmental reserves | $ | 5.8 | — | — | (0.4) | $ | 5.4 |
(a) Represents payments except the amounts for allowance for doubtful accounts primarily represents uncollectible accounts written-off, net of recoveries.
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