What changed in this filing

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Item 1. Financial Statements

2025-04-28 compared with 2024-10-28 · 385 added, 494 removed, 563 unchanged (61% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023

FOR THE FIRST QUARTER ENDED MARCH 30, 2025 AND MARCH 31, 2024

(Unaudited — Amounts in millions, except per share amounts)

Third Quarter Nine Months

2024 2023 2024 2023

First Quarter

Net sales $ 1,449.9 $ 1,350.1

2 unchanged sentences

Selling, general and administrative 233.9 219.7

Research and development

Acquired intangible asset amortization 52.0 49.4

1 unchanged sentence

Operating income (loss)

270.7 264.3 752.0 762.9

Interest and debt income (expense), net ( 17.3 ) ( 12.7 )

Gain (loss) on debt extinguishment — — — 1.6

Non-service retirement benefit income (expense), net 2.8 2.7

1 unchanged sentence

Income (loss) before income taxes

255.1 246.1 712.3 704.7

Provision (benefit) for income taxes 50.1 46.4

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023

FOR THE FIRST QUARTER ENDED MARCH 30, 2025 AND MARCH 31, 2024

(Unaudited — Amounts in millions)

Third Quarter Nine Months

2024 2023 2024 2023

First Quarter

Net income (loss) including noncontrolling interest $ 188.8 $ 179.1

11 unchanged sentences

(Unaudited — Amounts in millions, except share amounts)

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

Current Assets

5 unchanged sentences

Total current assets 2,981.7 2,944.6

Property, plant and equipment, net of accumulated depreciation and amortization of $ 1,015.0 at September 29, 2024 and $ 947.1 at December 31, 2023

Property, plant and equipment, net of accumulated depreciation and amortization of $ 1,045.9 at March 30, 2025 and $ 1,012.1 at December 29, 2024

Goodwill 8,534.0 7,990.5

13 unchanged sentences

Total Liabilities 5,117.1 4,645.1

Commitments and contingencies

Commitments and contingencies (see Note 15 )

Redeemable Noncontrolling Interest 6.2 6.0

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issued shares:

47,432,888 at September 29, 2024 and 47,331,845 at December 31, 2023;

47,424,847 at March 30, 2025 and 47,432,888 at December 29, 2024;

outstanding shares:

46,624,244 at September 29, 2024 and 47,331,845 at December 31, 2023

46,851,809 at March 30, 2025 and 46,706,612 at December 29, 2024

Additional paid-in capital 4,386.8 4,414.5

Retained earnings 6,455.3 6,266.7

Treasury stock, 808,644 shares at September 29, 2024 and none at December 31, 2023

Treasury stock, 573,038 shares at March 30, 2025 and 726,276 at December 29, 2024

( 231.1 ) ( 292.4 )

Accumulated other comprehensive income (loss) ( 686.3 ) ( 839.9 )

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Balance, December 29, 2024

Net income (loss) — — — 178.5 — 178.5

Other comprehensive income (loss), net of tax — — — — ( 90.9 ) ( 90.9 )

Stock-based compensation — 12.0 — — — 12.0

Exercise of stock options and other — 7.2 — — — 7.2

Balance, March 31, 2024 0.5 4,426.5 — 5,626.0 ( 725.0 ) 9,328.0

Net income (loss) — — — 180.2 — 180.2

Other comprehensive income (loss), net of tax — — — — ( 6.0 ) ( 6.0 )

Treasury stock issued — ( 1.9 ) 1.9 — — —

Treasury stock repurchased — — ( 193.8 ) — — ( 193.8 )

Stock-based compensation — 9.3 — — — 9.3

Exercise of stock options and other — 2.0 — — — 2.0

Balance, June 30, 2024 0.5 4,435.9 ( 191.9 ) 5,806.2 ( 731.0 ) 9,319.7

$ 0.5 $ 4,414.5 $ ( 292.4 ) $ 6,266.7 $ ( 839.9 ) $ 9,549.4

Net income (loss) — — — 188.6 — 188.6

1 unchanged sentence

Treasury stock issued — ( 61.3 ) 61.3 — — —

Treasury stock repurchased — — ( 138.8 ) — — ( 138.8 )

Stock-based compensation — 8.7 — — — 8.7

Stock-based compensation and other

— 4.1 — — — 4.1

Exercise of stock options

Balance, September 29, 2024 $ 0.5 $ 4,440.4 $ ( 321.6 ) $ 6,068.2 $ ( 593.3 ) $ 9,594.2

TELEDYNE TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)

(Unaudited - Amounts in millions)

— 29.5 — — — 29.5

Balance, March 30, 2025

$ 0.5 $ 4,386.8 $ ( 231.1 ) $ 6,455.3 $ ( 686.3 ) $ 9,925.2

Common Stock Additional Paid-in Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total

Balance, January 1, 2023 $ 0.5 $ 4,353.4 $ ( 20.0 ) $ 4,561.8 $ ( 726.5 ) $ 8,169.2

Net income (loss) — — — 178.7 — 178.7

Other comprehensive income (loss), net of tax — — — — ( 0.3 ) ( 0.3 )

Treasury stock issued — ( 10.6 ) 10.6 — — —

Stock-based compensation — 7.9 — — — 7.9

Exercise of stock options and other — 10.2 — — — 10.2

Balance, April 2, 2023 0.5 4,360.9 ( 9.4 ) 4,740.5 ( 726.8 ) 8,365.7

Net income (loss) — — — 185.3 — 185.3

Other comprehensive income (loss), net of tax — — — — 14.8 14.8

Treasury stock issued — ( 2.9 ) 2.9 — — —

Stock-based compensation — 8.4 — — — 8.4

Exercise of stock options — 4.8 — — — 4.8

Balance, July 2, 2023 0.5 4,371.2 ( 6.5 ) 4,925.8 ( 712.0 ) 8,579.0

Balance, December 31, 2023

$ 0.5 $ 4,407.3 $ — $ 5,447.5 $ ( 634.1 ) $ 9,221.2

Net income (loss) — — — 178.5 — 178.5

Other comprehensive income (loss), net of tax — — — — ( 90.9 ) ( 90.9 )

Treasury stock issued — ( 5.7 ) 5.7 — — —

Stock-based compensation — 8.0 — — — 8.0

Stock-based compensation and other

— 10.1 — — — 10.1

Exercise of stock options

Balance, October 1, 2023 $ 0.5 $ 4,385.7 $ ( 0.8 ) $ 5,124.4 $ ( 787.9 ) $ 8,721.9

— 9.1 — — — 9.1

Balance, March 31, 2024

$ 0.5 $ 4,426.5 $ — $ 5,626.0 $ ( 725.0 ) $ 9,328.0

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023

FOR THE THREE MONTHS ENDED MARCH 30, 2025 AND MARCH 31, 2024

(Unaudited — Amounts in millions)

4 unchanged sentences

Stock-based compensation 8.9 12.0

Debt extinguishment (income) expense — ( 1.6 )

Changes in operating assets and liabilities excluding the effect of business acquired:

13 unchanged sentences

Financing Activities

Proceeds from (payments on) fixed rate senior notes ( 450.0 ) ( 308.4 )

Net borrowings from (repayments made to) credit facility 315.0 —

1 unchanged sentence

Proceeds from exercise of stock options 29.5 9.1

Purchases of treasury stock ( 332.6 ) —

Liquidation (maturity) of cross currency swap — ( 13.5 )

Other financing, net ( 4.8 ) ( 2.9 )

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 29, 2024

March 30, 2025

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Teledyne Technologies Incorporated (“Teledyne” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission.

Securities and Exchange Commission (“SEC”).

Certain information and disclosures normally included in notes to consolidated financial statements have been condensed or omitted pursuant to such rules and regulations, but resultant disclosures are in accordance with generally accepted accounting principles in the United States (“GAAP”) as they apply to interim reporting.

The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes in Teledyne’s Annual Report on Form 10-K for the fiscal year ended December 29, 2024 (“2024 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, Teledyne’s consolidated financial position as of September 29, 2024 and the consolidated results of operations, consolidated comprehensive income (loss) and consolidated cash flows for the third quarter and nine months ended September 29, 2024.

The results of operations and cash flows for the periods ended September 29, 2024 and cash flows for the nine months ended September 29, 2024 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, Teledyne’s consolidated financial position as of March 30, 2025 and the consolidated results of operations, consolidated comprehensive income (loss) and consolidated cash flows for the first quarter ended March 30, 2025.

The results of operations and cash flows for the period ended March 30, 2025 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year.

Recent Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This standard requires a public entity to disclose significant segment expenses and other segment items on an interim and annual basis.

Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”).

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (Topic 740):

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The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Inco me Statement Expenses.

This standard requires public entities, on an interim and annual basis, to provide disclosure of specified information about costs and expenses in the notes to the financial statemen ts.

The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.

Other ASUs issued but not effective until after March 30, 2025, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.

Business Acquisitions

2025 Acquisitions

During the first quarter of 2025, the Company acquired Micropac Industries, Inc.

(“Micropac”) for approximately $ 51.2 million in cash, net of cash acquired.

Micropac, founded in 1963 and headquartered in Garland, Texas, designs and manufactures microelectronic circuits, optoelectronic components and sensor and display assemblies primarily for military, aerospace and medical applications.

Micropac will be part of the Aerospace & Defense Electronics segment.

The Company funded the acquisition from cash on hand.

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

Optical Systems and Advanced Electronics Systems businesses

During the first quarter of 2025 , the Company acquired select aerospace and defense electronics businesses of Excelitas Technologies C orp.

(“Excelitas”) for approximately $ 706.4 million in cash, net of cash acquired, and subject to certain adjustments.

The acquisition includes the Optical Systems ( “ OS ” ) business known under the Qioptiq ® brand based in Northern Wales, UK, as well as the U.S.

based Advanced Electronic Systems ( “ AES ” ) business.

The OS and AES businesses will be part of the Aerospac e and Defense Electronics segment.

The Company funded the acquisition from available borrowings on the credit facility as well as from cash on hand.

Goodwill resulting from the acquisition of the UK operations will not be deductible for tax purposes, and goodwill resulting from the acquisition of the U.S.

operations will be deductible for tax purposes.

2024 Acquisitions

During the second quarter of 2024, the Company acquired Adimec Holding B.V.

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During the second quarter of 2024, the Company acquired Valeport Holdings 2019 Limited and its affiliates (“Valeport”) for $ 35.0 million in cash, net of cash acquired, subject to certain adjustments.

Approximately 10 % of the purchase price is payable in fiscal year 2025.

Valeport, founded in 1969 and headquartered in Totnes, United Kingdom, designs and manufactures underwater sensors for environmental, energy, construction and defense applications.

Valeport, founded in 1969 and headquartered in Totnes, UK, designs and manufactures underwater sensors for environmental, energy, construction and defense applications.

