10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 2, 2011
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to

Commission file number: 1-15295

Teledyne Technologies Incorporated

(Exact name of registrant as specified in its charter)

Delaware	25-1843385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1049 Camino Dos Rios

Thousand Oaks, California 91360-2362

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (805) 373-4545

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $.01 per share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ  No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ        Accelerated filer o         Non-accelerated filer o        Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No þ

The aggregate market value of the registrant’s Common Stock held by non-affiliates was $1,319.0 million, based on the closing price of a share of Common Stock on July 2, 2010 ($37.49), which is the last business day of the registrant’s most recently completed fiscal second quarter. Shares of Common Stock known by the registrant to be beneficially owned as of February 25, 2011, by the registrant’s directors and the registrant’s executive officers subject to Section 16 of the Securities Exchange Act of 1934 are not included in the computation. The registrant, however, has made no determination that such persons are “affiliates” within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934.

At February 25, 2011, there were 36,640,514 shares of the registrant’s Common Stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Selected portions of the registrant’s proxy statement for its 2011 Annual Meeting of Stockholders (the “2011 Proxy Statement”) are incorporated by reference in Part III of this Report. Information required by paragraphs (d)(1)-(3) and (e)(5) of Item 407 of Regulation S-K shall not be deemed “soliciting material” or to be filed with the Commission as permitted by Item 407 of Regulation S-K.

INDEX

		Page
		Number
PART I
Item 1.	Business		1
Item 1A.	Risk Factors		18
Item 1B.	Unresolved Staff Comments		38
Item 2.	Properties		38
Item 3.	Legal Proceedings		41
Item 4.	Reserved
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		42
Item 6.	Selected Financial Data		43
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation		44
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk		70
Item 8.	Financial Statements and Supplementary Data		70
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		70
Item 9A.	Controls and Procedures		70
Item 9B.	Other Information		71
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		72
Item 11.	Executive Compensation		72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		72
Item 13.	Certain Relationships and Related Transactions, and Director Independence		73
Item 14.	Principal Accountant Fees and Services		73
PART IV
Item 15	Exhibits and Financial Statement Schedules		74
INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION			75
SIGNATURES			118
EXHIBIT INDEX			119
EX-2.2
EX-21
EX-23
EX-24.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Explanatory Notes

In this Annual Report on Form 10-K, Teledyne Technologies Incorporated is sometimes referred to as the “Company” or “Teledyne”.

For a discussion of risk factors and uncertainties associated with Teledyne and any forward looking statements made by us, see the discussion beginning at page 18 of this Annual Report on Form 10-K.

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PART I

Item 1.   Business.

Who We Are

Teledyne Technologies Incorporated is a leading provider of sophisticated electronic components and subsystems, instrumentation and communications products, including defense electronics, digital imaging products and software, monitoring and control instrumentation for marine, environmental and industrial applications, harsh environment interconnect products, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications. We also provide engineered systems and information technology services for defense, space, environmental and nuclear applications, and supply energy generation, energy storage and small propulsion products.

We serve niche market segments where performance, precision and reliability are critical. Our customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies and airlines.

Total sales from continuing operations in 2010 were $1,644.2 million, compared with $1,652.1 million in 2009 and $1,722.0 million in 2008. Our aggregate segment operating profit and other segment income were $207.3 million in 2010, $198.7 million in 2009 and $228.2 million in 2008. This information reflects the classification of our former Aerospace Engines and Components segment as a discontinued operation given the previously announced and pending sale of our piston engines businesses, as further described below.

Approximately 56% of our total sales from continuing operations in 2010 were to commercial customers and the balance was to the U.S. Government, as a prime contractor or subcontractor. Approximately 44% of these U.S. Government sales were attributable to fixed-price type contracts and the balance to cost plus fee-type contracts. Sales to international customers accounted for approximately 29% of total sales from continuing operations in 2010.

Our businesses are divided into four business segments; namely, Instrumentation, Digital Imaging, Aerospace and Defense Electronics and Engineered Systems. For 2010, we realigned and changed our reporting structure of some of our reportable business units. Our former Electronics and Communications segment is now reported as three separate segments, Instrumentation, Digital Imaging and Aerospace and Defense Electronics. The businesses that had comprised the Energy and Power Systems segment are now reported as part of the Aerospace and Defense Electronics and the Engineered Systems segments. Our battery products business, with revenues of $15.5 million in 2010, is now part of the Aerospace and Defense Electronics segment and the on-site gas and power generation systems and the turbine engines businesses, with combined revenues of $53.9 million in 2010, are now part of the Engineered Systems segment. Our previously reported segment data have been restated to reflect this revised reporting structure and the classification of our piston engines businesses as a discontinued operation.

Our four business segments and their respective contributions to our total sales in 2010, 2009 and 2008 are summarized in the following table:

	Percentage of Sales
Segment	2010			2009			2008
Instrumentation		35	%		32	%		32	%
Digital Imaging		8	%		8	%		8	%
Aerospace and Defence Electronics		37	%		35	%		35	%
Engineered Systems		20	%		25	%		25	%
		100	%		100	%		100	%

We are a Delaware corporation that was spun off as an independent company from Allegheny Teledyne Incorporated (now known as Allegheny Technologies Incorporated) (“ATI”) on November 29, 1999. Our

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principal executive offices are located at 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362. Our telephone number is (805) 373-4545.

Strategy

Our strategy continues to emphasize growth in our core markets of instrumentation, digital imaging, aerospace and defense electronics and government engineered systems. Our core markets are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our core businesses with targeted acquisitions. We aggressively pursue operational excellence to continually improve our margins and earnings. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire. Over time, our goal is to create a set of businesses that are truly superior in their niches. We continue to evaluate our businesses to ensure that they are aligned with our strategy.

With the recently completed acquisition of DALSA Corporation and subject to the divestiture of our general aviation piston engines businesses, as described below, we will be transformed into an electronics, instrumentation, digital imaging and engineering focused company.

Our Recent Acquisitions

During fiscal 2010, we acquired:

•  Optimum Optical Systems, Inc., a designer and manufacturer of custom-optics, optomechanical assemblies and electro-optics for use in the ultraviolet, visible and infrared spectrum. This acquisition expands Teledyne’s capabilities and product offerings in tactical infrared imaging systems.

•  Intelek plc, a designer and manufacturer of electronic systems for satellite and microwave communication and a manufacturer of aerostructures and advanced composites. This acquisition principally expands Teledyne’s capabilities in microwave systems.

•  Hafmynd ehf, a designer and manufacturer of the Gavia^tm autonomous underwater vehicle. This acquisition expands Teledyne’s underwater surveying capabilities.

On February l2, 2011, we completed Teledyne’s largest acquisition to date to broaden our digital imaging capabilities, markets and customers with:

•  DALSA Corporation (“DALSA”), a designer and manufacturer of digital imaging products as well as semiconductor wafers and components. Among other things, our combined digital imaging technologies should allow us to develop new infrared and visible light products for our respective markets and customers.

Teledyne spent $60.0 million on the above-listed 2010 acquisitions and approximately CAD $337 million for its recent 2011 acquisition of DALSA.

Our Pending Divestiture

In accordance with our strategy to evaluate and divest non-core businesses, in December 2010, we entered into an agreement to sell our general aviation piston engines businesses, including Teledyne Continental Motors, Inc. and Teledyne Mattituck Services, Inc., to Technify Motor (USA) Ltd., a subsidiary of China-based AVIC International Holding Corporation for $186.0 million in cash. These piston engines businesses formerly constituted Teledyne’s Aerospace Engines and Components segment and are now classified as discontinued operations. While the sale is subject to closing conditions, we expect it to close during the 1st quarter of 2011.

Available Information

Our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K, and any amendments to these reports, are available on our website as soon as reasonably

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practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission (the “SEC”). The SEC also maintains a website that contains these reports at www.sec.gov. In addition, our Corporate Governance Guidelines, our Corporate Objectives and Guidelines for Employee Conduct, our code of ethics for financial executives, directors and service providers and the charters of the standing committees of our Board of Directors are available on our website. Our website address is www.teledyne.com.

You will be responsible for any costs normally associated with electronic access, such as usage and telephone charges. Alternatively, if you would like a paper copy of any such SEC report (without exhibits) or document, please write to John T. Kuelbs, Executive Vice President, General Counsel and Secretary, Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362, and a copy of such requested document will be provided to you, free-of-charge.

Our Business Segments

Our businesses are divided into four segments: Instrumentation; Digital Imaging; Aerospace and Defense Electronics; and Engineered Systems. Financial information about our business segments can be found in Note 13 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Instrumentation

Our Instrumentation segment provides monitoring and control instruments for marine, environmental, scientific, industrial and defense applications and harsh environment interconnect products.

Marine Instrumentation

Historically, through Teledyne Geophysical Instruments, we have manufactured geophysical streamer cables, hydrophones and specialty products used in offshore hydrocarbon exploration to locate oil and gas reserves beneath the ocean floor. We continue to adapt this technology for the military market, where these products can be used to detect submarines, surface ships and torpedoes.

Through various acquisitions over the last several years, we have greatly expanded our underwater acoustic and marine instrumentation capabilities.

•  Teledyne RD Instruments, Inc.’s acoustic Doppler current profilers perform precise measurement of currents at varying depths in oceans and rivers, and its Doppler Velocity Logs are used for navigation by civilian and military surface ships, unmanned underwater vehicles and U.S. Navy divers. We also manufacture conductivity, temperature and depth (CTD) sensors.

•  Teledyne Benthos, Inc. manufactures oceanographic products used by the U.S. Navy and in energy exploration, oceanographic research and port and harbor security services. Products include acoustic modems for networked underwater communication, sidescan and sub-bottom profiling sonar systems, underwater acoustic releases and remotely operated underwater vehicles.

•  Teledyne TSS Limited designs and manufactures inertial sensing, gyrocompass navigation and subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets. Teledyne TSS’ inertial sensing and navigation systems, which contain mechanical gyros and solid state sensors, provide detailed positioning parameters for marine applications. Teledyne TSS’ electromagnetic detection systems are fitted to remotely operated vehicles and used for detection and maintenance of subsea telecommunications cables, power cables and offshore pipelines.

•  Teledyne Webb Research manufactures autonomous underwater gliding vehicles and profiling floats. Our gliders use a silent buoyancy engine for propulsion that takes advantage of changes in buoyancy in conjunction with wings and tail steering to convert vertical motion to horizontal displacement, thereby propelling the system on a programmed route with very low power consumption. Glider applications range from oceanographic research to military persistent surveillance systems and mobile nodes for subsea communication networks. To expand our underwater surveying capabilities, in 2010, we

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purchased an Icelandic company that manufactures the battery-powered Gavia^tm autonomous underwater vehicle. The Gavia^tm vehicle’s modular design allows for rapid sensor reconfiguration and battery replacement.

•  Teledyne Odom Hydrographic, Inc. designs and manufactures hydrographic survey instrumentation used in port surveys, dredging, pre-installation of offshore energy infrastructure and other applications. Teledyne Odom’s single and multibeam echo sounders, coupled with Teledyne RD Instruments’ Doppler Velocity Logs, Teledyne Benthos’ side scan sonar systems and Teledyne TSS’ inertial sensing systems, provide an extensive line of precision products for marine navigation, detection, sonar imaging and bathymetric survey.

•  U.K.-based Teledyne Cormon manufactures subsea and surface pipeline corrosion and erosion monitoring, as well as flow integrity monitoring solutions for the oil and gas industry. These flow assurance sensors and equipment rely on wet-mateable interconnect systems from Teledyne ODI and feed-through systems from Teledyne D.G. O’Brien.

We also provide a broader range of end-to-end undersea interconnect solutions to the offshore oil and gas, defense, oceanographic and telecom markets.

•  Teledyne ODI, Inc. manufactures subsea, wet-mateable electrical and fiber-optic interconnect systems used in offshore oil and gas production, oceanographic research and military applications.

•  Teledyne D.G. O’Brien manufactures glass-to-metal sealed subsea cable, pressure vessel penetrator and connector systems, primarily for subsea military and subsea oil and gas production.

•  Teledyne Impulse manufactures water-proof and splash-proof neoprene and glass reinforced epoxy connectors and cable assemblies that complement Teledyne D.G. O’Brien’s and Teledyne ODI’s interconnect systems typically used in underwater equipment and submerged monitoring systems.

•  Our Teledyne Oil & Gas group is working with Teledyne Scientific Company in an effort to improve the reliability of materials exposed to harsh deep sea conditions.

Environmental Instrumentation

We offer a wide range of products for environmental monitoring.

•  Teledyne Advanced Pollution Instrumentation, Inc. manufactures a broad line of instrumentation for monitoring trace levels of gases such as sulfur dioxide, carbon monoxide, carbon dioxide, nitrogen oxide, methane and ozone in order to measure the quality of the air we breathe.

•  Teledyne Monitor Labs, Inc. supplies environmental monitoring systems for the detection, measurement and reporting of air pollutants from industrial stack emissions.

•  Teledyne Isco, Inc. produces water quality and quantity monitoring products such as wastewater samplers and open channel flow meters. A variety of measurement technologies is offered to address challenging flow measurement applications in pump stations, flumes, weirs, industrial and municipal sewer systems and storm drains.

We provide laboratory instrumentation that complements our environmental monitoring businesses.

•  Teledyne Tekmar Company manufactures laboratory instrumentation that automates the preparation and concentration of organic samples for the analysis of trace levels of volatile organic compounds by a gas chromatograph and mass spectrometry. The company also provides laboratory instrumentation for the detection of total organic carbon and total nitrogen in water and wastewater samples.

•  Through Teledyne Leeman Labs, we provide inductively coupled plasma laboratory spectrometers, atomic absorption spectrometers, mercury analyzers and calibration standards. The advanced elemental analysis products are used by environmental and quality control laboratories to detect trace levels of inorganic contaminants in water, foods, soils and other environmental and geological samples.

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•  Teledyne Isco, Inc. manufactures liquid chromatography instruments and accessories for purification of organic compounds. Its liquid chromatography customers include pharmaceutical laboratories involved in drug discovery and development. It also manufactures high precision, high pressure syringe pumps to measure process extraction rates of fluids ranging from liquefied gases to viscous tars with flow rates spanning sub-micro liter to 400 ml per minute with applied pressures up to 20,000 psi.

A group of Teledyne businesses serve the process control and monitoring needs of industrial plants with instruments that include gas analyzers, vacuum and flow measurement devices, package integrity inspection systems and torque measurement sensors.

•  Teledyne Analytical Instruments was a pioneer in the development of precision oxygen analyzers. We now manufacture a wide range of process gas and liquid analysis products for measurement of oxygen, combustibles, oil-in-water, moisture, sulfides, pH and many other parameters. We also manufacture custom analyzer systems that provide turn-key solutions to complex process monitoring and/or control applications found in petrochemical and refinery facilities.

•  Teledyne Hastings Instruments manufactures a broad line of instruments for precise measurement and control of vacuum and gas flows. Our instruments are used in varied applications such as semiconductor manufacturing, refrigeration, metallurgy and food processing.

•  Under the Taptone^® brand, Teledyne Benthos, Inc. provides quality control and package integrity systems to the food and beverage, personal care and pharmaceutical industries that inspect plastic, glass and metal containers, labeling and content for various types of defects and non-conformities.

•  Through Teledyne Test Services, we manufacture torque sensors and automatic data acquisition systems that are used to instrument critical control valves subject to regulatory oversight, such as the requirement to test periodically the torque, thrust and force of motor-operated valves used in nuclear power plants.

Digital Imaging

Our Digital Imaging segment includes our sponsored and centralized research laboratories for a range of new technologies benefiting government programs and our businesses as well as major development efforts for innovative digital imaging products for government and space applications. It also includes infrared detectors, cameras and optomechanical assemblies.

We design and produce advanced focal plane arrays, sensors, and subsystems covering a broad spectrum of light from below 0.3 micron ultra-violet to 18 micron long-wave infrared.

•  Through Teledyne Imaging Sensors, we provide large format focal plane array sensors for both military and space science markets. We have been developing manufacturing processes to support production of third generation dual band infrared imagers designed to allow members of the armed forces to identify threats on the battlefield before the enemy can detect their presence. We have developed substrate-removed Mercury Cadmium Telluride focal plane arrays that can detect about 80% of the incident light in visible and infrared bands. These substrate removed sensors are being used on the Moon Mineralogy Mapper as well as the James Webb Space Telescope and are expected to be used in future NASA missions. We also design and manufacture advanced military laser protection eyewear.

•  Through Teledyne Judson Technologies, we provide a wider range of visible and infrared detectors, focal plane arrays and cameras. We have developed low noise Indium Gallium Arsenide focal plane arrays for short wavelength infrared night vision applications and integrated detector dewar cooler assemblies for tactical and space applications.

•  Through Teledyne Optimum Optical Systems, Inc., we design and manufacture custom optics, optomechnical assemblies and electro-optics for use in the ultraviolet, visible and infrared spectrum. We also design optical assemblies for simulators, including software and servo development.

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Through Teledyne Scientific Company, we provide research and engineering services primarily in the areas of electronics, materials, optics, and information sciences. Our scientific team delivers research and development services and specialty products to military, aerospace and industrial customers. We also license various technologies to third parties. The electronics business has developed high speed electronics, MEMS (micro electro mechanical systems) sensors and actuators, as well as compound semiconductors. The materials, optics and information sciences businesses have been involved with ceramic composites for next-generation rocket nozzles, energy harvesting technologies, electronic device packaging, biomaterials and liquid crystal-based optical devices, as well as imaging and sensor processing. We strive to maintain close relationships and collaborations with the Defense Advanced Research Products Agency, commonly called DARPA, and researchers at universities and national laboratories to stay at the forefront of cutting-edge technologies. Teledyne Scientific Company strives to provide value to various businesses throughout Teledyne via niche product development, critical problem resolution and joint program capture.

With the February 12, 2011 acquisition of DALSA, we have expanded our imaging products and solutions capabilities and customer base. Through Teledyne DALSA, Inc., we now design, develop and manufacture image capture products, primarily consisting of high performance digital cameras for use in industrial, scientific, medical and professional applications. We also now design, develop and manufacture imaging processing products, primarily consisting of hardware and software for imaging processing in industrial and medical applications. Our high performance image sensors utilize both CCD (charge coupled device) and CMOS (complementary metal-oxide semiconductor) technology. Our imaging process software allows OEMs or systems integrators to develop vision applications using our frame grabber or vision processor hardware. Our smart camera products are user-friendly, cost-effective vision appliances for task-specific factory floor applications such as gauging, high-precision alignment, inspection, assembly verification and machine guidance. Unlike OEM products, this category of cameras is designed to be quickly employed by technicians on the factory floor.

Additionally, with the DALSA acquisition, we manufacture semiconductor wafers and components for the electronics industry. We provide processing services for MEMS, high voltage and CMOS wafers and complete integrated circuit (IC) component products. Our semiconductor products and services support our digital imaging business.

Aerospace and Defense Electronics

Our Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications, as well as general aviation batteries.

Historically, through Teledyne MEC, we have designed and manufactured helix traveling wave tubes, commonly called TWTs, which are used to provide broadband power amplification of microwave signals. Military applications include radar, electronic warfare and satellite communication. We also make TWTs for commercial applications such as electromagnetic compatibility test equipment and satellite communication terminals. More recently, we have designed and delivered high power solid state TWT replacement amplifiers and complete amplifiers that incorporate a TWT and a power supply.

Through Teledyne Microwave, we design, develop and manufacture RF and microwave components and subassemblies used in aerospace and defense applications, including electronic warfare and radar and networked communications.

Over the last several years, we have expanded our microwave components and subsystems businesses with the goal of providing more highly integrated microwave subsystems to our defense customers.

•  Teledyne Cougar, Inc. produces cascadable amplifiers, voltage-controlled oscillators and microwave mixers, as well as performance Instantaneous Frequency Measurement (IFM)-based systems and subsystems, including integrated frequency locked sources and set-on receiver jammers used for the U.S. Navy and Air Force training.

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•  Teledyne KW Microwave adds RF filters, multiplexers and diplexers to our product mix.

•  U.K.-based Teledyne Defence Limited provides customized microwave subassemblies and integrated subsystems, including complex microwave receiver front-end subsystems, to the global defense industry.

In July 2010, we acquired Intelek plc, including its Paradise Datacom division and Labtech division, to further expand Teledyne’s capabilities in microwave systems.

•  Teledyne Paradise Datacom, LLC manufactures solid state power amplifiers, RF converters, low noise amplifiers (LNAs) and modems used in systems that provide communications links between ground stations and orbiting satellites. Such products are also used in mobile telephone, TV broadcast and commercial data communications networks.

•  U.K.-based Teledyne Labtech Limited manufactures microwave circuits and components primarily for the defense electronics, global telecommunications, space and satellite communications markets.

We have also expanded our connectors and cable assemblies businesses.

•  Through Teledyne Reynolds, Inc., we supply specialized high voltage connectors and subassemblies for defense, aerospace and industrial applications.

•  Through Teledyne Storm Products — Microwave, we provide coax microwave cable and interconnects primarily to defense customers for radar, electronic warfare and communications applications.

•  Through Teledyne Storm Products — Cable Solutions, we provide custom, high-reliability bulk wire and cable assemblies to a number of marine, environmental and industrial markets.

•  We also produce pilot helmet mounted display components and subsystems for the Joint Helmet Mounted Cueing System (“JHMCS”) used in the F-15, F-16 and F-18 aircrafts. The JHMCS system is a multi-role system designed to enhance pilot situational awareness and provides visual control of aircraft targeting systems and sensors. Teledyne Reynolds, Inc. is using an optical angle-of-arrival sensor invented at Teledyne Scientific Company in a “U-Track” pilot helmet tracker joint development effort.

We manufacture a wide array of other sophisticated electronic components and products and provide electronic manufacturing services as follows:

•  Through Teledyne Microelectronics Technologies, we develop and manufacture custom microelectronic modules that provide both high reliability and extremely dense packaging for military applications. We also develop custom tamper-resistant microcircuits designed to provide enhanced security in military communication. In addition, we develop and manufacture custom microelectronic modules that provide both high reliability and extremely dense packaging for implantable medical devices, such as pacemakers and defibrillators, and commercial communication products.

•  Through Teledyne Electronic Manufacturing Services, we serve the market for high-mix, low-volume manufacturing of sophisticated military electronics equipment.

•  Through Teledyne Printed Circuits Technology, we manufacture advanced packaging solutions for military and commercial aircraft using rigid and rigid-flex printed circuit boards.

•  Teledyne Electronic Safety Products continues to provide microprocessor-controlled aircraft ejection seat sequencers and related support elements to military aircraft programs, including the F/A-18E/F, F-15-SG/K and F-35 Joint Strike Fighter. While we completed a five-year contract in 2010 to produce the Digital Recovery Sequencer to support the F-15, F-16, F-22, A-10, B-1 and B-2 aircrafts, we have subsequently been awarded contracts to continue production for the next two years.

•  Teledyne Electronic Safety Products has been awarded several development contracts to furnish electronic safe and arm devices (ESAD) that will be used in several applications such as personnel protection, tactical and space launch systems, for active armor, rocket motor ignition/warhead fuze

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detonation and stage separation. We expect these new products to enter the production phase in the next two years.

•  Through Teledyne Relays, we supply electromechanical relays, solid-state power relays and coaxial switching devices to military and aerospace markets. We also supply electromechanical relays, solid-state power relays and coaxial switching devices to industrial, medical and commercial aviation markets. Applications include microwave and wireless communication infrastructure, RF and general broadband test equipment, test equipment used in semiconductor manufacturing, and industrial and commercial machinery and control equipment. On commercial aircraft, our solid state and electromechanical relays are used in a range of applications from jet engine fuel control to managing control surfaces to on board applications.

•  Through Teledyne Controls, we provide aircraft information management solutions that are designed to increase the reliability, safety and efficiency of airline transportation. We are a leading supplier of digital flight data acquisition and analysis systems to the civil aviation market. These systems acquire data for use by the aircraft’s flight data recorder as well as record additional data for the airline’s operation, such as aircraft and engine condition monitoring. We provide the means to transfer this data, using Teledyne’s patented wireless technology, from the aircraft to the airline operation center. We also design and manufacture aerospace Electronic Flight Bag equipment and networking products, including airborne servers, as well aircraft data loading equipment, flight line maintenance terminals and data distribution software used by commercial airlines, the U.S. military and aircraft manufacturers.

•  Our Gill^® line of lead acid batteries is widely recognized as the premier power source for general aviation. We have developed premium Valve Regulated Lead Tin (LT 7000 Series) aviation batteries for business and light jet applications. Our LT7000 Series battery is now certified as Original Equipment on the Embraer Phenom 100 Jet, the Embraer Phenom 300 Jet, the Gulfstream G250 and the Bell 429 Helicopter. Teledyne Battery Products continues to explore military battery opportunities.

Engineered Systems

Our Engineered Systems segment, principally through Teledyne Brown Engineering, Inc., applies the skills of its extensive staff of engineers and scientists to provide innovative systems engineering and integration, advanced technology application, software development, and manufacturing solutions to space, military, environmental, energy, chemical, biological and nuclear systems and missile defense requirements. This segment also designs and manufactures hydrogen gas generators, thermoelectric and fuel-cell based power sources and small turbine engines.

Engineered Products and Services

Teledyne Brown Engineering, Inc. is a well-recognized full-service missile defense contractor with more than 50 years of experience in air and missile defense and related systems integration. Our diverse customer base in this field includes the U.S. Army Aviation and Missile Command (“AMCOM”), the U.S. Army’s Space and Missile Defense Command (“SMDC”), the Missile Defense Agency (“MDA”) and Defense Department major prime contractors.

•  We play significant roles in diverse missile defense areas, which include analyses of alternatives, site operations and deployment, systems engineering, modeling and simulation, test and evaluation, and complex real time hardware-in-the-loop integration with an evolution to Service Oriented Architecture (“SOA”) solutions. Our engineering and technological capabilities include requirements definition, systems design, development, integration and testing, with specialization in SOA and real-time distributed systems.

•  During 2010, we continued our long-standing support of several air and missile defense programs, including the Ground-based Midcourse Defense (“GMD”), Missile Defense Systems Exerciser, the Extended Air Defense Simulation (“EADSIM”) and Single Stimulation Framework programs. The associated support tasks involve analysis, test and evaluation of ballistic missile defense system performance on a large number of major programs, including the Ground-based Midcourse Defense,

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Aegis Ballistic Missile Defense, the Patriot Advanced Capability 3, and the Terminal High Altitude Area Defense (“THAAD”) systems.

•  Through Teledyne Solutions, Inc., we are a primary Ballistic Missile Defense (“BMD”) systems engineering contractor for the Missile Defense Agency and the U.S. Army. Teledyne Solutions is a prime contractor for the Systems Engineering and Technical Assistance Bridge Contract in support of the Missile Defense Agency. We also provide engineering and services support to other major Department of Defense customers including the U.S. Army Space and Missile Defense Command, the Program Executive Office for Missiles and Space, the Joint Interoperability Test Command, the U.S. Army Aviation and Missile Command, and Redstone Arsenal Garrison.

In addition to our missile defense activities, we support many other programs of the U.S. Department of Defense.

•  We support the Navy’s Tactical Medical Logistics program, the Mission Package Development Lab for the Littoral Combat Ship, deployment of Littoral Battlespace Sensing Gliders and Patriot Missile software validation and verification for the Lower Tier Project Office. Tasking spans complex hardware integration and software development and testing, from design through systems fielding and operation.

•  Through Teledyne CollaborX, Inc., we provide full system acquisition lifecycle support from concept development to sustainment. Teledyne CollaborX provides engineering services to the U.S. Air Force, the Office of the Secretary of Defense, the Missile Defense Agency, the Defense Advanced Research Projects Agency and Service Laboratories, and select military combatant commands such as the U.S. Joint Forces Command, U.S. Strategic Command, and U.S. Northern Command. CollaborX provides the Air Force with operational and systems expertise in the development, test, integration, and fielding of new Command and Control and Intelligence, Surveillance and Reconnaissance capabilities for major Air Force weapons systems.

We are active in U.S. space programs and continue to be a significant contributor to NASA programs.

•  We have held various roles in the Space Shuttle program and continue to play a vital role in the science operations area of the International Space Station (“ISS”) program. Our cadre provides 24-hour-per-day payload operations in the ISS Payload Operations and Integration Center located at NASA’s Marshall Space Flight Center. TBE has supported well over 86,000 hours of science operations for NASA and its customers, and is skilled at fabricating space-qualified hardware and designing and integrating experiment payloads. We also work on the ISS Cargo Mission Contract at the Johnson Space Center as a subcontractor to Lockheed Martin. Since January 2004, we have provided services related to the planning, preparation and execution of cargo missions to the ISS.

•  We are the prime contractor on the Marshall Space Flight Center Systems Development and Operations Support Contract, which provides engineering services and hardware development support for a variety of space activities. We also have a prime Blanket Purchase Agreement with the Marshall Space Flight Center for specialized engineering and program support. We perform engineering and software services under this contract for NASA space launch vehicles.

We support the U.S. Government’s efforts to clean up dangerous materials and waste.

•  Since 1996, we have supported the U.S. Army’s Non-Stockpile Chemical Materiel Program.

•  We also have begun to apply sophisticated computer aided engineering, design, modeling and manufacturing skills to support the U.S. Army’s Edgewood Chemical and Biological Center.

•  We also support the U.S. Government in the development of Engineered Systems (design, build, test and install), including the Whole System Live Agent Test (WSLAT) Chamber. The test chamber will be used at the Baker Lab in Dugway, Utah to exercise biological warfare agent detectors.

•  We operate a U.S. Department of Energy-certified radiological analysis services laboratory in Knoxville, Tennessee. This laboratory has received certification from the National Environmental Laboratory Accreditation Program in three states, including Utah where the largest commercial radiological waste

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disposal site resides. With its Nuclear Utilities Procurement Issues Committee certification, the laboratory also serves approximately 46% of the nuclear power plants in United States.

We manufacture products that are primarily highly engineered and high quality machined and metal fabricated components and assemblies for external customers across the spectrum of our core business base, including for NASA, U.S. Department of Defense branches and the U.S. Department of Energy programs, as well as commercial customers.

•  Expanding on our core nuclear quality-related manufacturing, in February 2008, Fluor Enterprises, Inc., acting as an agent for USEC, awarded us a contract to manufacture and deliver an initial complement of gas centrifuge service modules to support fuel production for commercial nuclear power plants. In 2009, this contract was suspended due to the U.S. Department of Energy’s delayed decision regarding USEC’s application for a loan guarantee to complete construction of the American Centrifuge Project. We currently anticipate increased sales of gas centrifuge service modules in 2011 because USEC began remobilization of work under this contract in September 2010. USEC resubmitted a loan guarantee application to complete construction of the American Centrifuge Project in July 2010 and is awaiting a conditional approval. We expect USEC will receive feedback on this application in the first quarter of 2011. Continuation of this project beyond mid-year 2011 may depend on USEC receiving a favorable ruling regarding its loan guarantee application. Failure to secure such guarantees would seriously jeopardize USEC’s ability to finance, and therefore complete, the project.

•  We also expanded our production of nuclear quality hardware through the delivery of additional commercial nuclear hardware in 2010, including emergency diesel generator support equipment.

•  In 2010, we expanded our manufactured products capabilities with the addition of UK- based CML Group Limited (CML), part of the acquisition of Intelek plc. Through one of two manufacturing facilities we primarily manufacture precision machined large components for the commercial aviation industry. Through the other facility, we manufacture advanced composites. Teledyne CML Group Limited also participates in the Joint Strike Fighter program.

Energy Systems

Through Teledyne Energy Systems, Inc., a majority-owned subsidiary of Teledyne, we manufacture hydrogen/oxygen gas generators that utilize the principle of electrolysis to convert water into high purity hydrogen gas at useable pressures. This business also provides energy technology solutions for use in U.S. Government programs.

•  Our Teledyne Titan^tm gas generators are used worldwide in electrical power generation plants, semiconductor manufacturing, optical fiber production, chemical processing, specialty metals, float glass and other industrial processes. Our sales of hydrogen generators have been primarily in developing countries and domestic applications where delivered merchant gas is not practical.

•  For over 50 years, we have supplied high reliability direct energy conversion devices based on thermoelectric technology. We provided the thermoelectric power systems for the Pioneer 10 and 11 deep-space missions to Jupiter and Saturn and for the Viking 1 and Viking 2 Mars Landers. In 2006, in partnership with Pratt Whitney/Rocketdyne and under a ten-year $57 million contract signed in 2003 with the U.S. Department of Energy, we completed all of the testing of the Multi-Mission Radioisotope Thermoelectric Generator (MMRTG), which will provide long-term power for the outer planetary explorations of the future. The first mission to use this system will be the Mars Science Laboratory currently scheduled to launch in the fall of 2011.

•  Another important space power activity is work performed with NASA on PEM fuel cell stacks and systems being developed to support both manned and unmanned robotic missions in space. Compared to conventional space power technology, PEM fuel cells enable more efficient use of resources and can be integrated into regenerative aerospace energy platforms.

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Turbine Engines

Teledyne Turbine Engines designs, develops and manufactures small turbine engines primarily used in tactical missiles for military markets.

•  Our J402 engine powers the Boeing Harpoon missile system. Derivatives of this engine power the Standoff Land Attack Missile and the Standoff Land Attack Missile-Expanded Response. A derivative of the J402 engine powers the Lockheed Martin Joint Air-to-Surface Standoff Missile (“JASSM”). We are the sole source provider of engines for the baseline JASSM system. Production funding on the JASSM is forecasted to improve in 2011, resulting in higher sales for 2011.

•  Our J700 engine provides the turbine power for the Improved Tactical Air Launched Decoy (“ITALD”) built for the U.S. Navy. The ITALD system enhances combat aircraft survivability by both serving as a decoy and identifying enemy radar sources. Several international customers of the baseline TALD (unpowered) are considering an upgrade to the ITALD (powered) variant.

•  In 2010, we continued to work on advanced technology for small turbine engines and components under contract to the U.S. Air Force Research Laboratory sponsored Versatile Advanced Affordable Turbine Engine (VAATE) program. Advanced technology engine and component demonstrators sponsored under VAATE II will continue to be developed for the next generation cruise missile and UAVs.

Discontinued Operations

On December 11, 2010, we entered into an agreement to sell our piston engines businesses, which businesses are summarized below, to Technify Motor (USA) Ltd, a subsidiary of China-based AVIC International Holding Corporation. We have classified our piston engines operations as a discontinued operation. Such divestiture is, however, subject to closing conditions.

Principally through Teledyne Continental Motors, Inc., we design, develop and manufacture piston engines, ignition systems, and aftermarket engines and spare parts for general aviation airframe manufacturers and the aftermarket. We are one of two primary worldwide original equipment producers of piston aircraft engines for the general aviation marketplace.

•  We offer a complete line of piston engines that power some of the most advanced and successful piston engine powered aircraft in the world. Our current certified OEM products include engines for the Cirrus SR-20 and SR-22, the Diamond DA20, Cessna 350 Corvalis and 400 Corvalis series (formerly built by Columbia Aircraft Company), the Liberty XL2, the Beechcraft Bonanza and Baron aircraft, Mooney Ovation and Acclaim lines, and the Piper Seneca V twin-engine aircraft. Our O-200 Light Weight air-cooled engine powers Cessna Aircraft Company’s Light Sport Aircraft known as the SkyCatcher, which entered production and had its first customer delivery in 2009.

•  In late 2009, Teledyne Continental Motors took the first steps to continue its technological leadership with the introduction of its TD300 Turbo Diesel engine for piston powered aircraft. Although readily available in the United States, aviation gasoline is not easily obtainable in many parts of the world. The introduction of a line of heavy fuel based engines will potentially improve the international desire for and competitiveness of American produced aircraft. In addition, the use of heavy fuels improves the fuel economy and potentially the emission characteristics of piston engines when compared to current gasoline fueled engine technology.

•  In addition to the sales of OEM engines, we actively support the maintenance and replacement aircraft engine market. Our aftermarket support includes building and rebuilding of complete engines, as well as providing a full complement of spare parts such as cylinders, crankcases, fuel systems, crankshafts, camshafts and ignition products. Through our dedicated Factory Services Group, including Teledyne Mattituck Services, Inc., with locations in Mattituck, New York and Fairhope, Alabama, we provide repairs and overhauls of piston engines and engine installations to the general aviation marketplace for both Teledyne Continental Motors and Textron Lycoming aircraft engines.

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Customers

We have hundreds of customers in the electronics, instrumentation, digital imaging, communications and aerospace and defense electronics industries. No commercial customer accounted for more than 10% of our total sales during 2010, 2009 or 2008.

Approximately 44%, 47%, and 44% of our total sales for 2010, 2009 and 2008, respectively, were derived from contracts with agencies of, and prime contractors to, the U.S. Government. Our principal U.S. Government customer is the U.S. Department of Defense. These sales represented 34%, 36% and 32% of our total sales for 2010, 2009 and 2008, respectively. In 2010, 2009 and 2008, our largest program with the U.S. Government was the Systems Engineering and Technical Assistance contract with the Space and Missile Defense Command, and it represented 3.4%, 4.1% and 3.8% of total sales, respectively. Information on the Company’s sales to the U.S. Government, including direct sales as a prime contractor and indirect sales as a subcontractor, are as follows (in millions):

	2010		2009		2008
Instrumentation	$	35.6	$	36.4	$	24.5
Digital Imaging		93.3		96.6		90.0
Aerospace and Defense Electronics		302.4		287.0		271.5
Engineered Systems		296.1		357.8		368.5
Total U.S. Government sales	$	727.4	$	777.8	$	754.5

As described on pages 20 through 23, there are risks associated with doing business with the U.S. Government. In 2010, approximately 54% of our U.S. Government prime contracts and subcontracts were fixed-price type contracts, compared to 50% in 2009 and 48% in 2008. Under these types of contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price. Such contracts are typically not subject to renegotiation of profits if we fail to anticipate technical problems, estimate costs accurately or control costs during performance. Additionally, U.S. Government contracts are subject to termination by the U.S. Government at its convenience, without identification of any default. When contracts are terminated for convenience, we typically recover costs incurred or committed, settlement expenses and profit on work completed prior to termination. We had two U.S. Government contracts terminated for convenience in 2010, compared to seven in 2009 and five in 2008.

Our total backlog of confirmed orders was approximately $863.8 million at January 2, 2011, $812.5 million at January 3, 2010 and $822.5 million at December 28, 2008. We expect to fulfill 98% of such backlog of confirmed orders during 2011.

Sales to international customers accounted for approximately 29% of total sales in 2010, compared with 26% in 2009 and 24% in 2008. In 2009, we sold products to customers in over 100 foreign countries. Approximately 90 percent of our sales to foreign customers were made to customers in 28 foreign countries. The 2010 top five countries for international sales, which included the United Kingdom, Norway, Germany, China and Canada, constituted approximately 15.9% of our total sales.

Raw Materials and Suppliers

Generally, our businesses have experienced minimal fluctuations in the supply of raw materials, but not without some price volatility. While some of our businesses provide services, for those businesses that sell hardware and product, a portion of the value that we provide is labor oriented, such as design, engineering, assembly and test activities. In manufacturing our products, we use our own production capabilities and also third party suppliers and subcontractors, including international sources. Some of the items we purchase for the manufacture of our products, including certain gyro components for some marine navigation applications, certain magnets and helix wire for our traveling wave tubes and certain infrared detectors substrates are purchased from limited or single sources, including international sources, due to technical capability, price and other factors. While over the years we have not experienced much difficulty in procuring raw materials, components, sub-assemblies and other supplies required in our manufacturing processes, continuing disruption

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in the global economy and financial markets could trigger increased pricing and otherwise affect our suppliers as well as our ability to procure some supplies.

Sales and Marketing

Our sales and marketing approach varies by segment and by products within our segments. A shared fundamental tenet is the commitment to work closely with our customers to understand their needs, with an aim to secure preferred supplier and longer-term relationships.

Our segments use a combination of internal sales forces, distributors and commissioned sales representatives to market and sell our products and services. As part of on-going acquisition integration efforts, some of our Teledyne Instruments companies and other businesses have been working to consolidate or share internal sales and servicing efforts. Several Teledyne businesses have begun marketing and selling products collaboratively to similar customers to promote “one-stop” shopping under singular “brand” names, including Teledyne Oil & Gas, Teledyne Marine, Teledyne Nuclear and Teledyne Water Quality.

Products are also advertised in appropriate trade journals and by means of various websites. To promote our products and other capabilities, our personnel regularly participate in relevant trade shows and professional associations.

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

Through Teledyne Technologies International Corp. and other subsidiaries, the Company has established offices in foreign countries to facilitate international sales for various businesses.

Competition

We believe that technological capabilities and innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete. Although we have certain advantages that we believe help us compete effectively in our markets, each of our markets is highly competitive. Our businesses vigorously compete on the basis of quality, product performance and reliability, technical expertise, price and service. Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do.

Research and Development

Our research and development efforts primarily involve engineering and design related to improving products and developing new products and technologies in the same or similar fields. We spent a total of $319.9 million in 2010, $374.8 million in 2009 and $391.7 million in 2008 on research and development and bid and proposal costs. Customer-funded research and development, most of which was attributable to work under contracts with the U.S. Government, represented approximately 81% of total research and development costs for 2010, compared with 84% and 84% in 2009 and 2008, respectively.

In 2010, we incurred $61.3 million in Company-funded research and development and bid and proposal costs. We expect the level of Company-funded research and development and bid and proposal costs to be approximately $99.9 million in 2011.

Intellectual Property

While we own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights, which, in the aggregate, are of material importance to our business, we believe that our business as a whole is not materially dependent upon any one intellectual property or related group of such properties. We own several hundred active patents and are licensed to use certain patents, technology and other intellectual property rights owned and controlled by others. Similarly,

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

Patents, patent applications and license agreements will expire or terminate over time by operation of law, in accordance with their terms or otherwise. We do not expect the expiration or termination of these patents, patent applications and license agreements to have a material adverse effect on our business, results of operations or financial condition.

Employees

Overall, we consider our relations with our employees to be good. Our total current workforce consists of approximately 9,200 employees. This number includes approximately 1,000 employees added in connection with our DALSA acquisition and approximately 400 employees who are part of our discontinued operations.

The International Union of United Automobile, Aerospace and Agricultural Implement Workers of America represents approximately 250 active employees at our Teledyne Continental Motors piston engines manufacturing facility in Mobile, Alabama, part of discontinued operations, under a collective bargaining agreement that expires by its terms on March 20, 2013. This union also represents approximately 10 active employees at the Teledyne Turbine Engines facility in Toledo, Ohio under a collective bargaining agreement that expires on November 8, 2014. If the sale of our general aviation piston engines businesses occurs, the Mobile, Alabama collective bargaining agreement will be included with the sale.

Executive Management

Teledyne’s executive management includes:

Name and Title	Age		Principal Occupations Last 5 Years
Executive Officers:
Robert Mehrabian* Chairman, President and Chief Executive Officer; Director		69	Dr. Mehrabian has served as Chairman, President and Chief Executive Officer of Teledyne for more than five years. He is a director of Teledyne, Bank of New York Mellon Corporation and PPG Industries, Inc. On February 8, 2011, Dr. Mehrabian notified The Bank of New York Mellon Corporation that he plans to retire as a director on April 12, 2011.
John T. Kuelbs* Executive Vice President, General Counsel and Secretary		68	Mr. Kuelbs has been Executive Vice President, General Counsel and Secretary of Teledyne since September 1, 2005. Prior to that, he was Senior Vice President, General Counsel and Secretary of Teledyne.
Dale A. Schnittjer* Senior Vice President and Chief Financial Officer		66	Mr. Schnittjer has been Senior Vice President and Chief Financial Officer of the Company since September 1, 2005. From January 27, 2004 to September 1, 2005, he was Vice President and Chief Financial Officer of Teledyne.
Susan L. Main* Vice President and Controller		52	Ms. Main has been Vice President and Controller of the Company since March 2004.
Segment Management:
Aldo Pichelli* President and Chief Operating Officer, Instrumentation, Digital Imaging and Aerospace and Defense Electronics Segments		58	Mr. Pichelli has been President and Chief Operating Officer of each of Teledyne’s, Instrumentation, Digital Imaging and Aerospace and Defense Electronics segments since January 2, 2011. From September 1, 2007 to that date, he had been President and Chief Operating Officer of the Electronics and Communications segment. From July 22, 2003 to that date, he was Senior Vice President and Chief Operating Officer of that segment.

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Name and Title	Age		Principal Occupations Last 5 Years
Rex D. Geveden* President, Engineered Systems Segment		49	Mr. Geveden has been the President of Teledyne Brown Engineering, Inc. and the Engineered Systems segment since August 1, 2007. From January 1, 2008 through January 2, 2011, he had also been the President of the Energy and Power Systems segment, which as of January 2, 2011, was combined with the Engineered Systems segment (exclusive of Teledyne Battery Products which is now part of the Aerospace and Defense Electronics segment). Prior to that, Mr. Geveden served as the Associate Administrator of the National Aeronautics and Space Administration (NASA) where he functioned as the agency’s chief operating officer. Prior to that, he served as NASA’s Chief Engineer and Deputy Director of NASA’s Marshall Space Flight Center in Huntsville, Alabama.
Other Officers:
Stephen F. Blackwood Vice President and Treasurer		48	Mr. Blackwood has been Vice President and Treasurer of Teledyne since April 23, 2008. From March 2007 to April 2008, he was Treasurer and Senior Director of Investor Relations of MannKind Corporation, a biotechnology company. From September 2005 until the sale of the company in December 2006, he was Vice President and Treasurer of Pacific Energy Partners, L.P., a MLP holding company. Prior to that, he was Director of Global Treasury at Amgen, Inc., a biotechnology company.
Ivars R. Blukis Chief Business Risk Assurance Officer		68	Mr. Blukis has been the Chief Business Risk Assurance Officer since January 22, 2002 and is responsible for the internal audit function.
Melanie S. Cibik Vice President, Associate General Counsel and Assistant Secretary		51	Miss Cibik has been Vice President, Associate General Counsel and Assistant Secretary of the Company for more than five years.
Robyn E. McGowan Vice President, Administration, Human Resources and Assistant Secretary		46	Ms. McGowan has been Vice President -- Administration, Human Resources and Assistant Secretary of the Company for more than five years.
Patrick Neville Vice President and Chief Information Officer		37	Mr. Neville has been Vice President and Chief Information Officer since October 4, 2010. From January 2010 to June 2010, he was Director of IT Global Operations at Iberdrola S.A. and from January 2003 to December 2009 he was Vice President of Information Technology at Energy East Corporation.
Robert L. Schaefer Associate General Counsel and Assistant Secretary, Vice President and General Counsel of Instrumentation, Digital Imaging and Aerospace and Defense Electronics Segments		65	Mr. Schaefer has been an Associate General Counsel and an Assistant Secretary of Teledyne for more than five years. Since January 2, 2011, he has been the Vice President and General Counsel of each of the Instrumentation, the Digital Imaging and the Aerospace and Defense Electronics segments, having been the General Counsel of the Electronics and Communications segment for more than five years prior to its recent division.
Robert W. Steenberge Vice President and Chief Technology Officer		63	Mr. Steenberge became a Vice President of the Company on February 21, 2006, and has been Teledyne’s Chief Technology Officer for more than five years.
Jason VanWees Vice President, Corporate Development and Investor Relations		39	Mr. VanWees has been Vice President, Corporate Development and Investor Relations since February 21, 2006. Prior to that, he was Director of Corporate Development and Investor Relations of Teledyne for more than five years.

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*   Such officers are subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 1934, as amended.

Dr. Mehrabian and Teledyne have entered into a Fourth Amended and Restated Employment Agreement dated as of January 21, 2009. Under the agreement, we will employ Dr. Mehrabian as the Chairman, President and Chief Executive Officer through at least December 31, 2012, because 12 months notice of nonrenewal had not been given prior to the expiration of the term ended December 31, 2010. The agreement automatically renews for a successive one year unless either party gives the other written notice of its election not to renew at least 12 months before the expiration of the current term or any successive renewal terms. If notice is given, Dr. Mehrabian would then retire on December 31st of the year following the 12th month after receipt of the notice. Under the agreement, Dr. Mehrabian’s annual base salary is $861,000. The agreement provides that Dr. Mehrabian is entitled to participate in Teledyne’s annual incentive bonus plan (“AIP”) and other executive compensation and benefit programs. The agreement provides Dr. Mehrabian with a non-qualified pension arrangement, under which Teledyne will pay him annually starting six months following his retirement and for a period of 10 years, as payments supplemental to any accrued pension under our qualified pension plan, an amount equal to 50% of his base compensation as in effect at retirement.

Sixteen current members of management have entered into change of control severance agreements. The agreements have a three-year, automatically renewing term, except as noted below. The executive is entitled to severance benefits if (1) there is a change in control of the Company and (2) within three months before or 24 months after the change in control, either we terminate the executive’s employment for reasons other than cause or the executive terminates the employment for good reason. “Severance benefits” currently consist of:

•  A cash payment equal to three times (in the case of Dr. Mehrabian, Mr. Kuelbs and Mr. Schnittjer) or two times (in the case of Mr. Pichelli, Mr. Geveden and 11 other executives) the sum of (i) the executive’s highest annual base salary within the year preceding the change in control and (ii) the Annual Incentive Plan bonus target for the year in which the change in control occurs or the average actual bonus payout for the three years immediately preceding the change in control, whichever is higher (in the case of Dr. Mehrabian, Mr. Pichelli, Mr. Geveden and eight other executives) or the Annual Incentive Plan bonus target for the year in which the change in control occurs or the actual bonus payout for the year immediately preceding the change in control, whichever is higher (in the case of Mr. Kuelbs, Mr. Schnittjer and three other executives).

•  A cash payment for the current Annual Incentive Plan bonus cycle based on the fraction of the year worked times the Annual Incentive Plan target objectives at 100% (in the case of Dr. Mehrabian, Mr. Pichelli, Mr. Geveden and nine other executives) or 120% (in the case of Mr. Kuelbs, Mr. Schnittjer and three other executives) (with payment of the prior year bonus if not yet paid).

•  Payment in cash for unpaid performance share program awards, assuming applicable goals are met at 120% of performance targets.

•  Continued equivalent health and welfare (e.g., medical, dental, vision, life insurance and disability) benefits at our expense for a period of up to 36 months (24 months in some agreements) after termination (with the executive bearing any portion of the cost the executive bore prior to the change in control); provided, however, such benefits would be discontinued to the extent the executive receives similar benefits from a subsequent employer.

•  Removal of restrictions on restricted stock issued under our restricted stock award programs.

•  Full vesting under the Company’s pension plans (within legal parameters) such that the executive shall be entitled to receive the full accrued benefit under all such plans in effect as of the date of the change in control, without any actuarial reduction for early payment.

•  Up to $25,000 ($15,000 in some agreements) reimbursement for actual professional outplacement services.

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•  Immediate vesting of all stock options, with options being exercisable for the full remainder of the term (in the case of Mr. Kuelbs, Mr. Schnittjer and three other executives, this immediate vesting of options takes place upon a change of control.)

•  In the case of Mr. Kuelbs, Mr. Schnittjer and three other executives, a “gross-up-payment” to hold the executive harmless against the impact, if any, of federal excise taxes imposed on the executive as a result of the payments constituting an “excess parachute” as defined in Section 280G of the Internal Revenue Code. In the case of Dr. Mehrabian, Mr. Pichelli, Mr. Geveden and eight other executives, the executive will receive the better of, on an after-tax basis, (a) the unreduced excess parachute payment with no tax gross up payment, or (b) a parachute payment reduced to a level below which an excise tax is imposed.

The agreements were amended as of December 31, 2008 to defer certain payments for six months following a separation of service to assure compliance with Section 409A of the Internal Revenue Code.

On or before February 25, 2011, Dr. Mehrabian, Mr. Pichelli, Mr. Geveden and eight other executives voluntarily agreed to amend and restate their agreements to conform the agreements to prevailing best practices. As compared to the prior agreements, as reflected above, the amended and restated change in control severance agreements contain four key changes or reductions as follows:

•  Eliminate a “gross up payment” to hold the executive harmless against the impact, if any, of federal excise taxes imposed on executive as a result of “excess parachute” payments as defined in Section 280G of the Internal Revenue Code. Instead, the executive will receive the better of, on an after-tax basis, (a) the unreduced excess parachute payment with no tax gross up, or (b) a parachute payment reduced to a level below which an excise tax is imposed.

•  Change the “single trigger” vesting of stock options upon a change of control to a “double trigger”.

•  Change the formula for calculating the amount of severance: instead of the severance payment being a multiple of base salary plus bonus, with bonus being the higher of target or the most recent bonus payout, the severance payment will be a multiple of base salary plus bonus, with bonus being the higher of target or the prior three year average bonus.

•  Reduce the amount of short year bonus: instead of a short year bonus being calculated at maximum (i.e., two times target), short year bonus will be calculated at target.

On January 31, 2011, Teledyne also provided notice to Messrs. Kuelbs and Schnittjer and three other executives who did not agree to sign the amended and restated change in control agreement that it would not extend the term of their agreements, which action results in the termination of their existing change in control severance agreement three years from the date of such notice (January 31, 2014).

Effective April 22, 2009, the Company entered into individual Indemnification Agreements with directors and certain officers and executives of Teledyne, including those then members of Executive Management listed above. A total of 25 persons have such agreements. Simply, the Indemnification Agreements provide the directors and executives who are parties to the agreements with a stand-alone contractual right to indemnification and expense advancement to the greatest extent allowable under Delaware law. Some further details include:

•  In a third-party proceeding, an indemnitee is entitled to indemnification if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, if in a criminal action or proceeding, if the indemnitee had no reason to believe that his or her conduct was unlawful. In a third party proceeding, the indemnification obligation covers reasonable expenses, judgment fines, and amounts paid in settlement actually and reasonably incurred by the indemnity.

•  In proceedings by or in the name of the Company (e.g., derivative suits), an indemnitee is entitled to indemnification if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. In derivative suits, the indemnification

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obligation covers reasonable expenses, but in proceedings where the Company is alleging harm caused by the indemnitee, the indemnitee would generally not be entitled to be indemnified for judgments, fines and amounts paid in settlement (otherwise the Company would effectively not recover any damages), unless perhaps a Delaware or other court determines otherwise despite the finding of liability.

•  An indemnitee is presumed to be entitled to indemnification, with the Company bearing the burden of proof to demonstrate otherwise.

•  The determination of an indemnitee’s entitlement to indemnification is to be made, at the Company’s expense, as follows:

•  By (i) a majority vote of disinterested directors (or a committee thereof); (ii) if no disinterested directors are available or if they so direct, by independent legal counsel selected by the Board; or (iii) by a stockholder vote; or

•  Following a change of control or if the indemnitee requests, by independent legal counsel selected by the indemnitee (or, if the indemnitee chooses, the independent legal counsel can be selected by the Board).

•  The Company has an obligation to advance, on an unsecured and interest free basis, reasonable expenses incurred by the indemnitee within 30 days of the indemnitee’s request. The indemnitee does not need to meet any standard of conduct to be entitled to advancement of expenses and there is no determination requirement to be made by the Board in connection with the advancements of expenses.

•  By signing the agreement, the indemnitee undertakes to repay any amounts advanced if it is ultimately determined that the indemnitee is not entitled to indemnification.

Our indemnification obligations do not cover the following situations:

•  Where the indemnification payments have been made under Director’s & Officer’s insurance or other indemnification provisions;

•  Where the claim is based on disgorgement of short-swing profits under Section 16(b) of the Exchange Act;

•  Where the claim is based on reimbursement by the indemnitee to the Company of a bonus or other incentive-based or equity-base compensation if required under the Exchange Act (e.g., in connection with a restatement as a result of the company’s noncompliance with the financial reporting requirements required by Section 304 of the Sarbanes-Oxley Act); or

•  Where the proceeding is initiated by the indemnitee (other than proceedings that are consented to by the Board or that the indemnitee initiates against the Company to enforce the Agreement).

Under the Indemnification Agreements, in the event of a change in control or we reduce or do not renew our Director’s & Officer’s insurance coverage, we are required to purchase (or cause the acquirer or successor to the Company to purchase or maintain) a six-year tail policy, subject to a 200% premium cap. The agreements continue until the later of (i) 10 years after the indemnitee ceases to serve as a director or officer, and (ii) one year following the final termination of any proceeding subject to the agreement.

Item 1   A. Risk Factors.

Risk Factors; Cautionary Statement as to Forward-Looking Statements

The following text highlights various risks and uncertainties associated with Teledyne. These factors could materially affect “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that we may from time to time make, including forward-looking statements contained in “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K and in Teledyne’s 2010 Annual Report to Stockholders. It is not possible for management to predict all such factors, and new factors may emerge. Additionally, management cannot assess

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the impact of each such factor on Teledyne or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. While Teledyne has classified its general aviation piston engines businesses as “discontinued operations”, until such divestiture is completed, for the purposes of this section, Teledyne continues to identify the risk factors associated with such discontinued operations. As the divestiture is subject to closing conditions, there remains a risk that such disposition will not occur or will not occur on the terms previously agreed.

With the recently completed acquisition of DALSA Corporation and upon completion of the pending divestiture of Teledyne’s piston engines businesses, the risk profile of Teledyne will differ, and may differ materially from prior years, which could materially change Teledyne’s results of operations.

On February 12, 2011, Teledyne completed its largest acquisition to date when it acquired DALSA Corporation for approximately CAD $337 million, taking into account DALSA’s stock options and net cash as of December 31, 2010. DALSA, headquartered in Waterloo, Ontario, Canada, with key operations in Canada as well as the Netherlands and Japan, designs, develops, manufactures and markets digital imaging products and semiconductors. Teledyne funded the acquisition by borrowing under its bank credit facility and with cash on hand. DALSA’s revenues totaled CAD $212.3 million for 2010. As discussed on pages 24 to 27, while there are risks associated with acquisitions generally, including integration risks, there are additional risks associated with owning and operating businesses internationally, including those arising from U.S. and foreign policy changes and exchange rate fluctuations. In 2011, with this acquisition, a greater percentage of Teledyne’s revenues and expenses will arise from international sources. In addition, like other Teledyne businesses, continued innovation and research and development efforts will be required to maintain Teledyne DALSA’s leadership position in digital imaging products and semiconductor production. Teledyne DALSA’s business also may be more capital intensive than other Teledyne businesses, increasing Teledyne’s capital requirements. Further, Teledyne DALSA currently relies on a number of single-point of failure pieces of manufacturing equipment or processes within its semiconductor business. While it may monitor such equipment and processes, including where appropriate maintain redundant equipment, spare components or service agreements with equipment manufacturers, a catastrophic failure of such equipment or processes could have a material adverse impact on its business.

Additionally, Teledyne continues to work to close, in the first quarter of 2011, the previously announced divestiture of its general aviation piston engines businesses to Technify Motor (USA) Ltd., a subsidiary of China-based AVIC International Holding Corporation, for $186.0 million in cash. These piston engines businesses comprise Teledyne’s discontinued operations (formerly Teledyne’s Aerospace Engines and Components segment) and had $133.7 million in revenues in 2010. As discussed on pages 27 to 29, there are risks particular to these businesses that have historically been greater than those faced by other Teledyne businesses, such as those associated with product liability claims, product recalls and insurance coverages. The general economic downturn and the lack of availability of credit have tended to adversely impact sales of general aviation aircraft more than sales in some other markets in which we participate. When Teledyne no longer owns these piston engines businesses, such risks should be reduced.

