1 unchanged sentence
Disclosure Controls
−Removed: Teledyne’s disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that it files or submits, under the Securities Exchange Act of 1934, was recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
−Removed: The Company’s Chairman, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, with the participation and assistance of other members of management, have evaluated the effectiveness, as of January 2, 2022, of the Company’s “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended (“the Exchange Act”).
+Added: Teledyne’s disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that it files or submits, under the Exchange Act, was recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
+Added: The Company’s Chairman, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, with the participation and assistance of other members of management, have evaluated the effectiveness, as of January 1, 2023, of the Company’s “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) under the Exchange Act.
Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures as of January 1, 2023, are effective.
5 unchanged sentences
Sarbanes-Oxley Disclosure Committee
−Removed: The Company’s Sarbanes-Oxley Disclosure Committee includes the following members:
−Removed: Adams, Vice President, Business Risk Assurance
−Removed: Cynthia Belak, Vice President and Controller
−Removed: Blackwood, Senior Vice President, Strategic Sourcing, Tax and Treasurer
−Removed: Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary
−Removed: Duncan Forsythe, Associate Vice President, Taxation
−Removed: Lee, Director, Global Income Tax Accounting
−Removed: Levan, Senior Director of Financial Reporting and Assistant Controller
−Removed: Main, Senior Vice President and Chief Financial Officer
−Removed: Paul Sassalos, Associate Vice President, Associate General Counsel and Assistant Secretary
−Removed: Jason VanWees, Vice Chairman
−Removed: Vernon, Senior Director and Assistant Controller
+Added: The Company maintains a Sarbanes-Oxley Disclosure Committee, which is comprised of senior representatives of the Company, including members of our finance, accounting, tax, internal audit and legal departments.
Among its tasks, the Sarbanes-Oxley Disclosure Committee discusses and reviews disclosure issues to help us fulfill our disclosure obligations on a timely basis in accordance with SEC rules and regulations and is intended to be used as an additional resource for employees to raise questions regarding accounting, auditing, internal controls and disclosure matters.
2 unchanged sentences
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
+Added: Not applicable.
Directors, Executive Officers and Corporate Governance
−Removed: The information required by this item is set forth in the 2022 Proxy Statement under the captions “Executive Management”, “Item 1 on Proxy Card - Election of Directors,” “Board Composition and Practices,” “Corporate Governance,” “Committees of Our Board of Directors - Audit Committee” and “Report of the Audit Committee”.
−Removed: This information is incorporated herein by reference.
+Added: The information required by this item is set forth in the 2023 Proxy Statement under the captions “Executive Management”, “Item 1 on Proxy Card - Election of Directors,” “Board Composition and Practices,” “Corporate Governance,” “Committees of Our Board of Directors - Audit Committee” and “Report of the Audit Committee” and is incorporated herein by reference.
Executive Compensation
−Removed: The information required by this item is set forth in the 2022 Proxy Statement under the captions “Executive and Director Compensation” and “Personnel and Compensation Committee Report.” This information is incorporated herein by reference.
+Added: The information required by this item is set forth in the 2023 Proxy Statement under the captions “Executive and Director Compensation” and “Personnel and Compensation Committee Report” incorporated herein by reference.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
7 unchanged sentences
(1) Financial Statements
−Removed: See the “Index to Financial Statements and Related Information” on page 45 of this Report, which is incorporated herein by reference.
+Added: See the “Index to Financial Statements and Related Information” on page 3 6 of this Report, which is incorporated herein by
(2) Financial Statement Schedules
20 unchanged sentences
RESPONSIBILITY FOR PREPARATION OF THE FINANCIAL STATEMENTS AND ESTABLISHING AND MAINTAINING ADEQUATE INTERNAL CONTROL OVER FINANCIAL REPORTING
−Removed: We are responsible for the preparation of the financial statements included in this Annual Report.
+Added: 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 accounting principles generally accepted in the United States of America and include amounts that are based on the best estimates and judgments of management.
−Removed: The other financial information contained in this Annual Report is consistent with the financial statements.
+Added: 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.
6 unchanged sentences
Our evaluation included reviewing the documentation of our controls, evaluating the design effectiveness of our controls and testing their operating effectiveness.
−Removed: Our evaluation of internal control over financial reporting excluded the internal control activities of FLIR Systems, Inc ("FLIR"), which we acquired in May 2021.
−Removed: We have included the financial results of this acquisition in our consolidated financial statements from the date of acquisition.
−Removed: Total assets (excluding goodwill and intangible assets) and total net sales subject to FLIR’s internal control over financial reporting represented approximately 11% and 28% of our consolidated total assets and total net sales as of and for the fiscal year ended January 2, 2022, respectively.
−Removed: 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 January 1, 2023, the Company’s internal controls over financial reporting were effective.
8 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Stockholders and Board of Directors of Teledyne Technologies Incorporated
+Added: To the Stockholders and the Board of Directors of Teledyne Technologies Incorporated
Thousand Oaks, California
2 unchanged sentences
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 1, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
−Removed: 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 January 2, 2022, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements and financial statement schedule.
−Removed: 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 FLIR Systems, Inc., which was acquired on May 14, 2021, and whose financial statements (excluding goodwill and intangibles assets) constitute approximately 11% of total assets and 28% of net sales of the consolidated financial statement amounts as of and for the year ended January 2, 2022.
−Removed: Accordingly, our audit did not include the internal control over financial reporting at FLIR Systems, Inc.
+Added: 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 January 1, 2023, of the Company and our report dated February 24, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
18 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Stockholders and Board of Directors of Teledyne Technologies Incorporated
+Added: To the Stockholders and the Board of Directors of Teledyne Technologies Incorporated
Thousand Oaks, California
17 unchanged sentences
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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Acquisitions —FLIR Systems, Inc.
−Removed: – Intangible Assets – Refer to Notes 2 and 3 to the financial statements
+Added: Goodwill and Indefinite-Lived Trademarks – FLIR Reporting Unit and Trademarks - Refer to Notes 2, 3, and 6 to the financial statements
Critical Audit Matter Description
−Removed: The Company completed the acquisition of FLIR Systems, Inc.
−Removed: (“FLIR”) for total consideration of $7.9 billion on May 14, 2021.
−Removed: The Company accounted for the acquisition under the acquisition method of accounting for business combinations.
−Removed: Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including acquired intangible assets of $2.49 billion primarily from proprietary technology, trademarks, and customer list/relationships.
−Removed: Management estimated the fair value of proprietary technology using the discounted cash flows approach, trademarks using the relief from royalty approach, and customer list/relationships using the multi-period excess earnings approach.
−Removed: The provisional fair value determination of the acquired intangible assets required management to make significant estimates and assumptions related to future revenue projections.
−Removed: Given the fair value determination of the acquired intangibles for FLIR requires management to make significant estimates and assumptions related to the forecasts of future revenue projections, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.
+Added: The Company’s evaluation of goodwill and indefinite lived intangible assets for impairment involves the comparison of the fair value of each reporting unit and indefinite lived intangible asset to the respective carrying value.
+Added: The Company performed annual impairment tests using quantitative approaches for the FLIR reporting unit goodwill and the FLIR indefinite lived trademarks.
+Added: As of the annual impairment test date, the carrying value of the FLIR reporting unit goodwill and the FLIR indefinite lived trademarks were $5,748.0 million and $685.0 million, respectively.
+Added: Management used a combination of the discounted cash flow approach and the market approach to estimate fair value of the FLIR reporting unit, and the relief from royalty approach to estimate fair value of the FLIR indefinite lived trademarks.
+Added: The estimation of fair value using these quantitative approaches requires management to make significant estimates and assumptions related to future revenue projections and the selected discount rates.
+Added: Given the estimation of fair value of both the FLIR reporting unit and FLIR indefinite lived trademarks requires management to make significant estimates and assumptions related to the forecasts of future revenue projections and the selection of the discount rates, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our internal fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to revenue projections used to estimate the fair value of the intangible assets acquired included the following, among others:
−Removed: • We tested the effectiveness of management’s controls over the revenue projections used to estimate the fair value of the intangible assets acquired.
−Removed: • We evaluated the reasonableness of the revenue projections by comparing them to (1) FLIR and third-party historical financial data, (2) current economic factors and analyst reports of FLIR and companies in its peer group, (3) the Company’s similar historical acquisitions and reporting units.
+Added: Our audit procedures related to the forecasts of future revenue projections and the discount rate used to estimate the fair value of the FLIR reporting unit and the FLIR indefinite lived trademark as of the impairment test date included the following, among others:
+Added: • We tested the effectiveness of management’s controls over the forecasted future revenue projections and the selected discount rate used to both estimate the fair value and perform the quantitative impairment tests for the FLIR reporting unit and FLIR indefinite lived trademarks.
+Added: • We evaluated the reasonableness of the revenue projections by comparing them to (1) FLIR and third-party historical financial data, (2) current economic factors and analyst reports of FLIR and companies in its peer group, and (3) the Company’s similar historical acquisitions and reporting units.
• We performed a sensitivity analysis by varying projected revenue assumptions.
• With the assistance of our fair value specialists, we performed an analysis comparing applicable industry forecasted long-term revenue growth rates to management’s projected revenues used within the valuation models.
−Removed: Acquisitions —FLIR Systems, Inc.
−Removed: – Uncertain Tax Positions – Refer to Notes 2 and 3 and 10 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company completed the acquisition of FLIR for total consideration of $7.9 billion on May 14, 2021.
−Removed: The Company accounted for the acquisition under the acquisition method of accounting for business combinations.
−Removed: Accordingly, the Company evaluated the FLIR historical domestic and international tax positions to determine whether the ultimate tax determinations are uncertain and therefore represent a liability assumed in the acquisition.
−Removed: A tax position is recorded when a determination is made that it is more likely than not that the position is sustainable upon examination based on the technical merits of the position.
−Removed: We identified the Company’s assessment of technical merits evaluated in the more likely than not analysis for certain uncertain tax positions in foreign taxing jurisdictions in which FLIR operates and the resulting existence as of the acquisition date as a critical audit matter.
−Removed: This critical audit matter required challenging auditor judgment due to the nature and subjectivity of the applicable tax rules and/or their interpretation in each jurisdiction, as well as evaluating whether the information used in the Company’s analysis was known or knowable as of the acquisition date.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to (1) assessment of the technical merits evaluated in the more likely than not analysis for uncertain tax positions, and (2) existence of such uncertain tax positions as of the acquisition date included the following, among others:
−Removed: We tested the effectiveness of management’s controls over the determination of meeting the more likely than not threshold on potential uncertain tax positions and resulting existence as of the acquisition date.
−Removed: We evaluated the information used in Management’s assessment of the technical merits of the Company’s positions to determine whether such information was known or knowable as of the acquisition date and therefore should be recorded as a liability assumed as part of purchase accounting.
−Removed: We inspected external information and correspondence from foreign tax authorities on open tax examinations and tax assessments issued
−Removed: We inquired with external counsel through confirmations to understand matters, status, and facts relevant to tax positions.
−Removed: We also involved international tax professionals with specialized skills and knowledge in foreign tax law, who assisted in:
−Removed: – inspecting management prepared tax positions and external tax opinion documentation and comparing to interpretation of tax law
−Removed: – performing independent evaluation of tax positions and assumptions and comparing the results to the Company’s position, challenging the need for an uncertain tax position liability and disclosure
+Added: • With the assistance of our fair value specialists, we evaluated the discount rates, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates of the discount rates and comparing those to the discount rates selected by management.
/s/ Deloitte & Touche LLP
10 unchanged sentences
Cost of sales 3,128.3 2,772.9 1,905.3
−Removed: Selling, general and administrative expenses 1,067.8 662.0 715.1
+Added: Selling, general and administrative 1,156.6 1,067.8 662.0
Acquired intangible asset amortization 201.7 149.3 38.8
Total costs and expenses 4,486.6 3,990.0 2,606.1
−Removed: Operating income
+Added: Operating income (loss)
972.0 624.3 480.1
1 unchanged sentence
Non-service retirement benefit income 11.4 11.2 12.1
+Added: Gain (loss) on debt extinguishment 10.6 ( 13.4 ) —
Other income (expense), net 3.4 2.5 ( 7.2 )
−Removed: Income before income taxes
+Added: Income (loss) before income taxes
908.1 533.8 469.7
−Removed: Provision for income taxes 88.5 67.8 71.4
−Removed: Net income $ 445.3 $ 401.9 $ 402.3
+Added: Provision (benefit) for income taxes 119.2 88.5 67.8
+Added: Net income (loss) including noncontrolling interest
+Added: 788.9 445.3 401.9
+Added: Net income (loss) attributable to noncontrolling interest 0.3 — —
+Added: Net income (loss) attributable to Teledyne $ 788.6 $ 445.3 $ 401.9
Basic earnings per common share $ 16.85 $ 10.31 $ 10.95
8 unchanged sentences
2022 2021 2020
−Removed: Net income $ 445.3 $ 401.9 $ 402.3
+Added: Net income (loss) including noncontrolling interest $ 788.9 $ 445.3 $ 401.9
Other comprehensive income (loss):
2 unchanged sentences
Pension and postretirement benefit adjustments, net of tax 42.1 50.2 ( 24.7 )
−Removed: Other comprehensive income(a) 0.1 45.7 17.4
−Removed: Comprehensive income $ 445.4 $ 447.6 $ 419.7
−Removed: (a) Net of income tax expense of $ 11.7 million in 2021, income tax benefit of $ 9.8 million for 2020 and income tax benefit of $ 6.6 million for 2019.
+Added: Other comprehensive income (loss) (a) ( 296.5 ) 0.1 45.7
+Added: Comprehensive income (loss) including noncontrolling interest 492.4 445.4 447.6
+Added: Comprehensive income (loss) attributable to noncontrolling interest 0.3 — —
+Added: Comprehensive income (loss) attributable to Teledyne $ 492.1 $ 445.4 $ 447.6
+Added: (a) Net of income tax expense of $ 25.0 million in 2022, income tax expense of $ 11.7 million for 2021 and income tax benefit of $ 9.8 million for 2020.
The accompanying notes are an integral part of these financial statements.
27 unchanged sentences
Commitments and Contingencies
+Added: Redeemable Noncontrolling Interest 3.7 —
Stockholders’ Equity
12 unchanged sentences
( 20.0 ) ( 38.8 )
−Removed: Accumulated other comprehensive loss ( 430.0 ) ( 430.1 )
+Added: Accumulated other comprehensive income (loss) ( 726.5 ) ( 430.0 )
Total Stockholders’ Equity 8,169.2 7,622.0
5 unchanged sentences
Stock Additional
−Removed: Capital Treasury
−Removed: Stock Retained
−Removed: Earnings Accumulated
−Removed: Other Comprehensive
+Added: Capital Retained
+Added: Earnings Treasury
+Added: Stock Accumulated Other Comprehensive
Income (Loss) Total
Balance, December 29, 2019 $ 0.4 $ 360.5 $ 2,926.0 $ ( 96.4 ) $ ( 475.8 ) $ 2,714.7
−Removed: Net income — — — 402.3 — 402.3
−Removed: Other comprehensive income, net of tax — — — — 17.4 17.4
+Added: Net income (loss) — — 401.9 — — 401.9
+Added: Other comprehensive income (loss), net of tax — — — — 45.7 45.7
Treasury stock issued — ( 36.9 ) — 36.9 — —
1 unchanged sentence
Exercise of stock options — 36.3 — — — 36.3
−Removed: Balance, December 29, 2019 0.4 360.5 ( 96.4 ) 2,926.0 ( 475.8 ) 2,714.7
−Removed: Net income — — — 401.9 — 401.9
−Removed: Other comprehensive income, net of tax — — — — 45.7 45.7
+Added: Balance, January 3, 2021 0.4 389.9 3,327.9 ( 59.5 ) ( 430.1 ) 3,228.6
+Added: Net income (loss) — — 445.3 — — 445.3
+Added: Other comprehensive income (loss), net of tax — — — — 0.1 0.1
+Added: Common stock issued 0.1 3,888.6 — — — 3,888.7
Treasury stock issued — ( 20.7 ) — 20.7 — —
2 unchanged sentences
Balance, January 2, 2022 0.5 4,317.1 3,773.2 ( 38.8 ) ( 430.0 ) 7,622.0
−Removed: Net income — — — 445.3 — 445.3
−Removed: Other comprehensive income, net of tax — — — — 0.1 0.1
−Removed: Common stock issued 0.1 3,888.6 — — — 3,888.7
+Added: Net income (loss) — — 788.6 — — 788.6
+Added: Other comprehensive income (loss), net of tax — — — — ( 296.5 ) ( 296.5 )
Treasury stock issued — ( 18.8 ) — 18.8 — —
9 unchanged sentences
Operating Activities
−Removed: Net income $ 445.3 $ 401.9 $ 402.3
−Removed: Adjustments to reconcile net income to net cash provided by operating activities:
+Added: Net income (loss) including noncontrolling interest $ 788.9 $ 445.3 $ 401.9
+Added: Adjustments to reconcile net income (loss) including noncontrolling interest to net cash provided by (used in) operating activities:
Depreciation and amortization 332.2 371.8 116.2
Stock-based compensation 31.5 33.9 30.0
−Removed: Bridge financing and debt extinguishment expense 30.5 — —
−Removed: Changes in operating assets and liabilities, excluding the effect of businesses acquired:
+Added: Bridge financing and debt extinguishment (income) expense ( 10.6 ) 30.5 —
+Added: Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable and unbilled receivables ( 87.9 ) ( 158.9 ) 47.8
5 unchanged sentences
Other, net ( 28.2 ) 11.2 0.3
−Removed: Net cash provided by operating activities 824.6 618.9 482.1
+Added: Net cash provided by (used in) operating activities 486.8 824.6 618.9
Investing Activities
2 unchanged sentences
Other, net 16.8 0.6 1.0
−Removed: Net cash used in investing activities ( 3,824.3 ) ( 99.4 ) ( 571.9 )
+Added: Net cash provided by (used in) investing activities ( 175.4 ) ( 3,824.3 ) ( 99.4 )
Financing Activities
−Removed: Net proceeds from credit facility — — 96.0
Proceeds from issuance of term loans and senior notes, net — 3,975.9 2.7
Payments on other debt ( 174.8 ) ( 1,141.7 ) ( 100.8 )
+Added: Liquidations of cross currency swap 43.1 — —
Proceeds from stock options exercised 23.6 25.4 36.3
11 unchanged sentences
Description of Business
−Removed: Teledyne Technologies Incorporated (“Teledyne” or the “Company”), a Delaware company that became an independent public company effective November 29, 1999, provides enabling technologies for industrial growth markets that require advanced technology and high reliability.
+Added: Teledyne Technologies Incorporated (“Teledyne” or the “Company”) provides enabling technologies for industrial growth markets that require advanced technology and high reliability.
These markets include factory automation and condition monitoring, aerospace and defense, air and water quality environmental monitoring, electronics design and development, medical imaging and pharmaceutical research, oceanographic research, and deepwater energy exploration and production.
Following the 2021 acquisition of FLIR Systems, Inc.
−Removed: ( “FLIR”), we further evolved into a global sensing and decision-support technology company:
−Removed: providing specialty sensors, cameras, instrumentation, algorithms and software across the electromagnetic spectrum, as well as unmanned systems, in the subsea, land and air domains.
−Removed: We differentiate ourselves from many of our direct competitors by having a customer and Company-sponsored applied research center that augments our product development expertise.
−Removed: We believe that technological capabilities and innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.
−Removed: Teledyne consists of the Digital Imaging segment with principal operations in the United States, the United Kingdom, Canada, France, Sweden, the Netherlands, Belgium, Estonia and the United Arab Emirates:
−Removed: the Instrumentation segment with principal operations in the United States, the United Kingdom, Denmark and France;
−Removed: the Aerospace and Defense Electronics segment with principal operations in the United States and the United Kingdom;
−Removed: and the Engineered Systems segment with principal operations in the United States.
−Removed: Certain prior year amounts have been reclassified to conform to the current period presentation.
−Removed: The Company now discloses acquired intangible asset amortization on a separate income statement line.
−Removed: Acquired intangible asset amortization was previously included in selling, general and administrative expenses.
−Removed: In addition, the Company now discloses the balance of long-term deferred tax liabilities on a separate balance sheet line.
−Removed: Long-term deferred tax liabilities was previously included in other long-term liabilities.
−Removed: On May 14, 2021, Teledyne completed the acquisition of FLIR, and the financial results of FLIR have been included since the date of the acquisition.
−Removed: The financial statements of Teledyne contained herein are as of and for the fiscal year ended January 2, 2022, and reflect the results of the Company after giving effect to the acquisition of FLIR.
−Removed: Teledyne acquired the outstanding stock of FLIR for approximately $ 8.1 billion, comprising of net cash payments of $ 3.7 billion, Teledyne share issuances of $ 3.9 billion, and the assumption of FLIR debt of $ 0.5 billion.
−Removed: See Note 3 to these Notes to Consolidated Financial Statements for information regarding FLIR acquisition.
+Added: (“FLIR”), the Company further evolved into a global sensing and decision-support technology company, providing specialty sensors, cameras, instrumentation, algorithms and software across the electromagnetic spectrum, as well as unmanned systems, in the subsea, land and air domains.
+Added: Teledyne differentiates itself from many of our direct competitors by having a customer and Company-sponsored applied research center that augments its product development expertise.
+Added: The Company believes that technological capabilities and innovation and the 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.
+Added: The Company's businesses are aligned in four segments:
+Added: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
Summary of Significant Accounting Policies
−Removed: Principles of Consolidation
−Removed: The consolidated financial statements include the accounts of Teledyne and its majority-owned subsidiaries.