Valeport is part of the Marine Instrumentation product line within the Instrumentation segment.

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

2023 Acquisitions

Xena Networks

During the fourth quarter of 2023, the Company acquired Xena Networks ApS and affiliates (“Xena Networks”) for $ 24.2 million in cash, net of cash acquired, and subject to certain adjustments.

Xena Networks, headquartered in Denmark, is a leading provider of high-speed terabit ethernet validation, quality assurance, and production test solutions.

Xena Networks is part of the Test and Measurement Instrumentation product line within the Instrumentation segment.

Goodwill resulting from the Xena Networks acquisition will not be deductible for tax purposes.

During the first quarter of 2023, the Company acquired ChartWorld International Limited and affiliates ("ChartWorld") for $ 53.5 million in cash, net of cash acquired, and subject to certain adjustments.

ChartWorld, headquartered in Cyprus, with additional locations in Germany, Singapore, Canada and Japan, is a provider of digital marine navigation hardware and software provided through an affordable subscription-based model.

ChartWorld is part of the Digital Imaging segment.

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

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

Acquisitions Acquisition Date Consideration Transferred (a) Goodwill Acquired Acquired Intangible Assets

Adimec June 4, 2024 $ 88.7 $ 64.7 $ 17.9

Valeport April 10, 2024 35.0 23.0 7.8

OS and AES businesses

February 3, 2025 $ 706.4 $ 451.6 $ 183.6

December 30, 2024 51.2 5.0 8.1

$ 757.6 $ 456.6 $ 191.7

(a) Net of cash acquired

approximately 10 % of the Valeport purchase price is payable in 2025 and included in the amount above

Acquisitions Acquisition Date Consideration Transferred (a) Goodwill Acquired Acquired Intangible Assets

Xena Networks October 13, 2023 $ 24.2 $ 21.1 $ 4.8

ChartWorld January 3, 2023 53.5 55.5 11.3

June 4, 2024 $ 88.7 $ 64.6 $ 17.9

April 10, 2024 35.0 23.6 7.8

Total $ 123.7 $ 88.2 $ 25.7

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The differences between the fair value of the consideration paid and the estimated fair value of the assets and liabilities acquired was recorded as goodwill.

The fair value of the acquired identifiable assets and liabilities for the Adimec, Valeport and Xena Networks 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.

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 these acquisitions have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to the Company's financial results.

The fair value of the acquired identifiable assets and liabilities for the OS and AES businesses, Micropac and Adimec are 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.

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 these acquisitions have not been presented because the effects of these acquisitions both individually and in the aggregate were not material to the Company's financial results.

The significant factors that resulted in recognition of goodwill for the 2025 and 2024 acquisitions included the acquired businesses’ market positions, growth opportunities in the markets in which they operate, their experienced work force and established operating infrastructures.

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The Company has four reportable segments:

Digital Imaging;

Instrumentation;

Aerospace and Defense Electronics;

and Engineered Systems.

Segment results include net sales and operating income by segment but excludes corporate expenses.

Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.

Segment results include net sales and operating income by segment but exclude corporate expenses.

Corporate expense primarily includes administrative expenses relating to the corporate office not allocated to our segments.

The following table presents net sales and operating income by segment (dollars in millions):

Third Quarter % Nine Months %

2024 2023 Change 2024 2023 Change

In the first quarter of 2025, the Company completed two acquisitions, and the financial results of these acquisitions have been included since the date of the acquisition and are part of the Aerospace and Defense Electronics segment.

See No te 2 to these Notes to Condensed Consolidated Financial Statements for information regarding these 2025 acquisitions.

The following table presents net sales, operating expenses and operating income by segment (dollars in millions):

First Quarter %

Net Sales (a):

2025 2024 Change

Digital Imaging $ 757.0 $ 740.8 2.2 %

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Total net sales $ 1,449.9 $ 1,350.1 7.4 %

Operating income:

(a) Net sales exclude inter-segment sales of $ 3.8 million and $ 4.8 million for the first quarter of 2025 and 2024, respectively.

First Quarter %

Cost of sales:

2025 2024 Change

Digital Imaging $ 422.5 $ 408.6 3.4 %

2 unchanged sentences

Engineered Systems 90.2 82.5 9.3 %

Total cost of sales

$ 830.4 $ 770.2 7.8 %

First Quarter %

Selling, general and administrative:

2025 2024 Change

Digital Imaging $ 122.7 $ 123.7 ( 0.8 ) %

Instrumentation 49.7 47.0 5.7 %

Aerospace and Defense Electronics 33.2 21.0 58.1 %

Engineered Systems 6.1 7.9 ( 22.8 ) %

Total selling, general and administrative

$ 211.7 $ 199.6 6.1 %

First Quarter %

Research and development:

2025 2024 Change

Digital Imaging $ 44.1 $ 48.9 ( 9.8 ) %

Instrumentation 24.2 22.8 6.1 %

Aerospace and Defense Electronics 6.0 4.7 27.7 %

Engineered Systems — 0.1 ( 100.0 ) %

Total research and development

$ 74.3 $ 76.5 ( 2.9 ) %

First Quarter %

Acquired intangible asset amortization:

2025 2024 Change

Digital Imaging $ 45.4 $ 45.8 ( 0.9 ) %

Instrumentation 3.2 3.4 ( 5.9 ) %

Aerospace and Defense Electronics 3.4 0.2 *

Total acquired intangible asset amortization

$ 52.0 $ 49.4 5.3 %

* Not meaningful

First Quarter %

Operating income (loss):

2025 2024 Change

Digital Imaging $ 122.3 $ 113.8 7.5 %

Instrumentation 92.7 86.0 7.8 %

Aerospace and Defense Electronics 55.7 51.9 7.3 %

Engineered Systems 10.8 2.7 300.0 %

Corporate expense ( 22.2 ) ( 20.1 ) 10.4 %

Operating income $ 270.7 $ 264.3 2.4 % $ 752.0 $ 762.9 ( 1.4 ) %

(a) Net sales exclude inter-segment sales of $ 5.9 million and $ 19.2 million for the third quarter and first nine months of 2024, respectively, and $ 7.2 million and $ 21.5 million for the third quarter and first nine months of 2023, respectively.

Operating income (loss)

$ 259.3 $ 234.3 10.7 %

Product Lines

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The following table provides a summary of the net sales by product line for the Instrumentation segment (in millions):

Third Quarter Nine Months

First Quarter

Instrumentation 2025 2024

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Identifiable assets:

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

Digital Imaging $ 11,021.1 $ 10,942.4

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The Company disaggregates its revenue from contracts with customers by customer type and geographic region for each segment, as management believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

Third Quarter Ended

September 29, 2024

Third Quarter Ended

September 29, 2024

Customer Type Geographic Region (c)

(in millions) U.S.

(a) Other (b) Total United States Europe Asia All other Total

Digital Imaging $ 146.8 $ 621.6 $ 768.4 $ 361.2 $ 208.4 $ 131.7 $ 67.1 $ 768.4

Instrumentation 29.6 320.2 349.8 155.0 98.0 65.1 31.7 349.8

Aerospace and Defense Electronics 69.3 130.9 200.2 135.2 35.4 20.5 9.1 200.2

Engineered Systems 113.7 11.4 125.1 123.6 — 0.7 0.8 125.1

Total $ 359.4 $ 1,084.1 $ 1,443.5 $ 775.0 $ 341.8 $ 218.0 $ 108.7 $ 1,443.5

Government sales include sales as a prime contractor or subcontractor.

(b) Primarily commercial sales

Nine Months Ended

September 29, 2024

Nine Months Ended

September 29, 2024

Customer Type Geographic Region (c)

(in millions) U.S.

(a) Other (b) Total United States Europe Asia All other Total

Digital Imaging $ 399.8 $ 1,848.8 $ 2,248.6 $ 1,020.2 $ 610.4 $ 402.4 $ 215.6 $ 2,248.6

Instrumentation 92.3 921.4 1,013.7 453.0 277.5 187.1 96.1 1,013.7

Aerospace and Defense Electronics 188.9 391.4 580.3 391.8 103.0 59.2 26.3 580.3

Engineered Systems 289.2 35.9 325.1 322.4 — 1.1 1.6 325.1

Total $ 970.2 $ 3,197.5 $ 4,167.7 $ 2,187.4 $ 990.9 $ 649.8 $ 339.6 $ 4,167.7

Government sales include sales as a prime contractor or subcontractor.

(b) Primarily commercial sales

Third Quarter Ended

October 1, 2023

Third Quarter Ended

October 1, 2023

First Quarter Ended

March 30, 2025

First Quarter Ended

March 30, 2025

Customer Type Geographic Region (c)

(in millions) U.S.

(a) Other (b) Total United States Europe Asia All other Total

(a) Other (b) Total United States Europe Asia All Other

Digital Imaging $ 161.7 $ 595.3 $ 757.0 $ 355.9 $ 188.2 $ 139.7 $ 73.2 $ 757.0

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Nine Months Ended

October 1, 2023

Nine Months Ended

October 1, 2023

First Quarter Ended

March 31, 2024

First Quarter Ended

March 31, 2024

Customer Type Geographic Region (c)

(in millions) U.S.

(a) Other (b) Total United States Europe Asia All other Total

(a) Other (b) Total United States Europe Asia All Other

Digital Imaging $ 130.7 $ 610.1 $ 740.8 $ 333.7 $ 200.3 $ 134.2 $ 72.6 $ 740.8

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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 derived from cost-reimbursable type contracts.

For the nine months ended September 29, 2024, approximately 51 % of net sales in the Engineered Systems segment were derived from fixed price contracts.

For the three months ended March 30, 2025, approximately 47 % of net sales in the Engineered Systems segment were derived from fixed price contracts.

Contract Liabilities

Contract Liabilities by Balance Sheet Location (in millions) September 29, 2024

Contract Liabilities by Balance Sheet Location (in millions) March 30, 2025

December 29, 2024

2 unchanged sentences

Total contract liabilities $ 366.2 $ 343.1

The Company recognized revenue of $ 130.3 million during the nine months ended September 29, 2024 from contract liabilities that existed at the beginning of year.

The Company recognized revenue of $ 98.3 million during the three months ended March 30, 2025, from contract liabilities that existed at the beginning of year.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and exclude unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity).

As of September 29, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 3,578.4 million.

The Company expects approximately 77 % of remaining performance obligations to be recognized into revenue within the next twelve months , with the remaining 23 % recognized thereafter.

As of March 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 4,214.5 million.

The Company expects approximately 77 % of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 23 % recognized thereafter.

Changes in Contract Estimates at Completion

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.

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.

This EAC process requires management’s judgment relative to assessing risks, estimating contract revenue, determining reasonably dependable cost estimates, and making assumptions for scheduling and technical issues.