With the recently completed acquisition of DALSA and upon completion of the pending divestiture of Teledyne’s piston engines businesses, Teledyne will be transformed into an electronics, instrumentation, digital imaging and engineering focused company. Accordingly, the risk profile of Teledyne will change, and may differ materially, from prior years. Among other things, as highlighted above, Teledyne will face more international and business risks and it will no longer face the risks associated with being a manufacturer and seller of general aviation engines and related components. A larger percentage of Teledyne’s sales will be to commercial customers as opposed to the U.S. Government.

We sell products and services to customers in industries that are cyclical and sensitive to changes in general economic activity.

We develop and manufacture products for customers in the energy exploration and production markets, each of which has been cyclical and suffered from fluctuating market demands. Strong demand and increased prices for oil and natural gas historically has contributed to substantial revenue growth at Teledyne Geophysical Instruments, Teledyne ODI and our other marine businesses. A cyclical downturn in these markets

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may materially affect future operating results, particularly given our broader range of marine instrumentation businesses acquired since 2003.

Domestic and international commercial aerospace markets are cyclical in nature. Historic demand for new commercial aircraft has been related to the stability and health of domestic and international economies. If economic conditions do not improve and the credit markets further tighten, it may continue to be difficult for the commercial airlines and aircraft leasing companies to obtain credit to buy new airplanes. Delays or changes in aircraft and component orders could impact the future demand for our Teledyne Controls and other products and have a material adverse effect on our business, results of operations and financial condition.

Many of the OEM customers of our discontinued operations are privately-held and may not be well-capitalized. Over the last several years a few aircraft manufacturing customers of Teledyne Continental Motors have filed for bankruptcy protection. While Teledyne Continental Motors tries to monitor its customers’ payment streams and financial wherewithal and avail itself of available pre-bankruptcy protections, among other things, such actions may only mitigate losses, not prevent them. Any future credit problems with our customers could result in write-offs or reimbursements of purported preferential payments, and could have a material adverse effect on the business, results of operations and financial condition of our discontinued operations.

Some of our businesses, including newly acquired Teledyne DALSA, are also suppliers to the semiconductor industry, which is highly cyclical by nature. The semiconductor industry has experienced significant, and sometimes prolonged, downturns. Any downturn in the semiconductor industry or any other industry that uses a significant number of semiconductor devices, such as consumer electronic products, telecommunication devices, or computing devices could have a material adverse effect on our business and operating results.

In addition, we sell products and services to customers in industries that are sensitive to the level of general economic activity and consumer spending habits and in more mature industries that are sensitive to capacity. Adverse economic conditions affecting these industries may reduce demand for our products and services, which may reduce our profits, or our production levels, or both. Some of our businesses serve industries such as power generation and petrochemical refining, which may be negatively impacted by reductions in global capital expenditures and manufacturing capacity.

Changes in demand in the industries in which we do business also can result in the inventory we carry becoming excess or obsolete. Further, Teledyne DALSA relies on a small number of customers in its semiconductor business. Given this lack of diversity, small fluctuations and inventory corrections at the end customer level could negatively impact this acquired company’s operating results, as well as that of the Digital Imaging segment.

Our dependence on revenue from government contracts subjects us to many risks:

Our revenue from government contracts depends on the continued availability of funding from the U.S. Government, and, accordingly, we have the risk that funding for our existing contracts may be canceled or diverted to other uses or delayed.

We perform work on a number of contracts with the Department of Defense and other agencies and departments of the U.S. Government including sub-contracts with government prime contractors. Sales under contracts with the U.S. Government as a whole, including sales under contracts with the Department of Defense, as prime contractor or subcontractor, represented approximately 44% of our total revenue in 2010, as compared with 47% in 2009 and 44% in 2008. Performance under government contracts has certain inherent risks that could have a material effect on our business, results of operations, and financial condition.

Government contracts are conditioned upon the continuing availability of Congressional appropriations. Congress typically appropriates funds for a given program on a fiscal-year basis even though contract performance may take more than one year. As a result, at the beginning of a major program, a contract is typically only partially funded, and additional funding is normally committed to the contract by the procuring agency only as Congress makes appropriations available for future fiscal years. The timing of program cycles can also affect our results of operations for a particular quarter or year. It is not uncommon for the Department

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of Defense to delay the timing of awards for major programs for six to twelve months, or more, beyond the original projected timeframe.

The failure by Congress to approve budgets on a timely basis could delay procurement of our services and products and cause us to lose future revenues. In years when Congress is not able to complete its budget process before the end of the U.S. Government’s fiscal year on September 30, Congress typically funds government operations pursuant to a continuing resolution. When the U.S. Government operates under a continuing resolution, it may delay funding we expect to receive from customers on work we are already performing and will likely result in new initiatives being delayed or in some cases cancelled. The U.S. Government’s failure to complete its budget process, or to fund government operations pursuant to a continuing resolution, may result in a U.S. Government shutdown which could result in a material loss of revenues for us.

U.S. defense spending is expected to continue to moderate and then decline in some areas over the next few years. An emphasis on Federal deficit and debt reduction could lead to a decrease in overall defense spending. The continued war on terrorism and the Iraq and Afghanistan wars also could result in a diversion of funds from programs in which Teledyne participates. In addition, continued defense spending does not necessarily correlate to continued business for us, because not all of the programs in which we participate or have current capabilities may be provided with continued funding.

Changes in policy and budget priorities by the President, his Administration and our Congress for various Defense and NASA programs could continue to impact our Engineered Systems and Aerospace and Defense Electronics segments. For example, changes in national space policy that affect NASA’s budget are likely. There have already been significant reductions in missile defense budgets and we anticipate continuing scrutiny of those budgets to impact our revenues. Our Engineered Systems segment may be further impacted by delays in production funding on the Joint Air to Surface Standoff Missile (“JASSM”) program. In addition, reductions and delays in research and development funding by the U.S. Government may continue to impact our revenues. As the Defense Advanced Research Projects Agency, referred to as DARPA, reviews its programs aimed to enhance technologically U.S. military capabilities and national security, changes to the DARPA research and technology development programs in which we participate could occur. Finally, various Department of Defense initiatives, such as the emphasis on in-sourcing positions to the Government and the planned closure of the Joint Forces Command could negatively impact our Engineered Systems segment.

Our Aerospace and Defense Electronics segment provides a variety of products for several military platforms, including the F-35 Joint Strike Fighter. Teledyne CML Group Limited, part of our Engineered Systems segment, also provided products for this aircraft. Development and production of this aircraft is very expensive and there is no guarantee that the Department of Defense, as it balances budget priorities, will continue to provide funding to manufacture and support the F-35 aircraft or other platforms for which we provide products. In 2010, delays in the F-35 program were announced. In 2009, Congress had made the decision to curtail F-22A aircraft funding. Reallocation of funding priorities within the Department of Defense could also affect repair and spares sales for older military platforms, including, by way of example, sales of our traveling wave tubes for F-15, F-16, F-18, EA-6B, B-52, B-1, C-130 and U-2 aircraft.

Our participation in government programs may decrease or be subject to renegotiation as those programs evolve over time.

The relocation to Huntsville, Alabama of the Missile Defense Agency or MDA has resulted in the transfer to the MDA of certain missions and functions from the U.S. Army Space and Missile Defense Command or SMDC. New leadership at the MDA is conducting solicitations that could impact support by our Engineered Systems segment to the Agency. For example, all MDA government engineering support services work is now to be recompeted at the conclusion of each existing contract, and several major prime contracts under which we perform such services are nearing the end of their respective periods of performance.

The U.S. Government has also placed emphasis on Organizational Conflict of Interest or OCI. As a result, requests for proposals in the areas of engineering support, testing and operational analysis are restricting bidders from related development and integration work. This may require some businesses or subsidiaries of

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Teledyne to abstain or withdraw from contract competition if other Teledyne businesses may be affected by an OCI. In particular, the MDA is reconsidering its policy on OCI. It is reviewing all OCI mitigation plans and may require more rigid mitigatory conditions going forward, potentially limiting our participation in certain major MDA programs, such as Ground-Based Midcourse Defense.

The U.S. Government has been placing emphasis on small business quotas and increasing small business contract set asides and minimum work percentages. In some cases, prime contractors are required to reduce large subcontractor participation in order to fill small business quotas and be responsive to proposals and bids. Additionally, the General Accounting Office or GAO has issued rulings which favor the interests of small businesses under multiple award Indefinite Delivery/Indefinite Quantity or IDIQ contracts. Several of the contracts under which we perform engineering support services for MDA are of this type and, as a result, our engineering services business could be significantly impacted.

Over time, and for a variety of reasons, programs can evolve and affect the extent of our participation. For example, Teledyne Brown Engineering, Inc.’s Ground-based Midcourse Defense (“GMD”) program has been negatively impacted by both the nominal end date of development activity and the change in focus of the current Administration relative to missile defense. Teledyne Brown Engineering’s revenues for the GMD program declined from approximately $43 million in 2008 to $31 million in 2009 to $14 million in 2010. Although MDA plans to award a deployment and sustainment contract for GMD, we expect that Teledyne Brown Engineering’s revenues under this activity will continue to decline in 2011. This reduction is due to a number of factors including the completion of the current deployment cycle, the change in MDA focus toward a phased regional deployment defense architecture, continued Federal government personnel in-sourcing and increased small business participation requirements in Department of Defense contracts.

We have been a significant participant in NASA programs, primarily through our Engineered Systems segment and through Teledyne Scientific Company. Our current NASA activities focus on the James Webb Space Telescope, payload operation and integration on the International Space Station (ISS), and concept development, engineering services and integration for new NASA launch vehicles. During 2010, the President introduced significant changes to the National Space Policy. The President and Congress continue to discuss NASA’s future direction. Although the outcome of these discussions remains uncertain, current plans include the cancellation of NASA’s Constellation Program which includes Ares launch vehicles, utilization of commercial launch vehicles for crew and cargo ISS expeditions, and development of a NASA heavy lift launch vehicle for space exploration. As a result of these changes, we will attempt to transition our business to meet the needs of the new policy and programs. However, failure to transition our business successfully could result in reduced sales. In addition, delayed decisions and funding for NASA’s new space policy could negatively impact our business.

We may not be successful in bidding for future contracts, which would reduce our revenues or slow our growth.

We obtain many U.S. Government prime contracts and subcontracts through the process of competitive bidding. We may not be successful in having our bids awarded. In addition, we may spend substantial amounts of time, money and effort, including design, development and marketing activities, required to prepare bids and proposals for contracts that may not be awarded to us. In 2010, we incurred $14.3 million on bid and proposals costs, compared with $13.7 million in 2009 and $13.7 million in 2008.

Our contracts with the U.S. Government are subject to termination rights that could adversely affect us.

Most of our U.S. Government contracts are subject to termination by the U.S. Government either at its convenience or upon the default of the contractor. Even when not expressly included in a U.S. Government contract, courts have validated termination for convenience as a matter of public procurement policy. Termination for convenience provisions provide only for the recovery of costs incurred or committed, settlement expenses, and profit on work completed prior to termination. Termination for default clauses impose liability on the contractor for excess costs incurred by the U.S. Government in reprocuring undelivered items

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from another source. During 2010, Teledyne had two U.S. Government contracts terminated for convenience, one of which was in our Aerospace and Defense Electronics segment and one of which was in our Engineered Systems segment. We did not have any of our U.S. Government contracts terminated for default during 2010.

We may lose money or generate less than expected profits on our fixed-price government contracts and we may lose money if we fail to meet certain pre-specified targets in government contracts.

There is no guarantee that U.S. Government contracts will be profitable. A number of our U.S. Government prime contracts and subcontracts are fixed-price type contracts (54% of our total U.S. Government contracts in 2010, 50% in 2009 and 48% in 2008). Under these types of contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price. This is particularly true when the contract is awarded and the price finalized in advance of final completion of design. Under such contracts, we must absorb cost overruns, notwithstanding the difficulty of estimating all of the costs we will incur in performing these contracts. Our failure to anticipate technical problems, estimate costs accurately or control costs during performance of a fixed-price contract may reduce profitability or cause a loss. We have also experienced some volatility in the pricing of certain raw materials and components underlying our fixed-price contracts. Such contracts are typically not subject to renegotiation of profits if we fail to anticipate technical problems, estimate costs accurately or control costs during performance. We cannot assure that our contract loss provisions in our financial statements will be adequate to cover all actual future losses. We may lose money on some contracts if we fail to meet these estimates.

Certain fees under some of our U.S. Government contracts are linked to meeting specified technical, cost and/or schedule targets, including development or testing deadlines. Fees may also be influenced or be dependent on the collective efforts and success of other defense contractors over which we had no or limited control.

Our business is subject to government contracting regulations and our failure to comply with such laws and regulations could harm our operating results and prospects.

We, like other government contractors, are subject to various audits, reviews and investigations (including private party “whistleblower” lawsuits) relating to our compliance with federal and state laws. Generally, claims arising out of these U.S. Government inquiries and voluntary disclosures can be resolved without resorting to litigation. However, should the business or division involved be charged with wrongdoing, or should the U.S. Government determine that the business or division is not a “presently responsible contractor,” that business or division, and conceivably our Company as a whole, could be temporarily suspended or, in the event of a conviction, could be debarred for up to three years from receiving new government contracts or government-approved subcontracts. In addition, we could expend substantial amounts defending against such charges and in damages, fines and penalties if such charges were proven or were to result in negotiated settlements.

United States and global responses to terrorism, the Iraq and Afghanistan wars, the mass protests and turmoil in Middle Eastern countries, Mexican border town violence, nuclear proliferation concerns and potential epidemics increase uncertainties with respect to many of our businesses and may adversely affect our business and results of operations.

United States’ and global responses to terrorism, the Iraq and Afghanistan wars, the mass protests and turmoil in Middle Eastern countries, Mexican border town violence and nuclear proliferation concerns increase uncertainties with respect to U.S. and other business and financial markets. Several factors associated, directly or indirectly, with terrorism, the Iraq, Afghanistan, Egypt and Middle East situations and perceived nuclear threats and responses may adversely affect us. The reaction to Iran’s continuing desire to explore nuclear capabilities could adversely affect oil prices and some of our businesses. The reaction to Egypt permitting Iran to sent warships through the Suez Canal could adversely affect some of our businesses.

While some of our businesses that provide products or services to the U.S. Government experienced greater demand as a result of increased U.S. Government defense spending, various responses could realign

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government programs and affect the composition, funding or timing of our government programs. The President, his Administration and Congress could also further alter government programs. Government spending could shift to the Department of Defense or Homeland Security programs in which we may not participate or may not have current capabilities. These decisions could curtail less pressing non-defense programs in which we do participate, including Department of Energy or NASA programs. Government spending could also shift towards non-defense programs in which we do not currently participate.

Air travel declines have occurred after terrorist attacks and heightened security alerts, as well as after the H1N1 virus, SARS and bird flu scares. Additional declines in air travel resulting from such factors and other factors could adversely affect the financial condition of many of our commercial airline and aircraft manufacturer customers and, in turn, could adversely affect our Aerospace and Defense Electronics segment. In addition, a prolonged virus epidemic or pandemic, or the threat thereof, could result in worker absences, lower productivity, voluntary closure of our offices and manufacturing facilities, disruptions in our supply chain, travel restrictions on our employees, and other disruptions to our businesses. Moreover, health epidemics may force local health and government authorities to mandate the temporary closure of our offices and manufacturing facilities, as was done with our Mexico operations in 2009.

Deterioration of financial performance of airlines could result in a reduction of discretionary spending for upgrades of avionics and in-flight communications equipment, which would adversely affect our Aerospace and Defense Electronics segment.

The U.S. Government continues to evaluate potential security issues associated with general aviation. Increased government regulations, including but not limited to increased airspace regulations (including user fees), could lead to an overall decline in air travel and have an adverse affect on our Aerospace and Defense Electronics segment as well as our discontinued operations. As happened after the September 11th terrorist attacks, reinstatement of flight restrictions would negatively impact the market for general aviation aircraft piston engines and components of our discontinued operations and associated products of Teledyne Battery Products. Potential reductions in the need for general aviation aircraft maintenance as a result of declines in air travel could also adversely affect our discontinued operations.

Higher oil prices could adversely affect commercial airline-related customers of our Aerospace and Defense Electronics segment. Higher oil prices could also reduce general aviation air travel, negatively affecting our discontinued operations. Conversely, lower oil prices could decrease oil exploration and petrochemical refining activities and hinder our marine and other instrumentation businesses, including Teledyne Geophysical Instruments, Teledyne TSS Limited, Teledyne Benthos, Inc., Teledyne D.G. O’Brien and Teledyne ODI, Inc., as well as some of our other businesses such as Teledyne Storm Products, Inc. In addition, instability in the Middle East or other oil-producing regions could adversely affect expansion plans of the oil and gas industry customers of our instrumentation and cable solutions businesses.

Violence and crime in Mexico, particularly in border towns where we conduct some manufacturing activities, could adversely affect our relays and cable solutions businesses.

Acquisitions involve inherent risks that may adversely affect our operating results and financial condition.

Our growth strategy includes acquisitions. Acquisitions involve various inherent risks, such as:

•  our ability to assess accurately the value, strengths, weaknesses, internal controls, contingent and other liabilities and potential profitability of acquisition candidates;

•  the potential loss of key personnel of an acquired business;

•  our ability to integrate acquired businesses and to achieve identified financial, operating and other synergies anticipated to result from an acquisition;

•  our ability to assess, integrate and implement internal controls of acquired businesses in accordance with Section 404 of the Sarbanes-Oxley Act of 2002;

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•  the distraction of management resulting from the need to integrate acquired businesses;

•  increased competition for acquisition targets, which may increase acquisition costs; and

•  unanticipated changes in business and economic conditions affecting an acquired business.

While we conduct financial and other due diligence in connection with our acquisitions and generally seek some form of protection, including indemnification from a seller and sometimes an escrow of a portion of the purchase price to cover potential issues, such acquired companies may have weaknesses or liabilities that are not accurately assessed or brought to our attention at the time of the acquisition. Further, indemnities or escrows may not fully cover such matters, particularly matters identified after a closing.

We have also acquired several private companies, including the 2010 acquisitions of Optimum Optical Systems, Inc. and Hafmynd ehf (now known as Teledyne Gavia ehf). Private companies generally do not have as formal or comprehensive internal controls and compliance systems in place as public companies. While we have required various sellers to take certain compliance actions prior to the closing of an acquisition, including making voluntary disclosures under various export control laws and regulations, and have sought protections in the purchase agreement for such matters, there is no assurance that we have identified all issues or will be fully protected from historic liabilities. After acquiring a company, notwithstanding pre-closing due diligence, we have discovered issues that required further action, including making voluntary disclosures under various defense and export control laws and regulations.

While the products and customer base of the companies we have acquired over the years are complementary to some of Teledyne’s existing businesses, there is no assurance that we will achieve all identified financial, operating and marketing synergies. We may also experience problems that arise in entering new markets through acquisitions in which we may have little or no experience.

In 2011, we expanded our international presence with the acquisition of DALSA, which has operations in Canada, the Netherlands, Japan, China and Germany, as well as the United States. Additionally, in 2010, we expanded our United Kingdom presence with the acquisition of Intelek plc. Our United Kingdom operations accounted for approximately 5% of total revenues in both 2010 and 2009 compared with 4% in 2008. There are additional risks associated with owning and operating businesses internationally, including those arising from U.S. and foreign government policy changes or actions and exchange rate fluctuations. Further, it has been postulated that the United Kingdom economy may be recovering more slowly from the 2008 global economic crisis than the economies in the United States and mainland Europe.

In connection with acquisitions, we may consolidate one or more acquired facilities with other Teledyne facilities to obtain synergies and cost-savings. For example, in 2009, we consolidated the 2008-acquired Moorpark, CA-based operations and assets of Demo Systems LLC, principally with Teledyne Controls, El Segundo, CA. We also combined and relocated, with minimal disruption, the operations of the 2008-acquired Teledyne Impulse and long-time owned Teledyne Interconnect Devices to a new leased facility in San Diego, CA. In addition, in 2009, we relocated the principal operations of both 2008-acquired Teledyne TSS Limited and Teledyne Cormon Limited to more modern and larger facilities close to their prior locations. Nonetheless, despite planning, relocation and consolidation of manufacturing operations has inherent risks, as it tends to involve, among other things, change of personnel, application of a new business system software and learning or adaptation of manufacturing processes and techniques. As a result, production delays at a new operating location may occur.

Under SEC rules, Teledyne must issue a report on management’s assessment of the effectiveness of internal controls over financial reporting. The SEC permits a limited time-based exclusion for acquisitions to give a company an opportunity to evaluate more fully the internal controls of acquired companies and correct deficiencies and institute new or additional internal controls. Our 2010 management’s report specifically excludes from its scope and coverage our 2010 acquisitions of Intelek plc, Optimum Optical Systems, Inc. and Hafmynd ehf, allowing us additional time to evaluate existing internal controls and implement additional controls as appropriate. With regard to future acquisitions, we can provide no assurance that we will be able to provide a report that contains no significant deficiencies or material weaknesses with respect to these acquired companies or other acquisitions.

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In connection with our acquisitions, including ones which we do not complete, we may incur significant transaction costs. We are required to expense as incurred such transaction costs, which may have an adverse impact on our quarterly financial results.

We are subject to the risks associated with international sales, which could harm our business or results of operations.

During 2010, sales to international customers accounted for approximately 29% of our total revenues, as compared to 26% in 2009 and 24% in 2008. We anticipate that future sales to international customers will continue to account for a significant and increasing percentage of our revenues, particularly since business and growth plans for many Teledyne businesses focus on sales outside of the United States, including to emerging markets such as China and Brazil. The DALSA acquisition will also contribute to greater international sales. Risks associated with these sales include:

•  political and economic instability;

•  international terrorism;

•  export controls, including U.S. export controls related to China and increased scrutiny of exports of marine instruments, digital imaging and other products;

•  changes in legal and regulatory requirements;

•  U.S. and foreign government policy changes affecting the markets for our products;

•  changes in tax laws and tariffs;

•  changes in U.S.-China relations;

•  transportation, including piracy in international waters; and

•  exchange rate fluctuations.

Any of these factors could have a material adverse effect on our business, results of operations and financial condition. Exchange rate fluctuations may negatively affect the cost of our products to international customers and therefore reduce our competitive position. If the U.S. dollar strengthens against the British Pound Sterling or Euro, our European customers may no longer find our product prices more attractive than European competitors. With the acquisition of Canadian-based DALSA, increases in the value of the Canadian dollar relative to the U.S. dollar, or other foreign currencies, could adversely affect the business, operations and the financial condition of our Digital Imaging segment.

Sales of our products and services internationally are subject to U.S. and local government regulations and procurement policies and practices including regulations relating to import-export control. Violations of export control rules could result in suspension of our ability to export items from one or more businesses or the entire corporation. Depending on the scope of the suspension, this could have a material effect on our ability to perform certain international contracts. Concerns over theft of technology for military uses, nuclear proliferation concerns, terrorism, diversion and other factors have resulted in increased export scrutiny of international sales, including some of our marine instruments, digital imaging and other products to international customers. There has also been increasing export oversight and regulation of sales to China. Travel restrictions to Middle Eastern, African and other countries may negatively affect continuing international sales or service revenues from such regions. There are also U.S. and international regulations relating to investments, exchange controls and repatriation of earnings, as well as varying currency, political and economic risks.

Among other things, we are subject to the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits U.S. companies and their intermediaries from bribing foreign officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment. In particular, while we have procedures in place and conduct FCPA training, we may be held liable for actions taken by our strategic or local partners even though our partners are not subject to the FCPA. Further, the United Kingdom recently adopted, but delayed

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implementation of, the U.K. Bribery Act, which raises the bar for anti-bribery law enforcement and compliance relative to the FCPA. Any determination that we had violated the FCPA, the U.K. Bribery Act, when implemented, or equivalent anti-bribery and corruption laws in countries in which we do business could result in sanctions that could have a material adverse effect on our business, financial condition and results of operations.

Our indebtedness could materially and adversely affect our business.

As of January 2, 2011, we had $250.0 million in total outstanding indebtedness which included $250.0 million in senior unsecured notes issued and sold in a private placement transaction in September 2010 and no amounts under our prior $590.0 million credit facility. On February 25, 2011, we refinanced our prior $590.0 million credit facility that was set to expire in July 2011 and had $273.0 million outstanding under our new $550.0 million credit facility, which does not terminate until February 25, 2016. Our indebtedness could harm our business by, among other things, reducing the funds available to make new strategic acquisitions. Our indebtedness could also have a material adverse effect on our business by increasing our vulnerability to general adverse economic and industry conditions or a downturn in our business. General adverse economic and industry conditions or a downturn in our business could result in our inability to repay this indebtedness in a timely manner. Also, borrowing rates are higher under our new $550.0 million credit facility due to changes in market conditions since our last credit facility was put in place in 2006. A 100 basis point increase in interest rates results in an annual interest expense of approximately $2.7 million, assuming the $273.0 million in floating rate debt were outstanding for the full year. We may also elect to raise other forms of debt capital, depending on financial, market and economic conditions.

Product liability claims, product recalls and field service actions could have a material adverse effect on our reputation, business, results of operations and financial condition.

As a manufacturer and distributor of a wide variety of products, including aircraft engines (which is part of our discontinued operations and subject to divestiture), monitoring instruments and medical devices, our results of operations are susceptible to adverse publicity regarding the quality or safety of our products. In part, product liability claims challenging the safety of our products may result in a decline in sales for a particular product, which could adversely affect our results of operations. This could be the case even if the claims themselves are proven untrue or settled for immaterial amounts.

While we have general liability and other insurance policies concerning product liabilities, we have self-insured retentions or deductibles under such policies with respect to a portion of these liabilities. For example, our current annual self-insured retention for general aviation aircraft liabilities incurred in connection with products manufactured by Teledyne Continental Motors, Inc. (now part of discontinued operations and subject to divestiture), is approximately $5.0 million, a decrease from $17.2 million for the prior annual period. Our existing aircraft product liability insurance policy expires on May 31, 2011. Additionally, based on facts and circumstances of claims, we have not always accrued amounts up to the applicable annual self-insured retentions. Awarded damages could be more than our accruals. We could incur losses above the aggregate annual policy limit as well.

Product recalls can be expensive and tarnish our reputation and have a material adverse effect on the sales of our products. In 2009, our discontinued operations commenced two product recalls for which pre-tax charges aggregating $20.8 million had been recorded to cover estimated costs associated with the recall and replacement of the affected cylinders and lifters.

We have been joined, among a number of defendants (often over 100), in lawsuits alleging injury or death as a result of exposure to asbestos. We have not incurred material liabilities in connection with these lawsuits. The filings typically do not identify any of our products as a source of asbestos exposure, and we have been dismissed from cases for lack of product identification, but only after some defense costs have been incurred. Also, because of the prominent “Teledyne” name, we may be mistakenly joined in lawsuits involving a company or business that was not assumed by us as part of our 1999 spin-off. Our historic insurance coverage, including that of its predecessors, may not fully cover such claims and the defense of such matters. Coverage

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typically depends on the year of purported exposure and other factors. Nonetheless, we intend to defend these claims vigorously. Congress from time to time has considered tort reform to deal with asbestos-related claims, but to date nothing has materialized.

Certain gas generators historically manufactured by Teledyne Energy Systems, Inc. contained a sealed, wetted asbestos component. While the company has transitioned to a replacement material, had placed warning labels on its products and took care in handling of this discontinued material by employees, there is no assurance that the Company will not face product liability or workers compensation claims involving this component.

Our Teledyne Brown Engineering’s laboratory in Knoxville, Tennessee performs radiological analyses. While the laboratory is certified by the Department of Energy and the Nuclear Procurement Issues Committee, also known as NUPIC, and has other nuclear-related certifications and internal quality controls in place, errors and omissions in analyses may occur. We currently have errors and omissions insurance coverage and nuclear liability insurance coverage that might apply depending on the circumstances. We also have sought indemnities from some of our customers. Our insurance coverage or indemnities, however, may not be adequate to cover potential problems associated with faulty radiological analyses.

Teledyne Brown Engineering, Inc. and other Teledyne companies manufacture components for customers in the nuclear power market, including utilities and certain governmental entities. The components include, for example, penetration assemblies, waste storage canisters, and process equipment. Certain liabilities associated with such products are covered by the Price Anderson Act and other statutory and common law defenses, and we have received indemnities from some of our customers. However, there is no assurance we will not face product liability claims related to such products.

We cannot assure that we will not have additional product liability claims or that we will not recall any additional products.

We may have difficulty obtaining product liability and other insurance coverages, or be subject to increased costs for such coverage.

As a manufacturer of a variety of products, including aircraft engines used in general aviation aircraft (now part of our discontinued operations and subject to divestiture), we have general liability and other insurance policies that provide coverage beyond self-insured retentions or deductibles. We cannot assure that, for 2011 and in future years, insurance carriers will be willing to renew coverage or provide new coverage for product liability, especially as it relates to general aviation. Over the last several years, the number of insurance companies providing general aviation product liability insurance coverage has decreased. Even if such insurance is available, we may be required to pay substantially higher prices for coverage and/or increase our levels of self-insured retentions or reserves. Our current aircraft product liability insurance policy expires on May 31, 2011, and has an annual self-insured retention of approximately $5.0 million.

To offset aircraft product liability insurance costs, we continue to work to reduce manufacturing and other costs and also to pass on such insurance costs through price increases on our aircraft engines and spare parts. We cannot provide assurances that further cost reduction efforts will prove successful or that customers will accept additional price increases. Aircraft engines and spare part cost increases, coupled with increased costs of insurance for general aviation aircraft owners, tend to result in decreasing aftermarket sales of our piston engines and component parts. This, in turn, leaves our discontinued operations more dependent on sales to OEMs, which is more dependent on general economic conditions.

For certain electronic components for medical applications that we manufacture, such as those that go into cardiac defibrillators, we have asked for indemnities from our customers and/or to be included under their insurance policies. We cannot, however, provide any assurance that such indemnities or insurance will offset potential liabilities that we may incur as a result of our manufacture of such components. Additionally, while we have been exiting the manufacture of some medical components, claims may still arise after such manufacturing ceases.

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Aside from the uncertainties created by external events that can affect insurance coverages, such as the crash of Air France Flight 447 in the Atlantic Ocean in June 2009, the American International Group, Inc. 2008 failure and bailout, the devastating 2005 hurricane season or September 11th events, our ability to obtain product liability insurance and the cost for such insurance are affected by our historical claims experience. While we have taken steps to improve our claims management process over the last few years, we cannot assure that, for 2011 and in future years, our ability to obtain insurance, or the cost for such insurance, or the amount of self-insured retentions, reserves or limits, will not be negatively impacted by our experience in prior years.

Our pension expenses and the value of our pension assets are affected by factors outside of our control, including the performance of plan assets, the stock market, interest rates and actuarial data.

We have a defined benefit qualified pension plan covering most of our U.S. employees hired prior to 2004. The value of the combined pension assets is currently less than our accumulated pension benefit obligation. Given our pension plan’s underfunded status, in 2004 we began making required cash contributions to our qualified pension plan. In 2010, we made pretax cash contributions to our U.S. defined benefit qualified pension plan totaling $37.0 million, all of which was beyond what was required under ERISA. For 2009 and 2008, pretax cash contributions totaled $117.0 million and $58.7 million, respectively. In 2011, we currently expect to make a pretax voluntary cash contribution of $37.0 million, plus an additional $32.0 million pretax voluntary cash contribution if the divestiture of our piston engines businesses is completed. The accounting rules applicable to our qualified pension plan require that amounts recognized in the financial statements be determined on an actuarial basis, rather than as contributions are made to the plan. Two significant elements in determining our pension income or pension expense are the expected return on plan assets and the discount rate used in projecting pension benefit obligations. Declines in the stock market and lower rates of return could increase required contributions to our qualified pension plan. Any decreases or increases in market interest rates will affect the discount rate assumption used in projecting pension benefit obligations. If, and to the extent, decreases are not offset by voluntary contributions or asset returns, our required cash contributions and pension expense could increase under the plans. For additional discussion of pension matters, see the discussion under “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition” and Notes 2 and 12 to Notes to Consolidated Financial Statements. At the end of 2007, we changed some investment allocations to reduce exposure to deterioration in the subprime mortgage market. Throughout 2008 and until the latter part of 2009, given market disruptions and volatility, we maintained a greater amount in fixed income investments, including in U.S. Treasury notes, to achieve greater stability in our pension assets. During the second half of 2009, we began to change our investment strategy to more active management and increase our equity investments. Due to timing of investment allocation changes, we may not have benefited from some upswings in certain investments and in the future we may not benefit from any such upswings to the extent we change investment allocations to meet our current strategy. Additionally, our investment strategy may not be successful if the credit, financial or stock markets deteriorate.

Our future financial results could be adversely impacted by asset impairment charges.

Under current accounting guidance, we are required to test annually both acquired goodwill and other indefinite-lived intangible assets for impairment based upon a fair value approach, rather than amortizing them over time. We have chosen to perform our annual impairment reviews of goodwill and other indefinite-lived intangible assets during the fourth quarter of each fiscal year. We also are required to test goodwill for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our enterprise fair value below its book value. These events or circumstances could include a significant change in the business climate, including a significant sustained decline in an entity’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. If the fair market value is less than the carrying value, including goodwill, we could be required to record an impairment charge. The valuation of reporting units requires judgment in estimating future cash flows, discount rates and estimated product life cycles. In making these judgments, we evaluate the financial health of the business, including such factors as industry performance, changes in technology and operating cash flows. As we have grown through acquisitions, we have accumulated $546.3 million of

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goodwill, and have $113.9 million of net acquired intangible assets, which includes $37.8 million of indefinite-lived intangible assets, out of total assets of $1,557.8 million at January 2, 2011. As a result, the amount of any annual or interim impairment could be significant and could have a material adverse effect on our reported financial results for the period in which the charge is taken. We also may be required to record an earnings charge or incur unanticipated expenses if, as a result of a change in strategy or other reason, we were to determine the value of other assets had been impaired.

Generally accepted accounting principles require that a long-lived asset to be disposed of be reported at the lower of its carrying amount or fair value less cost to sell. An asset (other than goodwill and indefinite-lived intangible assets) is considered impaired when estimated future cash flows are less than the carrying amount of the asset. In the event the carrying amount of such asset is not deemed recoverable, the asset is adjusted to its estimated fair value. Fair value is generally determined based upon estimated discounted future cash flows.

We may not have sufficient resources to fund all future research and development and capital expenditures or possible acquisitions.

In order to remain competitive, we must make a substantial investment in research and development of new or enhanced products and continuously upgrade our process technology and manufacturing capabilities. In September 2006, we acquired Rockwell Scientific Company LLC, a provider of research and development services primarily in the areas of electronics, optics, information sciences and materials technologies. With Teledyne Scientific Company in our portfolio, we have been more actively promoting and funding joint research and development projects with other Teledyne businesses, including Teledyne Brown Engineering, Inc., Teledyne Reynolds, Inc. and our Teledyne Oil & Gas businesses. In 2010, we funded $47.0 million for research and development, compared to $45.1 million in 2009 and $47.8 million in 2008. Our capital expenditures totaled $31.0 million in 2010, $33.5 million in 2009 and $38.2 million in 2008. Although we believe that anticipated cash flows from operations and available borrowings under our new $550.0 million credit facility will be sufficient to satisfy our anticipated working capital, research and development and capital investment needs, including increased capital spending required by Teledyne DALSA, we may be unable to fund all of these needs or possible acquisitions. Our ability to raise additional capital will depend on a variety of factors, some of which will not be within our control, including the existence of a public offering market, investor perceptions of us, our businesses and the industries in which we operate, and general economic conditions. Although we successfully issued and sold $250.0 million in senior unsecured notes in a private placement transaction in September 2010, we may be unable to successfully raise additional capital, if needed. Failure to successfully raise needed capital on a timely or cost-effective basis could have a material adverse effect on our business, results of operations and financial condition.

We may be unsuccessful in our efforts to increase our participation in certain new markets.

We intend to both adapt our existing technologies and develop new products to expand into new market segments. We have been developing new electronic products, including high-power solid state microwave devices and tactical military camera systems, which are intended to access markets in which Teledyne does not currently participate or has limited participation. We may be unsuccessful in accessing these and other new markets if our products do not meet our customers’ requirements, as a result of changes in either technology and industry standards or because of actions taken by our competitors.

Limitations in customer funding for applied research and development and technology insertion projects due to the present economic conditions and the significant expenditures in Iraq and Afghanistan, as well as ongoing turmoil in Middle Eastern countries, may reduce our ability to apply our ongoing investments in some market areas. For example, our Engineered Systems segment’s development of Service Oriented Architectures for U.S. Department of Defense applications relies heavily on funding from customers who are actively competing for resources with war driven recapitalization, resupply and modernization requirements.

Teledyne DALSA is reliant on the Next Generation of Job Fund which is a grant from a provincial government authority to support research and development expenditures. Teledyne DALSA is also reliant on

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some government authorities for various tax incentives related to research and development, which drive and promote research and development spending. Changes in the Canadian and provincial governments’ policies could inhibit Teledyne DALSA’s ability to participate in new markets.

As discussed elsewhere herein, there has been a downturn in the general aviation market as a direct result of deteriorated economic and credit conditions in the United States and the world generally. In addition to our discontinued operations, as previously stated, this deterioration could further impact battery sales of our Aerospace and Defense Electronics segment. While we will try to offset such impact with battery sales to the military and into other applications, we may not be able to offset any such impact. Advanced lithium ion aircraft battery technology could also adversely affect our lead batteries sales and our ability to enter into new OEM jet markets.

We may be unable to successfully introduce new and enhanced products in a timely and cost-effective manner, which could harm our growth and prospects.

Our operating results depend in part on our ability to introduce new and enhanced products on a timely basis. Successful product development and introduction depend on numerous factors, including our ability to anticipate customer and market requirements, changes in technology and industry standards, our ability to differentiate our offerings from offerings of our competitors, and market acceptance. We may not be able to develop and introduce new or enhanced products in a timely and cost-effective manner or to develop and introduce products that satisfy customer requirements. However, our involvement, through the 2011- acquisition of DALSA, in the microelectronic innovation center in Bromont, Quebec, Canada, will provide us with access to a well-equipped MEMS research and development center, which we believe may help to improve our technology development capability.

Our new products also may not achieve market acceptance or correctly address new industry standards and technological changes. As an example, we continue to work to develop high power solid state power amplifiers, which could replace our traveling wave tubes in some applications, and, in this field, there is a larger base of potential competitors than there is for tube amplifiers. As a result, it may be more difficult for our solid state power amplifier products to gain market acceptance. We may also lose any technological advantage to competitors if we fail to develop new products in a timely manner. For example, if we fail to timely develop a permanent reservoir monitoring system for deep water applications, our growth and prospects in the deep water arena could be hampered.

Additionally, new products may trigger increased warranty costs as such products are tested further by actual usage. Accelerated entry of new products to meet heightened market demand and competitive pressures may cause additional warranty costs as development and testing time periods might be accelerated or condensed.

Technological change and evolving industry and regulatory standards could cause certain of our products or services to become obsolete or non-competitive.

The markets for some of our products and services are characterized by rapid technological development, evolving industry standards, changes in customer requirements and new product introductions and enhancements. A faster than anticipated change in one or more of the technologies related to our products or services, or in market demand for products or services based on a particular technology, could result in faster than anticipated obsolescence of certain of our products or services and could have a material adverse effect on our business, results of operations and financial condition. For example, Teledyne Reynolds’ high voltage connector business could be negatively impacted by marketplace shifts to lower voltage requirements where the number of competitors is larger. Most lighting displays in legacy aircraft use illumination devices that require high voltage connectors. LED backlights, which are increasingly being used for aircraft lighting displays, have substantially lower voltage requirements.

Currently accepted industry and regulatory standards are also subject to change, which may contribute to the obsolescence of our products or services. For example, effective July 1, 2006, a European directive, referred to as RoHS or the Restriction on Hazardous Substances directive, provided that certain electronic

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products must not contain impermissible levels of lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls or polybrominated diphenyl ethers. As a result, we must make sure that certain of our electronic products sold into European member states comply with this directive. Although many of our products are exempt from the European directive, we continue to expect that, over time, component manufacturers may discontinue selling components that have the restricted substances. This will, in turn, require us to accommodate changes in parameters, such as the way parts are soldered, and may, in some cases, require redesign of certain products. This could lead to increased costs, which we may not be able to recover from our customers, delays in product shipments and loss of market share to competitors. The European Union’s 2007-adopted Registration, Evaluation, Authorization and Restriction of Chemical substance reform legislation, commonly referred to as REACH, which requires registration and selective evaluation of more than 30,000 chemical substances that are deemed of high risk to environment, health and safety, is also expected to have, over time, an impact on the electronics supply chain similar to the RoHS. Additionally, similar laws restricting hazardous substances have been promulgated in various non-European countries, including China and Korea, as well as in various U.S. states.

Revenues of our Teledyne Test Services business, which provides testing and certification for products used in nuclear power plants, could be negatively impacted in the event of any changes in certification standards by the Nuclear Regulatory Commission.

Additionally, the U.S. Environmental Protection Agency continues to target general aviation fuel as a key contributor to lead in the atmosphere and could try to impose lead-free fuel regulations on general aviation. Such a change in the fuel standard could have an adverse impact on our discontinued operations, including increasing research and development costs. In part, we have been working to manufacture an engine that uses diesel fuel to address this risk.

We may not be able to reduce the costs of our products to satisfy customers’ cost reduction mandates, which could harm our sales or margins.

More and more customers continue to seek price reductions of our products. While we continually work to reduce our manufacturing and other costs of our products, without affecting product quality and reliability, there is no assurance that we will be able to do so and do so in a timely manner to satisfy the pricing pressures of our customers. Cost reductions of raw materials and other components used in our products may be beyond our control depending on market, credit and economic conditions. Customers may seek lower cost products from China and other developing countries where manufacturing costs are lower.

The airline industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer.

Governmental agencies throughout the world, including the U.S. Federal Aviation Administration, or the FAA, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products, as well as regulations regarding the repair and overhaul of aircraft engines. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. We include, with the products and replacement parts that we sell to our aircraft industry customers, documentation certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries. In order to sell our products, we and the products we manufacture must also be certified by our individual original equipment manufacturer, or OEM, customers. If any material authorization or approval qualifying us to supply our products is revoked or suspended, then the sale of the product would be prohibited by law, which would have an adverse effect on our business, financial condition and results of operations.

From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations. If these proposed regulations are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition and results of operations.

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Increasing competition could reduce the demand for our products and services.

Although we believe that we have certain advantages that help us compete in our markets, each of our markets is highly competitive. Many of our competitors have, and potential competitors could have, greater name recognition, a larger installed base of products, more extensive engineering, manufacturing, marketing and distribution capabilities and greater financial, technological and personnel resources than we do. New or existing competitors may also develop new technologies that could adversely affect the demand for our products and services. Industry acquisition and consolidation trends, particularly among aerospace and defense contractors, have adversely impacted demand for our aerospace and defense related engineering services as large prime contractors in-source increased amounts of major acquisition programs and also require significant expansion in small business participation to meet Government contracting goals. Low-cost competition from China and other developing countries could also result in decreased demand for our products. Increasing competition could reduce the volume of our sales or the prices we may charge, which would negatively impact our revenues.

We sell products to customers in industries that may again undergo rapid and unpredictable changes, which could adversely affect our operations results or production levels.

We develop and manufacture products for customers in industries that have undergone rapid changes in the past. For example, we manufacture products and provide manufacturing services to companies that serve telecommunications markets. During 2001, many segments of the telecommunications market experienced a dramatic and rapid downturn that resulted in cancellations or deferrals of orders for our products and services. This market, or others that we serve, may exhibit rapid changes in the future and may adversely affect our operating results, or our production levels, or both. We also manufacture products using fuel cell technology, which is a market that is not well-established and subject to significant change and evolution.

Our Engineered Systems segment manufactures gas centrifuge service modules for Fluor Enterprises, Inc., acting as agent for USEC, Inc., used in the American Centrifuge Project. We anticipate increased sales of gas centrifuge service modules in 2011 due to a likely return to full production for the American Centrifuge Project. In May 2010, USEC announced that Toshiba and Babcock and Wilcox signed definitive agreements to provide co-investments of $100 million each in the American Centrifuge Plant payable in three installments. In late July 2010, USEC updated its application to the Department of Energy, which triggered the initial investment of $75.0 million from Toshiba and Babcock and Wilcox. In anticipation of a favorable adjudication of its loan application and in light of the investment from the new partners, USEC began remobilization of the project in early September 2010. However, USEC has not authorized a return to full production. Failure to secure the loan guarantees would seriously jeopardize USEC’s ability to finance, and therefore complete, the centrifuge project. Continuation of this project beyond mid-year 2011 may depend on USEC receiving a favorable ruling regarding its loan guarantee application. If USEC does not receive a favorable ruling, future funding on this program could be reduced or eliminated. In such an event, our Engineered Systems segment may experience reduced sales.

Our business and financial results could be adversely affected by conditions and other factors associated with our suppliers.

Some items we purchase for the manufacture of our products, including certain gyro components for some marine navigation applications, certain magnets and helix wire for our traveling wave tubes and certain infrared detectors substrates are purchased from limited or single sources of supply due to technical capability, price and other factors. We have also outsourced from time to time the manufacturing of certain parts, components, subsystems and even finished products to single or limited sources, including international sources. For example, Teledyne Relays outsources the manufacture of certain relays and relay components to Taiwan and India, as well as our own facility in Mexico. Teledyne Imaging Sensors outsources the manufacture of read-out integrated circuits for focal plane arrays to a Taiwanese foundry. Disruption of these sources could cause delays or reductions in shipments of our products or increases in our costs, which could have an adverse effect on our financial condition or operations. International sources possess additional risks, some of which are similar to those described above in regard to international sales. With any continuing

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disruption in the global economy and financial markets, some of our suppliers may also continue to face issues gaining access to sufficient credit to maintain their businesses, which could reduce the availability of some components and, to the extent such suppliers are single source suppliers, could adversely affect our ability to continue to manufacture and sell our products. Continuing economic pressure on suppliers may also trigger increased pricing or workforce reductions or reduced workweeks possibly creating longer lead times to obtain needed components for our products.

Compliance with increasing environmental and climate change regulations, as well as the effects of potential environmental liabilities, could have a material adverse financial effect on us.

We, like other industry participants, are subject to various federal, state, local and international environmental laws and regulations. We may be subject to increasingly stringent environmental standards in the future, particularly as green house gas emissions and climate change regulations and initiatives increase. Future developments, administrative actions or liabilities relating to environmental and climate change matters could have a material adverse effect on our business, results of operations or financial condition.

While we have, as part of our overall risk management program, an environmental management and compliance program applicable to our operating facilities, including a “review and audit” program to monitor compliance where each facility is reviewed and audited by an internal environmental team every three years, such program does not eliminate potential environmental liabilities. In addition, while we conduct environmental-related due diligence in acquisitions and generally seek some form of protection, including indemnification from a seller, companies we acquire may have environmental liabilities that are not accurately assessed or brought to our attention at the time of the acquisition.

For additional discussion of environmental matters, see the discussion under the caption “Other Matters — Environmental” of “Item 7. Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 15 to Notes to Consolidated Financial Statements.

Increased environmental regulatory monitoring requirements of the air we breathe and the water we drink could have a favorable effect on the results of operations or financial condition of our instrumentation businesses, including the sulfur dioxide, carbon monoxide and ozone gas monitoring business of Teledyne Advanced Pollution Instrumentation, Inc., the air quality monitoring business of Teledyne Monitor Labs, Inc., the water quality monitoring business of Teledyne Isco, Inc., and the mercury monitoring business of Teledyne Leeman Labs. In contrast, the U.S. Environmental Protection Agency’s efforts to limit lead emissions from general aviation gasoline could adversely affect our discontinued operations. Consequently, in part, we have been working to manufacture an engine that uses unleaded diesel fuel to address this risk. Also, while our lead-acid battery manufacturing facility in Redlands, CA has scrubbers and other pollution control devices in place, additional lead-related air-emission limitations and other requirements could trigger additional expenditures and adversely affect the financial results of our Aerospace and Defense Electronics segment.

The U.S. Environmental Protection Agency announced that greenhouse gases (GHGs) threaten the public health and welfare of the American people. EPA also maintains that GHG emissions from on-road vehicles contribute to that threat. EPA’s endangerment finding covers emissions of six greenhouse gases — carbon dioxide, methane, nitrous oxide, hydrofluorocarbons (HFC), perfluorocarbons (PFC) and sulfur hexafluoride (SF6). EPA’s efforts to limit GHG emissions could adversely affect our U.S. manufacturing operations. Restrictions on carbon dioxide emissions may impact energy, fuel and transportation prices. Restrictions on HFCs, PFs and SF6 gases may impact the way these compounds are used and controlled at certain of our facilities. This may, in turn, require us to accommodate changes in parameters, such as the way parts are manufactured, and may, in some cases, require redesign of certain products. This could lead to increased costs, which we may not be able to recover from customers, delays in product shipments and loss of market share to competitors.

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Our inability to attract and retain key personnel could have a material adverse effect on our future success.

Our future success depends to a significant extent upon the continued service of our executive officers and other key management and technical personnel and on our ability to continue to attract, retain and motivate qualified personnel. We also have a maturing work force. While we have engaged in succession planning, the loss of the services of one or more of our key employees or our failure to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and results of operations.

Our Engineered Systems segment has been facing increasing competition for qualified engineering personnel as a result of the Department of Defense 2005 Base Realignment and Closure (also known as BRAC) decisions, particularly as positions continue to move to Huntsville, Alabama over the next several years. In addition, the U.S. Secretary of Defense announced in 2009 that the Department would decrease the use of contractors in support services and increase funding for civil service positions in those areas. As a result of this trend, our Engineered Systems segment lost personnel as their jobs were changed from contractor to Federal civil service positions. This trend may continue in 2011. The Engineered Systems segment is also losing personnel due to employees pursing vacancies that have been created in various industries as other employees accept employment with the U.S. government.

A labor strike or work stoppage could have a material adverse affect on our business.

While we believe our overall relations with our employees to be good, a labor strike or work stoppage at our union-represented or other facilities could have a material adverse effect on us. The International Union of United Automobile, Aerospace and Agricultural Implement Workers of America represents approximately 250 active employees at our Teledyne Continental Motors piston engine manufacturing facility in Mobile, Alabama under a collective bargaining agreement that expires by its terms on March 20, 2013. This union also represents approximately 10 active employees at the Teledyne Turbine Engines facility in Toledo, Ohio under a collective bargaining agreement that expires on November 8, 2014. Upon expiration of these agreements, there can be no assurance that a strike or work stoppage would not occur. As Teledyne Continental Motors, Inc. is part of discontinued operations and is subject to divestiture, the Mobile, Alabama collective bargaining agreement and the active employees represented thereby will be included with the sale.

We may not be able to sell, or exit on acceptable terms, businesses that we determine no longer meet with our growth strategy.

Consistent with our growth strategy to focus on markets to expand our profitable niche businesses, we continually evaluate our businesses to ensure that they are aligned with our strategy. Most recently, this review led to the decision to sell our general aviation piston engines businesses, which sale is expected to close in the 1st quarter of 2011. After the June 2004 acquisition of Isco, Inc., we determined that the on-line process control instrumentation business of its German subsidiary was not aligned with our strategy, and in March 2005, we sold this non-strategic business. In 2007, principally because of the decision of a customer to manufacture certain medical products at its facilities in India, we closed our contract manufacturing operations in El Rubi, Tijuana, Mexico and transferred the remaining operations to our La Mesa, Tijuana, Mexico and our Lewisburg, Tennessee facilities.

Our ability to dispose of or exit businesses that may no longer be aligned with our growth strategy will depend on many factors, including the terms and conditions of any asset purchase and sale agreement, as well as industry, business and economic conditions. We cannot provide any assurance that we will be able to sell non-strategic businesses on terms that are acceptable to us, or at all. Also, if the sale of any non-strategic business cannot be consummated or is not practical, alternative courses of action, including closure, may not be available to us or may be more costly than anticipated.

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Natural disasters, such as a serious earthquake or wildfire in California, a major hurricane in Alabama, Florida or Texas, or an ice storm in Canada, as well as man-made environmental disasters such as 2010 Gulf of Mexico Oil spill, could adversely affect our business, results of operations and financial condition.

Several of our facilities, as a result of their locations could be subject to a catastrophic loss caused by earthquakes, hurricanes, tornados, floods, ice storms or other natural disasters. Many of our production facilities and our headquarters are located in California and thus are in areas with above average seismic activity and may also be at risk of damage in wildfires. Teledyne DALSA’s facility in Quebec has in the past been impacted by severe ice storms. In addition, we have manufacturing facilities in the Southeastern United States and Texas that have been threatened and struck by major hurricanes. Our facilities in Alabama, Florida, Nebraska and Tennessee have also been threatened by tornados. While Teledyne Continental Motors’ piston-engines manufacturing facility located in Mobile, Alabama (which is now part of our discontinued operations and subject to divestiture), Teledyne Geophysical Instruments’ facility in Houston, Texas, Teledyne ODI’s facility in Daytona Beach, Florida and Teledyne Odom’s facility in Baton Rouge, Louisiana were relatively fortunate with respect to the building damage and business interruption they suffered during the previous hurricane season, there can be no assurance that any one of them will be as fortunate in the future. If any of our California facilities, including our California headquarters, were to experience a catastrophic earthquake or wildfire loss or if any of our Alabama, Florida, Louisiana, Nebraska, Tennessee or Texas facilities were to experience a catastrophic hurricane, storm, tornado or other natural disaster, such event could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility or facilities. While Teledyne has property insurance to partially reimburse it for losses caused by windstorm and earth movement, such insurance would not cover all possible losses. In addition, our existing disaster recovery and business continuity plans (including those relating to our information technology systems) may not be fully responsive to, or minimize losses associated with, catastrophic events.

The environmental disaster triggered by the Deepwater Horizon rig explosion and oil spill in 2010 resulted in a moratorium on offshore oil and gas production in the Gulf of Mexico that adversely affected the results of operations of some of our Teledyne Oil and Gas businesses, although such adverse impact was offset, in part, by the products we manufacture that supported well-capping and environmental clean-up efforts. Similar future man-made disasters that limit or cease offshore oil and gas production or further exploration in the regions in which we sell our products could have a material adverse affect on our business, results of operations and financial condition.

We may not be able to enforce or protect our intellectual property rights, which may harm our ability to compete and harm our business.

Our ability to enforce our patents, copyrights, software licenses, and other intellectual property rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our intellectual property rights in various countries. When we seek to enforce our rights, we are often subject to claims that the intellectual property right is invalid, is otherwise not enforceable, or is licensed to the party against whom we are asserting a claim. In addition, as our Teledyne Controls business has experienced, our assertion of intellectual property rights often results in the other party seeking to assert alleged intellectual property rights of its own or assert other claims against us. If we are not ultimately successful in defending ourselves against these claims in litigation, we may not be able to sell a particular product or family of products due to an injunction, or we may have to pay damages that could, in turn, harm our results of operations. Our inability to enforce our intellectual property rights under these circumstances may harm our competitive position and our business.

Our financial statements are based on estimates required by GAAP, and actual results may differ materially from those estimated under different assumptions or conditions.

Our financial statements are prepared in conformity with generally accepted accounting principles in the United States. These principles require our management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of

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revenue and expenses during the reporting period. For example, estimates are used when accounting for items such as asset valuations, allowances for doubtful accounts, depreciation and amortization, impairment assessments, employee benefits, taxes, recall costs, aircraft product and general liability and contingencies. While we base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances at the time made, actual results may differ materially from those estimated.

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

We continue to take action to assure compliance with the internal controls, disclosure controls and other requirements of the Sarbanes-Oxley Act of 2002. Our management, including our Chief Executive Officer and Chief Financial Officer, cannot guarantee that our internal controls and disclosure controls will prevent all possible errors or all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be relative to their costs. Because of the inherent limitations in all control systems, no system of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls. The design of any system of controls is also based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may be inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements resulting from error or fraud may occur and may not be detected.

Provisions of our governing documents, applicable law, and our Change in Control Severance Agreements could make an acquisition of Teledyne Technologies more difficult.

Our Restated Certificate of Incorporation, our Amended and Restated Bylaws and the General Corporation Law of the State of Delaware contain several provisions that could make the acquisition of control of Teledyne, in a transaction not approved by our board of directors, more difficult. We have also entered into Change in Control Severance Agreements with 16 members of our management, which could have an anti-takeover effect. These provisions may prevent or discourage attempts to acquire our company.

The market price of our Common Stock has fluctuated significantly since our spin-off from ATI, and could continue to do so.

Since the spin-off from ATI on November 29, 1999, the market price of our Common Stock has ranged from a low of $7.6875 to a high of $66.21 per share. During 2010 alone, the market price of our Common Stock ranged from $35.34 to $45.25 per share. At February 25, 2011, our closing stock price was $52.57. Fluctuations in our stock price could continue. Among the factors that could affect our stock price are:

•  quarterly variations in our operating results;

•  strategic actions by us or our competitors;

•  acquisitions;

•  divestitures;

•  adverse business developments;

•  war in the Middle East or elsewhere;

•  terrorist activities;

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•  military or homeland defense activities;

•  changes to the U.S. Federal budget;

•  changes in the energy exploration or production, semiconductor, digital imaging, telecommunications, commercial and general aviation, and electronic manufacturing services markets

•  general market conditions;

•  changes in tax laws;

•  general economic factors unrelated to our performance; and

•  one or more of the other risk factors described in this report.

The stock markets in general, and the markets for high technology companies in particular, have experienced a high degree of volatility that is not necessarily related to the operating performance of these companies. We cannot provide assurances as to our stock price.

Item 1B.   Unresolved Staff Comments.

By letter dated February 28, 2011, the staff of the Division of Corporation Finance at the Securities and Exchange Commission has informed us that there remains an unresolved comment with respect to the staff’s review of our Annual Report on Form 10-K for the fiscal year ended January 3, 2010, filed on March 2, 2010. The staff believes that each of our business units are operating segments and that any aggregation of operating segments into reportable segments should begin at the business unit level and that our fiscal 2010 Form 10-K disclosure should reflect this approach. We have determined that our reporting business units are aggregated into four reportable segments (not including discontinued operations) as set forth in this 2010 Form 10-K. After an extensive and careful review, including consultation with the Audit Committee of our Board of Directors and our external auditors, including their national office, we believe our determination of operating segments and reportable segments is consistent with applicable accounting literature, including Accounting Standards Board Accounting Standards Codification ASC 280 — Segment Reporting. We have determined that there is no impairment of goodwill or other intangible assets if impairment testing is performed at the reporting business unit level. We will continue to work with the Securities and Exchange Commission to resolve this comment. If the SEC does not agree with us, we may amend and restate our 2010 Form 10-K to reflect a different reporting segment structure.

Item 2.   Properties

Our principal facilities as of February 25, 2011, are listed below. Although the facilities vary in terms of age and condition, our management believes that these facilities have generally been well maintained and are adequate for current operations.