−Removed: Intercompany accounts and transactions have been eliminated.
The Company operates on a 52- or 53-week fiscal year convention ending on the Sunday nearest to December 31.
1 unchanged sentence
Fiscal year 2021 was a 52-week fiscal year and ended on January 2, 2022.
−Removed: Fiscal year 2019 was a 52-week fiscal year and ended on December 29, 2019.
+Added: Fiscal year 2020 was a 53-week fiscal year and ended on January 3, 2021.
References to the years 2022, 2021 and 2020 are intended to refer to the respective fiscal year unless otherwise noted.
+Added: Basis of Presentation
+Added: Certain prior year amounts have been reclassified to conform to the current period presentation.
+Added: In the current year, gain (loss) on debt extinguishment is presented as separate line item on the income statement.
+Added: Principles of Consolidation
+Added: The consolidated financial statements include the accounts of Teledyne and its majority-owned subsidiaries.
+Added: Intercompany accounts and intercompany transactions have been eliminated.
+Added: Foreign Currency Translation
+Added: The Company’s foreign entities’ accounts are generally measured using local currency as the functional currency.
+Added: Assets and liabilities of these entities are translated at the exchange rate in effect at year-end.
+Added: Revenues and expenses are translated at average month end rates of exchange prevailing during the year.
+Added: Unrealized translation gains and losses arising from differences in exchange rates from period to period are included as a component of accumulated other comprehensive income (loss) ("AOCI").
+Added: Use of Estimates
The preparation of financial statements in conformity with U.S.
3 unchanged sentences
Actual results may differ materially from these estimates under different assumptions or conditions.
−Removed: Management believes that the estimates are reasonable.
−Removed: Accumulated Other Comprehensive Income (Loss)
−Removed: The following table summarizes the changes in accumulated balances of other comprehensive income (loss) (“AOCI”) for the fiscal years ended January 2, 2022, and January 3, 2021 (in millions):
−Removed: Foreign Currency Translation Cash Flow Hedges and other Pension and Postretirement Benefits Total
−Removed: Balance as of December 29, 2019 $ ( 150.4 ) $ ( 2.3 ) $ ( 323.1 ) $ ( 475.8 )
−Removed: Other comprehensive income (loss) before reclassifications 65.8 ( 13.8 ) — 52.0
−Removed: Amounts reclassified from AOCI — 18.4 ( 24.7 ) ( 6.3 )
−Removed: Net other comprehensive income (loss) 65.8 4.6 ( 24.7 ) 45.7
−Removed: Balance as of January 3, 2021 ( 84.6 ) 2.3 ( 347.8 ) ( 430.1 )
−Removed: Other comprehensive income (loss) before reclassifications ( 44.4 ) 18.0 — ( 26.4 )
−Removed: Amounts reclassified from AOCI — ( 23.7 ) 50.2 26.5
−Removed: Net other comprehensive income (loss) ( 44.4 ) ( 5.7 ) 50.2 0.1
−Removed: Balance as of January 2, 2022 $ ( 129.0 ) $ ( 3.4 ) $ ( 297.6 ) $ ( 430.0 )
−Removed: The reclassification out of AOCI for the fiscal years ended January 2, 2022, and January 3, 2021, are as follows (in millions):
−Removed: January 2, 2022 January 3, 2021
−Removed: Amount reclassified from AOCI Amount reclassified from AOCI Financial Statement Presentation
−Removed: Gain (loss) on cash flow hedges:
−Removed: Gain (loss) recognized in income on derivatives $ ( 31.7 ) $ 24.8 See Note 2
−Removed: Income tax impact 8.0 ( 6.4 ) Provision for income taxes
−Removed: Total $ ( 23.7 ) $ 18.4
−Removed: Amortization of defined benefit pension and postretirement plan items:
−Removed: Amortization of prior service cost $ ( 3.5 ) $ ( 6.0 ) See Note 11
−Removed: Amortization of net actuarial loss 26.8 22.8 See Note 11
−Removed: Pension adjustments 36.6 ( 49.7 ) See Note 11
−Removed: Total before tax 59.9 ( 32.9 )
−Removed: Income tax impact ( 9.7 ) 8.2
−Removed: Net of tax $ 50.2 $ ( 24.7 )
−Removed: Revenue Recognition
−Removed: We determine the appropriate method by which we recognize revenue by analyzing the nature of the products or services being provided as well as the terms and conditions of contracts or arrangements entered into with our customers.
−Removed: We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.
−Removed: 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.
−Removed: For standard products or services, list prices generally represent the standalone selling price.
−Removed: For performance obligations where list price is not available, we typically use the expected cost plus a margin approach to estimate the standalone selling price for that performance obligation.
−Removed: Prior to the acquisition of FLIR, approximately 60 % of our revenue was recognized at a point in time, with the remaining 40 % recognized over time.
−Removed: The majority of FLIR revenue is recognized at a point in time.
−Removed: In future periods, we expect approximately 70 % of revenue to be recognized at a point in time, with the remaining 30 % recognized over time.
−Removed: Revenue recognized at a point in time relates primarily to the sale of standard or minimally customized products, with control transferring to the customer generally upon the transfer of title.
−Removed: This type of revenue arrangement is typical for our commercial contracts within the Digital Imaging, Instrumentation, and Aerospace and Defense Electronics segments, and to a lesser extent for certain commercial contracts within the Engineered Systems segment relating to the sale of standard hydrogen/oxygen gas generators.
−Removed: In limited circumstances, customer specified acceptance criteria exist.
−Removed: If we cannot objectively demonstrate that the product meets those specifications prior to the shipment, the revenue is deferred until customer acceptance is obtained.
−Removed: The transaction price in these arrangements can include variable consideration, such as product returns and sales allowances.
−Removed: The estimation of this variable consideration and determination of whether to include estimated amounts as a
−Removed: reduction in the transaction price is based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.
−Removed: Revenue recognized over time relates primarily to contracts to design, develop and/or manufacture highly engineered products used in both defense and commercial applications.
−Removed: This type of revenue arrangement is typical of our U.S.
−Removed: government contracts and to a lesser extent for certain commercial contracts, with both contract types occurring across all segments.
−Removed: The customer typically controls the work in process as evidenced either by contractual termination clauses or by our right to payment for costs incurred to date plus a reasonable profit for products or services that do not have an alternative use.
−Removed: As control transfers continuously over time on these contracts, revenue is recognized based on the extent of progress towards completion of the performance obligation.
−Removed: 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.
−Removed: We generally use the cost-to-cost measure of progress as this measure best depicts the transfer of control to the customer which occurs as we incur costs on our contracts.
−Removed: 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.
−Removed: 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.
−Removed: We estimate variable consideration at the amount to which we expect to be entitled, and we include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the estimation uncertainty is resolved.
−Removed: The estimation of this variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.
−Removed: The majority of our over time contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct.
−Removed: Over time contracts are often modified to account for changes in contract specifications and requirements.
−Removed: We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations.
−Removed: Most of our contract modifications on over time contracts are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract.
−Removed: The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.
−Removed: For over time contracts using the cost-to-cost method, we have an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of our performance obligations.
−Removed: 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.
−Removed: 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.
−Removed: This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters.
−Removed: 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.
−Removed: Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly.
−Removed: The majority of revenue recognized over time uses an EAC process.
−Removed: The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in 2021 was approximately $ 26.8 million of favorable operating income, primarily within the Digital Imaging operating segment, related to favorable changes in estimates that impacted revenue, and, to a lesser degree, cost of sales.
−Removed: The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in 2020 was approximately $ 14.6 million of favorable operating income, primarily within the Digital Imaging operating segment, related to changes in estimates that favorably impacted revenue, and, to a lesser degree, cost of sales.
−Removed: None of the effects of changes in estimates on any individual contract were material to the consolidated statements of income for any period presented.
−Removed: While extended or non-customary warranties do not represent a significant portion of our revenue, we recognize warranty services as a separate performance obligations when it is material to the contract.
−Removed: When extended or non-customary warranties represents a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period.
−Removed: 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).
−Removed: As of January 2, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 2,929.0 million.
−Removed: The Company expects approximately 78 % of remaining performance obligations to be recognized into revenue within the next twelve months , with the remaining 22 % recognized thereafter.
−Removed: Shipping and Handling
−Removed: Shipping and handling fees reimbursed by customers are classified as revenue while shipping and handling costs incurred by Teledyne are classified as cost of sales in the accompanying consolidated statements of income.
−Removed: Product Warranty Costs
−Removed: 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.
−Removed: 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.
−Removed: The adequacy of the preexisting warranty liabilities 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 .
−Removed: The product warranty reserve is included in current accrued liabilities and long-term liabilities on the balance sheet.
−Removed: Warranty Reserve (in millions):
−Removed: 2021 2020 2019
−Removed: Balance at beginning of year $ 22.4 $ 24.8 $ 21.0
−Removed: Product warranty expense 11.9 3.3 13.1
−Removed: Deductions ( 10.1 ) ( 8.2 ) ( 14.2 )
−Removed: Acquisitions 25.3 2.5 4.9
−Removed: Balance at end of year $ 49.5 $ 22.4 $ 24.8
−Removed: Research and Development and Bid and Proposal Costs
−Removed: Selling, general and administrative expenses include Company-funded research and development and bid and proposal costs which are expensed as incurred and were $ 299.3 million in 2021, $ 196.0 million in 2020 and $ 209.6 million in 2019.
−Removed: The higher amount in 2021 reflected $ 113.8 million in research and development and bid and proposal costs incurred by FLIR.
−Removed: We compute the provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for temporary differences between the tax basis of assets and liabilities and their reported amount in the financial statements, which will result in taxable or deductible amounts in the future.
−Removed: In evaluating our ability to recover our deferred tax assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations.
−Removed: In projecting future taxable income, we begin with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state, federal and foreign pretax operating income adjusted for items that do not have tax consequences.
−Removed: The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses.
−Removed: In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income.
−Removed: A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.
−Removed: Income tax positions must meet a more-likely-than-not recognition in order to be recognized in the financial statements.
−Removed: We recognize potential accrued interest and penalties related to unrecognized tax benefits within operations as income tax expense.
−Removed: 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.
−Removed: Earnings Per Common Share
−Removed: Basic and diluted earnings per common share were computed based on net income.
−Removed: The weighted average number of common shares outstanding during the period was used in the calculation of basic earnings per share.
−Removed: This number of shares was increased by contingent shares that could be issued under various compensation plans as well as by the dilutive effect of stock options based on the treasury stock method in the calculation of diluted earnings per common share.
−Removed: The following table sets forth the computations of basic and diluted earnings per common share (amounts in millions, except per share data):
−Removed: Earnings Per Common Share:
−Removed: 2021 2020 2019
−Removed: Net income $ 445.3 $ 401.9 $ 402.3
−Removed: Basic earnings per common share:
−Removed: Weighted average common shares outstanding 43.2 36.7 36.3
−Removed: Basic earnings per common share $ 10.31 $ 10.95 $ 11.08
−Removed: Diluted earnings per share:
−Removed: Weighted average common shares outstanding 43.2 36.7 36.3
−Removed: Effect of diluted securities (primarily stock options) 1.1 1.2 1.2
−Removed: Weighted average diluted common shares outstanding 44.3 37.9 37.5
−Removed: Diluted earnings per common share $ 10.05 $ 10.62 $ 10.73
−Removed: For 2021, 2020 and 2019, 196,802 , 239,422 and less than 3,000 stock options, respectively, were excluded in the computation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive.
−Removed: For 2021, 2020 and 2019, stock options to purchase 1.6 million, 1.6 million and 2.0 million shares of common stock, respectively, had exercise prices that were less than the average market price of the Company’s common stock during the respective periods and are included in the computation of diluted earnings per share.
−Removed: For 2021 and 2020, 2,608 and 497 shares, respectively, under the restricted stock plan, respectively, were excluded from fully diluted shares outstanding because they did not meet the applicable performance conditions for issuance.
−Removed: No contingent shares under the restricted stock plan were excluded from fully diluted shares outstanding for 2019.
−Removed: No contingent shares under the performance share compensation plan were excluded from fully diluted shares outstanding for 2021, 2020 or 2019.
+Added: Management believes that the estimates used are reasonable.
Cash and Cash Equivalents
−Removed: Cash and cash equivalents totaled $ 474.7 million at January 2, 2022, of which $ 294.0 million was held by foreign subsidiaries.
−Removed: Cash equivalents consist of highly liquid money-market mutual funds and bank deposits with maturities of three months or less when purchased.
−Removed: Accounts Receivable, Unbilled Receivables and Contract Liabilities
−Removed: The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities, which are included in accrued liabilities and other long-term liabilities) on the Consolidated Balance Sheet.
−Removed: Under the typical payment terms of our over time contracts, the customer pays us either performance-based payments or progress payments.
−Removed: Amounts billed and due from our customers are classified as receivables on the Consolidated Balance Sheet.
−Removed: We may receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment.
−Removed: We recognize a liability for these interim and advance payments in excess of revenue recognized and present it as a contract liability which is included within accrued liabilities and other long-term liabilities on the Consolidated Balance Sheet, which represented $ 186.0 million and $ 25.3 million as of January 2, 2022 and $ 160.1 million and $ 14.0 million as of January 3, 2021, respectively.
+Added: Cash and cash equivalents include cash on hand and highly liquid money-market mutual funds and bank deposits with maturities of three months or less when purchased.
+Added: Accounts Receivable, Contract Assets and Contract Liabilities
+Added: 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).
+Added: Under the typical payment terms of the Company's over time contracts, the customer pays the Company either performance-based payments or progress payments.
+Added: Amounts billed
+Added: and due from the Company's customers are classified as receivables on the consolidated balance sheets.
+Added: The Company may receive interim payments as work progresses, although for some contracts, the Company may be entitled to receive an advance payment.
+Added: 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 us from the other party failing to adequately complete some or all of its obligations under the contract.
−Removed: When revenue recognized exceeds the amount billed to the customer, we record an unbilled receivable (contract asset) for the amount we are entitled to receive based on our enforceable right to payment.
−Removed: The unbilled receivable balance increased from the beginning of the year by $ 99.9 million, or 39.6 %, primarily due to the acquisition of FLIR.
−Removed: Contract liabilities increased from the beginning of the year by $ 37.2 million, or 21.4 % primarily due to the acquisition of FLIR.
−Removed: The Company recognized revenue of $ 114.0 million during the year ended January 2, 2022 from contract liabilities that existed at the beginning of year.
−Removed: 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.
−Removed: Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material.
−Removed: Accounts receivable is presented net of an allowance for doubtful accounts of $ 13.8 million at January 2, 2022, and $ 12.3 million at January 3, 2021.
−Removed: Expense recorded for the allowance for doubtful accounts was $ 4.5 million, $ 4.1 million and $ 1.3 million for 2021, 2020 and 2019, respectively.
−Removed: An allowance for doubtful accounts is established for losses expected to be incurred on accounts receivable balances.
−Removed: Judgment is required in the estimation of the allowance and we evaluate the collectability of our accounts receivable and contract assets based on a combination of factors.
−Removed: If we become 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.
−Removed: For all other customers, we use an aging schedule and recognize
−Removed: allowances for doubtful accounts based on the creditworthiness of the debtor, the age and status of outstanding receivables, the current business environment and our historical collection experience adjusted for current expectations for the customers or industry.
−Removed: Accounts receivable are written off against the allowance for uncollectible accounts when we determine amounts are no longer collectible.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
−Removed: Inventories are stated at the lower of cost or net realizable value.
−Removed: The majority of inventory values are valued on an average cost or first-in, first-out method, and an immaterial amount of inventory values are stated at cost based on the last-in, first-out method.
−Removed: Costs include direct material, direct labor, applicable manufacturing and engineering overhead, and other direct costs.
−Removed: Judgment is required when establishing reserves to reduce the carrying amount of inventory to market or net realizable value.
+Added: 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 reserves are recorded when inventory is considered to be excess or obsolete based upon an analysis of actual on-hand quantities on a part-level basis to forecasted product demand and historical usage.
6 unchanged sentences
Goodwill, Acquired Intangible Assets and Other Long-Lived Assets
−Removed: Business acquisitions are accounted for under the acquisition method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed.
−Removed: Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill.
Goodwill and acquired intangible assets with indefinite lives are not amortized but tested at least annually for impairment.
7 unchanged sentences
However, for certain reporting units the Company may perform a quantitative impairment test more frequently.
−Removed: The Company performed a qualitative test for all reporting units in 2021.
−Removed: The results of our annual impairment tests of goodwill indicated that no impairment existed in 2021, 2020 or 2019.
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.
1 unchanged sentence
The Company assesses the recoverability of the carrying value of assets held for use based on a review of projected undiscounted cash flows.
−Removed: Impairment losses, where identified, are determined as the excess of the carrying value over the estimated fair value of the long-lived asset.
−Removed: Recorded impairment charges to intangible or other long-lived assets were no t material in 2021, 2020 or 2019.
−Removed: Deferred Compensation Plan
−Removed: The Company has a non-qualified executive deferred compensation plan that provides supplemental retirement income benefits for a select group of management.
−Removed: This plan permits eligible employees to make salary and bonus deferrals that are 100 % vested.
−Removed: We have an unsecured obligation to pay in the future the value of the deferred compensation adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period.
−Removed: In addition, the Company has a separate deferred compensation plan that was acquired in connection with the FLIR acquisition.
−Removed: This plan was frozen at year end 2021.
−Removed: As of January 2, 2022 and January 3, 2021, $ 115.5 million and $ 68.9 million, respectively, is included in other long-term liabilities related to these deferred compensation liabilities.
−Removed: Additionally, the Company purchased life insurance policies on certain participants to potentially offset these unsecured obligations.
−Removed: These policies are recorded at their cash surrender value as determined by the insurance carrier.
−Removed: The cash surrender value of these policies was $ 113.4 million and $ 72.6 million, as of January 2, 2022 and January 3, 2021, respectively, and are recorded in other non-current assets.
−Removed: Environmental
+Added: 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 selling, general and administrative expense at the respective business segment.
+Added: Pension and Postretirement Costs
+Added: 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.
+Added: In consultation with actuaries, the Company determines the appropriate assumptions for use in determining the liability for future pension benefits.
+Added: Net actuarial gains or losses are amortized to expense on a plan-by-plan basis when they exceed the accounting corridor.
+Added: 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.
+Added: Gains or losses outside of the corridor are subject to amortization.
+Added: Product Warranties
+Added: 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.
+Added: Facts and circumstances related to a product warranty matter and cost estimates
+Added: to return, repair and/or replace the product are considered when establishing a product warranty reserve.
+Added: 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 .
+Added: The product warranty reserve is included in current accrued liabilities and long-term liabilities on the consolidated balance sheets.
+Added: 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.
6 unchanged sentences
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.
−Removed: The Company’s reserves for environmental remediation obligations totaled $ 6.3 million and $ 6.5 million as of January 2, 2022 and January 3, 2021, respectively.
−Removed: The short term amount is included in current accrued liabilities and the long-term amount is included in long-term accrued liabilities.
−Removed: Foreign Currency Translation
−Removed: The Company’s foreign entities’ accounts are generally measured using local currency as the functional currency.
−Removed: Assets and liabilities of these entities are translated at the exchange rate in effect at year-end.
−Removed: Revenues and expenses are translated at average month end rates of exchange prevailing during the year.
−Removed: Unrealized translation gains and losses arising from differences in exchange rates from period to period are included as a component of AOCI.
+Added: Revenue Recognition
+Added: 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 our customers.
+Added: 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.
+Added: 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.
+Added: For standard products or services, list prices generally represent the standalone selling price.
+Added: 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.
+Added: Approximately 70 % of revenue is recognized at a point in time, with the remaining 30 % recognized over time.
+Added: Revenue recognized at a point in time relates primarily to the sale of standard or minimally customized products, with control transferring to the customer generally upon the transfer of title.
+Added: This type of revenue arrangement is typical for our commercial contracts within the Digital Imaging, Instrumentation, and Aerospace and Defense Electronics segments.
+Added: 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.
+Added: The transaction price in these arrangements can include variable consideration, such as product returns and sales allowances.
+Added: 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.
+Added: Revenue recognized over time relates primarily to contracts to design, develop and/or manufacture highly engineered products used in both defense and commercial applications.
+Added: This type of revenue arrangement is typical of the Company's U.S.
+Added: government contracts and to a lesser extent for certain commercial contracts, with both contract types occurring across all segments.
+Added: 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.
+Added: As control transfers continuously over time on these contracts, revenue is recognized based on the extent of progress towards completion of the performance obligation.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: The estimation of this variable consideration and determination of whether to include estimated
+Added: 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.
+Added: 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.
+Added: Over time contracts are often modified to account for changes in contract specifications and requirements.
+Added: The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: When extended or non-customary warranties represents a separate performance obligation, the revenue is deferred and recognized ratably over the extended warranty period.
+Added: 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.
+Added: Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material.
+Added: Shipping and Handling
+Added: 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 accompanying consolidated statements of income.
+Added: Research and Development and Bid and Proposal Costs
+Added: Selling, general and administrative expenses include research and development and bid and proposal costs which are expensed as incurred and were $ 360.6 million in 2022, $ 299.3 million in 2021 and $ 196.0 million in 2020.
+Added: The 2022 and 2021 amounts included $ 177.2 million and $ 113.8 million, respectively, in research and development and bid and proposal costs incurred by Teledyne FLIR, with the 2021 Teledyne FLIR amount representing a partial year due to the timing of the acquisition.
+Added: The Company determines if an arrangement is a lease at inception.