The majority of revenue recognized over time uses an EAC process.

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Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly.

The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in the first nine months of 2024 was $ 5.1 million of favorable operating income compared with $ 1.7 million of favorable operating income in the first nine months of 2023.

The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in the first three months of 2025 was $ 2.3 million of favorable operating income compared with $ 0.3 million of unfavorable operating income in the first three months of 2024.

None of the effects of changes in estimates on any individual contract were material to the condensed consolidated statements of income (loss) for any period presented.

6 unchanged sentences

Foreign currency changes and other 63.6 10.6 12.7 — 86.9

Balance at September 29, 2024

Balance at March 30, 2025

$ 6,918.2 $ 965.9 $ 632.3 $ 17.6 $ 8,534.0

1 unchanged sentence

Acquired intangible assets consisted of the following (in millions):

September 29, 2024 December 31, 2023

Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount

March 30, 2025 December 29, 2024

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Proprietary technology $ 1,830.5 $ 859.1 $ 971.4 $ 1,665.5 $ 796.6 $ 868.9

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An evaluation of the carrying value of goodwill and indefinite-lived intangibles is required to be performed on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

Based on the results of the Company’s annual assessment in the fourth quarter of 2023, all reporting units with the exception of the FLIR reporting unit in the Digital Imaging segment had estimated fair values that exceeded their respective carrying value by more than 100 %.

Based on the results of the Company’s annual assessment in the fourth quarter of 2024, all reporting units with the exception of the FLIR reporting unit in the Digital Imaging segment had estimated fair values that significantly exceeded their respective carrying value.

At the assessment date in the fourth quarter of 2024, the estimated fair value of the FLIR reporting unit exceeded its carrying value by approximately $ 420 million, or 5 %, and the FLIR reporting unit had $ 5,856.5 million of goodwill at the prior year assessment date.

As of September 29, 2024, the FLIR reporting unit had $ 5,884.9 million of goodwill, with the change in value from the prior year assessment date related to the impact of foreign currency translation.

As of March 30, 2025, the FLIR reporting unit had $ 5,873.4 million of goodwill, with the change in value from the prior year assessment date related to the impact of foreign currency translation.

Although the assumptions used in the Company’s prior year discounted cash flow model and market approach are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR reporting unit.

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Based on the results of the Company’s annual assessment in the fourth quarter of 2024, the estimated fair value of all material indefinite-lived trademarks, with the exception of the FLIR indefinite-lived trademark, significantly exceeded their respective carrying value.

Trademarks of recently acquired businesses generally represent a higher inherent risk of impairment, which typically decreases as the businesses are integrated into the Company.

At the prior year annual assessment date, the FLIR indefinite-lived trademark had a carrying value of $ 685.3 million and a fair value of $ 694.9 million.

The most significant assumptions utilized in the determination of the fair value of the FLIR trademark are the net sales growth rates (including residual growth rates), discount rate and royalty rate.

Although the FLIR sales forecasts are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR business.

At the prior year annual assessment date, the FLIR indefinite-lived trademark value was reduced to $ 635.8 million, which represented the estimated fair value of the asset as of the prior year assessment date.

The most significant assumptions utilized in the determination of the fair value of the FLIR trademark were the net sales growth rates (including residual growth rates), discount rate, and royalty rate.

Although the FLIR sales forecasts were based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR business.

Changes in sales forecast estimates or the application of alternative assumptions could produce significantly different results.

The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure.

The royalty rate was driven by historical and estimated future profitability of the underlying FLIR business, and the royalty rate assumption was consistent with assumptions used by the Company as part of the purchase price allocation of FLIR in 2021.

The royalty rate was driven by historical and estimated future profitability of the underlying FLIR business.

The royalty rate may be impacted by significant adverse changes in long-term operating margins.

Although no impairment exists for the FLIR trademark, a non-cash impairment of the trademark could result from a number of circumstances, including different assumptions used in determining the fair value of the trademark, changes to customer spending priorities, or a sharp increase in interest rates without a corresponding increase in future net sales.

Subsequent to the assessment made in the prior year, additional non-cash impairment of the trademark could result from a number of circumstances, including different assumptions used in determining the fair value of the trademark, changes to customer spending priorities, or a sharp increase in interest rates without a corresponding increase in future net sales.

For all indefinite-lived trademarks, including the FLIR trademark, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the trademark is below its carrying value.

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Cash Equivalents

The Company had $ 173.2 million and $ 265.1 million of cash equivalents at September 29, 2024 and December 31, 2023, respectively.

The Company had $ 99.7 million and $ 304.1 million of cash equivalents at March 30, 2025, and December 29, 2024, respectively.

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.

Accounts Receivable, Net

Accounts receivable is presented net of an allowance for doubtful accounts of $ 14.8 million at September 29, 2024 and $ 11.5 million at December 31, 2023.

Accounts receivable is presented net of an allowance for doubtful accounts of $ 15.6 million at March 30, 2025 and $ 15.5 million at December 29, 2024.

Inventories, Net

Inventories are stated at current cost, net of reserves for excess, slow moving and obsolete inventory.

Inventories are primarily valued under the first-in, first-out (“FIFO”) method or average cost method.

Inventories are primarily valued under the first-in, first-out method or the average cost method.

Inventory balances are summarized as follows (in millions):

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

Raw materials and supplies $ 599.4 $ 559.2

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Some of the Company’s products are subject to specified warranties, and the Company provides for the estimated cost of product warranties.

The adequacy of the warranty reserve is assessed regularly, and the reserve is adjusted as necessary based on a review of historic warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties.

The adequacy of the warranty reserve 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.

The warranty reserve is included in current accrued liabilities and other long-term liabilities on the condensed consolidated balance sheet.

First Quarter

Warranty Reserve (in millions):

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Long-Term Debt (in millions):

September 29, 2024 December 31, 2023

$ 1.20 billion credit facility due June 2029

Term loan due October 2024, variable rate of 6.60 % at September 29, 2024 and 6.71 % at December 31, 2023, swapped to a Euro fixed rate of 0.61 %

March 30, 2025 December 29, 2024

$ 1.20 billion credit facility due June 2029, weighted average variable rate of 5.55 % at March 30, 2025

1.60 % Fixed Rate Senior Notes due April 2026

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1,030.0 1,030.0

0.95 % Fixed Rate Senior Notes due and repaid April 2024

Other debt 1.1 1.2

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Total long-term debt, net of current portion $ 2,964.6 $ 2,648.7

At September 29, 2024, $ 1,171.1 million was available under the $ 1.20 billion credit facility, after a reduction of $ 28.9 million in outstanding letters of credit.

The Company’s bank credit agreements requires it to comply with various financial and operating covenants and at September 29, 2024, the Company was in compliance with these covenants.

During the first nine months of 2024, the Company made a $ 450 million debt maturity payment on the Senior Notes due April 2024.

Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates.

The Company estimates the fair value of long-term debt by using Level 2 inputs in the fair value hierarchy which is based on observable market data.

As of September 29, 2024 and December 31, 2023, the aggregate fair values of our borrowings were $ 2,600.3 million and $ 2,965.3 million, respectively, and the carrying values were $ 2,816.1 million and $ 3,266.0 million, respectively.

The income tax provision is calculated using an estimated annual effective tax rate, based upon estimates of annual income, permanent items, statutory tax rates and planned tax strategies in the various jurisdictions in which we operate except that certain loss jurisdictions and discrete items, such as the resolution of uncertain tax positions and stock-based accounting income tax benefits, are treated separately.

Third Quarter Nine Months

At March 30, 2025, $ 855.5 million was available under the $ 1.2 billion credit facility after reductions of $ 315.0 million in outstanding borrowings and $ 29.5 million in outstanding letters of credit.

The Company’s bank credit agreements requires it to comply with various financial and operating covenants, and at March 30, 2025, the Company was in compliance with these covenants.

The income tax provision is calculated using an estimated annual effective tax rate based upon estimates of annual income, permanent items, statutory tax rates, and planned tax strategies in the various jurisdictions in which the Company operates, except that certain loss jurisdictions and discrete items such as the resolution of uncertain tax positions and stock-based accounting income tax benefits are treated separately.

First Quarter

(dollars in millions) 2025 2024

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Effective tax rate 21.0 % 20.6 %

(a) The third quarter of 2024 includes net discrete income tax benefits of $ 62.3 million and the first nine months of 2024 includes net discrete income tax benefits of $ 67.4 million, respectively, with the income tax benefits primarily related to the release of a net income tax reserve liability (including applicable interest and penalties) as a result of a favorable resolution reached by the Company with foreign tax authorities around transfer pricing between certain FLIR subsidiaries.

The third quarter of 2023 includes net discrete income tax benefits of $ 6.1 million and the first nine months of 2023 includes net discrete income tax benefits of $ 14.1 million, respectively.

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion, or Pillar Two, model rules issued by the Organization for Economic Co-operation and Development (“OECD”).

A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million.

Under the Pillar Two rules, a company is required to determine a combined effective tax rate for all entities located in a jurisdiction.

If the jurisdictional effective tax rate determined under the Pillar Two is less than 15%, a top-up tax will be due to bring the jurisdictional effective tax rate up to 15%.

The Company is continuing to monitor the implementation of Pillar Two by individual countries and the potential effects of Pillar Two on our business.

The Company does not expect the provisions effective in 2024 will have a materially adverse impact on its results of operations, financial position or cash flows.

The Inflation Reduction Act of 2022 (“IRA”) levies a 1% excise tax on net stock repurchases after December 31, 2022.

If the Company were to repurchase shares, the excise tax would be recorded as a cost of acquiring treasury stock and is not material.

Additionally, the IRA imposes a 15% corporate alternative minimum tax (“CAMT”) for tax years beginning after December 31, 2022.

The Company does not expect the CAMT to have a material impact on its results of operations or financial position.

(a) The first quarter of 2025 includes net discrete income tax benefits of $ 3.7 million and $ 4.4 million, respectively

Pension Plans

Third Quarter Nine Months

2024 2023 2024 2023

First Quarter

Service cost — benefits earned during the period (in millions) $ 1.5 $ 1.5

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The Company issues shares of common stock upon the exercise of stock options.

In 2024, the Company began using the Black-Scholes option pricing model to determine the fair value of stock options.

The adoption of the Black-Scholes option pricing model was driven by a review of option exercise history, which more closely aligned with the methodology of the Black-Scholes option pricing model, and the adoption of the Black-Scholes option pricing model did not materially change the grant-date fair value calculation.

Stock-based compensation expense was $ 8.7 million and $ 30.0 million for the third quarter and first nine months of 2024, respectively, and $ 8.0 million and $ 24.3 million for the third quarter and first nine months of 2023, respectively.