Facility Location	Principal Use	Owned/Leased
Instrumentation Segment
United States
City of Industry, California	Development and production of precision oxygen analyzers	Owned
Poway, California	Development and production of underwater acoustic instrumentation	Leased
San Diego, California	Development and production of environmental monitoring instrumentation	Leased
San Diego, California	Development and production of electrical interconnection systems	Leased
Englewood, Colorado	Development and production of environmental monitoring systems	Leased
Daytona Beach, Florida	Development of subsea, wet-mateable electrical fiber-optic interconnection systems	Leased
Baton Rouge, Louisiana	Development and production of hydrographic survey instrumentation	Leased

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Facility Location	Principal Use	Owned/Leased
East Falmouth, Massachusetts	Development and production of autonomous underwater gliding vehicles, profilers, drifters and floats	Leased
North Falmouth, Massachusetts	Development and production of underwater acoustic instrumentation and package inspection systems	Owned
Lincoln, Nebraska	Development and production of water quality monitoring products, chemical separation instruments and flash chromatography instruments and consumables	Owned
Hudson, New Hampshire	Development and production of elemental analysis instruments	Leased
Seabrook, New Hampshire	Development and production of electrical and fiber optic interconnect systems	Leased
Mason, Ohio	Development and production of chemical analysis instruments	Leased
Houston, Texas	Development and production of geophysical streamer cables and hydrophones for seismic monitoring	Owned and Leased
Hampton, Virginia	Development and production of vacuum and flow measurement instruments	Owned
Iceland
Reykjavik	Development and production of autonomous underwater vehicles	Leased
United Kingdom
Mitcheldean, England	Repair of geophysical streamer cables	Leased
Watford, England	Development and production of inertial sensing and navigation systems	Leased
Worthing, England	Development and production of corrosion monitoring equipment	Leased
Digital Imaging Segment
United States
Camarillo, California	Production of focal plane arrays and imaging sensors and systems	Owned and Leased
Thousand Oaks, California	Provision of research and development services	Owned
Sunnyvale, California	Development and production of digital imaging products	Leased
Billerica, Massachusetts	Development and production of digital imaging products	Leased
Durham, North Carolina	Provision of research and development services	Leased
Montgomeryville, Pennsylvania	Development and production of infrared devices and accessory products	Owned and Leased
Canada
Waterloo, Ontario	Development and production of digital imaging products	Owned and Leased
Bromont, Quebec	Semiconductor design and fabrication	Owned
The Netherlands
Eindhoven	Development and production of digital imaging products	Leased
Aerospace and Defense Electronics Segment
United States
Chatsworth, California	Development and production of electronic seat ejection sequencers	Leased
El Segundo, California	Development and production of digital data acquisition systems for monitoring commercial aircraft and engines	Leased
Hawthorne, California	Production of electromechanical relays	Owned
Los Angeles, California	Development and production of high voltage connectors and subassemblies and pilot helmet mounted display components and subsystems	Leased
Los Angeles, California	Manufacturing of custom microelectronic assemblies	Owned and Leased
Mountain View, California	Production of microwave integrated circuits and systems	Owned
Poway, California	Development and production of defense microwave components and subsystems	Leased
Rancho Cordova, California	Development and production of traveling wave tubes	Owned

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Facility Location	Principal Use	Owned/Leased
Redlands, California	Manufacturing of batteries for the general aviation and business jet market	Owned
Santa Maria, California	Development and production of high voltage capacitor products	Leased
Sunnyvale, California	Development and production of RF and microwave amplifiers and components	Leased
Tracy, California	Development and production of precision secondary explosive components	Leased
Woodridge, Illinois	Development and production of microwave cable and interconnect products	Leased
Hudson, New Hampshire	Production of circuit boards	Owned
State College, Pennsylvania	Development and production of solid state power amplifiers and components	Leased
Lewisburg, Tennessee	Development and manufacturing of electronic components and subsystems	Owned
Dallas, Texas	Development and production of specialty wire and cable assemblies	Leased
Mexico
Tijuana, Mexico	Manufacturing of electromechanical and solid state relays	Leased
United Kingdom
Milton Keynes, England	Development and production of microwave components	Leased
Newbury, England	Development and production of high voltage connectors and cable products	Leased
Shipley, England	Development and production of electronic warfare equipment	Owned
Witham, England	Development and production of solid state amplifiers	Leased
West Drayton, England	Flight data monitoring services	Leased
Cumbernauld, Scotland	Production and repair of commercial avionic systems	Leased
Cwmbran, Wales	Development and production of high voltage connectors and cable products	Leased
Presteigne, Wales	Development and production of microwave components	Leased
Engineered Systems Segment
United States
Huntsville, Alabama	Provision of engineering services and products, including highly engineered manufactured products	Owned and Leased
Huntsville, Alabama	Production of gas centrifuge modules	Leased
Colorado Springs, Colorado	Provision of engineering services	Leased
Hunt Valley, Maryland	Manufacturing, assembling and manufacture of hydrogen	Leased
	generators, power generating systems and fuel cell test
	stations
Toledo, Ohio	Design, development and production of small turbine engines for aerospace and military markets	Leased
Knoxville, Tennessee	Laboratories and offices in support of environmental services	Leased
Arlington, Virginia	Defense program offices supporting governmental customers	Leased
United Kingdom
Birkenhead, England	Aerostructures manufacturing	Owned and Leased
Bromborough, England	Aerostructures composites	Leased
Discontinued Operations
Mobile, Alabama	Design, development and production of new and rebuilt piston engines, ignition systems and spare parts for the general aviation market	Leased
Mattituck, New York	Supply of aftermarket parts, services and engine overhauls	Leased
	for the general aviation market

We also own or lease other facilities and offices elsewhere in the United States and outside the United States, including facilities and offices in Australia, Brazil, Canada, China, France, Germany, Japan,

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Malaysia, Singapore and the United Kingdom. Our corporate executive offices are located at 1049 Camino Dos Rios, Thousand Oaks, California 91360-2362.

Item 3.   Legal Proceedings.

From time to time, we become involved in various lawsuits, claims and proceedings related to the conduct of our business, including those pertaining to product liability, patent infringement, commercial, employment and employee benefits. While we cannot predict the outcome of any lawsuit, claim or proceeding, our management does not believe that the disposition of any pending matters is likely to have a material adverse effect on our financial condition or liquidity. The resolution in any reporting period of one or more of these matters, however, could have a material adverse effect on the results of operations for that period.

In March 2009, Cold Creek Enterprises, Inc. and Bob DiSilva commenced a lawsuit against DALSA Corporation and certain related entities in the Ontario Superior Court of Justice. The claims originate from the interest of Mr. DiSilva’s company in DALSA Digital Camera Inc., a joint venture entered into in November 2004 and now a discontinued business of DALSA. The lawsuit seeks various forms of relief, including damages in excess of CAD $20 million. The lawsuit is being vigorously defended, and a counterclaim has been filed against the plaintiff.

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PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

Price Range of Common Stock and Dividend Policy

Our Common Stock is listed on the New York Stock Exchange and traded under the symbol “TDY.” The following table sets forth, for the periods indicated, the high and low sale prices for the Common Stock as reported by the New York Stock Exchange.

	High		Low
2009
1st Quarter	$	46.75	$	21.65
2nd Quarter	$	37.57	$	26.00
3rd Quarter	$	36.31	$	29.48
4th Quarter	$	39.80	$	32.95
2010
1st Quarter	$	42.87	$	35.64
2nd Quarter	$	44.57	$	36.19
3rd Quarter	$	43.00	$	35.34
4th Quarter	$	45.25	$	38.83
2011
1st Quarter (through February 25, 2011)	$	53.35	$	43.56

On February 25, 2011, the closing sale price of our Common Stock as reported by the New York Stock Exchange was $52.57 per share. As of February 25, 2011, there were 5,152 holders of record of the Common Stock.

We currently intend to retain any future earnings to fund the development and growth of our businesses, including through acquisitions. Therefore, we do not anticipate paying any cash dividends in the foreseeable future.

Issuer Purchases of Equity Securities

Our stock repurchase program expired on February 28, 2010. In 2009, we had repurchased 36,239 shares of Teledyne common stock for $0.8 million under this program. No shares were repurchased in 2010.

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Item 6.   Selected Financial Data.

The following table presents our summary consolidated financial data. We derived the following historical selected financial data from our audited consolidated financial statements. Our fiscal year is determined based on a 52- or 53-week convention ending on the Sunday nearest to December 31. Fiscal year 2010 contained 52 weeks and fiscal year 2009 contained 53 weeks while fiscal years 2008, 2007 and 2006 each contained 52 weeks. In December 2010, we entered into an agreement to sell our general aviation piston engine businesses, which comprised the former Aerospace Engines and Components segment. We have restated prior year financial data to classify this segment as a discontinued operation. The five-year summary of selected financial data should be read in conjunction with the discussion under “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Five-Year Summary of Selected Financial Data

	2010		2009		2008		2007		2006
			(In millions, except per-share amounts)
Sales	$	1,644.2	$	1,652.1	$	1,722.0	$	1,441.6	$	1,251.6
Net income attributable to Teledyne Technologies	$	120.5	$	113.3	$	111.3	$	98.5	$	80.3
Working capital	$	306.8	$	242.6	$	274.8	$	198.3	$	203.7
Total assets	$	1,557.8	$	1,421.5	$	1,534.5	$	1,159.4	$	1,061.4
Long-term debt and capital lease obligations, net of current portion	$	265.3	$	251.6	$	332.1	$	142.4	$	230.7
Total equity	$	787.0	$	667.4	$	506.9	$	506.9	$	408.3
Basic earnings per common share — continuing operations	$	3.31	$	3.22	$	3.29	$	2.45	$	2.06
Diluted earnings per common share — continuing operations	$	3.25	$	3.17	$	3.20	$	2.36	$	1.99
Basic earnings per common share	$	3.33	$	3.15	$	3.14	$	2.82	$	2.34
Diluted earnings per common share	$	3.27	$	3.10	$	3.05	$	2.72	$	2.26

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Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Teledyne Technologies Incorporated is a leading provider of sophisticated electronic components and subsystems, instrumentation and communications products, including defense electronics, digital imaging products and software, monitoring and control instrumentation for marine, environmental and industrial applications, harsh environment interconnect products, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications. We also provide engineered systems and information technology services for defense, space, environmental and nuclear applications, and supply energy generation, energy storage and small propulsion products.

We serve niche market segments where performance, precision and reliability are critical. Our customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies and airlines.

Strategy/Overview

Our strategy continues to emphasize growth in our core markets of instrumentation, digital imaging, aerospace and defense electronics and government engineered systems. Our core markets are characterized by high barriers to entry and include specialized products and services not likely to be commoditized. We intend to strengthen and expand our core businesses with targeted acquisitions. We aggressively pursue operational excellence to continually improve our margins and earnings. At Teledyne, operational excellence includes the rapid integration of the businesses we acquire. Over time, our goal is to create a set of businesses that are truly superior in their niches. We continue to evaluate our businesses to ensure that they are aligned with our strategy.

Consistent with this strategy, we made three acquisitions in 2010 and in December 2010 we entered into an agreement to sell our general aviation piston engines businesses, which comprised the former Aerospace Engines and Components segment. Accordingly, our consolidated financial statements have been restated to classify the Aerospace Engines and Components segment as a discontinued operation. We expect the sale to close in the first quarter of 2011, pending satisfaction of final closing conditions.

In addition, for 2010, we realigned and changed the reporting structure of some of our businesses. Our former Electronics and Communications segment is now reported as three separate segments, Instrumentation, Digital Imaging and Aerospace and Defense Electronics. The businesses that comprised the Energy and Power Systems segment are now reported as part of the Aerospace and Defense Electronics and the Engineered Systems segments. The battery products business, with revenues of $15.5 million in 2010, is now part of the Aerospace and Defense Electronics segment, and the on-site gas and power generation systems and the turbine engine businesses, with combined revenues of $53.9 million in 2010, are now part of the Engineered Systems segment. We have restated our previously reported segment data to reflect this revised segment reporting structure and the classification of the former Aerospace Engines and Components segment as a discontinued operation.

In 2010, sales totaled $1,644.2 million, compared with sales of $1,652.1 million for 2009. Our 2010 net income totaled $120.5 million or a record $3.27 per diluted share, compared to $113.3 million or $3.10 per diluted share in 2009. Net income for 2010 excluding our discontinued operations was $119.9 million or $3.25 per diluted share, compared with $115.9 million or $3.17 per diluted share for 2009. In 2010, a greater proportion of sales and operating profit were derived from sales of marine and environmental instrumentation products of our Instrumentation segment and from sales of our microwave devices and interconnect products of our Aerospace and Defense Electronics segment. Our 2010 record earnings per share was achieved despite lower sales of missile defense engineering services, NASA programs, gas centrifuge modules and turbine engines related to the Joint Air-to-Surface Standoff Missile (“JASSM”) program of our Engineered Systems segment. In 2011, we expect our business mix to evolve further, including as a result of our recent acquisitions. We do not expect our Engineered Systems segment to experience a contraction similar to 2010.

In early 2011, we completed the acquisition of DALSA Corporation (“DALSA”). DALSA, a Canadian company, is a designer and manufacturer of digital imaging products as well as semiconductor wafers and components. Among other things, our combined digital imaging technologies should allow us to develop new infrared and visible light products for our respective markets and customers. With the recently completed acquisition of DALSA and subject to the divestiture of our general aviation piston engines businesses, we will be transformed into an electronics, digital imaging, instrumentation and engineering focused company.

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In addition to the above events, on February 25, 2011, we replaced our $590.0 million credit facility that was set to expire in July 2011, with a $550.0 million credit facility. The new facility, together with the $250.0 million in Senior Notes issued in September 2010 and operating cash flow, will provide Teledyne with the ability to fund working capital needs, capital expenditures, voluntary pension contributions, debt service requirements and acquisitions for 2011. The anticipated proceeds from the expected sale of our general aviation piston engine businesses will initially be used to repay amounts outstanding under our $550.0 million credit facility.

Recent Acquisitions

The following summarizes the acquisitions we made during fiscal years 2010, 2009 and 2008. Other than the purchase of the assets of a marine sensor product line for $1.4 million and all of the remaining 14.1% minority interest in Ocean Design, Inc. (“ODI”) for $25.5 million, no other acquisitions were made in fiscal year 2009. See Note 3 to our Consolidated Financial Statements for additional information about our recent acquisitions. See also Note 17 to our Consolidated Financial Statements for information about our fiscal year 2011 acquisition of DALSA.

			Primary	Pre-acquisition	Transaction		Purchase
Name and Description(1)	Date Acquired	Ownership	Location(s)	Sales Volume	Type		Price (2)(3)
							(In millions)
Fiscal Year 2010
Optimum Optical Systems, Inc (“Optimum”)	June 7, 2010	100%	Camarillo, CA	$5.9 million for the		Stock	$	5.7
Designs and manufacturers custom optics and optomechanical assemblies				fiscal year ended December 31, 2009
Intelek plc (“Intelek”)	July 26, 2010	100%	United Kingdom	£38 million for the		Stock	$	43.5
Designs and manufactures electronic systems for satellite and microwave communication and aerostructure manufacturing			and State College, PA	fiscal year ended March 31, 2010
Hafmynd ehf., now known as Teledyne Gavia ehf (“Gavia”)	September 20, 2010	100%	Reykjavik,	532.4 million		Stock	$	10.8
Designs and manufactures the Gaviatm autonomous			Iceland	Icelandic króna for the
underwater vehicle (AUV)				fiscal year ended December 31, 2009
Fiscal Year 2008
Impulse Enterprise (“Impulse”)	December 31, 2007	100%	San Diego, CA	$16.8 million for its		Asset	$	35.0
Manufactures underwater electrical interconnection systems for harsh environments.				fiscal year ended December 31, 2006
Storm Products Co. (“Storm”)	December 31, 2007	100%	Dallas, TX	$45.7 million for its		Stock		47.7
Supplies custom, high-reliability bulk wire and cable assemblies to a number of markets, including energy exploration, environmental monitoring and industrial equipment. Also provides coax microwave cable and interconnect products primarily to defense customers for radar, electronic warfare and communications applications.			Woodridge, IL	fiscal year ended March 31, 2007
SG Brown Limited and its wholly owned subsidiary TSS International Limited (“TSS”)	January 31, 2008	100%	Watford, United Kingdom	£12.0 million for its fiscal year ended		Stock		54.8
Designs and manufactures inertial sensing, gyrocompass navigation and subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets.				March 31, 2007
Judson Technologies, LLC (“Judson”)	February 1, 2008	100%	Montgomeryville,	$13.8 million for its		Asset		27.0
Manufactures high performance infrared detectors utilizing a wide variety of materials such as Mercury Cadmium Telluride (HgCdTe), Indium Antimonide (InSb), and Indium Gallium Arsenide (InGaAs), as well as tactical dewar and cooler assemblies and other specialized standard products for military, space, industrial and scientific applications.			PA	fiscal year ended December 31, 2006
Webb Research Corp. (“Webb”)	July 7, 2008	100%	East Falmouth,	$12.2 million for its		Asset		24.3
Manufacturer of autonomous underwater gliding vehicles and autonomous profiling drifters and floats.			MA	fiscal year ended December 31, 2007
Defense business of Filtronic PLC (“Filtronic”)	August 15, 2008	100%	Shipley, United	£14.5 million for its		Stock		24.1
Provides customized microwave subassemblies and integrated subsystems to the global defense industry.			Kingdom	fiscal year ended May 31, 2008
Cormon Limited and Cormon Technology Limited (“Cormon”)	October 16, 2008	100%	Lancing, United Kingdom	£6.8 million for its fiscal year ended		Stock		20.9
Designs and manufactures subsea and surface sand and corrosion sensors, as well as flow integrity monitoring systems, used in oil and gas production systems.				March 31, 2008

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			Primary	Pre-acquisition	Transaction		Purchase
Name and Description(1)	Date Acquired	Ownership	Location(s)	Sales Volume	Type		Price (2)(3)
							(In millions)
Odom Hydrographic Systems, Inc. (“Odom”)	December 19, 2008	100%	Baton Rouge, LA	$10.9 million for its		Stock		7.0
Designs and manufactures hydrographic survey instrumentation used in port survey, dredging, offshore energy and other applications.				fiscal year ended September 30, 2008
Demo Systems LLC (“Demo”)	December 24, 2008	100%	Moorpark, CA	$7.3 million for its		Asset		5.3
Designs and manufactures aircraft data loading equipment, flight line maintenance terminals, and data distribution software used by commercial airlines, the U.S. military and aircraft manufacturers.				fiscal year ended December 31, 2007

1)	Each of the acquisitions is part of the Instrumentation segment except the Optimum, Intelek, Storm, Judson, Filtronic and Demo acquisitions. Storm, Filtronic and Demo are part of the Aerospace and Defense Electronics segment. Intelek is part of the Aerospace and Defense Electronics segment, except for the CML division of Intelek which is part of the Engineered Systems segment. Optimum and Judson are part of the Digital Imaging segment.
2)	The purchase price represents the contractual consideration for the acquired business, net of cash acquired, including certain acquisition transaction costs, paid as of January 2, 2011.
3)	In 2010, we acquired a 16.3% interest in Optical Alchemy, Inc. (“Optical Alchemy”), a designer and manufacturer of ultra-light electro optical gimbal system for $4.6 million. In the fourth quarter of 2010, we made an additional $3.0 million non-voting preferred stock investment in Optical Alchemy. Also in 2010, we made a scheduled payment for a prior acquisition of $0.3 million. In 2009, we made scheduled payments of $0.5 million related to two prior acquisitions, and received a purchase price adjustment of $0.3 million for the Cormon acquisition. In 2009, we also purchased the remaining minority ownership in ODI for $25.5 million and we purchased the assets of a marine sensor product line for a payment of $1.4 million. In 2008, we purchased an additional minority ownership in ODI for $38.5 million and made a scheduled payment of $0.3 million related to a prior acquisition.

Financial Highlights

Our fiscal year is determined based on a 52- or 53-week convention ending on the Sunday nearest to December 31. Fiscal year 2010 contained 52 weeks, fiscal year 2009 contained 53 weeks and fiscal year 2008

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contained 52 weeks. The following is our financial information for 2010, 2009 and 2008 (in millions, except per-share amounts):

	2010			2009			2008
Sales	$	1,644.2		$	1,652.1		$	1,722.0
Costs and Expenses
Cost of sales		1,148.1			1,177.3			1,205.9
Selling, general and administrative expenses		317.6			303.4			317.5
Total costs and expenses		1,465.7			1,480.7			1,523.4
Income before other income and expense and income taxes		178.5			171.4			198.6
Interest and debt expense, net		(6.5	)		(4.8	)		(10.9	)
Other income (expense), net		1.6			(0.2	)		0.3
Income from continuing operations before income taxes		173.6			166.4			188.0
Provision for income taxes(a)		53.6			50.0			69.1
Net income from continuing operations before noncontrolling interest		120.0			116.4			118.9
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)		(5.3	)
Net income before noncontrolling interest		120.6			113.8			113.6
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)		(2.3	)
Net income attributable to Teledyne Technologies	$	120.5		$	113.3		$	111.3
Net income from continuing operations before noncontrolling interest	$	120.0		$	116.4		$	118.9
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)		(2.3	)
Net income from continuing operations		119.9			115.9			116.6
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)		(5.3	)
Net income attributable to Teledyne Technologies	$	120.5		$	113.3		$	111.3
Basic earnings per common share
- Continuing operations	$	3.31		$	3.22		$	3.29
- Discontinued operations		0.02			(0.07	)		(0.15	)
Basic earnings per common share	$	3.33		$	3.15		$	3.14
Diluted earnings per common share
- Continuing operations	$	3.25		$	3.17		$	3.20
- Discontinued operations		0.02			(0.07	)		(0.15	)
Diluted earnings per common share	$	3.27		$	3.10		$	3.05

(a) Fiscal years 2010, 2009 and 2008 include net tax credits of $12.5 million, $15.0 million and $3.3 million, respectively, primarily from research and development tax credits.

Our businesses are divided into four business segments; namely, Instrumentation, Digital Imaging, Aerospace and Defense Electronics and Engineered Systems. Our four business segments and their respective contributions to our total sales in 2010, 2009 and 2008 are summarized in the following table:

	Percentage of Sales
Segment	2010			2009			2008
Instrumentation		35	%		32	%		32	%
Digital Imaging		8	%		8	%		8	%
Aerospace and Defense Electronics		37	%		35	%		35	%
Engineered Systems		20	%		25	%		25	%
		100	%		100	%		100	%

47

Results of Operations

2010 Compared with 2009

							%
Sales	2010			2009			Change
	(In millions)
Instrumentation	$	573.2		$	538.4			6.5	%
Digital Imaging		122.5			127.3			(3.8	)%
Aerospace and Defense Electronics		614.7			579.2			6.1	%
Engineered Systems		333.8			407.2			(18.0	)%
Total sales	$	1,644.2		$	1,652.1			(0.5	)%
							%
Operating Profit and Other Segment Income	2010			2009			Change
	(In millions)
Instrumentation	$	113.9		$	95.5			19.3	%
Digital Imaging		5.2			11.8			(55.9	)%
Aerospace and Defense Electronics		57.8			60.1			(3.8	)%
Engineered Systems		30.4			31.3			(2.9	)%
Segment operating profit and other segment income		207.3			198.7			4.3	%
Corporate expense		(28.8	)		(27.3	)		5.5	%
Interest and debt expense, net		(6.5	)		(4.8	)		35.4	%
Other income (expense), net		1.6			(0.2	)			*
Income from continuing operations before income taxes		173.6			166.4			4.3	%
Provision for income taxes(a)		53.6			50.0			7.2	%
Net income from continuing operations before noncontrolling interest		120.0			116.4			3.1	%
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)			*
Net income before noncontrolling interest		120.6			113.8			6.0	%
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)			*
Net income attributable to Teledyne Technologies	$	120.5		$	113.3			6.4	%

*	not meaningful
(a)	Fiscal years 2010 and 2009 include net tax credits of $12.5 million and $15.0 million, respectively, primarily from research and development tax credits.

We reported 2010 sales of $1,644.2 million, compared with sales of $1,652.1 million for 2009, a slight decrease of 0.5%. Net income attributable to Teledyne Technologies was $120.5 million ($3.27 per diluted share) for 2010, compared with $113.3 million ($3.10 per diluted share) for 2009, an increase of 6.4%. Net income attributable to Teledyne Technologies excluding discontinued operations was $119.9 million ($3.25 per diluted share) for 2010, compared with $115.9 million ($3.17 per diluted share) for 2009, an increase of 3.4%.

The decrease in sales in 2010, compared with 2009, reflected lower sales in the Engineered Systems segment and the Digital Imaging segment, partially offset by higher sales in both the Instrumentation segment and in the Aerospace and Defense Electronics segment. The decrease in the Engineered Systems segment reflected lower sales of missile defense engineering services, lower sales from NASA programs, lower sales of gas centrifuge service modules and lower sales related to the Joint Air-to-Surface Standoff Missile (“JASSM”) turbine engine program partially offset by sales of $6.3 million from a recent acquisition. Sales in the Instrumentation segment reflected higher sales of marine and environmental instrumentation products. Sales in the Aerospace and Defense Electronics segment reflected higher sales of microwave devices and interconnects,

48

and included sales of $15.9 million from recent acquisitions. The incremental increase in revenue in 2010 from businesses acquired since 2009 (see “Recent Acquisitions” table) was $25.3 million.

The increase in segment operating profit and other segment income for 2010, compared with 2009, reflected higher operating profit in the Instrumentation segment, partially offset by lower operating profit in the Aerospace and Defense Electronics segment, the Engineered Systems segment and the Digital Imaging segment. The increase in operating profit in the Instrumentation segment was in line with higher sales. The decrease in operating profit in the Aerospace and Defense Electronics segment reflected charges of $8.2 million, primarily to correct inventory valuations incorrectly recorded in previous periods at a business unit, partially offset by the impact of higher sales. The decrease in operating profit in the Engineered Systems segment reflected the impact of lower sales, partially offset by lower pension expense and higher margins. Operating profit included an incremental operating loss from our 2010 acquisitions of $5.1 million, which included acquisition expenses of $5.5 million and intangible amortization of $1.5 million.

Cost of sales in total dollars was lower in 2010, compared with 2009, and reflected the impact of lower pension expense and cost reductions, partially offset by the $8.2 million charge to correct inventory valuations. Cost of sales in 2010 included $0.8 million in LIFO expense, compared with $2.2 million of LIFO income in 2009. Cost of sales as a percentage of sales for 2010 was 69.8%, compared with 71.3% for 2009. The lower cost of sales percentage reflected the impact of cost reductions, product mix and lower pension expense, partially offset by the impact of the $8.2 million inventory write-down.

Selling, general and administrative expenses, including research and development and bid and proposal expense, in total dollars were higher in 2010 compared with 2009. The $14.2 million increase was primarily due to higher general and administrative expense. The higher general and administrative expense included $6.7 million in acquisition and disposition related expenses, as well as $1.5 million in intangible asset amortization for recent acquisitions. Corporate administrative expense in 2010 was higher by $1.5 million compared with 2009 and reflected higher employee compensation expenses. For 2010, we recorded a total of $4.7 million in stock option expense, of which $1.7 million was recorded as corporate expense and $3.0 million was recorded in segment results. For 2009, we recorded a total of $5.2 million in stock option expense, of which $1.8 million was recorded as corporate expense and $3.4 million was recorded in segment results. Selling, general and administrative expenses for 2010, as a percentage of sales, increased to 19.3%, compared with 18.4% for 2009 and reflected the impact of acquisition related expenses.

Included in operating profit in 2010 was domestic pension expense of $4.8 million, of which $9.6 million was recoverable in accordance with U.S. Government Cost Accounting Standards (“CAS”) from certain government contracts. Included in operating profit in 2009 was domestic pension expense of $21.4 million, of which $12.4 million was recoverable in accordance with CAS. Pension expense determined under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government. These amounts do not include pension expense of $0.4 million in 2010 and $1.1 million in 2009 now included as part of discontinued operations. In addition to the above amounts, the Company recorded $0.1 million in pension expense for 2010 related to the foreign pension plan acquired as part of the Intelek acquisition.

The Company’s effective tax rate for 2010 was 30.9%, compared with 30.0% for 2009. Fiscal years 2010 and 2009 included net tax credits of $12.5 million and $15.0 million, respectively, primarily research and development tax credits. Excluding the net tax credits, the effective tax rates for 2010 and 2009, would have been 38.1% and 39.1%, respectively.

During the next twelve months, it is reasonably possible that tax audit resolutions and expirations of the statutes of limitations could reduce unrecognized tax benefits by $2.4 million, either because our tax positions are sustained on audit, because the Company agrees to their disallowance, or because of the expiration of the statutes of limitations.

Sales under contracts with the U.S. Government were approximately 44% of sales in 2010 and 47% of sales in 2009. Sales to international customers represented approximately 29% of sales in 2010 and 26% of sales in 2009.

49

Total interest expense, including credit facility fees and other bank charges, was $6.9 million in 2010 and $5.1 million in 2009. Interest income was $0.4 million in 2010 and $0.3 million in 2009. The increase in interest expense in 2010 primarily reflected higher average interest rates, partially offset by lower outstanding debt levels.

Noncontrolling interest in subsidiaries’ earnings reflects the minority ownership interest in ODI in 2009 and Teledyne Energy Systems, Inc. in both 2010 and 2009. The lower amount in 2010 primarily reflects the decrease in minority ownership interest in ODI due to share purchases by Teledyne in 2009. In 2009, Teledyne purchased the remaining minority interest in ODI.

Other income and expense in 2010 and 2009 included sublease rental income and royalty income and deferred compensation expense. Other income in 2010 also includes an insurance benefit of $0.7 million.

2009 Compared with 2008

							%
Sales	2009			2008			Change
	(In millions)
Instrumentation	$	538.4		$	549.2			(2.0	)%
Digital Imaging		127.3			137.4			(7.4	)%
Aerospace and Defense Electronics		579.2			604.1			(4.1	)%
Engineered Systems		407.2			431.3			(5.6	)%
Total sales	$	1,652.1		$	1,722.0			(4.1	)%
							%
Operating Profit and Other Segment Income	2009			2008			Change
	(In millions)
Instrumentation	$	95.5		$	102.9			(7.2	)%
Digital Imaging		11.8			14.6			(19.2	)%
Aerospace and Defense Electronics		60.1			68.7			(12.5	)%
Engineered Systems		31.3			42.0			(25.5	)%
Segment operating profit and other segment income		198.7			228.2			(12.9	)%
Corporate expense		(27.3	)		(29.6	)		(7.8	)%
Interest and debt expense, net		(4.8	)		(10.9	)		(56.0	)%
Other income (expense), net		(0.2	)		0.3				*
Income from continuing operations before income taxes		166.4			188.0			(11.5	)%
Provision for income taxes(a)		50.0			69.1			(27.6	)%
Net income from continuing operations before noncontrolling interest		116.4			118.9			(2.1	)%
Income (loss) from discontinued operations, net of income taxes		(2.6	)		(5.3	)		(50.9	)%
Net income before noncontrolling interest		113.8			113.6			0.2	%
Less: net income attributable to noncontrolling interest		(0.5	)		(2.3	)		(78.3	)%
Net income attributable to Teledyne Technologies	$	113.3		$	111.3			1.8	%

*	not meaningful
(a)	Fiscal years 2009 and 2008 include net tax credits of $15.0 million and $3.3 million, respectively, primarily from research and development tax credits.

We reported 2009 sales of $1,652.1 million, compared with sales of $1,722.0 million for 2008, a decrease of 4.1%. Net income attributable to Teledyne Technologies was $113.3 million ($3.10 per diluted share) for 2009, compared with $111.3 million ($3.05 per diluted share) for 2008, an increase of 1.8%. Net income attributable to Teledyne Technologies excluding discontinued operations was $115.9 million ($3.17 per diluted share) for 2009, compared with $116.6 million ($3.20 per diluted share) for 2008, a decrease of 0.6%.

The decrease in sales in 2009, compared with 2008, reflected lower sales in each segment due to the general economic downturn in 2009. Sales in both the Instrumentation segment and in the Aerospace and Defense Electronics segment included the impact of acquisitions made in fiscal 2008. The incremental increase in revenue in 2009 from businesses acquired since 2008 (see “Recent Acquisitions” table) in the

50

Instrumentation segment and in the Aerospace and Defense Electronics segment was $24.2 million and $16.1 million, respectively.

Operating profit and other segment income was lower in each segment. The decrease in segment operating profit and other segment income for 2009, compared with 2008, reflected the impact of lower sales due to the general economic downturn in 2009. Operating profit in both the Instrumentation segment and in the Aerospace and Defense Electronics segment included incremental operating profit from acquisitions and related synergies of $1.2 million and $0.1 million, respectively.

Cost of sales in total dollars was lower in 2009, compared with 2008, primarily due to lower sales. Cost of sales in 2009 included $2.2 million in LIFO income, compared with $0.1 million in LIFO expense in 2008. Cost of sales as a percentage of sales for 2009 was 71.3%, compared with 70.0% for 2008. The higher cost of sales percentage reflected the impact of lower sales and increased pension expense, partially offset by cost reductions made throughout the year.

Selling, general and administrative expenses, including research and development and bid and proposal expense, in total dollars were lower in 2009 compared with 2008. This $14.1 million decrease was primarily due to lower sales, lower acquired intangible asset amortization of $3.5 million, lower corporate administrative expense and lower stock option expense. Corporate administrative expense in 2009 was lower by $2.3 million compared with 2008 and reflected reduced employee compensation and professional fee expenses. For 2009, we recorded a total of $5.2 million in stock option expense, of which $1.8 million was recorded as corporate expense and $3.4 million was recorded in segment results. For 2008, we recorded a total of $7.2 million in stock option expense, of which $2.5 million was recorded as corporate expense and $4.7 million was recorded in segment results. Selling, general and administrative expenses for 2009, as a percentage of sales, were 18.4% for both 2009 and 2008.

Included in operating profit in 2009 was pension expense of $21.4 million, of which $12.4 million was recoverable in accordance with CAS from certain government contracts. Included in operating profit in 2008 was pension expense of $9.0 million, of which $9.8 million was recoverable in accordance with CAS. Pension expense determined under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government. These amounts do not include pension expense of $1.1 million in 2009 and $0.6 million in 2008 now included as part of discontinued operations.

The Company’s effective tax rate for 2009 was 30.0%, compared with 36.8% for 2008. Fiscal years 2009 and 2008 included net tax credits of $15.0 million and $3.3 million, respectively, primarily research and development tax credits. Excluding the net tax credits, the effective tax rates for 2009 and 2008, would have been 39.1% and 38.5%, respectively.

Sales under contracts with the U.S. Government were approximately 47% of sales in 2009 and 44% of sales in 2008. Sales to international customers represented approximately 26% of sales in 2009 and 24% of sales in 2008.

Total interest expense, including credit facility fees and other bank charges, was $5.1 million in 2009 and $11.7 million in 2008. Interest income was $0.3 million in 2009 and $0.8 million in 2008. The decrease in interest expense in 2009 primarily reflected lower average interest rates.

Noncontrolling interest in subsidiaries’ earnings reflects the minority ownership interest in ODI and Teledyne Energy Systems, Inc. The lower amount in 2009 primarily reflects the decrease in minority ownership interest in ODI due to share purchases by Teledyne in 2009. In 2009, Teledyne purchased the remaining minority interest in ODI.

Other income and expense in 2009 and 2008 included sublease rental income and royalty income and deferred compensation expense.

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Segments

The following discussion of our four segments should be read in conjunction with Note 13 to the Notes to Consolidated Financial Statements. Such discussion also reflects the classification of our former Aerospace Engines and Components segment as a discontinued operation.

Instrumentation

	2010			2009			2008
	(Dollars in millions)
Sales	$	573.2		$	538.4		$	549.2
Operating profit	$	113.9		$	95.5		$	102.9
Operating profit % of sales		19.9	%		17.7	%		18.7	%
International sales % of sales		52.3	%		52.1	%		45.6	%
Governmental sales % of sales		6.2	%		6.8	%		4.5	%
Capital expenditures	$	6.4		$	16.1		$	12.5

Our Instrumentation segment provides monitoring and control instrumentation for marine, environmental, scientific, industrial and defense applications and harsh environment interconnect products.

2010 compared with 2009

Our Instrumentation segment sales were $573.2 million in 2010, compared with sales of $538.4 million in 2009, an increase of 6.5%. Operating profit was $113.9 million in 2010, compared with $95.5 million in 2009, an increase of 19.3%.

The 2010 sales increase resulted primarily from higher sales of marine and environmental instrumentation products. The higher sales of $18.3 million for marine instrumentation included improved sales of geophysical sensors for the energy exploration market. The higher sales of $16.5 million for environmental instrumentation reflected improved sales for most product offerings. The increase in operating profit reflected the impact of higher sales, cost reductions, lower pension expense and product mix differences. Operating profit included pension expense of $1.3 million for 2010, compared with $1.0 million for 2009.

Segment operating profit included $1.0 million of stock option compensation expense in 2010 compared with $1.1 million of stock option compensation expense in 2009. Segment operating profit in 2010 also reflected LIFO expense of $0.2 million compared with LIFO income of $0.5 million in 2009.

2009 compared with 2008

Our Instrumentation segment sales were $538.4 million in 2009, compared with sales of $549.2 million in 2008, a decrease of 2.0%. Operating profit was $95.5 million in 2009, compared with $102.9 million in 2008, a decrease of 7.2%.

The 2009 sales decrease resulted primarily from lower organic sales, partially offset by acquisitions. The lower sales of $25.0 million for environmental instrumentation reflected reduced sales across most product offerings. The higher sales of $14.2 million for marine instrumentation reflected the incremental revenue from acquisitions, partially offset by reduced sales of geophysical sensors for the marine exploration market. The incremental increase in revenue from acquisitions for 2009, compared with 2008, was $24.2 million. In 2009, operating profit, including synergies, included $1.2 million due to the incremental impact of acquisitions acquired since the end of fiscal year 2007.

Segment operating profit was negatively impacted by the decrease in revenue and higher pension expense. Pension expense was $1.0 million in 2009, compared with $0.6 million in 2008. Segment operating profit included $1.1 million of stock option compensation expense in 2009 compared with $1.5 million of stock option compensation expense in 2008. Segment operating profit in 2009 also reflected LIFO income of $0.5 million compared LIFO expense of $0.2 million in 2008.

52

Digital Imaging

	2010			2009			2008
	(Dollars in millions)
Sales	$	122.5		$	127.3		$	137.4
Operating profit	$	5.2		$	11.8		$	14.6
Operating profit % of sales		4.2	%		9.3	%		10.6	%
International sales % of sales		7.1	%		4.9	%		7.9	%
Governmental sales % of sales		76.2	%		75.9	%		65.5	%
Capital expenditures	$	11.3		$	5.7		$	7.1

Our Digital Imaging segment includes our sponsored and centralized research businesses for a range of new technologies benefiting government programs and our businesses, as well as major development and production efforts for innovative digital imaging products for government and space applications. It also includes infrared detectors, cameras and optomechanical assemblies.

2010 compared with 2009

Our Digital Imaging segment sales were $122.5 million in 2010, compared with sales of $127.3 million in 2009, a decrease of 3.8%. Operating profit was $5.2 million in 2010, compared with $11.8 million in 2009, a decrease of 55.9%.

The 2010 sales decrease reflected lower licensing sales and lower government subcontract sales, partially offset by $2.9 million in sales from the Optimum acquisition. The decrease in operating profit reflected the impact of lower sales, as well as, acquisition expenses of $1.5 million related to the 2011 DALSA acquisition.

2009 compared with 2008

Our Digital Imaging segment sales were $127.3 million in 2009, compared with sales of $137.4 million in 2008, a decrease of 7.4%. Operating profit was $11.8 million in 2009, compared with $14.6 million in 2008, a decrease of 19.2%.

The 2009 sales decrease resulted primarily from lower sales of contract research and development work. The decrease in operating profit reflected the impact of lower sales, as well as product mix.

Aerospace and Defense Electronics

	2010			2009			2008
	(Dollars in millions)
Sales	$	614.7		$	579.2		$	604.1
Operating profit	$	57.8		$	60.1		$	68.7
Operating profit % of sales		9.4	%		10.4	%		11.4	%
International sales % of sales		22.3	%		21.7	%		21.3	%
Governmental sales % of sales		49.2	%		49.5	%		44.9	%
Capital expenditures	$	9.7		$	8.4		$	14.5

Our Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications, as well as general aviation batteries.

2010 compared with 2009

Our Aerospace and Defense Electronics segment sales were $614.7 million in 2010, compared with sales of $579.2 million in 2009, an increase of 6.1%. Operating profit was $57.8 million in 2010, compared with $60.1 million in 2009, a decrease of 3.8%.

53

The 2010 sales increase of $35.5 million resulted primarily from higher sales of microwave devices and interconnects, as well as increased sales of avionics and electronic relays, partially offset by reduced manufacturing services in defense electronics. The increased sales also included sales of $15.9 million from recent acquisitions. Commercial aerospace sales increased slightly. The decrease in operating profit reflected the charges of $8.2 million, primarily to correct inventory valuations incorrectly recorded in previous periods at a business unit and acquisition related charges of $3.8 million, partially offset by higher sales, cost reductions, lower pension expense and product mix. The incremental operating loss included in the results for 2010 from businesses acquired in 2010 was $3.6 million and included charges of $3.8 million, related to acquisition activity, as well as, intangible asset amortization. Operating profit included pension expense of $1.7 million for 2010, compared with $8.2 million for 2009. Pension expense allocated to contracts pursuant to CAS was $2.5 million for 2010, compared with $2.4 million for 2009.

Segment operating profit included $1.1 million of stock option compensation expense in 2010 compared with $1.2 million of stock option compensation expense in 2009. Segment operating profit in 2010 also reflected LIFO expense of $0.4 million compared with LIFO income of $1.7 million in 2009.

2009 compared with 2008

Our Aerospace and Defense Electronics segment sales were $579.2 million in 2009, compared with sales of $604.1 million in 2008, a decrease of 4.1%. Operating profit was $60.1 million in 2009, compared with $68.7 million in 2008, a decrease of 12.5%.

The 2009 sales decrease of $24.9 million primarily reflected lower sales of avionics, electronic relays and microwave products, partially offset by $16.1 million in revenue from acquisitions. Sales of interconnect systems also decreased slightly. In 2009, operating profit, including synergies, included $0.1 million due to the incremental impact of acquisitions. Segment operating profit was negatively impacted by the decrease in revenue and higher pension expense. Pension expense was $8.2 million in 2009, compared with $2.9 million in 2008. Pension expense allocated to contracts pursuant to CAS was $2.4 million in 2009, compared with $1.9 million for 2008.

Segment operating profit included $1.2 million of stock option compensation expense in 2009 compared with $1.7 million of stock option compensation expense in 2008. Segment operating profit in 2009 also reflected LIFO income of $1.7 million compared with LIFO income of $0.7 million in 2008.

Engineered Systems

	2010			2009			2008
	(Dollars in millions)
Sales	$	333.8		$	407.2		$	431.3
Operating profit	$	30.4		$	31.3		$	42.0
Operating profit % of sales		9.1	%		7.7	%		9.7	%
International sales % of sales		7.6	%		3.8	%		6.8	%
Governmental sales % of sales		88.7	%		87.9	%		85.4	%
Capital expenditures	$	3.6		$	3.4		$	4.0

Our Engineered Systems segment, principally through Teledyne Brown Engineering, Inc., provides innovative systems engineering and integration, advanced technology application, software development, and manufacturing solutions to space, military, environmental, energy, chemical, biological and nuclear systems and missile defense requirements. This segment also designs and manufactures hydrogen gas generators, thermoelectric and fuel-cell based power sources and small turbine engines.

54

2010 compared with 2009

Our Engineered Systems segment sales were $333.8 million in 2010, compared with sales of $407.2 million in 2009, a decrease of 18.0%. Operating profit was $30.4 million in 2010, compared with $31.3 million in 2009, a decrease of 2.9%.

Sales for 2010, compared with 2009, primarily reflected lower revenue from engineered products and services, as well as turbine engine programs. Sales of engineered products and services declined $67.0 million as a result of lower sales of missile defense engineering services, NASA programs and gas centrifuge service modules, partially offset by $6.3 million in sales from the acquisition of the CML division of Intelek. The revenue decline of $11.5 million in turbine engine programs reflected lower sales of turbine engines for the JASSM program. Fiscal year 2010 included higher sales of $5.1 million of commercial and government energy systems. Operating profit for 2010 reflected the impact of lower revenue and disposition related costs of $1.2 million related to the reduction of organizational conflict of interest business activity, partially offset by lower pension expense and higher margins related to the JASSM program.

Segment operating profit included pension expense of $1.6 million in 2010, compared with $12.0 million in 2009. Pension expense allocated to contracts pursuant to CAS was $7.1 million in 2010, compared with $10.0 million in 2009.

In 2011, we do not expect our Engineered Systems segment to experience a contraction similar to 2010. While missile defense engineering services and NASA programs are expected to decline, sales of gas centrifuge service modules, JASSM turbine engines and other manufacturing programs are expected to increase.

2009 compared with 2008

Our Engineered Systems segment sales were $407.2 million in 2009, compared with sales of $431.3 million in 2008, a decrease of 5.6%. Operating profit was $31.3 million in 2009, compared with $42.0 million in 2008, a decrease of 25.5%.

Sales for 2009, compared with 2008, primarily reflected lower revenue from engineered products and services as well as reduced sales of energy systems. Sales of engineered products and services declined $14.3 million primarily as a result of lower sales from missile defense engineering services and NASA programs. The revenue decline of $6.5 million for energy systems reflected lower commercial hydrogen generators, partially offset by increased sales of power systems for government applications. The revenue decline of $3.3 million related to turbine engines, reflected lower research and development sales. Operating profit for 2009 reflected the impact of lower revenue and higher pension expense.

Segment operating profit included pension expense of $12.0 million in 2009, compared with $5.3 million in 2008. Pension expense allocated to contracts pursuant to CAS was $10.0 million in 2009, compared with $7.9 million in 2008. Operating profit in 2009 reflected a $1.0 million product replacement reserve for commercial hydrogen generators. Operating profit in 2008 was favorably impacted by $1.3 million for environmental reserves no longer needed due to a final settlement.

Financial Condition, Liquidity and Capital Resources

Principal Capital Requirements

Our principal capital requirements are to fund working capital needs, capital expenditures, voluntary and required pension contributions, debt service requirements and acquisitions, including the acquisition of DALSA. It is anticipated that operating cash flow, together with available borrowings under the credit facility described below, will be sufficient to meet these requirements and could be used to fund some acquisitions in the year 2011. To support acquisitions, we may need to raise additional capital. Our liquidity is not dependent upon the use of off-balance sheet financial arrangements. We have no off-balance sheet financing arrangements that incorporate the use of special purpose entities or unconsolidated entities.

55

Revolving Credit Agreement and Senior Notes

Teledyne’s amended and restated credit facility had lender commitments totaling $590.0 million and was set to expire on July 14, 2011. Excluding interest and fees, no payments were due under the amended and restated credit facility until it matured. On February 25, 2011, we refinanced the $590.0 million credit facility by terminating the facility and entering into a new facility that has lender commitments totaling $550.0 million. The new facility has a termination date of February 25, 2016. As of February 25, 2011, we had $273.0 million outstanding on the new facility. The new facility requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios. Excluding interest and fees, no payments are due under the $550.0 million facility until it matures. Borrowings under our credit facility are at variable rates which are, at our option, tied to a Eurocurrency rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as defined in our credit agreement. Eurocurrency rate loans may be denominated in U.S. dollars or an alternative currency as defined in the agreement. Eurocurrency or LIBOR based loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate. Interest rates are also subject to change based on our consolidated leverage ratio as defined in the credit agreement. The credit agreement also provides for facility fees that vary between 0.20% and 0.45% of the credit line, depending on our consolidated leverage ratio as calculated from time to time.

On September 15, 2010, taking advantage of favorable long-term borrowing rates, the Company issued $250.0 million in aggregate principal amount of private placement Senior Notes at par. The notes consist of $75.0 million of 4.04% Senior Notes due September 15, 2015, $100.0 million of 4.74% Senior Notes due September 15, 2017 and $75.0 million of 5.30% Senior Notes due September 15, 2020. The interest rates for the notes were determined on April 14, 2010. The Company used the proceeds of the private placement Senior Notes to pay down amounts outstanding under the Company’s then existing $590.0 million credit facility.

The credit agreements require the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits on acquired debt. At January 2, 2011, the Company was in compliance with these covenants and we had a significant amount of margin between required financial covenant ratios and our actual ratios. Currently, we do not believe our ability to undertake additional debt financing, if needed, is reasonably likely to be materially impacted by debt restrictions under our credit agreements subject to our complying with required financial covenants listed in the table below. At January 2, 2011, the required financial covenant ratios and the actual ratios were as follows:

$590.0 million Credit Facility expires July 2011 — Terminated February 25, 2011

Financial Covenant	Required Covenant	Actual Covenant
Consolidated Net Worth(1)	No less than $459.5M	$787.0M
Consolidated Leverage Ratio (Debt/EBITDA)(2)	No more than 3.0 to 1	1.2 to 1
Consolidated Interest Coverage Ratio(EBIT/Interest)(3)	No less than 3.0 to 1	28.7 to 1

$250.0 million Private Placement Notes due 2015, 2017 and 2020

Financial Covenant	Required Covenant	Actual Covenant
Consolidated Leverage Ratio (Net Debt/EBITDA)(4)	No more than 3.25 to 1	0.9 to 1
Consolidated Interest Coverage Ratio(EBITDA/Interest)(5)	No less than 3.0 to 1	36.7 to 1

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$550.0 million Credit Facility expires February 2016 (if it had been in effect)

Financial Covenant	Required Covenant	Actual Covenant
Consolidated Leverage Ratio (Net Debt/EBITDA)(4)	No more than 3.25 to 1	1.0 to 1
Consolidated Interest Coverage Ratio(EBITDA/Interest)(5)	No less than 3.0 to 1	36.7 to 1

1)	The Actual Covenant is equal to the Consolidated Stockholders’ Equity for the Quarter Ended. The Required Covenant is equal to $240 million plus 50% of Cumulative Consolidated Net Income as defined in our credit agreement for each quarter ending after April 2, 2006 plus 75% of the amount of Equity Issuances after the Closing Date as defined in our credit agreement.
2)	The Consolidated Leverage Ratio is equal to Debt/Earnings before Interest Taxes and Depreciation and Amortization (“EBITDA”) as defined in our credit agreement.
3)	The Consolidated Interest Coverage Ratio is equal to Earnings before Interest Taxes (“EBIT”)/Interest as defined in our credit agreement.
4)	The Consolidated Leverage Ratio is equal to Net Debt/EBITDA as defined in our private placement note purchase agreement and our $550.0 million credit agreement.
5)	The Consolidated Interest Coverage Ratio is equal to EBITDA/Interest as defined in our private placement note purchase agreement and our $550.0 million credit agreement.

Available capacity under the, now terminated, $590.0 million credit facility was $589.3 million at January 2, 2011. The maximum amount that could be borrowed under our credit facility as of January 2, 2011 while still remaining in compliance with our consolidated leverage ratio covenant was $423.2 million.

In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted interest payments associated with the then anticipated issuance of fixed rate debt. The objective of these cash flow hedges was to protect against the risk of changes in the interest payments attributable to changes in the designated benchmark, which is the LIBOR interest rate leading up to the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional amount of the debt hedged was $150.0 million. In the second quarter, concurrent with the interest rates being determined on the fixed rate debt, Teledyne terminated the cash flow hedges for a total payment of $0.6 million. Since the cash flow hedges were considered effective, changes in the fair value of the hedge contract as of the termination date were deferred in accumulated other comprehensive loss. Amounts deferred in accumulated other comprehensive loss will be reclassified to interest expense over the same period of time that interest expense is recognized on the borrowings beginning September 15, 2010. As of January 2, 2011, the remaining unamortized loss of $0.6 million was included in accumulated other comprehensive loss in the stockholders’ equity section of the balance sheet.

Contractual Obligations

The following table summarizes our expected cash outflows resulting from financial contracts and commitments at January 2, 2011. We have not included information on our normal recurring purchases of

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materials for use in our operations. These amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature (in millions):

											2016 and
	2011		2012		2013		2014		2015		beyond		Total
Long-term debt obligations	$	—	$	—	$	—	$	—	$	75.0	$	175.0	$	250.0
Interest expense(a)		11.7		11.7		11.7		11.7		11.0		31.2		89.0
Operating lease obligations		15.0		14.7		12.6		11.5		9.5		22.7		86.0
Capital lease obligations(b)		2.4		2.2		2.1		2.0		2.0		11.8		22.5
Purchase obligations(c)		61.4		4.3		0.9		0.1		—		0.2		66.9
Total	$	90.5	$	32.9	$	27.3	$	25.3	$	97.5	$	240.9	$	514.4

(a)	Interest expense related to the amended and restated credit facility, including facility fees, is assumed to accrue at the rates in effect at year-end 2010 and is assumed to be paid at the end of each quarter with the final payment in July 2011 when the credit facility expires.
(b)	Includes imputed interest and short-term portion.
(c)	Purchase obligations generally include long-term contractual obligations for the purchase of goods and services.

At January 2, 2011, we are not required to make any cash contributions to the domestic qualified pension plan for 2011. Teledyne expects to make a voluntary pretax contribution to its domestic qualified pension plan of approximately $37.0 million in the first quarter of 2011 and expects to make an additional $32.0 million pretax contribution provided the sale of the former Aerospace Engines and Components segment is completed. Teledyne has no required or scheduled contributions to its foreign pension plan for 2011. Based on current assumptions and expected contributions to be made in 2011, we would not have a minimum qualified pension plan funding requirement, as set forth by ERISA, in 2012. Our minimum funding requirements after 2010 are dependent on several factors as discussed under “Accounting for Pension Plans” in the Critical Accounting Policies section of this Management’s Discussion and Analysis of Financial Condition and Results of Operation. Estimates beyond 2011 have not been provided due to the significant uncertainty of these amounts, which are subject to change until the Company’s pension assumptions can be updated at the appropriate times. In addition, certain pension contributions are eligible for future recovery through the pricing of products and services to the U.S. government under certain government contracts, therefore, the amounts noted are not necessarily indicative of the impact these contributions may have on our liquidity. We also have payments due under our other postretirement benefits plans. These plans are not required to be funded in advance, but are pay as you go. See further discussion in Note 12 of the Notes to Consolidated Financial Statements.

Operating Activities

In 2010, net cash provided by operating activities from continuing operations was $127.1 million, compared with $160.4 million in 2009 and $120.2 million in 2008.

The lower net cash provided for 2010, compared with 2009, reflected higher income tax payments of $49.2 million, higher deferred accounts receivable and higher accounts receivable due to timing of sales, partially offset by lower pretax pension contributions of $71.9 million.

The higher net cash provided for 2009, compared with 2008, reflected lower income tax payments of $34.2 million, the incremental cash contribution from acquisitions made in 2008 and improved working capital management, partially offset by higher pretax pension contributions of $58.3 million.

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Free cash flow (cash from operating activities from continuing operations less capital expenditures) was $124.2 million, compared with $198.0 million in 2009 and $117.7 million in 2008.

	Total			Total			Total
	Year			Year			Year
Free Cash Flow(a)	2010			2009			2008
	(In millions,
	brackets indicate use of funds)
Cash provided by operating activities, continuing operations	$	127.1		$	160.4		$	120.2
Capital expenditures for property, plant and equipment		(31.0	)		(33.5	)		(38.2	)
Free cash flow		96.1			126.9			82.0
Pension contributions, net of tax(b)		28.1			71.1			35.7
Adjusted free cash flow	$	124.2		$	198.0		$	117.7

(a)

We define free cash flow as cash provided by operating activities from continuing operations (a measure prescribed by generally accepted accounting principles) less capital expenditures for property, plant and equipment. Adjusted free cash flow eliminates the impact of pension contributions on a net of tax basis. We believe that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing our ability to generate cash flow, including the impact of voluntary and required pension contributions.

(b)

All pension cash contributions were voluntary.

Working Capital

Working capital increased to $306.8 million at year-end 2010, compared with $242.5 million at year-end 2009. The increase in working capital reflected the higher cash balances and higher accounts receivables. The higher cash balance reflects unused cash proceeds from the private placement of debt in September 2010. The higher accounts receivables balance reflects higher deferred accounts receivable and timing of sales.

Balance Sheet Changes

The changes in the following selected components of Teledyne’s balance sheet are discussed below (in millions):

	2010		2009
Cash and cash equivalents	$	75.1	$	26.1
Accounts receivable, net	$	254.8	$	228.7
Long-term deferred income taxes, net	$	—	$	17.6
Goodwill	$	546.3	$	501.5
Acquired intangible assets, net	$	113.9	$	109.6
Long-term debt and capital lease obligations, net of current portion	$	265.3	$	251.6
Accrued pension obligation — long term	$	62.1	$	79.8

The higher cash balance reflects unused cash proceeds from the private placement of debt in September 2010. The higher balance in accounts receivable reflected higher deferred accounts receivable and timing of sales. The decrease in long-term deferred income taxes was primarily due to the pension contributions in 2010. The increase in goodwill reflected current year acquisitions. The increase in acquired intangible assets primarily reflected current year acquisitions, partially offset by amortization. The increase in long-term debt and capital lease obligations primarily reflected issuance of $250.0 million of private placement debt, partially offset by cash used for acquisitions and the repayment of the amended and restated credit facility. The accrued pension obligation decreased primarily as a result of pension contributions, and a decrease in the unfunded pension liability in 2010 due to the increase in pension assets during the year resulting from positive market returns, partially offset by the inclusion of the Intelek defined benefit pension plan that the Company assumed responsibility for in connection with the acquisition of Intelek.

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Investing Activities

Net cash used in investing activities included capital expenditures as presented below (in millions):

Capital Expenditures

	2010		2009		2008
Instrumentation	$	6.4	$	16.1	$	12.5
Digital Imaging		11.3		5.7		7.1
Aerospace and Defense Electronics		9.7		8.4		14.5
Engineered Systems		3.6		3.3		4.0
Corporate		—		—		0.1
	$	31.0	$	33.5	$	38.2

During 2011 we plan to invest approximately $50.0 million to $55.0 million in capital expenditures, principally to upgrade capital equipment, reduce manufacturing costs and introduce new products. Commitments at January 2, 2011, for capital expenditures were approximately $5.6 million.

Investing activities from continuing operations used cash for acquisitions of $67.9 million, $27.1 million and $284.9 million, in fiscal 2010, 2009 and 2008, respectively (see “Recent Acquisitions” table). We received $0.4 million in 2008 from the sale of assets.

Teledyne funded the acquisitions primarily from borrowings under its credit facility and cash on hand.

In all acquisitions, the results of operations and cash flows are included in our consolidated financial statements form the date of each respective acquisition. Each of the acquisitions is part of the Instrumentation segment except the Optimum, Intelek, Storm, Filtronic, Judson and Demo acquisitions. Storm, Filtronic and Demo are part of the Aerospace and Defense Electronics segment. Intelek is part of the Aerospace and Defense Electronics segment, except for the CML division of Intelek which is part of the Engineered Systems segment. Optimum and Judson are part of the Digital Imaging segment.

The following table shows the purchase price, goodwill acquired and intangible assets acquired for the acquisitions made in fiscal 2010 and 2008 (in millions):

	Fiscal Year 2010
						Acquired
		Purchase		Goodwill		Intangible
Acquisition Date	Name	Price(a)		Acquired		Assets
June 7, 2010	Optimum	$	5.7	$	4.3	$	1.9
July 26, 2010	Intelek		43.5		34.0		15.3
September 20, 2010	Gavia		10.8		8.1		2.3
		$	60.0	$	46.4	$	19.5

(a) includes transaction costs that are expensed under current accounting guidance.

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	Fiscal Year 2008
						Acquired
		Purchase		Goodwill		Intangible
Acquisition Date	Name	Price(a)		Acquired		Assets
December 31, 2007	Impulse	$	35.0	$	15.3	$	16.2
December 31, 2007	Storm		47.7		31.4		10.0
January 31, 2008	TSS		54.8		28.6		23.0
February 1, 2008	Judson		27.0		13.9		7.9
July 7, 2008	Webb		24.3		13.6		8.1
August 15, 2008	Filtronic		24.1		9.8		2.8
October 16, 2008	Cormon		20.9		11.9		8.3
December 19, 2008	Odom		7.0		4.5		2.3
December 24, 2008	Demo		5.3		4.0		1.0
		$	246.1	$	133.0	$	79.6

(a) includes transaction costs that were capitalized as part of the purchase price.

