What changed in this filing

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Item 1. Business

2024-02-23 compared with 2023-02-24 · 68 added, 73 removed, 153 unchanged (48% of the section changed)

Teledyne Technologies Incorporated is a Delaware corporation that became an independent public company effective November 29, 1999.

We provide 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.

(“FLIR”), we 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.

Teledyne Technologies Incorporated is a Delaware corporation that provides enabling technologies for industrial growth markets that require advanced technology and high reliability.

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

Our products include digital imaging sensors, cameras and systems within the visible, infrared and X-ray spectra, monitoring and control instrumentation for marine and environmental applications, harsh environment interconnects, electronic test and measurement equipment, aircraft information management systems, and defense electronics and satellite communication subsystems.

We also supply engineered systems for defense, space, environmental and energy applications.

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.

We believe our technological capabilities, 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.

The following description of our business should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K.

We believe our technological capabilities, innovation and 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.

We became an independent public company effective November 29, 1999.

The following description of our business should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K.

Recent Developments

Consistent with our strategy, we completed two acquisitions in 2022 and one acquisition in 2021.

Our May 2021 acquisition of FLIR was our largest acquisition to date.

Consistent with our strategy, we completed two acquisitions each in 2023 and in 2022.

The financial results of these acquisitions have been included since the respective date of each acquisition.

All acquisitions in 2022 and 2021 were part of the Digital Imaging segment.

See Note 3 for additional information about our recent acquisitions.

As discussed in Note 18 , we have completed one acquisition in early 2023, which is part of the Digital Imaging segment.

Our 2023 acquisitions were within the Digital Imaging and Instrumentation segments, and both acquisitions in 2022 were part of the Digital Imaging segment.

See Note 3 for additional information about our recent business acquisitions.

Our Business Segments

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Digital Imaging Segment

Our Digital Imaging segment includes high-performance sensors, cameras, and systems, within the visible, infrared, ultraviolet and X-ray spectra for use in industrial, scientific, government, space, defense, security and medical applications, among others.

We also produce and provide manufacturing services for micro electromechanical systems (“MEMS”) and high-performance, high-reliability semiconductors including analog-to-digital and digital-to-analog converters, as well as unmanned aerial and ground systems.

This segment also includes our sponsored and centralized research laboratories.

This segment also includes our customer- and Company-sponsored applied research center.

Through this segment, we provide visible spectrum sensors and digital cameras for industrial machine vision and automated quality control, as well as for medical, research and scientific applications.

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We develop high-resolution, low-dose X-ray sensors as well as high-power microwave and high-energy X-ray subsystems for medical, dental and industrial applications.

We also provide instruments for the measurement of physical properties and other maritime products for recreational and commercial customers globally.

We also provide instruments for the measurement of physical properties and maritime products for recreational and commercial customers globally.

We provide research and engineering capabilities primarily in the areas of electronics, materials, optical systems, and information science to military, aerospace and industrial customers, as well as to various businesses throughout Teledyne.

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Marine Instrumentation

We offer a variety of products designed for use in harsh underwater environments, instruments that measure currents and other physical properties in the water column, systems that create acoustic images of objects beneath the water’s surface, including the bottom of a body of water, and sensors that determine the geologic structure below the bottom.

We offer a variety of products designed for use in harsh underwater environments, instruments that measure currents and other physical properties in the water column, systems that create acoustic images of objects beneath the water’s surface, including the bottom of a body of water, instruments for navigation and sensors that determine the geologic structure below the bottom.

We also design and manufacture vehicles that utilize and transport these sensors over and beneath the water’s surface.

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We manufacture subsea, wet-mateable electrical and fiber-optic interconnect systems and subsea pressure vessel penetrators and connector systems with glass-to-metal seals.

Our waterproof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies are used in underwater equipment, submerged monitoring systems and other industrial applications.

Our waterproof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies are used in underwater equipment, submerged monitoring systems and other industrial and defense applications.

Other marine products used by the U.S.

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

We also supply monitoring systems for the detection, measurement and automated reporting of air pollutants from industrial stack emissions, ozone generators and other process gas monitoring instruments.

We supply monitoring systems for the detection, measurement and automated reporting of air pollutants from industrial stack emissions, ozone generators and other process gas monitoring instruments.

We also supply water monitoring systems for wastewater monitoring and detection of water-borne pathogens and contaminants of concern.