Stock option activity for the third quarter and first nine months of 2024 is as follows:

Third Quarter Nine Months

Shares Weighted Average Exercise Price Shares Weighted Average

Exercise Price

The Company uses the Black–Scholes option pricing model to determine the fair value of stock options.

Stock-based compensation expense was $ 8.9 million and $ 12.0 million for the first quarter of 2025 and 2024, respectively.

Stock option activity for the first quarter of 2025 is as follows:

Shares Weighted Average Exercise Price

Beginning balance 1,135,749 $ 278.34

Granted — $ — 67,003 $ 441.98

Exercised ( 137,124 ) $ 215.36

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Exercisable at end of period 916,486 $ 276.56

Restricted stock activity for the third quarter and first nine months of 2024 is as follows:

Third Quarter Nine Months

Shares Weighted average fair value per share Shares Weighted average fair value per share

On April 22, 2025, the Company granted approximately 63,000 stock options at an exercise price of $ 461.10 per share and a grant date fair value of $ 179.30 per share.

Restricted stock activity for the first quarter of 2025 is as follows:

Shares Weighted Average Fair Value per Share

Beginning balance 160,344 $ 398.79

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Ending balance 136,817 $ 402.70

On April 22, 2025, the Company granted approximately 71,000 time-based restricted stock units with a grant date fair value of $ 461.10 per share.

Earnings Per Share

The weighted average number of common shares used in the calculation of basic and diluted earnings per share consisted of the following (in millions):

Third Quarter Nine Months

2024 2023 2024 2023

First Quarter

Weighted average basic common shares outstanding 46.8 47.3

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Weighted average diluted common shares outstanding 47.3 48.0

For the third quarter and first nine months of 2024 and 2023, 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.

For the first quarter of 2024, 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.

For the first quarter of 2025, the Company did not have any stock options that would have been anti-dilutive.

Stock Repurchases

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The Company currently intends to fund future share repurchases with cash on hand and available borrowings under the Company's credit facility.

During the third quarter of 2024, the Company repurchased approximately 0.3 million shares for $ 138.8 million with a weighted-average price of $ 404.67 per share.

During the first nine months of 2024, the Company repurchased approximately 0.8 million shares for $ 332.6 million with a weighted-average price of $ 397.14 per share.

Subsequent to the end of the third quarter of 2024, the Company repurchased less than 0.1 million shares for $ 21.4 million with a weighted-average price of $ 445.85 per share.

No repurchases under any authorizations were made in the first quarter of 2025 or 2024.

Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) (“AOCI”) by component, net of tax, for the third quarter and nine months ended September 29, 2024 and October 1, 2023 are as follows (in millions):

Foreign Currency Translation Cash Flow Hedges and Other Pension and Postretirement Benefits Total

Balance at June 30, 2024

$ ( 487.3 ) $ 1.7 $ ( 245.4 ) $ ( 731.0 )

Other comprehensive income (loss) before reclassifications 136.2 ( 3.3 ) — 132.9

Amounts reclassified from AOCI — 3.3 1.5 4.8

Net other comprehensive income (loss) 136.2 — 1.5 137.7

Balance at September 29, 2024

$ ( 351.1 ) $ 1.7 $ ( 243.9 ) $ ( 593.3 )

Foreign Currency Translation Cash Flow Hedges and Other Pension and Postretirement Benefits Total

Balance at July 2, 2023

$ ( 464.3 ) $ 5.4 $ ( 253.1 ) $ ( 712.0 )

Other comprehensive income (loss) before reclassifications ( 76.6 ) 2.4 — ( 74.2 )

Amounts reclassified from AOCI — ( 3.5 ) 1.8 ( 1.7 )

Net other comprehensive income (loss) ( 76.6 ) ( 1.1 ) 1.8 ( 75.9 )

Balance at October 1, 2023

$ ( 540.9 ) $ 4.3 $ ( 251.3 ) $ ( 787.9 )

Foreign Currency Translation Cash Flow Hedges and Other Pension and Postretirement Benefits Total

The changes in accumulated other comprehensive income (loss) (“AOCI”) by component, net of tax, as applicable, for the first quarter ended March 30, 2025, and March 31, 2024, are as follows (in millions):

Foreign Currency Translation Cash Flow Hedges

Pension and Postretirement Benefits Total

Balance at December 29, 2024

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Net other comprehensive income (loss) 150.8 1.3 1.5 153.6

Balance at September 29, 2024

Balance at March 30, 2025

$ ( 451.5 ) $ ( 0.9 ) $ ( 233.9 ) $ ( 686.3 )

Foreign Currency Translation Cash Flow Hedges and Other Pension and Postretirement Benefits Total

Balance at January 1, 2023

Foreign Currency Translation Cash Flow Hedges

Pension and Postretirement Benefits Total

Balance at December 31, 2023

$ ( 392.7 ) $ 8.2 $ ( 249.6 ) $ ( 634.1 )

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Net other comprehensive income (loss) ( 88.8 ) ( 4.2 ) 2.1 ( 90.9 )

Balance at October 1, 2023

Balance at March 31, 2024

$ ( 481.5 ) $ 4.0 $ ( 247.5 ) $ ( 725.0 )

The reclassifications out of AOCI to net income for the third quarter ended September 29, 2024 and October 1, 2023 are as follows (in millions):

Amount Reclassified from AOCI for the Quarter Ended September 29, 2024

The reclassifications out of AOCI to net income for the first quarter ended March 30, 2025, and March 31, 2024 are as follows (in millions):

Amount Reclassified from AOCI for the Quarter Ended March 30, 2025

Amount Reclassified from AOCI for the Quarter Ended

October 1, 2023

Statement of Income (Loss) Presentation

(Gain) loss on cash flow hedges:

Gain recognized in income on derivatives $ 4.4 $ ( 4.6 ) See Note 13

Income tax impact ( 1.1 ) 1.1 Provision for income taxes

Total $ 3.3 $ ( 3.5 )

Amortization of defined benefit pension and postretirement plan items:

Amortization of prior service cost $ ( 0.1 ) $ ( 0.4 ) Costs and expenses

Amortization of net actuarial loss 2.3 2.7 Costs and expenses

Total before tax 2.2 2.3

Income tax impact ( 0.7 ) ( 0.5 ) Provision for income taxes

Total $ 1.5 $ 1.8

Amount Reclassified from AOCI for the Nine Months Ended September 29, 2024

Amount Reclassified from AOCI for the Nine Months Ended October 1, 2023

March 31, 2024

Statement of Income (Loss) Presentation

(Gain) loss on cash flow hedges:

Gain recognized in income on derivatives $ ( 5.3 ) $ ( 16.2 ) See Note 13

Loss (gain) recognized in income on derivatives

$ 0.9 $ ( 9.3 ) See Note 13

Income tax impact ( 0.2 ) 2.4 Provision for income taxes

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dollar value of future cash flows and minimize the volatility of reported earnings.

During the first quarter ended March 30, 2025, the Company entered into certain derivative contracts to reduce the volatility from translation of the Company’s euro denominated net investments.

The Company does not use foreign currency forward contracts for speculative or trading purposes.

The Company mitigates exposure to foreign currency exchange rates and interest rates primarily through the following:

Mitigation Approach Quantitative Information on Approach

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.

As of September 29, 2024, the Company had foreign currency forward contracts to buy Canadian dollars and to sell U.S.

dollars totaling $ 68.1 million.

These foreign currency forward contracts have maturities ranging from December 2024 to February 2026.

As of September 29, 2024, the Company had foreign currency forward contracts to buy British pounds and to sell U.S.

dollars totaling $ 5.5 million.

These foreign currency forward contracts have maturities ranging from December 2024 to February 2025.

Designated Hedging Activities

As of March 30, 2025, foreign currency forward contracts in Canadian dollars designated as cash flow hedges have maturities ranging from June 2025 to February 2026.

As of March 30, 2025, foreign currency forward contracts in British pounds designated as cash flow hedges have maturities ranging from June 2025 to February 2026.

The Company utilizes cross-currency swaps to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S.

In the first quarter of 2025, the Company entered cross-currency swaps designated as net investment hedges with a total notional amount of € 300.0 million to hedge portions of the Company’s euro denominated net investments against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S.

These cross-currency swaps mature between March 2027 and September 2029.

The Company converted a U.S.

dollar denominated, variable rate debt obligation of a European subsidiary into a euro fixed rate obligation using a receive float, pay fixed cross-currency swap to reduce the variability of interest rates.

This cross-currency swap had notional amounts of € 156.0 million and $ 150.0 million and matured in October 2024.

Non-Designated Hedging Activities

The Company utilizes foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables.

These foreign currency forward contracts are not designated as accounting hedges.

See Non-Designated Hedging Activities section below.

The Company has converted a U.S.

dollar denominated, variable rate debt obligation of a European subsidiary into euro fixed rate obligation using a receive float, pay fixed cross currency swap to reduce the variability of interest rates.

This cross currency swap is designated as cash flow hedge.

As of September 29, 2024, the Company has a cross currency swap outstanding with a notional amount of € 156.0 million and $ 150.0 million that matures in October 2024.

All derivative instruments are recorded on the condensed consolidated balance sheets at fair value.

The accounting for gains and losses resulting from changes in fair value depends on the use of the derivative instrument and whether it is designated and qualifies for hedge accounting.

Designated Hedging Activities

For a derivative instrument designated as an accounting hedge of an anticipated transaction (a cash flow hedge), the change in the fair value is recorded on the condensed consolidated balance sheets in AOCI to the extent the derivative instrument is effective in mitigating the exposure related to the anticipated transaction.

The amount recorded within AOCI is reclassified into earnings in the same period during which the underlying hedged transaction affects earnings.

The effect of derivative instruments designated as cash flow hedges in the condensed consolidated financial statements for the third quarter and nine months ended September 29, 2024 and October 1, 2023 was as follows (in millions):

Third Quarter Nine Months

2024 2023 2024 2023

The gain or loss resulting from a change in fair value of a derivative instrument that is not designated in accounting hedge is recognized immediately in earnings and intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.

Derivative Instruments

The following is a summary of the gain (loss) included in the condensed consolidated statements of income (loss) and comprehensive income (loss) related to the derivative instruments described above (in millions):

First Quarter

Net gain (loss) recognized in AOCI—Foreign Exchange Contracts (a)

Net gain (loss) reclassified from AOCI into revenue - Foreign Exchange Contracts (a) $ ( 0.1 ) $ ( 1.1 ) $ 0.9 $ ( 4.8 )

Net gain (loss) recognized in AOCI—Cross-Currency Swap Contracts (a)

$ ( 5.5 ) $ —

Net gain (loss) reclassified from AOCI into revenue/cost of sales—Foreign Exchange Contracts (a)

$ ( 0.9 ) $ 0.7

Net gain (loss) reclassified from AOCI into other income and expense, net—Foreign Exchange Contracts (b)

Net gain (loss) reclassified from AOCI into interest expense—Foreign Exchange Contracts

Net gain (loss) reclassified from AOCI into interest expense - Interest Rate Contracts $ — $ — $ — $ 0.6

Net gain (loss) recognized in other income and expense, net—Foreign Exchange Contracts

(a) Effective portion, pre-tax

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

Net deferred gains recorded in AOCI for the forward contracts that will mature in the next twelve months total $ 1.2 million, net of taxes.