Except for the Gavia, Storm and Demo acquisitions, goodwill resulting from the acquisitions made in fiscal 2010 and 2008 will be deductible for tax purposes.

The following is a summary at the acquisition date of the estimated fair values of the assets acquired and liabilities assumed for the acquisitions made in fiscal 2010 and 2008 (in millions):

	2010		2008
Current assets, excluding cash acquired	$	18.4	$	61.6
Property, plant and equipment		16.5		17.8
Goodwill		46.4		133.0
Intangible assets		19.5		79.6
Total assets acquired		100.8		292.0
Current liabilities, including short-term debt		18.8		34.1
Other long-term liabilities		25.0		11.8
Total liabilities assumed		43.8		45.9
Purchase price, net of cash acquired	$	57.0	$	246.1

Financing Activities

Cash provided by financing activities for 2010 reflected the $250.0 million proceeds from the issuance of Senior Notes and repayment of borrowings under our revolving credit agreement of $246.4 million. Cash used by financing activities for 2009 reflected net repayments of borrowings of $81.6 million, primarily under our revolving credit agreement. Cash provided by financing activities for 2008 reflected the net borrowings of $189.9 million. Fiscal years 2010, 2009 and 2008 all reflect proceeds from the exercise of stock options of $3.9 million, $1.1 million and $13.0 million, respectively. Fiscal years 2010, 2009 and 2008 included $1.5 million, $0.8 million and $10.3 million, respectively, in excess tax benefits related to stock-based compensation.

Teledyne’s amended and restated credit facility had lender commitments of $590.0 million and was set to expire in July 2011. At year-end 2010, we had $589.3 million of available committed credit under the credit facility, which can be utilized, as needed, for daily operating and periodic cash needs, including acquisitions. Excluding interest and fees, no payments were due under the amended and restated credit facility until it matures. Borrowings under this credit facility were at variable rates which were, at our option, tied to a eurodollar base rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as

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defined in our credit agreement. LIBOR based loans under the facility typically had terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Base rate loans had interest rates that primarily fluctuate with changes in the prime rate. Interest rates were also subject to change based on our debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio. The credit agreement also provided for facility fees that vary between 0.10% and 0.25% of the credit line, depending on our consolidated leverage ratio as calculated from time to time. As noted earlier, on February 25, 2011, we refinanced the $590.0 million credit facility by terminating the facility and entering into a new facility that has lender commitments totaling $550.0 million. The new facility has a termination date of February 25, 2016. As of February 25, 2011, we had $273.0 million outstanding on the new facility.

On September 15, 2010 the Company issued $250.0 million in aggregate principal amount of private placement Senior Notes at par. The notes consist of $75.0 million of 4.04% Senior Notes due September 15, 2015, $100.0 million of 4.74% Senior Notes due September 15, 2017 and $75.0 million of 5.30% Senior Notes due September 15, 2020. The interest rates for the notes were determined on April 14, 2010. The Company used the proceeds of the private placement Senior Notes to pay down amounts outstanding under the Company’s then existing $590.0 million credit facility.

The credit agreements require the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits on acquired debt. We also have a $5.0 million uncommitted credit line which permits credit extensions up to $5.0 million plus an incremental $6.5 million solely for standby letters of credit. There were no outstanding funding advances under the uncommitted credit line at January 2, 2011. Total debt at year-end 2010 includes $250.0 million outstanding in Senior Notes. No amounts were outstanding under the now terminated $590.0 million credit facility at year-end 2010. The Company also has $17.3 million outstanding under capital leases, of which $2.0 million is current. At year-end 2010, Teledyne had $12.2 million in outstanding letters of credit.

In 2009, Teledyne repurchased 36,239 shares of Teledyne common stock for $0.8 million under this now-expired program. No shares were repurchased in 2010.

Pension and Postretirement Plans

As of January 1, 2004, non-union new hires participate in an enhanced defined contribution plan as opposed to the Company’s existing defined benefit pension plan. The plan was closed to all union new hires as of February 20, 2007. Teledyne anticipates making pretax cash contributions of approximately $37.0 million to its domestic pension plan in 2011 before recovery from the U.S. Government and expects to make an additional pretax cash contribution of $32.0 million provided the sale of the former Aerospace Engines and Components segment is completed. In connection with the acquisition of Intelek, the Company assumed responsibility for a defined benefit pension plan based in the United Kingdom covering certain employees of Intelek. The plan was closed to new members in January 2000 and ceased further service accruals to members in September 2002.

Other Matters

Income Taxes

The Company’s effective tax rate for 2010 was 30.9%, compared with 30.0% for 2009 and 36.8% for 2008. Fiscal years 2010, 2009 and 2008 included net tax credits of $12.5 million, $15.0 million and $3.3 million, respectively, primarily research and development tax credits. Excluding these items the company’s effective tax rates for fiscal years 2010, 2009 and 2008 would have been 38.1%, 39.1% and 38.5%, respectively. Based on the Company’s history of operating earnings, expectations of future operating earnings and potential tax planning strategies, it is more likely than not that the deferred income tax assets at January 2, 2011 will be realized.

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Costs and Pricing

Inflationary trends in recent years have been moderate. Current inventory costs, the increasing costs of equipment and other costs are considered in establishing sales pricing policies. The Company emphasizes cost containment in all aspects of its business.

Hedging Activities; Market Risk Disclosures

In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted interest payments associated with the then anticipated issuance of fixed rate debt. The objective of these cash flow hedges was to protect against the risk of changes in the interest payments attributable to changes in the designated benchmark, which is the LIBOR interest rate leading up to the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional amount of the debt hedged was $150.0 million. In the second quarter, concurrent with the interest rates being determined on the fixed rate debt, Teledyne terminated the cash flow hedges for a total payment of $0.6 million. Except for the cash flow hedges, we have not entered into any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures during 2010 or 2009. We had no derivative financial instruments outstanding at January 2, 2011. We believe that adequate controls are in place to monitor any hedging activities. Our primary exposure to market risk relates to changes in interest rates and foreign currency exchange rates. We periodically evaluate these risks and have taken measures to mitigate these risks. We own assets and operate facilities in countries that have been politically stable. Also, our foreign risk management objectives are geared towards stabilizing cash flow from the effects of foreign currency fluctuations. Most of our sales are denominated in U.S. dollars which mitigates the effect of exchange rate changes. Borrowings under our credit facility are at fixed rates that vary with the term and timing of each loan under the facility. Loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Interest rates are also subject to change based on our debt to earnings before interest, taxes, depreciation and amortization ratio. However, as of January 2, 2011, we had no outstanding indebtedness under our amended and restated credit facility. Any borrowings under the Company’s revolving credit line are based on a fluctuating market interest rate and, consequently, the fair value of any outstanding debt should not be affected materially by changes in market interest rates. On February 25, 2011, we refinanced the $590.0 million credit facility by terminating the facility and entering into a new facility that has lender commitments totaling $550.0 million. The new facility has a termination date of February 25, 2016. As of February 25, 2011 we had $273.0 million outstanding on the new facility.

Related Party Transactions

Our Chairman, President and Chief Executive Officer is a director of The Bank of New York Mellon Corporation, as is one of our other directors. On February 8, 2011, our Chairman notified The Bank of New York Mellon Corporation that he plans to retire as a director on April 12, 2011. The Bank of New York Mellon Corporation is the successor to Mellon Financial Corporation following its merger with The Bank of New York in 2007. Another of our directors was a former chief executive officer of Mellon Financial Corporation. All transactions with The Bank of New York Mellon Corporation and its respective affiliates are effected under normal commercial terms, and we believe that our relationships with The Bank of New York Mellon Corporation and its respective affiliates are arms-length. The Bank of New York Mellon Corporation is one of 13 lenders under our prior $590.0 million credit facility, having committed up to $90.0 million under the facility. The Bank of New York Mellon Corporation is one of 12 lenders under our new $550.0 million credit facility, having committed up to $45.0 million under the facility. The Bank of New York Mellon Corporation also provides cash management services, serves as trustee for the Teledyne Technologies Incorporated Pension Plan and, through its subsidiaries and affiliates, provides asset management and transition management services for the Pension Plan. Mellon Investor Services LLC, dba BNY Mellon Shareowner Services, serves as our transfer agent and registrar and also handles administration of our stock options. We engaged BNY Mellon Shareowner Services to help us solicit proxies in connection with our annual meetings.

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Until its expiration in November 2009, BNY Mellon Shareowner Services was the rights agent under our Shareholder Rights Plan.

Environmental

We are subject to various federal, state, local and international environmental laws and regulations which require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. These include sites at which Teledyne has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund, and comparable state laws. We are currently involved in the investigation and remediation of a number of sites. Reserves for environmental investigation and remediation totaled $5.2 million at January 2, 2011 and $3.0 million at January 3, 2010. The increase from 2009 reflects environmental liabilities assumed in the Intelek acquisition. As investigation and remediation of these sites proceed and new information is received, the Company expects that accruals will be adjusted to reflect new information. Based on current information, we do not believe that future environmental costs, in excess of those already accrued, will materially and adversely affect our financial condition or liquidity. However, resolution of one or more of these environmental matters or future accrual adjustments in any one reporting period could have a material adverse effect on our results of operations for that period. See also our environmental risk factor disclosure beginning at page 34.

For additional discussion of environmental matters, see Notes 2 and 15 to the Notes to Consolidated Financial Statements.

Government Contracts

We perform work on a number of contracts with the Department of Defense and other agencies and departments of the U.S. Government including sub-contracts with government prime contractors. Sales under these contracts with the U.S. Government, which included contracts with the Department of Defense, were approximately 44% of total sales in 2010, 47% of total sales in 2009 and 44% of total sales in 2008. For a summary of sales to the U.S. Government by segment, see Note 13 to the Notes to Consolidated Financial Statements. Sales to the Department of Defense represented approximately 34%, 36% and 32% of total sales for 2010, 2009 and 2008, respectively. See also our government contracts risks factor disclosure beginning at page 20.

Performance under government contracts has certain inherent risks that could have a material adverse effect on the Company’s business, results of operations and financial condition. Government contracts are conditioned upon the continuing availability of Congressional appropriations, which usually occurs on a fiscal year basis even though contract performance may take more than one year.

For information on accounts receivable from the U.S. Government, see Note 5 to the Notes to Consolidated Financial Statements.

Estimates and Reserves

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, we evaluate our estimates, including those related to product returns and replacements, allowance for doubtful accounts, inventories, intangible assets, income taxes, warranty obligations, pension and other postretirement benefits, long-term contracts, environmental, workers’ compensation and general liability, employee dental and medical benefits and other contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at the time, the results of which form the basis for making our judgments. Actual results may differ materially from these estimates under different assumptions

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or conditions. In some cases, such differences may be material. See “Other Matters — Critical Accounting Policies”.

The following table reflects significant reserves and valuation accounts, which are estimates and based on judgments as described above, at January 2, 2011 and January 3, 2010 (In millions):

Reserves and Valuation Accounts (a)

	2010		2009
Allowance for doubtful accounts	$	2.9	$	2.3
LIFO inventory reserves	$	16.5	$	15.7
Other inventory reserves	$	27.2	$	26.5
Workers’ compensation and general liability reserves(b)	$	9.5	$	10.0
Warranty reserves(b)	$	13.0	$	13.6
Environmental reserves(b)	$	5.2	$	3.0
Other accrued liability reserves(b)	$	2.1	$	2.2

(a)	This table should be read in conjunction with the Notes to Consolidated Financial Statements.
(b)	Includes both long-term and short-term reserves.

Some of the Company’s products are subject to specified warranties and the Company provides for the estimated cost of product warranties. We regularly assess the adequacy of our pre-existing warranty liabilities and adjust amounts as necessary based on a review of historic warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year. The product warranty reserve is included in current accrued liabilities and other long-term liabilities on the balance sheet. Changes in the Company’s product warranty reserve are as follows (in millions):

	2010			2009			2008
Balance at beginning of year	$	13.6		$	11.0		$	8.2
Accruals for product warranties charged to expense		4.0			9.5			6.1
Cost of product warranty claims		(4.8	)		(6.9	)		(5.6	)
Acquisitions		0.2			—			2.3
Balance at year-end	$	13.0		$	13.6		$	11.0

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Our critical accounting policies are those that are reflective of significant judgment, complexity and uncertainty, and may potentially result in materially different results under different assumptions and conditions. We have identified the following as critical accounting policies: revenue recognition; accounting for pension plans; accounting for business combinations, goodwill and other long-lived assets; and accounting for income taxes. For additional discussion of the application of these and other accounting policies, see Note 2 of the Notes to Consolidated Financial Statements.

Revenue Recognition

Commercial sales and sales from U.S. Government fixed-price type contracts are generally recorded as shipments are made or as services are rendered. Occasionally, for certain fixed-price type contracts that require substantial performance over a long time period (generally one or more years), revenues are recorded under the percentage-of-completion method. We measure the extent of progress toward completion using the

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units-of-delivery method, cost-to-cost method or upon attainment of scheduled performance milestones which could be time, event or expense driven. Occasionally, invoices are submitted to and paid by the customer under a contractual agreement which has a different time schedule than the related revenue recognition. Sales under cost-reimbursement contracts, usually from the U.S. Government, are recorded as allowable costs are incurred and fees are earned.

The development of cost of sales percentages used to record costs under certain fixed-price type contracts and fees under certain cost-reimbursement type contracts requires management’s judgment to make reasonably dependable cost estimates for the design, manufacture and delivery of products and services, generally over a long time period. Since certain fixed-price and cost-reimbursement type contracts extend over a long period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings on a cumulative catch-up basis. This method recognizes in the current period the cumulative effect of the changes on current and prior quarters. For fixed-price contracts, if the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract cost and revenue estimates for significant contracts are generally reviewed and reassessed quarterly. These types of contracts and estimates are most frequently related to our sales to the U.S. Government or sales to other defense contractors for ultimate sale to the U.S. Government. The Company follows the revenue recognition criteria under Accounting Standards Codification (“ASC”) 605-10-S99-1, Revenue Recognition. For our sales to the U.S. Government in 2010, 2009 and 2008, operating income as a percent of sales did not vary by more than 1.5%. If operating income as a percent of sales to the U.S. Government had been higher or lower by 1.5% in 2010, the Company’s operating income would have changed by approximately $12.9 million.

Accounting for Pension Plans

The Company’s accounting for its defined benefit pension plan requires that amounts recognized in financial statements be determined on an actuarial basis, rather than as contributions are made to the plan. A significant element in determining the Company’s pension income or expense is the expected return on plan assets, as well as the assumed discount rate on pension liabilities. The Company has assumed, based upon the types of securities the plan assets are invested in and the long-term historical returns of these investments, that the long-term expected return on pension assets will be 8.25% in 2011 for its domestic pension plan and 6.6% for its foreign pension plan. The assumed discount rate will be 5.9% in 2011 for its domestic pension plan and 5.4% for its foreign pension plan. The Company’s long-term expected return on pension assets used in 2010 was 8.25% and the assumed discount rate used in 2010 was 6.25% for its domestic pension plans. The Company’s long-term expected return on pension assets used in 2010 was 6.4% and the assumed discount rate used in 2010 was 5.6% for its foreign pension plan. The actual rate of return on pension assets was12.3% in 2010 and 12.5% in 2009 for its domestic pension plans. The actual rate of return on pension assets was 12.1% in 2010 for its foreign pension plan. If the actual rate of return on pension assets is above the projection, the Company may be able to reduce its contributions to the pension trust. If the actual rate of return on pension assets is below the projection, the Company may be required to make additional contributions to the pension trust. The Company made pretax contributions of $37.0 million to its pension benefit plans in 2010 and currently anticipates making an pretax cash contribution of approximately $37.0 million to its pension benefit plans in 2011, before recovery from the U.S. Government and expects to make an additional pretax cash contribution of $32.0 million provided the sale of the former Aerospace Engines and Components segment is completed. The assumed long-term rate of return on assets is applied to the market-related value of plan assets at the end of the previous year. This produces the expected return on plan assets that is included in the annual pension income or expense calculation for the current year. The cumulative difference between this expected return and the actual return on plan assets is deferred and amortized into pension income or expense over future periods. At year-end 2010 the Company has a $168.0 million non-cash reduction to stockholders’ equity and a long-term additional liability of $276.6 million related to its pension plans. At year-end 2009, the Company had a $160.2 million non-cash reduction to stockholders’ equity and a long-term additional liability of $263.6 million related to its pension plans. See Note 12 of the Notes to Consolidated Financial Statements for additional pension disclosures.

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Differences in the discount rate and expected long-term rate of return on assets within the indicated range would have had the following impact on 2010 pension expense:

	0.25 Percentage			0.25 Percentage
	Point Increase			Point Decrease
	In millions
Increase (decrease) to pension expense resulting from:
Change in discount rate	$	(2.1	)	$	2.2
Change in long-term rate of return on plan assets	$	(1.8	)	$	1.8

See Note 12 of the Notes to Consolidated Financial Statements for additional pension disclosures.

Accounting for Business Combinations, Goodwill, Acquired Intangible Assets and Other Long-Lived Assets

The Company accounts for goodwill and purchased intangible assets under ASC 80. In all acquisitions, the results are included in the Company’s consolidated financial statements from the date of each respective acquisition. Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Purchased intangible assets with finite lives are amortized over their estimated useful lives. Adjustments to fair value assessments are recorded to goodwill over the purchase price allocation period.

Goodwill and acquired intangible assets with indefinite lives are not amortized. We review goodwill and acquired indefinite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company also performs an annual impairment test in the fourth quarter of each year. We would test goodwill for impairment between annual tests if events occur or circumstances change that would more likely than not reduce our enterprise fair value below its book value. These events or circumstances could include a significant change in the business climate, including a significant sustained decline in an entity’s market value, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business, or other factors. Based on the annual impairment test completed in the fourth quarter of 2010, no impairment of goodwill or intangible assets with indefinite lives was indicated.

For goodwill impairment testing, the Company estimates the fair value of the reporting units, using a discounted cash flow model based on our best estimate of amounts and timing of future revenues and cash flows and our most recent business and strategic plans, and compares the estimated fair value to the carrying value of the reporting unit, including goodwill. The discounted cash flow model requires judgmental assumptions about projected revenue growth, future operating margins, discount rates and terminal values. There are inherent uncertainties related to these assumptions and management’s judgment in applying them to the analysis of goodwill impairment While the Company believes it has made reasonable estimates and assumptions to calculate the fair value of its reporting units, it is possible a material change could occur. If actual results are not consistent with management’s estimates and assumptions, goodwill may be overstated and a charge would need to taken against net earnings.

As of January 2, 2011, the Company had 33 reporting units for goodwill impairment testing. The carrying value of goodwill included in the Company’s individual reporting units ranges from $0.4 million to $63.2 million. The Company’s analysis in 2010 indicated that in all instances, the fair value of the Company’s reporting units exceeded their carrying values and consequently did not result in an impairment charge. The excess of the estimated fair value over the carrying value (expressed as a percentage of carrying value of the respective reporting unit) for each of the Company’s reporting units as of the fourth quarter of 2010, the annual testing date, ranged from approximately 20% to 1,600%.

Changes in these projections could affect the estimated fair value of certain of the Company’s reporting units and could result in a goodwill impairment charge in a future period. In order to evaluate the sensitivity of the fair value calculations used in the goodwill impairment test, the Company applied a hypothetical 10%

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decrease to the fair values of each reporting unit and compared those values to the reporting unit carrying values. Based on this sensitivity analysis, the Company did not identify any goodwill impairment charges.

The impairment test for indefinite-lived intangibles other than goodwill (primarily trademarks and trade names) consists of a comparison of the fair value of the indefinite-lived intangible asset to the carrying value of the asset as of the impairment testing date. The Company estimates the fair value of its indefinite-lived intangibles using a discounted cash flow model based on our best estimate of amounts and timing of future revenues and cash flows and our most recent business and strategic plans, and compares the estimated fair value to the carrying value of the asset. The estimated fair values significantly exceed the carrying value for each of the Company’s indefinite-lived intangible assets as of the fourth quarter of 2010, the annual testing date.

Accounting for Income Taxes

Income tax expense and deferred tax assets and liabilities reflect management’s assessment of actual future taxes to be paid on items reflected in the financial statements. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. Uncertainty exists regarding tax positions taken in previously filed tax returns still under examination and positions expected to be taken in future returns. Deferred tax assets and liabilities arise due to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax carryforwards. Although we believe our income tax expense and deferred tax assets and liabilities are reasonable, no assurance can be given that the final tax outcome will not be different from that which is reflected in our historical income tax provisions and accruals. To the extent that the final tax outcome is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest.

Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence including past operating results, estimates of future taxable income and the feasibility of tax planning strategies. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.

Our effective tax rates differ from the statutory rate primarily due to the tax impact of the prior year research and development tax credits, state taxes and tax audit settlements. The effective tax rate was 30.9%, 30.0% and 36.8% in fiscal 2010, 2009 and 2008, respectively.

The following presents a rollforward of our unrecognized tax benefits (in millions):

	2010						2009
	Unrecognized						Unrecognized
	Tax Benefits			Interest			Tax Benefits			Interest
Beginning of year	$	25.2		$	1.0		$	36.8		$	0.8
Increase (decrease) in prior year tax positions		(3.5	)		0.7			(3.2	)		0.4
Increase for tax positions taken during the current period		0.6			—			5.0			—
Reduction related to settlements with taxing authorities		(9.2	)		(0.4	)		(12.3	)		—
Reduction related to lapse of the statue of limitations		(3.0	)		(0.5	)		(1.1	)		(0.2	)
End of year	$	10.1		$	0.8		$	25.2		$	1.0

We recognized interest related to unrecognized tax benefits of $0.9 million and $0.9 million within the provision for income taxes in our statements of operations for fiscal year 2010 and 2009, respectively.

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As of January 2, 2011, we estimated that the entire balance of unrecognized tax benefits, if resolved in our favor, would positively impact the effective tax rate and, therefore be recognized as additional tax benefits in our income statement.

We file income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions. The Company has substantially concluded on all U.S. federal and California income tax matters for all years through 2006. Substantially all other material state and local and foreign income tax matters have been concluded for years through 2005.

The Company anticipates the total unrecognized tax benefit for various federal and state tax items may be reduced by $2.4 million due to the expiration of statutes of limitation for various federal and state tax issues in the next 12 months.

Accounting Pronouncements Adopted

In April 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) No. 2010-17, “Milestone Method of Revenue Recognition.” This ASU allows entities to make a policy election to use the milestone method of revenue recognition and provides guidance on defining a milestone and the criteria that should be met for applying the milestone method. The scope of this ASU is limited to the transactions involving milestones relating to research and development deliverables. The guidance includes enhanced disclosure requirements about each arrangement, individual milestones and related contingent consideration, substantive milestones and factors considered in that determination. The amendments in this ASU are effective prospectively to milestones achieved in fiscal years, and interim periods within those years, beginning after June 15, 2010. Early application and retrospective application are permitted. We have evaluated this new ASU and have determined that it will not have a significant impact on the determination or reporting of our financial results.

Safe Harbor Cautionary Statement Regarding Forward-Looking Data

This Management’s Discussion and Analysis of Financial Condition and Results of Operation contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, directly and indirectly relating to earnings, growth opportunities, product sales, capital expenditures, pension matters, stock option compensation expense, taxes and strategic plans. All statements made in this Management’s Discussion and Analysis of Financial Condition and Results of Operation that are not historical in nature should be considered forward-looking. Actual results could differ materially from these forward-looking statements. Many factors could change the anticipated results: including disruptions in the global economy; changes in the insurance and credit markets; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; continued liquidity of our suppliers and customers (including commercial and aviation customers); availability of credit to our suppliers and customers; and a potential decrease in offshore oil production and exploration activity due to the April 2010 oil spill in the Gulf of Mexico. Increasing fuel costs could negatively affect the markets of our commercial aviation businesses. Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, could negatively affect our businesses that supply the oil and gas industry. In addition, financial market fluctuations affect the value of our pension assets.

Global responses to terrorism and other perceived threats increase uncertainties associated with forward-looking statements about our businesses. Various responses to terrorism and perceived threats could realign government programs, and affect the composition, funding or timing of our programs. Changes in the policies of U.S. and foreign governments could result, over time, in reductions and realignment in defense or other government spending and further changes in programs in which the Company participates, including anticipated reductions in the Company’s missile defense engineering services and NASA programs.

The Company continues to take action to assure compliance with the internal controls, disclosure controls and other requirements of the Sarbanes-Oxley Act of 2002. While we believe our control systems are effective,

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

While Teledyne’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 customers and achieve identified financial and operating synergies. There are additional risks associated with acquiring, owning and operating businesses outside of the United States, including those arising from U.S. and foreign government policy changes or actions and exchange rate fluctuations.

Anticipated benefits of the recent DALSA acquisition are subject to numerous risks and uncertainties, including Teledyne’s ability to integrate the acquired operations, retain customers and achieve operating synergies, the ability of DALSA to develop and market new products, the operating results of DALSA being lower than anticipated, and unexpected acquisition-related costs and expenses.

With the recently completed acquisition of DALSA and upon completion of the pending divestiture of our piston engines businesses, which is subject to closing conditions, the Company’s risk profile will change, and may differ materially from prior years.

Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained beginning on page 18 of this Form 10-K under the caption “Risk Factors; Cautionary Statements as to Forward-Looking Statements.” Forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believes” or “expect”, that convey the uncertainty of future events or outcomes. We assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or otherwise.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

The information required by this item is included in this Report at page 63 under the caption “Other Matters — Hedging Activities; Market Risk Disclosures” of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Item 8.   Financial Statements and Supplementary Data.

The information required by this item is included in this Report at pages 76 through 117. See the “Index to Financial Statements and Related Information” at page 75.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.   Controls and Procedures.

Disclosure Controls

Teledyne’s disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that it files or submits, under the Securities Exchange Act of 1934, was recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s Chairman, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, with the participation and assistance of other members of management, have evaluated the effectiveness, as of January 2, 2011, of the Company’s “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended (“the Exchange Act”). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the disclosure controls and procedures as of January 2, 2011, are effective at the reasonable assurance level.

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Internal Controls

See Management Statement on page 76 for management’s annual report on internal control over financial reporting. See Report of Independent Registered Public Accounting Firm on page 77 for Ernst & Young LLP’s attestation report on management’s assessment of internal control over financial reporting.

There was no change in the Company’s “internal control over financial reporting” (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended January 2, 2011, that has materially affected, or is reasonably likely to materially effect, the Company’s internal control over financial reporting. There also were no significant deficiencies or material weaknesses identified for which corrective action needed to be taken.

Sarbanes-Oxley Disclosure Committee

The Company’s Sarbanes-Oxley Disclosure Committee includes the following members:

Stephen F. Blackwood, Vice President and Treasurer

Ivars R. Blukis, Chief Business Risk Assurance Officer (Internal Audit)

Melanie S. Cibik, Vice President, Associate General Counsel and Assistant Secretary

John T. Kuelbs, Executive Vice President, General Counsel and Secretary

Brian A. Levan, Director of External Financial Reporting and Assistant Controller

Susan L. Main, Vice President and Controller

Robyn E. McGowan, Vice President, Administration, Human Resources and Assistant Secretary

Patrick Neville, Vice President and Chief Information Officer

S. Paul Sassalos, Senior Corporate Counsel

Dale A. Schnittjer, Senior Vice President and Chief Financial Officer

Jason VanWees, Vice President, Corporate Development and Investor Relations

Among its tasks, the Sarbanes-Oxley Disclosure Committee discusses and reviews disclosure issues to help us fulfill our disclosure obligations on a timely basis in accordance with SEC rules and regulations and is intended to be used as an additional resource for employees to raise questions regarding accounting, auditing, internal controls and disclosure matters. Our toll-free Ethics Help Line (1-877-666-6968) continues to be an alternative means to communicate concerns to the Company’s management.

Item 9B.   Other Information.

None.

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PART III

Item 10.   Directors, Executive Officers and Corporate Governance.

In addition to the information set forth under the caption “Executive Management” beginning at page 14 in Part I of this Report, the information required by this item is set forth in the 2011 Proxy Statement under the captions “Item 1 on Proxy Card — Election of Directors,” “Board Composition and Practices,” “Corporate Governance,” “Committees of Our Board of Directors — Audit Committee” and “Report of the Audit Committee” and “Stock Ownership — Sections 16(a) Beneficial Ownership Reporting Compliance.” This information is incorporated herein by reference.

Item 11.   Executive Compensation.

The information required by this item is set forth in the 2011 Proxy Statement under the captions “Executive and Director Compensation” “Compensation Committee Interlocks and Insider Participation” and “Personnel and Compensation Committee Report.” This information is incorporated herein by reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plans Information

Except for the table below, the information required by this item is set forth in the 2011 Proxy Statement under the caption “Stock Ownership Information.”

The following table summarizes information with respect to equity compensation plans as of January 2, 2011:

					Number of Securities
					Remaining Available
					for Future Issuance
	Number of Securities				under Equity
	to be Issued upon		Weighted- Average		Compensation Plans
	Exercise of		Exercise Price of		[excluding securities
	Outstanding Options,		Outstanding Options,		reflected in
	Warrants and Rights		Warrants or Rights		column
Plan Category	(a)		(b)		(a)]
Equity compensation plans approved by security holders:
1999 Incentive Plan(1)		868,791	$	34.83		—
1999 Non-Employee Director Stock Compensation Plan(1)		281,052	$	20.47		—
2002 Stock Incentive Plan(1)		1,242,012	$	29.73		—
2008 Incentive Plan		507,766	$	40.93		778,363	(2)
Employee Stock Purchase Plan(3)		—		—		1,000,000
Equity compensation plans not approved security holders		—		—		—
Total		2,899,621	$	32.32		1,778,363

(1)

The 1999 Incentive Plan, the 2002 Stock Incentive Plan and the 1999 Non-Employee Director Stock Compensation Plan terminated following stockholder approval of the 2008 Incentive Award Plan at our 2008 Annual Meeting of Stockholders, and no additional awards under these plans may be made thereafter.

(2)

The amount includes: up to 56,582 shares of our common stock potentially issuable at January 2, 2011, for the third and final installment under our Performance Share Plan (PSP) for the 2006-2008 performance cycle. A total of 53,834 shares were issued on February 2, 2009 with respect to the first installment thereto and 44,751 shares were issued on February 3, 2010, with respect to the second installment thereto. The amount also includes: up to 104,810 shares of our common stock potentially issuable at January 2, 2011 under our

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Performance Share Plan (PSP) for the 2009-2011 performance cycle. The shares would be issuable in three equal annual installments beginning in 2012.

(3)

We maintain an Employee Stock Purchase Plan (commonly known as The Stock Advantage Plan) for eligible employees. It enables employees to invest in our common stock through automatic, after-tax payroll deductions, within specified limits. We add a 25% matching company contribution up to $1,200 annually. Our contribution is currently paid in cash and the plan administrator purchases shares of our common stock in the open market.

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is set forth in the 2011 Proxy Statement under the captions “Corporate Governance” and “Certain Transactions” and is incorporated herein by reference.

Item 14.   Principal Accountant Fees and Services.

The information required by this item is set forth in the 2011 Proxy Statement under the captions “Fees Billed by Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policies” under “Item 2 on Proxy Card — Ratification of Appointment of Independent Registered Public Accounting Firm” and is incorporated herein by reference.

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PART IV

Item 15.   Exhibits and Financial Statement Schedules.

(a) Exhibits and Financial Statement Schedules:

(1) Financial Statements

See the “Index to Financial Statements and Related Information” at page 75 of this Report, which is incorporated herein by reference.

(2) Financial Statement Schedules

See Schedule II captioned “Valuation and Qualifying Accounts” at page 117 of this Report, which is incorporated herein by reference.

(3) Exhibits

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

(b) Exhibits:

See Item 15(a)(3) above.

(c) Financial Schedules:

See Item 15(a)(2) above.

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INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION

	Page
Financial Statements and Related Information:
Management Statement		76
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		77
Report of Independent Registered Public Accounting Firm		78
Consolidated Statements of Income		79
Consolidated Balance Sheets		80
Consolidated Statements of Stockholders’ Equity		81
Consolidated Statements of Cash Flows		82
Notes to Consolidated Financial Statements		83
Financial Statement Schedule:
Schedule II — Valuation and Qualifying Accounts		117

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MANAGEMENT STATEMENT

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

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

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

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

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

We are also responsible for establishing and maintaining adequate internal control over financial reporting. We conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of January 2, 2011. In making this evaluation, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework. Our evaluation included reviewing the documentation of our controls, evaluating the design effectiveness of our controls and testing their operating effectiveness. Our evaluation did not include assessing the effectiveness of internal control over financial reporting for the 2010 acquisitions of Intelek plc, Optimum Optical Systems, Inc. and Hafmynd ehf., which are included in the 2010 consolidated financial statements of the Company and constituted: $101.6 million and $61.5 million of total and net assets, respectively, as of January 2, 2011 and $25.3 million and $3.1 million of total revenues and net loss, respectively, for the year then ended. We did not assess the effectiveness of internal control over financial reporting at these newly acquired entities due to the insufficient time between the date acquired and year-end and the complexity associated with assessing internal controls during integration efforts making the process impractical. Based on this evaluation we believe that, as of January 2, 2011, the Company’s internal controls over financial reporting were effective.

Ernst and Young LLP, our independent registered public accounting firm, has issued their report on the effectiveness of Teledyne Technologies’ internal control over financial reporting. Their report appears on page 77 of this Annual Report.

Date: March 3, 2011

/s/  Robert Mehrabian

Robert Mehrabian

Chairman, President and Chief Executive Officer

Date: March 3, 2011

/s/  Dale A. Schnittjer

Dale A. Schnittjer

Senior Vice President and Chief Financial Officer

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Board of Directors and Stockholders of

Teledyne Technologies Incorporated

We have audited Teledyne Technologies Incorporated’s internal control over financial reporting as of January 2, 2011, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Teledyne Technologies Incorporated’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Teledyne Technologies Incorporated’s Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

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

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

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

As indicated in the accompanying Report of Management on Teledyne Technologies Incorporated’s Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the recent acquisitions of Intelek plc, Optimum Optical Systems, Inc. and Hafmynd ehf., which are included in the 2010 consolidated financial statements of Teledyne Technologies Incorporated and constituted $101.6 million and $61.5 million of total and net assets, respectively, as of January 2, 2011 and $25.3 million and $3.1 million of total revenues and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of Teledyne Technologies Incorporated also did not include an evaluation of the internal control over financial reporting of Intelek plc, Optimum Optical Systems, Inc. and Hafmynd ehf.

In our opinion, Teledyne Technologies Incorporated maintained, in all material respects, effective internal control over financial reporting as of January 2, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Teledyne Technologies Incorporated as of January 2, 2011 and January 3, 2010, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended January 2, 2011 of Teledyne Technologies Incorporated and our report dated March 3, 2011 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Los Angeles, California

March 3, 2011

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Teledyne Technologies Incorporated

We have audited the accompanying consolidated balance sheets of Teledyne Technologies Incorporated as of January 2, 2011 and January 3, 2010, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended January 2, 2011. Our audits also included the financial statement schedule listed in the index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Teledyne Technologies Incorporated at January 2, 2011 and January 3, 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 2, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Teledyne Technologies Incorporated’s internal control over financial reporting as of January 2, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2011 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

Los Angeles, California

March 3, 2011

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TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per-share amounts)

	2010			2009			2008
Sales	$	1,644.2		$	1,652.1		$	1,722.0
Costs and Expenses
Cost of sales		1,148.1			1,177.3			1,205.9
Selling, general and administrative expenses		317.6			303.4			317.5
Total costs and expenses		1,465.7			1,480.7			1,523.4
Income before other income and expense and income taxes		178.5			171.4			198.6
Interest and debt expense, net		(6.5	)		(4.8	)		(10.9	)
Other income (expense), net		1.6			(0.2	)		0.3
Income from continuing operations before income taxes		173.6			166.4			188.0
Provision for income taxes		53.6			50.0			69.1
Net income from continuing operations before noncontrolling interest		120.0			116.4			118.9
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)		(5.3	)
Net income before noncontrolling interest		120.6			113.8			113.6
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)		(2.3	)
Net income attributable to Teledyne Technologies	$	120.5		$	113.3		$	111.3
Net income from continuing operations before noncontrolling interest	$	120.0		$	116.4		$	118.9
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)		(2.3	)
Net income from continuing operations		119.9			115.9			116.6
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)		(5.3	)
Net income attributable to Teledyne Technologies	$	120.5		$	113.3		$	111.3
Basic earnings per common share
— Continuing operations	$	3.31		$	3.22		$	3.29
— Discontinued operations		0.02			(0.07	)		(0.15	)
Basic earnings per common share	$	3.33		$	3.15		$	3.14
Diluted earnings per common share
— Continuing operations	$	3.25		$	3.17		$	3.20
— Discontinued operations		0.02			(0.07	)		(0.15	)
Diluted earnings per common share	$	3.27		$	3.10		$	3.05

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

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TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)

	2010			2009
Assets
Cash and cash equivalents	$	75.1		$	26.1
Accounts receivable, net		254.8			228.7
Inventories, net		172.3			164.8
Deferred income taxes, net		28.4			26.2
Prepaid expenses and other current assets		42.3			32.6
Assets of discontinued operation held for sale		75.1			90.2
Total current assets		648.0			568.6
Property, plant and equipment, net		203.4			187.9
Deferred income taxes, net		—			17.6
Goodwill, net		546.3			501.5
Acquired intangibles, net		113.9			109.6
Other assets, net		46.2			36.3
Total Assets	$	1,557.8		$	1,421.5
Liabilities and Stockholders’ Equity
Accounts payable	$	100.6		$	96.7
Accrued liabilities		177.3			164.3
Liabilities of discontinued operation held for sale		61.3			64.5
Current portion of long-term debt and capital lease		2.0			0.5
Total current liabilities		341.2			326.0
Long-term debt and capital lease obligations		265.3			251.6
Accrued pension obligation		62.1			79.8
Accrued postretirement benefits		16.5			15.7
Other long-term liabilities		85.7			81.0
Total Liabilities		770.8			754.1
Stockholders’ equity
Preferred stock, $0.01 par value; outstanding shares — none		—			—
Common stock, $0.01 par value; authorized 125 million shares;
Outstanding shares: 2010 — 36,363,372 and 2009 — 36,078,269		0.4			0.4
Additional paid-in capital		267.5			254.7
Retained earnings		703.7			583.2
Accumulated other comprehensive loss		(185.6	)		(171.8	)
Total Stockholders’ Equity		786.0			666.5
Noncontrolling interest		1.0			0.9
Total Equity		787.0			667.4
Total Liabilities and Stockholders’ Equity	$	1,557.8		$	1,421.5

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

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TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)

														Total
														Teledyne
											Accumulated			Technologies
			Additional								Other			Incorporated
	Common		Paid-in		Treasury			Retained			Comprehensive			Stockholders’			Noncontrolling			Total
	Stock		Capital		Stock			Earnings			Income (Loss)			Equity			Interest			Equity
Balance, December 30, 2007	$	0.4	$	206.9	$	—		$	359.9		$	(61.2	)	$	506.0		$	0.9		$	506.9
Net income		—		—		—			111.3			—			111.3			2.3			113.6
Other comprehensive loss, net of tax:
Foreign currency translation losses		—		—		—			—			(23.4	)		(23.4	)		—			(23.4	)
Minimum benefit plan liability adjustment		—		—		—			—			(121.2	)		(121.2	)		—			(121.2	)
Comprehensive loss		—		—		—			111.3			(144.6	)		(33.3	)		2.3			(31.0	)
Reclassification to redeemable		—		—		—			—			—			—			(2.1	)		(2.1	)
noncontrollling interest
Stock option compensation expense		—		7.5		—			—			—			7.5			—			7.5
Exercise of stock options and other, net		—		25.6		—			—			—			25.6			—			25.6
Balance, December 28, 2008		0.4		240.0		—			471.2			(205.8	)		505.8			1.1			506.9
Net income		—		—		—			113.3			—			113.3			0.5			113.8
Other comprehensive income, net of tax:
Foreign currency translation gains		—		—		—			—			3.4			3.4			—			3.4
Minimum benefit plan liability adjustment		—		—		—			—			30.6			30.6			—			30.6
Comprehensive income		—		—		—			113.3			34.0			147.3			0.5			147.8
Purchase of redeemable noncontrolling		—		4.7		—			(1.3	)		—			3.4			(0.7	)		2.7
interest
Treasury Stock-purchase		—		—		0.8			—						0.8			—			0.8
Treasury Stock-issuance		—		—		(0.8	)		—						(0.8	)		—			(0.8	)
Stock option compensation expense		—		5.4		—			—			—			5.4			—			5.4
Exercise of stock options and other, net		—		4.6		—			—			—			4.6			—			4.6
Balance, January 3, 2010		0.4		254.7		—			583.2			(171.8	)		666.5			0.9			667.4
Net income		—		—		—			120.5			—			120.5			0.1			120.6
Other comprehensive income, net of tax:
Interest rate swap position		—		—		—			—			(0.6	)		(0.6	)		—			(0.6	)
Foreign currency translation losses		—		—		—			—			(3.7	)		(3.7	)		—			(3.7	)
Minimum benefit plan liability adjustment		—		—		—			—			(9.5	)		(9.5	)		—			(9.5	)
Comprehensive income		—		—		—			120.5			(13.8	)		106.7			0.1			106.8
Stock option compensation expense		—		4.9		—			—			—			4.9			—			4.9
Exercise of stock options and other, net		—		7.9		—			—			—			7.9			—			7.9
Balance, January 2, 2011	$	0.4	$	267.5	$	—		$	703.7		$	(185.6	)	$	786.0		$	1.0		$	787.0

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

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TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

	2010			2009			2008
Operating activities
Net income from continuing operations before non-controlling interest	$	120.0		$	116.4		$	118.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of assets		45.2			42.5			45.0
Deferred income taxes		17.1			59.5			(40.7	)
Stock option expense		4.9			5.4			7.5
Noncontrolling interest		0.1			0.5			2.3
Excess income tax benefits from stock options		(1.5	)		(0.8	)		(10.3	)
Changes in operating assets and liabilities, excluding the effect of businesses acquired:
Decrease (increase) in accounts receivable		(19.0	)		38.1			(23.7	)
Decrease (increase) in inventories		1.3			18.2			(4.3	)
Decrease (increase) in prepaid expenses and other assets		3.9			4.4			(1.9	)
Decrease (increase) in long-term assets		(2.5	)		(6.4	)		5.2
Decrease in accounts payable		(3.7	)		(5.7	)		(0.8	)
Increase (decrease) in accrued liabilities		10.7			(10.1	)		12.6
Decrease (increase) in current income taxes payable, net		(9.1	)		5.3			(6.7	)
Increase (decrease) in other long-term liabilities		(4.2	)		10.2			(2.7	)
Increase (decrease) in accrued postretirement benefits		0.8			(0.9	)		(6.2	)
Increase (decrease) in accrued pension obligation		(39.9	)		(117.4	)		32.4
Other operating, net		3.0			1.2			(6.4	)
Net cash provided by operating activities from continuing operations		127.1			160.4			120.2
Net cash provided (used) by discontinued operations		14.7			(5.5	)		0.2
Net cash provided by operating activities		141.8			154.9			120.4
Investing activities
Purchases of property, plant and equipment		(31.0	)		(33.5	)		(38.2	)
Purchase of businesses and other investments, net of cash acquired		(67.9	)		(27.1	)		(284.9	)
Proceeds from sale of assets		—			—			0.4
Net cash used by investing activities from continuing operations		(98.9	)		(60.6	)		(322.7	)
Net cash used by discontinued operations		(2.3	)		(8.1	)		(3.9	)
Net cash used by investing activities		(101.2	)		(68.7	)		(326.6	)
Financing activities
Proceeds from issuance of Senior Notes		250.0			—			—
Net proceeds (payments) — long-term debt		(246.4	)		(81.6	)		189.9
Purchase of treasury stock		—			(0.8	)		—
Issuance of treasury shares for stock options exercised		—			0.8			—
Tax benefit from stock options exercised		1.5			0.8			10.3
Issuance of cash flow hedges		(0.6	)		—			—
Proceeds from exercise of stock options		3.9			0.3			13.0
Net cash provided (used) by financing activities		8.4			(80.5	)		213.2
Increase in cash and cash equivalents		49.0			5.7			7.0
Cash and cash equivalents — beginning of year		26.1			20.4			13.4
Cash and cash equivalents — end of year	$	75.1		$	26.1		$	20.4

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

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TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Description of Business

Effective November 29, 1999 (the “Distribution Date”), Teledyne Technologies Incorporated (“Teledyne” or the “Company”), became an independent, public company as a result of the distribution by Allegheny Teledyne Incorporated, now known as Allegheny Technologies Incorporated (“ATI”), of the Company’s Common Stock, $.01 par value per share, to holders of ATI Common Stock at a distribution ratio of one for seven (the “spin-off”). The spin-off has been treated as a tax-free distribution for federal income tax purposes. The spin-off included the transfer of certain of the businesses of ATI’s Aerospace and Electronics segment to the new corporation, immediately prior to the Distribution Date. ATI no longer has a financial investment in Teledyne.

Teledyne is a leading provider of sophisticated electronic components and subsystems, instrumentation and communications products, including defense electronics, digital imaging, monitoring and control instrumentation for marine, environmental and industrial applications, harsh environment interconnect products, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications. We also provide engineered systems and information technology services for defense, space, environmental and nuclear applications and supply energy generation, energy storage and small propulsion products.

Teledyne serves niche market segments where performance, precision and reliability are critical. Teledyne’s customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies and airlines companies.

Teledyne consists of the Instrumentation segment with operations in the United States, United Kingdom, Iceland, Singapore, China, France and Brazil; the Digital Imaging segment with operations in the United States; the Aerospace and Defense segment with operations in the United States, United Kingdom, Mexico, Singapore, China and Australia; and the Engineered Systems segment with operations in the United States and the United Kingdom.

In December 2010, we entered into an agreement to sell our general aviation piston engines businesses, which comprised the former Aerospace Engines and Components segment. We have restated prior year financial data to classify this segment as a discontinued operation.

Note 2.  Summary of Significant Accounting Policies

Principles of Consolidation

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

Fiscal Year

The Company operates on a 52- or 53-week fiscal year convention ending on the Sunday nearest to December 31. Fiscal year 2010 was a 52-week fiscal year and ended on January 2, 2011. Fiscal year 2009 was a 53-week fiscal year and ended on January 3, 2010. Fiscal year 2008 was a 52-week fiscal year and ended on December 28, 2008. References to the years 2010, 2009 and 2008 are intended to refer to the respective fiscal year unless otherwise noted.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets, liabilities,

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revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to product returns and replacements, allowance for doubtful accounts, inventories, intangible assets, income taxes, warranty obligations, pension and other postretirement benefits, long-term contracts, environmental, workers’ compensation and general liability, employee dental and medical benefits and other contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances at the time, the results of which form the basis for making its judgments. Actual results may differ materially from these estimates under different assumptions or conditions. Management believes that the estimates are reasonable.

Revenue Recognition

Commercial sales and revenue from U.S. Government fixed-price type contracts generally are recorded as shipments are made, as services are rendered or in some cases, on a percentage-of-completion basis. Sales under cost-reimbursement contracts are recorded as work is performed. Occasionally, for certain fixed-price type contracts that require substantial performance over a long time period (generally one or more years), revenues are recorded under the percentage-of-completion method. We measure the extent of progress toward completion using the units-of-delivery method, cost-to-cost method or based upon attainment of scheduled performance milestones which could be time, event or expense driven. Occasionally, invoices are submitted to be paid by the customer under a contractual agreement which has a different time schedule than the related revenue recognition. Since certain contracts extend over a long period of time, all revisions in cost and revenue estimates during the progress of work have the effect of adjusting the current period earnings on a cumulative catch-up basis. If the current contract estimate indicates a loss, provision is made for the total anticipated loss in the period that it becomes evident. Sales under cost-reimbursement contracts are recorded as allowable costs are incurred and fees are earned. The Company follows the revenue recognition criteria under Accounting Standards Codification (“ASC”) 605-10-S99-1, Revenue Recognition.

Shipping and Handling

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

Product Warranty and Recall and Replacement Costs

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 preexisting warranty liabilities is assessed regularly and the reserve is adjusted as necessary based on a review of historic warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year. The product warranty reserve is included in current accrued liabilities and long-term liabilities on the balance sheet. Changes in the Company’s product warranty reserve are as follows (in millions):

	2010			2009			2008
Balance at beginning of year	$	13.6		$	11.0		$	8.2
Accruals for product warranties charged to expense		4.0			9.5			6.1
Cost of product warranty claims		(4.8	)		(6.9	)		(5.6	)
Acquisitions		0.2			—			2.3
Balance at year-end	$	13.0		$	13.6		$	11.0

The Company establishes reserves for product returns and replacements on a product-specific basis when circumstances giving rise to the return become known. Facts and circumstances related to a return, including where the product affected by the return is located (e.g., the end user, customers’ inventory, or in Teledyne’s inventory) and cost estimates to return, repair and/or replace the product are considered when establishing a

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product return reserve. The reserve is reevaluated each period and is adjusted when the reserve is either not sufficient to cover or exceeds the estimated product return expenses.

Research and Development

Selling, general and administrative expenses include company-funded research and development and bid and proposal costs which are expensed as incurred and were $61.3 million in 2010, $58.8 million in 2009, and $61.5 million in 2008. Costs related to customer-funded research and development contracts were $258.6 million in 2010, $316.0 million in 2009 and $330.2 million in 2008 and are charged to cost of sales as the related sales are recorded. A portion of the costs incurred for company-funded research and development is recoverable through overhead cost allocations on government contracts.

Income Taxes

The Company accounts for income taxes in accordance with Generally Accepted Accounting Principles. Deferred income tax assets and liabilities are determined on the estimated future tax effects of differences between the financial reporting and tax basis of assets and liabilities given the application of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the asset or liability from year to year. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.

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

Net Income Per Common Share

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

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

	2010			2009			2008
Net income from continuing operations before noncontrolling interest	$	120.0		$	116.4		$	118.9
Less: net income attributable to noncontrolling interest		(0.1	)		(0.5	)		(2.3	)
Net income from continuing operations		119.9			115.9			116.6
Income (loss) from discontinued operations, net of income taxes		0.6			(2.6	)		(5.3	)
Net income attributable to Teledyne Technologies	$	120.5		$	113.3		$	111.3
Basic earnings per share
Weighted average common shares outstanding		36.2			36.0			35.5
Basic earnings per common share
— Continuing operations	$	3.31		$	3.22		$	3.29
— Discontinued operations		0.02			(0.07	)		(0.15	)
Basic earnings per common share	$	3.33		$	3.15		$	3.14
Diluted earnings per share
Weighted average common shares outstanding		36.2			36.0			35.5
Diluted effect of contingently issuable shares		0.7			0.6			1.0
Weighted average common shares outstanding		36.9			36.6			36.5
Diluted earnings per common share
— Continuing operations	$	3.25		$	3.17		$	3.20
— Discontinued operations		0.02			(0.07	)		(0.15	)
Diluted earnings per common share	$	3.27		$	3.10		$	3.05

For 2010, 2009 and 2008, 846,307, 910,539 and 194,897 stock options were excluded in the computation of diluted earnings per share because they had exercise prices that were greater than the average market price of the Company’s common stock during 2010, 2009 and 2008, respectively.

Stock options to purchase 2.1 million, 1.8 million and 2.5 million shares of common stock at fiscal year-end 2010, 2009, and 2008, respectively, had exercise prices that were less than the average market price of the Company’s common stock during the respective periods and are included in the computation of diluted earnings per share.

In addition 22,668, 14,135 and 5,902 contingent shares of the Company’s common stock under a compensation plan were excluded from fully diluted shares outstanding for 2010, 2009 and 2008, respectively, since performance and other conditions for issuance have not yet been met.

Accounts Receivable

Receivables are presented net of a reserve for doubtful accounts of $2.9 million at January 2, 2011, and $2.3 million at January 3, 2010. Expense recorded for the reserve for doubtful accounts was $1.4 million, $0.4 million, and $0.6 million for 2010, 2009, and 2008, respectively. An allowance for doubtful accounts is established for losses expected to be incurred on accounts receivable balances. Judgment is required in the estimation of the allowance and is based upon specific identification, collection history and creditworthiness of the debtor. The Company markets its products and services principally throughout the United States, Europe, Japan and Canada to commercial customers and agencies of, and prime contractors to, the U.S. Government. Trade credit is extended based upon evaluations of each customer’s ability to perform its obligations, which are updated periodically.

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Cash Equivalents

Cash equivalents consist of highly liquid money-market mutual funds and bank deposits with initial maturities of three months or less. Cash equivalents totaled $61.8 million at January 2, 2011, and $11.2 million at January 3, 2010.

Inventories

Inventories are stated at the lower of cost or market, less progress payments. The majority of inventory values are stated at cost based on the last-in, first-out method, while the remainder are principally valued on an average cost, or first-in, first-out method. Costs include direct material, direct labor, applicable manufacturing and engineering overhead, and other direct costs.

Property, Plant and Equipment

Property, plant and equipment is capitalized at cost. Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are determined using a combination of accelerated and straight-line methods over the estimated useful lives of the various asset classes. Buildings are depreciated over periods not exceeding 45 years, equipment over 5 to 18 years, computer hardware and software over 3 to 5 years and leasehold improvements over the shorter of the estimated remaining lives or lease terms. Significant improvements are capitalized while maintenance and repairs are charged to operations as incurred. Depreciation expense on property, plant and equipment, including assets under capital leases, was $30.6 million in 2010, $30.1 million in 2009 and $29.2 million in 2008.

Goodwill and Other Intangible Assets

The Company performs an annual impairment test for goodwill and other intangible assets in the fourth quarter of each year, or more often as circumstances require. The two-step impairment test is used to first identify potential goodwill impairment and then measure the amount of goodwill impairment loss, if any. When it is determined that an impairment has occurred, an appropriate charge to operations is recorded. Based on the annual impairment test completed in the fourth quarter of 2010, no impairment of goodwill or intangible assets was indicated.

Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Purchased intangible assets with finite lives are amortized over their estimated useful lives. Goodwill and intangible assets with indefinite lives are not amortized, but tested at least annually for impairment.

Other Long-Lived Assets

The carrying value of long-lived assets is periodically evaluated in relation to the operating performance and sum of undiscounted future cash flows of the underlying businesses. An impairment loss is recognized when the sum of expected undiscounted future net cash flows is less than book value.

Environmental

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

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third parties, but do reflect anticipated allocations among potentially responsible parties at federal Superfund sites or similar state-managed sites and an assessment of the likelihood that such parties will fulfill their obligations at such sites. The measurement of environmental liabilities by the Company is based on currently available facts, present laws and regulations, and current technology. Such estimates take into consideration the Company’s prior experience in site investigation and remediation, the data concerning cleanup costs available from other companies and regulatory authorities, and the professional judgment of the Company’s environmental personnel in consultation with outside environmental specialists, when necessary.

Foreign Currency Translation

The Company’s foreign entities’ accounts are generally measured using local currency as the functional currency. Assets and liabilities of these entities are translated at the exchange rate in effect at year-end. Revenues and expenses are translated at average month end rates of exchange prevailing during the year. Unrealized translation gains and losses arising from differences in exchange rates from period to period are included as a component of accumulated other comprehensive income in stockholders’ equity. Most of the Company’s sales are denominated in U.S. dollars which mitigates the effect of exchange rate changes.

Accounting Pronouncements Adopted

In April 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) No. 2010-17, “Milestone Method of Revenue Recognition.” This ASU allows entities to make a policy election to use the milestone method of revenue recognition and provides guidance on defining a milestone and the criteria that should be met for applying the milestone method. The scope of this ASU is limited to the transactions involving milestones relating to research and development deliverables. The guidance includes enhanced disclosure requirements about each arrangement, individual milestones and related contingent consideration, substantive milestones and factors considered in that determination. The amendments in this ASU are effective prospectively to milestones achieved in fiscal years, and interim periods within those years, beginning after June 15, 2010. Early application and retrospective application are permitted. We have evaluated this new ASU and have determined that it will not have a significant impact on the determination or reporting of our financial results.

Hedging Activities

In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted interest payments associated with the then anticipated issuance of fixed rate debt. The objective of these cash flow hedges was to protect against the risk of changes in the interest payments attributable to changes in the designated benchmark, which is the LIBOR interest rate leading up to the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional amount of the debt hedged was $150.0 million. In the second quarter, concurrent with the interest rates being determined on the fixed rate debt, Teledyne terminated the cash flow hedges for a total payment of $0.6 million. Except for the cash flow hedges, the Company has not entered into any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures during 2010 or 2009. We had no derivative financial instruments outstanding at January 2, 2011.

Supplemental Cash Flow Information

Cash payments for federal, foreign and state income taxes were $59.9 million for 2010. Tax refunds received in 2010 totaled $15.5 million. Cash payments for federal, foreign and state income taxes were $28.1 million for 2009. Tax refunds received in 2009 totaled $32.9 million. Cash payments for federal, foreign and state income taxes were $29.3 million for 2008 which is net of refunds of $0.5 million. Cash payments for interest and credit facility fees totaled $2.8 million, $6.5 million and $10.4 million for 2010, 2009 and 2008, respectively.

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Comprehensive Income (Loss)

The Company’s comprehensive income consists of net income, the minimum benefit plan liability adjustment and foreign currency translation adjustments. See Note 12 for a further discussion of the minimum benefit plan liability adjustment. The Company’s comprehensive income was $106.7 million for 2010, compared with comprehensive income of $147.3 million for 2009 and comprehensive loss of $33.3 million for 2008.

The year-end components of accumulated other comprehensive loss are shown in the following table (in millions):

Balance at year end	2010			2009			2008
Foreign currency translation losses	$	(22.2	)	$	(18.5	)	$	(21.9	)
Hedging activities		(0.6	)		—			—
Minimum benefit plan liability adjustment(a)		(162.8	)		(153.3	)		(183.9	)
Accumulated other comprehensive loss	$	(185.6	)	$	(171.8	)	$	(205.8	)

(a) Net of deferred taxes of $105.5 million in 2010, $99.0 million in 2009 and $118.9 million in 2008.

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Note 3.  Business Acquisitions, Goodwill and Intangible Assets

The table below summarizes the acquisitions we made during fiscal years 2010, 2009 and 2008. Other than the purchase of the assets of a marine sensor product line for $1.4 million and all of the remaining 14.1% minority interest in Ocean Design, Inc. (“ODI”) for $25.5 million, no other acquisitions have been made in fiscal year 2009. See Note 17 to our Consolidated Financial Statements for information about our fiscal year 2011 acquisition of DALSA Corporation (“DALSA”).