+Added: Operating leases are recorded as right-of-use assets and operating lease liabilities.
+Added: Finance leases are included in property and equipment, current accrued liabilities, and other long-term liabilities in the consolidated balance sheets.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Lease expense for operating leases is recognized on a straight-line basis over the lease term.
+Added: Stock-based Compensation Costs
+Added: The Company recognizes compensation expense for its stock-based compensation programs, which include stock options, restricted stock, restricted stock units (RSUs), and performance shares.
+Added: 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.
+Added: Since 2019, stock options granted to our Chairman, President and Chief Executive Officer are expensed immediately, as stock options continue to vest after retirement.
+Added: The Company issues shares of common stock upon the exercise of stock options.
+Added: The Company is subject to income taxes in the Unites States and numerous foreign jurisdictions.
+Added: 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.
+Added: In evaluating the Company's ability to recover its deferred tax assets
+Added: 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.
+Added: 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.
+Added: 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.
+Added: In evaluating the objective evidence that historical results provide, the Company considers three years of cumulative operating income.
+Added: A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.
+Added: Income tax positions must meet a more-likely-than-not recognition in order to be recognized in the financial statements.
+Added: The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
+Added: 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.
+Added: Business Acquisitions
+Added: Business acquisitions are accounted for under the acquisition method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed.
+Added: 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.
+Added: Earnings Per Common Share
+Added: Basic and diluted earnings per common share are computed based on net income (loss) attributable to Teledyne.
+Added: The weighted average number of common shares outstanding during the period is used in the calculation of basic earnings per share.
+Added: 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
2 unchanged sentences
dollar value of future cash flows and minimize the volatility of reported earnings.
+Added: The Company's foreign currency objective is achieved through the following:
• The Company utilizes foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenue and expenses denominated in Canadian dollars for our Canadian companies, and in British pounds for our U.K.
These contracts are designated and qualify as cash flow hedges.
−Removed: The Company has also converted a U.S.
−Removed: dollar denominated, variable rate and fixed rate debt obligations of a European subsidiary, into a euro fixed rate obligations using a receive float, pay fixed cross currency swap, and a receive fixed, pay fixed cross currency swap.
+Added: • The Company has converted U.S.
+Added: dollar denominated, variable rate and fixed rate debt obligations of a European subsidiary, into euro fixed rate obligations using a receive float, pay fixed cross currency swap, and a receive fixed, pay fixed cross currency swap.
These cross currency swaps are designated as cash flow hedges.
+Added: • 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.
In addition, the Company has converted domestic U.S.
variable rate debt to fixed rate debt using a receive variable, pay fixed interest rate swap.
−Removed: The interest rate swap is also designated as a cash flow hedge.
+Added: The interest rate swap is designated as a cash flow hedge.
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.
1 unchanged sentence
The effective portion of the cash flow hedge contracts’ gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of AOCI in stockholders’ equity until the underlying hedged item is reflected in our consolidated statements of income, at which time the effective amount in AOCI is reclassified to revenue in our consolidated statements of income.
−Removed: Net deferred losses recorded in AOCI, net of tax, for forward contracts that will mature in the next 12 months total $ 0.7 million.
−Removed: These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item.
−Removed: Amounts related to the cross currency swaps and interests rate swap expected to be reclassified from AOCI into income in the next 12 months total $ 2.8 million.
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.
−Removed: As of January 2, 2022, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and to sell U.S.
−Removed: dollars totaling $ 148.2 million.
−Removed: These foreign currency forward contracts have maturities ranging from March 2022 to February 2023.
−Removed: Teledyne had foreign currency forward contracts designated as cash flow hedges to buy British pounds and to sell U.S.
−Removed: dollars totaling $ 18.9 million.
−Removed: These foreign currency forward contracts have maturities ranging from March 2022 to February 2023.
−Removed: The cross currency swaps have notional amounts of € 113.0 million and $ 125.0 million, and € 135.0 million and $ 150.0 million, and mature in March 2023 and October 2024, respectively.
−Removed: The interest rate swap has a notional amount of $ 125.0 million U.S.
−Removed: dollars and matures in March 2023.
−Removed: In addition, the Company utilizes foreign currency forward contracts which are not designated as hedging instruments for accounting purposes to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables.
−Removed: As of January 2, 2022, Teledyne had foreign currency contracts of this type primarily in the following pairs (in millions):
−Removed: Contracts to Buy Contracts to Sell
−Removed: Currency Amount Currency Amount
−Removed: Canadian Dollars C$ 169.4 U.S.
−Removed: Dollars US$ 132.0
−Removed: Euros € 147.3 U.S.
−Removed: Dollars US$ 167.1
−Removed: Euros € 33.5 Canadian Dollars C$ 48.4
−Removed: Great Britain Pounds £ 59.2 U.S.
−Removed: Dollars US$ 78.9
−Removed: Dollars US$ 31.0 Swedish Krona kr 280.1
−Removed: Danish Krone Kr.
−Removed: Dollars US$ 60.2
−Removed: Swedish Krona kr 355.7 Euros € 35.0
−Removed: Norwegian Krone kr 228.0 Swedish Krona kr 227.1
−Removed: Norwegian Krone kr 78.9 U.S.
−Removed: Dollars US$ 8.6
−Removed: The above table includes non-designated hedges derived from terms contained in triggered or previously designated cash flow hedges.
−Removed: The gains and losses on these derivatives which are not designated as hedging instruments, are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.
−Removed: All derivatives are recorded on the balance sheet at fair value.
−Removed: As discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting.
−Removed: Teledyne does not use foreign currency forward contracts for speculative or trading purposes.
−Removed: The effect of derivative instruments designated as cash flow hedges for 2021 and 2020 was as follows (in millions):
−Removed: Net gain (loss) recognized in AOCI - foreign exchange contracts (a) $ 23.6 $ ( 13.7 )
−Removed: Net gain recognized in AOCI - interest rate contracts $ 0.4 $ 4.8
−Removed: Net gain reclassified from AOCI into revenue/cost of sales - foreign exchange contracts $ 9.2 $ 1.5
−Removed: Net gain reclassified from AOCI into interest expense - foreign exchange contracts $ 3.4 $ 4.4
−Removed: Net loss reclassified from AOCI into interest expense -interest rate contracts $ ( 1.6 ) $ ( 1.0 )
−Removed: Net gain (loss) reclassified from AOCI into other income and expense, net - foreign exchange contracts (b) $ 20.7 $ ( 26.7 )
−Removed: (a) Effective portion
−Removed: (b) Amount reclassified to offset earnings impact of liability hedged by cross currency swap
−Removed: The effect of derivative instruments designated as fair value hedges for 2021 and 2020 was as follows (in millions):
−Removed: Net gain recognized in earnings for effective portion - other income and expense, net - foreign exchange contracts $ 7.9 $ —
−Removed: Net gain recognized in earnings for amounts excluded from effectiveness testing - other income and expense, net - foreign exchange contracts $ 0.2 $ —
−Removed: The effect of derivative instruments not designated as cash flow hedges recognized in other income and expense for 2021 and 2020 was a expense of $ 21.9 million and a gain of $ 7.4 million, respectively.
−Removed: The Company has elected to use the income approach to value the derivatives, using observable Level 2 market expectations at measurement date and standard valuation techniques to convert future amounts to a single present amount.
−Removed: Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR and EURIBOR) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and EURIBOR cash and swap rates, foreign currency forward rates and cross currency basis spreads).
−Removed: Mid-market pricing is used as a practical expedient for fair value measurements.
−Removed: The fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty.
−Removed: Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position has also been factored into the fair value measurement of the derivative instruments and did not have a material impact on the fair value of these derivative instruments.
−Removed: Both the counterparty and the Company are expected to continue to perform under the contractual terms of the instruments.
−Removed: The fair values of the Company’s derivative financial instruments are presented below.
−Removed: All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy (in millions):
−Removed: Asset/(Liability) Derivatives Balance sheet location January 2, 2022 January 3, 2021
−Removed: Derivatives designated as hedging instruments:
−Removed: Cash flow forward contracts Other assets $ 0.3 $ 7.3
−Removed: Interest rate contracts Other non-current liabilities ( 0.1 ) ( 1.8 )
−Removed: Interest rate contracts Other current liabilities ( 1.2 ) ( 1.5 )
−Removed: Cash flow forward contracts Accrued liabilities ( 1.2 ) —
−Removed: Cash flow cross currency swaps Other current assets 3.8 3.3
−Removed: Cash flow cross currency swaps Other non-current liabilities ( 9.4 ) ( 29.2 )
−Removed: Cash flow cross currency swaps Other current assets (accrued interest) 0.1 0.1
−Removed: Total derivatives designated as hedging instruments ( 7.7 ) ( 21.8 )
−Removed: Derivatives not designated as hedging instruments:
−Removed: Non-designated forward contracts Other current assets 4.7 6.7
−Removed: Non-designated forward contracts Accrued liabilities ( 2.1 ) ( 1.2 )
−Removed: Total derivatives not designated as hedging instruments 2.6 5.5
−Removed: Total liability derivatives $ ( 5.1 ) $ ( 16.3 )
−Removed: Supplemental Cash Flow Information
−Removed: Cash payments for federal, foreign and state income taxes were $ 83.6 million for 2021, which are net of $ 22.4 million in tax refunds.
−Removed: Cash payments for federal, foreign and state income taxes were $ 74.5 million for 2020, which are net of $ 8.1 million in tax refunds.
−Removed: Cash payments for federal, foreign and state income taxes were $ 110.1 million for 2019, which are net of $ 7.1 million in tax refunds.
−Removed: Cash payments for interest and credit facility fees and other bank charges totaled $ 117.2 million, $ 19.1 million and $ 23.4 million for 2021, 2020 and 2019, respectively.
−Removed: The 2021 amount included $ 30.5 million paid for bond financing and debt extinguishment costs.
Fair Value Measurements
1 unchanged sentence
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.
−Removed: The Company uses the following three levels of inputs in determining the fair value, focusing on the most observable inputs when available:
−Removed: • Level 1-Quoted prices in active markets for identical assets or liabilities.
−Removed: • Level 2-Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;
−Removed: quoted prices in markets with insufficient volume or infrequent transactions (less active markets);
+Added: The fair value hierarchy comprises three levels.
+Added: Level 1 relates to quoted prices in active markets for identical assets or liabilities.
+Added: Level 2 relates to observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;
+Added: quoted prices in markets with insufficient volume or infrequent
+Added: 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.
−Removed: • Level 3-Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
+Added: 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;
−Removed: In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.
+Added: 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
1 unchanged sentence
Recent Accounting Standards
−Removed: In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326).
−Removed: The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments.
−Removed: The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.
−Removed: We adopted this ASU as of December 30, 2019 using the modified retrospective approach related to our accounts receivables and contract assets, resulting in no cumulative adjustment to retained earnings.
−Removed: The adoption of this guidance did not have a material impact on our consolidated financial statements.
−Removed: In October 2021, the FASB issued ASU No.
−Removed: 2021-08, Business Combinations (Topic 805):
−Removed: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606), which we generally expect will result in the recognition and measurement of contract assets and contract liabilities in a manner that is consistent with the acquiree.
−Removed: Prior to the adoption of ASU 2021-08, the Company measured contract assets and contract liabilities acquired in business acquisitions at fair value.
−Removed: The Company early adopted ASU 2021-08 in the fourth quarter of 2021, with applicability to the accounting for our 2021 business acquisitions and any future business acquisitions.
−Removed: The application of ASU 2021-08 did not have a material effect on the recognition and measurement of acquired contract assets and contract liabilities associated with our 2021 acquisition.
−Removed: Business Acquisitions, Goodwill and Acquired Intangible Assets
+Added: In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities-Supplier Finance Programs (Topic 405-50):
+Added: Disclosure of Supplier Finance Program Obligations.
+Added: This standard requires annual disclosure of the key terms of supplier finance programs, obligations outstanding with a description of where the amounts are presented in the financial statements, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period.
+Added: This standard does not affect recognition, measurement or financial statement presentation of supplier finance obligations.
+Added: The guidance requires retrospective application to all periods in which a balance sheet is presented, except for the rollforward requirement, which will be applied prospectively.
+Added: The ASU becomes effective January 1, 2023, except for the rollforward, which is effective on January 1, 2024.
+Added: The Company is currently evaluating the impact of this guidance on our consolidated financial statements.
+Added: Other ASU's issued but not effective until after January 1, 2023 are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.
+Added: Business Acquisitions
+Added: 2022 Acquisitions
+Added: During the fourth quarter of 2022, Teledyne acquired ETM-Electromatic, Inc.
+Added: ("ETM") for $ 87.7 million in cash, net of cash acquired, and subject to certain adjustments.
+Added: ETM, headquartered in Newark, California, designs and manufactures high-power microwave and high-energy X-ray subsystems for cancer radiotherapy, defense and X-ray security applications.
+Added: ETM is part of the Digital Imaging segment.
+Added: Goodwill resulting from the ETM acquisition will not be deductible for tax purposes.
+Added: During the third quarter of 2022, the Company acquired an approximate 80 % majority interest in Noiseless Acoustics Oy ("NL Acoustics"), paying $ 11.9 million in cash, net of cash acquired, during the year, with an immaterial amount payable in 2023.
+Added: NL Acoustics, located in Helsinki, Finland, designs and manufactures acoustics imaging instruments and predictive maintenance solutions.
+Added: NL Acoustics is part of the Digital Imaging segment.
+Added: Goodwill resulting from the NL Acoustics acquisition will not be deductible for tax purposes.
+Added: The minority ownership interest in shares of NL Acoustics held by a third party is classified as a redeemable noncontrolling interest on the consolidated balance sheet due to a put option under which the third party may require the Company to purchase the remaining ownership interest, with the put option exercisable beginning in the third quarter of 2025.
+Added: The redeemable noncontrolling interest is measured at the greater of the amount that would be paid if settlement occurred as of the balance sheet date based on the contractually defined redemption value and its carrying amount adjusted for net income (loss) attributable to the noncontrolling interest.
+Added: Adjustments to the carrying value of the redeemable noncontrolling interest are recorded through retained earnings.
+Added: Changes in the redeemable noncontrolling interest balance during the period were not material.
+Added: The following tables show the purchase price (net of cash acquired), goodwill acquired, and acquired intangible assets for the acquisitions made in 2022 (in millions):
+Added: Acquisitions Acquisition Date Cash Paid (a) Goodwill Acquired Acquired Intangible Assets
+Added: ETM October 28, 2022 $ 87.7 $ 32.6 $ 20.9
+Added: NL Acoustics (acquisition of 80 % interest)
+Added: July 15, 2022 11.9 11.6 3.8
+Added: Total $ 99.6 $ 44.2 $ 24.7
+Added: (a) Net of cash acquired;
+Added: an immaterial portion of NL Acoustics will be paid in 2023.
+Added: The Company’s cost to acquire these 2022 acquisitions was allocated to the assets acquired and liabilities assumed based
+Added: upon their respective fair values as of the date of the completion of the acquisition.
+Added: 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.
+Added: The fair value of the acquired identifiable assets and liabilities for the 2022 acquisitions is provisional pending finalization of the Company’s acquisition accounting, including the measurement of tax basis in certain jurisdictions and the resulting deferred taxes that might arise from book and tax basis differences, if any.
+Added: 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 2022 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.
+Added: The significant factors that resulted in recognition of goodwill for the 2022 acquisitions included the acquired businesses’ market positions, growth opportunities in the markets in which they operate, their experienced work force and established operating infrastructures.
+Added: The results of these acquisitions have been included in Teledyne’s results since the dates of their respective acquisition.
2021 Acquisition
1 unchanged sentence
FLIR stockholders received $ 28.00 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share, and Teledyne issued approximately 9.5 million shares at $ 409.41 per share.
−Removed: See Note 9 to these Notes to Consolidated Financial Statements for information regarding financing activities undertaken in connection with the FLIR acquisition.
+Added: See Note 8 for information regarding financing activities undertaken in connection with the FLIR acquisition.
FLIR is an industrial technology company focused on intelligent sensing solutions for defense and industrial applications.
2 unchanged sentences
FLIR is part of the Digital Imaging segment.
−Removed: 2020 Acquisition
−Removed: On January 5, 2020, we acquired OakGate Technology, Inc.
−Removed: (“OakGate”) for $ 28.5 million in cash, net of cash acquired.
−Removed: Based in Loomis, California, OakGate provides software and hardware designed to test electronic data storage devices from development through manufacturing and end-use applications.
−Removed: The acquired business is part of the Test and Measurement product line of the Instrumentation segment.
−Removed: 2019 Acquisitions
−Removed: On February 5, 2019, we acquired the scientific imaging businesses of Roper Technologies, Inc.
−Removed: for $ 224.8 million in cash.
−Removed: The acquired businesses include Princeton Instruments, Photometrics and Lumenera.
−Removed: The acquired businesses provide a range of imaging solutions, primarily for life sciences, academic research and customized original equipment manufacturer industrial imaging solutions.
−Removed: Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging.
−Removed: Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence.
−Removed: Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications.
−Removed: Principally located in the United States and Canada, the acquired businesses are part of the Digital Imaging segment.
−Removed: On August 1, 2019, we acquired the gas and flame detection businesses of 3M Company for $ 233.5 million in cash.
−Removed: The gas and flame detection businesses includes Oldham, Simtronics, Gas Measurement Instruments, Detcon and select Scott Safety products.
−Removed: The gas and flame detection businesses provides a portfolio of fixed and portable industrial gas and flame detection instruments used in a variety of industries including petrochemical, power generation, oil and gas, food and beverage, mining and waste water treatment.
−Removed: Principally located in France, the United Kingdom and the United States, the acquired businesses are part of the Environmental Instrumentation product line of the Instrumentation segment.
−Removed: On August 30, 2019, we acquired Micralyne Inc.
−Removed: (“Micralyne”) for $ 25.7 million in cash.
−Removed: Micralyne is a foundry providing MEMS devices.
−Removed: In particular, Micralyne possesses unique microfluidic technology for biotech applications, as well as capabilities in non-silicon-based MEMS (e.g.
−Removed: gold, polymers) often required for human body compatibility.
−Removed: Based in Edmonton, Alberta, Canada, the acquired business is part of the Digital Imaging segment.
−Removed: The results of these acquisitions have been included in Teledyne’s results since the dates of their respective acquisition.
+Added: Goodwill resulting from the FLIR acquisition will not be deductible for tax purposes.
The primary reasons for the FLIR acquisition were to achieve synergies in merging with a business that has the same core business model based on proprietary sensor technologies, but with different products and markets;
2 unchanged sentences
and the opportunity to add FLIR’s suite of imaging sensor products based on different semiconductor technologies for different wavelengths to Teledyne’s offerings.
−Removed: The primary reasons for the 2020 and 2019 acquisitions were to strengthen and expand our core businesses through adding complementary product and service offerings, allowing greater integrated products and services, enhancing our technical capabilities or increasing our addressable markets.
−Removed: Teledyne funded the 2020 and 2019 acquisitions primarily from borrowings under its credit facilities, issuance of senior notes and term loans and cash on hand.
The significant factors that resulted in recognition of goodwill include the acquired businesses’ market positions, growth opportunities in the markets in which they operate, their experienced work force and established operating infrastructures.
−Removed: Teledyne’s goodwill was $ 7,986.7 million at January 2, 2022, and $ 2,150 million at January 3, 2021.
−Removed: The increase in the balance of goodwill in 2021 primarily resulted from the FLIR acquisition.
−Removed: Teledyne’s net acquired intangible assets were $ 2,741.6 million at January 2, 2022, and $ 409.7 million at January 3, 2021.
−Removed: The increase in the balance of acquired intangible assets in 2021 resulted from the FLIR acquisition, partially offset by amortization of acquired intangible assets.
−Removed: The Company’s cost to acquire the 2021 and 2020 acquisitions has been allocated to the assets acquired and liabilities assumed based upon their respective fair values as of the date of the completion of the acquisition.
−Removed: The differences between the fair value of the consideration paid and the estimated fair value of the assets and liabilities acquired has been recorded as goodwill.
−Removed: The fair value of all the acquired identifiable assets and liabilities summarized below for the 2021 FLIR acquisition is provisional pending finalization of the Company’s acquisition accounting, including the measurement of tax basis in certain jurisdictions and the resulting deferred taxes that might arise from book and tax basis differences, if any.
−Removed: The following tables show the purchase price (net of cash acquired), goodwill acquired for the FLIR, OakGate acquisition and other investments made in 2021 and 2020 (in millions):
−Removed: Acquisition Acquisition Date Consideration Transferred(a) Goodwill Acquired Acquired Intangible Assets
−Removed: May 14, 2021 $ 7,620.9 $ 5,905.5 $ 2,490.0
−Removed: (a) Net of cash acquired.
−Removed: The consideration included approximately $ 3.9 billion of Teledyne shares issued to existing shareholders of the acquired company.
−Removed: This $ 3.9 billion of equity consideration is a non-cash transaction.
−Removed: An immaterial portion of the cash consideration for certain vested FLIR restricted stock awards was deferred at the election of the award holder and will be paid out in future periods.
−Removed: Acquisitions Acquisition Date Cash Paid (a) Goodwill Acquired Acquired Intangible Assets
−Removed: OakGate Technology, Inc.
−Removed: January 5, 2020 $ 28.5 $ 16.9 $ 7.0
−Removed: Purchase price adjustment - Micralyne Inc.
−Removed: (acquired in 2019) 0.5 — —
−Removed: Total $ 29.0 $ 16.9 $ 7.0
−Removed: (a) Net of cash acquired.
−Removed: Goodwill resulting from the OakGate acquisition will not be deductible for tax purposes.