These gains are expected to be offset by anticipated losses in the value of the forecasted underlying hedged item.

Amounts related to the cross currency swap expected to be reclassified from AOCI into income in the next twelve months total $ 0.4 million.

Non-Designated Hedging Activities

For a derivative instrument that has not been designated as an accounting hedge, the change in the fair value is recognized immediately in earnings.

As of September 29, 2024, the Company had foreign currency forward contracts not designated as accounting hedges primarily in the following types and pairs (in millions):

Contracts to Buy Contracts to Sell

Currency Amount Currency Amount

Canadian Dollars $ 327.6 U.S.

Dollars US$ 243.9

Danish Krone Kr.

Dollars US$ 24.5

Great Britain Pounds £ 10.2 Euros € 12.0

Great Britain Pounds £ 115.7 U.S.

Dollars US$ 152.4

Norwegian Krone kr 297.7 U.S.

Dollars US$ 28.4

Swedish Krona kr 246.0 Euros € 21.8

Swedish Krona kr 754.7 U.S.

Dollars US$ 74.2

Dollars US$ 10.9 Euros € 10.0

The preceding table includes non-designated hedges derived from terms contained in previously designated cash flow hedges.

The gains and losses on these derivatives instruments which are not designated as accounting hedges are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings.

The effect of derivative instruments not designated as accounting hedges recognized in other income and expense for the third quarter and nine months ended September 29, 2024 was income of $ 15.3 million and $ 3.2 million, respectively.

The effect of derivative instruments not designated as accounting hedges in other income and expense for the third quarter and nine months ended October 1, 2023 was expense of $ 12.9 million and $ 3.1 million, respectively.

The income or expense was largely offset by losses or gains in the value of the underlying hedged item excluding the impact of forward points.

Fair Value of Derivative Financial Instruments

The fair values of the Company’s derivative instruments are presented below.

All fair values for these derivative instruments were measured using Level 2 inputs in the fair value hierarchy (in millions):

Asset/(Liability) Derivative Instruments Balance sheet location September 29, 2024 December 31, 2023

(b) Amount reclassified to offset earnings impact of liability hedged by cross-currency swap, used to hedge debt

Net deferred losses recorded in AOCI for the forward contracts that will mature in the next 12 months total $ 1.0 million, net of taxes.

These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item.

The following is a summary of notional amounts and fair values of the Company’s derivatives recorded in the condensed consolidated balance sheets presented by instrument type and use (in millions):

Notional Amount

Fair Value Asset

Fair Value (Liability)

March 30, 2025 December 29, 2024 March 30, 2025 December 29, 2024 March 30, 2025 December 29, 2024

Derivatives designated as hedging instruments

Cash flow forward contracts Other current assets $ 1.3 $ 3.7

Cash flow forward contracts Other non-current assets 0.4 2.4

Currency / interest rate contracts Other current assets 0.3 0.1

Currency / interest rate contracts Other current liabilities ( 24.2 ) ( 21.3 )

Foreign currency forward contracts $ 99.6 $ 83.3 $ 0.6 $ — $ ( 1.9 ) $ ( 3.0 )

Cross-currency swap agreements 324.0 — 2.7 — ( 7.9 ) —

Total derivatives designated as hedging instruments $ 423.6 $ 83.3 $ 3.3 $ — $ ( 9.8 ) $ ( 3.0 )

Derivatives not designated as hedging instruments

Non-designated forward contracts Other current assets 5.2 14.2

Non-designated forward contracts Accrued liabilities ( 2.6 ) ( 3.2 )

Total derivatives not designated as hedging instruments 2.6 11.0

Total derivative instruments, net $ ( 19.6 ) $ ( 4.1 )

Foreign currency forward contracts 689.3 974.8 16.7 1.0 ( 2.7 ) ( 13.9 )

Total derivatives $ 1,112.9 $ 1,058.1 $ 20.0 $ 1.0 $ ( 12.5 ) $ ( 16.9 )

All derivative assets are presented in Other current assets or Other non-current assets.

All derivative liabilities are presented in Accrued liabilities or Other non-current liabilities.

Fair Value Measurement

The Company’s financial assets and liabilities carried at fair value are primarily comprised of derivative contracts used to hedge the Company’s foreign currency risk.

The Company has not elected to measure any additional financial instruments or other items at fair value.

Financial Instruments Recorded at Fair Value

The fair values of the Company’s derivative financial instruments are presented below.

All fair values for these derivatives were measured using Level 2 hierarchy information as defined by the accounting policies (in millions):

March 30, 2025 December 29, 2024

Foreign currency forward contracts $ 17.3 $ 1.0

Cross-currency swaps 2.7 —

Total assets recorded at fair value $ 20.0 $ 1.0

Foreign currency forward contracts

( 4.6 ) ( 16.9 )

Cross-currency swaps ( 7.9 ) —

Total liabilities recorded at fair value $ ( 12.5 ) $ ( 16.9 )

Net derivatives at fair value $ 7.5 $ ( 15.9 )

Gross derivative assets and liabilities are subject to legally enforceable master netting agreements, for which the Company have not elected to present net amounts on the condensed consolidated balance sheets.

The effect of such right of setoff on the Company’s financial position were $ 0.4 million and $ 0.2 million, as of March 30, 2025, and December 29, 2024, respectively.

Financial Instruments Not Recorded at Fair Value

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturities of these assets and liabilities.

Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates.

The Company’s long-term debt is considered a Level 2 and is valued based on observable market data.

As of March 30, 2025 and December 29, 2024, the aggregate fair values of our borrowings were $ 2,758.8 million and $ 2,395.0 million, respectively, and the carrying values were $ 2,981.1 million and $ 2,666.2 million, respectively.

The cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.

Commitments and Contingencies

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jurisdictions which were not licensed due to an incorrect de minimis calculation methodology under the Export Administration Regulations.

The Company has also made voluntary disclosures to export authorities in jurisdictions outside the U.S.

for certain potential violations of local export laws.

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.

The Company has also made voluntary disclosures to export authorities in jurisdictions outside the United States for certain potential violations of local export laws.

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 outcome becomes estimable or known.

Environmental Remediation Obligations

At September 29, 2024, the Company’s reserves for environmental remediation obligations totaled $ 6.7 million, of which $ 3.0 million is included in current accrued liabilities.

At March 30, 2025, the Company’s reserves for environmental remediation obligations totaled $ 6.5 million, of which $ 3.1 million is included in current accrued liabilities.

At December 29, 2024, the Company’s reserves for environmental remediation obligations totaled $ 6.5 million.

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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.

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We intend to strengthen and expand our business with targeted acquisitions and through product development.

We continue to focus on balanced and disciplined capital deployment among capital expenditures, acquisitions, product development and stock repurchases.

We continue to focus on balanced and disciplined capital deployment among capital expenditures, acquisitions, stock repurchases and product development.

We aggressively pursue operational excellence to continually improve our margins and earnings by emphasizing cost containment and evaluating cost reductions in all aspects of our business.

At Teledyne, operational excellence includes the rapid integration of the businesses we acquire.

Using complementary technology across our businesses and through targeted research and development, we seek to create new products to grow our company and expand our addressable markets.

Using complementary technology across our businesses and through targeted research and development (“R&D”), we seek to create new products to grow our company and expand our addressable markets.

We continually evaluate our businesses to ensure that they are aligned with our strategy.

Consistent with our strategy, we completed two acquisitions each in 2024 and in 2023.

Consistent with our strategy, we completed two acquisitions each in the first quarter of 2025 and the full year of 2024.

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

Trends Affecting Our Business and Other Matters

We had previously assumed no full year sales growth in industrial automation markets as well as electronic test and measurement markets.

Those markets weakened more than planned in the first half of the year, however, we believe those markets have stabilized or are beginning to recover.

Trends and Other Matters Affecting Our Business

In early 2025, the U.S.

Presidential administration implemented significant new tariffs on foreign imports impacting multiple countries, commodities and industries, and these new tariffs and export restrictions also prompted retaliatory tariffs and export restrictions from certain countries.

As of April 2025, certain tariffs and retaliatory tariffs have been delayed, but a number of the new tariffs remain in effect, including significant tariffs and trade sanctions between the United States and China.

Our net sales to China-based customers represented approximately 4% of total revenues in 2024, of which less than 50% of these sales were made directly from our U.S.

subsidiaries.

China has also restricted the export of certain rare earth minerals which are used in our products.

Tariffs, trade restrictions and retaliatory measures could result in revenue reduction, cost increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, operational results and cash flows.

Consistent with our strategy, we are optimizing operations and facilities and taking measures to contain costs to reduce the impact from tariffs.

We may also implement additional pricing actions to mitigate the impact of these tariffs.

Sales recorded and costs incurred recorded by subsidiaries operating outside of the United States are translated into U.S.

2 unchanged sentences

See Note 13 for additional discussion around our derivative instruments and hedging activities used to mitigate these impacts.

To date, we have not been materially impacted by the conflict in Israel and its effect on neighboring regions.

We do not have material assets in Israel.

Our total net sales to Israel in the first nine months of 2024 and the full year 2023 were approximately 1% of total net sales, respectively.

It is too early to determine the full extent of the impact this conflict could have on our business and our operations, including the impact to our suppliers from these regions, and our assessment of the potential impacts is ongoing.

As part of a continuing effort to reduce costs and improve operating performance, we may take and have taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weaker end markets.

As part of a continuing effort to reduce costs and improve operating performance, we continue to take actions to consolidate and relocate certain facilities and reduce head count across various businesses, reducing our exposure to weaker end markets.

We continue to seek cost reductions in our businesses.

Results of Operations

Third Quarter % Nine Months %

(dollars in millions) 2024 2023 Change 2024 2023 Change

First Quarter %

(dollars in millions) 2025 2024 Change

Net sales $ 1,449.9 $ 1,350.1 7.4 %

1 unchanged sentence

Cost of sales 830.4 770.2 7.8 %

Selling, general and administrative (“SG&A”) 299.1 291.9 2.5 % 891.8 905.3 (1.5) %

Selling, general and administrative

233.9 219.7 6.5 %

Research and development

74.3 76.5 (2.9) %

Acquired intangible asset amortization 52.0 49.4 5.3 %

2 unchanged sentences

Interest and debt income (expense), net (17.3) (12.7) 36.2 %

Gain (loss) on debt extinguishment — — — % — 1.6 *

Non-service retirement benefit income (expense) 2.8 2.7 3.7 %

6 unchanged sentences

* Not meaningful

Third Quarter % Nine Months %

(dollars in millions) 2024 2023 Change 2024 2023 Change

First Quarter %

(dollars in millions) 2025 2024 Change

Net sales (a):

13 unchanged sentences

Total operating income (loss) $ 259.3 $ 234.3 10.7 %

(a) Net sales exclude inter-segment sales of $5.9 million and $19.2 million for the third quarter and nine months of 2024, respectively, and $7.2 million and $21.5 million for the third quarter and nine months of 2023, respectively.