			Primary	Pre-acquisition	Transaction	Purchase Price
Name and Description(1)	Date Acquired	Ownership	Location(s)	Sales Volume	Type	(2)(3)
						(In millions)
Fiscal Year 2010
Optimum Optical Systems, Inc (“Optimum”) Designs and manufacturers custom optics and optomechanical assemblies	June 7, 2010	100%	Camarillo, CA	$5.9 million for the fiscal year ended December 31, 2009	Stock	$	5.7
Intelek plc (“Intelek”) Designs and manufactures electronic systems for satellite and microwave communication and aerostructure manufacturing	July 26, 2010	100%	United Kingdom and State College, PA	£38 million for the fiscal year ended March 31, 2010	Stock	$	43.5
Hafmynd ehf., now known as Teledyne Gavia ehf (“Gavia”) Designs and manufactures the Gaviatm autonomous underwater vehicle (AUV)	September 20, 2010	100%	Reykjavik, Iceland	532.4 million Icelandic króna for the fiscal year ended December 31, 2009	Stock	$	10.8
Fiscal Year 2008
Impulse Enterprise (“Impulse”) Manufactures underwater electrical interconnection systems for harsh environments.	December 31, 2007	100%	San Diego, CA	$16.8 million for its fiscal year ended December 31, 2006	Asset	$	35.0
Storm Products Co. (“Storm”) Supplies custom, high-reliability bulk wire and cable assemblies to a number of markets, including energy exploration, environmental monitoring and industrial equipment. Also provides coax microwave cable and interconnect products primarily to defense customers for radar, electronic warfare and communications applications.	December 31, 2007	100%	Dallas, TX Woodridge, IL	$45.7 million for its fiscal year ended March 31, 2007	Stock		47.7
SG Brown Limited and its wholly owned subsidiary TSS International Limited (“TSS”) Designs and manufactures inertial sensing, gyrocompass navigation and subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets.	January 31, 2008	100%	Watford, United Kingdom	£12.0 million for its fiscal year ended March 31, 2007	Stock		54.8
Judson Technologies, LLC (“Judson”) Manufactures high performance infrared detectors utilizing a wide variety of materials such as Mercury Cadmium Telluride (HgCdTe), Indium Antimonide (InSb), and Indium Gallium Arsenide (InGaAs), as well as tactical dewar and cooler assemblies and other specialized standard products for military, space, industrial and scientific applications.	February 1, 2008	100%	Montgomeryville, PA	$13.8 million for its fiscal year ended December 31, 2006	Asset		27.0
Webb Research Corp. (“Webb”) Manufacturer of autonomous underwater gliding vehicles and autonomous profiling drifters and floats.	July 7, 2008	100%	East Falmouth, MA	$12.2 million for its fiscal year ended December 31, 2007	Asset		24.3
Defense business of Filtronic PLC (“Filtronic”) Provides customized microwave subassemblies and integrated subsystems to the global defense industry.	August 15, 2008	100%	Shipley, United Kingdom	£14.5 million for its fiscal year ended May 31, 2008	Stock		24.1
Cormon Limited and Cormon Technology Limited (“Cormon”) Designs and manufactures subsea and surface sand and corrosion sensors, as well as flow integrity monitoring systems, used in oil and gas production systems.	October 16, 2008	100%	Lancing, United Kingdom	£6.8 million for its fiscal year ended March 31, 2008	Stock		20.9
Odom Hydrographic Systems, Inc. (“Odom”) Designs and manufactures hydrographic survey instrumentation used in port survey, dredging, offshore energy and other applications.	December 19, 2008	100%	Baton Rouge, LA	$10.9 million for its fiscal year ended September 30, 2008	Stock		7.0
Demo Systems LLC (“Demo”) Designs and manufactures aircraft data loading equipment, flight line maintenance terminals, and data distribution software used by commercial airlines, the U.S. military and aircraft manufacturers.	December 24, 2008	100%	Moorpark, CA	$7.3 million for its fiscal year ended December 31, 2007	Asset		5.3

1) Each of the acquisitions is part of the Instrumentation segment except the Optimum, Intelek, Storm, Judson, Filtronic and Demo acquisitions. Storm, Filtronic and Demo are part of the Aerospace and Defense Electronics segment. Intelek is part of the Aerospace and Defense Electronics segment, except for the CML division of Intelek which is part of the Engineered Systems segment. Optimum and Judson are part of the Digital Imaging segment.

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2)

The purchase price represents the contractual consideration for the acquired business, net of cash acquired, including certain acquisition transaction costs, paid as of January 2, 2011.

3)

In 2010, we acquired a 16.3% interest in Optical Alchemy, Inc. (“Optical Alchemy”), a designer and manufacturer of ultra-light electro optical gimbal system for $4.6 million. In the fourth quarter of 2010, we made an additional $3.0 million non-voting preferred stock investment in Optical Alchemy. Also in 2010, we made a scheduled payment for a prior acquisition of $0.3 million. In 2009, we made scheduled payments of $0.5 million related to two prior acquisitions, and received a purchase price adjustment of $0.3 million for the Cormon acquisition. In 2009, we also purchased the remaining minority ownership in ODI for $25.5 million and we purchased the assets of a marine sensor product line for a payment of $1.4 million. In 2008, we purchased an additional minority ownership in ODI for $38.5 million and made a scheduled payment of $0.3 million related to a prior acquisition.

The unaudited pro forma information for fiscal year 2008 set forth below gives effect to the nine acquisitions made in fiscal year 2008 as if they had been acquired at the beginning of fiscal year 2008 and includes the effect of estimated amortization of acquired identifiable intangible assets, increased depreciation expense for fixed assets, as well as increased interest expense on acquisition debt. This pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the respective period. In addition, the pro forma results are not intended to be a projection of future results and do not reflect any operating efficiencies or cost savings that might be achievable.

	2008
	(unaudited in millions,
	except per-share amounts)
Sales	$	1,771.6
Net income from continuing operations	$	114.2
Net income attributable to Teledyne Technologies	$	108.9
Basic earnings per common share — continuing operations	$	3.22
Basic earnings per common share — attributable to Teledyne Technologies	$	3.07
Diluted earning per common share — continuing operations	$	3.13
Diluted earning per common share — attributable to Teledyne Technologies	$	2.98

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

Teledyne’s goodwill was $546.3 million at January 2, 2011, and $501.5 million at January 3, 2010. Teledyne’s acquired intangible assets were $113.9 million at January 2, 2011, and $109.6 million at January 3, 2010. The increase in goodwill reflected current year acquisitions. The increase in acquired intangible assets primarily reflected current year acquisitions, partially offset by amortization.

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The following tables show the purchase price, goodwill acquired and intangible assets acquired for the acquisitions made in fiscal 2010 and 2008 (in millions):

	Fiscal year 2010
						Acquired
		Purchase		Goodwill		Intangible
Acquisition Date	Name	Price(a)		Acquired		Assets
June 7, 2010	Optimum	$	5.7	$	4.3	$	1.9
July 26, 2010	Intelek		43.5		34.0		15.3
September 20, 2010	Gavia		10.8		8.1		2.3
		$	60.0	$	46.4	$	19.5

(a) includes transaction costs that are expensed under current accounting guidance.

	Fiscal year 2008
						Acquired
		Purchase		Goodwill		Intangible
Acquisition Date	Name	Price(a)		Acquired		Assets
December 31, 2007	Impulse	$	35.0	$	15.3	$	16.2
December 31, 2007	Storm		47.7		31.4		10.0
January 31, 2008	TSS		54.8		28.6		23.0
February 1, 2008	Judson		27.0		13.9		7.9
July 7, 2008	Webb		24.3		13.6		8.1
August 15, 2008	Filtronic		24.1		9.8		2.8
October 16, 2008	Cormon		20.9		11.9		8.3
December 19, 2008	Odom		7.0		4.5		2.3
December 24, 2008	Demo		5.3		4.0		1.0
		$	246.1	$	133.0	$	79.6

(a) includes transaction costs that were capitalized as part of the purchase price.

The following is a summary at the acquisition date of the estimated fair values of the assets acquired and liabilities assumed for the acquisitions made in 2010 and 2008 (in millions):

	2010		2008
Current assets, excluding cash acquired	$	18.4	$	61.6
Property, plant equipment		16.5		17.8
Goodwill		46.4		133.0
Intangible assets		19.5		79.6
Total assets acquired		100.8		292.0
Current liabilities, including short-term debt		18.8		34.1
Other long-term liabilities		25.0		11.8
Total liabilities assumed		43.8		45.9
Purchase price, net of cash acquired	$	57.0	$	246.1

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The following table summarizes the intangible assets acquired as part of the acquisitions made in 2010 and 2008 (dollars in millions):

	2010				2008
			Weighted				Weighted
			average				average
	Intangible		useful life in		Intangible		useful life in
	Assets		years		Assets		years
Intangibles assets not subject to amortization:
Goodwill	$	46.4		n/a	$	133.0		n/a
Trademarks	$	3.2		n/a	$	23.7		n/a
Intangibles assets subject to amortization:
Proprietary Technology	$	9.2		6.4	$	31.3		8.4
Customer List/Relationships		6.3		7.2		21.9		7.2
Trademarks		—		—		0.1		0.2
Backlog		0.8		0.8		2.6		0.7
	$	16.3		7.3	$	55.9		5.5

Goodwill resulting from the acquisitions made in fiscal 2010 and 2008 will be deductible for tax purposes, except for the Gavia, Storm and Demo acquisitions.

The following table summarizes the changes in the carrying value of goodwill (in millions):

							Aerospace
				Digital			and Defense			Engineered
	Instrumentation			Imaging			Electronics			Systems		Total
Balance at December 28, 2008	$	268.9		$	87.2		$	129.7		$	15.8	$	501.6
Current year acquisitions		1.0			—			—			—		1.0
Impact of foreign currency changes		1.6			—			0.2			—		1.8
Adjustment to prior year acquisitions(a)		(6.7	)		(1.6	)		5.4			—		(2.9	)
Balance at January 3, 2010		264.8			85.6			135.3			15.8		501.5
Current year acquisitions		8.1			4.3			27.0			7.0		46.4
Impact of foreign currency changes		(1.2	)		—			(0.3	)		—		(1.5	)
Adjustment to prior year acquisitions(b)		(0.1	)		—			—			—		(0.1	)
Balance at January 2, 2011	$	271.6		$	89.9		$	162.0		$	22.8	$	546.3

(a)	The adjustments to prior year acquisitions primarily related to final estimates of fair value for assets acquired and liabilities assumed in connection with business acquisitions completed prior to 2009.
(b)	The adjustments to prior year acquisitions primarily related to final estimates of fair value for assets acquired and liabilities assumed in connection with business acquisitions completed prior to 2010.

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The following table summarizes the carrying value of other acquired intangible assets (in millions):

	2010						2009
	Gross				Net		Gross				Net
	carrying		Accumulated		Carrying		carrying		Accumulated		Carrying
	amount		amortization		Amount		amount		amortization		Amount
Other acquired intangible assets:
Proprietary Technology	$	79.5	$	33.4	$	46.1	$	70.7	$	25.0	$	45.7
Customer List/Relationships		44.5		17.6		26.9		38.4		12.8		25.6
Patents		0.7		0.5		0.2		0.7		0.5		0.2
Non-compete agreements		1.0		0.9		0.1		1.0		0.7		0.3
Trademarks		3.2		1.0		2.2		3.3		0.8		2.5
Backlog		7.7		7.5		0.2		7.0		7.0		—
Other acquired intangible assets subject to amortization	$	136.6	$	60.9	$	75.7	$	121.1	$	46.8	$	74.3
Other acquired intangible assets not subject to amortization
Trademarks		38.2		—		38.2		35.3		—		35.3
Total other acquired intangible	$	174.8	$	60.9	$	113.9	$	156.4	$	46.8	$	109.6

Amortizable other intangible assets are amortized on a straight-line basis over their estimated useful lives ranging from one to 20 years. The Company recorded $14.1 million and $12.4 million in amortization expense in 2010 and 2009, respectively, for other acquired intangible assets. The expected future amortization expense for the next five years is as follows (in millions): 2011 — $14.3; 2012 — $12.8; 2013 — $11.4; 2014 — $11.2; 2015 — $9.8.

The estimated remaining useful lives by asset category as of January 2, 2011, are as follows:

	Weighted
	average
	remaining
	useful life
Intangibles subject to amortization	in years
Proprietary Technology		5.2
Customer List/Relationships		5.3
Patents		3.6
Non-compete agreements		1.0
Backlog		1.7
Trademarks		10.6
Total intangibles subject to amortization		5.3

Note 4.  Financial Instruments

The carrying amounts of cash and cash equivalents approximate fair value because of the short maturity of those instruments. Teledyne estimates the fair value of its long-term debt based on the quoted market prices for debt of similar rating and similar maturity and at comparable interest rates. The estimated fair value of Teledyne’s long-term debt at January 2, 2011, approximated the carrying value of $250.0 million. The estimated fair value of Teledyne’s long-term debt at January 3, 2010, approximated the carrying value of $240.0 million. The estimated fair value of Teledyne’s long-term debt at December 28, 2008, approximated the carrying value of $326.0 million.

The carrying value of other on-balance-sheet financial instruments approximates fair value, and the cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.

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Note 5.  Accounts Receivable

Accounts receivable are summarized as follows (in millions):

	Balance at year-end
	2010			2009
U.S. Government and prime contractors contract receivables:
Billed receivables	$	21.6		$	20.9
Unbilled receivables		33.1			42.8
Commercial and other receivables		203.0			167.3
		257.7			231.0
Reserve for doubtful accounts		(2.9	)		(2.3	)
Total accounts receivable, net	$	254.8		$	228.7

The billed contract receivables from the U.S. Government and prime contractors contain $17.6 million and $14.1 million at January 2, 2011 and January 3, 2010, respectively, due to long-term contracts. The unbilled contract receivables from the U.S. Government and prime contractors contain $26.4 million and $31.1 million at January 2, 2011 and January 3, 2010, respectively.

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

Note 6.  Inventories

Inventories consisted of the following (in millions):

	Balance at year-end
	2010			2009
Raw materials and supplies	$	90.6		$	77.3
Work in process		97.8			99.2
Finished goods		18.3			12.9
Total inventories at cost, net		206.7			189.4
LIFO reserve		(16.5	)		(15.7	)
Progress payments		(17.9	)		(8.9	)
Total inventories, net	$	172.3		$	164.8

Inventories at cost determined on the last-in, first-out method were $98.9 million at January 2, 2011, and $92.5 million at January 3, 2010. The remainder of the inventories using average cost or the first-in, first-out methods, were $107.8 million at January 2, 2011, and $96.9 million at January 3, 2010.

The Company recorded LIFO expense of $0.8 million in 2010, LIFO income of $2.2 million in 2009 and LIFO income of $.01 million in 2008.

Total inventories at current cost were net of reserves for excess, slow moving and obsolete inventory of $27.2 million and $26.5 million at January 2, 2011, and January 3, 2010, respectively.

Inventories, before progress payments, related to long-term contracts were $27.8 million and $20.8 million at January 2, 2011, and January 3, 2010, respectively. Progress payments related to long-term contracts were $1.0 million and $1.5 million at January 2, 2011 and January 3, 2010, respectively. Under the contractual arrangements by which progress payments are received, the customer has an ownership right in the inventories associated with specific contracts.

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Note 7.  Supplemental Balance Sheet Information

Property, plant and equipment were as follows (in millions):

Balance at year-end	2010			2009
Land	$	22.3		$	21.3
Buildings		122.0			100.2
Equipment and software		313.1			301.9
		457.4			423.4
Accumulated depreciation and amortization		(254.0	)		(235.5	)
Total property, plant and equipment, net	$	203.4		$	187.9

Other long-term assets included amounts related to deferred compensation of $31.9 million and $26.7 million at January 2, 2011 and January 3, 2010, respectively. Accrued liabilities included salaries and wages and other related compensation reserves of $87.2 million and $79.4 million at January 2, 2011 and January 3, 2010, respectively. Accrued liabilities also included customer related deposits and credits of $28.6 million and $30.6 million at January 2, 2011 and January 3, 2010, respectively. Accrued liabilities also included warranty reserves, commission accruals and professional fee accruals. Other long-term liabilities included deferred compensation liabilities of $31.9 million and $26.7 million at January 2, 2011 and January 3, 2010, respectively. Other long-term liabilities also included reserves for self-insurance, environmental liabilities and the long-term portion of compensation reserves.

Note 8.  Stockholders’ Equity

The following is an analysis of Teledyne’s common stock share activity:

Balance, December 30, 2007	35,150,117
Stock options exercised and other	776,107
Balance, December 28, 2008	35,926,224
Stock options exercised and other	152,253
Balance, January 3, 2010	36,078,477
Stock options exercised and other	284,895
Balance, January 2, 2011	36,363,372

Shares issued in all three fiscal years include stock options exercised as well as shares issued under certain compensation plans.

Preferred Stock

Authorized preferred stock may be issued with designations, powers and preferences designated by the Board of Directors. There were no shares of preferred stock issued or outstanding in 2010, 2009 or 2008.

Stock Incentive Plan

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

The valuation methodologies and assumptions in estimating the fair value of stock options granted in 2010 were similar to those used in estimating the fair value of stock options granted in 2009 and 2008. Stock option compensation expense is recorded on a straight line basis over the appropriate vesting period, generally three years.

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The Company recorded $4.7 million, $5.2 million, and $7.2 million for stock option expense, for 2010, 2009 and 2008, respectively. The Company issues shares of common stock upon the exercise of stock options.

The Company used a combination of its historical stock price volatility and the volatility of exchange traded options on the Company stock to compute the expected volatility for purposes of valuing stock options issued. The period used for the historical stock price corresponded to the expected term of the options and was between five and six years. The period used for the exchange traded options extended to the longest-dated options publicly available, generally six to nine months. The expected dividend yield is based on Teledyne’s practice of not paying dividends. The risk-free rate of return is based on the yield of U.S. Treasury Strips with terms equal to the expected life of the option as of the grant date. The expected life in years is based on historical actual stock option exercise experience. The following assumptions were used in the valuation of stock options granted in 2010, 2009 and 2008:

For the year	2010			2009			2008
Expected dividend yield		—			—			—
Expected volatility		35.3	%		38.8	%		34.7	%
Risk-free interest rate		2.4	%		2.1	%		3.3	%
Expected lives		6.0			5.6			5.6

Based on the assumptions in the table above, the grant date fair value of stock options granted in 2010, 2009 and 2008 was $16.44, $10.02 and $19.35, respectively.

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

	2010					2009					2008
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Beginning balance		2,249,050		$	30.40		2,339,970		$	30.39		2,702,157		$	24.71
Granted		433,094		$	42.09		—		$	—		356,298		$	50.81
Exercised		(179,747	)	$	20.34		(76,517	)	$	12.83		(693,197	)	$	18.66
Canceled or expired		(43,601	)	$	37.72		(14,403	)	$	28.04		(25,288	)	$	31.91
Ending balance		2,458,796		$	33.07		2,249,050		$	30.40		2,339,970		$	30.39
Options exercisable at year-end		1,939,785		$	30.19		1,879,554		$	27.29		1,513,815		$	23.39

The following table provides certain information with respect to stock options outstanding and stock options exercisable at January 2, 2011 under the employee stock option plans:

	Stock Options Outstanding						Stock Options Exercisable
			Weighted						Weighted
			Average						Average
			Exercise		Remaining				Exercise
Range of Exercise Prices	Shares		Price		Life		Shares		Price
$13.45-$20.00		621,210	$	16.66		1.9		621,210	$	16.66
$20.01-$30.00		300,858	$	26.99		4.2		300,858	$	26.99
$30.01-$40.00		796,421	$	36.23		5.7		796,089	$	36.23
$40.01-$50.00		418,493	$	42.11		9.1		2,000	$	45.41
$50.01-$59.05		321,814	$	50.85		7.1		219,628	$	50.85
		2,458,796	$	33.07		5.3		1,939,785	$	30.19

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Non-Employee Director Stock Compensation Plan

Teledyne also sponsors a stock plan for non-employee directors pursuant to which non-employee directors receive annual stock options and may receive stock or stock options in lieu of their respective retainer and meeting fees. The options become exercisable one year after issuance and have a maximum 10 year life.

Stock option transactions for Teledyne’s non-employee director stock option plan are summarized as follows:

	2010					2009					2008
				Weighted					Weighted				Weighted
				Average					Average				Average
				Exercise					Exercise				Exercise
	Shares			Price		Shares			Price		Shares		Price
Beginning balance		418,817		$	26.66		392,002		$	25.53		348,266	$	22.44
Granted		41,364		$	39.53		42,483		$	30.66		43,736	$	50.15
Exercised		(17,356	)	$	14.55		(15,668	)	$	9.26		—	$	—
Canceled or expired		(2,000	)	$	14.75		—		$	—		—	$	—
Ending balance		440,825		$	28.23		418,817		$	26.66		392,002	$	25.53
Options exercisable at year-end		399,461		$	27.06		378,974		$	26.24		348,266	$	22.44

The following table provides certain information with respect to stock options outstanding and stock options exercisable at January 2, 2011 under the non-employee director stock option plan:

	Stock Options Outstanding						Stock Options Exercisable
			Weighted						Weighted
			Average						Average
			Exercise		Remaining				Exercise
Range of Exercise Prices	Shares		Price		Life		Shares		Price
$8.37-$10.00		19,108	$	9.21		1.9		19,108	$	9.21
$10.01-$20.00		156,363	$	15.29		2.4		156,363	$	15.29
$20.01-$30.00		81,102	$	26.19		5.8		71,738	$	26.14
$30.01-$40.00		78,252	$	34.40		7.0		78,252	$	34.40
$40.01-$50.00		70,000	$	44.66		7.7		38,000	$	45.79
$50.01-$53.76		36,000	$	53.76		7.4		36,000	$	53.76
		440,825	$	28.23		5.1		399,461	$	27.06

The total pretax intrinsic value of options exercised during 2010 and 2009 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $4.3 million and $1.9 million, respectively. At January 2, 2011, the intrinsic value of stock options outstanding was $33.7 million and the intrinsic value of stock options exercisable was $33.5 million. During 2010 and 2009, the amount of cash received from the exercise of stock options was $3.9 million and $1.1 million, respectively.

At January 2, 2011, there was $4.8 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 1.4 years.

Performance Share Plan

Teledyne’s Performance Share Plan (“PSP”) provides grants of performance share units, which key officers and executives may earn if Teledyne meets specified performance objectives over a three-year period. Awards are payable in cash and shares of Teledyne common stock. Awards are generally paid to the participants in three annual installments after the end of the performance cycle so long as they remain employed by Teledyne (with exceptions for retirement, disability and death).

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In January 2006, the performance cycle for the three-year period ending December 28, 2008 was set. Based on the performance over the three-year period, 53,834 shares were issued in 2009, 44,751 shares were issued in February 2010 and 47,589 shares were issued in February 2011.

In January 2009, the performance cycle for the three-year period ending January 1, 2012 was set. Based on the estimated performance over the three-year period, an aggregate of 104,810 shares are expected to be issued in three equal installments during 2012, 2013 and 2014.

The calculated expense for each plan year was based on the expected cash payout and the expected shares to be issued, valued at the share price at the inception of the performance cycle, except for the shares that can be issued based on a market comparison. The expected expense for these shares was calculated using a Monte-Carlo type simulation which takes into consideration several factors including volatility, risk free interest rates and correlation of Teledyne’s stock price with the comparator, the Russell 2000 Index. No adjustment to the calculated expense for the shares issued based on a market based comparison will be made regardless of the actual performance. The Company recorded $2.6 million, $2.6 million and $3.9 million in compensation expense related to the PSP program for fiscal years 2010, 2009 and 2008, respectively. At January 2, 2011 based on estimated performance over the three year period, there was $2.6 million in unrecognized compensation cost related to the PSP program.

Restricted Stock Award Program

Under Teledyne’s restricted stock award program selected officers and key executives receive a grant of stock equal to 30% of the participant’s annual base salary at the date of grant. The Restricted Stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”. The restrictions have both time-based and performance-based components. The restricted period expires (and the restrictions lapse) on the third anniversary of the date of grant, subject to the achievement of stated performance objectives over a specified three-year performance period. If employment is terminated (other than via death, retirement or disability) during the restricted period, stock is forfeited. Under the 2007 to 2009 and 2008 to 2010 and 2009 to 2011 performance periods an aggregate of 109,002 shares of restricted stock were issued and outstanding at year-end 2010.

The following table summarizes Teledyne’s restricted stock activity:

				Weighted
				average
				fair value
	Shares			per share
Balance, December 30, 2007		112,305		$	25.76
Granted		27,913		$	37.89
Issued		(39,270	)	$	28.54
Balance, December 28, 2008		100,948		$	28.04
Granted		39,204		$	30.97
Issued		(37,100	)	$	21.24
Forfeited/Canceled		(1,712	)	$	21.24
Balance, January 3, 2010		101,340		$	31.77
Granted		41,885		$	29.62
Issued		(31,307	)	$	27.71
Forfeited/Canceled		(2,916	)	$	27.71
Balance, January 2, 2011		109,002		$	32.22

The calculated expense for each plan year is based on a Monte-Carlo type simulation which takes into consideration several factors including volatility, risk free interest rates and the correlation of Teledyne’s stock price with the comparator, the Russell 2000 Index. No adjustment to the calculated expense will be made

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regardless of actual performance. The Company recorded $1.2 million, $1.1 million and $0.9 million in compensation expense related to the restricted stock award program for fiscal years 2010, 2009 and 2008, respectively. At January 2, 2011, there was $1.2 million of total unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of 1.3 years.

Note 9.  Related Party Transactions

The Company’s Chairman, President and Chief Executive Officer is a director of The Bank of New York Mellon Corporation, as is one of our other directors. On February 8, 2011, our Chairman notified The Bank of New York Mellon Corporation that he plans to retire as a director on April 12, 2011. The Bank of New York Mellon Corporation is the successor to Mellon Financial Corporation following its merger with The Bank of New York in 2007. Another of the Company’s directors was a former chief executive officer and director of Mellon Financial Corporation. The Bank of New York Mellon Corporation is one of 13 lenders under the Company’s prior $590.0 million credit facility, having committed up to $90.0 million under the facility. The Bank of New York Mellon Corporation is one of 12 lenders under our new $550.0 million credit facility, having committed up to $45.0 million under the facility. The Bank of New York Mellon Corporation also provides cash management services, serves as trustee for the Teledyne Technologies Incorporated Pension Plan and, through its subsidiaries and affiliates, provides asset management and transition management services for the Pension Plan. Mellon Investor Services LLC, dba BNY Mellon Shareowner Services, serves as our transfer agent and registrar, as well as handles administration of our stock options. We engaged BNY Mellon Shareowner Services to help us solicit proxies in connection with our annual meetings. Until its expiration in November 2009, BNY Mellon Shareowner Services was the rights agent under our Shareholder Rights Plan.

Note 10.  Long-Term Debt

At January 2, 2011, Teledyne had $250.0 million in long-term debt outstanding. At January 3, 2010, Teledyne had $240.0 million in long-term debt outstanding.

On September 15, 2010 the Company issued $250.0 million in aggregate principal amount of private placement Senior Notes at par. The notes consist of $75.0 million of 4.04% Senior Notes due September 15, 2015, $100.0 million of 4.74% Senior Notes due September 15, 2017 and $75.0 million of 5.30% Senior Notes due September 15, 2020. The interest rates for the notes were determined on April 14, 2010. The Company used the proceeds of the private placement Senior Notes to pay down amounts outstanding under the Company’s then existing $590.0 million credit facility.

In February 2008, Teledyne Technologies entered into a First Amendment to its $400.0 million Amended and Restated Credit Agreement dated as of July 14, 2006. The amended and restated credit facility had lender commitments totaling $590.0 million and was set to expire on July 14, 2011. Available capacity under the $590.0 million credit facility was $589.3 million at January 2, 2011 which can be utilized, as needed, for daily operating and periodic cash needs, including acquisitions. Borrowings under the credit facility are at variable rates which are at our option tied to a eurodollar base rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as defined in our credit agreement. LIBOR based loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate. Interest rates are also subject to change based on our debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio. Borrowings under the credit facility bear interest, at our option, at a rate based on either a defined base rate or the LIBOR, plus applicable margins. The credit agreement also provides for facility fees that vary between 0.10% and 0.25% of the credit line, depending on our consolidated leverage ratio as calculated from time to time. The credit agreement requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits on acquired debt. At January 3, 2010, the Company was in compliance with these covenants. We also have a $5.0 million uncommitted credit line which permits credit extensions up to $5.0 million plus an incremental $6.5 million solely for standby letters of credit. There were no outstanding funding advances

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under the uncommitted credit line at January 2, 2011. Total debt at year-end 2010 includes $250.0 million in Senior Notes and no debt outstanding under the $590.0 million credit facility. The Company also has $17.3 million outstanding under capital leases, of which $2.0 million is current. At year-end 2010, Teledyne had $12.2 million in outstanding letters of credit.

On February 25, 2011, we refinanced the $590.0 million credit facility by terminating the facility and entering into a new facility that has lender commitments totaling $550.0 million. The new facility has a termination date of February 25, 2016. As of February 25, 2011 we had $273.0 million outstanding on the new facility. The new facility requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios. Excluding interest and fees, no payments are due under the $550.0 million facility until it matures. Borrowings under our credit facility are at variable rates which are, at our option, tied to a Eurocurrency rate equal to LIBOR (London Interbank Offered Rate) plus an applicable rate or a base rate as defined in our credit agreement. Eurocurrency rate loans may be denominated in U.S. dollars or an alternative currency as defined in the agreement. Eurocurrency or LIBOR based loans under the facility typically have terms of one, two, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Base rate loans have interest rates that primarily fluctuate with changes in the prime rate. Interest rates are also subject to change based on our consolidated leverage ratio as defined in the credit agreement. The credit agreement also provides for facility fees that vary between 0.20% and 0.45% of the credit line, depending on our consolidated leverage ratio as calculated from time to time.

In the first and second quarters of 2010, Teledyne entered into cash flow hedges of forecasted interest payments associated with the then anticipated issuance of fixed rate debt. The objective of these cash flow hedges was to protect against the risk of changes in the interest payments attributable to changes in the designated benchmark, which is the LIBOR interest rate leading up to the fixed rate on the anticipated issuance of fixed rate debt being locked. The notional amount of the debt hedged was $150.0 million. In the second quarter, concurrent with the interest rates being determined on the fixed rate debt, Teledyne terminated the cash flow hedges for a total payment of $0.6 million. Since the cash flow hedges were considered effective, changes in the fair value of the hedge contract as of the termination date were deferred in accumulated other comprehensive loss. Amounts deferred in accumulated other comprehensive loss will be reclassified to interest expense over the same period of time that interest expense is recognized on the borrowings beginning September 15, 2010. As of January 2, 2011, the remaining unamortized loss of $0.6 million was included in accumulated other comprehensive loss in the stockholders’ equity section of the balance sheet.

Total interest expense including credit facility fees and other bank charges was $6.9 million in 2010, $5.1 million in 2009 and $11.7 million in 2008.

At January 2, 2011 and January 3, 2010, long-term debt consisted of the following (in millions):

	2010		2009
4.04% Senior Notes due September 2015	$	75.0	$	—
4.74% Senior Notes due September 2017		100.0		—
5.30% Senior Notes due September 2020		75.0		—
$590.0 million revolving credit facility, weighted average rate of 0.9% at January 3, 2010		—		240.0
Total long-term debt	$	250.0	$	240.0

No minimum principal payments on long-term debt are required until September 2015.

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Note 11.  Income Taxes

Provision (benefit) for income taxes was as follows (in millions):

	2010			2009		2008
Current
Federal	$	36.8		$	20.5	$	34.9
State		(1.8	)		6.6		7.7
Foreign		(1.4	)		3.5		4.2
Total current		33.6			30.6		46.8
Deferred
Federal		16.1			16.2		18.6
State		3.9			3.2		3.7
Total deferrred		20.0			19.4		22.3
Provision for income taxes	$	53.6		$	50.0	$	69.1

Income before income taxes included income from domestic operations of $168.1 million for 2010, $148.6 million for 2009 and $167.5 million for 2008. In 2010, 2009 and 2008, Teledyne recognized previously unrecognized tax benefits of $1.3 million, $1.2 million and $0.8 million, respectively. These were recognized due to the expiration of applicable statutes of limitations. The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate:

	2010			2009			2008
U.S. federal statutory tax rate		35.0	%		35.0	%		35.0	%
State and local taxes, net of federal benefit		3.8			4.2			4.2
Reseach and development tax credits		(6.7	)		(9.1	)		(1.2	)
Qualified production activity deduction		(1.8	)		(0.6	)		(1.2	)
Other		0.6			0.5			—
Effective income tax rate		30.9	%		30.0	%		36.8	%

Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse. A valuation allowance of $0.3 million, $0.4 million and $0.6 million existed against deferred tax assets for 2010, 2009 and 2008, respectively.

Teledyne had net deferred tax assets of $22.2 million at the end of 2010 and $43.8 million at the end of 2009. The amount of future taxable income required to realize the deferred tax assets was $58.0 million and $111.9 million, respectively.

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

	2010		2009
Deferred income tax assets:
Current
Reserves	$	11.0	$	11.4
Inventory valuation		8.8		6.2
Accrued vacation		10.2		9.2
Deferred compensation and other benefits plans		0.9		1.1
Intangible amortization		0.9		0.1
Long-term
Postretirement benefits other than pensions		7.2		7.0
Reserves		8.9		4.6
Deferred compensaton and other benefit plans		29.5		44.4
Other items		1.5		2.9
Total deferred income tax assets		78.9		86.9
Deferred income tax liabilities:
Current
Other items		3.4		1.8
Long-term
Property, plant and equipment differences		16.3		9.7
Intangible amortization		34.0		29.4
Other items		3.0		2.2
Total deferred income tax liabilities		56.7		43.1
Net deferred income tax assets	$	22.2	$	43.8

Additional paid in capital was credited $1.7 million in 2010, $0.8 million in 2009 and $10.3 million in 2008 for the tax benefit resulting from the exercise of stock options.

The following presents a rollforward of our unrecognized tax benefits (in millions):

	2010						2009
	Unrecognized						Unrecognized
	Tax Benefits			Interest			Tax Benefits			Interest
Beginning of year	$	25.2		$	1.0		$	36.8		$	0.8
Increase (decrease) in prior year tax positions		(3.5	)		0.7			(3.2	)		0.4
Increase for tax positions taken during the current period		0.6			—			5.0			—
Reduction related to settlements with taxing authorities		(9.2	)		(0.4	)		(12.3	)		—
Reduction related to lapse of the statue of limitations		(3.0	)		(0.5	)		(1.1	)		(0.2	)
End of year	$	10.1		$	0.8		$	25.2		$	1.0

We recognized interest related to unrecognized tax benefits of $0.9 million and $0.9 million within the provision for income taxes in our statements of operations for fiscal year 2010 and 2009, respectively. Interest in the amount of $0.8 million was recognized in the 2010 statement of financial position. As of January 2, 2011, we estimated that the entire balance of unrecognized tax benefits, if resolved in our favor, would

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positively impact the effective tax rate and, therefore, be recognized as additional tax benefits in our income statement.

We file income tax returns in the United States federal jurisdiction and in various states and foreign jurisdictions. The Company has substantially concluded on all U.S. federal and California income tax matters for all years through 2006. Substantially all other material state and local and foreign income tax matters have been concluded for years through 2005.

The Company anticipates the total unrecognized tax benefit for various federal and state tax items may be reduced by $2.4 million due to the expiration of statutes of limitation for various federal and state tax issues in the next 12 months.

Note 12.  Pension Plans and Postretirement Benefits

Pension Plans

Prior to the spin-off, certain Teledyne’s employees participated in the defined benefit plan sponsored by ATI. Benefits under the defined benefit plan are generally based on years of service and/or final average pay. ATI funded the pension plan in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code.

As of the spin-off date, Teledyne assumed the existing defined benefit plan obligations for all of Teledyne’s employees, both active and inactive, at its companies that perform government contract work and for Teledyne’s active employees at its companies that do not perform government contract work. As of January 1, 2004, non-union new hires participate in an enhanced defined contribution plan as opposed to the Company’s existing defined benefit plan. The plan was closed to all union new hires as of February 2007.

In connection with the acquisition of Intelek, the Company assumed responsibility for a defined benefit pension plan based in the United Kingdom covering certain employees of Intelek. The plan was closed to new members in January 2000 and ceased further service accruals to members in September 2002. In 2010, the Company recorded $0.1 million in expense related to the plan.

Teledyne’s pension expense was $4.8 million in 2010 of which $9.6 million was recoverable in accordance with U.S. Government Cost Accounting Standards (“CAS”) from certain government contracts compared with pension expense of $21.4 million in 2009 of which $12.4 million was recoverable in accordance with CAS and pension expense of $9.0 million in 2008 of which $9.8 million was recoverable in accordance with CAS. These amounts do not include pension expense of $0.4 million in 2010, $1.1 million in 2009 and $0.6 million in 2008 now included as part of discontinued operations. Teledyne made pretax contributions to its pension plans of $37.0 million in 2010 and $117.0 million in 2009, prior to any recovery from the U.S. Government. The Company anticipates making total pretax contributions, before any recovery from the U.S. Government, of approximately $37.0 million to its pension plan in 2011 and expects to make an additional cash contribution of $32.0 million provided the sale of the former Aerospace Engines and Components segment is completed.

The Company’s contribution associated with 401(k) plans were $7.4 million, $7.4 million and $7.5 million, for 2010, 2009 and 2008, respectively.

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The following table sets forth the components of net period pension benefit expense for Teledyne’s defined benefit pension plans for 2010, 2009 and 2008 (in millions):

	Pension Benefits									Pension Benefits -
	-Domestic Plans									Foreign Plans
	2010			2009			2008			2010
Service cost — benefits earned during the period	$	13.7		$	14.8		$	17.1		$	—
Interest cost on benefit obligation		40.6			40.1			38.4			0.7
Expected return on plan assets		(57.2	)		(48.6	)		(49.7	)		(0.6	)
Amortization of prior service cost		0.4			0.4			0.7			—
Recognized actuarial loss		7.7			15.8			3.1			—
Net periodic benefit expense	$	5.2		$	22.5		$	9.6		$	0.1
Less: expense attributable to discontinued operations		0.4			1.1			0.6			—
Net periodic benefit expense — continuing operations	$	4.8		$	21.4		$	9.0		$	0.1

The following table sets forth the reconciliation of the beginning and ending balances of the benefit obligation of the defined benefit pension plans (in millions):

	Pension Benefits -						Pension Benefits -
	Domestic Plans						Foreign Plans
	2010			2009			2010
Changes in benefit obligation:
Benefit obligation — beginning of year	$	669.3		$	667.8		$	—
Service cost — benefits earned during the year		13.7			14.8			—
Interest cost on projected benefit obligation		40.6			40.1			0.7
Actuarial (gain) loss		35.1			(19.7	)		0.9
Benefits paid		(35.8	)		(33.7	)		(0.8	)
Other — foreign currency		—			—			0.1
Business Combination		—			—			30.2
Benefit obligation — end of year	$	722.9		$	669.3		$	31.1
Accumulated benefit obligation — end of year	$	678.1		$	633.2		$	31.1

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

The following table presents the estimated future benefit payments for the Company’s pension and plans (in millions):

	Domestic		Foreign
	Plans		Plan
2011	$	37.1	$	1.8
2012		39.9		1.9
2013		42.1		2.0
2014		44.3		1.9
2015		46.4		1.8
2016-2020		265.8		9.7
Total	$	475.6	$	19.1

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The following tables set forth the reconciliation of the beginning and ending balances of the fair value of plan assets for Teledyne’s defined benefit pension plans and the percentage of year-end market value by asset class (in millions):

	Domestic Plans						Foreign Plan
	2010			2009			2010
Changes in plan assets:
Fair value of plan assets — beginning of year	$	584.5		$	436.0		$	—
Business combination		—			—			20.5
Actual return on plan assets		70.8			64.0			2.0
Employer contribution — defined benefit plan		37.0			117.0			8.1
Employer contribution — other benefit plan		1.1			1.2			—
Foreign currency changes		—			—			(0.1	)
Benefits paid		(35.8	)		(33.7	)		(0.8	)
Fair value of net plan assets — end of year	$	657.6		$	584.5		$	29.7

							Foreign Plan
	Domestic Plans						Plan Assets % to
	Plan Assets % to Total						Total
	2010			2009			2010
Equity instruments		67	%		54	%		59	%
Fixed income instruments		30	%		46	%		41	%
Other		3	%		—			—
Total		100	%		100	%		100	%

The Company has an active management policy for a portion of its pension assets for the domestic pension plans. The investment policy includes a target allocation percentage of 70% in equity instruments and 30% in domestic fixed income instruments. The balance in equity instruments can range from 45% to 75% before rebalancing is required under the Company’s policy. The investment policy for the foreign plan is set by the Company along with the trustees of the foreign plan. The current long-term asset allocation target of the foreign plan is 60% equity instruments and 40% fixed income instruments and alternative investments.

The plan’s investments are stated at fair value. A total of $352.8 million in plan investments for the domestic pension plan are considered a level 1 fair value hierarchy and are valued at quoted market prices in active markets. A total of $303.3 million in plan investments for the domestic pension plan are considered a level 2 fair value hierarchy and are valued based on observable market data. The plan has no investments that would be considered a level 3 fair value hierarchy.

A total of $28.9 million in plan investments for the foreign pension plan are considered a level 1 fair value hierarchy and are valued at quoted market prices in active markets. A total of $0.8 million in plan investments for the foreign pension plan are considered a level 2 fair value hierarchy and are valued based on observable market data. The plan has no investments that would be considered a level 3 fair value hierarchy.

The expected long-term rate of return on plan assets is reviewed annually, taking into consideration the Company’s asset allocation, historical returns on the types of assets held, and the current economic environment. We determined the discount rate based on a model which matches the timing and amount of expected benefit payments to maturities of quality bonds priced as of the pension plan measurement date. For some years, there were no bonds maturing. In these instances, we chose to estimate the missing bond by using bonds that have similar features as the prior year’s bond. The yields on the bonds are used to derive a discount rate for the liability.

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The following assumptions were used to determine the benefit obligation and the net benefit cost:

	Domestic Plans									Foreign Plan
For the year	2010			2009			2008			2010
Weighted average discount rate		6.25	%		6.25	%		6.00	%		5.60	%
Weighted average increase in future compensation levels		4.07	%		3.50	%		3.66	%		n/a
Expected weighted-average long-term rate of return		8.25	%		8.25	%		8.50	%		6.40	%

For its domestic pension plans the Company is projecting a long-term rate of return on plan assets of 8.25% in 2011. The discount rate used in determining the benefit obligations is expected to be 5.9% in 2011 and the expected weighted average increase in future compensation levels is 4.14%. For its foreign pension plan the Company is projecting a long-term rate of return on plan assets of 6.6% in 2011. The discount rate used in determining the benefit obligations is expected to be 5.4% in 2011.

The following table sets forth the funded status and amounts recognized in Teledyne’s consolidated balance sheets for its pension plans at year end 2010 and 2009 (in millions):

	Domestic Plans -						Foreign Plan -
	Pension Benefits						Pension Benefits
	2010			2009			2010
Funded status	$	(65.3	)	$	(84.8	)	$	(1.3	)
Unrecognized prior service cost		1.4			1.8			—
Unrecognized net (gain) loss		275.6			261.8			(0.6	)
Prepaid (accrued) benefit cost	$	211.7		$	178.8		$	(1.9	)
Accrued pension obligation (long-term)	$	(60.7	)	$	(79.8	)	$	(1.4	)
Accrued pension obligation (short-term)		(1.5	)		(2.0	)		(0.1	)
Accumulated other comprehensive income		277.0			263.6			(0.4	)
Other liabilities		(3.1	)		(3.0	)		—
Net amount recognized	$	211.7		$	178.8		$	(1.9	)

At year-end 2010 the Company had a $162.8 million non-cash reduction to stockholders’ equity and a long-term additional liability of $268.2 million related to the pension and postretirement plans. At year-end 2009, the Company had a $153.3 million non-cash reduction to stockholders’ equity and a long-term additional liability of $252.3 million related to the pension and postretirement plans. The adjustments to equity did not affect net income and are recorded net of deferred taxes.

At January 2, 2011, the amounts in the minimum liability adjustment that have not yet been recognized as components of net periodic benefit cost for the pension plans are: net loss $275.1 million and net prior service cost $1.4 million.

At January 2, 2011, the estimated amounts of the minimum liability adjustment that are expected to be recognized as components of net periodic benefit cost during 2011 for the pension plans are: net loss $15.4 million and net prior service cost $0.3 million.

Postretirement Plans

The Company sponsors several postretirement defined benefit plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for certain eligible retirees.

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The following table sets forth the components of net period postretirement benefit income/expense for Teledyne’s postretirement benefit plans for 2010, 2009 and 2008 (in millions):

	Postretirement Benefits
	2010			2009			2008
Service cost — benefits earned during the period	$	—		$	0.1		$	0.1
Interest cost on benefit obligation		1.1			1.1			1.4
Amortization of prior service cost		(0.5	)		(0.5	)		(0.5	)
Recognized actuarial gain		(1.1	)		(1.3	)		(0.8	)
Net periodic benefit (income) expense		(0.5	)		(0.6	)		0.2
Less: expense attributable to discontinued operations		(0.5	)		(0.6	)		(0.7	)
Net periodic benefit income — continuing operations	$	—		$	—		$	0.9

The following table sets forth the reconciliation of the beginning and ending balances of the benefit obligation of the postretirement benefit plans (in millions):

	Postretirement Benefits
	2010			2009
Changes in benefit obligation:
Benefit obligation — beginning of year	$	17.6		$	18.9
Service cost — benefits earned during the year		—			0.1
Interest cost on projected benefit obligation		1.1			1.1
Actuarial (gain) loss		1.4			(0.9	)
Benefits paid		(1.7	)		(1.6	)
Benefit obligation — end of year	$	18.4		$	17.6

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

The following table presents the estimated future benefit payments for the Company’s postretirement plans (in millions):

	Postretirement
	Benefit Plan
2011	$	1.8
2012		1.8
2013		1.8
2014		1.7
2015		1.7
2016-2020		7.6
Total	$	16.4

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The following table sets forth the funded status and amounts recognized in Teledyne’s consolidated balance sheets for the postretirement plans at year end 2010 and 2009 (in millions):

	Postretirement
	Benefits
	2010			2009
Funded status	$	(18.4	)	$	(17.6	)
Unrecognized prior service cost		(1.8	)		(2.3	)
Unrecognized net gain		(6.5	)		(9.0	)
Accrued benefit cost	$	(26.7	)	$	(28.9	)
Accrued postretirement benefits (long-term)	$	(16.5	)	$	(15.7	)
Accrued postretirement benefits (short-term)		(1.9	)		(1.9	)
Accumulated other comprehensive income		(8.3	)		(11.3	)
Net amount recognized	$	(26.7	)	$	(28.9	)

At January 2, 2011, the amounts in the minimum liability adjustment that have not yet been recognized as components of net periodic benefit income for the retiree medical plans are: net gain $6.5 million and net prior service cost $1.8 million. At January 2, 2011, the estimated amounts in the minimum liability expected to be recognized as components of net periodic benefit income during 2011 for the retiree medical plans are: net gain $0.9 million and net prior service cost $0.5 million.

The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for health care plans is 8.0% in 2011 and was assumed to decrease to 5.0% by the year 2016 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point increase in the assumed health care cost trend rates would result in an increase in the annual service and interest costs by less than $0.1 million for 2010 and would result in an increase in the postretirement benefit obligation by $1.0 million at January 2, 2011. A one percentage point decrease in the assumed health care cost trend rates would result in a decrease in the annual service and interest costs by less than $0.1 million for 2010 and would result in a decrease in the postretirement benefit obligation by $0.9 million at January 2, 2011.

Note 13.  Business Segments

Teledyne is a leading provider of sophisticated electronic components and subsystems, instrumentation, digital imaging and communications products, engineered systems and information technology services, as well as energy generation, energy storage and small propulsion products. Our customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies, and airline companies.

In 2010, we realigned and changed the reporting structure of some of our reportable business units. Our former Electronics and Communications segment is now reporting as three segments: Instrumentation; Digital Imaging; and Aerospace and Defense Electronics. The businesses that comprised the Energy and Power Systems segment are now reported as part of the Aerospace and Defense Electronics and the Engineered Systems segments. The battery products business, with revenues of $15.5 million in 2010, is now part of the Aerospace and Defense Electronics segment, and the energy systems and the turbine engine businesses, with combined revenues of $53.9 million in 2010, are now part of the Engineered Systems segment. We have restated our previously reported segment data to reflect this realignment and structure and the expected sale of the former Aerospace Engines and Components segment, now classified as a discontinued operation.

The Company has four reportable segments: Instrumentation; Digital Imaging; Aerospace and Defense Electronics; and Engineered Systems. The Company manages, evaluates and aggregates its operating segments for segment reporting purposes primarily on the basis of product and service type, production process, distribution methods, type of customer, management organization, sales growth potential and long-term

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profitability. The Instrumentation segment provides monitoring and control instruments for marine, environmental, scientific, industrial and defense applications and harsh environmental interconnect products. The Digital Imaging segment includes our sponsored and centralized research laboratories benefiting government programs and businesses, as well as major development efforts for innovative digital imaging products for government and space applications. The Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, data acquisition and communications equipment for air transport and business aircraft and components and subsystems for wireless and satellite communications, as well as general aviation batteries. The Engineered Systems segment provides innovative systems engineering and integration, advanced technology application, software development and manufacturing solutions to space, military, environmental, energy, chemical, biological and nuclear systems and missile defense requirements. The Engineered Systems segment also designs and manufactures hydrogen generators, thermoelectric and fuel-cell based power sources and small turbine engines.

Segment operating profit includes other income and expense directly related to the segment, but excludes minority interest, interest income and expense, gains and losses on the disposition of assets, sublease rental income and non-revenue licensing and royalty income, domestic and foreign income taxes and corporate office expenses.

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

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

	2010		2009		2008
Sales
Instrumentation	$	573.2	$	538.4	$	549.2
Digital Imaging		122.5		127.3		137.4
Aerospace and Defense Electronics		614.7		579.2		604.1
Engineered Systems		333.8		407.2		431.3
Total sales	$	1,644.2	$	1,652.1	$	1,722.0

	2010			2009			2008
Income before taxes
Instrumentation	$	113.9		$	95.5		$	102.9
Digital Imaging		5.2			11.8			14.6
Aerospace and Defense Electronics		57.8			60.1			68.7
Engineered Systems		30.4			31.3			42.0
Segment operating profit and other segment income		207.3			198.7			228.2
Corporate expense		(28.8	)		(27.3	)		(29.6	)
Interest and debt expense, net		(6.5	)		(4.8	)		(10.9	)
Other income (expense), net		1.6			(0.2	)		0.3
Income before taxes	$	173.6		$	166.4		$	188.0

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	2010		2009		2008
Depreciation and amortization
Instrumentation	$	16.6	$	16.0	$	16.8
Digital Imaging and Instrumentation		9.3		9.6		10.0
Aerospace and Defense Electronics		16.0		14.0		15.5
Engineered Systems		3.1		2.7		2.6
Corporate		0.2		0.2		0.1
Total depreciation and amortization	$	45.2	$	42.5	$	45.0

	2010		2009		2008
Capital expenditures
Instrumentation	$	6.4	$	16.1	$	12.5
Digital Imaging		11.3		5.7		7.1
Aerospace and Defense Electronics		9.7		8.4		14.5
Engineered Systems		3.6		3.3		4.0
Corporate		—		—		0.1
Total capital expenditures	$	31.0	$	33.5	$	38.2

	2010		2009		2008
Identifiable assets
Instrumentation	$	575.0	$	541.5	$	563.6
Digital Imaging		192.0		179.8		187.9
Aerospace and Defense Electronics		460.7		415.2		439.8
Engineered Systems		106.9		92.8		114.8
Corporate		148.1		102.1		141.9
Discontinued operations		75.1		90.1		86.5
Total identifiable assets	$	1,557.8	$	1,421.5	$	1,534.5

Information on the Company’s sales to the U.S. Government, including direct sales as a prime contractor and indirect sales as a subcontractor, were as follows (in millions):

	2010		2009		2008
Instrumentation	$	35.6	$	36.4	$	24.5
Digital Imaging		93.3		96.6		90.0
Aerospace and Defense Electronics		302.4		287.0		271.5
Engineered Systems		296.1		357.8		368.5
Total U.S. Government sales	$	727.4	$	777.8	$	754.5

Product Lines

This Instrumentation segment includes two product lines: Environmental Instrumentation; and Marine Instrumentation. The Digital Imaging segment contains one product line as does the Aerospace and Defense Electronics segment. This Engineered Systems segment includes three product lines: Engineered Products and Services; Turbine Engines; and Energy Systems.

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

Instrumentation	2010		2009		2008
Environmental Instrumentation	$	219.8	$	203.3	$	228.3
Marine Instrumentation		353.4		335.1		320.9
Total	$	573.2	$	538.4	$	549.2

Engineered Systems	2010		2009		2008
Engineered Products and Services	$	279.9	$	346.9	$	361.2
Turbine Engines		17.0		28.5		31.8
Energy Systems		36.9		31.8		38.3
Total	$	333.8	$	407.2	$	431.3

Sales to the U.S. Government included sales to the Department of Defense of $555.0 million in 2010, $590.5 million in 2009, and $557.1 million in 2008. Total sales to international customers were $470.8 million in 2010, $427.7 million in 2009, and $418.8 million in 2008. Of these amounts, sales by operations in the United States to customers in other countries were $397.7 million in 2010, $394.6 million in 2009, and $329.4 million in 2008. There were no sales to individual countries outside of the United States in excess of 10 percent of the Company’s sales. More than 95 percent of our total sales were made by our operations located in the United States. Sales between business segments, which were not material, generally were priced at prevailing market prices.

Note 14.  Lease Commitments

The Company leases buildings and equipment under capital and operating leases. The present value of the minimum capital lease payments, net of the current portion, totaled $15.3 million at January 2, 2011. Operating lease agreements, which include leases for manufacturing facilities and office space frequently include renewal options and require the Company to pay for utilities, taxes, insurance and maintenance expense.

At January 2, 2011, future minimum lease payments for capital leases and for operating leases with non-cancelable terms of more than one year were as follows (in millions):

	Capital			Operating
2011	$	2.4		$	15.0
2012		2.2			14.7
2013		2.1			12.6
2014		2.0			11.5
2015		2.0			9.5
Thereafter		11.8			22.7
Total minimum lease payments		22.5		$	86.0
Less:
Imputed interest		(5.2	)
Current portion		(2.0	)
Present value of minimum capital lease payments, net of current portion	$	15.3

The 2010 property, plant and equipment accounts included $17.0 million of property leased under capital leases and $2.2 million of related accumulated depreciation. The 2009 property, plant and equipment accounts included $12.2 million of property leased under capital leases and $1.2 million of related accumulated depreciation. Rental expense under operating leases, net of sublease income, was $21.5 million in 2010, $20.5 million in 2009, and $20.3 million in 2008.

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Note 15.  Commitments and Contingencies

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

In accordance with the Company’s accounting policy disclosed in Note 2, environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, investigations are not yet at a stage where the Company has been able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss, or certain components thereof. Estimates of the Company’s liability are further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and estimates of appropriate cleanup technology, methodology and cost, the extent of corrective actions that may be required, and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation. Accordingly, as investigation and remediation of these sites proceeds, it is likely that adjustments in the Company’s accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the amounts, and the possible range of loss in excess of the amounts accrued, are not reasonably estimable. Based on currently available information, however, management does not believe that future environmental costs in excess of those accrued with respect to sites with which the Company has been identified are likely to have a material adverse effect on the Company’s financial condition or liquidity. However, there can be no assurance that additional future developments, administrative actions or liabilities relating to environmental matters will not have a material adverse effect on the Company’s financial condition or results of operations.

At January 2, 2011, the Company’s reserves for environmental remediation obligations totaled $5.2 million, of which approximately $0.3 million was included in other current liabilities. The Company is evaluating whether it may be able to recover a portion of future costs for environmental liabilities from its insurance carriers and from third parties.

The timing of expenditures depends on a number of factors that vary by site, including the nature and extent of contamination, the number of potentially responsible parties, the timing of regulatory approvals, the complexity of the investigation and remediation, and the standards for remediation. The Company expects that it will expend present accruals over many years, and will complete remediation of all sites with which it has been identified in up to thirty years.

Various claims (whether based on U.S. Government or Company audits and investigations or otherwise) may be asserted against the Company related to its U.S. Government contract work, including claims based on business practices and cost classifications and actions under the False Claims Act. Although such claims are generally resolved by detailed fact-finding and negotiation, on those occasions when they are not so resolved, civil or criminal legal or administrative proceedings may ensue. Depending on the circumstances and the outcome, such proceedings could result in fines, penalties, compensatory and treble damages or the cancellation or suspension of payments under one or more U.S. Government contracts. Under government regulations, a company, or one or more of its operating divisions or units, can also be suspended or debarred from government contracts based on the results of investigations. However, although the outcome of these matters cannot be predicted with certainty, management does not believe there is any audit, review or investigation currently pending against the Company of which management is aware that is likely to result in suspension or debarment of the Company, or that is otherwise likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, employment and employee benefits. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company,

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management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period. We have reserves for environmental, product liability and legal issues based on our determination of the range of likelihood of outcomes on any given issue. Where we have not provided a reserve on an issue, we believe that either there is a remote possibility of loss or an estimate of loss cannot be made.

Teledyne has aircraft and product liability insurance with an annual self-insured retention for general aviation aircraft liabilities incurred in connection with products manufactured by Teledyne Continental Motors of $5.0 million. The Company’s current aircraft product liability insurance policy expires in May 2011.

Note 16.  Discontinued Operation

In accordance with our strategy to evaluate and divest non-core product lines, in December 2010, we entered into an agreement to sell our general aviation piston engines businesses, which comprised the former Aerospace Engines and Components segment, to Technify Motor (USA) Ltd., a subsidiary of China-based AVIC International Holding Corporation, for $186.0 million in cash. We have restated prior year financial data to classify this segment as a discontinued operation. We expect the sale to close in the first quarter of 2011, pending satisfaction of final closing conditions.

The operating assets and liabilities of Aerospace Engines and Components segment have been reclassified as assets and liabilities of discontinued operations and included in other current assets and current liabilities on the balance sheet for 2010 and 2009, respectively. The following is a summary of the assets and liabilities for the discontinued operation at year end 2010 and 2009 (in millions):

	2010		2009
Accounts receivable, net	$	13.8	$	17.1
Inventory		17.2		24.8
Other current assets		7.5		11.5
Property, plant and equipment		18.6		18.6
Goodwill		0.9		0.9
Other long-term assets		17.1		17.3
Total assets	$	75.1	$	90.2
Accounts payable	$	6.8	$	7.1
Accrued liabilities		6.3		12.5
Other long-term liabilities, including aircraft product liabilities		48.2		44.9
Total liabilities	$	61.3	$	64.5

Sales for this segment were $133.7 million, $113.1 million and $171.0 million for 2010, 2009 and 2008, respectively. The operating results were net income of $0.6 million in 2010, a loss of $2.6 million in 2009 and a loss of $5.3 million in 2008. The operating results were net of income taxes of $1.2 million for fiscal year 2010 and net of an income tax benefit of $2.7 million and $4.1 million for fiscal years 2009 and 2008, respectively.

Note 17.  Subsequent Events

On December 22, 2010, Teledyne Technologies Incorporated entered into an Arrangement Agreement (the “Arrangement Agreement”) that provided for the acquisition of DALSA Corporation (“DALSA”), a company organized under the laws of Ontario, Canada, by a wholly-owned subsidiary of Teledyne. On February 12, 2011, Teledyne completed the acquisition of DALSA. The transaction was carried out by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). DALSA received the requisite

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shareholder approvals for the plan of arrangement at the meeting of its shareholders held on February 10, 2011. The Ontario Superior Court of Justice (Commercial List) granted a final order approving the plan of arrangement on February 11, 2011. Pursuant to the plan of arrangement and the Arrangement Agreement, Teledyne acquired all of the issued and outstanding DALSA Shares for CAD $18.25 in cash for each DALSA Share. The aggregate value for the transaction is approximately CAD $337 million, taking into account DALSA’s stock options and net cash as of December 31, 2010. DALSA, headquartered in Waterloo, Ontario, Canada, designs, develops, manufactures and markets digital imaging products and semiconductors. DALSA had sales of CAD $212.3 million for its fiscal year ended December 31, 2010. DALSA is part of the Digital Imaging segment. The acquisition was funded from borrowing under Teledyne’s credit facility and cash on hand.