−Removed: The following table presents the preliminary purchase price allocation for FLIR.
−Removed: We are accounting for the FLIR acquisition under the acquisition method and are required to measure identifiable assets acquired and liabilities assumed of the acquiree at the fair values on the closing date.
−Removed: The Company made an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities.
−Removed: As of January 2, 2022, the measurement period (not to exceed one year) is open;
−Removed: therefore, the assets acquired and liabilities assumed related to the FLIR acquisition are subject to adjustment until the end of the respective measurement period.
−Removed: The Company is in the process of specifically identifying the amounts assigned to certain assets, including acquired intangible assets, and liabilities and the related impact on taxes and goodwill for the FLIR acquisition.
−Removed: The Company is in the process of reviewing a third-party
−Removed: valuation of certain intangible assets and tangible assets of FLIR.
−Removed: The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company.
−Removed: The amounts recorded as of January 2, 2022 are preliminary since there was insufficient time between the acquisition date and the end of the period to finalize the analysis.
−Removed: Goodwill resulting from the FLIR acquisition will not be deductible for tax purposes.
−Removed: Provisional fair values allocated to the assets acquired and liabilities assumed - FLIR (in millions):
+Added: The results of this acquisition have been included in Teledyne’s results since the dates of acquisition.
+Added: The following table presents the final purchase price allocation for FLIR, as the measurement period closed in the second quarter of 2022.
+Added: The Company accounted for the FLIR acquisition under the acquisition method and measured identifiable assets acquired and liabilities assumed of the acquiree at the fair values on the closing date.
+Added: The Company has completed the process of specifically identifying the amounts assigned to certain assets, including acquired intangible assets, and liabilities and the related impact on taxes and goodwill for the FLIR acquisition.
+Added: The fair values of acquired intangibles were determined based on estimates and assumptions deemed reasonable by the Company.
+Added: Final fair values allocated to the assets acquired and liabilities assumed - FLIR (in millions):
Cash and cash equivalents $ 287.7
21 unchanged sentences
An immaterial portion of the cash consideration for certain vested FLIR restricted stock awards was deferred at the election of the award holder and will be paid out in future periods.
−Removed: With significant operations in the United States, Europe and Canada, FLIR had sales of approximately $ 1,923.7 million for its fiscal year ended December 31, 2020.
−Removed: FLIR’s results have been included since the date of the acquisition and include $ 1,273.6 million in net sales and operating income of $ 80.4 million, which included $ 242.6 million in acquisition-related costs for 2021 in the Digital Imaging segment.
−Removed: In connection with the FLIR acquisition, in 2021, Teledyne incurred pretax expenses of $ 350.3 million, consisting of $ 110.3 million in acquired intangible asset amortization expense, $ 106.7 million recorded to cost of sales, primarily in acquired inventory step-up expense, and $ 103.0 million of transaction and integration-related costs, recorded to selling, general and administrative expenses and $ 30.6 million was recorded to interest and debt expense.
−Removed: Of these amounts, $ 242.6 million impacted the Digital Imaging segment’s operating income and $ 77.1 million of transaction and integration-related costs impacted corporate expense.
−Removed: The unaudited proforma information below, as required by GAAP, assumes that FLIR had been acquired at the beginning of the 2020 fiscal year and includes the effect of transaction accounting adjustments.
−Removed: These adjustments include the financing and interest costs associated with debt to fund the acquisition, amortization of acquired intangible assets, depreciation of the fair value step-up of acquired property, plant and equipment, amortization of inventory fair value step-up (assumed to be fully amortized in 2020), and tax related effects as well as the issuance of Teledyne common stock in connection with the acquisition.
−Removed: This unaudited proforma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the 2020 fiscal year.
−Removed: In addition, the unaudited proforma results are not intended to be a projection of future results and do not reflect any operating efficiencies or cost savings that might be achievable.
−Removed: The following table presents proforma net sales, net income and earnings per share data assuming FLIR was acquired at the beginning of the 2020 fiscal year:
−Removed: (unaudited - in millions, except per share amounts) 2021 (a) 2020 (a)
−Removed: Net sales $ 5,235.6 $ 5,009.9
−Removed: Net income $ 571.7 $ 399.6
−Removed: Basic earnings per common share $ 13.23 $ 8.65
−Removed: Diluted earnings per common share $ 12.91 $ 8.43
−Removed: (a) The above unaudited proforma information is presented for the FLIR acquisition as it is considered a material acquisition.
During fiscal year 2018, the Swedish Tax Authority (“STA”) issued a reassessment of tax for the year ending December 31, 2012 to one of FLIR’s non-operating subsidiaries in Sweden.
The total taxes, penalties and interest levied by the STA totals SEK 3.1 billion ($ 364.7 million based on exchange rates as of the acquisition date).
−Removed: The reassessment concerns the use of tax credits applied against capital gains pursuant to European Union Council Directive 2009/133/EC, commonly referred to as the EU Merger Directive, and the reassessment levied significant taxes and penalties.
In March 2020, FLIR received an adverse judgment from the First Instance Court of Sweden regarding the STA’s reassessment.
FLIR appealed the decision to the Administrative Court of Appeal in Stockholm, Sweden (the “Appellate Court”).
−Removed: After completing an extensive analysis, including consultation with outside specialists, Teledyne recorded a liability for this uncertain tax position that reflects the most likely outcome for this tax matter under the acquisition method for business combinations in the third quarter of 2021, which is included within accrued liabilities on the consolidated balance sheet.
−Removed: Subsequently, the Appellate Court hearing was held on September 15, 2021 and in the subsequent weeks ending on October 22, 2021, the STA and Teledyne submitted additional arguments in writing, including closing arguments.
+Added: Teledyne recorded a liability for this uncertain tax position that reflects the most likely outcome for this tax matter under the acquisition method for business combinations in the third quarter of 2021, which was included within accrued liabilities on the consolidated balance sheet.
On January 26, 2022, the Administrative Court of Appeal in Stockholm, Sweden generally affirmed the March 2020 ruling of the First Instance Court and determined an estimated tax liability in the amount of SEK 2.765 billion.
−Removed: We paid the tax on February 2, 2022 totaling $ 296.4 million.
−Removed: We are evaluating the ruling.
−Removed: The Company is in the process of reviewing and identifying acquisition accounting adjustments for a number of acquired tax positions of FLIR that may meet the definition of an acquired uncertain tax position.
−Removed: In addition to the STA matter described above, the Company has preliminarily recorded $ 177.5 million of provisional purchase accounting adjustments for the accrual of other uncertain tax positions of FLIR.
−Removed: These amounts are included primarily within other long-term liabilities on the consolidated balance sheet.
−Removed: These preliminary estimates are subject to change as the Company obtains additional information on these matters and as additional information is made known during the post-acquisition measurement period.
−Removed: The final acquisition accounting adjustments for these tax matter may be materially different, as Teledyne obtains additional information on this matter and as additional information is made known during the post-acquisition measurement period.
−Removed: The following table is a summary at the acquisition date of the acquired intangible assets and weighted average useful life in years for the FLIR acquisition made in 2021 (dollars in millions;
−Removed: amounts considered provisional as discussed above):
+Added: Teledyne paid the tax on February 2, 2022 totaling $ 296.4 million.
+Added: The Company requested for permission to appeal this ruling to the Swedish Administrative Supreme Court.
+Added: In the fourth quarter of 2022, the appeal was denied.
+Added: During the second quarter of 2022, the Company finalized the measurement period including reviewing and identifying acquisition accounting adjustments for a number of acquired tax positions of FLIR that meet the definition of an acquired uncertain tax position.
+Added: In addition to the STA matter described above, the Company recorded $ 187.6 million of purchase accounting adjustments for the accrual of other uncertain tax positions of FLIR.
+Added: These amounts are primarily included within other long-term liabilities on the consolidated balance sheets.
+Added: The following table is a summary at the acquisition date of the acquired intangible assets and weighted average useful life in years for the FLIR acquisition (dollars in millions):
Intangibles subject to amortization:
3 unchanged sentences
Total acquired intangibles subject to amortization 1,805.0 10.9
−Removed: Intangibles not subject to amortization:(a)
+Added: Intangibles not subject to amortization:
Trademarks 685.0 n/a
1 unchanged sentence
Goodwill $ 5,939.7 n/a
+Added: This unaudited proforma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the 2020 fiscal year.
+Added: In addition, the unaudited proforma results are not intended to be a projection of future results and do not reflect any operating efficiencies or cost savings that might be achievable.
+Added: The unaudited proforma information below, as required by GAAP, assumes that FLIR had been acquired at the beginning of the 2020 fiscal year and includes the effect of transaction accounting adjustments.
+Added: These adjustments include the financing and interest costs associated with debt to fund the acquisition, amortization of acquired intangible assets, depreciation of the fair value step-up of acquired property, plant and equipment, amortization of inventory fair value step-up (assumed to be fully amortized in 2020), and tax related effects as well as the issuance of Teledyne common stock in connection with the acquisition.
+Added: The following table presents proforma net sales, net income and earnings per common share data assuming FLIR was acquired at the beginning of the 2020 fiscal year:
+Added: (unaudited - in millions, except per share amounts) 2021 (a) 2020 (a)
+Added: Net sales $ 5,235.6 $ 5,009.9
+Added: Net income $ 571.7 $ 399.6
+Added: Basic earnings per common share $ 13.23 $ 8.65
+Added: Diluted earnings per common share $ 12.91 $ 8.43
+Added: (a) The above unaudited proforma information is only presented for the FLIR acquisition as it is considered a material acquisition.
+Added: Business Segments
+Added: Teledyne's businesses are aligned in four reportable segments:
+Added: Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.
+Added: 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.
+Added: The Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared and X-ray spectra for use in industrial, government and medical applications, as well as micro electromechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters.
+Added: This segment also includes our sponsored and centralized research laboratories which benefit government programs and commercial businesses.
+Added: Teledyne acquired FLIR in May 2021.
+Added: Teledyne FLIR technologies include thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems, and advanced threat-detection solutions.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Segment results include net sales and operating income by segment but excludes corporate office expenses.
+Added: Corporate expense primarily includes various administrative expenses relating to the corporate office not allocated to our segments.
+Added: Information on the Company’s business segments was as follows (in millions):
+Added: Net sales (a):
+Added: 2022 2021 2020
+Added: Digital Imaging $ 3,110.9 $ 2,412.9 $ 986.0
+Added: Instrumentation 1,254.0 1,166.9 1,094.5
+Added: Aerospace and Defense Electronics 682.4 628.7 589.4
+Added: Engineered Systems 411.3 405.8 416.3
+Added: Total net sales $ 5,458.6 $ 4,614.3 $ 3,086.2
+Added: Operating income (loss):
+Added: 2022 2021 2020
+Added: Digital Imaging $ 519.3 $ 325.6 $ 192.8
+Added: Instrumentation 295.3 253.7 213.2
+Added: Aerospace and Defense Electronics 184.1 133.2 80.8
+Added: Engineered Systems 39.2 48.6 50.1
+Added: Corporate expense ( 65.9 ) ( 136.8 ) ( 56.8 )
+Added: Total operating income (loss) $ 972.0 $ 624.3 $ 480.1
+Added: (a) Net sales excludes inter-segment sales of $ 25.3 million and $ 20.2 million for fiscal years 2022 and 2021, respectively.
+Added: Depreciation and amortization (in millions):
+Added: 2022 2021 2020
+Added: Digital Imaging (a) $ 279.0 $ 309.2 $ 49.2
+Added: Instrumentation 32.6 38.1 38.3
+Added: Aerospace and Defense Electronics 12.4 13.2 13.7
+Added: Engineered Systems 4.4 7.2 9.2
+Added: Corporate 3.8 4.1 5.8
+Added: Total depreciation and amortization $ 332.2 $ 371.8 $ 116.2
+Added: (a) The fiscal year 2022 amount for Digital Imaging included $ 167.6 million of acquired asset intangible amortization related to FLIR.
+Added: The fiscal year 2021 amount included $ 106.4 million of acquired inventory step-up expense and $ 110.3 million of acquired asset intangible amortization related to FLIR.
+Added: Capital expenditures (in millions):
+Added: 2022 2021 2020
+Added: Digital Imaging $ 63.9 $ 64.2 $ 33.4
+Added: Instrumentation 9.3 13.3 18.0
+Added: Aerospace and Defense Electronics 8.0 8.4 10.4
+Added: Engineered Systems 5.3 12.9 7.5
+Added: Corporate 6.1 2.8 2.1
+Added: Total capital expenditures $ 92.6 $ 101.6 $ 71.4
+Added: Identifiable assets are those assets used in the operations of the segments.
+Added: Corporate assets primarily consist of cash and cash equivalents, deferred taxes, pension assets and other assets.
+Added: Identifiable assets (in millions):
+Added: 2022 2021 2020
+Added: Digital Imaging $ 11,432.3 $ 11,756.8 $ 2,000.8
+Added: Instrumentation 1,626.4 1,640.3 1,676.2
+Added: Aerospace and Defense Electronics 540.1 536.3 567.6
+Added: Engineered Systems 200.3 179.2 175.1
+Added: Corporate 554.9 317.7 665.1
+Added: Total identifiable assets $ 14,354.0 $ 14,430.3 $ 5,084.8
+Added: Information on the Company’s sales by geographic region and long-lived assets by major geographic area was as follows:
+Added: Sales by geographic region (in millions):
+Added: 2022 2021 2020
+Added: United States $ 2,872.6 $ 2,466.4 $ 1,700.9
+Added: Europe 1,157.3 958.5 616.9
+Added: Asia 971.5 807.9 597.6
+Added: All other regions 457.2 381.5 170.8
+Added: Total sales $ 5,458.6 $ 4,614.3 $ 3,086.2
+Added: Long-lived assets (in millions):
+Added: 2022 2021 2020
+Added: United States $ 7,873.1 $ 9,446.3 $ 1,707.0
+Added: Canada 1,169.7 763.5 372.9
+Added: United Kingdom 825.8 622.4 539.5
+Added: France 427.4 463.7 505.1
+Added: All other countries 1,225.4 679.3 201.7
+Added: Total long-lived assets $ 11,521.4 $ 11,975.2 $ 3,326.2
+Added: Long-lived assets consist of property, plant and equipment, goodwill, acquired intangible assets, prepaid pension assets and other long-term assets including deferred compensation assets but excluding any deferred tax assets.
+Added: In 2021, provisional amounts for goodwill and intangible assets were primarily included in the United States as the FLIR acquisition was provisional at that time.
+Added: The all other countries category primarily consists of Teledyne’s other operations in Europe, primarily in Sweden, Norway, Belgium and Estonia.
+Added: Product Lines
+Added: The Instrumentation segment includes three product lines:
+Added: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation.
+Added: All other segments each contain one product line.
+Added: The tables below provide a summary of the sales by product line for the Instrumentation segment (in millions):
+Added: Instrumentation:
+Added: 2022 2021 2020
+Added: Environmental Instrumentation $ 465.0 $ 446.3 $ 411.3
+Added: Marine Instrumentation 460.7 424.1 426.3
+Added: Test and Measurement Instrumentation 328.3 296.5 256.9
+Added: Total $ 1,254.0 $ 1,166.9 $ 1,094.5
+Added: As part of a continuing effort to reduce costs and improve operating performance, as well as to respond to the impact of the COVID pandemic, beginning in 2020 the Company took actions to reduce headcount across various businesses, reducing our exposure to weak end markets, such as commercial aerospace.
+Added: Teledyne also exited certain facilities no longer needed.
+Added: In 2021, the Company took actions to integrate FLIR into our businesses resulting in higher severance and facility closure costs in the Digital Imaging segment.
+Added: In 2021, the Company incurred $ 26.4 million of severance and facility consolidation costs, primarily related to our Digital Imaging Segment.
+Added: Severance and facility consolidation costs incurred in 2022 were not material, and, at January 1, 2023, an immaterial amount remains to be paid related to these actions.
+Added: Revenue Recognition and Contract Balances
+Added: The Company disaggregates its revenue from contracts with customers by customer type and geographic region for each of our segments, 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.
+Added: With the exception of the Engineered Systems segment, net sales in each of our segments is primarily derived from fixed-price contracts.
+Added: 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.
+Added: For 2022, 2021 and 2020, approximately 49 %, 47 %, and 53 % of net sales in the Engineered Systems segment was derived from fixed-price contracts.
+Added: Fiscal Year Ended
+Added: January 1, 2023 Fiscal Year Ended
+Added: January 1, 2023
+Added: Customer Type Geographic Region (c)
+Added: (in millions) U.S.
+Added: (a) Other (b) Total United States Europe Asia All other Total
+Added: Digital Imaging $ 619.1 $ 2,491.8 $ 3,110.9 $ 1,416.6 $ 749.7 $ 637.8 $ 306.8 $ 3,110.9
+Added: Instrumentation 108.1 1,145.9 1,254.0 554.5 311.5 267.1 120.9 1,254.0
+Added: Aerospace and Defense Electronics 266.3 416.1 682.4 494.6 96.1 65.3 26.4 682.4
+Added: Engineered Systems 366.4 44.9 411.3 406.9 — 1.3 3.1 411.3
+Added: Total $ 1,359.9 $ 4,098.7 $ 5,458.6 $ 2,872.6 $ 1,157.3 $ 971.5 $ 457.2 $ 5,458.6
+Added: Government sales include sales as a prime contractor or subcontractor.
+Added: (b) Primarily commercial sales
+Added: (c) Geographic region by destination
+Added: Fiscal Year Ended
+Added: January 2, 2022 Fiscal Year Ended
+Added: January 2, 2022
+Added: Customer Type Geographic Region (c)
+Added: (in millions) U.S.
+Added: (a) Other (b) Total United States Europe Asia All other Total
+Added: Digital Imaging $ 515.9 $ 1,897.0 $ 2,412.9 $ 1,082.6 $ 567.8 $ 510.3 $ 252.2 $ 2,412.9
+Added: Instrumentation 91.6 1,075.3 1,166.9 512.6 298.5 247.5 108.3 1,166.9
+Added: Aerospace and Defense Electronics 227.2 401.5 628.7 469.0 92.1 48.6 19.0 628.7
+Added: Engineered Systems 358.4 47.4 405.8 402.2 0.1 1.5 2.0 405.8
+Added: Total $ 1,193.1 $ 3,421.2 $ 4,614.3 $ 2,466.4 $ 958.5 $ 807.9 $ 381.5 $ 4,614.3
+Added: Government sale include sales as a prime contractor or subcontractor.
+Added: (b) Primarily commercial sales
+Added: (c) Geographic region by destination
+Added: Fiscal Year Ended
+Added: January 3, 2021 Fiscal Year Ended
+Added: January 3, 2021
+Added: Customer Type Geographic Region (c)
+Added: (in millions) U.S.
+Added: (a) Other (b) Total United States Europe Asia All other Total
+Added: Digital Imaging $ 120.9 $ 865.1 $ 986.0 $ 387.0 $ 245.2 $ 310.7 $ 43.1 $ 986.0
+Added: Instrumentation 80.6 1,013.9 1,094.5 471.1 279.2 238.9 105.3 1,094.5
+Added: Aerospace and Defense Electronics 229.9 359.5 589.4 429.4 92.4 46.6 21.0 589.4
+Added: Engineered Systems 386.8 29.5 416.3 413.4 0.1 1.4 1.4 416.3
+Added: Total $ 818.2 $ 2,268.0 $ 3,086.2 $ 1,700.9 $ 616.9 $ 597.6 $ 170.8 $ 3,086.2
+Added: Government sales include sales as a prime contractor or subcontractor.
+Added: (b) Primarily commercial sales
+Added: (c) Geographic region by destination
+Added: For over time contracts using the cost-to-cost method, the Company has an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of our performance obligations.
+Added: 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.
+Added: 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.
+Added: This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters.
+Added: 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.
+Added: Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly.
+Added: The majority of revenue recognized over time uses an EAC process.
+Added: The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in 2022 and 2021 was approximately $ 29.9 million of favorable operating income and $ 26.8 million favorable operating income, respectively, with both years primarily related to favorable changes in estimates that impacted revenue, and, to a lesser degree, cost of sales within the Digital Imaging operating segment.
+Added: None of the effects of changes in estimates on any individual contract were material to the consolidated statements of income for any period presented.
+Added: 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).
+Added: As of January 1, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 3,099.3 million.
+Added: The Company expects approximately 76 % of remaining performance obligations to be recognized into revenue within the next twelve months , with the remaining 24 % recognized thereafter.
+Added: The unbilled receivable balance decreased from the beginning of the year by $ 41.4 million, or 13.1 %, primarily due to achieving billing milestones on certain contracts within the Digital Imaging segment, including FLIR defense-related contracts.
+Added: Contract liabilities decreased from the beginning of the year by $ 3.5 million, or 1.7 % primarily due to the decrease in customer advances and credits in our Digital Imaging segment partially offset by an increase in customer advances in our Engineered Systems segment.
+Added: The Company recognized revenue of $ 144.4 million during the year ended January 1, 2023 from contract liabilities that existed at the beginning of year.