Third Quarter Results

The following is a discussion of our 2024 third quarter results compared with the third quarter results of 2023.

(a) Net sales exclude inter-segment sales of $3.8 million and $4.8 million for the first quarter of 2025 and 2024, respectively.

First Quarter Results

The following is a discussion of our 2025 first quarter results compared with the first quarter results of 2024.

Comparisons are with the corresponding reporting period of 2024 unless noted otherwise.

Third quarter of 2024 compared with the third quarter of 2023

Our third quarter of 2024 net sales increased 2.9%.

Net income attributable to Teledyne for the third quarter of 2024 increased 31.9%, driven primarily by the favorable resolution of an uncertain tax position reached by the Company with foreign tax authorities around transfer pricing between certain FLIR subsidiaries.

Net income per diluted share was $5.54 for the third quarter of 2024, compared with net income per diluted share of $4.15.

The third quarter of 2024 net sales, compared with the third quarter of 2023, reflected higher net sales in each segment other than the Digital Imaging segment.

The third quarter of 2024 included $18.0 million in incremental sales from recent acquisitions.

Cost of Sales

Cost of sales increased $26.7 million in the third quarter of 2024 primarily driven by higher net sales.

Cost of sales as a percentage of net sales increased for the third quarter of 2024 to 57.1% from 56.8%.

Selling, General and Administrative Expense

SG&A expense, including research and development expense, increased $7.2 million in the third quarter of 2024 due to higher sales.

SG&A expense as a percentage of net sales decreased to 20.7% for the third quarter of 2024, compared with 20.8%.

Corporate expense, which is included in SG&A expense, was $18.7 million for the third quarter of 2024, compared with $17.8 million, with the increase primarily related to higher compensation expense.

Stock-based compensation expense was $8.7 million for the third quarter of 2024 compared with $8.0 million.

Acquired Intangible Asset Amortization

Acquired intangible asset amortization for the third quarter of 2024 was $49.8 million compared with $49.1 million.

Pension Service Expense

Pension service expense is included in both cost of sales and SG&A expense.

For the third quarter of 2024 and 2023, pension service expense was $1.5 million.

For 2024, the weighted-average discount rate used to determine the benefit obligation for the domestic qualified pension plans is 6.86% compared with 5.71% in 2023.

Operating Income

Operating income for the third quarter of 2024 increased 2.4%.

The third quarter of 2024, compared with the third quarter of 2023, reflected higher operating income in each segment other than the Digital Imaging segment.

Non-operating Income and Expense

Interest and debt expense, net of interest income, was $15.7 million for the third quarter of 2024, compared with $18.4 million, with the decrease related to reduced outstanding borrowings compared to the third quarter of 2023.

Non-service retirement benefit income was $2.8 million for the third quarter of 2024 compared with $3.1 million.

Other income and expense, net was expense of $2.7 million for the third quarter of 2024 compared with expense of $2.9 million for the third quarter of 2023.

The third quarter income tax provision considers income, permanent items, tax credits, and various statutory tax rates.

Third Quarter

(dollars in millions) 2024 2023

Provision (benefit) for income taxes (a) $ (7.1) $ 47.3

Income (loss) before income taxes $ 255.1 $ 246.1

Effective tax rate (2.8)% 19.2%

(a) The third quarter of 2024 includes net discrete income tax benefits of $62.3 million and the third quarter of 2023 includes net discrete income tax benefits of $6.1 million.

During the third quarter of 2024, the Company released $62.5 million of net income tax reserve liability (including applicable interest and penalties) as a result of a favorable resolution reached by the Company with foreign tax authorities around transfer pricing between certain FLIR subsidiaries.

First nine months of 2024 compared with the first nine months of 2023

The first nine months of 2024 net sales decreased 1.0%.

Net income for the first nine months of 2024 increased 10.3%, driven primarily by the favorable resolution of an uncertain tax position reached by the Company with foreign tax authorities around transfer pricing between certain FLIR subsidiaries.

Net income per diluted share was $13.01 for the first nine months of 2024, compared with net income per diluted share of $11.75.

The first nine months of 2024 net sales, compared with the first nine months of 2023, reflected lower net sales in the Digital Imaging and Engineered Systems segments, partially offset by higher net sales in the Aerospace and Defense Electronics and Instrumentation segments.

The first nine months of 2024 included $32.1 million in incremental sales from recent acquisitions.

First quarter of 2025 compared with the first quarter of 2024

Our first quarter of 2025 net sales increased 7.4%.

Net income attributable to Teledyne for the first quarter of 2025 increased 5.7%, driven primarily by higher net sales.

Net income per diluted share was $3.99 for the first quarter of 2025, compared with net income per diluted share of $3.72.

The first quarter of 2025 net sales compared with the first quarter of 2024 reflected higher net sales in each segment.

The first quarter of 2025 included $55.6 million in incremental sales from recent acquisitions.

Cost of Sales

Cost of sales decreased $18.6 million in the first nine months of 2024 and reflected the impact of lower sales.

Cost of sales as a percentage of net sales increased for the first nine months of 2024 to 57.0% from 56.9%.

Cost of sales increased $60.2 million in the first quarter of 2025, primarily driven by higher net sales.

Cost of sales as a percentage of net sales increased slightly for the first quarter of 2025 to 57.3% from 57.0%.

Selling, General and Administrative Expense

SG&A expense, including research and development expense, decreased $13.5 million in the first nine months of 2024 due to lower sales as well as lower research and development expense, with the lower research and development expense primarily related to FLIR integration-related cost-reduction efforts implemented in the second half of 2023.

SG&A expense as a percentage of net sales for the first nine months of 2024 was 21.4% compared with 21.5%.

Corporate expense, which is included in SG&A expense, was $57.1 million for the first nine months of 2024, compared with $49.8 million, with the increase primarily related to higher compensation expense, including higher stock-based compensation expense and increased legal contingencies for a legacy environmental reserve.

Stock-based compensation expense was $30.0 million for the first nine months of 2024 compared with $24.3 million.

The first nine months of 2024 also included $6.9 million of FLIR-related integration costs, including employee separation costs, facility consolidation costs and facility lease impairments, compared with $5.8 million.

Selling, general and administrative (“SG&A”) expense increased $14.2 million in the first quarter of 2025 due to higher net sales.

SG&A expense as a percentage of net sales decreased to 16.1% for the first quarter of 2025 compared with 16.3%.

Corporate expense, which is included in SG&A expense, was $22.2 million for the first quarter of 2025 compared with $20.1 million, with the increase primarily related to higher transaction costs in the first quarter of 2025 related to current year acquisitions.

Stock-based compensation expense was $8.9 million for the first quarter of 2025 compared with $12.0 million, with the decrease due to timing of grants in the current year.

Subsequent to the end of the first quarter of 2025, the Company made its annual stock option and restricted stock grants.

Research and Development Expense

R&D expense decreased $2.2 million in the first quarter of 2025 due to lower R&D expense at the Digital Imaging segment.

Acquired Intangible Asset Amortization

Acquired intangible asset amortization for the first nine months of 2024 was $148.3 million compared with $148.1 million.

Acquired intangible asset amortization for the first quarter of 2025 was $52.0 million compared with $49.4 million, with the increase primarily related to 2025 acquisitions within the Aerospace and Defense Electronics segment.

Pension Service Expense

Pension service expense is included in both cost of sales and SG&A expense.

For both the first nine months of 2024 and 2023, pension service expense was $4.5 million.

For the first quarter of 2025 and 2024, pension service expense was $1.5 million.

For 2025, the weighted-average discount rate used to determine the benefit obligation for the domestic qualified pension plans is 7.05% compared with 6.86% in 2024.

Operating Income

Operating income for the first nine months of 2024 decreased 1.4%.

The first nine months of 2024, compared with the first nine months of 2023, reflected lower operating income in the Digital Imaging and Engineered Systems segments, partially offset by higher operating income in the Aerospace and Defense Electronics and Instrumentation segments.

Operating income for the first quarter of 2025 increased 10.7%.

The first quarter of 2025, compared with the first quarter of 2024, reflected higher operating income in each segment.

Non-operating Income and Expense

Interest and debt expense, net of interest income, was $44.2 million for the first nine months of 2024, compared with $61.7 million, with the decrease related to reduced outstanding borrowings with lower weighted average interest rates compared to the first nine months of 2023.

Non-service retirement benefit income was $8.2 million for the first nine months of 2024 compared with $9.3 million for the first nine months of 2023.

Other income and expense, net was expense of $3.7 million for the first nine months of 2024 compared with $7.4 million of other expense for the first nine months of 2023, with the difference primarily related to lower foreign exchange losses in the first nine months of 2024 compared with the first nine months of 2023.

The first nine months income tax provision considers income, permanent items, tax credits, and various statutory tax rates.

In both years, the first nine months discrete impact is primarily tax on stock-based compensation.

Interest and debt expense, net of interest income, was $17.3 million for the first quarter of 2025 compared with $12.7 million, with the decrease related to higher outstanding borrowings compared to the first quarter of 2024.

Non-service retirement benefit income was $2.8 million for the first quarter of 2025 compared with $2.7 million.

Other income and expense, net, was expense of $5.9 million for the first quarter of 2025 compared with income of $1.2 million for the first quarter of 2024.

Other income and expense, net, primarily consisted of foreign currency exchange losses in the first quarter of 2025, as compared with foreign currency exchange gains in the first quarter of 2024.

The first quarter income tax provision considers income, permanent items, tax credits, and various statutory tax rates.

First Quarter

(dollars in millions) 2025 2024

2 unchanged sentences

Effective tax rate 21.0% 20.6%

(a) The first nine months of 2024 includes net discrete income tax benefits of $67.4 million and the first nine months of 2023 includes net discrete income tax benefits of $14.1 million, respectively.

During the first nine months of 2024, the Company released $62.5 million of net income tax reserve liability (including applicable interest and penalties) as a result of a favorable resolution reached by the Company with foreign tax authorities around transfer pricing between certain FLIR subsidiaries.

(a) The first quarter of 2025 includes net discrete income tax benefits of $3.7 million and the first quarter of 2024 includes net discrete income tax benefits of $4.4 million.

Segment Results

Segment results include net sales and operating income by segment but exclude corporate office expenses.