Our instrumentation is used to detect a variety of water quality parameters and in applications found in petrochemical and refinery facilities.

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In addition, we manufacture liquid chromatography instruments and accessories for the purification of organic compounds, which include highly sensitive evaporative light scanning detectors, primarily for pharmaceutical laboratories involved in drug discovery and development.

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

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

Finally, we manufacture 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 wastewater treatment.

Test and Measurement Instrumentation

We believe our test and measurement products provide unique, world-class capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly.

Our test and measurement products provide capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly.

Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in a broad range of industries, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics mobile and power electronics.

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Our leadership in USB and video technologies provides a unique base to service the mobile, internet of things, automotive and consumer electronics test markets.

We also produce protocol validation and test tools for high-performance solid-state storage devices used in both enterprise-grade data centers and in consumer computing applications.

We also produce protocol validation and test tools for high-performance solid-state storage devices used in both enterprise-

grade data centers and in consumer computing applications.

Our recently introduced interposers and software options allow engineers to get a complete picture when testing the PCI Express interface standard by enabling a link between an oscilloscope and a protocol analyzer.

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Department of Energy, foreign militaries and commercial customers.

Teledyne exited the cruise missile turbine engine business in the first quarter of 2021.

We have a large number of customers in the various industries we serve.

We have a broad and diversified customer base in the various markets we serve.

No commercial customer in 2023 or 2022 accounted for more than 10% of net sales for any of our segments or for the total Company.

Total sales to international customers were $2,740.1 million in 2023 and $2,586.0 million in 2022.

Of these sales to international customers, our businesses in the United States accounted for $837.9 million in 2022 and $723.9 million in 2021.

There were no sales to individual countries outside of the United States in excess of 10% of the Company’s sales.

Of these net sales to international customers, our businesses in the United States accounted for $900.5 million in 2023 and $837.9 million in 2022.

In both 2023 and 2022, we sold products to customers in over 100 foreign countries.

Approximately 90% of our net sales to international customers during 2023 were made to customers in 30 foreign countries.

In 2022, the top five countries for sales to international customers, ranked by net sales, were China, Germany, Japan, the United Kingdom and France and represented approximately 20% of our total net sales.

Approximately 25% and 26% of our total net sales in 2022 and 2021, respectively, were derived from contracts with agencies of, and prime contractors to, the U.S.

Information on our sales to the U.S.

Government, including direct sales as a prime contractor and indirect sales as a subcontractor, is as follows (in millions):

In 2023, the top five countries for sales to international customers, ranked by net sales, were the United Kingdom, China, Japan, Germany and Norway and represented approximately 21% of our total net sales.

There were no sales to individual countries outside of the United States in excess of 10% of the Company’s sales.

Information on our net sales to the U.S.

Government, including direct sales to agencies as a prime contractor and indirect sales as a subcontractor, was as follows (in millions):

Government sales by segment:

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Government sales $ 1,381.7 $ 1,359.9 $ 1,193.1

Government sales as a percent of total net sales 24.5 % 24.9 % 25.9 %

Our principal U.S.

Government customer is the U.S.

Department of Defense, which totaled $1,065.1 million and $876.6 million of our total net sales for 2022 and 2021, respectively.

Department of Defense, with total net sales of $1,081.3 million and $1,065.1 million in 2023 and 2022, respectively.

With the exception of the Engineered Systems segment, no U.S Government program in 2023 or 2022 accounted for more than 10% of net sales for any of our segments or for the total Company.

In 2022 and 2021, the largest program with the U.S.

Government within the Engineered Systems segment was the Mission Operations and Integration (“MO&I”) contract with the NASA Marshall Space Flight Center, which represented approximately 11% of Engineered Systems net sales in both 2022 and 2021.

In 2023, the largest program with the U.S.

Government within the Engineered Systems segment was the Marshall Operations, Systems, Services, and Integration II (“MOSSI II”) contract with the NASA Marshall Space Flight Center, which represented approximately 17% of Engineered Systems net sales.

In 2022, the largest program with the U.S.

Government within the Engineered Systems segment was the Mission Operations and Integration contract with the NASA Marshall Space Flight Center, which represented approximately 11% of Engineered Systems net sales.

As described in greater detail under Item 1A.

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Government prime contracts and subcontracts were fixed-price type contracts, compared to 80% in 2022, with the remaining U.S.