+Added: Goodwill and Intangible Assets
Goodwill (in millions) :
Digital Imaging Instrumentation Aerospace and Defense Electronics Engineered Systems Total
−Removed: Balance at December 29, 2019 $ 962.7 $ 905.9 $ 164.3 $ 17.6 $ 2,050.5
+Added: Balance at January 3, 2021 $ 997.8 $ 968.8 $ 165.8 $ 17.6 $ 2,150.0
Current year acquisitions 5,905.5 — — — 5,905.5
1 unchanged sentence
Balance at January 3, 2022 6,867.5 935.9 165.7 17.6 7,986.7
−Removed: Current year acquisition 5,905.5 — — — 5,905.5
+Added: Current year acquisitions 78.5 — — — 78.5
Foreign currency changes and other ( 165.6 ) ( 22.7 ) ( 3.9 ) — ( 192.2 )
Balance at January 1, 2023 $ 6,780.4 $ 913.2 $ 161.8 $ 17.6 $ 7,873.0
+Added: In the fourth quarter of 2022, the Company performed a quantitative test for the FLIR reporting unit and qualitative tests for all other reporting units.
+Added: The results of our annual impairment tests of goodwill indicated that no impairment existed in 2022, 2021 or 2020.
Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount
4 unchanged sentences
Non-compete agreements 0.9 0.9 — 0.9 0.9 —
−Removed: Trademarks 4.5 3.9 0.6 4.5 3.6 0.9
+Added: Definite-lived trademarks 7.1 4.4 2.7 4.5 3.9 0.6
Backlog 16.1 15.8 0.3 16.3 16.3 —
1 unchanged sentence
Acquired intangible assets not subject to amortization:
−Removed: Trademarks 857.1 — 857.1 175.7 — 175.7
+Added: Indefinite-lived trademarks 848.2 — 848.2 857.1 — 857.1
Total acquired intangible assets $ 3,136.7 $ 696.1 $ 2,440.6 $ 3,263.3 $ 521.7 $ 2,741.6
Amortizable acquired intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from one to 15 years.
−Removed: Consistent with Teledyne’s growth strategy, we seek to acquire companies in markets characterized by high barriers to entry and that include specialized products not likely to be commoditized.
+Added: 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 our markets and highly engineered nature of our products, the rates of new technology development and customer acquisition and/or attrition are often not volatile.
−Removed: As such, we believe the value of acquired intangible assets decline in a linear, as opposed to an accelerated fashion, and we believe amortization on a straight-line basis is appropriate.
+Added: As such, Teledyne believes the value of acquired intangible assets decline in a linear, as opposed to an accelerated fashion, and the Company believes amortization on a straight-line basis is appropriate.
+Added: Recorded impairment charges to intangible assets were not material in 2022, 2021 or 2020.
The expected future amortization expense for the next five years is as follows (in millions):
10 unchanged sentences
Total acquired intangibles subject to amortization 8.2
−Removed: Financial Instruments
−Removed: The Company had an immaterial amount of cash equivalents at January 2, 2022, compared with $ 471.0 million in cash equivalents at January 3, 2021.
−Removed: The Company has categorized its cash equivalents as a Level 1 financial asset, measured at fair value based on quoted prices in active markets of identical assets.
−Removed: The fair value of the Company’s forward currency contracts as of January 2, 2022 and January 3, 2021, are disclosed in Note 2, under “Derivative Instruments and Hedging Activities,” of the Notes to Consolidated Financial Statements and are based on Level 2 inputs.
−Removed: Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates.
−Removed: The fair value of the Company’s senior unsecured notes as described in Note 9, “Long-Term Debt,” of the Notes to Consolidated Financial Statements approximated the carrying value based upon Level 2 inputs and is valued based on observable market data at January 2, 2022 and January 3, 2021.
−Removed: The fair value of the Company’s credit facility, term loans and other debt, also described in Note 9, at January 2, 2022 and January 3, 2021, approximated the carrying value due to the variable market rate used to calculate interest
−Removed: The Company does not have any other significant financial assets or liabilities that are measured at fair value.
−Removed: The carrying value of other on-balance-sheet financial instruments approximates fair value, and the cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.
−Removed: Accounts Receivable and Unbilled Receivables
+Added: Supplemental Balance Sheet Information
Accounts Receivable and Unbilled Receivables (in millions):
13 unchanged sentences
Total inventories, net $ 890.7 $ 752.9
−Removed: Supplemental Balance Sheet Information
Property, plant and equipment (in millions):
6 unchanged sentences
Total property, plant and equipment, net $ 769.8 $ 827.5
−Removed: The following table presents selected balance sheet components (in millions):
−Removed: Balance sheet items Balance sheet location January 2, 2022 January 3, 2021
−Removed: Salaries and wage accruals Accrued liabilities $ 215.1 $ 126.2
−Removed: Stockholders ’ Equity
−Removed: Common stock and treasury stock activity:
−Removed: Common Stock Treasury Stock
−Removed: Balance, December 30, 2018 37,697,865 1,610,568
−Removed: Issued — ( 460,669 )
−Removed: Balance, December 29, 2019
−Removed: 37,697,865 1,149,899
−Removed: Issued — ( 403,641 )
−Removed: Balance, January 3, 2021
−Removed: 37,697,865 746,258
−Removed: Issued 9,496,901 ( 243,788 )
−Removed: Balance, January 2, 2022
−Removed: 47,194,766 502,470
−Removed: In 2021, Teledyne issued approximately 9.5 million shares in connection with the FLIR acquisition.
−Removed: See Note 3 to these Notes to Consolidated Financial Statements for additional information about the FLIR acquisition.
−Removed: Shares issued from treasury stock include stock options exercised as well as shares issued under certain other compensation plans.
−Removed: Treasury Stock
−Removed: In January 2016, the Company’s Board of Directors authorized a stock repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its common stock.
−Removed: The number of shares that we may repurchase will depend on a variety of factors, such as share price, levels of cash and borrowing capacity available, alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions.
−Removed: Although we have no current plans to repurchase stock, future repurchases, if any, are expected to be funded with cash on hand and borrowings under the Company’s credit facility.
−Removed: No repurchases were made since 2015.
−Removed: Up to approximately three million shares may be repurchased under the stock repurchase program.
−Removed: Preferred Stock
−Removed: Authorized preferred stock may be issued with designations, powers and preferences designated by the Board of Directors.
−Removed: There were no shares of preferred stock issued or outstanding in 2021, 2020 or 2019.
−Removed: Stock Incentive Plans
−Removed: Teledyne has long-term incentive plans which provide its Board of Directors the flexibility to grant restricted stock, restricted stock units, performance shares, non-qualified stock options, incentive stock options and stock appreciation rights to officers and employees of Teledyne.
−Removed: 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.
−Removed: Stock Options
−Removed: Stock option compensation expense is recorded on a straight line basis over the appropriate vesting period, generally three years except for stock options that were granted after 2018 to Teledyne’s then President and Chief Executive Officer and Teledyne’s Executive Chairman, which were expensed immediately.
−Removed: The Company recorded $ 20.0 million, $ 24.7 million, and $ 26.1 million for stock option expense, for 2021, 2020 and 2019, respectively.
−Removed: The Company issues shares of common stock upon the exercise of stock options.
−Removed: The total pretax intrinsic value of options exercised during 2021 and 2020 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $ 64.2 million and $ 96.9 million, respectively.
−Removed: At January 2, 2022, the intrinsic value of stock options outstanding was $ 414.0 million and the intrinsic value of stock options exercisable was $ 382.7 million.
−Removed: During 2021 and 2020, the amount of cash received from the exercise of stock options was $ 25.4 million and $ 36.3 million, respectively.
−Removed: At January 2, 2022, there was $ 30.9 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 1.5 years.
−Removed: The fair value of stock options is determined by using a lattice-based option pricing model.
−Removed: 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.
−Removed: The period used for the historical stock price corresponded to the expected term of the options.
−Removed: The period used for the exchange traded options, if any, included the longest-dated options publicly available, generally three months .
−Removed: The expected dividend yield is based on Teledyne’s practice of not paying dividends.
−Removed: The risk-free rate of return is based on the yield of U.S.
−Removed: Treasury Strips with terms equal to the expected life of the options as of the grant date.
−Removed: The expected life in years is based on historical actual stock option exercise experience.
−Removed: Stock option valuation assumptions:
−Removed: 2021 2020 2019
−Removed: Expected dividend yield n/a n/a n/a
−Removed: Expected volatility 27.8 % 23.7 % 26.7 %
−Removed: Risk-free interest rate 0.09 % to 1.58 %
−Removed: 1.50 % to 1.75 %
−Removed: 2.47 % to 2.70 %
−Removed: Expected life in years 5.2 6.6 6.6
−Removed: Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2021, 2020 and 2019 was $ 134.88 , $ 106.26 and $ 72.00 , respectively.
−Removed: Stock option transactions for Teledyne ’ s stock option plans are summarized as follows:
−Removed: 2021 2020 2019
−Removed: Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price
−Removed: Beginning balance 1,819,147 $ 170.10 1,988,576 $ 130.67 2,064,740 $ 104.66
−Removed: Granted 211,973 $ 440.48 247,273 $ 382.91 390,789 $ 217.58
−Removed: Exercised ( 213,384 ) $ 118.55 ( 382,554 ) $ 95.22 ( 429,654 ) $ 80.31
−Removed: Canceled or expired ( 23,879 ) $ 328.15 ( 34,148 ) $ 252.43 ( 37,299 ) $ 181.62
−Removed: Ending balance 1,793,857 $ 206.08 1,819,147 $ 170.10 1,988,576 $ 130.67
−Removed: Options exercisable at end of period 1,328,191 $ 148.73 1,242,786 $ 118.57 1,242,205 $ 94.04
−Removed: The following table provides certain information with respect to stock options outstanding and stock options exercisable at January 2, 2022, under the stock option plans.
−Removed: Stock Options Outstanding Stock Options Exercisable
−Removed: Range of Exercise Prices Shares Weighted Average Exercise Price Remaining life in years Shares Weighted Average Exercise Price
−Removed: $ 40.70 -$ 99.99
−Removed: 500,916 $ 82.16 2.7 500,916 $ 82.16
−Removed: $ 100.00 -$ 199.99
−Removed: 558,185 $ 153.97 5.6 558,185 $ 153.97
−Removed: $ 200.00 -$ 299.99
−Removed: 307,410 $ 217.71 7.1 197,353 $ 217.77
−Removed: $ 300.00 -$ 399.99
−Removed: 220,180 $ 382.89 8.1 71,737 $ 382.93
−Removed: $ 400.00 -$ 445.21
−Removed: 207,166 $ 440.93 9.7 — $ —
−Removed: 1,793,857 $ 206.08 5.8 1,328,191 $ 148.73
−Removed: Performance Share Plan
−Removed: Teledyne’s Performance Share Plan (“PSP”) provides grants of performance share units, which key officers and executives may earn if Teledyne meets specified performance objectives over a three-year period.
−Removed: Awards are payable in cash and to the extent available, shares of Teledyne common stock.
−Removed: Awards are generally paid to the participants in three annual installments after the end of the performance cycle so long as they remain employed by Teledyne (with an exception for retirement).
−Removed: Participants in the PSP program can elect to receive a cash payment in lieu of awarded shares to pay income taxes due with respect to an installment payment.
−Removed: The cash payment in lieu of awarded shares is based on the then current market value of Teledyne stock.
−Removed: Under the 2015 to 2017 plan, and based on actual performance, the Company issued 7,673 , 8,586 and 6,481 shares of Teledyne common stock in 2020, 2019 and 2018, respectively.
−Removed: Under the 2018 to 2020 plan, and based on actual performance, the Company issued 9,588 shares of Teledyne common stock in 2021.
−Removed: The maximum number of remaining shares that could be issued in two equal installments in 2022 and 2023, is 35,082 .
−Removed: The estimated expense for each plan year was based on the expected cash payout and the expected shares to be issued, valued at the share price at the inception of the performance cycle, except for the shares that can be issued based on a market-based comparison.
−Removed: The Company recorded $ 6.2 million and $ 7.5 million in compensation expense related to the PSP program for fiscal years 2020 and 2019, respectively.
−Removed: In 2021, the Company discontinued the PSP.
−Removed: Restricted Stock
−Removed: 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.
−Removed: The restricted stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”.
−Removed: The restrictions have both time-based and performance-based components.
−Removed: 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.
−Removed: If employment is terminated (other than by death, retirement or disability) during the restricted period, the stock grant is forfeited.
−Removed: The estimated expense for restricted stock awards to employees is based on a lattice-based simulation which takes into consideration several factors including volatility, risk free interest rates and the correlation of Teledyne’s stock price with the comparator, the S&P 500 Index for awards granted in 2021, the Russell 1000 Index for awards granted from 2018 to 2020 and the Russell 2000 for awards granted prior to 2018.
−Removed: The Company recorded $ 3.5 million, $ 3.3 million and $ 3.0 million in compensation expense related to restricted stock awards to employees, for fiscal years 2021, 2020 and 2019, respectively.
−Removed: At January 2, 2022, there was $ 3.5 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.5 years.
−Removed: As part of the acquisition of FLIR, the Company assumed certain unvested restricted stock units that were issued by FLIR in March 2021.
−Removed: The unvested restricted stock units were converted to 62,974 Teledyne restricted stock units.
−Removed: The post-acquisition expense for these restricted stock units was $ 7.8 million for 2021.
−Removed: The expense related to these assumed restricted stock units is included in the Digital Imaging segment results.
−Removed: This amount can be impacted by employee retirements and terminations or other awards granted during the remainder of the year.
−Removed: At January 2, 2022, 49,351 restricted stock units are outstanding and there was $ 14.4 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 2.2 years.
−Removed: The following table shows restricted stock award activity for grants made to employees:
−Removed: Restricted Stock:
−Removed: Shares Weighted average fair value per share
−Removed: Balance, December 30, 2018 74,220 $ 108.05
−Removed: Granted 17,522 $ 200.00
−Removed: Issued ( 35,330 ) $ 72.91
−Removed: Balance, December 29, 2019
−Removed: 56,412 $ 158.62
−Removed: Granted 10,080 $ 360.33
−Removed: Issued ( 23,087 ) $ 114.74
−Removed: Balance, January 3, 2021
−Removed: 43,405 $ 228.80
−Removed: Granted 10,227 $ 334.92
−Removed: Issued ( 15,423 ) $ 176.64
−Removed: Forfeited/Canceled ( 380 ) $ 176.64
−Removed: Balance, January 2, 2022
−Removed: 37,829 $ 279.27
−Removed: Non-employee directors each received restricted stock units valued at $ 130,000 in 2021 and $ 110,000 in 2020 and 2019 or valued at half the amount for a person who becomes a director for the first time after the date of the Annual Meeting.
−Removed: 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.
−Removed: The annual expense related to non-employee director’s restricted stock units was $ 1.2 million for 2021, $ 1.1 million for 2020 and $ 1.0 million for 2019.
−Removed: The following table shows restricted stock award activity for grants made to non-employee directors:
−Removed: Directors Restricted Stock:
−Removed: Shares Weighted average fair value per share
−Removed: Balance, December 30, 2018 7,752 $ 170.00
−Removed: Granted 4,155 $ 251.23
−Removed: Issued ( 2,840 ) $ 193.39
−Removed: Balance, December 29, 2019
−Removed: 9,067 $ 199.90
−Removed: Granted 3,692 $ 312.41
−Removed: Issued ( 2,640 ) $ 249.72
−Removed: Canceled ( 353 ) $ 311.17
−Removed: Balance, January 3, 2021
+Added: Accrued liabilities (in millions):
+Added: Balance at year-end
+Added: Compensation, benefit and other employee related accruals $ 205.1 $ 215.1
+Added: Contract liabilities 187.6 186.0
+Added: Warranty reserve 43.3 41.8
+Added: Operating lease liabilities 29.4 28.3
+Added: Derivative liabilities 27.8 4.4
+Added: Unrecognized tax benefits, including accrued interest and penalties — 341.0
+Added: Other 224.4 212.3
+Added: Total accrued liabilities $ 717.6 $ 1,028.9
+Added: Other long-term liabilities (in millions):
+Added: Balance at year-end
+Added: Unrecognized tax benefits, including accrued interest and penalties $ 176.3 $ 150.7
+Added: Operating lease liabilities 125.9 138.0
+Added: Deferred compensation liabilities 92.2 115.5
+Added: Pension and postretirement related liabilities 50.2 67.2
+Added: Contract liabilities 20.2 25.3
+Added: Derivative liabilities 19.4 9.6
+Added: Warranty reserve 7.0 7.7
+Added: Other 56.0 71.0
+Added: Total other long-term liabilities
$ 547.2 $ 585.0
−Removed: Granted 2,592 $ 450.27
−Removed: Issued ( 5,300 ) $ 227.90
−Removed: Balance, January 2, 2022
+Added: A rollforward of the warranty reserve, including both short and long-term reserve balances, for the years 2022, 2021 or 2020 is as follows:
+Added: Warranty Reserve (in millions):
2022 2021 2020
+Added: Balance at beginning of year $ 49.5 $ 22.4 $ 24.8
+Added: Product warranty expense 12.6 11.9 3.3
+Added: Deductions ( 14.3 ) ( 10.1 ) ( 8.2 )
+Added: Acquisition-related 2.5 25.3 2.5
+Added: Balance at end of year $ 50.3 $ 49.5 $ 22.4
Long-Term Debt
−Removed: Long-Term Debt (dollars in millions, except as noted) :
+Added: Long-Term Debt (dollars in millions) :
January 1, 2023 January 2, 2022
1 unchanged sentence
$ 125.0 $ 125.0
−Removed: Term loan due October 2024, variable rate of 1.35 % at January 2, 2022 and 1.150 % at January 3, 2021, swapped to a Euro fixed rate of 0.612 %
0.65 % Fixed Rate Senior Notes due April 2023
0.95 % Fixed Rate Senior Notes due April 2024, callable after April 2022
−Removed: 1.60 % Fixed Rate Senior Notes due April 2026
+Added: Term loan due October 2024, variable rate of 5.63 % at January 1, 2023 and 1.35 % at January 2, 2022, swapped to a Euro fixed rate of 0.612 %
1.60 % Fixed Rate Senior Notes due April 2026
+Added: Term loan due May 2026, variable rate of 5.61 % at January 1, 2023 and 1.35 % at January 2, 2022
2.25 % Fixed Rate Senior Notes due April 2028
+Added: 2.50 % Fixed Rate Senior Notes due August 2030
2.75 % Fixed Rate Senior Notes due April 2031
−Removed: Term loan due May 2026, variable rate of 1.35 % at January 2, 2022
−Removed: 3.09 % Fixed Rate Senior Notes due December 2021
−Removed: 3.28 % Fixed Rate Senior Notes due November 2022
−Removed: 0.70 % € 50 Million Fixed Rate Senior Notes due April 2022
−Removed: 0.92 % € 100 Million Fixed Rate Senior Notes due April 2023
−Removed: 1.09 % € 100 Million Fixed Rate Senior Notes due April 2024
+Added: 1,040.0 1,100.0
Other debt 2.1 0.7
3 unchanged sentences
Total long-term debt, net of current portion $ 3,620.5 $ 4,099.4
+Added: Excluding interest and fees, no payments are due under the $ 1.15 billion unsecured credit facility (“credit facility”) until it matures in March 2026.
+Added: Borrowings under our credit facility and term loans are at variable rates which are, at our option, tied to a base rate, Eurocurrency rate or equivalent as defined in our credit agreements.
+Added: Available borrowing capacity under the credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $ 1,003.7 million at January 1, 2023.
+Added: The credit agreement and term loans require the Company to comply with various financial and operating covenants and at January 1, 2023, the Company was in compliance with these covenants.
+Added: At January 1, 2023, Teledyne had $ 38.6 million in outstanding letters of credit.
+Added: During 2022, the Company repaid $ 185.0 million of debt.
+Added: The Company made $ 110.0 million of floating rate debt payments on its term loan due May 2026.
+Added: The Company also repurchased and retired $ 75.0 million of its Fixed Rate Senior Notes due August 2030 and April 2031, recording a $ 10.6 million non-cash gain on the extinguishment of this debt.
+Added: During 2021, the Company completed various financing activities as follows, with activity through the first half of 2021 primarily related to funding the cash portion of the FLIR acquisition:
+Added: • On January 4, 2021, the Company entered into a $ 4.5 billion short term stand-by bridge facility to support the completion of the FLIR acquisition, resulting in debt expense of $ 17.2 million.
+Added: • On March 4, 2021, the Company entered into a $ 1.0 billion Term Loan Credit Agreement (maturing May 2026) and an Amended and Restated Credit Agreement (maturing March 2026) with capacity of $ 1.15 billion.
+Added: The terms of the $ 1.0 billion Term Loan Credit Agreement allow for prepayments, at the Company’s option, at any time or from time to time, in whole or in part without premium or penalty.
+Added: • On March 17, 2021, the Company called $ 493.3 million of existing fixed rate senior notes and incurred debt extinguishment expenses of $ 13.4 million, which is included in interest and debt expense, net.
+Added: • On March 22, 2021, the Company completed all permanent financing for the acquisition of FLIR and terminated the $ 4.5 billion stand-by bridge facility.
+Added: The permanent financing consists of $ 3.0 billion investment-grade bonds (the “Notes”), including $ 300.0 million aggregate principal amount of 0.65 % Notes due 2023, $ 450.0 million aggregate principal amount of 0.95 % Notes due 2024, $ 450.0 million aggregate principal amount of 1.60 % Notes due 2026, $ 700.0 million aggregate principal amount of 2.25 % Notes due 2028 and $ 1.1 billion aggregate principal amount of 2.75 % Notes due 2031.
+Added: Teledyne may redeem the $ 450.0 million of 0.95 % Notes due 2024 at any time or from time to time, in whole or in part, at the Company’s option, from and after April 1, 2022, at a redemption price equal to 100 % of the principal amount of the Notes redeemed.
+Added: • As part of the acquisition of FLIR, the Company assumed and guaranteed FLIR’s $ 500.0 million, 2.50 % Fixed Rate Senior Notes due August 2030.