On February 25, 2011, we refinanced our prior $590.0 million credit facility set to expire in July 2011 by terminating the facility and entering into a new facility that has lender commitments totaling $550.0 million. The new facility has a termination date of February 25, 2016. As of February 25, 2011 we had $273.0 million outstanding on the new facility. The new facility requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios. Excluding interest and fees, no payments are due under the $550.0 million facility until it matures.

Note 18.  Quarterly Financial Data (Unaudited)

The following is Teledyne’s quarterly information (in millions, except per-share amounts):

	1st Quarter		2nd Quarter		3rd Quarter			4th Quarter
Fiscal year 2010(a)
Sales from continuing operations	$	404.9	$	408.0	$	409.8		$	421.5
Gross profit from continuing operations	$	117.1	$	120.6	$	124.9		$	133.5
Earnings from continuing operations	$	25.0	$	28.0	$	30.0		$	37.0
Earnings (loss) from discontinued operations	$	—	$	0.6	$	0.4		$	(0.4	)
Net income	$	25.0	$	28.6	$	30.4		$	36.6
Less: Net income attributable to noncontrolling interest	$	—	$	—	$	(0.1	)	$	—
Net income attributable to Teledyne Technologies(b)	$	25.0	$	28.6	$	30.3		$	36.6
Basic earnings per share attributable to Teledyne Technologies:
Continuing operations	$	0.69	$	0.77	$	0.83		$	1.02
Discontinued operations	$	—	$	0.02	$	0.01		$	(0.01	)
Basic earnings per share	$	0.69	$	0.79	$	0.84		$	1.01
Diluted earnings per share attributable to Teledyne Technologies:
Continuing operations	$	0.68	$	0.76	$	0.81		$	1.00
Discontinued operations	$	—	$	0.02	$	0.01		$	(0.01	)
Diluted earnings per share	$	0.68	$	0.78	$	0.82		$	0.99

(a)	Fiscal year 2010 was a 52-week year, each quarter contained 13 weeks.
(b)	Includes net tax credits, primarily recresearch and development tax credits of $12.5 million of which $0.4 million was recorded in the first quarter, $0.2 million was recorded in the second quarter, $2.9 million was recorded in the third quarter and $9.0 million was recorded in the fourth quater.

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Fiscal year 2009(a)	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
Sales from continuing operations	$	414.3		$	411.4		$	398.9		$	427.5
Gross profit from continuing operations	$	119.3		$	116.6		$	115.0		$	123.9
Earnings from continuing operations	$	23.1		$	25.0		$	34.6		$	33.7
Earnings (loss) from discontinued operations	$	(2.1	)	$	0.4		$	0.6		$	(1.5	)
Net income	$	21.0		$	25.4		$	35.2		$	32.2
Less: Net income attributable to noncontrolling interest	$	(0.2	)	$	(0.2	)	$	(0.1	)	$	—
Net income attributable to Teledyne Technologies(b)	$	20.8		$	25.2		$	35.1		$	32.2
Basic earnings per share attributable to Teledyne Technologies:
Continuing operations	$	0.64		$	0.69		$	0.96		$	0.93
Discontinued operations	$	(0.06	)	$	0.01		$	0.02		$	(0.04	)
Basic earnings per share	$	0.58		$	0.70		$	0.98		$	0.89
Diluted earnings per share attributable to Teledyne Technologies:
Continuing operations	$	0.63		$	0.68		$	0.94		$	0.92
Discontinued operations	$	(0.06	)	$	0.01		$	0.02		$	(0.04	)
Diluted earnings per share	$	0.57		$	0.69		$	0.96		$	0.88

(a)

Fiscal year 2009 was a 53-week year, each quarter contained 13 weeks, except for the fourth quarter which contained 14 weeks.

(b)

Includes research and development tax credits of $14.3 million, of which $8.2 million was recorded in the third quarter and $6.1 million was recorded in the fourth quarter. Includes the reversal of $1.2 million in income tax contingency reserves which were determined to be no longer needed due to the completion of state tax audits and the expiration of applicable statutes of limitations, of which $1.1 million was recorded in the third quarter and $0.1 million was recorded in the fourth quarter. Includes additional tax expense of $0.5 million, primarily related to the impact of California income tax law changes, of which $0.3 million was recorded in the first quarter and $0.2 million was recorded in the fourth quarter.

116

Schedule II

VALUATION AND QUALIFYING ACCOUNTS

For the Fiscal Years Ended January 2, 2011, January 3, 2010 and December 28, 2008
(In millions)

	Balance at		Charged
	beginning of		to costs and							Balance at end
Description	period		expenses		Acquisitions		Deductions(a)			of period
Fiscal 2010
Reserve for doubtful accounts	$	2.3		1.4		—		(0.8	)	$	2.9
Environmental reserves	$	3.0		0.3		2.4		(0.5	)	$	5.2
Fiscal 2009
Reserve for doubtful accounts	$	2.7		0.4		—		(0.8	)	$	2.3
Environmental reserves	$	2.7		1.1		—		(0.8	)	$	3.0
Fiscal 2008
Reserve for doubtful accounts	$	2.8		0.3		0.3		(0.7	)	$	2.7
Environmental reserves	$	4.3		0.4		—		(2.0	)	$	2.7

(a) Represents payments except the amounts for allowance for doubtful accounts primarily represents uncollectible accounts written off, net of recoveries.

117

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized as of March 3, 2011.

Teledyne Technologies Incorporated (Registrant)

By:  /s/  Robert Mehrabian

Robert Mehrabian

Chairman, President and Chief Executive Officer

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

/s/  Robert Mehrabian Robert Mehrabian		Chairman, President and Chief Executive Officer (Principal Executive Officer) and Director	March 3, 2011
/s/  Dale A. Schnittjer Dale A. Schnittjer		Senior Vice President and Chief Financial Officer (Principal Financial Officer)	March 3, 2011
/s/  Susan L. Main Susan L. Main		Vice President and Controller (Principal Accounting Officer)	March 3, 2011
* Roxanne S. Austin		Director	March 3, 2011
* Frank V. Cahouet		Director	March 3, 2011
* Charles Crocker		Director	March 3, 2011
* Kenneth C. Dahlberg		Director	March 3, 2011
* Simon M. Lorne		Director	March 3, 2011
* Paul D. Miller		Director	March 3, 2011
* Michael T. Smith		Director	March 3, 2011
* Wesley W. von Schack		Director	March 3, 2011
*By:	/s/  Melanie S. Cibik Melanie S. Cibik Pursuant to Power of Attorney filed as Exhibit 24.1

118

EXHIBIT INDEX

Exhibit
No.			Description
	2	.1	Separation and Distribution Agreement dated as of November 29, 1999 by and among Allegheny Teledyne Incorporated, TDY Holdings, LLC, Teledyne Industries, Inc. and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated as of November 29, 1999 (File No. 1-15295))
	2	.2	Purchase Agreement by and among Teledyne Technologies Incorporated, Technify Motor (USA) Ltd. and AVIC International Holding Corporation, dated as of December 11, 2010*
	2	.3	Arrangement Agreement, dated December 22, 2010, between Teledyne Technologies Incorporated, Teledyne Canada, Inc. and DALSA Corporation (incorporated by reference to Exhibit 2.01 to the Company’s Current Report on Form 8-K dated February 12, 2011(File No. 1-15295))
	2	.4	Amending Agreement, dated January 17, 2011, between Teledyne Technologies Incorporated, Teledyne Canada, Inc. and DALSA Corporation (incorporated by reference to Exhibit 2.02 to the Company’s Current Report on Form 8-K dated February 12, 2011(File No. 1-15295))
	3	.1	Restated Certificate of Incorporation of Teledyne Technologies Incorporated (including Certificate of Designation of Series A Junior Participating Preferred Stock) (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295))
	3	.2	Amended and Restated Bylaws of Teledyne Technologies Incorporated (incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295))
	10	.1	Tax Sharing and Indemnification Agreement between Allegheny Teledyne Incorporated and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated as of November 29, 1999 (File No. 1-15295))
	10	.2	Employee Benefits Agreement between Allegheny Teledyne Incorporated and Teledyne Technologies Incorporated (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K/A (Amendment No. 1) dated as of November 29, 1999 (File No. 1-15295))†
	10	.3	Teledyne Technologies Incorporated 1999 Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295))†
	10	.4	Teledyne Technologies Incorporated 1999 Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295))†
	10	.5	Amendment No. 1 to Teledyne Technologies Incorporated 1999 Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-15295)†
	10	.6	Amendment No. 2 to Teledyne Technologies Incorporated 1999 Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000 (File No. 1-15295)†
	10	.7	Amendment No. 3 to Teledyne Technologies Incorporated 1999 Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 29, 2002 (File No. 1-15295)†
	10	.8	Amendment No. 4 to Teledyne Technologies Incorporated 1999 Non-Employee Director Stock Compensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the period ended September 28, 2003) (File No. 1-15295)†
	10	.9	Fourth Amended and Restated Employment Agreement, dated as of January 21, 2009, by and between Teledyne Technologies Incorporated and Dr. Robert Mehrabian (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated January 20, 2009 (File No. 1-15295))†
	10	.10	Form of Change of Control Severance Agreement (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended January 2, 2000 (File No. 1-15295) with regard to Dale A. Schnittjer (incorporated by reference to Exhibit 10 to the Company’s Quarterly Report on Form 10-Q for the period ended June 29, 2003 (File No. 1-15295)) and with regard to Rex Geveden (filed herewith)†

119

Exhibit
No.			Description
	10	.11	Form of Amendment to the Change of Control Severance Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated December 31, 2008 (File No. 1-15295))†
	10	.12	Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Robert Mehrabian (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No. 1-15295))†
	10	.13	Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Al Pichelli (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No. 1-15295))†
	10	.13	Amended and Restated Change in Control Severance Agreement, dated as of January 31, 2011, by and between Teledyne Technologies Incorporated and Rex Geveden (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 31, 2011 (File No. 1-15295))†
	10	.14	Teledyne Technologies Incorporated Executive Deferred Compensation Plan, as originally effective as of November 29, 1999, as amended and restated effective December 31, 2004 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 31, 2008) (File No. 1-15295)†
	10	.15	Teledyne Technologies Incorporated Pension Equalization/Benefit Restoration Plan, as originally effective as of November 29, 1999, as amended and restated effective December 31, 2004 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 31, 2008) (File No. 1-15295))†
	10	.16	Teledyne Technologies Incorporated 2002 Stock Incentive Plan (incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 30, 2001 (File No. 1-15295))†
	10	.17	Administrative Rules of the 2002 Stock Incentive Plan Related to Non-Employee Director Stock Compensation (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K dated January 23, 2007 (File No. 1-5295))†
	10	.18	Teledyne Technologies Incorporated 2008 Incentive Award Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement filed March 7, 2008 (File No. 1-15295))†
	10	.19	Teledyne Technologies Incorporated Administrative Rules of the 2008 Incentive Award Plan Related to Non-Employee Director Stock Compensation (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2008 (File No. 1-15295))†
	10	.20	Form of Restricted Stock Award Agreement — January 22, 2008 Award (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 30, 2008 (File No. 1-15295))†
	10	.21	Form of Restricted Stock Award Agreement — January 20, 2009 Award (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 20, 2009 (File No. 1-15295))†
	10	.22	Form of Restricted Stock Award Agreement under the 2008 Incentive Award Plan†
	10	.23	Administrative Rules for the Teledyne Technologies Incorporated Restricted Stock Award Program under the 2008 Incentive Award Plan, effective as of January 20, 2009 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 20, 2009 (File No. 1-15295))†
	10	.24	Summary Plan Description for the Teledyne Technologies Incorporated Performance Share Plan under the 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated January 20, 2009 (File No. 1-15295))†
	10	.25	Note Purchase Agreement, dated May 12, 2010, by and among Teledyne Technologies Incorporated and the Purchasers identified therein (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 2010 (File No. 1-15295))

120

Exhibit
No.			Description
	10	.26	Credit Agreement, dated as of February 25, 2011, by and among Teledyne Technologies Incorporated, certain of its subsidiaries and the lenders named therein, together with Schedules and Exhibits thereto (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated February 25, 2011 (File No. 1-15295))
	10	.27	Form of Amendment to Stock Options, dated October 1, 2007, by and between Teledyne Technologies Incorporated and directors Frank V. Cahouet, Charles Crocker, Simon M. Lorne, Paul D. Miller and Michael T. Smith (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007 (File No. 1-15295))†
	10	.28	Form of Indemnification Agreement executed by each of the Company’s directors and named executive officers (incorporated by reference to the Company’s Current Report on Form 8-K dated April 22, 2009 (File No. 1-15295))†
	10	.29	Form of Stock Option Agreement under the 2008 Incentive Award Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 19, 2010 (File No. 1-15295))†
	14	.1	Teledyne Technologies Incorporated Corporate Objectives and Guidelines for Employee Conduct — this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.asp
	14	.2	Code of Ethics for Financial Executives — this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.asp
	14	.3	Directors Code of Business Conduct and Ethics — this code of ethics may be accessed via the Company’s website at www.teledyne.com/aboutus/ethics.asp
	21		Subsidiaries of Teledyne Technologies Incorporated*
	23		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm*
	24	.1	Power of Attorney — Directors*
	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
	32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
	101		The following materials from Teledyne Technologies Incorporated’s Annual Report on Form 10-K for the year ended January 2, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Stockholders’ Equity, (iv) the Consolidated Statements of Cash Flows and (v) related notes, tagged as blocks of text.

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

121

EX-2.2

EXHIBIT 2.2

EXECUTION VERSION

PURCHASE AGREEMENT

BY AND AMONG

TELEDYNE TECHNOLOGIES INCORPORATED,

TECHNIFY MOTOR (USA) LTD.

AND

AVIC INTERNATIONAL HOLDING CORPORATION

DATED AS OF DECEMBER 11, 2010

TABLE OF CONTENTS

	Page
SECTION 1 DEFINITIONS		1
SECTION 2 THE TRANSACTION		9
2.1. Sale and Purchase of Stock and Assets		9
2.2. Excluded Assets		10
2.3. Assumption of Certain Liabilities		11
2.4. Determination and Payment of Consideration		12
2.5. Purchase Price Adjustment		13
SECTION 3 CLOSING AND CLOSING DATE		15
3.1. Closing		15
3.2. Closing Date		15
3.3. Closing Payment and Deliveries at the Closing		15
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER		16
4.1. Organization		16
4.2. Authorization of Transaction		17
4.3. Noncontravention; Consents		17
4.4. Capitalization; Title to and Validity of Shares		17
4.5. Business Financial Statements		17
4.6. Subsequent Events		18
4.7. Tax Matters		20
4.8. Contracts		20
4.9. Real Property		21
4.10. Title and Status		22
4.11. Intellectual Property		22
4.12. Litigation		23
4.13. Employee Benefits		23
4.14. Labor Relations		24
4.15. Environmental Matters		24
4.16. Legal Compliance		25
4.17. Permits		25
4.18. Brokers’ Fees		26

i

TABLE OF CONTENTS
(continued)

	Page
4.19. Insurance		26
4.20. Product Warranty		26
4.21. Accounts Receivable		26
4.22. Inventory		26
4.23. Customers and Suppliers		26
4.24. Export Laws and Regulations		27
4.25. LIMITED WARRANTIES		27
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER		28
5.1. Organization of the Purchaser and Purchaser Guarantor		28
5.2. Authorization of Transaction		28
5.3. Noncontravention; Consents		29
5.4. Litigation		29
5.5. Brokers’ Fees		29
5.6. Financing and Solvency		30
5.7. Investment		30
SECTION 6 PRE-CLOSING COVENANTS		30
6.1. General		30
6.2. Notices and Consents; CFIUS		30
6.3. Carry on in Regular Course		31
6.4. Intercompany Receivables and Intercompany Payables		33
6.5. Access		33
6.6. Notification of Certain Matters		33
6.7. Compliance with FAA Regulations		35
6.8. Transfer of Turbine Engine Cell Business		35
SECTION 7 POST-CLOSING COVENANTS		35
7.1. General		35
7.2. Post-Closing Consents; Nonassignable Contracts		35
7.3. Litigation Support; Tax Return Preparation; Records Retention; Transitional Services		36
7.4. Use of Trademarks; Signage and Labels		38

ii

TABLE OF CONTENTS
(continued)

	Page
7.5. Aircraft Product Liability Insurance		39
7.6. Section 338(h)(10) Election.		42
7.7. Directors’ and Officers’ Indemnification		42
7.8. Noncompetition and Nonsolicitation		43
7.9. Continued Operation of the Business		44
7.10. Release of Seller Guarantees		44
SECTION 8 EMPLOYEE MATTERS		44
8.1. Employee Benefits		44
8.2. Workers Compensation Plan Matters		47
SECTION 9 CLOSING CONDITIONS		47
9.1. Conditions to Obligation of the Purchaser		48
9.2. Conditions to Obligation of the Seller		49
SECTION 10 REMEDIES FOR BREACHES OF THIS AGREEMENT		51
10.1. Survival		51
10.2. Indemnification Provisions for Benefit of the Purchaser		51
10.3. Indemnification Provisions for Benefit of the Seller		51
10.4. Matters Involving Third Parties		52
10.5. Indemnification Limitations; Liability Threshold and Caps		53
10.6. Indemnification for Environmental Matters		54
10.7. EXCLUSIVE REMEDY		56
10.8. Minimizing Losses		57
10.9. Indemnity Payments		57
SECTION 11 TERMINATION		57
11.1. Termination of Agreement		57
11.2. Effect of Termination		57
SECTION 12 MISCELLANEOUS		58
12.1. Press Releases and Announcements		58
12.2. Expenses; Transfer Taxes		58
12.3. Consent to Amendments		58

iii

TABLE OF CONTENTS
(continued)

	Page
12.4. Successors and Assigns		58
12.5. Severability		58
12.6. Counterparts		59
12.7. Descriptive Headings		59
12.8. Notices		59
12.9. No Third-Party Beneficiaries		60
12.10. Entire Agreement		60
12.11. Construction		60
12.12. Incorporation of Exhibits and Schedules		60
12.13. WARN Act		61
12.14. GOVERNING LAW; JURISDICTION		61
12.15. Purchaser Guaranty		62

iv

PURCHASE AGREEMENT

     THIS PURCHASE AGREEMENT (“Agreement”), is dated and entered into as of December 11, 2010, by and among TELEDYNE TECHNOLOGIES INCORPORATED, a Delaware corporation (the “Seller”), TECHNIFY MOTOR (USA) LTD., a Delaware corporation (the “Purchaser”) and AVIC INTERNATIONAL HOLDING CORPORATION, a limited liability company organized and existing under the Laws of the Peoples Republic of China (the “Purchaser Guarantor”) with reference to the following:

RECITALS

     The Seller, through its wholly-owned subsidiary, Teledyne Continental Motors, Inc., a Delaware corporation (“Continental”), designs, develops and manufactures piston engines and ignition systems for general aviation aircraft and provides spare parts and engine rebuilding services for the general aviation aircraft marketplace (the “Continental Business”).

     The Seller, through its wholly-owned indirect subsidiary, Teledyne Mattituck Services, Inc., a Delaware corporation (“Mattituck”), serves as an aftermarket supplier and piston engine overhauler to the general aviation aircraft marketplace (the “Mattituck Business”, and together with the Continental Business, the “Business”).

     The Purchaser wishes to purchase the Business and the Seller is willing to sell the Business on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual representations, warranties, covenants, agreements, terms and conditions set forth below, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

     Section 1 Definitions. For purposes of this Agreement, the following terms have the meanings set forth below:

     “Accounts Receivable” has the meaning set forth in Section 4.21.

     “Actions or Proceedings” means any action, suit, proceeding, arbitration or Governmental Entity investigation or audit.

     “Affiliate” means any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting securities of another Person shall be deemed to control that Person.

     “Affiliated Group” means an affiliated group as defined in Section 1504 of the Code (or any analogous combined, consolidated or unitary group defined under state, local or foreign income Tax Law) of which Companies are or have been a member.

     “Agreement” means this Purchase Agreement, as the same may be amended from time to time in accordance with the terms hereof.

     “Amended and Restated Credit Agreement” means that certain Amended and Restated Credit Agreement, dated July 14, 2006, among Seller, the lenders and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, as amended.

     “Ancillary Agreements” means, collectively, the Assignment Agreement, the Assumption Agreement and the Transition Services Agreement.

     “Assets and Properties” of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including without limitation, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory, raw materials, goods and Intellectual Property.

     “Assignment Agreement” has the meaning set forth in Section 2.3(b).

     “Assumed Liabilities” has the meaning set forth in Section 2.3(a).

     “Assumption Agreement” has the meaning set forth in Section 2.3(a).

     “Books and Records” means all files, documents, instruments, papers, books and records relating to the Business or financial condition of the Companies, including without limitation financial statements, Tax Returns and related work papers and letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, customer lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans.

     “Business” has the meaning set forth in the Recitals to this Agreement.

     “Business Day” means a day other than Saturday, Sunday or any day on which banks located in the States of California and Alabama are authorized or obligated to close.

     “Cash” means cash on hand or in banks and cash equivalents, marketable securities and short-term investments.

     “CERCLA” means the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

     “CFIUS” means the Committee on Foreign Investment in the United States.

2

     “Closing” has the meaning set forth in Section 3.1.

     “Closing Date” has the meaning set forth in Section 3.2.

     “Closing Net Working Capital” has the meaning set forth in Section 2.5(a).

     “Closing Date Working Capital Adjustment” has the meaning set forth in Section 3.3(a).

     “COBRA” has the meaning set forth in Section 8.1(h).

     “Code” means the United States Internal Revenue Code of 1986, as amended.

     “Collective Bargaining Agreement” means that certain Agreement by and between Teledyne Continental Motors- Mobile, Alabama and Local Union 1639 — International Union of United Automobile, Aerospace and Agricultural Implement Workers of America, dated March 21, 2010.

     “Companies” means both Continental and Mattituck.

     “Confidentiality Agreement” means the confidentiality letter agreement dated March 2, 2010, between the Purchaser Guarantor and Continental.

     “Company Plans” has the meaning set forth in Section 4.13(a).

     “Continental” has the meaning set forth in the Recitals to this Agreement.

     “Continental Business” has the meaning set forth in the Recitals to this Agreement.

     “Continental Comparable Business” has the meaning set forth in Section 7.8(a).

     “Continental Stock” has the meaning set forth in Section 2.1(a).

     “Contracts” means any written agreement, lease, license, evidence of Indebtedness, mortgage, indenture, security agreement or other contract.

     “Current Year Policies” has the meaning set forth in Section 7.5(a).

     “Disclosure Schedules” means, collectively, the various Schedules referred to in this Agreement pertaining to Section 4 and Section 5.

     “Disputed Amounts” has the meaning set forth in Section 2.5(b)(iii).

     “D&O Indemnified Parties” has the meaning set forth in Section 7.7(a).

     “Employee Benefit Plan” means an Employee Pension Benefit Plan or an Employee Welfare Benefit Plan, where no distinction is required by the context in which the term is used.

     “Employee Pension Benefit Plan” has the meaning set forth in Section 3(2) of ERISA.

3

     “Employees” has the meaning set forth in Section 8.1(a).

     “Employee Welfare Benefit Plan” has the meaning set forth in Section 3(1) of ERISA.

     “End Date” has the meaning set forth in Section 11.1(b).

     “Environmental Law” means any Law with respect to any Hazardous Materials, drinking water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, air emissions, storm water run-off, waste emissions, wells or otherwise concerning pollution or the protection of human health and the environment. The term “Environmental Law” as used in this Agreement does not include Laws with respect to worker safety.

     “Environmental Losses” has the meaning set forth in Section 10.6(a).

     “ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended.

     “Estimated Closing Net Working Capital” has the meaning set forth in Section 2.5(a)(i).

     “Estimated Closing Net Working Capital Statement” has the meaning set forth in Section 2.5(a)(i).

     “Excluded Assets” has the meaning set forth in Section 2.2.

     “Existing Policies” has the meaning set forth in Section 7.5(c).

     “Facilities” means those facilities currently used by the Continental and Mattituck for the operation of the Business.

     “FCPA” has the meaning set forth in Section 4.24(b).

     “Financial Statements” has the meaning set forth in Section 4.5(a).

     “GAAP” means the accounting principles generally accepted in the United States.

     “General Cap” has the meaning set forth in Section 10.5(a)(iii).

     “Governmental Entity” means any court, tribunal, arbitrator, government or any governmental agency, authority, bureau, board, commission, department or political subdivision, whether federal, state or local, domestic or foreign.

     “Hart-Scott-Rodino Act” means the United States Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

     “Hazardous Materials” means any element, compound, chemical mixture, contaminant, pollutant, material, waste or other substance which is defined, determined or identified as hazardous or toxic under Environmental Law or with respect to which liability or standards of

4

conduct are imposed under any Environmental Law. Without limiting the generality of the foregoing, the term will include (a) “hazardous substances” as defined in CERCLA, (b) “extremely hazardous substances” as defined in Title III of the United States Superfund Amendments and Reauthorization Act, each as amended, and regulations promulgated thereunder, (c) “hazardous waste” as defined in the United States Resource Conservation and Recovery Act of 1976, as amended, and regulations promulgated thereunder, (d) “hazardous materials” as defined in the United States Hazardous Materials Transportation Act, as amended, and regulations promulgated thereunder, (e) “chemical substance or mixture” as defined in the United States Toxic Substances Control Act, as amended, and regulations promulgated thereunder, and (f) petroleum products and byproducts.

     “Indebtedness” of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business consistent with past practice), (iv) under capital leases or (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

     “Indemnified Party” has the meaning set forth in Section 10.4.

     “Indemnifying Party” has the meaning set forth in Section 10.4.

     “Intellectual Property” has the meaning set forth in Section 4.11.

     “Intercompany Payables” means obligations owed by any of Continental or Mattituck to the Seller or any of the Seller’s Affiliates.

     “Intercompany Receivables” means obligations owed to any of Continental or Mattituck by the Seller or any of the Seller’s Affiliates.

     “Insurance Policies” has the meaning set forth in Section 4.19.

     “Joint Filing” has the meaning set forth in Section 6.2.

     “Key Employees” means Rhett Ross, William Read, Ken Suda, Steve Ginger, Johnny Doo and Susan Ames.

     “Knowledge” as applied to the Seller, means the actual knowledge of the members of the management of the Business or the Seller identified on Schedule 1.1.

     “Law” means any federal, state or local, domestic or foreign, constitutional provision, statute, law, rule, regulation, Permit, decree, injunction, judgment, order or legally binding ruling, determination, finding or writ of any Governmental Entity enacted as of the date hereof.

     “Leased Real Property” means all the real property leased by any of Continental and Mattituck.

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     “Lien” means any lien, mortgage, pledge, security interest, charge, levy, claim or other encumbrance of any kind.

     “Losses” has the meaning set forth in Section 10.2.

     “Material Adverse Effect” or “Material Adverse Change” means, with respect to the Companies, any effect or change that is materially adverse to the Business, the results of operations or financial condition thereof, taken as a whole; provided that none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect or Material Adverse Change: any adverse change, event, development, or effect arising from or relating to (1) general business or economic conditions, or conditions in the industries in which any of Continental and Mattituck operate, (2) the announcement of this Agreement and the transactions contemplated hereby or the performance of this Agreement and the transactions contemplated hereby, (3) national or international political or social conditions, including the engagement by the United States and/or The People’s Republic of China in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any actual or threatened military or terrorist attack upon the United States and/or The People’s Republic of China, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States and/or The People’s Republic of China or any terrorist attack using or involving aircraft, (4) the conditions of any financial, banking, or securities markets (including any disruption thereof and any decline in the price of any security or any market index), (5) changes in United States generally accepted accounting principles, (6) any increase in fuel prices or oil shortages, (7) the imposition of new material flight restrictions, (8) material adverse changes in global markets for aircraft/aviation liability insurance, (9) changes in laws, rules, regulations, orders, or other binding directives issued by any Governmental Entity after the date hereof, or (10) the enactment or promulgation of any Law regulating lead emissions from aircraft engines using leaded aviation gasoline; provided, however, that the exceptions set forth in clauses (1), (3), (4), (5) and (9) above shall not apply to the extent such changes, events, developments or effects are disproportionately adverse to the Companies as compared to other companies in the industries in which the Companies operate.

     “Material Claim” has the meaning set forth in Section 10.5(a)(i).

     “Mattituck” has the meaning set forth in the Recitals to this Agreement.

     “Mattituck Business” has the meaning set forth in the Recitals to this Agreement.

     “Mattituck Stock” has the meaning set forth in Section 2.1(a).

     “Most Recent Balance Sheet” means the unaudited consolidated balance sheet of the Business as of October 3, 2010.

     “Note Purchase Agreement” means that certain Note Purchase Agreement, dated May 12, 2010, by and among Seller and the purchasers thereto.

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     “Order” means any writ, judgment, decree, injunction or similar order of any Government Entity (in each such case, whether preliminary or final).

     “Permit” means any license, permit, franchise, certificate of authority or order, certificate of occupancy, building, safety and fire and health approval, or any waiver of the foregoing, issued by any Governmental Entity.

     “Permitted Lien” means (a) any Lien for Taxes, assessments or governmental charges or claims that are not yet delinquent, (b) any mechanics’, materialmen’s or similar Liens with respect to amounts that are not yet delinquent, (c) any purchase money Lien or any Lien securing rental payments under capital lease arrangements, (d) the Liens set forth on Schedule 1.2.

     “Person” means an individual, a partnership, a corporation, a limited liability company or partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity.

     “Post-Closing Net Working Capital Adjustment” has the meaning set forth in Section 2.5(c).

     “Post-Closing Net Working Capital Statement” has the meaning set forth in Section 2.5(a)(ii).

     “Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion ending on (and including) the Closing Date of any taxable period that includes but does not end on the Closing Date.

     “Pre-Closing Taxes” means any Tax (i) of or payable by the Companies relating to the Pre-Closing Tax Period, (ii) arising by reason of either Company being liable for any Taxes of Seller or any other person pursuant to Treasury Regulation §1.1502-6 or any analogous state, local or foreign Tax provision, by contract as a transferee, successor or otherwise, (iii) incurred in connection with the transactions contemplated by this Agreement, including as a result of any Section 338(h)(10) Election and (iv) for which Seller is liable pursuant to Section 12.2.

     “Post-Closing Taxes” means any Tax other than Pre-Closing Taxes.

     “Purchased Assets” has the meaning set forth in Section 2.1(b).

     “Purchase Price” has the meaning set forth in Section 2.4(a).

     “Purchaser” has the meaning set forth in the Preamble to this Agreement.

     “Purchaser Employee Benefit Plans” has the meaning set forth in Section 8.1(c).

     “Purchaser’s 401(k) Plan” has the meaning set forth in Section 8.1(f).

     “Purchaser Indemnified Parties” has the meaning set forth in Section 10.2.

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     “Reference Net Working Capital” has the meaning set forth in Section 2.5(a).

     “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating from, dumping, discarding, burying, abandoning or disposing into the environment.

     “Required Cash” has the meaning set forth in Section 2.1(c).

     “Restricted Territory” has the meaning set forth in Section 7.8(c).

     “Review Period” has the meaning set forth in Section 2.5(b)(i).

     “Schedule” means, unless the context otherwise requires, the referenced Schedule attached hereto.

     “Section 338(h)(10) Election” has the meaning set forth in Section 7.6(a).

     “Securities Act” has the meaning set forth in Section 5.7.

     “Seller” has the meaning set forth in the Preamble to this Agreement.

     “Seller Covenant Not to Compete” has the meaning set forth in Section 7.8(a).

     “Seller 401(k) Plan” has the meaning set forth in Section 8.1(f).

     “Seller’s Affiliates” means an Affiliate of the Seller other than Continental or Mattituck.

     “Seller Guarantees” has the meaning set forth in Section 7.10.

     “Seller Indemnified Parties” has the meaning set forth in Section 10.3.

     “Seller Pension Plan” means the Teledyne Technologies Incorporated Pension Plan.

     “Seller Sponsored Employee Benefit Plans” has the meaning set forth in Section 8.1(c).

     “Seller Workers’ Compensation Plan” has the meaning set forth in Section 8.2(b).

     “Significant Customers” has the meaning set forth in Section 4.23.

     “Significant Suppliers” has the meaning set forth in Section 4.23.

     “Sponsored Employee Benefit Plans” has the meaning set forth in Section 4.13.

     “Stock” has the meaning set forth in Section 2.1(a).

     “Straddle Period” has the meaning set forth in Section 7.3(e).

     “Statement of Objections” has the meaning set forth in Section 2.5(b)(ii).

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     “Subsidiary” means any Person in which the Seller, directly or indirectly through Subsidiaries or otherwise, beneficially owns more than fifty percent (50%) of either the equity interests in, or the voting control of, such Person and any partnership the only general partner or general partners of which are the Seller or one or more of its Subsidiaries.

     “Tax” means any federal, state, local or foreign net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other tax, fee, assessment or charge, including any related interest, penalty or addition thereto.

     “Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto.

     “Teledyne Marks” has the meaning set forth in Section 2.2(f).

     “Transition Services Agreement” has the meaning set forth in Section 3.3.

     “Turbine Engine Business Transfer” has the meaning set forth in Section 6.8.

     “Turbine Engine Cell Business” means the business and assets associated with the turbine engine manufacturing cell located in Mobile, Alabama.

     “Union 401(k) Plan” has the meaning set forth in Section 2.3(a)(ii).

     “US Dollars” and “US$” and “$” means the lawful currency of the United States of America.

     “WARN Act” means the United States Federal Worker Adjustment and Retraining Notification Act, as amended.

     “Workers’ Compensation Claims” has the meaning set forth in Section 8.2(a).

     “Working Capital Resolution Period” has the meaning set forth in Section 2.5(b)(ii).

     Section 2 The Transaction.

     2.1. Sale and Purchase of Stock and Assets.

     (a) Sale and Purchase of Stock. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller will sell, transfer, assign, convey, set over and deliver to the Purchaser, and the Purchaser will purchase, acquire and accept from the Seller, all right, title and interest of the Seller in and to all of the issued and outstanding capital stock of Continental (the “Continental Stock”) and all of the issued and outstanding capital stock of Mattituck (the “Mattituck Stock” and the Continental Stock collectively referred to herein as the “Stock”).

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     (b) Sale and Purchase of Certain Assets. Upon the terms and subject to the conditions of this Agreement, at the Closing the Seller will sell, transfer, assign, convey, set over and deliver to Continental, and Continental will purchase, acquire and accept from the Seller, all right, title and interest of the Seller in and to any of the Seller’s right to use the name “Continental Motors,” “Continental” and, subject to Section 2.2(f), any derivative thereof (together with the goodwill associated with those names), and (ii) those patents and trademarks (together with the goodwill associated with those trademarks) identified on Schedule 2.1(b) (the “Purchased Assets”).

     (c) Cash on Hand. Upon receipt by the Seller of written notice to be deilivered by the Purchaser not later than the third Business Day prior to the Closing Date, the eller shall cause Continental to retain the amount of Cash as of the Closing Date as set forth in such notice, not to exceed $3 million (the “Required Cash”).

     2.2. Excluded Assets. Notwithstanding the provisions of Section 2.1, the Purchased Assets and the Business will not include any of the following assets, rights or properties (collectively, the “Excluded Assets”):

     (a) any and all assets, rights and properties of Continental associated with the Turbine Engine Cell Business;

     (b) any and all assets, rights and properties of the Seller or any of the Seller’s Affiliates, including those assets associated with the Turbine Engine Cell Business, but not including the Stock and the Purchased Assets which are being transferred to the Purchaser pursuant to Sections 2.1(a) and 2.1(b), respectively;

     (c) Cash (other than as contemplated by Section 2.4(b));

     (d) any rights or claims of the Seller or its Affiliates with respect to any Tax refund, carryback or carryforward or other credits to the Seller or its Affiliates for periods ending prior to the Closing Date including with respect to the Business;

     (e) subject to Section 7.5, all of the Seller’s and its Affiliate’s insurance policies, including such policies to which Continental or Mattituck may be a named insured, additional named insured, or which cover or relate to the Business, including any property, casualty, workers’ compensation or other insurance policy or related insurance services contract relating to the Seller or any of its Affiliates, and any rights of the Seller or any of its Affiliates under any such insurance policy or contract, including, but not limited to, rights to any cancellation value; provided, however that nothing contained in this Section 2.2(e) is intended to limit the ability of Purchaser, Continental or Mattituck to have complete access to coverage for covered claims under the terms of such policies;

     (f) all “Teledyne” and “Teledyne Technologies” marks, including any and all trademarks or service marks, trade names, registered and unregistered designs, slogans or other like property relating to or including the names “Teledyne” or “Teledyne Technologies,” the marks Teledyne and Teledyne Technologies, and any derivative thereof and the Teledyne and

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Teledyne Technologies logos or any derivatives thereof and any and all related trade dress (the “Teledyne Marks”); the Seller’s proprietary computer programs or other software, including but not limited to the Seller’s proprietary data bases (including environmental databases), accounting and reporting formats, systems and procedures irrespective of whether used in the Business; and any documents or information not related to the Business;

     (g) any claim, cause of action, suit, judgment, demand or right of any nature against third parties to the extent relating to any Excluded Asset and all attorney-client, work product and other legal privileges of the Seller related thereto; and

     (h) except for the Union 401(k) Plan, any assets attributable to any employees or any former employee of the Seller or the Seller’s Affiliates under any Seller Sponsored Employee Benefit Plans.

     2.3. Assumption of Certain Liabilities.

     (a) At the Closing, each of the Purchaser, Continental and Mattituck will, jointly and severally, assume and become responsible for, and will thereafter pay, perform and discharge when due, all of the following liabilities, whether absolute or contingent, known or unknown, matured or unmatured or whether arising prior to or after the Closing (collectively, the “Assumed Liabilities”) pursuant to an Assumption Agreement in the form attached to this Agreement as Exhibit A (the “Assumption Agreement”); provided, however, that nothing contained herein shall require the Purchaser to pay or discharge any liabilities or obligations expressly assumed hereunder so long as the Purchaser shall in good faith contest or cause to be contested the amount or validity thereof; provided, further, that notwithstanding the foregoing, as between Purchaser and Seller, Purchaser shall pay or discharge when due the amount of any such liabilities or obligations, or portion thereof, (i) that are not being contested in good faith, (ii) that are reimbursable pursuant to Section 7.5, (iii) which are found by a court or Governmental Entity (and such finding is binding, final and not subject to further appeal) to be legitimate liabilities or obligations or (iv) which it voluntarily agrees to pay despite there being a good faith reason for contesting them:

     (i) all liabilities of the Seller (including any liabilities of their respective predecessors, Subsidiaries and Affiliates for which Seller has liability) related to the Business, including, without limitation, all aviation- and product liability-related litigation and claims and future aviation- and product liability-related litigation and claims related to or arising out of the Continental Business or the Mattituck Business (which claims include, without limitation, those claims listed on Schedule 4.12 of the Disclosure Schedules) and any self-insured retentions and deductibles related to the Existing Policies; provided, however, that to the extent that such assumption would result in a claim or liability that would otherwise be covered under the Existing Policies to no longer be covered under such Existing Policies, then such claim or liability shall not be assumed by the Purchaser, Continental or Mattituck and instead the Purchaser, Continental and Mattituck shall, jointly and severally, promptly reimburse the Seller for any amounts actually paid (provided such payments were made with Purchaser’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed) by

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the Seller or any of the Seller’s Affiliates related to such claim or liability; provided further, that the Purchaser, Continental and Mattituck shall conduct activities related to all aviation- and product liability-related litigation and claims and future aviation- and product liability related litigation and claims arising out of the Continental Business or the Mattituck Business (which claims include, without limitation, those claims listed on Schedule 4.12 of the Disclosure Schedules), including with respect to administration, handling, management, defense and settlement in substantially the same manner as if such claim or liability had been assumed by the Purchaser, Continental and Mattituck.

     (ii) all liabilities and obligations of the Seller with respect to Employees and former employees which Purchaser has agreed to assume pursuant to Section 8 of this Agreement, including, without limitation, the Teledyne Continental Motors Union 401(k) Plan (“Union 401(k) Plan”) liabilities and those liabilities and obligations for sale bonus and stay/severance bonuses (but not any obligations under annual incentive plans, stock option plans, performance share plans or restricted stock programs) pursuant to sale and stay bonus agreements and severance commitments listed on Schedule 2.3(a)(ii), but excluding any obligations of Seller under any Seller Sponsored Employee Benefit Plans and those payments characterized in those agreements listed on Schedule 2.3(a)(ii) as “Option Alternative Payments”; and

     (iii) all liabilities and obligations of the Seller with respect to the Teledyne Aviation Exposure Escrow Fund, including, without limitation, all administrative responsibilities and future contribution obligations, related to those asbestos cases identified on Schedule 4.12 of the Disclosure Schedules and any applicable future asbestos claims.

     (b) At the Closing, the Purchaser and Continental will assume and become responsible for, and will thereafter pay, perform and discharge when due, all of the liabilities and obligations arising from or related to the Purchased Assets pursuant to an Assignment and Assumption Agreement for Intellectual Property in the form attached to this Agreement as Exhibit C (the “Assignment Agreement”); provided, however, that nothing contained herein shall require the Purchaser to pay or discharge any liabilities or obligations expressly assumed hereunder so long as the Purchaser shall in good faith contest or cause to be contested the amount or validity thereof; provided, further, that notwithstanding the foregoing, as between Purchaser and Seller, Purchaser shall pay or discharge when due the amount of any such liabilities or obligations, or portion thereof, (i) that are not being contested in good faith or (ii) which are found by a court or Governmental Entity (and such finding is binding, final and not subject to further appeal) to be legitimate liabilities or obligations.

     (c) Except as expressly set forth in this Agreement or the Ancillary Agreements, none of the Purchaser, Continental or Mattituck shall assume any other liabilities of the Seller, whether or not in connection with this Agreement and the Ancillary Agreements, and the transactions contemplated hereby and thereby.

     2.4. Determination and Payment of Consideration.

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     (a) In consideration of the sale and transfer of the Stock and the Purchased Assets to the Purchaser and the other undertakings of the Seller hereunder, the Purchaser shall (i) pay the sum of One Hundred Eighty Six Million US Dollars ($186,000,000.00) (the “Purchase Price”) to the Seller and (ii) shall assume the Assumed Liabilities on the terms, and subject to the conditions, contained in this Agreement. The Purchase Price payable by Purchaser at the Closing shall be adjusted pursuant to Section 2.5 and Section 3.3(a).

     (b) The Purchaser shall pay to the Seller within thirty (30) days after the Closing, the amount of any Cash on hand in Continental and Mattituck as of the effective time of the Closing, including the Required Cash.

     2.5. Purchase Price Adjustment.

     (a) The Purchase Price will be subject to adjustment upward or downward, as the case may be, in the amount of the difference, if any, between (i) $30,591,000.00 (the “Reference Net Working Capital”), and (ii) the Closing Net Working Capital. For purposes of this Agreement, the “Closing Net Working Capital” shall mean the difference between (A) current assets of the Business (except cash and cash equivalents, Intercompany Receivables and LIFO reserves) and (B) current liabilities of the Business (except Intercompany Payables, aircraft product liability reserves, recall reserves, customer deposits and outstanding checks), in each case calculated without regard to materiality.

     (i) Estimated Closing Net Working Capital Statement. On or before the fifth (5^th) Business Day prior to the Closing Date, the Seller shall deliver to the Purchaser a statement (the “Estimated Closing Net Working Capital Statement”) setting forth its good faith estimate of the Closing Net Working Capital, containing the same line items and calculated in the same manner as Schedule 2.5 and consistent with the historical accounting practices of the Seller (the “Estimated Closing Net Working Capital”). The parties shall use such Estimated Closing Net Working Capital Statement to determine the Closing Date Working Capital Adjustment pursuant to Section 3.3(a).

     (ii) Post-Closing Net Working Capital Statement. As soon as reasonably practicable, but in no event later than the sixtieth (60^th) day following the Closing, the Purchaser shall prepare and deliver to the Seller a statement containing the same line items and calculated in the same manner as Schedule 2.5 and consistent with the historical accounting practices of the Seller, setting forth its good faith calculation of Closing Net Working Capital (the “Post-Closing Net Working Capital Statement”).

     (b) Examination and Review.

     (i) Examination. After receipt of the Post-Closing Net Working Capital Statement, the Seller shall have thirty (30) days (the “Review Period”) to review the Post-Closing Net Working Capital Statement. During the Review Period, the Seller, its representatives and accountants shall have full access to the Books and Records, the personnel of, and work papers prepared by, the Purchaser and the Purchaser’s representatives and accountants to the extent that they relate to the Post-Closing Net

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Working Capital Statement and to such historical financial information relating to the Post-Closing Net Working Capital Statement as the Seller may reasonably request for the purpose of reviewing the Post-Closing Net Working Capital Statement and preparing a Statement of Objections (defined below).

     (ii) Objection. On or prior to the last day of the Review Period, the Seller may object to the Post-Closing Net Working Capital Statement by delivering to the Purchaser a written statement setting forth the Seller’s objections in reasonable detail, indicating each disputed item or amount and the basis for the Seller’s disagreement therewith (the “Statement of Objections”). To the extent that the Seller fails to deliver the Statement of Objections with respect to the Post-Closing Net Working Capital Statement on or prior to the last day of the Review Period, the Closing Net Working Capital reflected in the Post-Closing Net Working Capital Statement shall be deemed to have been accepted by the Seller. If the Seller delivers the Statement of Objections on or prior to the last day of the Review Period, the Purchaser and the Seller shall negotiate in good faith to resolve such objections within ten (10) days after the delivery of the Statement of Objections (the “Working Capital Resolution Period”), and, if the same are so resolved within the Working Capital Resolution Period, the Closing Net Working Capital with such changes as may have been previously agreed in writing by the Purchaser and the Seller, shall be final and binding on the Purchaser and the Seller.

     (iii) Resolution of Disputes. If the Seller and the Purchaser fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration of the Working Capital Resolution Period, then any amounts remaining in dispute (“Disputed Amounts”) may be submitted for resolution to KPMG LLP or, if KPMG LLP is unable to serve, the Purchaser and the Seller shall appoint by mutual agreement an impartial internationally recognized firm of independent certified public accountants other than the Accountants (KPMG LLP or such other firm of independent certified public accountants, the “Independent Accountants”) who, acting as experts and not arbitrators, shall resolve the Disputed Amounts only and make any adjustments to the Post-Closing Net Working Capital Statement, which adjustments shall be final and binding on the Purchaser and the Seller. The Independent Accountants shall only decide the specific items under dispute by the parties and their decision for each Disputed Amount must be within the range of values assigned to each such item in the Post-Closing Net Working Capital Statement and the Statement of Objections, respectively.

     (iv) Fees of the Independent Accountants. Seller and Purchaser shall each bear, and be responsible for, their own costs and expenses incurred by each of them (including any fees and expenses of their respective accounting firms) in connection with the preparation and review of the Post-Closing Net Working Capital Statement. If the Independent Accountants are engaged, the fees and expenses of the Independent Accountants shall be allocated in proportion to the extent either Seller or Purchaser, as the case may be, did not prevail on dollar amount of items in dispute with respect to the Post-Closing Net Working Capital Statement; provided that, such fees and expenses shall not include, so long as such non-prevailing party complies with the procedures of this Section 2.5, the other party’s outside counsel or accounting fees.

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     (v) Determination by Independent Accountants. The Independent Accountants shall make a determination as soon as practicable within thirty (30) days (or such other time as the parties hereto shall agree in writing) after their engagement, and their resolution of the Disputed Amounts and their adjustments to the Post-Closing Net Working Capital Statement, in each case in accordance with this Section 2.5, shall be conclusive and binding upon the parties hereto.

     (c) Post-Closing Net Working Capital Adjustment. The post-Closing Net Working Capital adjustment shall be an amount equal to the Closing Net Working Capital set forth on the Post-Closing Net Working Capital Statement minus the Estimated Closing Net Working Capital (the “Post-Closing Net Working Capital Adjustment”). If the Post-Closing Net Working Capital Adjustment is a positive number greater than $100,000, the Purchaser shall pay to the Seller an amount equal to the Post-Closing Net Working Capital Adjustment. If the Post-Closing Net Working Capital is a negative number less than -$100,000, the Seller shall pay to Purchaser an amount equal to the absolute value of the amount of the Post-Closing Working Capital Adjustment. For the avoidance of doubt, in the event that the Post-Closing Working Capital Adjustment is greater than -$100,000 and less than $100,000, no adjustment to the Purchase Price will be made.

     (d) Payments of Post-Closing Net Working Capital Adjustment. Except as otherwise provided herein, any payment of the Post-Closing Net Working Capital Adjustment shall (A) be due (i) within five (5) Business Days of agreement or acceptance of the Closing Net Working Capital Statement pursuant to Section 2.5(b)(ii) or (ii) if there are Disputed Amounts, then within five (5) Business Days of the resolution of such Disputed Amounts in accordance with Section 2.5(b)(iii) above and (B) be paid by wire transfer of immediately available United States funds to such account as directed by the Purchaser or the Seller, as the case may be.

     Section 3 Closing and Closing Date.

     3.1. Closing. Subject to the provisions of Section 11, the consummation of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Continental, 2039 Broad Street, Mobile, Alabama 36615, at 10:00 a.m. local time or at such other place as the Purchaser and the Seller may agree on the later of (a) March 15, 2011, (b) the fifteenth (15^th) Business Day after the day on which the conditions set forth in Section 9.1 and Section 9.2 shall have been satisfied or, if permissible, waived or (c) such other date as the Purchaser and the Seller mutually agree in writing. The Closing will be deemed effective as of 11:59 p.m. Thousand Oaks, California time, on the day of the Closing Date.

     3.2. Closing Date. The date on which the Closing actually takes place is referred to in this Agreement as the “Closing Date.”

     3.3. Closing Payment and Deliveries at the Closing.

     (a) At the Closing, the Purchaser shall pay a sum equal to the Purchase Price, plus the amount by which the Estimated Closing Net Working Capital exceeds the Reference Net Working Capital, or minus the amount by which the Reference Net Working Capital exceeds the

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Estimated Closing Net Working Capital (the “Closing Date Working Capital Adjustment”), by wire transfer of immediately available US Dollars to the Seller to such account as the Seller may direct.

     (b) At the Closing, (i) the Seller will deliver to the Purchaser the various certificates, instruments and documents referred to in Section 9.1; (ii) the Purchaser will deliver to the Seller the various certificates, instruments and documents referred to in Section 9.2; (iii) the Seller will execute, acknowledge (if appropriate) and deliver, or cause to be executed, acknowledged (if appropriate) and delivered, to the Purchaser (A) Stock certificates and stock powers executed in blank transferring the Stock to the Purchaser, (B) the Assignment Agreement, (C) a transition services agreement on substantially the terms and conditions set forth in Exhibit C (the “Transition Services Agreement”), (D) a duly executed Internal Revenue Service Form 8023 (properly prepared and submitted to Seller in advance by Purchaser) and any corresponding forms as required under applicable state or local Law with respect to elections that may be made by Purchaser under Code Section 338(h)(10) and any corresponding provision of state or local Law and (E) such other instruments of sale, transfer, conveyance, and assignment as the Purchaser and its counsel may reasonably request in form reasonably satisfactory to the Seller and the Purchaser or as required by applicable Governmental Entities; (iv) the Purchaser will execute, acknowledge and deliver to the Seller (A) the Assumption Agreement, (B) the Transition Services Agreement and (C) such other instruments of assumption as the Seller and its counsel reasonably may request in form reasonably satisfactory to the Seller and the Purchaser or as required by applicable Governmental Entities; (v) Continental and Mattituck will deliver to the Seller the Assumption Agreement; (vi) Continental deliver to the Seller the Assignment Agreement; and (vii) the Purchaser will deliver to the Seller the Purchase Price as specified in Section 2.4 and the Purchaser’s share of any Taxes and recording and filing fees identified and required to be paid by the Purchaser pursuant to Section 12.2.

     Section 4 Representations and Warranties of the Seller. The Seller represents and warrants to the Purchaser as follows:

     4.1. Organization.

     (a) Organization of the Seller. The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is licensed or qualified to transact business as a foreign corporation, and is in good standing, under the laws of all states in the United States where the businesses conducted by it would require it to be so licensed or qualified except where the failure to be so licensed, qualified or in good standing would not materially impair the ability of the Seller to perform its obligations under this Agreement or the Ancillary Agreements or consummate the transactions contemplated hereby or thereby.

     (b) Organization of Continental and Mattituck. Continental and Mattituck are corporations duly organized, validly existing and in good standing under the laws of the State of Delaware and are licensed or qualified to transact business as foreign corporations, and are in good standing, under the laws of all states in the United States where the Continental Business and the Mattituck Business, respectively, would require them to be so licensed, qualified or in

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good standing, except where the failure to be so licensed, qualified or in good standing would not have a Material Adverse Effect.

     4.2. Authorization of Transaction. The Seller has full corporate power and authority and has taken all requisite corporate action to enable it to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to perform its obligations hereunder and thereunder. This Agreement constitutes, and each of the Ancillary Agreements when executed and delivered by the Seller, will constitute, the valid and legally binding obligation of the Seller, enforceable against the Seller in accordance with their respective terms and conditions, subject to bankruptcy, insolvency, reorganization, moratorium and similar Laws now or hereafter in effect relating to creditors’ and landlords’ rights and general principles of equity.

     4.3. Noncontravention; Consents. Neither the execution and delivery of this Agreement or any of the Ancillary Agreements by the Seller nor the consummation by the Seller of the transactions contemplated hereby or thereby, will violate any provision of the charter or bylaws of the Seller or any Law or Order to which the Seller is subject, except violations of Law or any Order which would not materially impair the Seller’s ability to consummate the transactions contemplated by this Agreement. Except (i) as set forth on Schedule 4.3 of the Disclosure Schedules, (ii) to the extent the Seller’s ability to consummate the transactions contemplated by this Agreement would not be materially impaired, and (iii) for consents that may be required for the assignment of certain Contracts, neither the execution and delivery of this Agreement or any of the Ancillary Agreements by the Seller, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will constitute a violation of, constitute or create a default under or result in the creation or imposition of any Lien (other than a Permitted Lien) upon any of the Companies, Purchased Assets or Stock under any Contract or Permit to which the Seller, either Company or any of the Purchased Assets or the Stock is a party or is bound. As of the Closing Date, except as set forth on Schedule 4.3 of the Disclosure Schedules, the Seller will have given all required notices and obtained all material licenses, permits, consents, approvals, authorizations, and orders of Governmental Entities as are required in order to enable the Seller to perform their respective obligations under this Agreement and each of the Ancillary Agreements.

     4.4. Capitalization; Title to and Validity of Shares. The authorized and outstanding capital stock of Continental and Mattituck is as set forth on Schedule 4.4 of the Disclosure Schedules. All outstanding shares of capital stock of Continental and Mattituck have been duly authorized and validly issued and are fully paid and nonassessable and are owned by the Seller. Except as set forth on Schedule 4.4 of the Disclosure Schedules, there are no outstanding (i) shares of capital stock, other securities or phantom or other equity interests of Continental and Mattituck, (ii) securities of Continental and Mattituck convertible into or exchangeable for shares of capital stock or other securities of Continental or Mattituck or (iii) options or other rights to acquire from Continental or Mattituck any capital stock, other securities or phantom or other equity interests of Continental or Mattituck.

     4.5. Business Financial Statements.

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     (a) Set forth as Schedule 4.5(a) of the Disclosure Schedules are correct and complete copies of the unaudited balance sheet and income statement of the Companies for the fiscal years ended as of January 3, 2010 and December 28, 2008 and the unaudited balance sheet and income statement of the Companies for the nine-month period ended October 3, 2010, and the related statements of income for said periods (the “Financial Statements”). Except as set forth on Schedule 4.5(a) of the Disclosure Schedules, the Financial Statements (i) are consistent with and were derived from the books and records of Companies, (ii) present, in all material respects, the consolidated financial positions, results of operations and cash flows of the Companies as of the dates and for the periods indicated and (iii) have been prepared in accordance with GAAP as historically applied throughout the periods covered thereby.

     (b) Except as set forth in Schedule 4.5(b) of the Disclosure Schedules and for the liabilities and obligations (i) for which reserves have been recorded on the Most Recent Balance Sheet, or which are reflected in the footnotes thereto and for which reserves are not required under GAAP as historically applied or (ii) incurred in the ordinary course of business since the date of the Most Recent Balance Sheet which are not, and would not, individually or in the aggregate, reasonably be expected to have a material adverse impact on the results of operations or financial condition of the Business, none of Continental or Mattituck have incurred any liabilities or obligations, whether absolute or contingent, matured or unmatured, or otherwise.

     4.6. Subsequent Events. Except for (i) the execution and delivery of this Agreement and the Ancillary Agreements and the transactions to take place pursuant hereto or thereto on or prior to the Closing Date, including, without limitation, the Turbine Engine Business Transfer and (ii) as set forth on Schedule 4.6 of the Disclosure Schedules, since October 3, 2010 there has not been any change, event or development which, individually or together with other such changes, events or developments has resulted, or would reasonably be expected to result, in a Material Adverse Effect. Without limiting the generality of the foregoing, since such date and in each case in connection with the Stock, the Purchased Assets, the Assumed Liabilities and the Business, except as contemplated by the Agreement, neither the Seller, Continental, nor Mattituck has:

     (a) sold, leased, transferred or assigned or incurred any Lien (other than a Permitted Lien) on, any Assets and Properties of the Business or the Companies, other than in the ordinary course of business;

     (b) experienced any casualty damage, destruction or loss (whether or not covered by insurance) to its property in excess of $350,000;

     (c) (i) entered into any employment, deferred compensation or other similar agreement or arrangement with any of the Employees, (ii) adopted, entered into or become bound by any amendment, modification or termination (partial or complete) of any Employee Benefit Plan or collective bargaining agreement, except to the extent required by applicable Law or (iii) otherwise increased the compensation, bonus or other benefits payable to any of the Employees, other than (A) increases effected in the ordinary course of business and consistent with past practice or as required by Law, and (B) the sale and stay bonus agreements and severance commitments set forth on Schedule 2.3(a)(ii);

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     (d) accelerated, terminated, made material modifications to, or canceled (i) any Contract listed on Schedule 4.8 of the Disclosure Schedules hereof except in the ordinary course of business or (ii) any accounts receivable, or delayed or postponed the payment of any accounts payable and other material liabilities, in each case, outside the ordinary course of business consistent with past practice;

     (e) made any capital expenditures outside the ordinary course of business in excess of $350,000;

     (f) made any voluntary purchase, cancellation, prepayment or complete or partial discharge in advance of a scheduled payment date with respect to, or waiver of any right of either Company under, any Indebtedness of or owing to either Company;

     (g) made any material change in (i) any pricing, investment, accounting, financial reporting, inventory, credit, allowance or Tax practice or policy of either Company, or (ii) any method of calculating any bad debt, contingency or other reserve of either Company for accounting, financial reporting or Tax purposes, or any change in the fiscal year of either Company;

     (h) made any (i) amendment of the certificate or articles of incorporation or by-laws (or other comparable corporate charter documents) of either Company, (ii) recapitalized, reorganized, liquidated or dissolved either Company or (iii) merged or entered into another business combination involving either Company, on the one hand, and any other Person, on the other hand;

     (i) made any capital investment in, or any loan to, any other Person in excess of $350,000, except any such investments or loans that constitute intercompany receivables;

     (j) incurred any Indebtedness;

     (k) entered into, amended, modified or terminated (i) any Contract which is required (or had it been in effect on the date hereof would have been required) to be disclosed on Section 4.8 of the Disclosure Schedules or (ii) any material Permit held by either Company;

     (l) issued, sold, or otherwise disposed of any of its capital stock or other equity interests, or granted any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock or other equity interests;

     (m) made any loan to, or entered into any other transaction with, any of its directors, officers, and employees outside the ordinary course of business;

     (n) made or changed any material tax election or Tax method of accounting, settled or compromised any material Tax liability, filed any material Tax Return other than in accordance with past practice, materially amended any Tax Return;

     (o) commenced or terminated of any line of business of either Continental or Mattituck, or both;

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     (p) agreed or entered into any settlement, compromise or discontinuation of any material Action or Proceeding that is pending or was threatened in writing;

     (q) caused either Company to enter into any transaction between such Company, on the one hand, and the Seller or any of the Seller’s Affiliates, on the other hand, other than in the ordinary course of business; and

     (r) committed to do or engage in any of the foregoing after the date hereof.