Government contracts related to cost-reimbursable contracts ("cost-type").

Government contracts related to cost-reimbursable contracts (“cost-type”) contracts.

Under fixed-price type contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price.

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Additionally, U.S.

Government contracts are subject to termination by the U.S.

Government contracts are subject

to termination by the U.S.

Government at its convenience, without identification of any default.

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During 2023 and 2022, contracts terminated by the U.S.

Government have not materially impacted our results of operations.

Government did not materially impact our results of operations.

Many of our government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions.

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Most raw materials used in our operations are readily available;

however, during 2022, we experienced supply chain challenges, including increased lead times, as well as cost inflation for parts and components, logistics and labor due to availability constraints and high demand.

While the current supply chain constraints have not materially affected our business, we have implemented short-term and long-term supplier actions to reduce disruptions and prioritize mitigation.

however, we have experienced supply chain challenges in recent years, including increased lead times, as well as cost inflation for parts and components, logistics and labor due to availability constraints and high demand.

Some raw materials are purchased from a limited set of suppliers, including international sources, due to technical capability, price, and other factors.

We leverage our existing supplier relationships and are not dependent on any one supplier for a material amount of our purchases.

Prices of certain key raw materials and electronic components have fluctuated in the past and are expected to fluctuate in the future.

We mitigate raw material cost increases primarily with long-term supply agreements and customer price increases.

We expect inflationary and supply chain constraint trends to continue in 2023.

However, we believe our short-term and long-term supplier actions position us well to mitigate and reduce the impact these factors may have on our businesses.

While some of our businesses provide services, for those businesses that sell products, a portion of the value that we provide is labor-oriented, such as design, engineering, assembly and test activities.

In manufacturing our products, we use our own production capabilities and third-party suppliers and subcontractors, including international sources.

Our sales and marketing approach varies by segment and by products within our segments.

A shared fundamental tenet is the commitment to work closely with our customers to understand their needs, with an aim to secure preferred supplier and longer-term relationships.

Given the technical nature of our products, we conduct our marketing activities through a direct internal sales force as well as third-party sales representatives.

Given the technical nature of our products, we conduct our marketing activities through a direct internal sales force as well as third-party sales representatives and distributors.

Several Teledyne businesses, including across our segments, have been marketing and selling products collaboratively to similar customers.

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Although we have certain advantages that we believe help us compete effectively in our markets, each of our markets is highly competitive.

Our businesses vigorously compete on quality, product performance and reliability, technical expertise, price and service.

Our businesses compete on quality, product performance and reliability, technical expertise, price and service.

Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do.

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We own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights.

We are licensed to use certain patents, technology and other intellectual property rights owned and controlled by others.

Similarly, other companies are licensed to use certain patents, technology and other intellectual property rights owned and controlled by us.

We do not consider any single patent or trademark, or any group

of them, essential either to Teledyne’s business as a whole or to any one of our reportable segments.

The annual royalties

received or paid under license agreements are not significant to any of our reportable segments or to Teledyne’s overall

We license patents, technology and other intellectual property rights owned and controlled by others.

Similarly, other companies license patents, technology and other intellectual property rights owned and controlled by us.

We do not consider any single patent or trademark, or any group of them, essential either to Teledyne’s business as a whole or to any one of our reportable segments.

The annual royalties received or paid under license agreements are not significant to any of our reportable segments or to our overall operations.

Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise.

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Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 17 .

No material capital expenditures relating to environmental or other government regulatory compliance are presently anticipated.

No material capital expenditures relating to environmental compliance are presently anticipated.

See Note 17 for additional discussion of other government regulations.

Sustainability

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They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling the Earth’s oceans.

Applications of our instruments provide scientists information that spans time from the origin of the universe to providing real-time data regarding air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.

Recently, the prominence and importance of sustainability and Environmental, Social and Governance (“ESG”) initiatives have dramatically increased.

In November 2022, we published our second Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of Teledyne’s most recent efforts focused on sustainability and ESG.

The CSR report,

which is not incorporated by reference in this document, is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.

The CSR Report includes data on Teledyne’s combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”), workplace safety, water usage, waste generation and recycling and workplace demographics.

Applications of our instruments provide scientists information that spans

time from the origin of the universe to providing real-time data regarding air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.