+Added: • In the second half of 2021, the Company made $ 645.0 million of floating rate debt payments on its term loan due May 2026.
Maturities of long-term debt as of January 1, 2023 (in millions):
4 unchanged sentences
The Company has no sinking fund requirements.
−Removed: In the first quarter of 2021, Teledyne completed various financing activities related to the then pending acquisition of FLIR.
−Removed: These activities included entering into a $ 4.5 billion short term stand-by bridge facility on January 4, 2021, as required by the definitive agreement, resulting in debt expense of $ 17.2 million.
−Removed: In addition, on March 17, 2021 Teledyne called $ 493.3 million of existing fixed rate senior notes and incurred debt extinguishment expenses of $ 13.4 million, which is included in interest and debt expense, net.
−Removed: On March 22, 2021, Teledyne completed all permanent financing for the acquisition of FLIR and terminated the $ 4.5 billion stand-by bridge facility.
−Removed: The permanent financing consists of $ 3.0 billion investment-grade bonds (the “Notes”), including $ 300.0 million aggregate principal amount of 0.65 % Notes due 2023, $ 450.0 million aggregate principal amount of 0.95 % Notes due 2024, $ 450.0 million aggregate principal amount of 1.60 % Notes due 2026, $ 700.0 million aggregate principal amount of 2.25 % Notes due 2028 and $ 1.1 billion aggregate principal amount of 2.75 % Notes due 2031.
−Removed: Teledyne may redeem the $ 450.0 million of 0.95 % Notes due 2024 at any time or from time to time, in whole or in part, at the Company’s option, from and after April 1, 2022, at a redemption price equal to 100 % of the principal amount of the Notes redeemed.
−Removed: In addition, we guaranteed FLIR’s $ 500.0 million, 2.50 % Fixed Rate Senior Notes due August 2030.
−Removed: Previously on March 4, 2021, Teledyne entered into a $ 1.0 billion Term Loan Credit Agreement (maturing May 2026) and an Amended and Restated Credit Agreement (maturing March 2026) with capacity of $ 1.15 billion.
−Removed: The terms of the $ 1.0 billion Term Loan Credit Agreement allow for prepayments, at the Company’s option, at any time or from time to time, in whole or in part without premium or penalty.
−Removed: Teledyne used the proceeds from the Notes together with the proceeds from the $ 1.0 billion Term Loan Credit Agreement and cash on hand to pay the cash portion of the consideration for the FLIR acquisition and refinance certain existing debt.
−Removed: Excluding interest and fees, no payments are due under the $ 1.15 billion unsecured credit facility (“credit facility”) until it matures in March 2026.
−Removed: Borrowings under our credit facility and term loans are at variable rates which are, at our option, tied to a base rate, Eurocurrency rate or equivalent as defined in our credit agreements.
−Removed: Available borrowing capacity under the credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $ 759.2 million at January 2, 2022.
−Removed: The credit agreement and term loans requires the Company to comply with various financial and operating covenants and at January 2, 2022, the Company was in compliance with these covenants.
−Removed: At January 2, 2022, Teledyne had $ 281.9 million in outstanding letters of credit.
−Removed: Of this amount, $ 244.6 million was released in February 2022.
Total interest expense including credit facility fees and other bank charges was $ 89.3 million in 2022, $ 104.8 million in 2021 and $ 15.8 million in 2020.
−Removed: Income before income taxes included income from domestic operations of $ 108.0 million for 2021, $ 289.5 million for 2020 and $ 295.9 million for 2019.
−Removed: Income before taxes included income from foreign operations of $ 425.9 million for 2021, $ 180.2 million for 2020 and $ 177.8 million for 2019.
−Removed: Income tax provision/(benefit) - (in millions):
+Added: Cash payments for interest and credit facility fees and other bank charges totaled $ 79.3 million, $ 117.2 million and $ 19.1 million for 2022, 2021 and 2020, respectively.
+Added: The 2021 amount included $ 30.5 million paid for bond financing and debt extinguishment costs.
+Added: Income (loss) before income taxes included the following (in millions):
2022 2021 2020
+Added: Domestic operations $ 490.3 $ 108.0 $ 289.5
+Added: Foreign operations 417.8 425.8 180.2
+Added: Total income (loss) before income taxes $ 908.1 $ 533.8 $ 469.7
+Added: The provision for income taxes included the following (in millions):
+Added: 2022 2021 2020
+Added: Current provision (benefit)
Federal $ 47.2 $ 43.0 $ 25.3
1 unchanged sentence
Foreign 47.8 57.5 39.1
−Removed: Total current 111.3 71.4 105.0
+Added: Total current provision (benefit) 109.8 111.3 71.4
+Added: Deferred provision (benefit)
Federal ( 39.0 ) ( 39.7 ) ( 0.5 )
1 unchanged sentence
Foreign 48.1 17.0 ( 5.4 )
−Removed: Total deferred ( 22.8 ) ( 3.6 ) ( 33.6 )
−Removed: Provision for income taxes $ 88.5 $ 67.8 $ 71.4
+Added: Total deferred provision (benefit) 9.4 ( 22.8 ) ( 3.6 )
+Added: Provision (benefit) for income taxes $ 119.2 $ 88.5 $ 67.8
The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate:
−Removed: Tax rate reconciliation:
2022 2021 2020
4 unchanged sentences
Foreign rate differential 1.5 1.4 0.6
−Removed: Net reversals for unrecognized tax benefits ( 2.4 ) 0.7 ( 0.6 )
+Added: Net accruals (reversals) for unrecognized tax benefits ( 7.9 ) ( 2.4 ) 0.7
Stock-based compensation ( 1.1 ) ( 2.5 ) ( 4.5 )
25 unchanged sentences
Net deferred income tax liabilities $ 475.4 $ 596.1
−Removed: We intend to reinvest indefinitely the earnings of our material foreign subsidiaries in our operations outside of the United States.
−Removed: The cash that the Company’s foreign subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions.
−Removed: We estimate that future domestic cash generation will be sufficient to meet future domestic cash requirements.
−Removed: federal and applicable state income taxes have been accrued for deemed repatriations.
−Removed: At January 2, 2022, the amount of undistributed foreign earnings was $ 619.8 million, for which we have not recorded a deferred tax liability of approximately $ 1.3 million for corporate income taxes which would be due if reinvested foreign earnings were repatriated.
−Removed: Should we decide to repatriate the foreign earnings, we would need to adjust our income tax provision in the period we determined that we would no longer indefinitely reinvest the earnings outside the United States.
−Removed: In assessing the need for a valuation allowance, we consider all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences, projected future taxable income, availability of taxable income in carryback periods and tax planning strategies.
+Added: The Company is not permanently reinvested with respect to unremitted earnings of most of its foreign subsidiaries.
+Added: The Company is subject to U.S.
+Added: income tax on substantially all of these foreign earnings, while any remaining foreign earnings are eligible for potential U.S.
+Added: tax deductions.
+Added: As of January 1, 2023, the incremental tax cost to repatriate these earnings was not material.
+Added: The Company continues to make an indefinite reinvestment assertion on its material foreign subsidiaries in Canada, as the unremitted earnings of the Company’s Canadian foreign subsidiaries held for indefinite reinvestment are used to finance Canadian operations and investments.
+Added: The Company estimates that future cash generation from non-Canadian operations will be sufficient to meet future domestic cash requirements.
+Added: Determination of the unrecognized deferred tax liability for unremitted Canadian earnings is not practicable due to uncertainty and overall complexity of the potential calculations.
+Added: 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 that it is possible that some portion of deferred tax assets will not be realized as a future benefit and therefore has recorded a valuation allowance.
−Removed: The valuation allowance for deferred tax assets decreased by $ 0.2 million in 2021, primarily related to the evidence for future utilization of remaining investment tax credits, offset by acquisition-related valuation allowance.
−Removed: At January 2, 2022, the Company had approximately $ 45.3 million of net operating loss carryforward primarily from the Company’s entities in the United Kingdom, Denmark and Norway, of which $ 28.8 million have no expiration dates and $ 16.5 million have expiration dates ranging from 2025 to 2040.
+Added: In 2022, the valuation allowance for deferred tax assets increased by $ 3.4 million in 2022.
+Added: At January 1, 2023, the Company had approximately $ 45.1 million of net operating loss carryforward primarily from the Company’s entities in Denmark, France, the Netherlands and the United Kingdom, of which $ 36.3 million have no expiration dates and $ 8.8 million have expiration dates ranging from 2023 to 2040.
The Company had Canadian capital loss carryforward in the amount of $ 3.9 million which has no expiration date.
5 unchanged sentences
The state net operating loss carryforward amounts have expiration dates ranging from 2023 to 2043.
−Removed: Finally, the Company had federal research and development credit carryforward in the amount of $ 0.3 million which has an expiration date of 2037 and state tax credits of $ 17.9 million, of which $ 14.1 million have no expiration date and $ 3.8 million have expiration dates ranging from 2023 to 2035.
+Added: Finally, the Company had state tax credits of $ 13.9 million, of which $ 9.4 million have no expiration date and $ 4.5 million have expiration dates ranging from 2023 to 2035.
Unrecognized tax benefits (in millions):
9 unchanged sentences
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 $ 89.1 million due to the expiration of statutes of limitation for various federal, state and foreign tax issues.
−Removed: We recognized net tax benefits and expense for interest and penalties related to unrecognized tax benefits within the provision for income taxes in our statements of operations of $ 2.4 million of expense, $ 0.1 million of expense and $ 0.3 million of benefit, for 2021, 2020 and 2019, respectively.
+Added: Teledyne recognized net tax benefits and expense for interest and penalties related to unrecognized tax benefits within the provision for income taxes in our statements of operations of $ 12.2 million of expense, $ 2.4 million of expense and $ 0.1 million of expense, for 2022, 2021 and 2020, respectively.
Interest and penalties in the amount of $ 45.6 million, $ 160.8 million and $ 1.2 million were recognized in the 2022, 2021 and 2020 statement of financial position, respectively.
1 unchanged sentence
Substantially all of the unrecognized tax benefits as of January 1, 2023, if recognized, would affect our effective tax rate.
−Removed: Current accrued liabilities on the consolidated balance sheet included unrecognized tax benefits including accrued interest and penalties of $ 341.0 million as of January 2, 2022, compared with no balance as of January 3, 2021.
−Removed: Teledyne paid $ 296.4 million related to this current accrued liabilities balance on February 2, 2022.
−Removed: We file income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions.
+Added: Current accrued liabilities on the consolidated balance sheet as of January 2, 2022 included unrecognized tax benefits, including accrued interest and penalties, of $ 341.0 million.
+Added: Teledyne paid $ 296.4 million related to this accrued liability balance on February 2, 2022.
+Added: Teledyne files income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions.
The Company has substantially concluded on all U.S.
federal income tax matters for all years through 2011, Canadian income tax matters for all years through 2012, Swedish income tax matters for all years through 2016, Norwegian income tax matters for all years through 2017, Belgian income tax matters for all years through 2019, French income tax matters for all years through 2019 and United Kingdom income tax matters for all years through 2014.
+Added: Cash payments for federal, foreign and state income taxes were $ 212.4 million for 2022, which are net of $ 20.1 million in tax refunds.
+Added: Cash payments for federal, foreign and state income taxes were $ 83.6 million for 2021, which are net of $ 22.4 million in tax refunds.
+Added: Cash payments for federal, foreign and state income taxes were $ 74.5 million for 2020, which are net of $ 8.1 million in tax refunds.
Pension Plans and Postretirement Benefits
3 unchanged sentences
All FLIR U.S.
−Removed: employees participate in a defined contribution plan, as FLIR has no legacy U.S.
+Added: employees participate in a defined contribution plan, as FLIR had no legacy U.S.
pension plans.
1 unchanged sentence
The Company also has several small domestic non-qualified and foreign-based defined benefit pension plans.
+Added: The measurement date for the Company’s pension plans is December 31.
The domestic qualified pension plans allow participants to elect a lump-sum payment at retirement.
1 unchanged sentence
Each year beginning with 2014, the Society of Actuaries released revised mortality tables, which updated life expectancy assumptions.
−Removed: In consideration of these tables, each year the Company reviews the mortality assumptions used in determining our pension and post-retirement obligations.
+Added: In consideration of these tables, each year the Company reviews the mortality assumptions used in determining our pension and postretirement obligations.
+Added: Net periodic benefit expense (income) allocation
Domestic Foreign
10 unchanged sentences
Pension non-service (income) expense $ ( 11.2 ) $ ( 11.5 ) $ ( 13.0 ) $ ( 0.4 ) $ 0.2 $ 0.2
+Added: 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.
−Removed: We determined the discount rate based on a model which matches the timing and amount of expected benefit payments to maturities of high-quality corporate bonds priced as of the pension plan measurement date.
+Added: 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.
−Removed: The following assumptions were used to measure the net benefit income/cost within each respective year for the domestic qualified plans and the foreign plans:
+Added: 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:
Weighted-average discount rate Weighted-average increase in future compensation levels Expected weighted-average long-term rate of return
−Removed: Domestic plan - 2021
+Added: Domestic plans - 2022
2.91 % - 3.08 %
2.75 % 6.58 % - 7.80 %
−Removed: Domestic plan - 2020
−Removed: 3.38 % to 3.52 %
+Added: Domestic plans - 2021
2.55 % - 2.78 %
−Removed: Domestic plan - 2019
2.75 % 6.71 % - 7.80 %
+Added: Domestic plans - 2020
+Added: 3.38 % - 3.52 %
+Added: 2.75 % 6.71 % - 7.80 %
Foreign plans - 2022
10 unchanged sentences
1.00 % - 3.00 %
−Removed: For its domestic based pension plans the Company is projecting a long-term rate of return on plan assets of 6.82 % in 2022.
−Removed: For its foreign based pension plans the Company is projecting a long-term rate of return on plan assets of 2.23 % in 2022.
+Added: For its domestic and foreign pension plans the Company is projecting a weighted-average long-term rate of return on plan assets of 6.85 % and 4.48 % in 2023, respectively.
Domestic Foreign
14 unchanged sentences
Discount rate 5.71 % - 5.72 %
−Removed: 2.55 % to 2.78 %
2.91 % - 3.08 %
1 unchanged sentence
2.20 % - 4.80 %
+Added: 0.20 % - 1.80 %
+Added: 0.10 % - 1.20 %
Salary growth rate 2.75 %
12 unchanged sentences
Fair value of net plan assets - end of year $ 719.7 $ 864.3 $ 35.0 $ 52.9
−Removed: The measurement date for the Company’s pension plans is December 31.
The following tables sets forth the funded status and amounts recognized in the consolidated balance sheets at year-end 2022 and 2021 for the domestic qualified and nonqualified pension plans and the foreign-based pension plans for benefits provided to certain employees (in millions):
1 unchanged sentence
2022 2021 2022 2021
−Removed: Funded status $ 65.0 $ 7.7 $ ( 7.3 ) $ ( 16.0 )
−Removed: Amounts recognized in the consolidated balance sheets:
−Removed: Prepaid pension asset long-term $ 118.9 $ 67.9 $ 4.8 $ —
−Removed: Accrued pension obligation long-term ( 44.4 ) ( 51.6 ) ( 11.7 ) ( 15.5 )
−Removed: Accrued pension obligation short-term ( 3.7 ) ( 2.7 ) ( 0.4 ) ( 0.5 )
−Removed: Other long-term liabilities ( 5.8 ) ( 5.9 ) — —
+Added: Funded (unfunded) status $ 136.7 $ 65.0 $ ( 10.2 ) $ ( 7.3 )
+Added: Amounts recognized in the consolidated balance sheets as a debit (credit):
+Added: Balance sheet item Balance sheet location
+Added: Prepaid pension assets Other assets, net - noncurrent $ 178.4 $ 118.9 $ — $ 4.8
+Added: Accrued pension obligations short-term Accrued liabilities ( 3.9 ) ( 3.7 ) ( 0.5 ) ( 0.4 )
+Added: Accrued pension obligations long-term Other long-term liabilities ( 37.8 ) ( 50.2 ) ( 9.7 ) ( 11.7 )
Net amount recognized $ 136.7 $ 65.0 $ ( 10.2 ) $ ( 7.3 )
−Removed: Amounts recognized in accumulated other comprehensive loss:
+Added: Amounts recognized in AOCI:
Net prior service cost (credit) $ ( 1.2 ) $ ( 3.0 ) $ 0.5 $ 0.6
17 unchanged sentences
2028 - 2032 $ 244.2 $ 13.3
−Removed: Total $ 564.6 $ 24.8
−Removed: The following table sets forth the percentage of year-end market value by asset class for the pension plans:
−Removed: Market value by asset class:
−Removed: % to Total Foreign
−Removed: 2021 2020 2021 2020
−Removed: Equity instruments 34 % 38 % 55 % 52 %
−Removed: Fixed income instruments 55 49 25 25
−Removed: Alternatives and other 11 13 20 23
−Removed: Total 100 % 100 % 100 % 100 %
−Removed: The Company has an active management policy for the pension assets in the qualified domestic pension plan.
−Removed: As of January 2, 2022, the long term asset allocation target for the domestic plan consists of approximately 34 % in equity instruments, approximately 55 % in fixed income instruments and approximately 11 % in alternatives.
−Removed: The pension plan’s investments are stated at fair value.
+Added: The Company has an active management policy for the pension assets in the qualified domestic pension plans.
+Added: As of January 1, 2023, the long-term asset allocation target for the domestic plans consists of approximately 35 % in equity instruments, approximately 54 % in fixed income instruments and approximately 11 % in alternatives.
+Added: 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.
46 unchanged sentences
Fixed income investments are also valued at the net asset value provided by the independent administrator or custodian of the fund.
−Removed: 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
−Removed: current yields of similar instruments.
+Added: 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.
−Removed: The Company’s contributions associated with its 401(k) plans were $ 15.2 million, $ 13.8 million and $ 13.4 million, for 2021, 2020 and 2019, respectively.
−Removed: Postretirement Plans
+Added: 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.
−Removed: Total cost for these plans was less than $ 1.0 million for each fiscal year 2021, 2020 and 2019.
−Removed: Business Segments
−Removed: The Company has four reportable segments:
−Removed: Digital Imaging;
−Removed: Instrumentation;
−Removed: Aerospace and Defense Electronics;
−Removed: and Engineered Systems.
−Removed: 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.
−Removed: The Digital Imaging segment includes high-performance sensors, cameras and systems, within the visible, infrared and X-ray spectra for use in industrial, government and medical applications, as well as micro electromechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters.
−Removed: This segment also includes our sponsored and centralized research laboratories which benefit government programs and commercial businesses.
−Removed: Teledyne acquired FLIR in May 2021, which is reported in the Digital Imaging segment.
−Removed: FLIR offers a diversified portfolio that serves a number of applications in government and defense, industrial, and commercial markets.
−Removed: FLIR technologies include thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems, and advanced threat-detection solutions.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The Engineered Systems segment also designs and manufactures electrochemical energy systems.
−Removed: Teledyne exited the cruise missile turbine engine business in the first quarter of 2021.
−Removed: Segment results include net sales and operating income by segment but excludes noncontrolling interest, equity income or loss, unusual non-recurring legal matter settlements, interest income and expense, sublease rental income and non-revenue licensing and royalty income, domestic and foreign income taxes and corporate office expenses.
−Removed: Corporate expense includes various administrative expenses relating to the corporate office and certain nonoperating expenses not allocated to our segments.
−Removed: As part of a continuing effort to reduce costs and improve operating performance, as well as to respond to the impact of the COVID pandemic, beginning in 2020 the Company took actions to reduce headcount across various businesses, reducing our exposure to weak end markets, such as commercial aerospace.
−Removed: We also exited certain facilities no longer needed.
−Removed: In 2021, we took actions to integrate FLIR into our businesses resulting in higher severance and facility closure costs in the Digital Imaging segment.
−Removed: At January 2, 2022, an immaterial amount remains to be paid related to these actions.
−Removed: The following pre-tax charges were incurred related to severance and facility consolidations (in millions):
+Added: Total cost for these plans was less than
+Added: $ 1.0 million for each fiscal year 2022, 2021 and 2020.
+Added: Deferred Contribution Plans
+Added: The Company’s contributions associated with its 401(k) plans were $ 29.7 million, $ 15.2 million and $ 13.8 million, for 2022, 2021 and 2020, respectively.
+Added: Deferred Compensation Plans
+Added: The Company has non-qualified executive deferred compensation plans that provide supplemental retirement income benefits for a select group of management.
+Added: This plan permits eligible employees to make salary and bonus deferrals that are 100 % vested.
+Added: 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.
+Added: 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.
+Added: As of January 1, 2023 and January 2, 2022, $ 92.2 million and $ 115.5 million, respectively, is included in other long-term liabilities related to deferred compensation liabilities on the consolidated balance sheets.
+Added: Additionally, the Company purchased life insurance policies on certain participants to potentially offset these unsecured obligations.
+Added: These policies are recorded at their cash surrender value as determined by the insurance carrier.
+Added: The cash surrender value of these policies was $ 94.7 million and $ 113.4 million, as of January 1, 2023 and January 2, 2022, respectively, and is primarily included in other non-current assets on the consolidated balance sheets.