Corporate expense primarily includes various administrative expenses relating to our corporate office not allocated to our segments.

Corporate expense primarily includes various administrative expenses relating to our corporate office that are not allocated to our segments.

See Note 3 to these condensed consolidated financial statements for additional segment information.

Digital Imaging

Third Quarter Change Nine Months Change

First Quarter Change

(dollars in millions) 2025 2024 $ %

1 unchanged sentence

Cost of sales $ 422.5 $ 408.6 $ 13.9 3.4 %

SG&A expense $ 170.5 $ 171.8 $ (1.3) (0.8) % $ 512.5 $ 552.9 $ (40.4) (7.3) %

Selling, general and administrative expense

$ 122.7 $ 123.7 $ (1.0) (0.8) %

Research and development expense

$ 44.1 $ 48.9 $ (4.8) (9.8) %

Acquired intangible asset amortization $ 45.4 $ 45.8 $ (0.4) (0.9) %

2 unchanged sentences

Cost of sales 55.8 % 55.2 %

SG&A expense 22.2 % 22.1 % 22.8 % 23.6 %

Selling, general and administrative expense

16.2 % 16.6 %

Research and development expense

Acquired intangible asset amortization 6.0 % 6.2 %

Operating income 16.2 % 15.4 %

Third quarter of 2024 compared with the third quarter of 2023

Net sales decreased primarily due to lower sales of industrial automation imaging systems and X-ray products, partially offset by higher sales of unmanned air systems, surveillance systems, infrared detectors, commercial infrared imaging systems and incremental sales from recent acquisitions.

Sales of industrial automation imaging systems decreased $45.3 million, sales of X-ray products decreased $9.7 million, sales of unmanned air systems increased $15.6 million, sales of surveillance systems increased $8.9 million, sales of commercial infrared imaging systems increased $6.2 million and sales of infrared detectors increased $5.3 million.

The third quarter of 2024 also included $10.8 million in incremental sales from recent acquisitions.

Cost of sales increased primarily due to product mix partially offset by decreased net sales.

As a result of unfavorable product mix, including lower industrial automation imaging systems net sales, the cost of sales percentage increased during the period.

SG&A expense decreased due to lower net sales.

SG&A expense as a percentage of net sales increased slightly during the quarter.

Operating income decreased primarily due to lower net sales and unfavorable product mix during the period, and operating income as a percentage of net sales decreased during the period primarily due to unfavorable product mix.

First nine months of 2024 compared with the first nine months of 2023

Net sales decreased primarily due to lower sales of industrial automation imaging systems, X-ray products and geospatial products, partially offset by higher sales of unmanned air systems, surveillance systems, infrared detectors and incremental sales from recent acquisitions.

Sales of industrial automation imaging systems decreased $136.7 million, sales of X-ray products decreased $23.1 million, sales of commercial infrared imaging systems decreased $9.6 million, sales of geospatial products decreased $8.0 million, sales of unmanned air systems increased $33.7 million, sales of surveillance systems increased $20.4 million and sales of infrared detectors increased $19.2 million.

The first nine months of 2024 also included $14.8 million in incremental sales from recent acquisitions.

Cost of sales decreased primarily due to decreased net sales partially offset by product mix.

As a result of unfavorable product mix, including lower industrial automation imaging systems net sales, the cost of sales percentage increased during the period.

SG&A expense decreased primarily due to lower net sales and $54.5 million in lower research and development costs.

SG&A expense as a percentage of net sales decreased primarily due primarily due to lower research and development costs.

Research and development costs decreased primarily due to FLIR integration-related cost-reduction efforts implemented in the second half of 2023.

Operating income decreased primarily due to lower net sales and unfavorable product mix during the period partially offset by lower research and development costs.

Operating income as a percentage of net sales decreased during the period primarily due to unfavorable product mix partially offset by lower research and development costs.

First quarter of 2025 compared with the first quarter of 2024

Net sales increased primarily due to higher sales of commercial infrared imaging components as well as surveillance systems, partially offset by lower sales of X-ray products.

Sales of commercial infrared imaging components increased $13.9 million, sales of surveillance systems increased $11.7 million, and sales of X-Ray products decreased $6.9 million.

The first quarter of 2025 included $8.9 million in incremental sales from recent acquisitions.

Cost of sales increased primarily due to product mix.

As a result of unfavorable product mix, the cost of sales percentage increased during the period.

SG&A expense decreased primarily due to cost reduction initiatives that completed in 2024, partially offset by higher sales.

As a result, SG&A expense as a percentage of net sales decreased during the quarter.

R&D expense decreased primarily due to ongoing cost rationalization and cost reduction initiatives.

Operating income increased primarily due to higher net sales and lower SG&A and R&D expense, partially offset by unfavorable product mix during the period, and operating income as a percentage of net sales increased during the period primarily due to lower SG&A and R&D expense in the first quarter of 2025.

Instrumentation

Third Quarter Change Nine Months Change

First Quarter Change

(dollars in millions) 2025 2024 $ %

1 unchanged sentence

Cost of sales $ 173.5 $ 171.2 $ 2.3 1.3 %

SG&A expense $ 71.7 $ 69.9 $ 1.8 2.6 % $ 214.2 $ 209.6 $ 4.6 2.2 %

Selling, general and administrative expense

$ 49.7 $ 47.0 $ 2.7 5.7 %

Research and development expense

$ 24.2 $ 22.8 $ 1.4 6.1 %

Acquired intangible asset amortization $ 3.2 $ 3.4 $ (0.2) (5.9) %

2 unchanged sentences

Cost of sales 50.5 % 51.8 %

SG&A expense 20.5 % 21.2 % 21.1 % 21.1 %

Selling, general and administrative expense

14.5 % 14.2 %

Research and development expense

Acquired intangible asset amortization 1.0 % 1.1 %

Operating income 27.0 % 26.0 %

Third quarter of 2024 compared with the third quarter of 2023

Net sales increased due to higher sales in our Marine Instrumentation product line, partially offset by lower sales at our Test and Measurement Instrumentation and Environmental Instrumentation product lines.

First quarter of 2025 compared with the first quarter of 2024

Net sales increased due to higher sales in our Marine Instrumentation and Test and Measurement Instrumentation product lines, partially offset by lower sales at our Environmental Instrumentation product line.

Sales of Marine Instrumentation increased $14.0 million due to the ongoing recovery in offshore energy markets as well as stronger defense market sales.

Sales of Test and Measurement Instrumentation and Environmental Instrumentation decreased $7.2 million and $4.0 million, respectively, with the decrease in Test and Measurement Instrumentation primarily due to end market weakness.

The third quarter of 2024 included $7.2 million in incremental sales from recent acquisitions.

Sales of Test and Measurement Instrumentation increased $1.1 million, and sales of Environmental Instrumentation decreased $2.2 million.

The first quarter of 2025 included $4.4 million in incremental sales from recent acquisitions.

Cost of sales increased primarily due to higher net sales, partially offset by favorable product mix.

The cost of sales percentage decreased due to favorable product mix, including improved margins in our Marine Instrumentation product line.

SG&A expense increased slightly due to higher net sales in the period, and SG&A expense as a percentage of net sales decreased as research and development expense was relatively consistent in both periods while net sales increased.

Operating income increased primarily due to higher Marine Instrumentation sales, favorable product mix and improved Marine Instrumentation margins, and operating income as a percentage of net sales increased due to favorable product mix and improved Marine Instrumentation margins as well as lower research and development expense as a percentage of net sales.

For nine months of 2024 compared with the first nine months of 2023

Sales of Marine Instrumentation increased $71.9 million due to the ongoing recovery in offshore energy markets as well as stronger defense market sales.

Sales of Test and Measurement Instrumentation decreased $36.6 million, and sales of Environmental Instrumentation decreased $12.6 million, respectively, with the decrease in Test and Measurement Instrumentation primarily due to end market weakness.

The first nine months of 2024 included $17.3 million in incremental sales from recent acquisitions.

Cost of sales decreased primarily due to favorable product mix, and the cost of sales percentage decreased due to favorable product mix, including improved margins in our Marine Instrumentation product line.

SG&A expense increased primarily due to higher net sales.

Operating income increased primarily due to higher net sales and favorable product mix, including improved margins in our Marine Instrumentation product line.

Operating income as a percentage of net sales increased primarily due to increased net sales and favorable product mix.

SG&A expense increased due to higher net sales during the period, and SG&A expense as a percentage of net sales increased slightly.

R&D expense increased due to higher Marine Instrumentation product development, and the R&D expense percentage was relatively consistent in both periods.

Operating income increased primarily due to higher Marine Instrumentation sales, favorable product mix, and improved Marine Instrumentation margins, and operating income as a percentage of net sales increased due to favorable product mix and improved Marine Instrumentation margins.

Aerospace and Defense Electronics

Third Quarter Change Nine Months Change

First Quarter Change

(dollars in millions) 2025 2024 $ %

1 unchanged sentence

Cost of sales $ 144.2 $ 107.9 $ 36.3 33.6 %

SG&A expense $ 31.9 $ 25.6 $ 6.3 24.6 % $ 87.2 $ 73.2 $ 14.0 19.1 %

Selling, general and administrative expense

$ 33.2 $ 21.0 $ 12.2 58.1 %

Research and development expense

$ 6.0 $ 4.7 $ 1.3 27.7 %

Acquired intangible asset amortization $ 3.4 $ 0.2 $ 3.2 *

2 unchanged sentences

Cost of sales 59.5 % 58.1 %

SG&A expense 15.9 % 14.0 % 15.0 % 13.5 %

Selling, general and administrative expense

13.7 % 11.3 %

Research and development expense

Acquired intangible asset amortization 1.3 % 0.1 %

Operating income 23.0 % 28.0 %

Third quarter of 2024 compared with the third quarter of 2023

Net sales increased due to a $12.6 million increase in defense electronics and a $4.3 million increase in aerospace electronics.

Cost of sales increased due to higher net sales partially offset by favorable product mix, and the cost of sales percentage decreased due to favorable product mix.

SG&A expense increased primarily due to higher net sales as well as a $2.5 million increase in research and development costs.

Operating income and operating income as a percent of net sales increased primarily due to increased net sales and favorable product mix during the period.

First nine months of 2024 compared with the first nine months of 2023

Net sales increased due to a $19.4 million increase for defense electronics and an $18.4 million increase for aerospace electronics.

Cost of sales increased primarily due to higher net sales partially offset by favorable product mix, and the cost of sales percentage decreased as a result.

SG&A expense as well as the SG&A expense percentage increased primarily due to a $5.7 million increase in research and development costs.

Operating income and operating income as a percent of net sales increased primarily due to increased net sales during the period as well as favorable product mix.