The prominence and importance of sustainability and Environmental, Social and Governance (“ESG”) initiatives have dramatically increased.

In November 2022, we published our second Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of our most recent efforts focused on sustainability and ESG.

We published a supplement to the CSR report in November 2023 to include updated financial information and other information in the report.

The CSR report together with its supplement, which is not incorporated by reference in this document, is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.

The CSR Report and its supplement includes data on Teledyne’s combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”), workplace safety, water usage, waste generation and recycling and workplace demographics.

In 2021, we compiled the first global inventory of our greenhouse gas (“GHG”) emissions (starting with fiscal year 2020) and have developed a GHG monitoring and management plan.

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More information about our carbon footprint and GHG emission reduction efforts and goals, and the contributions that Teledyne products make to carbon monitoring and environmental and climate science, can be found in our CSR report.

Board Oversight

Pursuant to the mandate in their respective charters, the Audit Committee of our Board of Directors (the “Board”) regularly reviews matters related to compliance with environmental laws and the health and safety of employees, and the Nominating and Governance Committee of our Board reviews and evaluates our policies and practices and monitors our efforts in areas of legal and social responsibility, diversity and sustainability, and other ESG matters.

The Audit Committee also oversees risk management, including the impact of climate change-related risks.

Human Capital

We consider our relations with our employees to be good.

At January 1, 2023, our total workforce consisted of approximately 14,700 employees in more than 37 countries.

At December 31, 2023, our total workforce consisted of approximately 14,900 employees in 36 countries.

Workforce demographics for various regions are provided below:

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In 2023, our voluntary employee turnover (excluding reductions in force) was approximately 10%.

As of January 1, 2023, the average years of service of our employees was approximately 10 years.

Equality, Diversity and Inclusion

Employees are vital to the success of our innovation-driven growth strategy.

As of December 31, 2023, the average years of service of our employees was approximately 10 years.

Employees are vital to the success of our growth strategy.

Our goal is to maintain a safe, hospitable and inclusive work environment in which every employee is encouraged to contribute to the success of the company.

We are focused on attracting, developing, and retaining employees through competitive compensation and benefits, workforce and management development, diversity and inclusion initiatives, succession planning, corporate culture and leadership quality.

Teledyne has a Corporate-led committee to oversee our equality, diversity and inclusion efforts.

We are committed to building a more diverse and inclusive workplace, and we actively monitor diversity metrics on a global basis.

We regularly review our policies, processes and practices to ensure that they promote inclusivity for all applicants and employees.

We continue to focus on several activities and initiatives to actively increase diverse representation and progression within our company.

Various initiatives include developing relationships with universities with higher underrepresentation, creating diverse talent pools, and increasing networking and referrals with diverse professional organizations.

Teledyne has a Corporate-led committee to oversee our diversity, equity and inclusion efforts.

The committee focuses on activities and initiatives to increase diverse representation and progression within our company.

Various initiatives include developing relationships with universities with higher underrepresentation, creating more diverse and larger talent pools, and increasing networking and referrals with diverse professional organizations.

We advertise vacancies and strive to recruit the best possible candidate for each role.

Employee Well-Being

We monitor diversity metrics on a global basis.

The health and wellness of our employees is a critical component to the success of our business.

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We also have vacation and sick leave policies that provide employees with flexibility to take time away from work for relaxation or to recover from illness.

based employees have access to third-party counseling and mental health services at no cost to the employee when life events impact an employee.

Talent Development

The majority of our employees (including all full-time employees in the U.S., Canada and the United Kingdom) have access to our employee assistance program which includes third-party counseling and mental health services at no cost to the employee when life events impact an employee.

We are committed to identifying and developing the talents of our next generation of leaders.

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We invest in employee skills development in various ways, including through educational expense reimbursement.

Specialized training in a job-related field gives employees new skills and a strong foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible

positions at Teledyne.

Specialized training in a job-related field gives employees new skills and a strong

foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible positions at Teledyne.

Our employees have access to Teledyne University, a learning platform.

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We will provide, free of charge, a paper copy of any report we file with the SEC (without exhibits) upon written request to Melanie S.

Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, at Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362.

Cibik, Executive Vice President, General Counsel, Chief Compliance Officer and Secretary, at Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362.

We have included our website addresses throughout this report as inactive textual references only.

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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.

What changed 10-K

Item 1. Business