+Added: Stockholders ’ Equity
+Added: Common stock and treasury stock activity:
+Added: Common Stock Treasury Stock
+Added: Balance, December 29, 2019 37,697,865 1,149,899
+Added: Issued — ( 403,641 )
+Added: Balance, January 3, 2021
37,697,865 746,258
−Removed: Digital Imaging $ 23.9 $ 2.9 $ 1.1
−Removed: Instrumentation 1.3 5.9 1.5
−Removed: Aerospace and Defense Electronics 0.7 11.1 0.5
−Removed: Engineered Systems 0.4 0.5 0.1
−Removed: Corporate 0.1 0.4 —
−Removed: Total $ 26.4 $ 20.8 $ 3.2
−Removed: Information on the Company’s business segments was as follows (in millions):
+Added: Issued 9,496,901 ( 243,788 )
+Added: Balance, January 2, 2022
47,194,766 502,470
−Removed: Digital Imaging $ 2,412.9 $ 986.0 $ 992.9
−Removed: Instrumentation 1,166.9 1,094.5 1,105.1
−Removed: Aerospace and Defense Electronics 628.7 589.4 690.1
−Removed: Engineered Systems 405.8 416.3 375.5
−Removed: Total net sales $ 4,614.3 $ 3,086.2 $ 3,163.6
−Removed: Operating income:
+Added: Issued — ( 220,339 )
+Added: Balance, January 1, 2023
47,194,766 282,131
−Removed: Digital Imaging $ 325.6 $ 192.8 $ 176.5
−Removed: Instrumentation 253.7 213.2 200.4
−Removed: Aerospace and Defense Electronics 133.2 80.8 143.4
−Removed: Engineered Systems 48.6 50.1 36.5
−Removed: Corporate expense ( 136.8 ) ( 56.8 ) ( 65.1 )
−Removed: Total operating income $ 624.3 $ 480.1 $ 491.7
−Removed: Depreciation and amortization:
+Added: In 2021, Teledyne issued approximately 9.5 million shares in connection with the FLIR acquisition.
+Added: See Note 3 for additional information about the FLIR acquisition.
+Added: Shares issued from treasury stock include stock options exercised as well as shares issued under certain other compensation plans.
+Added: Treasury Stock
+Added: In January 2016, the Company’s Board of Directors authorized a stock repurchase program authorizing the Company to repurchase up to 3,000,000 shares of its common stock.
+Added: The number of shares that the Company may repurchase will depend on a variety of factors, such as share price, levels of cash and borrowing capacity available, alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions.
+Added: Although the Company has no current plans to repurchase stock, future repurchases, if any, are expected to be funded with cash on hand and borrowings under the Company’s credit facility.
+Added: No repurchases were made since 2015.
+Added: Preferred Stock
+Added: Authorized preferred stock may be issued with designations, powers and preferences designated by the Board of Directors.
+Added: There were no shares of preferred stock issued or outstanding in 2022, 2021 or 2020.
+Added: Stock Incentive Plans
+Added: Teledyne has long-term incentive plans which provide its Board of Directors the flexibility to grant restricted stock, restricted stock units, performance shares, non-qualified stock options, incentive stock options and stock appreciation rights to officers and employees of Teledyne.
+Added: During 2022, 2021 and 2020, the Company has granted time-based stock options, time-based restricted stock unit awards, and performance-based restricted stock unit awards.
+Added: 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.
+Added: Employee time-based restricted stock units vest in one-third increments on the first, second and third anniversary of the grant.
+Added: Performance-based restricted stock awards granted during 2022, 2021 and 2020 may be earned based upon a time-based component and the performance of the Company's return to stockholders over a three-year period.
+Added: In 2021, the Company discontinued the Performance Share Plan ("PSP"), with an immaterial amount of compensation expense recorded in 2022 and 2021.
+Added: 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.
+Added: Awards were payable in cash and to the extent available, shares of Teledyne common stock.
+Added: Stock Options
+Added: The Company recorded $ 17.9 million, $ 20.0 million, and $ 24.7 million for stock option expense for 2022, 2021 and 2020, respectively.
+Added: The Company issues shares of common stock upon the exercise of stock options.
+Added: The total pretax intrinsic value of options exercised during 2022 and 2021 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $ 53.7 million and $ 64.2 million, respectively.
+Added: At January 1, 2023, the intrinsic value of stock options outstanding was $ 312.6 million and the intrinsic value of stock options exercisable was $ 306.1 million.
+Added: During 2022 and 2021, the amount of cash received from the exercise of stock options was $ 23.6 million and $ 25.4 million, respectively.
+Added: At January 1, 2023, there was $ 27.3 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 1.5 years.
+Added: The fair value of stock options is determined by using a lattice-based option pricing model.
+Added: 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.
+Added: The period used for the historical stock price corresponded to the expected term of the options.
+Added: The period used for the exchange traded options, if any, included the longest-dated options publicly available, generally three months .
+Added: The expected dividend yield is based on Teledyne’s practice of not paying dividends.
+Added: The risk-free rate of return is based on the yield of U.S.
+Added: Treasury Strips with terms equal to the expected life of the options as of the grant date.
+Added: The expected life in years is based on historical actual stock option exercise experience.
+Added: Stock option valuation assumptions:
2022 2021 2020
−Removed: Digital Imaging $ 309.2 $ 49.2 $ 48.5
−Removed: Instrumentation 38.1 38.3 35.9
−Removed: Aerospace and Defense Electronics 13.2 13.7 14.3
−Removed: Engineered Systems 7.2 9.2 6.0
−Removed: Corporate 4.1 5.8 7.2
−Removed: Total depreciation and amortization $ 371.8 $ 116.2 $ 111.9
−Removed: Capital expenditures:
+Added: Expected dividend yield n/a n/a n/a
+Added: Expected volatility 26.5 % 27.8 % 23.7 %
+Added: Risk-free interest rate 3.33 %
+Added: 0.09 % to 1.58 %
+Added: 1.50 % to 1.75 %
+Added: Expected life in years 6.4 5.2 6.6
+Added: Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2022, 2021 and 2020 was $ 124.44 , $ 134.88 and $ 106.26 , respectively.
+Added: Stock option transactions for Teledyne ’ s stock option plans are summarized as follows:
2022 2021 2020
−Removed: Digital Imaging $ 64.2 $ 33.4 $ 45.2
−Removed: Instrumentation 13.3 18.0 18.9
−Removed: Aerospace and Defense Electronics 8.4 10.4 19.0
−Removed: Engineered Systems 12.9 7.5 3.6
−Removed: Corporate 2.8 2.1 1.7
−Removed: Total capital expenditures $ 101.6 $ 71.4 $ 88.4
−Removed: Identifiable assets are those assets used in the operations of the segments.
−Removed: Corporate assets primarily consist of cash and cash equivalents, deferred taxes, pension assets and other assets.
−Removed: Identifiable assets:
+Added: Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price
+Added: Beginning balance 1,793,857 $ 206.08 1,819,147 $ 170.10 1,988,576 $ 130.67
+Added: Granted 135,751 $ 360.39 211,973 $ 440.48 247,273 $ 382.91
+Added: Exercised ( 179,828 ) $ 131.44 ( 213,384 ) $ 118.55 ( 382,554 ) $ 95.22
+Added: Canceled or expired ( 23,049 ) $ 397.36 ( 23,879 ) $ 328.15 ( 34,148 ) $ 252.43
+Added: Ending balance 1,726,731 $ 223.43 1,793,857 $ 206.08 1,819,147 $ 170.10
+Added: Options exercisable at end of period 1,395,949 $ 182.53 1,328,191 $ 148.73 1,242,786 $ 118.57
+Added: The following table provides certain information with respect to stock options outstanding and stock options exercisable at January 1, 2023, under the stock option plans.
+Added: Stock Options Outstanding Stock Options Exercisable
+Added: Range of Exercise Prices Shares Weighted Average Exercise Price Remaining life in years Shares Weighted Average Exercise Price
$ 40.70 -$ 99.99
−Removed: Digital Imaging $ 11,756.8 $ 2,000.8 $ 1,874.6
−Removed: Instrumentation 1,640.3 1,676.2 1,680.2
−Removed: Aerospace and Defense Electronics 536.3 567.6 618.3
−Removed: Engineered Systems 179.2 175.1 143.4
−Removed: Corporate 317.7 665.1 263.3
−Removed: Total identifiable assets $ 14,430.3 $ 5,084.8 $ 4,579.8
−Removed: Information on the Company’s sales by country of origin and long-lived assets by major geographic area was as follows:
−Removed: Sales by country of origin:
395,285 $ 84.21 2.0 395,285 $ 84.21
−Removed: United States $ 2,932.1 $ 2,078.7 $ 2,179.6
−Removed: Canada 458.1 333.7 301.0
−Removed: United Kingdom 286.3 237.5 251.7
−Removed: Belgium 227.3 10.7 10.2
−Removed: The Netherlands 127.0 105.5 134.2
−Removed: All other countries 583.5 320.1 286.9
−Removed: Total sales $ 4,614.3 $ 3,086.2 $ 3,163.6
−Removed: Long-lived assets:
$ 100.00 -$ 199.99
−Removed: United States $ 9,446.3 $ 1,707.0 $ 1,839.4
−Removed: Canada 763.5 372.9 355.0
−Removed: United Kingdom 622.4 539.5 492.2
−Removed: France 463.7 505.1 367.1
−Removed: All other countries 679.3 201.7 195.6
−Removed: Total long-lived assets $ 11,975.2 $ 3,326.2 $ 3,249.3
−Removed: Long-lived assets consist of property, plant and equipment, goodwill, acquired intangible assets, prepaid pension assets and other long-term assets including deferred compensation assets but excluding any deferred tax assets.
−Removed: Until purchase accounting for the FLIR acquisition is finalized, provisional amounts for goodwill and intangible assets are primarily included in the United States.
−Removed: The all other countries category primarily consists of Teledyne’s other operations in Europe.
−Removed: Product Lines
−Removed: The Instrumentation segment includes three product lines:
−Removed: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation.
−Removed: All other segments each contain one product line.
−Removed: The tables below provide a summary of the sales by product line for the Instrumentation segment (in millions):
−Removed: Instrumentation:
519,692 $ 153.53 4.6 519,692 $ 153.53
−Removed: Environmental Instrumentation $ 446.3 $ 411.3 $ 391.4
−Removed: Marine Instrumentation 424.1 426.3 450.2
−Removed: Test and Measurement Instrumentation 296.5 256.9 263.5
−Removed: Total $ 1,166.9 $ 1,094.5 $ 1,105.1
−Removed: Sales to the U.S.
−Removed: Government included sales to the U.S.
−Removed: Department of Defense of $ 876.6 million in 2021, $ 578.4 million in 2020, and $ 545.5 million in 2019.
−Removed: Total sales to international customers were $ 2,147.9 million in 2021, $ 1,385.3 million in 2020, and $ 1,391.6 million in 2019.
−Removed: Of these amounts, sales by operations in the United States to customers in other countries were $ 723.9 million in 2021, $ 546.8 million in 2020, and $ 638.0 million in 2019.
−Removed: There were no sales to individual countries outside of the United States in excess of 10 percent of the Company’s sales.
−Removed: Sales between business segments generally were priced at prevailing market prices and were $ 20.2 million, $ 23.4 million and $ 30.3 million for 2021, 2020 and 2019, respectively.
−Removed: We also disaggregate our revenue from contracts with customers by customer type and geographic region for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
−Removed: With the exception of the Engineered Systems segment, net sales in our segments is primarily derived from fixed price contracts.
−Removed: Net sales in the Engineered Systems segment is typically between 45 % and 55 % fixed price contracts in a given reporting period, with the balance of net sales derived from cost type contracts.
−Removed: For the year ended January 2, 2022, approximately 47 % of net sales in the Engineered Systems segment was derived from fixed price contracts.
−Removed: Fiscal Year Ended
−Removed: January 2, 2022 Fiscal Year Ended
−Removed: January 3, 2021 Fiscal Year Ended
−Removed: December 29, 2019
−Removed: Customer Type Customer Type Customer Type
−Removed: (in millions) United States Government (a) Other, Primarily Commercial Total United States Government (a) Other, Primarily Commercial Total United States Government (a) Other, Primarily Commercial Total
−Removed: Digital Imaging $ 515.9 $ 1,897.0 $ 2,412.9 $ 120.9 $ 865.1 $ 986.0 $ 107.4 $ 885.5 $ 992.9
−Removed: Instrumentation 91.6 1,075.3 1,166.9 80.6 1,013.9 1,094.5 80.4 1,024.7 1,105.1
−Removed: Aerospace and Defense Electronics 227.2 401.5 628.7 229.9 359.5 589.4 225.3 464.8 690.1
−Removed: Engineered Systems 358.4 47.4 405.8 386.8 29.5 416.3 338.9 36.6 375.5
−Removed: Total $ 1,193.1 $ 3,421.2 $ 4,614.3 $ 818.2 $ 2,268.0 $ 3,086.2 $ 752.0 $ 2,411.6 $ 3,163.6
−Removed: a) Includes sales as a prime contractor or subcontractor.
−Removed: Fiscal Year Ended
−Removed: January 2, 2022 Fiscal Year Ended
−Removed: January 3, 2021 Fiscal Year Ended
−Removed: December 29, 2019
−Removed: Geographic Region (a) Geographic Region (a) Geographic Region (a)
−Removed: (in millions) United States Europe All other Total United States Europe All other Total United States Europe All other Total
−Removed: Digital Imaging $ 1,144.9 $ 642.7 $ 625.3 $ 2,412.9 $ 309.3 $ 272.9 $ 403.8 $ 986.0 $ 316.1 $ 299.4 $ 377.4 $ 992.9
−Removed: Instrumentation 857.9 248.2 60.8 1,166.9 844.4 204.4 45.7 1,094.5 899.7 164.8 40.6 1,105.1
−Removed: Aerospace and Defense Electronics 523.5 105.2 — 628.7 508.7 80.1 0.6 589.4 588.3 100.8 1.0 690.1
−Removed: Engineered Systems 405.8 — — 405.8 416.3 — — 416.3 375.5 — — 375.5
+Added: $ 200.00 -$ 299.99
+Added: 279,956 $ 217.67 6.1 279,956 $ 217.67
+Added: $ 300.00 -$ 399.99
+Added: 338,503 $ 373.88 8.2 135,248 $ 382.91
+Added: $ 400.00 -$ 445.21
+Added: 193,295 $ 440.89 8.7 65,768 $ 440.90
+Added: 1,726,731 $ 223.43 5.4 1,395,949 $ 182.53
+Added: Restricted Stock
+Added: The following table shows restricted stock award activity:
+Added: Employee Time-Based Restricted Stock Units Employee Performance-Based Restricted
+Added: Stock Awards Non-Employee Directors Restricted Stock Units
+Added: Restricted Stock:
+Added: Shares Weighted average fair value per share Shares Weighted average fair value per share Shares Weighted average fair value per share
+Added: Balance, December 29, 2019 — $ — 56,412 $ 158.62 $ 9,067 $ 199.90
+Added: Granted — $ — 10,080 $ 360.33 3,692 $ 312.41
+Added: Vested — $ — ( 23,087 ) $ 114.74 ( 2,640 ) $ 249.72
+Added: Forfeited/Canceled — $ — — $ — ( 353 ) $ 311.17
+Added: Balance, January 3, 2021
+Added: — $ — 43,405 $ 228.80 9,766 $ 224.94
+Added: Granted 62,974 $ 409.41 10,227 $ 334.92 2,592 $ 450.27
+Added: Vested ( 8,720 ) $ 409.41 ( 15,423 ) $ 176.64 ( 5,300 ) $ 227.90
+Added: Forfeited/Canceled ( 4,903 ) $ 409.41 ( 380 ) $ 176.64 — $ —
+Added: Balance, January 2, 2022
+Added: 49,351 $ 409.41 37,829 $ 279.27 7,058 $ 308.54
+Added: Granted 89,472 $ 360.39 19,492 $ 427.51 3,904 $ 451.13
+Added: Vested ( 15,698 ) $ 409.41 ( 17,522 ) $ 200.00 ( 1,440 ) $ 450.27
+Added: Forfeited/Canceled ( 5,653 ) $ 399.20 ( 398 ) $ 388.15 — $ —
+Added: Balance, January 1, 2023
+Added: 117,472 $ 372.51 39,401 $ 386.76 9,522 $ 345.57
+Added: Employee Time-based Restricted Stock Units
+Added: Prior to 2021, the Company had no outstanding employee restricted stock units subject only to time-based vesting.
+Added: As part of the acquisition of FLIR, the Company assumed certain unvested restricted stock units that were issued by FLIR in March 2021.
+Added: The unvested restricted stock units were converted to 62,974 Teledyne restricted stock units.
+Added: In October 2022, the Company granted 89,472 restricted stock units with a weighted average fair value of $ 360.39 per share.
+Added: The Company recorded $ 7.8 million in compensation expense related to restricted stock units to employees for both fiscal years 2022 and 2021.
+Added: The majority of the expense related to these restricted stock units is included in the Digital Imaging segment results.
+Added: This amount can be impacted by employee retirements, terminations or other awards granted during the remainder of the year.
+Added: At January 1, 2023, there was $ 36.8 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 2.5 years.
+Added: Employee Performance-based Restricted Stock Awards
+Added: 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.
+Added: The restricted stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”.
+Added: The restrictions have both time-based and performance-based components.
+Added: 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.
+Added: If employment is terminated (other than by death, retirement or disability) during the restricted period, the stock grant is forfeited.
+Added: 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, the S&P 500 Index for awards granted since 2021, the Russell 1000 Index for awards granted from 2018 to 2020 and the Russell 2000 for awards granted prior to 2018.
+Added: The Company recorded $ 5.1 million, $ 3.5 million and $ 3.3 million in compensation expense related to restricted stock awards to employees, for fiscal years 2022, 2021 and 2020, respectively.
+Added: At January 1, 2023, there was $ 6.7 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.5 years.
+Added: Non-Employee Directors Restricted Stock
+Added: Non-employee directors each received restricted stock units valued at $ 170,000 in 2022, $ 130,000 in 2021 and $ 110,000 in 2020 or valued at half the amount for a person who becomes a director for the first time after the date of the Annual Meeting.
+Added: 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.
+Added: The annual expense related to non-employee director’s restricted stock units was $ 1.7 million for 2022, $ 1.2 million for 2021 and
+Added: $ 1.1 million for 2020, with an immaterial amount of unrecognized compensation cost that will be recognized over the first half of 2023.
+Added: Earnings Per Share
+Added: The following table sets forth the computations of basic and diluted earnings per common share (amounts in millions, except per share data):
+Added: Earnings Per Common Share:
+Added: 2022 2021 2020
+Added: Net income attributable to Teledyne $ 788.6 $ 445.3 $ 401.9
+Added: Basic earnings per common share:
+Added: Weighted average common shares outstanding 46.8 43.2 36.7
+Added: Basic earnings per common share $ 16.85 $ 10.31 $ 10.95
+Added: Diluted earnings per share:
+Added: Weighted average common shares outstanding 46.8 43.2 36.7
+Added: Effect of diluted securities (primarily stock options) 0.9 1.1 1.2
+Added: Weighted average diluted common shares outstanding 47.7 44.3 37.9
+Added: Diluted earnings per common share $ 16.53 $ 10.05 $ 10.62
+Added: In 2022, 2021 and 2020, the Company excluded approximately 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.
+Added: Accumulated Other Comprehensive Income (Loss)
+Added: The following table summarizes the changes in AOCI for the fiscal years ended January 1, 2023, and January 2, 2022:
+Added: (in millions) Foreign Currency Translation Cash Flow Hedges Pension and Postretirement Benefits Total
+Added: Balance as of January 3, 2021 $ ( 84.6 ) $ 2.3 $ ( 347.8 ) $ ( 430.1 )
+Added: Other comprehensive income (loss) before reclassifications ( 44.4 ) 18.0 — ( 26.4 )
+Added: Amounts reclassified from AOCI — ( 23.7 ) 50.2 26.5
+Added: Net other comprehensive income (loss) ( 44.4 ) ( 5.7 ) 50.2 0.1
+Added: Balance as of January 2, 2022 ( 129.0 ) ( 3.4 ) ( 297.6 ) ( 430.0 )
+Added: Other comprehensive income (loss) before reclassifications ( 343.3 ) 16.4 — ( 326.9 )
+Added: Amounts reclassified from AOCI — ( 11.7 ) 42.1 30.4
+Added: Net other comprehensive income (loss) ( 343.3 ) 4.7 42.1 ( 296.5 )
+Added: Balance as of January 1, 2023 $ ( 472.3 ) $ 1.3 $ ( 255.5 ) $ ( 726.5 )
+Added: The reclassification out of AOCI for the fiscal years ended January 1, 2023, and January 2, 2022, are as follows:
+Added: (in millions) Amount reclassified from AOCI Amount reclassified from AOCI Financial Statement Presentation
+Added: Gain (loss) on cash flow hedges:
+Added: Gain (loss) recognized in income on derivatives $ ( 15.7 ) $ ( 31.7 ) See Note 14
+Added: Income tax impact 4.0 8.0 Provision for income taxes
Total $ ( 11.7 ) $ ( 23.7 )
−Removed: a) Net sales by geographic region of origin.
−Removed: Lease Commitments
−Removed: Lease Commitments
−Removed: We determine if an arrangement is a lease at inception.
−Removed: Operating leases are recorded as right-of-use assets, other long-term lease liabilities and current accrued liabilities in our consolidated balance sheets.
−Removed: Finance leases are included in property and equipment, current accrued liabilities, and other long-term liabilities in our consolidated balance sheets.
−Removed: Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.
−Removed: 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.
−Removed: Since most of our leases do not provide an implicit rate, we use the incremental borrowing rate to determine the present value of lease payments.
−Removed: 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.
−Removed: Our lease agreements may include options to extend the lease term at either a fixed cost, fixed increase or market value adjustment.
−Removed: We evaluate 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.