     4.7. Tax Matters. All material Tax Returns required to be filed on or before the Closing Date with any taxing authority by or on behalf of the Seller, Continental and Mattituck, with respect to the Business, have been filed through the date hereof, or will be filed on or before the Closing Date in accordance with all applicable laws, and all material Taxes, fees, penalties, interest and other governmental charges due under applicable law on such Tax Returns, reports, declarations and forms have been paid, and there are no material deficiencies for any Taxes owed to any government (except for any failure to file a Tax Return, any incompleteness or inaccuracy of any Tax Return or any failure to pay Taxes, as applicable, that does not result in either Continental or Mattituck being liable for such Taxes or does not give rise to a Lien). The foregoing Tax Returns reflect in all material respects the facts regarding the income, business, assets, operations and status of any entity required to be shown thereon. To the Seller’s Knowledge, there is no action, suit, proceeding, investigation, audit or claim now pending against, or with respect to any Tax or assessment, nor is there any claim for additional Tax or assessment asserted in writing by any such authority relating to the Taxes of, the Seller, Continental and Mattituck, as the case may be, with respect to the Business. There are no material Liens for Taxes upon the assets of the Business, except Liens for current Taxes not yet due. There are no agreements for the extension of the time for the assessments of any Taxes of the Business with respect to any income, properties or operations of the Business that have not been complied with. Neither Continental nor Mattituck is a party to any Tax sharing or similar agreement with any Person or has liability for the Taxes of any Person other than Continental or Mattituck under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law). The Seller, Continental and Mattituck (as the case may be) have retained in all material respects all records and software related to Taxes and Tax Returns in accordance with applicable law. Each of the Seller, Continental and Mattituck (as the case may be), with respect to the Business, has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any Employee, independent contractor, creditor or other party. Neither Continental nor Mattituck has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii).

     4.8. Contracts.

     (a) Except for the Contracts listed on Schedule 4.8(a) of the Disclosure Schedules (the “Contracts”) and the contracts and agreements constituting Excluded Assets, neither the Seller (with respect to the Business only), Continental nor Mattituck (as the case may be) has any liabilities or obligations under, and is not otherwise bound by, any executory written (i) mortgage, indenture, note, installment obligation or other instrument relating to the borrowing of

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money, (ii) guarantee of any obligation, (iii) letter of credit, bond or other indemnity (excluding endorsements of instruments for collection in the ordinary course of the operation of the Business), (iv) agreement requiring the payment by Continental or Mattituck (as the case may be) of more than $200,000 in any twelve (12)-month period for the purchase or lease of any machinery, equipment or other capital assets, (v) collective bargaining agreement, employment, international sales agent, representative or consulting agreement or agreement providing for severance payments or other additional similar rights or benefits (whether or not optional) in the event of the sale of the Business, (vi) joint venture agreement, (vii) agreement requiring the payment by Continental or Mattituck (as the case may be) to any Person (other than any division, unit or Affiliate of the Seller) of more than $200,000 in any twelve (12)-month period for the purchase of goods or services, (viii) agreement requiring the payment to Continental or Mattituck (as the case may be) by any Person (other than any division, unit or other Affiliate of the Seller) of more than $200,000 in any twelve (12)-month period for the sale of goods or services provided by the Business or (ix) any Contract between or among either Company, on one hand, and any of the Seller or the Seller’s Affiliates, on the other hand.

     (b) The Seller has delivered or made available to the Purchaser correct and complete copies (in all material respects) of each written Contract listed on Schedule 4.8(a) of the Disclosure Schedules.

     (c) Each Contract disclosed Schedule 4.8(a) of the Disclosure Schedules is in full force and effect in all material respects and constitutes a legal, valid and binding agreement, enforceable in accordance with its terms, by either Company, as the case may be, and, to Seller’s Knowledge, by each other Person that is a party thereto (subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ or landlords’ rights and remedies generally); and except as disclosed in Schedule 4.8(c) of the Disclosure Schedules, neither Company nor, to Seller’s Knowledge, any other party to such Contract has received written notice that it is in violation or breach of or default under any such Contract (or with notice or lapse of time or both, would be in violation or breach of or default under any such Contract) in any material respect.

     (d) Except as set forth on Schedule 4.8(d) of the Disclosure Schedules and for single or one-off purchase orders, neither Company is party to any Contract for the purchase or sale of goods or services with the United States government or prime contractor to the United States government.

     4.9. Real Property.

     (a) Owned Real Property. Neither Continental nor Mattituck owns any real property.

     (b) Leased Real Property. Schedule 4.9(b) of the Disclosure Schedules contains a true and complete list of the Leased Real Property. With respect to the Leased Real Property, except as set forth on Schedule 4.9(b) of the Disclosure Schedules:

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     (i) each of Continental and Mattituck, as the case may be, has a valid leasehold interest in the Leased Real Property, free and clear of all Liens, other than Permitted Liens;

     (ii) neither the Seller, Continental nor Mattituck, as the case may be, has received written notice of any condemnation proceedings, lawsuits or administrative actions relating to the Leased Real Property;

     (iii) neither the Seller, Continental nor Mattituck, as the case may be, has received written notice that the use or occupancy of the Leased Real Property violates in any material respect any covenants, conditions or restrictions that encumber such property, or that any such property is subject to any restriction for which any material Permits necessary to the current use thereof have not been obtained; and

     (iv) to the Seller’s Knowledge, there are no subleases, licenses, concessions or other agreements granting to any Person the right of use or occupancy of any portion of the Leased Real Property.

     4.10. Title and Status.

     (a) The Seller has and will convey to the Purchaser on the Closing Date good and marketable title to all the Stock free and clear of all Liens (other than Permitted Liens). Other than the Intellectual Property, as to which representations and warranties are made pursuant to Section 4.11, each of Continental and Mattituck has either (a) good, marketable and exclusive title to its assets, or (ii) a valid leasehold interest in such assets. Except as set forth in Schedule 4.10 of the Disclosure Schedules, all of such assets are free and clear of all Liens (other than Permitted Liens).

     (b) Notwithstanding the Turbine Engine Business Transfer, except with respect to the Excluded Assets and subject to the receipt of any consents that may be required for the assignment of certain Contracts, the Assets and Properties of the Companies, together with the Purchased Assets and the services to be provided pursuant to the Transition Services Agreement, are sufficient to conduct the Business as currently conducted in all material respects.

     4.11. Intellectual Property. Schedule 4.11 of the Disclosure Schedules identifies each material patent and trademark currently used in connection with the Continental Business or the Mattituck Business (the “Intellectual Property”). With respect to each item of Intellectual Property identified in Schedule 4.11 of the Disclosure Schedules, except as set forth on Schedule 4.11 of the Disclosure Schedules, no action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand is pending or, to the Seller’s Knowledge, threatened which challenges the legality, validity, enforceability, use or ownership of the item. To the Seller’s Knowledge, neither the Seller, Continental nor Mattituck (as the case may be) has received any written notice that it is infringing upon the intellectual property rights of others in connection with the Business or the operation of the Business. The Seller owns, or is licensed to use, all Intellectual Property that is being assigned pursuant to the Assignment Agreement. Except for the Intellectual Property that is being assigned pursuant to the Assignment Agreement,

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Continental owns, or is licensed to use, that Intellectual Property currently used in the conduct of the Continental Business, and Mattituck owns, or is licensed to use, that Intellectual Property currently used in the conduct of the Mattituck Business.

     4.12. Litigation. Schedule 4.12 of the Disclosure Schedules identifies, as of the date hereof, all pending actions, suits and proceedings filed in or brought before any court or other Governmental Entity for which Continental, Mattituck or, solely in connection with the Business, the Seller, has been served and is a party that relate to aviation-related product liability or asbestos claims and any other claim material to the Companies’ overall operation of the Business and which have not been settled, dismissed or otherwise resolved. Except as set forth on Schedule 4.12 of the Disclosure Schedules, each of Continental and Mattituck and, solely in connection with the Business, the Seller is not (a) subject to any unsatisfied judgment, Order, decree, stipulation, injunction or criminal charge or (b) a party to or, to the Seller’s Knowledge, threatened to be made a party to any complaint, action, suit, criminal charge, proceeding, hearing or investigation against Continental or Mattituck or, solely with respect to the Business, the Seller, of or in any court or quasi-judicial or administrative agency of any Governmental Entity that, if adversely determined, would reasonably be expected to have a result in any injunction or other equitable ruling against Continental, Mattituck or the Business that would interfere in any material respect with the Companies’ overall operation of the Business. There are no judicial or administrative actions, proceedings or investigations pending or, to the Seller’s Knowledge, threatened that question the validity of this Agreement or any of the Ancillary Agreements or any action taken or to be taken by the Seller in connection with this Agreement or any of the Ancillary Agreements or that, if adversely determined, would materially impair the Seller’s ability to enter into or perform its obligations under this Agreement or any of the Ancillary Agreements to which it is a party.

     4.13. Employee Benefits.

     (a) Schedule 4.13(a) of the Disclosure Schedules sets forth and identifies a complete and correct list of all Employee Pension Benefit Plans, material Employee Welfare Benefit Plans and any other material employee benefit arrangements or payroll practices (including employment agreements and severance agreements) maintained by the Seller, Continental or Mattituck for the Business, or to which the Seller, Continental, or Mattituck contributes or has any existing liability in connection with the Business, in each case with respect to any Employees (collectively, the “Sponsored Employee Benefit Plans”) separately listing those Sponsored Employee Benefit Plans maintained or sponsored by the Companies (the “Company Plans”). With respect to each Sponsored Employee Benefit Plan, the Seller has provided or made available to the Purchaser a current, accurate and complete copy thereof and, to the extent applicable, the most recent determination letter, and any summary plan description and other written communications (or a description of any oral communications) by the Seller or the Companies to the Employees concerning the extent of the benefits provided under a Sponsored Employee Benefit Plan.

     (b) Each Company Plan has been established and administered in all material respects in accordance with its terms and in material compliance with the applicable provisions of ERISA, the Code and other applicable Laws. As of the Closing Date, all contributions required

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to be made to any Company Plan with respect to any periods through the Closing Date have been timely made.

     (c) With respect to any Company Plan, (i) no actions, suits or claims (other than routine claims for benefits in the ordinary course) are pending or, to the Seller’s Knowledge, threatened and (ii) no facts or circumstances exist that could give rise to any such actions, suits or claims.

     (d) Except as set forth on Schedule 4.13(d) of the Disclosure Schedules and as accrued in the Financial Statements, the Companies have no liabilities with respect to the Seller Sponsored Employee Benefit Plans.

     (e) Except as set forth on Schedule 4.13(e) of the Disclosure Schedules, neither Continental nor Mattituck maintains or is obligated to provide benefits under, nor do any of such entities have any liability with respect to, any life, medical or health plan which provides or will provide such benefits to retired or other terminated Employees.

     (f) To Seller’s Knowledge, neither of the Companies has at any time sponsored or maintained an employee benefit plan that is subject to Section 412 of the Code or Title IV of ERISA, or contributed to any “multiemployer plan”, as that term is defined in Section 4001 of ERISA.

     (g) Except as set forth on Schedule 4.13(g) of the Disclosure Schedules or as otherwise contemplated by Sections 8.1(f), 8.1(i) and 8.1(j) of this Agreement, the consummation of the transactions contemplated by this Agreement will not (either alone or together with any other event) entitle any employee, consultant or director of the Companies to severance, change of control or other similar pay or benefits under, or accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other material obligation to such persons. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) to Employees, or that otherwise vests, in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code.

     4.14. Labor Relations. Except as set forth on Schedule 4.14 of the Disclosure Schedules, there are no disputes, claims or actions pending or, to the Seller’s Knowledge, threatened between the Seller, Continental or Mattituck (as the case may be) and any Employee or any labor or other collective bargaining unit representing any Employee, in each case that could reasonably be expected to result in a labor strike, material slow-down or work stoppage. Except as listed in Schedule 4.14 of the Seller Disclosure Schedules, there are no unfair labor practice charges, grievances or complaints pending or, to the Seller’s Knowledge, threatened in writing by or on behalf of any Employee or group of Employees.

     4.15. Environmental Matters. Except as set forth on Schedule 4.15 of the Disclosure Schedules, each of Continental and Mattituck (as the case may be) (1) is and at all times since

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January 1, 2007 has been in material compliance with all Environmental Laws; (2) has not entered into any judgment, decree or order issued by any Governmental Entity, or received any written notice from a Governmental Entity or any other Person, in any such case relating to material non-compliance with any Environmental Law regarding operation of the Business and which have not been fully resolved (including the payment of any fines and penalties with respect thereto) or to any investigation or remediation of Hazardous Materials regarding the Business or Leased Real Property pursuant to any Environmental Law; (3) has not received any written communication alleging that any of Continental or Mattituck (as the case may be) has any material liability under any Environmental Laws relating in any manner to the Release of Hazardous Materials at the Leased Real Property, or at a facility formerly owned or operated by Continental or Mattituck; or (4) has not (i) treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, Released or exposed any Person to (except with respect to (x) exposure to asbestos or asbestos containing materials, which is the subject of Section 4.12, (y) Employees, former employees, contractors or agents, or (z) exposure resulting from nonmaterial health effects) any Hazardous Materials or owned or operated any property or facility (and no such property or facility is contaminated by any Hazardous Materials) so as to give rise to any material liabilities or any material investigative, corrective or remedial obligations under any Environmental Law, or (ii) either expressly or by operation of law, assumed or undertaken any material liability, including without limitation any material obligation for corrective or remedial action, of any other Person under any Environmental Laws. Notwithstanding the generality of any other representations in this Agreement, this Section 4.15 will be deemed to contain the only representations and warranties in this Agreement with respect to environmental matters or Environmental Laws (other than with respect to litigation as set forth in Section 4.12 and permits as set forth in Section 4.17).

     4.16. Legal Compliance. Except (a) with respect to compliance with Environmental Laws (which is covered by Section 4.15), Intellectual Property (which is covered by Section 4.11), Export Laws and Regulations (which is covered by Section 4.24) and Tax Laws (which is covered by Section 4.7), and (b) as set forth on Schedule 4.16 of the Disclosure Schedules, each of the Seller (in connection with the Business), Continental and Mattituck are in material compliance with all applicable Laws and Orders applicable to them. Except as disclosed in Schedule 4.16 of the Disclosure Schedules and where such violations or defaults would not have a material adverse impact on the results of operations or financial condition of the Business, none of the Seller (in connection with the Business), Continental or Mattituck is, or has at any time within the last five (5) years been, or has received any written notice that it is or has at any time within the last five (5) years been, in violation of or in default under any Law or Order applicable to such Company or the Business, or any of their respective Assets and Properties.

     4.17. Permits. Continental and Mattituck hold all material Permits that are required by any Government Entity to permit them to operate the Business and the Purchased Assets (as the case may be) as they are currently operated, including, without limitation, all Permits required under Environmental Laws with respect to the operations and facilities of Continental and Mattituck. No actions are pending for which either Company has received written notice or, to the Seller’s Knowledge, threatened, to revoke, terminate, cancel, restrict, materially modify, challenge or otherwise appeal any such material Permits. Each material Permit is listed on Schedule 4.17 of the Disclosure Schedules.

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     4.18. Brokers’ Fees. The Seller has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Purchaser could become liable or obligated.

     4.19. Insurance. Schedule 4.19 of the Disclosure Schedules contains a summary of each material insurance policy currently covering any of Continental, Mattituck or the Business (collectively, the “Insurance Policies”). All of the Insurance Policies are valid and binding and in full force and effect (subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ or landlords’ rights and remedies generally and subject as to enforceability to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing) and, as of the date hereof, there is no material claim by Continental or Mattituck pending under any Insurance Policy as to which coverage has been denied or disputed by the underwriters of such Insurance Policy. All premiums due thereunder have been paid when due and none of the Seller, Continental or Mattituck has received any written notice from any underwriter of non-coverage of any particular claim or of cancellation, non-renewal, material premium increase or other material change in prospective coverage with respect to any such Insurance Policies.

     4.20. Product Warranty. Substantially all of the products manufactured, sold, leased, and delivered by Continental and Mattituck are subject to standard written warranty terms and conditions of sale or lease. There are no product warranty claims pending, or to the Seller’s Knowledge, threatened, against any of Continental or Mattituck in each case that, individually, could reasonably be expected to give rise to a liability of more than $350,000.

     4.21. Accounts Receivable. All accounts receivable of Continental, Mattituck and the Business reflected on the Financial Statements (the “Accounts Receivable”): (a) arose from bona fide sales transactions in the ordinary course of business, (b) to Seller’s Knowledge, are legal, valid and binding obligations of the respective debtors enforceable in accordance with their terms, (c) to Seller’s Knowledge, are not subject to any valid set-off or counterclaim and (d) are not subject to any actions, suits and proceedings filed in or brought before any court or other Governmental Entity by or on behalf of either Company or the Business.

     4.22. Inventory. Except with respect to the excess, obsolete inventory and slow moving reserve contained in the Financial Statements, all of the inventory and raw materials used by the Companies and the Business consists of a quality and quantity usable and salable in the ordinary course of business consistent with past practice, subject to normal and customary allowances in the industry for spoilage, damage and outdated items.

     4.23. Customers and Suppliers. Schedule 4.23 of the Disclosure Schedules lists each of the customers of each of Continental and Mattituck, respectively, that account for 10% or more of each of such entity’s revenue for each of the two (2) most recent fiscal years (the “Significant Customers”) and sets forth opposite the name of each such Significant Customer the percentage of net sales attributable to such Significant Customer for each such entity. Schedule 4.23 of the Disclosure Schedules also lists each of the suppliers of each of Continental and Mattituck, respectively, that account for 5% or more of each of such entity’s purchases of parts, components and assemblies, subassemblies and raw materials for each of the two (2) most recent fiscal years

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(the “Significant Suppliers”) and sets forth opposite the name of each such Significant Supplier the percentage of purchases of parts, components and assemblies, subassemblies and raw materials attributable to such Significant Supplier for each such entity. Except as disclosed on Schedule 4.23 of the Disclosure Schedules, no such customer or supplier has ceased or materially reduced its purchases from, use of the services of, or sales or provision of services to the Company since the date of the Most Recent Balance Sheet, or to Seller’s Knowledge, has threatened or intends to cease or materially reduce such purchases, use, sales or provision of services after the date hereof.

     4.24. Export Laws and Regulations.

     (a) No product, technical data or service provided, made, sold or distributed by the Companies or the Business now or during the last five (5) years that is exported, re-exported or transshipped by the Companies or the Business outside of the United States required a license or authorization for export, re-export or transshipment from any Governmental Authority of the United States; and (ii) no product, technical data or service provided, made, sold or distributed by the Business now or during the last five (5) years that is exported, re-exported or transshipped from a country other than the United States by the Company required a license for export, re-export or transshipment from any Governmental Authority of such country. To the Seller’s Knowledge, no technical data or service provided, made, sold or distributed by the Business as of the date hereof would require a license for export to The People’s Republic of China.

     (b) No action has been taken by the Seller (with respect to the Business), the Companies or the Business, or, to Seller’s Knowledge, as applicable, any director, officer, agent, employee thereof, directly or indirectly, that would result in a violation by the Companies or the Business of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) and there are no Actions or Proceedings pending for which the Seller or Companies have received written or verbal notice of or, to the Seller’s Knowledge, threatened against the Company or the Business related to a violation or an alleged violation of the FCPA by either Company or the Business.

     4.25. LIMITED WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 4, THE SELLER MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER TO THE PURCHASER, EXPRESS, IMPLIED OR STATUTORY, CONCERNING THE PURCHASED ASSETS, THE STOCK, THE ASSUMED LIABILITIES OR THE BUSINESS. EXCEPT AS SET FORTH IN THIS SECTION 4, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO VALUE, QUALITY, QUANTITY, CONDITION, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, WORKING ORDER, COMPLIANCE WITH LAW OR FUTURE PROFITABILITY OF CONTRACTS OR COMMITMENTS OF THE BUSINESS OR ANY ASSETS OF THE BUSINESS. ANY WARRANTIES OTHER THAN THOSE EXPRESSLY PROVIDED FOR IN THIS SECTION 4 WHETHER EXPRESS, IMPLIED OR STATUTORY, WRITTEN OR ORAL, ARE HEREBY EXPRESSLY DISCLAIMED.

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     THE PURCHASER HAS RECEIVED FROM THE SELLER CERTAIN PROJECTIONS, INCLUDING PROJECTED BALANCE SHEETS AND STATEMENTS OF OPERATING REVENUES AND INCOME FROM OPERATIONS OF CONTINENTAL AND MATTITUCK AND CERTAIN BUSINESS PLAN INFORMATION FOR ALL OR PART OF SUCH YEARS. THE PURCHASER ACKNOWLEDGES THAT (I) THERE ARE UNCERTAINTIES INHERENT IN ATTEMPTING TO MAKE SUCH ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS, (II) THE PURCHASER IS FAMILIAR WITH SUCH UNCERTAINTIES, (III) THE PURCHASER IS TAKING FULL RESPONSIBILITY FOR MAKING ITS OWN EVALUATION OF THE ADEQUACY AND ACCURACY OF ALL ESTIMATES, PROJECTIONS AND OTHER FORECASTS AND PLANS (INCLUDING THE REASONABLENESS OF THE ASSUMPTIONS, UNDERLYING ESTIMATES, PROJECTIONS AND FORECASTS FURNISHED TO IT), AND (IV) THE PURCHASER SHALL HAVE NO ENTITLEMENT TO ANY ESTIMATES, PROJECTIONS OR FORECASTS OF THE SELLER AFTER THE DATE HEREOF. ACCORDINGLY, THE SELLER MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO ANY SUCH ESTIMATES, PROJECTIONS OR OTHER FORECASTS AND PLANS.

     Section 5 Representations and Warranties of the Purchaser. The Purchaser represents and warrants to the Seller as follows:

     5.1. Organization of the Purchaser and Purchaser Guarantor. The Purchaser is a Delaware corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is licensed or qualified to transact business as a foreign corporation, and is in good standing under the laws of all states in the United States where its business would require it to be so licensed or qualified, except where the failure to be so licensed or qualified would not reasonably be expected to materially impair the ability of the Purchaser to consummate the transactions contemplated by this Agreement. Purchaser Guarantor is a limited liability company duly organized, validly existing and in good standing under the laws of the Peoples Republic of China and is licensed or qualified to transact business as a foreign corporation, and is in good standing under the laws of all states in the United States where its business would require it to be so licensed or qualified, except where the failure to be so licensed or qualified would not reasonably be expected to materially impair the ability of Purchaser Guarantor to consummate the transactions contemplated by this Agreement.

     5.2. Authorization of Transaction. The Purchaser has full corporate power and authority to, and has taken all action to enable it to, execute and deliver this Agreement and each of the Ancillary Agreements to which it is specified to be a party and to perform its obligations hereunder and thereunder (including the consummation of the transactions contemplated hereby). Purchaser Guarantor has full corporate power and authority to, and has taken all action to enable it to, execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes, and each of the Ancillary Agreements to which the Purchaser is specified to be a party, when executed and delivered by the Purchaser, will constitute, the valid and legally binding obligation of the Purchaser enforceable against the Purchaser in accordance with their respective terms and conditions, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws now or hereafter in effect relating to creditors’ and landlords’ rights and general principles of equity, including commercial reasonableness, good

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faith and fair dealing. This Agreement, to the extent specified herein, constitutes the valid and legally binding obligation of Purchaser Guarantor enforceable against Purchaser Guarantor in accordance with its terms and conditions, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws now or hereafter in effect relating to creditors’ and landlords’ rights and general principles of equity, including commercial reasonableness, good faith and fair dealing.

     5.3. Noncontravention; Consents. Except as set forth on Schedule 5.3(a) of the Purchaser Disclosure Schedules, neither the execution and delivery of this Agreement by the Purchaser or Purchaser Guarantor, nor the performance of their obligations hereunder (including the consummation of the transactions contemplated hereby), nor the execution and delivery by the Purchaser of any of the Ancillary Agreements to which it is specified to be a party, nor the performance of the Purchaser of its obligations thereunder, do or will (with or without notice or lapse of time, or both) conflict with or result in any breach of or acceleration of rights under, constitute a default under, result in a violation of or result in the creation of any Lien upon any material properties or assets of the Purchaser or Purchaser Guarantor under (i) any provision of the charter or bylaws of the Purchaser or Purchaser Guarantor, (ii) any Law to which the Purchaser or Purchaser Guarantor (or any of their respective material properties) is subject, or (iii) any agreement or commitment to which the Purchaser or Purchaser Guarantor is a party or by which the Purchaser or Purchaser Guarantor (or any of their respective material properties) is bound, except for such conflicts, breaches, accelerations, defaults, violations and Liens, in the case of the foregoing clauses (ii) and (iii), which would not reasonably be expected to materially impair the ability of the Purchaser or Purchaser Guarantor to consummate the transactions contemplated by this Agreement. As of the Closing Date, except as set forth on Schedule 5.3(b) of the Purchaser Disclosure Schedules, the Purchaser and Purchaser Guarantor will have given all required notices and obtained all material licenses, permits, consents, approvals, authorizations, and orders of Governmental Entities as are required in order to enable the Purchaser and Purchaser Guarantor to perform their respective obligations under this Agreement and each of the Ancillary Agreements.

     5.4. Litigation. There are no judicial or administrative actions, proceedings or investigations pending or, to the Purchaser’s knowledge, threatened that question the validity of this Agreement or any of the Ancillary Agreements or any action taken or to be taken by the Purchaser or Purchaser Guarantor in connection with this Agreement or any of the Ancillary Agreements or that, if adversely determined, would have a material adverse effect upon the Purchaser’s or Purchaser Guarantor’s ability to enter into or perform its obligations under this Agreement or any of the Ancillary Agreements to which it is a party.

     5.5. Brokers’ Fees. Neither the Purchaser nor the Purchaser Guarantor has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Seller could become liable or obligated.

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     5.6. Financing and Solvency.

     (a) Purchaser shall be, as of the Closing, able to pay its debts generally as they become due and is solvent and will not be, nor, assuming that Continental and Mattituck are solvent as of the Closing, will Continental or Mattituck be, as of immediately after the Closing, rendered insolvent solely as a result of the transactions contemplated hereby. At the time of this Agreement, and as of the Closing, the Purchaser has and will have cash resources sufficient to consummate the transactions contemplated by this Agreement and to pay the Purchase Price and to pay all required fees and expenses required to be paid by the Purchaser hereunder.

     (b) The Purchaser is not in breach or default of any obligation owed to any creditor for borrowed money or any other creditor who may have a lien or other encumbrance on any of its rights and assets. The Purchaser has not, either voluntarily or involuntarily, (i) admitted in writing that it is or may become unable to pay its debts generally as they become due, (ii) filed or consented to the filing against it of a petition in bankruptcy or a petition to take advantage of an insolvency act, (iii) made an assignment for the benefit of its creditors, (iv) consented to the appointment of a receiver for itself or for the whole or any substantial part of its property, (v) had a petition in bankruptcy filed against it, (vi) been adjudged as bankrupt or filed a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any law or statute of the United States of America or any other jurisdiction, or (vii) incurred or reasonably should have believed it would incur, debts that are or will be beyond its ability to pay as such debts mature. Purchaser is not engaged, nor currently contemplates being engaged, in a business or transaction for which any property remaining with Purchaser following any such business or transaction would be insufficient to continue to pay its debts generally as they come due.

     5.7. Investment. The Purchaser is not acquiring the Stock with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). The Purchaser is an accredited investor under the Securities Act and is capable of evaluating the merits and risks of an investment in the Stock.

     Section 6 Pre-Closing Covenants. Between the date hereof and the Closing:

     6.1. General. Each of the Seller and the Purchaser will use its commercially reasonable efforts to take all actions and to do all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement (including satisfying the closing conditions set forth in Section 9).

     6.2. Notices and Consents; CFIUS.

     (a) The Seller will, and it will cause Continental, and Mattituck to, prior to the Closing Date, give all notices to third parties and will use its commercially reasonable efforts at its expense to obtain all third party approvals, consents, novations and waivers that are required to be obtained by the Seller in connection with the transactions contemplated by this Agreement; provided, however, that neither the Seller, Continental nor Mattituck will be obligated hereunder to pay any consideration to the third party from whom such approval, consent, novation or waiver is requested except for fees associated with required filings. The Purchaser hereby agrees

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to cooperate with the Seller in its efforts to obtain such third party consents and where necessary will give or procure the giving of security to a contracting third party in order to obtain such approval, consent, novation or waiver.

     (b) The Seller and the Purchaser, as promptly as practicable, but no later than five (5) days from the date of this Agreement, shall submit: (1) a Notification and Report Form and related material with the Federal Trade Commission and the Antitrust Division of the United Stated Department of Justice under the Hart-Scott-Rodino Act or under the antitrust or competition Laws of applicable foreign jurisdictions, and (2) a joint filing (the “Joint Filing”) to CFIUS pursuant to 31 C.F.R. Part 800 with regard to the transactions contemplated hereby. The Seller, the Purchaser and the Purchaser Guarantor will each (i) promptly provide all necessary information within their respective control and (ii) use commercially reasonable efforts to provide all necessary information which is not within such party’s control, in each case, to complete the Joint Filing in that time period and to timely respond to any requests by CFIUS for additional information, and they shall keep each other generally apprised of communications with, and requests for additional information from, CFIUS, and use their respective commercially reasonable efforts to obtain CFIUS approval.

     (c) As promptly as practicable following the date of this Agreement, the Purchaser and Purchaser Guarantor shall use their respective commercially reasonable efforts to obtain any consent, approval, and make and filings or notices to, The People’s Republic of China, necessary to consummate the transactions contemplated by this Agreement.

     6.3. Carry on in Regular Course.

     (a) Except as expressly permitted by this Agreement, from and after the date of this Agreement until the Closing or earlier termination of this Agreement pursuant to Section 11, the Seller will, and it will cause Continental and Mattituck to carry on the operations of the Business in the same manner as heretofore conducted in all material respects. Without limiting the generality of the foregoing, the Seller will:

     (i) cause the Companies and the Business to use their respective commercially reasonable efforts to (A) preserve intact the present business organization of such Companies and its Business, (B) keep available (subject to dismissals and retirements in the ordinary course of business) the services of the present, employees and consultants of such Company and its Business, (C) maintain the Assets and Properties of such Company and its Business in good working order and condition, ordinary wear and tear excepted, (D) maintain the goodwill of customers, suppliers, lenders and other Persons to whom such Company and its Business sells goods or provides services or with whom such Company and its Business otherwise has significant business relationships and (E) continue, in all material respects, all current sales, marketing and promotional activities relating to the business and operations of such Company and its Business;

     (ii) except to the extent required by applicable Law, (A) cause the books and records of the Companies and the Business to be maintained in the usual, regular and ordinary manner, (B) not permit any material change in (x) any pricing, investment,

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accounting, financial reporting, inventory, credit, allowance or Tax practice or policy or election of the Companies and the Business, or (y) any method of calculating any bad debt, contingency or other reserve of the Companies and the Business for accounting, financial reporting or Tax purposes and (C) not permit any change in the fiscal year of the Companies and the Business; and

     (iii) comply, and cause the Companies and the Business to comply, in all material respects, with all Laws and Orders applicable to the Business and the operations of the Companies, and promptly following receipt thereof to give Purchaser copies of any written notice received from any Governmental Entity or other Person alleging in writing any violation of any such Law or Order.

     (b) Except as expressly permitted by this Agreement or on Schedule 6.3(b), from and after the date of this Agreement until the Closing or earlier termination of this Agreement pursuant to Section 11, the Seller will not, and will cause Continental and Mattituck not to, without the prior consent of Purchaser (which shall not be unreasonably withheld or delayed):

     (i) make or institute any material change in the methods of manufacture, management, accounting or operation of the Business;

     (ii) amend the Companies’ certificates or articles of incorporation or by-laws (or other comparable corporate charter documents) in any material respect or take any action with respect to any such amendment or any recapitalization, reorganization, liquidation or dissolution of any such corporation;

     (iii) authorize, issue, sell or otherwise dispose of any shares of capital stock of or any option with respect to the Companies, or modify or amend any right of any holder of outstanding shares of capital stock of or option with respect to the Companies;

     (iv) other than in the ordinary course of business and as set forth in Section 6.8, acquire or dispose of, otherwise transfer or assign, or incur any Lien (other than a Permitted Lien) on, any Assets or Properties of the Companies that are individually or in the aggregate material to the Business;

     (v) materially amend, modify, terminate or grant any material waiver under any Contract or Permit material to the Business, other than terminations of Contracts or Permits in accordance with their terms, or enter into any Contract outside the ordinary course of business;

     (vi) in each case in connection with the Business, (a) make capital expenditures or commitments for additions to property, plant or equipment constituting capital assets in an aggregate amount exceeding $250,000 or (B) incur any Indebtedness (net of amounts of Indebtedness discharged during such period), other than Intercompany Payables;

     (vii) other than in the ordinary course of business and consistent with past practice or to the extent required by applicable Laws, in each case with respect to the

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Business, adopt, enter into or become bound by any Employee Benefit Plan, employment-related Contract or collective bargaining agreement, or amend, modify or terminate (partially or completely) any such Employee Benefit Plan, employment-related Contract or collective bargaining agreement or increase the compensation, bonus or benefits payable to any of the Employees;

     (viii) transfer, assign and/or relocate from the Business, the employees of the Companies other than the employees of the Turbine Engine Cell Business as provided in Section 6.8; or

     (ix) enter into any Contract to do or engage in any of the activities described in Section 6.3(b)(i) through Section 6.3(b)(viii).

     (c) Notwithstanding Section 6.3(a) or Section 6.3(b), nothing herein shall prohibit or prevent any of Continental or Mattituck from: (i) repaying, collecting or otherwise extinguishing any Intercompany Receivables or Intercompany Payables pursuant to Section 6.4, (ii) declaring, setting aside, or paying any Cash dividend, (iii) making any distribution of Cash, (iv) redeeming or purchasing, or otherwise acquiring, any of its capital stock or other equity interests for Cash, (v) repaying any of its Indebtedness for Cash or (vi) transferring, assigning and/or relocating the assets and employees of the Turbine Engine Cell Business as provided in Section 6.8.

     6.4. Intercompany Receivables and Intercompany Payables. The Seller, Continental and Mattituck shall repay, collect or otherwise extinguish all Intercompany Receivables and Intercompany Payables (except for Intercompany Receivables and Intercompany Payables under any captive insurance company policies insuring either or both of the Companies) immediately prior to the Closing with no further liability or obligation of the Seller or the Companies therefor. The parties agree to treat, for all federal Tax purposes, the repayment, collection or extinguishment of any such (a) Intercompany Receivables as dividends to the Seller and (b) Intercompany Payables as contributions of capital by the Seller.

     6.5. Access. The Seller will, and it will cause Continental and Mattituck to, permit representatives of the Purchaser to have access at reasonable times to the Business and the Purchaser agrees that it will use all commercially reasonable efforts to schedule its review of such items at such times which are not disruptive to the operations of the Business. Prior to the Closing Date, the Purchaser will be permitted to complete, at the sole cost and expense of the Purchaser, a Phase I environmental study of the Leased Real Property; provided, however, that no such Phase I or other environmental review by the Purchaser will involve sampling, Phase II testing or invasive investigatory work without prior written consent of the Seller. The Purchaser will deliver to the Seller a copy of any Phase I or other third party report generated by any permitted environmental investigation. The Purchaser will treat any review, including any environmental review of the Leased Real Property, as confidential information.

     6.6. Notification of Certain Matters.

     (a) Each party will give prompt written notice to the other in writing of (i) any fact, change, condition, circumstance or occurrence or nonoccurrence of any event of which it is

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aware that will or is reasonably likely (A) render untrue any representation or warranty of such party contained in this Agreement or (B) to result in any of the conditions set forth in either Section 9.1 or Section 9.2 of this Agreement becoming incapable of being satisfied, (ii) any notice or other communication from any Governmental Entity in connection with the transaction contemplated by this Agreement, (iii) any Actions or Proceedings (or communications indicating that the same may be contemplated) commenced or threatened against either the Purchaser, the Purchaser Guarantor, the Seller, the Companies or the Business which, if pending or threatened on the date of this Agreement would be required to be disclosed pursuant to Section 4.12 or Section 5.4 of this Agreement or (iv) any notice or other communication from any third party alleging that the consent of such party is required in connection with the transactions contemplated by this Agreement; provided that the receipt of any such notice shall not be deemed to cure any breach of this Agreement or non-compliance with the terms of this Agreement or otherwise limit the rights of the parties hereto.

     (b) The Seller will deliver to the Purchaser prior to the Closing Date a written update or supplement to the Disclosure Schedules reflecting events occurring and contracts and agreements from the date of this Agreement through the Closing Date.

     (i) To the extent that such updated or supplemental Disclosure Schedules reflect matters or events which have occurred after the date of this Agreement, which do not constitute a violation of any of Seller’s covenants set forth in Section 6 and which would reasonably be expected to result in Losses in the aggregate of $2 million or less, then the Disclosure Schedules shall be deemed to be amended as of the Closing Date to include the information set forth on such updated or supplemental Disclosure Schedules.

     (ii) To the extent that such updated or supplemental Disclosure Schedules reflect matters or events which have occurred after the date of this Agreement and which would reasonably be expected to result in Losses in the aggregate of $10 million or more, then (i) the parties will negotiate in good faith during the five (5)-day period immediately after delivery of the update or supplemental Disclosure Schedules to determine the consequences of such disclosures, (ii) the Disclosure Schedules will be amended only to the extent that the parties mutually agree as a result of such negotiation and (iii) the Purchaser may elect to terminate this Agreement after the expiration of such five (5)-day period, in which event the Seller and the Purchaser will have no liability to the other as a result of such termination.

     (iii) To the extent that such updated or supplemental Disclosure Schedules reflect matters or events which have occurred after the date of this Agreement which do not arise in the ordinary course of business of the Business and would reasonably be expected to result in Losses in the aggregate in excess of $2 million but less than $10 million, then (i) the parties will negotiate in good faith during the five (5)-day period immediately after delivery of the updated or supplemental Disclosure Schedules to determine the consequences of such disclosures, (ii) use commercially reasonable and good faith efforts to negotiate and mutually agree upon a reduction to the Purchase Price, if any; provided that, any such reduction to the Purchase Price shall not exceed $3.6 million in the aggregate, and (iii) upon such agreement, (A) the Disclosure Schedules

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shall be deemed to be amended as of the Closing Date to include the information set forth on such updated or supplemented Disclosure Schedule and (B) the Purchaser Indemnified Parties shall have waived any right to indemnification pursuant to Section 10 or recover any Losses from the Seller or any of Seller’s Affiliates, arising from or relating to the matters reflected in such updated or supplemental Disclosure Schedules.

     (iv) Notwithstanding the foregoing, the dollar thresholds referenced in this Section 6.6(b) shall be solely for use in this Section 6.6(b) and shall not be utilized to determine material, materiality or whether a material adverse impact or Material Adverse Effect has occurred for purposes of other sections of this Agreement.

     6.7. Compliance with FAA Regulations. Purchaser shall, as soon as practical following the date hereof but in any event within sixty (60) days following the date hereof, notify the Federal Aviation Administration of the transactions contemplated by this Agreement and the necessity to effectuate name changes with respect to any type certificates, amended and/or supplemental type certificates, parts manufacturer approval, production certificates, repair station certificates and any other applicable certificates or approvals held by either Company as of the Closing. The Seller shall cooperate with the Purchaser in making such notification and effectuating such name changes as contemplated by this Section 6.6(b)(i) and shall provide the Purchaser with all information reasonably requested by the Purchaser relating thereto, and the Purchaser shall pay all out-of-pocket costs and expenses of Seller, Continental and Mattituck reasonably incurred in connection with such cooperation.

     6.8. Transfer of Turbine Engine Cell Business. Prior to Closing, to the extent not previously done, the Seller will cause Continental to transfer, assign, and/or relocate all assets and materials that comprise and constitute the Turbine Engine Cell Business from Continental’s Mobile, Alabama Facilities to a newly designated location or locations (the “Turbine Engine Business Transfer”).

     Section 7 Post-Closing Covenants. The parties agree as follows with respect to the period following the Closing Date:

     7.1. General. In case at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, each of the parties will take such further action (including the execution and delivery of such further instruments and documents) as the other party reasonably may request, at the sole cost and expense of the requesting party (unless the requesting party is entitled to indemnification therefor under Section 10 of this Agreement).

     7.2. Post-Closing Consents; Nonassignable Contracts. The Seller will use its commercially reasonable efforts after the Closing Date to obtain, and to cause Continental and Mattituck to obtain, all third party approvals, consents, novations and waivers that are not obtained prior to the Closing Date and that are required in connection with the transactions contemplated by this Agreement; provided that the Seller will not be obligated hereunder to pay any consideration to the third party from whom such approval, consent, novation or waiver is required. The Purchaser hereby agrees to use commercially reasonable efforts to cooperate with the Seller in its efforts to obtain such third party approvals, consents, novations and waivers and

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where necessary will give or procure the giving of security to obtain such third party approval, consent, novation or waiver.

     7.3. Litigation Support; Tax Return Preparation; Records Retention; Transitional Services.

     (a) In the event and for so long as any party is actively investigating, contesting, defending against or prosecuting any charge, complaint, action, suit, contract appeal, proceeding, hearing, investigation, claim, demand or audit (including routine audits and contract close-outs) in connection with (i) any transaction contemplated under this Agreement or (ii) any fact, circumstance, condition, activity, practice, event, incident, action, failure to act or transaction on or prior to the Closing Date involving the Business, the other party will cooperate reasonably with the contesting or defending party, its insurers and counsel in the contest or defense, make available its personnel and provide such testimony and access to its books, records and equipment as may be reasonably necessary in connection with the contest or defense.

     (b) The Seller and the Purchaser will each provide the other party with such assistance as may reasonably be requested in connection with the preparation of any Tax Return, audit or other examination by any taxing authority or judicial or administrative proceeding relating to liability for Taxes and will provide to the other party all records and other information which may be relevant to any such Tax Return, audit or examination, proceeding or determination and with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any Tax Return of the other party for any period.

     (c) The Seller shall include the income of Continental and Mattituck on its consolidated federal income Tax Returns for all taxable periods through the end of the Closing Date. The Seller shall pay all Taxes in connection with such Tax Returns. The Purchaser shall timely furnish Tax information to the Seller with respect to each of Continental and Mattituck in accordance with past custom and practice and as requested by the Seller for the preparation of its consolidated Tax Returns to be prepared by the Seller pursuant to the preceding sentence. The Seller will prepare and file all state and local Tax Returns that it is required to file with respect to Continental and Mattituck on the basis of the Tax year ending as of the Closing Date. The Seller shall be responsible for and shall timely pay all Pre-Closing Taxes. The Purchaser shall be responsible for and shall timely pay all Post-Closing Taxes.

     (d) The Purchaser will be responsible for the preparation and filing of all Tax Returns that it is required to file with respect to Continental and Mattituck attributable to taxable periods (or portions thereof) commencing after the Closing Date. Such Tax Returns shall be true, complete and correct in all material respects. The Purchaser will make all payments of Taxes shown to be due on such Tax Returns.

     (e) The Purchaser shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Company for any taxable period that begins before and ends after the Closing Date (“Straddle Period”) in accordance with applicable Law. The Seller shall pay to the Purchaser within twenty (20) days after the date on which Taxes are paid with respect to a

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Straddle Period an amount equal to the portion of such Taxes that relates to Pre-Closing Tax Period to the extent such Taxes were not paid prior to Closing, were not paid by the Seller after Closing, and are not accrued on the Closing Statement. For purposes of this Section 7.3(e), in case of any Taxes that are imposed on a periodic basis and are payable for a Straddle Period, the portion of such Tax that relates to the Pre-Closing Tax Period shall (i) in the case of any Tax based upon or related to income or receipts, be deemed equal to the amount that would be payable if the relevant taxable period ended on the Closing Date and (ii) in the case of any Taxes other than Taxes described in (i) above, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in the entire taxable period. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with prior custom and practice of the Seller, Continental and Mattituck.

     (f) Other than with respect to Taxes paid by Purchaser for which the Seller has not indemnified the Purchaser pursuant to this Agreement, any Tax refunds that are received by the Purchaser or any of Continental or Mattituck, and any amounts credited against Tax to which the Purchaser or any of Continental or Mattituck becomes entitled, that relate to a Pre-Closing Tax Period shall be for the account of the Seller, and the Purchaser shall pay over to the Seller any such refund or the amount of any such credit within fifteen (15) days after receipt or entitlement thereto, net of the Tax and other costs incurred in connection therewith.

     (g) The Purchaser will provide reasonable assistance to the Seller in connection with any Tax audits or other administrative or judicial proceedings involving the Business and affecting such income Tax Returns or declarations for any period all or any portion of which is prior to the Closing Date, including the participation of the then current personnel of the Purchaser in such audits and proceedings. The Purchaser will not, without the prior written consent of the Seller, or except as required by Law, initiate any contract or voluntarily enter into any agreements with, or volunteer any information to, any taxing authorities with regard to specific items on such Tax Returns or declarations.

     (h) The Purchaser will, and will cause the Companies to, maintain all original books, records, files, documents, papers and agreements pertaining to Companies, the Purchased Assets, the Stock, the Assumed Liabilities or otherwise relating to the Business as conducted before the Closing Date for at least seven (7) years following the Closing Date or such longer period as may be required by Law. The Purchaser agrees that before it or the Companies destroy or discard any materials required to be retained pursuant to this Section 7.3(a), it will notify the Seller in writing and the Seller may, at its sole cost and expense, remove or make copies of such materials within sixty (60) days following the date of such written notice. In the event the other party has not removed such materials or otherwise responded within such sixty (60)-day period, such other party shall be deemed to have consented to such destruction or other disposal and the Purchaser or the Companies, as the case may be, may proceed with such action without any liability to the Seller.

     (i) After the Closing Date the Purchaser will provide reasonable services, assistance and cooperation to the Seller in connection with:

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     (i) the completion and delivery of the financial statements and the general ledger of the Business as of the Closing Date to the Seller;

     (ii) the preparation of quarterly, semi-annual and annual reports required to be prepared by the Seller (either by Law or in accordance with the Seller’s internal reporting systems and procedures) in connection with the operation of the Business prior to the Closing Date and with the transactions provided for herein;

     (iii) the preparation of audit information packages required to be prepared by the Seller (either by Law or in accordance with the Seller’s internal reporting systems and procedures) in connection with the operation of the Business prior to the Closing Date, the transactions provided for in this Agreement and the Seller’s year-end financial audit; and

     (iv) such other services as the Seller may reasonably request incidental to the orderly transfer of the Business, the Purchased Assets and the Stock to the Purchaser and the assumption of the Assumed Liabilities by the Purchaser.

     (j) If a request is made by a party pursuant to this Section 7.3, the requesting party shall reimburse the other party for all reasonable expenses, including any reasonable personnel expenses, incurred to comply with such request.

     (k) The Purchaser agrees to indemnify the Seller for any additional tax owed by Seller (including tax owed by Seller due to this indemnification payment) resulting from any transaction engaged by Continental or Mattituck not in the ordinary course of business occurring on the Closing Date after Purchaser’s purchase of the stock of Continental and Mattituck other than any Section 338(h)(10) Election. The Purchaser and the Seller agree to report all transactions not in the ordinary course of business occurring on the Closing Date after the Purchaser’s purchase of the stock of Continental and Mattituck on the Purchaser’s or the acquired company’s federal Income Tax Return to the extent permitted by U.S. Treasury Regulation §1.1502-76(b)(1)(ii)(B).

     7.4. Use of Trademarks; Signage and Labels.

     (a) As soon as practicable after the Closing Date, but in no event more than one hundred and twenty (120) days thereafter, the names utilized in the Business, including in connection with the names of Continental and Mattituck, shall be changed to names that do not include any “Teledyne” and “Teledyne Technologies” marks, including any Teledyne Marks, and the Purchaser shall not use, and shall cause Continental and Mattituck not to use, the Teledyne Marks (including in any domain names) other than for purposes of describing the historical relationship of Continental and Mattituck with the Seller and its Affiliates. Within one hundred and twenty (120) days of the Closing Date, the Purchaser shall cause Continental and Mattituck to deliver to the Seller evidence that ownership of any and all domain name registrations owned by the Continental and Mattituck that contain any Teledyne Mark has been transferred to the Seller, including duly executed copies of all instruments of transfer and other

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documents required to be filed with the applicable registrar and acknowledgment of receipt of such filings by the registrar.

     (b) The Purchaser will, and will cause the Companies to, remove the Teledyne Marks from all exterior signs located at the Leased Real Property as soon as practicable but in any event within one year after the Closing Date. The Companies may use the Teledyne Marks on finished goods and inventory but will change or otherwise replace the stamps and dies bearing the Teledyne Marks as soon as reasonably practicable after the Closing Date, but in any event within one year of the Closing Date.

     (c) The Seller shall, with respect to each trademark licensed by Seller to Continental that are listed on Schedule 4.11 of the Disclosure Schedules and do not comprise the Purchased Assets, within thirty (30) days after receipt of a written request from the Purchaser (i) surrender the applicable certificate of registration to the United States Patent and Trademark Office or other equivalent process of the applicable jurisdiction or (ii) if not so registered, expressly withdraw or abandon any related application for registration. Notwithstanding the foregoing, nothing contained herein shall require Seller to pay any filing or maintenance fees or take any other action to prevent such trademarks from lapsing, expiring or becoming abandoned.

     (d) With respect to each trademark licensed by Seller to Continental that are listed on Schedule 4.11 of the Disclosure Schedules and do not comprise the Purchased Assets, Continental may, in its discretion, use or apply for registrations of trademarks substantially identical to such marks provided that such marks are amended to remove any name or symbol related to any Teledyne Mark.

     7.5. Aircraft Product Liability Insurance.

     (a) Seller shall maintain in full force and effect and not modify to the detriment of the Companies or the Business, all aviation-related insurance policies of the Seller covering the Business as of the date hereof (the “Current Year Policies”) until their current expiration dates of May 31, 2011. Purchaser shall be responsible for, indemnify against and reimburse the Seller for, the pro-rata portion of any and all obligations with respect to the Current Year Policies, including, without limitation, the payment of premiums attributable to periods following the Closing. As promptly as practical in connection with the Closing, Seller shall use its commercially reasonable efforts to cause Purchaser to be named as an additional insured under the Current Year Policies; provided that, Purchaser shall reimburse Seller for any out-of-pocket costs associated therewith.

     (b) (i) For a period of two (2) years from and after the expiration of the Current Year Policies, the Purchaser shall, and shall cause Continental and Mattituck to, obtain and maintain aircraft product liability insurance policies with insurance companies that have a current A.M Best rating of not less than “A-” or S&P “BBB” and (ii) for a period of three (3) years after such two-year period, the Purchaser shall maintain aircraft product liability insurance policies with insurance companies that have a current A.M Best rating of not less than “A-” or S&P “BBB”; provided, however, that if the annual premiums for any such coverage and amount of insurance would exceed 110% of the current annual rate, Purchaser, Continental and Mattituck shall only

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be obligated to obtain and maintain the maximum aggregate coverage which shall then be available at an annual premium equal to 110% of such rate. Such insurance policies shall designate the Seller and each of their respective Affiliates as additional insureds. The Purchaser shall be responsible for any and all obligations with respect to such product liability insurance, including, without limitation, the payment of premiums, retentions (including self insured retentions) and deductibles and all aspects of claims administration. The limits of liability, deductibles or retentions (including self-insured retentions) of such product liability insurance policies shall be similar in all material respects to the limits of liability, deductibles or retentions (including self insured retentions) maintained by the Seller on the date hereof. For clarity, any aircraft product liability insurance policies maintained by the Seller or the Seller’s Affiliates prior to the Closing shall not constitute the policies required to be obtained and maintained by the Purchaser pursuant to this Section 7.5. In addition to the foregoing, Seller shall use commercially reasonable efforts to assist (and with respect to periods before the Closing cause the Companies to assist) Purchaser to obtain or replace insurance with respect to the Business; provided that, Purchaser shall reimburse the Buyer (and the Companies with respect to periods before the Closing) for any out-of-pocket costs incurred in connection therewith.

     (c) The Seller shall provide reasonable cooperation to the Purchaser in order to afford the Purchaser the benefits of policy coverage, after the Closing, under any aviation-related insurance policies of the Seller covering the Business prior to the Closing, including any Current Year Policies (the “Existing Policies”) with respect to any claim or loss covered by such policies that relates to the Business prior to the Closing Date, including without limitation claims currently being processed under such insurance policies. The Purchaser shall promptly notify the Seller of the occurrence of any events that might form the basis of such an insurance claim and the amount of such claim, and shall have the right to tender claims under the Existing Policies. Any such rights of the Purchaser to receive the benefits of policy coverage on any such insurance claim shall be subject to any deductibles, self-insured retentions, retained amounts, retentions or exclusions, including those deductibles and retentions set forth on the Financial Statements and to the other terms of the applicable insurance policy. Notwithstanding the foregoing, after the Closing, in no event shall the Seller or any of the Seller’s Affiliates (i) have any obligation to pursue an insurer under any of the policies of the Seller on behalf of any of Purchaser, Continental or Mattituck or (ii) have any liability to any of the Purchaser, Continental or Mattituck as a result of the refusal by an insurer under any of the policies of Seller to reimburse or pay any of Purchaser, Continental or Mattituck with respect to any claim submitted by any of the Purchaser, Continental or Mattituck; provided, however, that at Purchaser’s reasonable request, Seller shall use commercially reasonable efforts to assist Purchaser in the pursuit of any insurer of Seller or Seller’s Affiliates, except to the extent pursuit of such insurer is to the detriment of Seller or Seller’s Affiliates with respect to their insurance. Seller will take no action whatsoever to limit, terminate (other than an expiration in accordance with its terms) or modify any Existing Policy. In no event shall the Seller or any of the Seller’s Affiliates have any liability or obligation to the Purchaser, Continental or Mattituck in the event that any Existing Policy shall be unavailable or inadequate to cover any Losses for any reason whatsoever (other than due to a breach by Seller of the covenant set forth in the immediately preceding sentence) or shall not be renewed or extended beyond the current expiration date. In the event that any Losses exceed the policy limit of liability of any Existing Policy and the Seller pays for any such

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Losses, then any insurance proceeds received therefor shall be first allocated to reimburse for the amount of any Losses suffered by the Seller.

     (d) Nothing contained herein shall be considered as an attempted assignment of any policy or insurance or as a contract of insurance nor shall be construed to waive any right or remedy of the Seller or any of the Seller’s Affiliates with respect to the Existing Policies. To the extent that the lead underwriter of an Existing Policy or a court of competent jurisdiction deems or determines that an assignment of any rights under an Existing Policy has occurred where such assignment is precluded by the terms of such insurance policy, the Seller shall be responsible for paying any deductible, retentions or other self-insurance obligation and the Purchaser shall promptly reimburse the Seller for such amounts and any other Losses incurred by the Seller or the Seller’s Affiliates in connection with such payments.

     (e) The Purchaser (or Continental or Mattituck, as the case may be) shall be responsible for all aspects of claims administration with respect to any Losses related to the Business and covered by the Existing Policies, regardless of whether the Seller is entitled to indemnification for such Losses pursuant to Section 10 of this Agreement. The Purchaser shall, and as of and after the Closing shall cause each of Continental and Mattituck to, at their sole expense, defend, resolve and administer any one or more or all claims with respect to any Losses covered in whole, or in part, by the Existing Policies, including without limitation, the reporting of claims to the issuers of such Existing Policies, as well as the management, defense and settlement of such claims and, subject to any applicable rules of discovery and except to the extent disclosure of such information would adversely affect attorney-client privilege, at Seller’s request, the Purchaser shall, and shall cause Continental and Mattituck to, at Buyer’s expense, provide the Seller with any and all information concerning, and permit the Seller to monitor, the foregoing management, defense, settlement and insurance handling of such claims. To the extent that the Purchaser (or Continental or Mattituck, as the case may be) is precluded by either the lead underwriter or a court of competent jurisdiction from administering any claims as set forth in this Section 7.5(e), the Seller shall afford reasonable cooperation to the Purchaser in administering such claims; provided, however, that Purchaser shall promptly reimburse the Seller for any and all Losses incurred by the Seller or the Seller’s Affiliates in connection with such claims administration, to the extent such claims administration (including all costs associated with such claims) has been expressly authorized by Purchaser in writing (such authorization not to be unreasonably withheld, conditioned or delayed). Except with the express written consent of the Seller, neither the Purchaser nor, as of and after the Closing Date, Continental and Mattituck, shall provide an issuer of such Existing Policies with a release, nor shall they amend, modify, or waive any rights under such Existing Policies, if such release, amendment, modification or waiver would adversely affect rights or potential rights of the Seller or the Seller’s Affiliates. Notwithstanding the foregoing, with respect to any claims covered by Existing Policies that relate to the Business prior to the Closing and wherein Seller is a named party or damages are otherwise sought from the Seller, neither the Purchaser, Continental, Mattituck, nor their respective Affiliates shall consent to the entry of any judgment or enter into any settlement which does not include a provision whereby the plaintiff or claimant in the matter releases the Seller from liability thereto, without first obtaining the written consent of the Seller, which consent shall not be unreasonably withheld, conditioned or delayed.

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     (f) The Purchaser does hereby agree that neither the Seller nor any of the Seller’s Affiliates shall have any Liability whatsoever as a result of the insurance policies and practices of the Seller and its Affiliates as in effect at any time prior to the Closing, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

     7.6. Section 338(h)(10) Election.

     (a) The Seller shall join with the Purchaser in making a joint election under Code Section 338(h)(10) (and any corresponding election under applicable state or local Law) to treat as an acquisition of assets for Tax purposes the purchase and sale of Continental and Mattituck to the extent that Purchaser decides to make any such election (the “Section 338(h)(10) Election”). The Seller and the Purchaser shall cooperate fully with each other in the making of such elections. At the Closing, and at any such later time reasonably requested by Purchaser, the Seller shall deliver to the Purchaser a duly executed Internal Revenue Service Form 8023 and any corresponding forms identified and prepared by the Purchaser under applicable state or local Law with respect to each such election, and in each case such form shall or shall not be filed, after Seller’s review and approval, as determined by the Purchaser in its sole discretion. The Purchaser shall provide the Seller with notice of the filing of each such election no later than ten (10) days after the filing of each such election, and such notice shall provide the Seller with a complete list of each Section 338(h)(10) Election (or similar election ) made, the entity for which made and the jurisdiction in which made. The Purchaser and the Seller agree that the Purchase Price and the liabilities of Continental and Mattituck (plus other relevant items) will be allocated to the assets of the Business for all purposes (including Tax and financial accounting) in a manner consistent with the fair market values set forth in the statement of allocation to be agreed upon by the Purchaser and the Seller within one hundred twenty (120) days after the Closing Date. In the event that Purchaser and Seller are unable to agree as to the allocation of the Purchase Price to the assets of the Business in accordance with the foregoing, the Purchaser and Seller shall retain KPMG LLP to resolve such disagreement. KPMG LLP’s resolution shall be binding on both parties for all purposes and its fees shall be borne equally by Purchaser and the Seller. The Purchaser and the Seller shall file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

     (b) In the absence of a Section 338(h)(10) Election, the Purchaser and the Seller hereby agree that Exhibit D attached to this Agreement reflects the allocation of the Purchase Price to the Stock and Purchased Assets and that such allocation shall be used by the Purchaser and the Seller in preparing their respective Tax Returns and neither the Purchaser nor the Seller shall dispute such allocation in connection with any audit or other proceeding.