* Not meaningful

First quarter of 2025 compared with the first quarter of 2024

Net sales increased due to a $57.1 million increase in defense electronics, partially offset by a $0.3 million decrease in aerospace electronics.

The first quarter of 2025 included $42.3 million in incremental sales from recent acquisitions.

Cost of sales increased due to higher net sales, partially offset by unfavorable product mix, including recent acquisitions which carry a higher cost of sales percentage, and the cost of sales percentage increased due to unfavorable product mix.

SG&A expense increased due to higher net sales as well as $3.2 million of transaction and integration costs for 2025 acquisitions incurred in the first quarter of 2025, with no comparable amount recorded in the first quarter of 2024.

R&D expense increased due to primarily to the 2025 acquisitions, and the R&D expense percentage was similar in both periods.

Operating income increased primarily due to increased net sales, and operating income as a percent of net sales decreased primarily due higher transaction and integration costs as well as unfavorable product mix.

Engineered Systems

Third Quarter Change Nine Months Change

First Quarter Change

(dollars in millions) 2025 2024 $ %

1 unchanged sentence

Cost of sales $ 90.2 $ 82.5 $ 7.7 9.3 %

SG&A expense $ 6.3 $ 6.8 $ (0.5) (7.4) % $ 20.8 $ 19.8 $ 1.0 5.1 %

Selling, general and administrative expense

$ 6.1 $ 7.9 $ (1.8) (22.8) %

Research and development expense

$ — $ 0.1 $ (0.1) (100.0) %

Operating income $ 10.8 $ 2.7 $ 8.1 300.0 %

1 unchanged sentence

Cost of sales 84.2 % 88.5 %

SG&A expense 5.0 % 6.0 % 6.4 % 5.9 %

Selling, general and administrative expense

Research and development expense

Operating income 10.1 % 2.9 %

Third quarter of 2024 compared with the third quarter of 2023

Net sales increased due to higher sales of $10.3 million for engineered products and $0.5 million for energy systems.

Cost of sales increased primarily due to higher net sales, and the cost of sales percentage increased slightly during the period.

SG&A expense decreased primarily due to lower research and development and bid and proposal expense, and SG&A expense as a percentage of net sales decreased.

Operating income and operating income as a percentage of net sales increased primarily due higher net sales and favorable program mix.

First nine months of 2024 compared with the first nine months of 2023

Net sales decreased primarily due to lower sales of $8.7 million for engineered products and $1.6 million for energy systems.

Cost of sales decreased primarily due to lower net sales.

The cost of sales percentage increased due to program mix.

SG&A expense and SG&A expense as a percentage of net sales increased.

Operating income decreased primarily due to lower net sales.

Operating income as a percentage of net sales decreased slightly.

First quarter of 2025 compared with the first quarter of 2024

Net sales increased due to higher sales of $14.2 million for engineered products, partially offset by a $0.3 million decrease in energy systems.

Cost of sales increased primarily due to higher net sales, and the cost of sales percentage decreased during the period due to favorable program mix.

SG&A expense decreased primarily due to lower selling expense, and SG&A expense as a percentage of net sales decreased.

Operating income and operating income as a percentage of net sales increased primarily due to higher net sales, lower selling expense and favorable program mix.

Financial Condition, Liquidity and Capital Resources

5 unchanged sentences

Cash and Cash Equivalents

Cash and cash equivalents totaled $561.0 million at September 29, 2024 compared with $648.3 million at December 31, 2023.

Cash and cash equivalents totaled $461.5 million at March 30, 2025, compared with $649.8 million at December 29, 2024.

Cash equivalents consist of highly liquid money-market mutual funds, with maturities of three months or less when purchased.

Long-term Debt

Total debt at September 29, 2024 was $2,798.0 million compared with $3,244.9 million at December 31, 2023.

In the first nine months of 2024, we made a $450 million debt maturity payment on the Senior notes due April 2024.

At September 29, 2024, $1,171.1 million was available under the $1.20 billion credit facility, after reductions of $28.9 million in outstanding letters of credit.

Our bank credit agreements, which includes our $1.20 billion credit facility expiring June 2029 and our $150.0 million term loan due October 2024, require us to comply with various financial and operating covenants.

At September 29, 2024, we were in compliance with these covenants.

Total debt at March 30, 2025, was $2,964.8 million compared with $2,649.0 million at December 29, 2024, with the increase due to borrowings under the credit facility to support acquisition activity in the first quarter of 2025.

At March 30, 2025, $855.5 million was available under the $1.20 billion credit facility, after reductions of $315.0 million in outstanding borrowings and $29.5 million in outstanding letters of credit.

Our bank credit agreements, which includes our $1.20 billion credit facility expiring June 2029, require us to comply with various financial and operating covenants.

At March 30, 2025, we were in compliance with these covenants.

Our liquidity is not dependent upon the use of off-balance sheet financial arrangements.

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We currently intend to fund future share repurchases with cash on hand and available borrowings under our credit facility.

During the first nine months of 2024, we repurchased approximately 0.8 million shares for $332.6 million with a weighted-average price of $397.14 per share.

Subsequent to the end of the third quarter of 2024, we repurchased approximately 0.1 million shares for $21.4 million with a weighted-average price of $445.85 per share.

Net cash provided by operating activities was $859.5 million for the first nine months of 2024 compared with $671.7 million, driven primarily by stronger working capital conversion in the first nine months of 2024, including stronger account receivable collection and higher contract liabilities from customer advances.

Net cash used in investing activities was $178.2 million for the first nine months of 2024 compared with $127.3 million.

During the first nine months of 2024, we spent $123.7 million on acquisitions as compared with $53.5 million.

Capital expenditures for the first nine months of 2024 and 2023 were $54.7 million and $74.7 million, respectively.

No repurchases under any authorizations were made in the first quarter of 2025 or 2024.

Net cash provided by operating activities was $242.6 million for the first three months of 2025 compared with $291.0 million, with the decrease driven primarily by cash outflows on foreign exchange contracts in the first quarter of 2025 as compared to cash inflows on foreign exchange contracts in the first quarter of 2024 as well as lower customer advances received in the first quarter of 2025.

Net cash used in investing activities was $775.0 million for the first three months of 2025 compared with $15.9 million.

During the first three months of 2025, we spent $757.6 million on acquisitions, with no comparable spend for the first three months of 2024.

Capital expenditures for the first three months of 2025 and 2024 were $18.0 million and $15.9 million, respectively.

We currently plan to invest approximately $130 million for capital expenditures in 2025.

Net cash used in financing activities was $772.4 million for the first nine months of 2024 compared with net cash used in financing activities of $665.7 million, with the first nine months of 2024 including a $450 million debt maturity payment on the Senior Notes due April 2024, and share repurchases of $332.6 million.

During the first nine months of 2023, the Company repaid $125.0 million of amounts outstanding on its credit facility, the $300.0 million Fixed Rate Senior Notes due April 2023, and the remaining $245.0 million on its term loan due May 2026.

The Company also repurchased and retired $10.0 million of its Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt.

Net cash provided by financing activities was $339.6 million for the first three months of 2025 compared with net cash provided by financing activities of $6.1 million, with the first three months of 2025 including net proceeds from our credit facility of $315.0 million.

Critical Accounting Policies and Estimates

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Safe Harbor Cautionary Statement Regarding Forward-Looking Information

From time to time we make, and this report contains, forward looking statements, as defined in the Private Securities Litigation Reform Act of 1995, directly or indirectly relating to sales, sales growth, earnings, operating margin, growth opportunities, acquisitions, product sales, capital expenditures, stock repurchases, pension matters, stock-based compensation expense, the credit facility, interest expense, severance, relocation and facility consolidation costs, environmental remediation costs, taxes, exchange rate fluctuations and strategic plans.

Forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believe” or “expect”, that convey the uncertainty of future events or outcomes.

From time to time we make, and this report contains, forward looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations, acquisitions, capital expenditures and product synergies, integration costs, tax matters and businesses of Teledyne in the future.

Forward-looking statements involve risks and uncertainties, are based on the current expectations of the management of Teledyne and are subject to uncertainty and changes in circumstances.

All statements made in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and in other sections of this Form 10-Q that are not historical in nature should be considered forward-looking.

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Many factors could change anticipated results, including:

the impact of policies of the U.S.

Presidential Administration, especially with respect to new and higher tariffs, cutbacks in the funding of government agencies and programs, and the scaling back of environmental and green energy policies;

escalating economic and diplomatic tension between China and the United States, including a potential “trade war” that results in higher tariffs and restrictions on sales of goods and services;

reciprocal tariffs from other countries;

changes in relevant tax and other laws;

foreign currency exchange risks;

rising interest rates;

rising interest rates and inflation;

risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof;

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the inability to develop and market new competitive products;

inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S.

GAAP and related standards;

inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with GAAP and related standards;

disruptions in the global economy;

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and foreign government spending and budget priorities triggered by inflation, rising interest costs, and economic conditions;

impacts from the United Kingdom’s exit from the European Union;

uncertainties related to the 2024 U.S.

Presidential election;

the imposition and expansion of, and responses to, trade sanctions and tariffs;

the continuing review and resolution of FLIR’s trade compliance and tax matters;

escalating economic and diplomatic tension between China and the United States;

threats to the security of our confidential and proprietary information, including cybersecurity threats;

risks related to artificial intelligence;

natural and man-made disasters, including those related to or intensified by climate change;

natural and man-made disasters;

and our ability to achieve emission reduction targets and decrease our carbon footprint.

Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including those implemented in response to climate change, could further negatively affect our businesses that supply the oil and gas industry.

Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production could further negatively affect our businesses that supply the oil and gas industry.

Weakness in the commercial aerospace industry negatively affects the markets of our commercial aviation businesses.

The recent machinist strike at Boeing as well as the ongoing issues with Boeing’s 737 MAX product line could result in manufacturing delays and lower sales of our products to Boeing.

Lower aircraft production rates at Boeing or Airbus could result in reduced sales of our commercial aerospace products.

In addition, financial market fluctuations affect the value of the company’s pension assets.

Changes in the policies of U.S.

and foreign governments, including economic sanctions, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

While our growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made.

Changes in the policies of the United States and foreign governments, including economic sanctions or in regard to support Ukraine, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

While the Company’s growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made.

Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain key management and customers and achieve identified financial and operating synergies.

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While we believe our control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and may not be detected.

Readers are urged to read our periodic reports filed with the Securities and Exchange Commission for a more complete description of our company, its businesses, its strategies and the various risks that we face.

Readers are urged to read our periodic reports filed with the SEC for a more complete description of our Company, its businesses, its strategies and the various risks that we face.

Various risks are identified in our 2024 Form 10-K and subsequent Quarterly Reports on Form 10-Q.

All forward-looking statements speak only as of the date they are made and are based on information available at that time.

We assume no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.

We assume no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.

As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

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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-Q

Item 1. Financial Statements