−Removed: Lease expense for operating leases is recognized on a straight-line basis over the lease term.
+Added: Amortization of defined benefit pension and postretirement plan items:
+Added: Amortization of prior service cost $ ( 1.8 ) $ ( 3.5 ) See Note 10
+Added: Amortization of net actuarial loss 22.7 26.8 See Note 10
+Added: Pension adjustments 45.2 36.6 See Note 10
+Added: Total before tax 66.1 59.9
+Added: Income tax impact ( 24.0 ) ( 9.7 )
+Added: Net of tax $ 42.1 $ 50.2
+Added: Derivative Instruments
+Added: As of January 1, 2023, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and to sell U.S.
+Added: dollars totaling $ 125.8 million.
+Added: These foreign currency forward contracts have maturities ranging from March 2023 to February 2024.
+Added: As of January 1, 2023, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy British pounds and to sell U.S.
+Added: dollars totaling $ 16.8 million.
+Added: These foreign currency forward contracts have maturities ranging from March 2023 to February 2024.
+Added: The cross currency swaps have notional amounts of € 130.0 million and $ 125.0 million, and € 156.0 million and $ 150.0 million, and mature in March 2023 and October 2024, respectively.
+Added: The interest rate swap has a notional amount of $ 125.0 million U.S.
+Added: dollars and matures in March 2023.
+Added: In addition, the Company utilizes foreign currency forward contracts which are not designated as hedging instruments for accounting purposes to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables.
+Added: As of January 1, 2023, Teledyne had foreign currency contracts of this type primarily in the following pairs (in millions):
+Added: Contracts to Buy Contracts to Sell
+Added: Currency Amount Currency Amount
+Added: Canadian Dollars $ 236.1 U.S.
+Added: Dollars US$ 178.6
+Added: Euros € 237.4 U.S.
+Added: Dollars US$ 237.2
+Added: Great Britain Pounds £ 89.5 U.S.
+Added: Dollars US$ 104.9
+Added: Dollars US$ 15.6 Swedish Krona kr 168.8
+Added: Danish Krone Kr.
+Added: Dollars US$ 10.0
+Added: Swedish Krona kr 491.1 Euros € 46.0
+Added: Norwegian Krone kr 214.7 Swedish Krona kr 231.4
+Added: The above table includes non-designated hedges derived from terms contained in triggered or previously designated cash flow hedges.
+Added: The gains and losses on these derivatives which are not designated as hedging instruments, are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.
+Added: All derivatives are recorded on the balance sheet at fair value.
+Added: The accounting for income and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting.
+Added: Teledyne does not use foreign currency forward contracts for speculative or trading purposes.
+Added: The effect of derivative instruments designated as cash flow hedges for 2022 and 2021 was as follows (in millions):
+Added: Net gain (loss) recognized in AOCI - foreign exchange contracts (a) $ 17.6 $ 23.6
+Added: Net gain (loss) recognized in AOCI - interest rate contracts $ 1.7 $ 0.4
+Added: Net gain (loss) reclassified from AOCI into revenue/cost of sales - foreign exchange contracts $ 4.8 $ 9.2
+Added: Net gain (loss) reclassified from AOCI into interest expense - foreign exchange contracts $ 5.2 $ 3.4
+Added: Net gain (loss) reclassified from AOCI into interest expense -interest rate contracts $ 0.4 $ ( 1.6 )
+Added: Net gain (loss) reclassified from AOCI into other income and expense, net - foreign exchange contracts (b) $ 15.5 $ 20.7
+Added: (a) Effective portion
+Added: (b) Amount reclassified to offset earnings impact of liability hedged by cross currency swap
+Added: Net deferred losses recorded in AOCI, net of tax, for forward contracts that will mature in the next 12 months total $ 5.0 million.
+Added: These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item.
+Added: Amounts related to the cross currency swaps and interests rate swap expected to be reclassified from AOCI into income in the next 12 months total $ 7.2 million.
+Added: The effect of derivative instruments not designated as cash flow hedges recognized in other income and expense for 2022 and 2021 was an expense of $ 32.0 million and income of $ 21.9 million, respectively.
+Added: Fair Value Measurements
+Added: Cash equivalents were $ 167.1 million at January 1, 2023 and less than $ 0.1 million at January 2, 2022.
+Added: The Company has categorized its cash equivalents as a Level 1 financial asset, measured at fair value based on quoted prices in active markets of identical assets.
+Added: Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates.
+Added: The Company’s long-term debt is considered a level 2 fair value hierarchy and is valued based on observable market data.
+Added: As of January 1, 2023 and January 2, 2022, the aggregate fair values of our borrowings were $ 3,492.7 million and $ 4,146.6 million, respectively, and the carrying values were $ 3,947.1 million and $ 4,130.0 million,
+Added: respectively.
+Added: The fair values of the Company’s derivative financial instruments are presented below.
+Added: All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy (in millions):
+Added: Asset (Liability) Derivative Positions Balance sheet location January 1, 2023 January 2, 2022
+Added: Derivatives designated as hedging instruments:
+Added: Cash flow forward contracts Other current assets $ 0.4 $ 0.3
+Added: Cash flow forward contracts Accrued liabilities ( 6.8 ) ( 1.2 )
+Added: Interest rate contracts Other current assets 0.7 —
+Added: Interest rate contracts Accrued liabilities — ( 1.2 )
+Added: Interest rate contracts Other long-term liabilities — ( 0.1 )
+Added: Cash flow cross currency swaps Other current assets 2.7 3.9
+Added: Cash flow cross currency swaps Accrued liabilities ( 14.0 ) —
+Added: Cash flow cross currency swaps Other long-term liabilities ( 18.3 ) ( 9.4 )
+Added: Total derivatives designated as hedging instruments ( 35.3 ) ( 7.7 )
+Added: Derivatives not designated as hedging instruments:
+Added: Non-designated foreign currency forward contracts Other current assets 3.5 4.7
+Added: Non-designated foreign currency forward contracts Accrued liabilities ( 7.0 ) ( 2.1 )
+Added: Total derivatives not designated as hedging instruments ( 3.5 ) 2.6
+Added: Total asset (liability) derivatives $ ( 38.8 ) $ ( 5.1 )
+Added: The carrying value of other on-balance-sheet financial instruments approximates fair value, and the cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.
Operating Leases
−Removed: Teledyne has approximately 165 long-term operating lease agreements for manufacturing facilities and office space.
+Added: 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.
−Removed: We account for lease and non-lease components as a single lease component when the payments are fixed.
+Added: 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.
−Removed: At January 2, 2022, Teledyne has right-of-use assets of $ 144.5 million included in other long-term other assets on the balance sheet.
+Added: At January 1, 2023, Teledyne has right-of-use assets of $ 142.1 million included in noncurrent other assets, net on the consolidated balance sheets.
At January 1, 2023, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in millions):
5 unchanged sentences
Present value of minimum lease payments, net of current portion $ 125.9
−Removed: The weighted average remaining lease term for operating leases is approximately 7.8 years and the weighted average discount rate is approximately 3.48 % Rental expense under operating leases, including leases with a term of 12 months or less, net of immaterial sublease income, was $ 40.9 million in 2021, $ 29.4 million in 2020 and $ 26.5 million in 2019.
+Added: The weighted average remaining lease term for operating leases is approximately 7.0 years and the weighted average discount rate is approximately 3.53 %.
+Added: Rental expense under operating leases, including leases with a term of 12 months or less, net of immaterial sublease income, was $ 45.1 million in 2022, $ 40.9 million in 2021 and $ 29.4 million in 2020.
+Added: Variable lease expense was $ 5.9 million in 2022, $ 5.8 million in 2021 and $ 5.3 million in 2020.
Cash paid for amounts included in the measurement of lease liabilities was $ 36.9 million for 2022 and $ 39.7 million for 2021.
+Added: Right-of-use assets obtained in
+Added: exchange for lease obligations was $ 26.1 million for 2022 and $ 24.3 million for 2021
Finance Leases and Subleases
2 unchanged sentences
The Company is subject to federal, state and local environmental laws and regulations which require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations, including sites at which the Company has been identified as a potentially responsible party under the federal Superfund laws and comparable state laws.
−Removed: In accordance with the Company’s accounting policy disclosed in Note 2, environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable.
−Removed: In many cases, however, investigations are not yet at a stage where the Company has been able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss, or certain components thereof.
−Removed: Estimates of the Company’s liability are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and estimates of appropriate cleanup technology, methodology and cost, the extent of corrective actions that may be required, and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation.
−Removed: Accordingly, as investigation and remediation of these sites proceeds, it is likely that adjustments in the Company’s accruals will be necessary to reflect new information.
−Removed: The amounts of any such adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the amounts, and the possible range of loss in excess of the amounts accrued, are not reasonably estimable.
−Removed: Based on currently available information, however, management does not believe that future environmental costs in excess of those accrued with respect to sites with which the Company has been identified are likely to have a material adverse effect on the Company’s financial condition or liquidity.
−Removed: At January 2, 2022, the Company’s reserves for environmental remediation obligations totaled $ 6.3 million, of which $ 1.7 million is included in current accrued liabilities with the remainder included in long-term accrued liabilities.
+Added: At January 1, 2023, the Company’s reserves for environmental remediation obligations totaled $ 5.8 million, of which $ 1.6 million is included in current accrued liabilities and the remainder included in other long-term liabilities .
The Company periodically evaluates whether it may be able to recover a portion of future costs for environmental liabilities from its insurance carriers and from third parties.
1 unchanged sentence
The Company expects that it will expend present accruals over many years and will complete remediation of all sites with which it has been identified in up to thirty years .
−Removed: On April 24, 2018, FLIR entered into a Consent Agreement with the United States Department of State’s Directorate of Defense Trade Controls to resolve allegations regarding the unauthorized export of technical data and defense services to dual and third country nationals in certain of FLIR’s facilities, the failure to properly use and manage export licenses and export authorizations, and failures to report certain payments under 22 CFR Part 130 in potential violation of International Traffic in Arms Regulations (“ITAR”).
−Removed: The Consent Agreement has a four-year term and provides for:
−Removed: (i) a civil penalty of $ 30.0 million with $ 15.0 million of this amount suspended on the condition that the funds have or will be used for Department-approved Consent Agreement remedial compliance measures, (ii) the appointment of an external Special Compliance Official to oversee compliance with the Consent Agreement and the ITAR;
−Removed: (iii) two external audits of our ITAR compliance program;
−Removed: and (iv) continued implementation of ongoing remedial compliance measures and additional remedial compliance measures related to automated systems and ITAR compliance policies, procedures, and training.
−Removed: While FLIR has enhanced its trade compliance program more broadly, implemented and continues to implement remedial measures and has undergone its first external audit and just concluded its second external audit of FLIR’s ITAR compliance program, additional adverse disclosures and findings could materially cause incurrence of additional expenses in connection with implementation of remedial measures and result in a substantial adjustment to our revenue and net income.
−Removed: As of January 2, 2022, under the Consent Agreement, $ 3.5 million remains to be paid by April 24, 2022.
−Removed: FLIR’s investments to date in remedial compliance measures have been more than sufficient to cover the $ 15.0 million suspension amount.
−Removed: In June 2017, the Bureau of Industry and Security (“BIS”) of the United States Department of Commerce informed FLIR of additional export licensing requirements that restricted the FLIR’s ability to sell certain thermal products without a license to customers in China not identified on a list maintained by the United States Department of Commerce.
−Removed: This action was precipitated by concerns of sale without a license or potential diversion of some of FLIR’s products to prohibited end users and to countries subject to economic and other sanctions implemented by the United States.
−Removed: BIS subsequently favorably modified these restrictions to reduce the applicability of the restrictions to sales of FLIR's Tau camera cores (as opposed to finished products containing Tau camera cores) to customers in China not identified on a list maintained by the United States Department of Commerce and persons in a country other than those in the Export Administration Regulations (“EAR”) Country Group A:5 (Supplement No.
−Removed: 1 to Part 740 of the EAR).
−Removed: FLIR has identified certain shipments that potentially violate these license requirements and voluntary disclosed this matter to BIS.
−Removed: In April 2021, FLIR resolved allegations of misrepresentations made to BIS, between November 2012 and December 2013, in a commodity jurisdiction request relating to newly developed Lepton uncooled focal plane arrays by an administrative settlement and fine of $ 0.3 million and agreeing to perform two internal audits of its EAR export compliance programs.
−Removed: The first internal audit has been completed and another voluntary disclosure has been filed to report potential violations.
−Removed: FLIR has made other voluntary disclosures to the U.S.
−Removed: Department of State and U.S.
−Removed: Department of Commerce, including to BIS with respect to the shipments of products from non-U.S.
−Removed: jurisdictions which were not licensed due to incorrect de minimis calculation methodology.
−Removed: If FLIR is found to have violated applicable rules and regulations with respect to customers and limitations on the export and end use of its products, FLIR could be subject to substantial fines and penalties, suspension of existing licenses or other authorizations and/or loss or suspension of export privileges.
−Removed: At this time, based on available information, we are unable to reasonably estimate the time it may take to resolve these matters or the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection with these matters.
+Added: Effective April 24, 2022, the United States Department of State’s Office of Defense Trade Controls Compliance (“DDTC”) closed the four-year Consent Agreement that had been entered into by FLIR Systems, Inc.
+Added: to resolve allegations regarding various violations of the International Traffic in Arms Regulations (“ITAR”).
+Added: On April 13, 2022, Teledyne paid $ 3.5 million as the final installment of the civil penalty under the Consent Agreement.
+Added: While FLIR and its successor by mergers, Teledyne FLIR, have enhanced the trade compliance program more broadly, implemented remedial measures and have undergone external audits of the ITAR compliance program, future adverse disclosures and findings could cause incurrence of additional expenses in connection with potential penalties or further remedial measures.
+Added: In April 2021, FLIR resolved allegations of misrepresentations made to the U.S.
+Added: Department of Commerce, Bureau of Industry and Security (“BIS”), between November 2012 and December 2013, in a commodity jurisdiction request relating to newly developed Lepton uncooled focal plane arrays by an administrative settlement and fine of $ 0.3 million and agreeing to perform two internal audits of its EAR export compliance programs.
+Added: The first internal audit has been completed timely and another voluntary disclosure had been filed to report potential violations.
+Added: This case was closed without further action by BIS with the issuance of a warning letter.
+Added: The second internal audit was completed timely in October 2022, for which a voluntary disclosure was also filed and is still pending disposition.
+Added: Teledyne has made other voluntary disclosures to the U.S.
+Added: Department of State and the U.S.
+Added: Department of Commerce, including to BIS with respect to Teledyne FLIR shipments of products from non-U.S.
+Added: jurisdictions which were not authorized due to a potentially incorrect de minimis calculation methodology under section 734.4 and Supplement No.
+Added: 2 of the EAR.
+Added: Furthermore, Teledyne has made voluntary disclosures to export authorities in jurisdictions outside the U.S.
+Added: for certain potential violations of local export laws, which may increase its penalty exposure.
+Added: At this time, based on available information, the Company is unable to reasonably estimate the time it may take to resolve these matters or the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection with these matters.
However, 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 an outcome becomes estimable or known.
−Removed: Certain provisional adjustments have been made for the FLIR historical export compliance matters in Teledyne’s current preliminary estimates of its purchase price allocation.
−Removed: The final acquisition accounting adjustments for these matters may be materially different, as Teledyne obtains additional information on these matters and as additional information is made known during the post-acquisition measurement period.
−Removed: See Note 3 to these Notes to Consolidated Financial Statements for information regarding FLIR historical tax matters that existed at the date of the acquisition, including the Swedish Tax Authority's reassessment of tax for the year ending December 31, 2012 related to one of FLIR’s non-operating subsidiaries in Sweden.
Various claims (whether based on U.S.
7 unchanged sentences
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.
−Removed: 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.
+Added: While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be
+Added: 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.
Subsequent Events
−Removed: On January 26, 2022, the Administrative Court of Appeal in Stockholm, Sweden generally affirmed the March 2020 ruling of the First Instance Court and determined a tax liability in the amount of SEK 2.765 billion.
−Removed: We paid the tax on February 2, 2022 totaling $ 296.4 million.
−Removed: We are evaluating the ruling.
−Removed: As a result of the payment, the Swedish Tax Authority cancelled the standby letter of credit of $ 244.6 million.
+Added: On January 3, 2023, the Company acquired ChartWorld International Limited and affiliates ("ChartWorld").
+Added: 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.
+Added: ChartWorld is part of the Digital Imaging segment.
Schedule II VALUATION AND QUALIFYING ACCOUNTS
VALUATION AND QUALIFYING ACCOUNTS
−Removed: For the Fiscal Years Ended January 2, 2022, January 3, 2021 and December 29, 2019
+Added: For the Fiscal Years Ended January 1, 2023, January 2, 2022 and January 3, 2021
(in millions)
20 unchanged sentences
3.1 Restated Certificate of Incorporation of Teledyne Technologies Incorporated (including Certificate of Designation of Series A Junior Participating Preferred Stock) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No.
−Removed: 3.2 Third Amended and Restated Bylaws of Teledyne Technologies Incorporated (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 27, 2021 (File No.
−Removed: 4.1 Description of the Registrant's Securities *
+Added: 3.2 F o urth Amended and Restated Bylaws of Teledyne Technologies Incorporated (incorporated by reference to Exhibit 3.
+Added: 2 to the Company’s Current Report on Form 8-K dated December 20, 2022 (File No.
+Added: 4.1 Description of the Registrant's Securities (incorporated by reference to Ex hibit 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 2022 (File No.
4.2 Indenture, dated as of March 22, 2021, between Teledyne Technologies Incorporated and U.S.
27 unchanged sentences
10.17 Form of Stock Option Award Agreement under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 23, 2018)†
−Removed: 10.18 Terms and Conditions of Stock Option Award Agreement under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan for grants made after 2018 (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 File No.
+Added: 10.18 Terms and Conditions of Stock Option Award Agreement under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan for grants made after 2018 to Robert Me h rabian and Aldo Pichelli (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 File No.
10.19 Summary Plan Description for the Performance Share Plan 2018-2020 Cycle under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K dated January 23, 2018)†
1 unchanged sentence
10.21 Seventh Amended and Restated Employment Agreement dated as of August 27, 2021, by and between Teledyne Technologies Incorporated and Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 27, 2021 (File No.
−Removed: 10.22 Employment Agreement, by and between Teledyne Technologies Incorporated and Aldo Pichelli, dated as of October 23, 2018.
−Removed: (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 23, 2018) (File No.
−Removed: 10.23 Amendment No.
−Removed: 1 to Employment Agreement dated as of January 26, 2021, by and between Teledyne Technologies Incorporated and Aldo Pichelli*†
−Removed: 10.24 Amendment Number 2 to Employment Agreement dated as of August 27, 2021, by and between Teledyne Technologies Incorporated and Aldo Pichelli (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated August 27, 2021 (File No.
10.25 Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No.
−Removed: 10.26 Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Al Pichelli (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No.
10.27 Amended and Restated change in Control Severance Agreement dated January 31, 2011, by and between Teledyne Technologies Incorporated and Susan L.
2 unchanged sentences
10.29 Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Melanie Cibik (incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year end December 29, 2013 (File No.
+Added: 10.30 Amended and Restated Change in Control Severance Agreement, dated as of January31, 2011, by and between Teledyne Technologies Incorporated and Edwin Roks (incorporated by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the fiscal year end December 30, 2018 (File No.
10.31 Teledyne Technologies Incorporated Executive Deferred Compensation Plan, as originally effective as of November 29, 1999, as amended and restated effective December 31, 2004 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 31, 2008)(File No.
4 unchanged sentences
10.36 Joinder Agreement of Teledyne FLIR, LLC, dated as of May 14, 2021, to Amended and Restated Credit Agreement dated as of March 4, 2021, by and among Teledyne Technologies Incorporated, as a borrower and guarantor, the designated borrowers party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated May 14, 2021) (File No.
−Removed: 10.36 Amended and Restated Term Loan Credit Agreement, dated October 30, 2019, by an among Teledyne Technologies Incorporated and Teledyne Netherlands BV, as borrowers, the several banks and other financial institutions form time to time parties thereto as lenders, Bank of America, N.A., as administrative agent, and B of A Securities, Inc., as sole book manager and sole lead arranger (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 30, 2019).
+Added: 10.37 Amended and Restated Term Loan Credit Agreement, dated October 30, 2019, by an d among Teledyne Technologies Incorporated and Teledyne Netherlands BV, as borrowers, the several banks and other financial institutions form time to time parties thereto as lenders, Bank of America, N.A., as administrative agent, and B of A Securities, Inc., as sole book manager and sole lead arranger (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 30, 2019).
10.38 First Amendment to Amended and Restated Term Loan Credit Agreement dated as of January 19, 2021, by and among Teledyne Technologies Incorporated and Teledyne Netherlands BV, as borrowers, the guarantors party thereto, the several banks and other financial institutions from time to time parties thereto as lenders and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 19, 2021 File No.
10 unchanged sentences
Bank National Association, as trustee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 14, 2021) (File No.
−Removed: 10.45 Note Purchase and Guaranty Agreement, dated as of April 18, 2017, by and among Teledyne Technologies Incorporated, Teledyne Netherlands B.V.
−Removed: and the purchasers identified therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 18, 2017).
10.46 Form of Indemnification Agreement executed by each of the Company’s directors and named executive officers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 22, 2009 (File No.
36 unchanged sentences
* Director February 24, 2023
−Removed: * Director February 25, 2022
Charles Crocker
7 unchanged sentences
* Director February 24, 2023
+Added: * Director February 24, 2023
/s/ Melanie S.
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.