     7.7. Directors’ and Officers’ Indemnification.

     (a) For a period of six (6) years following the Closing Date, Purchaser shall cause the certificates of incorporation and bylaws of each of Continental and Mattituck to contain the provisions with respect to indemnification and advancement of expenses set forth in the certificates of incorporation and bylaws of each of Continental and Mattituck, as applicable, as

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amended, restated and in effect on the date of this Agreement, which provisions shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of the individuals who at any time prior to the Closing Date were directors or officers of Continental and Mattituck (the “D&O Indemnified Parties”), unless such modification is required by Law.

     (b) This Section 7.7 is intended to benefit the D&O Indemnified Parties, and shall be binding on all successors and assigns of the Purchaser, Continental and Mattituck.

     7.8. Noncompetition and Nonsolicitation.

     (a) Absent the prior written consent of the Purchaser, the Seller agrees that it shall not for a period of five (5) years from the Closing Date, directly or indirectly, through its subsidiaries, the Seller’s Affiliates or otherwise, engage or participate or plan or prepare to engage or participate in any Continental Comparable Business in the Restricted Territory (the “Seller Covenant Not to Compete”); provided, however, that, notwithstanding anything to the contrary in this Section 7.8, the Seller Covenant Not to Compete shall not restrict or limit the Seller from acquiring or holding an interest of less than five percent (5%) of the outstanding equity securities of any Continental Comparative Business whose equity securities are listed on a national securities exchange, quoted on NASDAQ, national or capital markets or traded in the over-the-counter bulletin board. For purposes of this Section 7.8, the term “Continental Comparable Business” means the business of designing, developing and manufacturing piston engines and ignition systems for the general aviation aircraft marketplace, providing piston spare parts and piston engine rebuilding services to the general aviation aircraft marketplace and developing and manufacturing electronic piston engine controls for the general aviation aircraft marketplace; it being expressly understood and agreed that such term does not include the business, in whole or in part, of designing, developing, manufacturing, selling, distributing or servicing turbine engines or battery products, or components thereof, for aircraft, unmanned aerial vehicles or unmanned aerospace vehicles. Absent the prior written consent of the Purchaser, the Seller further agrees that, for a period of three (3) years from the Closing Date, it shall not, directly or indirectly, through its subsidiaries, the Seller’s Affiliates or otherwise, solicit for employment or hire any employee of the Companies, except that the Seller shall not be precluded from hiring any such employee who responds to any broadly disseminated public advertisement for a general solicitation of employment (including the use of professional executive search firms) not targeted at employees of the Companies and any employee who contacts the Seller on his or her own initiative without any direct or indirect solicitation from the Seller.

     (b) The Purchaser and the Seller agree that the duration and area for which the Seller Covenant Not to Compete set forth in this Section 7.8 to be effective is reasonable. In the event that any court of competent jurisdiction determines that the time period or the area or both are unreasonable and such covenant is to that extent unenforceable, the Purchaser and the Seller agree that the covenants shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable. The Purchaser and the Seller agree that damages are an inadequate remedy for any breach of this covenant and that the Purchaser shall, whether or not it is pursuing any potential remedies at Law, be entitled to equitable relief in the

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form of preliminary and permanent injunctions without bond or other security upon any actual or threatened breach of this covenant. No waiver of any breach of the foregoing covenant shall be implied from the forbearance or failure of the Purchaser to take action thereon. The Seller acknowledges and agrees that the sale of the Business contemplated hereby includes the sale of goodwill and the consideration to be paid pursuant to this Agreement for the Seller Covenant Not to Compete is adequate.

     (c) As used above, the term “Restricted Territory” mean with respect to the Seller Covenant Not to Compete, any country where Continental and Mattituck conducted its respective business as of the Closing, including but not limited to those countries comprising North America.

     7.9. Continued Operation of the Business. For a period of at least five (5) years from the Closing Date, the Purchaser Guarantor shall cause Purchaser, and Purchaser agrees to: (1) remain in existence and in good standing; (2) continue to operate the Business at and from the Continental’s facility located in Mobile, Alabama; and (3) maintain, and cause Continental to maintain, a dedicated claims management and accident investigation process, staffed with appropriate personnel (in Purchaser’s sole judgment), in substantially the same manner as the claims management and accident investigation process utilized by the Seller and Continental prior to the date hereof.

     7.10. Release of Seller Guarantees. From and after the Closing, Purchaser shall assume, terminate or cause to be terminated any guarantees entered into by Seller in favor of any third party guaranteeing or assuring such third party of the payment of any actual or potential liability of, or the performance of any actual or potential obligation of, Continental, Mattituck or the Business (the “Seller Guarantees”).

     Section 8 Employee Matters.

     8.1. Employee Benefits.

     (a) The Purchaser shall cause each of Continental and Mattituck to continue to offer employment effective as of the Closing Date to all employees of Continental and Mattituck, who are actively employed on a full-time basis in connection with the Business on the Closing Date, including those employees who are on temporary leave for purposes of jury duty, vacation, annual military duty, disability, workers’ compensation or sick leave (the “Employees”).

     (b) Collective Bargaining Agreement. The Purchaser acknowledges that Continental is party to the Collective Bargaining Agreement. The Purchaser agrees to assume and perform, or to cause Continental to perform, all rights, duties and obligations of the Seller with regard to the Collective Bargaining Agreement (as in effect from time to time) on and after the Closing Date. The Purchaser agrees to assume sole responsibility and liability for: (i) any future benefit increases provided in the Collective Bargaining Agreement, regardless of whether the benefit increases are retroactive or relate to an event, agreement or period of time prior to the Closing Date; and (ii) any post-retirement medical and group life insurance provided to the Employees in the Collective Bargaining Agreement (as in effect from time to time).

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     (c) Plan Participation. Effective as of the Closing, the Employees shall cease to participate in those Employee Benefit Plans sponsored by the Seller, including those listed in Schedule 8.1(c) (the “Seller Sponsored Employee Benefit Plans”). Effective as of the Closing Date, neither Purchaser nor the Companies shall have any liability with respect to the Seller Sponsored Employee Benefit Plans. Notwithstanding the foregoing, Employees shall retain any vested rights that they have under the Seller Sponsored Employee Benefit Plans. The Purchaser shall provide levels of compensation and defined contribution retirement and welfare benefits to Employees on the Closing Date that, taken as a whole, are comparable in the aggregate to the levels of compensation and such benefits provided to the Employees immediately prior to the Closing. To the extent necessary to provide such comparable compensation and benefits, the Purchaser shall provide, or cause Continental or Mattituck, as the case may be, to provide, for the Employees’ participation in existing Employee Benefit Plans or establish new employee benefit plans (collectively, the “Purchaser Employee Benefit Plans”). Notwithstanding the foregoing, for periods on and after the Closing, the Purchaser shall cause the terms and conditions of the Purchaser Employee Benefit Plans to satisfy the requirements of those Employee Benefit Plans required to be provided to employees covered by the Collective Bargaining Agreement, as in effect from time to time, with respect to such employees.

     (d) Service and Other Credit.

     (i) To the extent applicable with respect to the Purchaser Employee Benefit Plans, the Employees (and their eligible dependents) shall be given credit for their service with the Continental and Mattituck, as well as the Seller and the Seller’s Affiliates for purposes of: (i) eligibility and vesting, (but not benefit accruals); and (ii) satisfying any waiting periods, evidence of insurability requirements, or the application of any pre-existing condition limitations under the Purchaser’s Employee Benefit Plans to the extent such service was taken into account (or such pre-existing conditions were waived) for comparable purposes under the Seller Sponsored Employee Benefit Plans.

     (ii) The Employees shall be given credit for amounts paid under the Seller Sponsored Employee Benefit Plans during the calendar year in which the Closing Date occurs for purposes of applying deductibles, copayments, and out-of-pocket maximums under the Purchaser’s Employee Benefit Plans.

     (iii) The Purchaser shall provide each Employee with credit for all of the earned but unused vacation, sick leave, and other time off accrued through the Closing Date as determined under the applicable policies of Continental or Mattituck.

     (e) Liability for Benefit Claims. Other than workers’ compensation claims, which are addressed in Section 8.1(k), all claims incurred with regard to any Employee or former employee of Continental or Mattituck before the Closing and which are covered under the applicable health, life or accidental death and dismemberment plans of the Seller shall be payable under the terms of the applicable Seller Sponsored Employee Benefit Plan; provided, however that Continental, and Mattituck, as the case may be, shall promptly reimburse the Seller for the amount of any payments made by the Seller, in accordance with the terms of the Seller Sponsored Employee Benefit Plans with respect to such claims. All other claims incurred with

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regard to any Employee on or after the Closing and which are covered under the applicable health, life or accidental death or dismemberment plans of the Purchaser shall be payable under the terms of the applicable plan of the Purchaser.

     (f) Defined Benefit Pension Plan and Defined Contribution Plan Benefits.

     (i) As of the Closing Date, each Employee’s participation in the Teledyne Technologies Incorporated Pension Plan, as amended, and the Teledyne Technologies Incorporated 401(k) Plan (the “Seller’s 401(k) Plan”) shall cease. Immediately prior to the Closing, Seller shall cause all of the Employees’ account balances under the Seller’s 401(k) Plan to be fully vested. Effective as soon as practicable after the Closing, the Purchaser shall establish a new 401(k) plan or provide for participation in an existing 401(k) plan (the “Purchaser’s 401(k) Plan”) and the Purchaser’s 401(k) Plan shall permit each Employee the option to “rollover” to the Purchaser’s 401(k) Plan such employee’s account balance in the Seller’s 401(k) Plan and, to the extent permitted by under applicable law, any loan of such Employee from the Seller’s 401(k) Plan.

     (ii) Prior to the Closing, Seller shall cause the Union 401(k) Plan to be transferred from Seller as adopting employer to Continental as adopting and sponsoring employer and shall authorize the transfer of plan assets and assignment of related agreements with the custodian and recordkeeper (or such other service providers responsible for administration of the Union 401(k) Plan).

     (iii) Effective as of the Closing, Purchaser shall establish, to the extent required by, and in accordance with, the Collective Bargaining Agreement (as in effect from time to time), a defined benefit pension plan for participation by those employees eligible to participate pursuant to the Collective Bargaining Agreement (as in effect from time to time).

     (g) Retiree Medical and Life Coverage. Effective as of the Closing, the Purchaser shall establish medical and group life insurance plans to cover the Employees and former employees of Continental and Mattituck who are currently receiving retiree benefits or who are eligible to receive retiree benefits (including, without limitation, deferred vested Employees) pursuant to the terms of the Collective Bargaining Agreement (as in effect from time to time) or pursuant to the programs for salaried Employees set forth on Schedule 4.13(e) of the Disclosure Schedules, which will be substantially similar in the aggregate to those offered by the Seller for salaried Employees or as otherwise required pursuant to the Collective Bargaining Agreement (as in effect from time to time).

     (h) COBRA. The Purchaser shall be responsible for providing health care continuation coverage as required by the Consolidation Omnibus Reconciliation Act of 1985 (“COBRA”) to Employees who are terminated by the Purchaser on and after the Closing Date.

     (i) Sale/Stay Bonuses. The Purchaser shall be responsible for, and hereby agrees to pay pursuant to the terms thereof, the obligations and liabilities for sale and stay bonuses and stay/severance bonuses (but not obligations under annual incentive plans, stock option plans,

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performance share plans or restricted stock programs) pursuant to the sale and stay bonus agreements and severance commitments listed on Schedule 2.3(a)(ii); provided, however, Seller shall be responsible for those payments characterized as “Option Alternative Payments”.

     (j) Vesting of Continental Pension Eligible Employees. The Seller shall cause each employee of Continental who is a participant in the Seller Pension Plan as of the Closing Date to be fully vested in his or her accrued benefit under the Seller Pension Plan.

     (k) Nothing in this Section 8.1, express or implied: (i) is intended to confer on any Person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement or (ii) shall require Purchaser to maintain any specific benefit plan or to guarantee employment of any Employee for any period of time after Closing, except as required under the Collective Bargaining Agreement (as in effect from time to time). No provision of this Section 8.1 shall create any third party beneficiary rights in any Person, including, without limitation, any Employees.

     8.2. Workers Compensation Plan Matters.

     (a) The Purchaser shall be solely responsible for all liabilities relating to, arising out of, or resulting from workers’ compensation claims by Employees and former employees of the Business that are related to their employment with the Business (“Workers’ Compensation Claims”), whether incurred before or after the Closing Date, including any claims related to an aggravation of an injury incurred prior to the Closing Date.

     (b) With respect to Workers’ Compensation Claims arising prior to the Closing, the Seller shall continue to administer, or cause to be administered, such claims under Sellers’ workers’ compensation insurance policies and related third party administration agreements (the “Seller Workers’ Compensation Plan”) in accordance with applicable law. The Purchaser shall fully cooperate with the Seller and its insurance company or companies in the administration and reporting of Workers’ Compensation Claims under the Seller Workers’ Compensation Plan. Any determination made, or settlement entered into, by or on behalf of Seller or its insurance company or companies with respect to such Workers’ Compensation Claims shall be final and binding. The Purchaser shall reimburse the Seller or its insurance company, as the case may be, for any and all direct and indirect costs related to such Workers’ Compensation Claims, including, but not limited to loss costs, claims administration fees, legal expenses, premium audits, per claim deductibles, and retrospective premium adjustments.

     (c) With respect to Workers’ Compensation Claims arising after the Closing, the Purchaser shall be responsible for complying with the workers’ compensation requirements of the states in which Continental and Mattituck conduct business and for obtaining and maintaining insurance programs for its risk of loss as of the Closing Date (or such earlier date as the Purchaser may determine). Such insurance arrangements shall be separate and apart from the Seller Workers’ Compensation Plan.

     Section 9 Closing Conditions.

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     9.1. Conditions to Obligation of the Purchaser. The obligation of the Purchaser to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (a) each of the representations and warranties set forth made by the Seller in Section 4 (other than those made as of a specified date earlier than the Closing Date) shall be true and correct in all material respects on and as of the date of this Agreement, and on the Closing Date as though such representation and warranty was made on and as of the Closing Date, and any representation or warranty contained in Section 4 made as of a specified date earlier than the Closing Date shall have been true and correct in all material respects on and as of such earlier date; provided that to the extent that any such representation or warranty is qualified as to materiality pursuant to the terms of such representation or warranty, such representation or warranty shall be true and correct in all respects as of the date of this Agreement and the Closing Date unless such representation or warranty was made as of a specified date earlier than the Closing Date, in which case such representation and warranty shall be true and correct in all respects on and as of such earlier date;

     (b) the Seller will have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (c) there shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or the Ancillary Agreements; provided that Purchaser shall use its commercially reasonable efforts to cause any such Order or Law to be vacated or lifted, and there shall not be pending on the Closing Date any Action or Proceeding in, before or by any Governmental Entity which would reasonably be expected to result in the issuance of any such Order or the enactment, promulgation of any Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or the Ancillary Agreements by the Seller;

     (d) all consents, approvals and actions of, filings with and notices to any Governmental Entity necessary to permit the Purchaser to perform its obligations under this Agreement and to consummate the transactions contemplated hereby (including, without limitation, all such consents, approvals and actions of, filings with and notices to The People’s Republic of China in connection with the transactions contemplated hereby) (a) shall have been duly obtained, made or given, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement, including under the HSR Act, shall have occurred;

     (e) the Purchaser shall have received written notice from CFIUS that review under Section 721 of the U.S. Defense Production Act of 1950, as amended, of the transactions contemplated by this Agreement has been concluded; and CFIUS shall have determined that there are no unresolved national security concerns with respect to the transactions contemplated by this Agreement sufficient to warrant a recommendation that the President block such

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transactions under said Section 721, and advised that action under said Section 721 has been concluded with respect to such transactions;

     (f) the Seller will have delivered to the Purchaser a certificate executed by an executive officer to the effect that each of the conditions specified in Sections 9.1(a) through 9.1(e) are satisfied in all respects;

     (g) the Seller will have executed and delivered to the Purchaser the documents identified in Section 3.3;

     (h) the Seller shall have requested, in writing, to have Continental released as a guarantor under the Amended and Restated Credit Agreement and the Note Purchase Agreement to the appropriate Person under such Contracts as a result of the transactions contemplated by this Agreement;

     (i) the Purchaser shall have entered into employment and non-competition agreements with the Key Employees; provided that, the condition set forth in this Section 9.1(i) shall be of no further force or effect and be deemed to have been waived by Purchaser on the date that is sixty (60) days following the date hereof; and

     (j) the Purchaser shall have obtained (i) a certificate of insurance followed by an endorsement effective as of the Closing Date evidencing that Purchaser has been added as an additional insured on the Current Year Policies and (ii) commitments, in form and substance reasonably satisfactory to Purchaser, from appropriate insurance brokers and underwriters, that property and liability, commercial general liability, umbrella liability, automobile liability, and workers’ compensation insurance policies as Purchaser reasonably deems necessary or appropriate with respect to the Companies and the Business, but in no event greater than the insurance coverage currently in effect with respect to the Companies and the Business, shall be in place, or capable of being in place, as of the Closing Date; provided that, the condition set forth in this Section 9.1(j)(ii) shall be of no further force or effect and be deemed to have been waived by Purchaser on the date that is seventy-five (75) days following the date hereof.

     The Purchaser may waive any condition specified in this Section 9.1, other than Section 9.1(d) solely with respect to the HSR Act, and Section 9.1(e), if it executes a writing so stating at or prior to the Closing.

     9.2. Conditions to Obligation of the Seller. The obligation of the Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

     (a) each of the representations and warranties set forth made by the Purchaser in Section 5 (other than those made as of a specified date earlier than the Closing Date) shall be true and correct in all material respects on and as of the date of this Agreement, and on the Closing Date as though such representation and warranty was made on and as of the Closing Date, and any representation or warranty contained in Section 5 made as of a specified date earlier than the Closing Date shall have been true and correct in all material respects on and as of such earlier

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date; provided that to the extent that any such representation or warranty is qualified as to materiality pursuant to the terms of such representation or warranty, such representation or warranty shall be true and correct in all respects as of the date of this Agreement and the Closing Date unless such representation or warranty was made as of a specified date earlier than the Closing Date, in which case such representation and warranty shall be true and correct in all respects on and as of such earlier date;

     (b) the Purchaser will have performed and complied with all of its covenants hereunder in all material respects through the Closing;

     (c) there shall not be in effect on the Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or the Ancillary Agreements; provided that Seller shall use its commercially reasonable efforts to cause any such Order or Law to be vacated or lifted, and there shall not be pending on the Closing Date any Action or Proceeding in, before or by any Governmental Entity which would reasonably be expected to result in the issuance of any such Order or the enactment, promulgation of any Law restraining, enjoining or otherwise prohibiting or making illegal the consummation of any of the transactions contemplated by this Agreement or the Ancillary Agreements by the Purchaser Guarantor or Purchaser;

     (d) all consents, approvals and actions of, filings with and notices to any Governmental Entity necessary to permit the Seller to perform its obligations under this Agreement and to consummate the transactions contemplated hereby (including, without limitation, all such consents, approvals and actions of, filings with and notices to The People’s Republic of China in connection with the transactions contemplated hereby) (a) shall have been duly obtained, made or given, (b) shall not be subject to the satisfaction of any condition that has not been satisfied or waived and (c) shall be in full force and effect, and all terminations or expirations of waiting periods imposed by any Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement, including under the HSR Act, shall have occurred;

     (e) the Seller shall have received written notice from CFIUS that review under Section 721 of the U.S. Defense Production Act of 1950, as amended, of the transactions contemplated by this Agreement has been concluded; and CFIUS shall have determined that there are no unresolved national security concerns with respect to the transactions contemplated by this Agreement sufficient to warrant a recommendation that the President block such transactions under said Section 721, and advised that action under said Section 721 has been concluded with respect to such transactions;

     (f) the Purchaser will have delivered to the Seller a certificate executed by an executive officer to the effect that each of the conditions specified in Sections 9.2(a) through 9.2(e) is satisfied in all respects;

     (g) Intentionally Omitted;

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     (h) the Purchaser will have executed and delivered to the Seller the documents identified in Section 3.3; and

     (i) the Purchaser will have delivered to the Seller the Purchase Price.

          The Seller may waive any conditions specified in this Section 9.2, other than Section 9.2(d) solely with respect to the HSR Act, and Section 9.2(e), if it executes a writing so stating at or prior to the Closing.

     Section 10 Remedies for Breaches of this Agreement.

     10.1. Survival. Except as otherwise provided herein, all of the representations and warranties contained in this Agreement or in any certificate delivered pursuant to this Agreement relating to the representations and warranties contained in this Agreement will survive the Closing and continue in full force and effect (a) in the case of the representations and warranties contained in Section 4.1, Section 4.2 and Section 4.10(a) shall survive the Closing indefinitely, (b) in the case of the representations and warranties contained in Section 4.7 and Section 4.18 until thirty (30) days following the expiration of the applicable statute of limitations and (c) in the case of the representations and warranties contained in Section 4.15, for a period of six (6) years, and (d) in the case of any other representations and warranties contained in Section 4 of this Agreement, for a period of eighteen (18) months after the Closing Date.

     10.2. Indemnification Provisions for Benefit of the Purchaser. Subject to the limitations set forth in this Section 10 and provided that the Purchaser within the applicable survival period makes a written claim for indemnification against the Seller setting forth in reasonable detail the circumstances regarding the claim and, if ascertainable, an estimate of the amount thereof, then the Seller shall indemnify, defend and hold harmless Purchaser and its respective Affiliates, from and against any losses, expenses, fees, costs, damages, fines, penalties and other liabilities, including, without limitation, reasonable fees of attorneys and accountants (collectively, “Losses”) the Purchaser or any of its Affiliates, or any of their respective directors, officers, employees, agents or representatives (collectively, the “Purchaser Indemnified Parties”), suffer to the extent such Losses result from, arise out of or are caused from any of the following:

     (a) the inaccuracy or breach of any representation or warranty made by the Seller in this Agreement;

     (b) the nonfulfillment, nonperformance or other breach by the of any agreement or covenant contained in this Agreement and in all other agreements, instruments or certificates delivered pursuant to this Agreement; or

     (c) any claim or liability arising out of the Excluded Assets.

     10.3. Indemnification Provisions for Benefit of the Seller. Subject to the limitations set forth in this Section 10 and provided that the Seller within the applicable survival period makes a written claim for indemnification against the Purchaser setting forth in reasonable detail the circumstances regarding the claim and, if ascertainable, an estimate of the amount thereof, then the Purchaser, Continental and Mattituck shall, jointly and severally, indemnify, defend and hold

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harmless the Seller and its respective Affiliates, from and against any Losses the Seller or any of its Affiliates, or any of their respective directors, officers, employees, agents or representatives (collectively, the “Seller Indemnified Parties”), suffer to the extent such Losses result from, arise out of or are caused from any of the following:

     (a) the inaccuracy or breach of any representation or warranty made by the Purchaser in this Agreement or in any certificates delivered pursuant to this Agreement;

     (b) the nonfulfillment, nonperformance or other breach by the Purchaser, or after the Closing by Continental or Mattituck, of any agreement or covenant contained in this Agreement (including any failure by the Purchaser to pay the Purchase Price as required by this Agreement or the Purchaser, Continental or Mattituck, as the case may be, to pay directly or reimburse the Seller any amounts in accordance with Section 7.5);

     (c) the failure of the Purchaser, Continental or Mattituck to pay or otherwise discharge when due and payable the Assumed Liabilities;

     (d) the operation of the Business or ownership of the Stock, or the use of the Purchased Assets, whether before or after the Closing, including, without limitation, any liability of the Seller related thereto or arising therefrom;

     (e) the Seller Guarantees; or

     (f) any acts or omissions of the Purchaser Indemnified Parties which if taken or omitted to be taken (i) result in Environmental Losses pursuant to Section 10.6(f) and (ii) cause Seller not to have any, or otherwise exonerate the Seller from, indemnification obligations pursuant to Section 10.6(f).

     10.4. Matters Involving Third Parties. If any third party notifies any party hereto (the “Indemnified Party”) with respect to any matter which may give rise to a claim for indemnification against the other party hereto (the “Indemnifying Party”) under this Section 10, then the Indemnified Party will notify the Indemnifying Party thereof promptly and in any event within ten (10) days after receiving any written notice from a third party; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation hereunder unless, and then solely to the extent that, the Indemnifying Party is materially prejudiced thereby. Once the Indemnified Party has given notice of the matter to the Indemnifying Party, the Indemnified Party may defend against the matter in any manner it reasonably may deem appropriate. In the event the Indemnifying Party notifies the Indemnified Party within ten (10) days after the date the Indemnified Party has given notice of the matter that the Indemnifying Party is assuming the defense of such matter (a) the Indemnifying Party will vigorously defend the Indemnified Party against the matter with counsel of its choice reasonably satisfactory to the Indemnified Party, and (b) the Indemnified Party may retain separate counsel at its sole cost and expense (except that the Indemnifying Party will be responsible for the fees and expenses of such separate co-counsel to the extent the Indemnified Party reasonably concludes in good faith that the Indemnified Party has defenses available to it that may conflict with those of the Indemnifying Party), (c) the Indemnified Party will not

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consent to the entry of a judgment or enter into any settlement with respect to the matter without the written consent of the Indemnifying Party (not to be withheld or delayed unreasonably), and (d) the Indemnifying Party will not consent to the entry of a judgment with respect to the matter or enter into any settlement which does not include a provision whereby the plaintiff or claimant in the matter releases the Indemnified Party from all liability with respect thereto, without the written consent of the Indemnified Party (not to be withheld or delayed unreasonably). If the Indemnifying Party fails to defend the third party claim, then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the third party claim by all appropriate proceedings, which proceedings will be prosecuted by the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonable withheld conditioned or delayed), but only to the extent that the Indemnified Party is entitled to indemnification pursuant to this Section 10.

     10.5. Indemnification Limitations; Liability Threshold and Caps.

     (a) An Indemnified Party shall have the right to payment by the Indemnifying Party under Section 10.2(a) or Section 10.3(a), as applicable, only if, and only to the extent that:

     (i) the Indemnified Party shall have incurred Losses, with respect to any individual claim, in an amount in excess of $100,000 (each, a “Material Claim”);

     (ii) the Indemnified Party shall have incurred Losses, with respect to all Material Claims in the aggregate, in an amount in excess of one percent (1%) of the Purchase Price; and

     (iii) the Indemnified Party shall have incurred Losses (including Environmental Losses) that do not exceed, in the aggregate, twenty percent (20%) of the Purchase Price (the “General Cap”), in which event such indemnification shall be required only to the extent of the Indemnified Party’s Losses below the General Cap.

     (b) Notwithstanding the anything contained in this Section 10.5, (i) the limitations set forth in Section 10.5(a) shall not apply to any claims based on or arising out of Sections 10.2(b), 10.2(c), 10.3(b), 10.3(c), 10.3(d) or 10.3(f) or based on willful or intentional misconduct, fraud or fraudulent misrepresentation and (ii) the limitations set forth in Section 10.5(a)(ii), shall not apply to any claims for inaccuracies or breaches of the representations and warranties contained in Section 4.1, Section 4.2, Section 4.7, Section 4.10(a) and Section 4.18.

     (c) Neither party hereto will be liable to the other hereunder for any punitive, consequential or incidental damages (including loss of revenue or income, business interruption, cost of capital or loss of business reputation or opportunity) relating to any claim for which either such party may be entitled to recover under this Agreement (other than indemnification of amounts paid or payable to third parties in respect of any third party claim for which indemnification hereunder is required).

     (d) No claim for the recovery of Losses based upon breach of any representation, warranty, covenant or agreement may be asserted by Seller Indemnified Parties or Purchaser

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Indemnified Parties against the Purchaser or the Seller, as the case may be if any of the Seller Indemnified Parties or the Purchaser Indemnified Parties, as the case may be, had actual knowledge of such breach (i) on or before the Closing Date or (ii) as of the date the Disclosure Schedules are deemed to be amended, if at all, for those matters identified pursuant to Section 6.6(b); provided, however, that if the Disclosure Schedules are not deemed to be amended pursuant Section 6.6(b)(ii)(ii), on or before the date of this Agreement.

     (e) Neither Seller nor any of its Affiliates shall have any liability under or otherwise in connection with this Agreement or the transactions contemplated hereby for any Loss: (a) to the extent arising as a result of any action taken or omitted to be taken by the Purchaser or any of its Affiliates, (b) to the extent arising from a change in any law that becomes effective after the Closing Date and (c) if such Loss is accrued, provided or reserved for in, or otherwise taken into account in connection with, the calculation of the Estimated Net Working Capital, Closing Net Working Capital or the preparation of the Post-Closing Net Working Capital Statement, but only to the extent of the amount specifically included on the Estimated Net Working Capital Statement or the Closing Net Working Capital Statement.

     10.6. Indemnification for Environmental Matters.

     (a) With respect to any Losses for a breach of a representation or warranty contained in Section 4.15 or Section 4.17 to the extent pertaining to or relating to or arising from any Environmental Law for which the Purchaser is entitled to indemnification pursuant to this Section 10 in connection with the operation of the Business or the Leased Real Property (“Environmental Losses”), the Purchaser shall provide notice to the Seller pursuant to Section 12.8 hereof specifying in reasonable detail, to the extent known, the nature of the Environmental Losses and the estimated amount to remediate the condition giving rise to the Environmental Losses, to the extent it is then quantifiable (which estimate shall not be conclusive of the final amount of any Environmental Losses).

     (b) The Seller shall have the right to control and investigate and/or remediate any condition giving rise to a claim or demand for indemnification by the Purchaser under this Agreement with respect to any Environmental Losses; provided, however, that if after written notice and a reasonable opportunity to cure the Seller does not exercise such right, the Purchaser may exercise such right without prejudice to the Purchaser’s rights to indemnification for any Environmental Losses. The Seller and its employees, contractors, representatives and agents shall have reasonable access upon at least seventy-two (72) hours of advance notice and at reasonable times to the facilities of the Business for the purpose of conducting any investigation and/or remediation, including any sampling or monitoring required to be performed by the Seller after the Closing Date or at any time thereafter. The Seller and its employees, contractors, representatives and agents shall use commercially reasonable efforts to minimize disruption to the Business as a result of conducting any such investigation or remediation. Each of the Seller and the Purchaser shall indemnify, defend and hold harmless each other from any Losses arising from or related to their respective gross negligence or willful misconduct during performance of any investigation or remediation by the Seller. The Seller shall manage any investigation or remediation in good faith and in a responsible manner, and any activities conducted in connection therewith shall be undertaken and completed using commercially reasonable efforts,

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taking into account the schedules and approvals as agreed with the applicable Governmental Entity.

     (c) The Purchaser shall be entitled to a reasonable right of participation, at its sole cost and expense, in the event that the Seller assumes primary control under Section 10.6(b) with respect to any condition giving rise to a claim or demand for indemnification by the Purchaser under this Agreement with respect to any Environmental Losses. Such reasonable right of participation shall be limited to the right to (i) receive final copies of all work plans, reports, correspondence and other documents concerning any environmental matter, and (ii) review and comment on, in advance, and to Seller only, any work plans.

     (d) The Purchaser shall use commercially reasonable efforts to cooperate with the Seller to minimize costs with respect to Environmental Losses. Nothing in this Agreement shall require the Seller to perform any environmental remediation activities or other environmental testing, sampling or monitoring activities beyond the minimum required by applicable Environmental Laws as necessary to permit the use of the Leased Real Property consistent with its current use. The Seller shall have no obligation to indemnify the Purchaser for costs to the extent those costs are related to activities that the Purchaser elects to take or requests Seller to take beyond the minimum required by applicable Environmental Laws. The party performing the investigation or remediation shall have the right to the use of institutional or engineering controls, and in no event shall any institutional or engineering controls that may be used as part of a remedy unreasonably interfere with the Business or the Purchaser’s operations at the Leased Real Property. Any remedial action covered hereunder shall be deemed to have been adequately completed to the extent that it attains compliance with applicable Environmental Laws consistent with this Section 10.6(c), including without limitation, applicable action levels or cleanup standards promulgated thereunder, and any lawful order or directive of the appropriate Governmental Entity, unless such order or directive is successfully challenged by the performing party.

     (e) To the extent that the Seller is Indemnifying the Purchaser with respect to any Environmental Losses, then the Purchaser shall give prompt written notice to the Seller of any report or other document submitted, whether voluntarily or by requirement of a Government Entity, to a Governmental Entity. To the extent reasonably possible in the circumstances, the Seller shall have the right to review and comment upon any submission to a Governmental Entity which describes or addresses any environmental condition for which the Purchaser is claiming indemnification from the Seller hereunder (and the Seller will cooperate with the Purchaser in responding to such requests, including making available all relevant records in its possession or under its reasonable control), and the Purchaser shall revise such submission in accordance with the Seller’s reasonable comments thereon. To the extent reasonably possible in the circumstances, the Purchaser shall give the Seller prompt written notice of, and the Seller and/or its representatives shall have the right to participate in, any phone call or meeting with any Governmental Entity at which any environmental condition for which the Purchaser is claiming indemnification from the Seller hereunder is to be discussed or addressed in any manner.

     (f) The Seller shall not have any obligation to indemnify any Purchaser Indemnified Party from and against (i) any Environmental Losses to the extent arising from or related to a use

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of the facilities of the Business that is not substantially a continuation of the operation of the Business as conducted on the Closing Date, or (ii) any Environmental Losses to the extent arising from or related to any change in the use of the Leased Real Property from industrial use, or by the installation or construction of new buildings, pavement or other structures or improvements on, or alteration of the topography of, the Leased Real Property other than as a substantial continuation of the operation of the Business as described in subparagraph (i) above, or (iii) any Environmental Losses to the extent arising from or related to any amendment to or change in any Environmental Law from that which is in effect on the date hereof. Notwithstanding anything to the contrary contained herein, the Seller will not have any obligation to indemnify the Purchaser Indemnified Parties from and against any Environmental Losses to the extent that any such Environmental Losses (w) do not relate to an environmental condition arising from the operation of the Business and in existence prior to the Closing Date, (x) arise with respect to any Release of a Hazardous Material by the Purchaser after the Closing Date, (y) result from the Purchaser, its agents and representatives, conducting invasive environmental investigations, sampling or monitoring of the facilities of the Business unless (A) required to do so by Environmental Law or by a Governmental Entity or (B) in response to a reasonable due diligence request from the owner of such real property and only as contractually required by Purchaser pursuant to the terms of the applicable lease existing as of the date hereof, or (z) result from any act or failure to act of the Purchaser, its employees, contractors, representatives or agents that further cause or exacerbate the Release of any Hazardous Materials at the facilities of the Business; provided that, any failure to act with regard to further migration of existing contamination shall not be considered exacerbation. The Purchaser acknowledges that nothing contained herein absolves it of any obligation under any Environmental Law for Environmental Losses with respect to violations of Environmental Laws by the Purchaser, its employees, contractors, representatives or agents.

     10.7. EXCLUSIVE REMEDY. THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS SECTION 10 WILL CONSTITUTE THE SOLE AND EXCLUSIVE RECOURSE AND REMEDY OF THE PARTIES FOR MONETARY DAMAGES WITH RESPECT TO ANY BREACH OF ANY OF THE REPRESENTATIONS, WARRANTIES OR COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS OR WITH RESPECT TO ANY LOSSES RESULTING FROM, ARISING OUT OF, OR CAUSED BY EXCLUDED LIABILITIES. THE PROVISIONS OF THIS SECTION 10 WILL NOT RESTRICT THE RIGHT OF ANY PARTY TO SEEK SPECIFIC PERFORMANCE OR OTHER EQUITABLE REMEDIES IN CONNECTION WITH ANY BREACH OF ANY OF THE COVENANTS CONTAINED IN THIS AGREEMENT OR ANY OF THE ANCILLARY AGREEMENTS, INCLUDING WITHOUT LIMITATION THE FAILURE TO PAY, PERFORM AND DISCHARGE WHEN DUE, THE ASSUMED LIABILITIES. NOTWITHSTANDING ANY OTHER PROVISIONS OF THE AGREEMENT, THE PROVISIONS OF THIS SECTION 10.7 SHALL NOT APPLY TO EXCLUDE OR LIMIT THE LIABILITY OF THE SELLER TO THE EXTENT THAT ANY CLAIM ARISES BY REASON OF ANY WILLFUL OR INTENTIONAL MISCONDUCT OF THE SELLER OR FRAUD OR FRAUDULENT MISREPRESENTATION OF ANY PARTY.

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     10.8. Minimizing Losses. Each party agrees to use all commercially reasonable efforts to minimize all Losses for which it may seek indemnification from the other party pursuant to this Section 10.

     10.9. Indemnity Payments. The parties agree that any payments by one party to the other party made pursuant to this Section 10 will be treated by the parties on all applicable tax returns as an adjustment to the Purchase Price. Each Party acknowledges that in case of any breach of its respective covenants or other obligations, the other Parties would suffer immediate and irreparable harm, which money damages would be inadequate to remedy, and accordingly, in case of any such breach each non-breaching Party shall be entitled to obtain specific performance and other equitable remedies, in addition to other remedies provided in this Section 10.

     Section 11 Termination.

     11.1. Termination of Agreement. The parties may terminate this Agreement as provided below:

     (a) the parties may terminate this Agreement by mutual written consent at any time prior to the Closing;

     (b) the Purchaser may terminate this Agreement by giving written notice to the Seller at any time prior to the Closing if the Closing has not occurred on or before the date that is one-hundred twenty (120) days following the date hereof (the “End Date”); provided that, the End Date shall be extended for an additional thirty (30) days to the extent that (I) the Purchaser has not received written notice from CFIUS that (i) review under Section 721 of the U.S. Defense Production Act of 1950, as amended, of the transactions contemplated by this Agreement has been concluded, and (ii) CFIUS has determined that there are no unresolved national security concerns with respect to the transactions contemplated by this Agreement sufficient to warrant a recommendation that the President block such transactions under said Section 721, and (iii) advised that action under said Section 721 has been concluded with respect to such transactions and/or (II) the condition set forth in Section 9.1(d), solely with respect to the HSR Act or any approvals required by the People’s Republic of China, shall not have been satisfied on the End Date; unless (x) failure results primarily from the Purchaser itself breaching any representation, warranty or covenant contained in this Agreement, or (y) unless an extension is mutually agreeable to the Seller and the Purchaser; and

     (c) the Seller may terminate this Agreement by giving written notice to the Purchaser at any time prior to the Closing if the Closing has not occurred on or before the End Date (as may be extended pursuant to Section 11.1(b)); unless (x) failure results primarily from the Seller itself breaching any representation, warranty or covenant contained in this Agreement, or (y) unless an extension is mutually agreeable to the Seller and the Purchaser.

     11.2. Effect of Termination. If any party terminates this Agreement pursuant to Section 11.1, all obligations of the parties hereunder will terminate without liability of any party to the other party (except for any liability of any party then in breach); provided that the provisions of

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Sections 12.1 and 12.2 of this Agreement and the Confidentiality Agreement will survive termination and remain in full force and effect thereafter.

     Section 12 Miscellaneous.

     12.1. Press Releases and Announcements. No party will issue any press release or announcement relating to the subject matter of this Agreement prior to the Closing Date without the prior approval of the other party; provided that any party may make any public disclosure it believes in good faith is required by Law or the rules of any national securities exchange or any automated inter-dealer quotation system on which the securities of either party (or any Affiliate thereof) are listed or admitted for trading.

     12.2. Expenses; Transfer Taxes. Each of the parties hereto will bear all legal, accounting, investment banking and other expenses incurred by it or on its behalf in connection with the transactions contemplated by this Agreement, whether or not such transactions are consummated. The Purchaser shall be responsible for one hundred percent (100%) of any filing fees required in connection with the transactions contemplated hereby, including pursuant to the Hart-Scott-Rodino Act and all fees and expenses of any governmental approvals required by The People’s Republic of China in connection with the transactions contemplated hereby. The Seller will pay and hold the Purchaser harmless from all sales, use, transfer and documentary taxes applicable to the transfer of the Purchased Assets and the Stock to the Purchaser and the party responsible under Law for filing the Tax Returns relating to any such Taxes shall file such Tax Returns.

     12.3. Consent to Amendments. The provisions of this Agreement may be amended or waived only by a written agreement executed and delivered by the Seller and the Purchaser. No other course of dealing between the parties to this Agreement or any delay in exercising any rights hereunder will operate as a waiver of any rights of such parties.

     12.4. Successors and Assigns. No party hereto may assign or delegate any of such party’s rights or obligations under or in connection with this Agreement without the written consent of the other party hereto; provided that the Seller may assign this Agreement to an Affiliate of the Seller that acquires the Stock or to a purchaser of the Seller or substantially all the assets of the Seller. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will be binding upon and enforceable against the respective successors and assigns of such party and will be enforceable by and will inure to the benefit of the respective successors and permitted assigns of such party.

     12.5. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will be ineffective only to the extent of such prohibition of invalidity, without invalidating the remainder of this Agreement.

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     12.6. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement.

     12.7. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

     12.8. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally to the recipient or when sent to the recipient by telecopy (receipt confirmed), one (1) Business Day after the date when sent to the recipient by reputable express courier service (charges prepaid) or two (2) Business Days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the Purchaser and the Seller at the respective address indicated below:

          If to the Purchaser:

AVIC International Holding Corporation
14/F Catic Plaza No. 18 Beichen East Rd.,
Chaoyang District, Beijing 100101, China
Attention: Jiao Yan
Deputy General Legal Counsel
Telephone: (86-10) 84808596
Facsimile:   (86-10) 84808490

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
Facsimile No.: (212) 822-5171
Attn: Alexander M. Kaye
          Edward T. Sun

          If to the Seller:

Teledyne Technologies Incorporated
1049 Camino Dos Rios
Thousand Oaks, California 91360
Attention: John T. Kuelbs
Executive Vice President, General Counsel and Secretary
Telephone: (805) 373-4602
Facsimile:   (805) 373-4610

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With a copy to:

McGuireWoods LLP
625 Liberty Avenue, 23^rd Floor
Pittsburgh, PA 15222
Attention: Scott E. Westwood
Telephone: (412) 667-7989
Facsimile:   (412) 402-4191

     12.9. No Third-Party Beneficiaries. Other than as set forth in Section 7.7, this Agreement is intended solely for the benefit of each party hereto and their successors and permitted assigns and is not intended to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnity under Section 10.

     12.10. Entire Agreement. This Agreement, including the Ancillary Agreements and the Confidentiality Agreement, constitute the entire Agreement and understanding of the parties and supersede any previous agreement between the parties relating to the subject matter of this Agreement. Each of the parties acknowledges and agrees that in entering into this Agreement, and the documents referred to in it, it does not rely on, and shall have no remedy in respect of any statement, representation, warranty or understanding (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement. The only remedy available to it for breach of the warranties shall be for breach of contract under the terms of this Agreement. Nothing in this sub-clause shall, however, operate to limit or exclude any liability for fraud. Subject to the requirements of the parties to make certain efforts required by Section 6.2(b), each of the parties acknowledges and agrees that no party shall have any liability for the failure to receive, for any reason whatsoever, any approvals, waivers, consents or other authorizations (including, without limitation terminations or expirations of applicable waiting periods) in respect of, or related to, the HSR Act, other anti-trust or merger control filings, CFIUS, or as may be required by the Laws of the People’s Republic of China.

     12.11. Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction will be applied against any party. The use of the word “including” in this Agreement means “including without limitation” and is intended by the parties to be by way of example rather than limitation.

     12.12. Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. If and to the extent any information required to be furnished in any Disclosure Schedule is contained in this Agreement or any other Disclosure Schedule, such information shall be deemed to be included in all of the Disclosure Schedules in which the information would otherwise be required to be included. By listing matters on the Disclosure Schedules, the Seller shall not be deemed to have established any materiality standard, admitted any liability or concluded that one or more of such matters are material, or expanded in any way the scope or effect of the representations and warranties of the Seller contained in this Agreement.

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     12.13. WARN Act. The Purchaser will be solely liable for any and all obligations and liabilities arising under the WARN Act with respect to consummation of the transactions contemplated by this Agreement.

     12.14. GOVERNING LAW; JURISDICTION. WITH RESPECT TO THE SELLER THE PURCHASER AND THE PURCHASER GUARANTOR, ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE. Each of the Seller, the Purchaser and Purchaser Guarantor hereby irrevocably submits to the exclusive jurisdiction of (i) the Court of Chancery in and for the State of Delaware and (ii) to the extent that jurisdiction cannot be obtained in the Court of Chancery, the state courts located in the State of Delaware for the purposes of any suit, action or other proceeding arising out of or relating to the transactions contemplated by this Agreement, this Agreement, any provision of this Agreement or the breach, performance, enforcement, validity or invalidity of this Agreement or any provision hereof (and agrees not to commence any action, suit or proceeding relating thereto except in such courts). Each of the Seller, the Purchaser and Purchaser Guarantor further agrees that service of any process, summons, notice or document hand delivered or sent by U. S. registered mail to such party’s respective address set forth in Section 12.8 will be effective service of process for any action, suit or proceeding in any such courts with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. To the extent that either Purchaser or Purchaser Guarantor is not otherwise subject to service of process in the State of Delaware, each of Purchaser and Purchaser Guarantor appoints INCFILE.COM, 1220 N. Market Street, Suite 806, Wilmington, Delaware 19801 irrevocably as its agent in the State of Delaware for acceptance of legal process in connection with any suit, action or other proceeding arising out of or relating to the transactions contemplated by this Agreement, this Agreement, any provision of this Agreement or the breach, performance, enforcement, validity or invalidity of this Agreement or any provision hereof against such party with the same legal force and validity as if served upon such party personally within the State of Delaware. Each of the Seller, the Purchaser and Purchaser Guarantor hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of or relating to the transactions contemplated by this Agreement, this Agreement, any provision of or the breach, performance, enforcement, validity or invalidity of this Agreement or any provision of this Agreement in the Court of Chancery in and for the State of Delaware or state courts of the State of Delaware and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Notwithstanding the foregoing, each of the Seller, the Purchaser and Purchaser Guarantor agrees that a final judgment in any action, suit or proceeding so brought shall be conclusive and may be enforced by suit on the judgment in any jurisdiction or in any other manner provided in Law or in equity. Neither Purchaser nor Purchaser Guarantor shall claim that it is entitled to any sovereign immunity exemption or defense, and to the extent that either Purchaser or Purchaser Guarantor is so entitled, each of Purchaser and Purchaser Guarantor hereby waive their respective rights to any such exemption or defense.

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     12.15. Purchaser Guaranty. At least three (3) days prior to the Closing Date, Purchaser Guarantor shall execute and deliver to the Seller a guaranty substantially in the form attached to this Agreement as Exhibit E (the “Purchaser Guaranty”).

(Signatures appear on the following page.)

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     IN WITNESS WHEREOF the parties hereto have executed and delivered this Agreement on the date first written above.

TELEDYNE TECHNOLOGIES INCORPORATED
By:	/s/ John T. Kuelbs
Name: John T. Kuelbs
Title: Executive Vice President, General Counsel and Secretary
TECHNIFY MOTOR (USA) LTD.
By:	/s/ Tian Shan
Name: Tian Shan
Title: Chief Executive Officer
AVIC INTERNATIONAL HOLDING CORPORATION
By:	/s/ Yu Yimin
Name: Yu Yimin
Title: Vice President

SIGNATURE PAGE TO PURCHASE AGREEMENT

The following exhibits and schedules to the Purchase Agreement have been omitted. The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Commission upon request.

Exhibit A — Form of Assumption Agreement
Exhibit B — Form of Assignment and Assumption Agreement for Intellectual Property
Exhibit C — Term Sheet for the Transition Services Agreement
Exhibit D — Purchase Price Allocation in absence of Section 338(h)(10) Election
Exhibit E — Form of Purchaser Guaranty
Schedule 1.1 — Knowledge Persons
Schedule 1.2 — Permitted Liens
Schedule 2.1(b) — Purchased Assets
Schedule 2.3(a)(iii) — Stay Bonuses and Severance Agreements
Schedule 2.5 — Reference Net Working Capital
Schedule 4.3 — Noncontravention; Consents
Schedule 4.4 — Capitalization; Title to and Validity of the Shares
Schedule 4.5(a) — Business Financial Statements
Schedule 4.5(b) — Liabilities
Schedule 4.6 — Subsequent Events
Schedule 4.8(a) — Contracts
Schedule 4.8(c) — Written Notice of Violation or Breach of Contract
Schedule 4.8(d) — Government Contracts
Schedule 4.9(b) — Leased Real Property
Schedule 4.10 — Title and Status
Schedule 4.11 — Intellectual Property
Schedule 4.12 — Litigation
Schedule 4.13(a) — Employee Benefit Plans
Schedule 4.13(d) Seller Sponsored Employee Benefit Plan Liability
Schedule 4.13(e) — Life, Medical or Health Plans for Retired or Terminated Employees
Schedule 4.13(g) — Severance, Change of Control or Other Similar Benefits Resulting from Transaction
Schedule 4.14 — Labor Relations
Schedule 4.15 — Environmental Matters
Schedule 4.16 — Legal Compliance
Schedule 4.17 — Permits
Schedule 4.19 — Insurance Policies
Schedule 4.23 — Customers and Suppliers
Schedule 5.3(a) — Consents
Schedule 5.3(b) — Purchaser Approvals
Schedule 6.3(b) — Permitted Actions
Schedule 8.1(c) — Seller Sponsored Employee Benefit Plans

EX-21

Exhibit 21

Subsidiaries
of Teledyne Technologies Incorporated

	State/Jurisdiction	Fictitious Business Name(s)
Name of Subsidiary	of Incorporation	Used by Subsidiary
DALSA B.V.	Netherlands
DALSA GmbH	Germany
DALSA KK	Japan
DALSA Digital Cinema, Inc.	Canada
DALSA Digital Cinema Holdings, Inc.	Delaware
DALSA Digital Cinema LA Ltd.	California
DALSA (Shanghai) Trading Co., Ltd.	China
Ensambles de Precision S.A. de C.V.	Mexico
Gulfcoast Aerospace Alliance, LLC**	Delaware
Hurricane Acquisition Company	California
Intelek Limited	United Kingdom
Intelek, Inc.	Delaware
Intelek Properties Limited	United Kingdom
Maple Imaging, LLC	Delaware
Maple Netherlands C.V.	Netherlands
Ocean Design Ltda.	Brazil	Teledyne ODI Brasil
Reynolds Industries Limited	United Kingdom
Teledyne Advanced Pollution Instrumentation, Inc.	California
Teledyne Aerospace, LLC**	Florida
Teledyne Australia Pty Ltd	Australia
Teledyne Benthos, Inc.	Massachusetts	Teledyne Taptone Teledyne Webb Research
Teledyne Brown Engineering, Inc.	Delaware
Teledyne Brown Netherlands, Inc.	Delaware
Teledyne C.M.L. Group Limited	United Kingdom
Teledyne CollaborX, Inc.	Colorado
Teledyne Continental Motors, Inc.*	Delaware
Teledyne Controls Wichita, Inc.	Delaware
Teledyne Cormon, Inc.	Texas
Teledyne Cormon Limited****	United Kingdom
Teledyne Cormon Technology Limited****	United Kingdom
Teledyne Cougar, Inc.	California
Teledyne DALSA, Inc.	Ontario, Canada
Teledyne DALSA Asia-Pacific Ltd.	Ontario, Canada
Teledyne DALSA Colorado Springs, Inc.	Delaware
Teledyne DALSA Holdings (USA), Inc.	Delaware
Teledyne DALSA Industrial Products, Inc.	Delaware
Teledyne DALSA Rad-icon Imaging Corp.	California
Teledyne DALSA Semiconductor Inc.	Ontario, Canada
Teledyne Defence Limited	United Kingdom
Teledyne Energy Systems, Inc.***	Delaware
Teledyne France	France	Teledyne RD Instruments Europe
Teledyne Gavia ehf.	Iceland

	State/Jurisdiction	Fictitious Business Name(s)
Name of Subsidiary	of Incorporation	Used by Subsidiary
Teledyne Germany GmbH	Germany
Teledyne Instruments, Inc.	Delaware	Geophysical Instruments Teledyne D.G. O’Brien Teledyne Impulse Teledyne TSS
Teledyne Isco, Inc.	Nebraska	ISCO
Teledyne Labtech Limited	United Kingdom
Teledyne Licensing, LLC	Delaware
Teledyne Lighting and Display Products, Inc.	Nevada
Teledyne Limited	United Kingdom	Teledyne Controls Flight Data Company
Teledyne Mattituck Services, Inc.*	Delaware
Teledyne Monitor Labs, Inc.	Delaware	Teledyne Test Services
Teledyne Netherlands B.V.	Netherlands
Teledyne Monitor Labs P.R., Inc.	Puerto Rico
Teledyne ODI, Inc.	Delaware	Teledyne Oil & Gas
Teledyne Oil and Gas Limited****	United Kingdom
Teledyne Odom Hydrographic, Inc.	Louisiana
Teledyne Optimum Optical Systems, Inc.	California
Teledyne Paradise Datacom Limited	United Kingdom
Teledyne Paradise Datacom, LLC	Pennsylvania
Teledyne Properties Limited	United Kingdom
Teledyne RD Instruments, Inc.	Delaware
Teledyne RD Technologies (Shanghai) Co., Ltd.	China
Teledyne Reynolds, Inc.	California
Teledyne RISI, Inc.	California
Teledyne Scientific & Imaging, LLC	Delaware	Teledyne Imaging Sensors Teledyne Judson Technologies Teledyne Scientific Company
Teledyne SG Brown Limited	United Kingdom
Teledyne Singapore Private Limited	Singapore
Teledyne Solutions, Inc.	Alabama
Teledyne Storm Products, Inc.	California	Teledyne Storm Products - Cable Solutions Group Teledyne Storm Products - Microwave
Teledyne Technologies (Bermuda) Limited	Bermuda
Teledyne Technologies International Corp.	Delaware
Teledyne Tekmar Company	Ohio	Teledyne Leeman Labs
Teledyne TSS Limited	United Kingdom
Teledyne Wireless, LLC	Delaware	Teledyne KW Microwave Teledyne MEC Teledyne MEC Vacuum Electronics Teledyne Microwave Teledyne Vacuum Technologies

*	Subject to pending sale
**	50% owned
***	Majority Owned
****	Company inactive- to be liquidated

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following registration statements:

• Registration Statement (Form S-8 No. 333-87014) pertaining to the Teledyne Technologies Incorporated 2002 Stock Incentive Plan,

• Registration Statement (Form S-8 No. 333-94739) pertaining to the Teledyne Technologies Incorporated 1999 Incentive Plan,

• Registration Statement (Form S-8 No. 333-91781) pertaining to the Teledyne Technologies Incorporated Executive Deferred Compensation Plan,

• Registration Statement (Form S-8 No. 333-91785) pertaining to the Teledyne Technologies Incorporated 401(k) Plan,

• Registration Statement (Form S-8 No. 333-91787) pertaining to the Teledyne Technologies Incorporated Stock Purchase Plan,

• Registration Statement (Form S-8 No. 333-104712) pertaining to the Teledyne Technologies Incorporated Non-Employee Director Stock Compensation Plan,

• Registration Statement (Form S-8 No. 333-91791) pertaining to the Teledyne Technologies Incorporated Non-Employee Director Stock Compensation Plan,

• Registration Statement (Form S-8 No. 333-46630) pertaining to the Teledyne Technologies Incorporated 1999 Incentive Plan,

• Registration Statement (Form S-8 No. 333-33878) pertaining to the Teledyne Technologies Incorporated 401(k) Plan,

• Registration Statement (Form S-8 No. 333-127273) pertaining to the Teledyne Technologies Incorporated 1999 Incentive Plan,

• Registration Statement (Form S-8 No. 333-147401) pertaining to the Teledyne Technologies Incorporated 1999 Incentive Plan, and

• Registration Statement (Form S-8 No. 333-150633) pertaining to the Teledyne Technologies Incorporated 2008 Incentive Award Plan

of our reports dated March 3, 2011 with respect to the consolidated financial statements and schedule of Teledyne Technologies Incorporated and the effectiveness of internal control over financial reporting of Teledyne Technologies Incorporated included in this Annual Report (Form 10-K) for the year ended January 2, 2011.

/s/ Ernst & Young LLP

Los Angeles, California

March 3, 2011

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

The undersigned directors of Teledyne Technologies Incorporated, a Delaware corporation (“Teledyne”), do hereby constitute and appoint John T. Kuelbs and Melanie S. Cibik, or either one of them, our true and lawful attorneys and agents, to execute, file and deliver the Annual Report on Form 10-K of Teledyne for its 2010 fiscal year (“Form 10-K”), in our name and on our behalf in our capacities as directors of Teledyne as listed below, and to do any and all acts or things, in our name and on our behalf in our capacities as directors of Teledyne as listed below, which said attorneys and agents, or either one of them, may deem necessary or advisable to enable Teledyne to comply with the Securities Exchange Act of 1934 and any rules, regulations and requirements of the Securities and Exchange Commission in connection with the
Form 10-K (including without limitation executing, filing and delivering any amendments to the Form 10-K), and the undersigned do hereby ratify and confirm all that said attorneys and agents, or either one of them, shall do or cause to be done by virtue hereof.

     Witness the due execution hereof as of February 22, 2011.

/s/ Roxanne S. Austin Roxanne S. Austin	Director
/s/ Frank V. Cahouet Frank V. Cahouet	Director
/s/ Charles Crocker Charles Crocker	Director
/s/ Kenneth C. Dahlberg Kenneth C. Dahlberg	Director
/s/ Simon M. Lorne Simon M. Lorne	Director
/s/ Paul D. Miller Paul D. Miller	Director
/s/ Michael T. Smith Michael T. Smith	Director
/s/ Wesley W. von Schack Wesley W. von Schack	Director

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert Mehrabian, certify that:

1. I have reviewed this report on Form 10-K of Teledyne Technologies Incorporated (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a—15(e) and 15d—15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d — 15(f))for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2011

/s/ Robert Mehrabian

Robert Mehrabian

Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dale A. Schnittjer, certify that:

1. I have reviewed this report on Form 10-K of Teledyne Technologies Incorporated (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a—15(e) and 15d—15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d — 15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2011

/s/ Dale A. Schnittjer

Dale A. Schnittjer

Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350

I, Robert Mehrabian, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, to my knowledge that:

1.	the Annual Report on Form 10-K Teledyne Technologies Incorporated (the “Corporation”) for the year ended January 2, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Robert Mehrabian

Robert Mehrabian

Chairman, President and Chief Executive Officer

March 3, 2011

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350

I, Dale A. Schnittjer, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, to my knowledge that:

1.	the Annual Report on Form 10-K Teledyne Technologies Incorporated (the “Corporation”) for the year ended January 2, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Dale A. Schnittjer

Dale A. Schnittjer

Senior Vice President and Chief Financial Officer

March 3, 2011