Business Segments

12 Months Ended

Dec. 28, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

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 profitability. The Instrumentation segment provides monitoring and control instruments for marine, environmental, industrial and other applications, electronic test and measurement equipment and harsh environment interconnect products. The Digital Imaging segment includes high performance sensors, cameras and systems, within the visible, infrared and X-ray spectra, for use in industrial, government and medical applications, as well as MEMS. It also includes our sponsored and centralized research laboratories benefiting government programs and businesses. The Aerospace and Defense Electronics segment provides sophisticated electronic components and subsystems and communications products, including defense electronics, harsh environment interconnects, data acquisition and communications equipment for aircraft and components and subsystems for wireless and satellite communications, as well as general aviation batteries. The Engineered Systems segment provides innovative systems engineering and integration, advanced technology application, software development and manufacturing solutions for defense, space, environmental and energy applications. The Engineered Systems segment also designs and manufactures electrochemical energy systems and small turbine engines.

In the second quarter of 2013, the Company changed the reporting structure of two of its interconnect business units. The two interconnect business units were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Instrumentation segment. These business units primarily serve energy production markets and are now managed by and integrated with our other interconnect businesses within Teledyne Oil & Gas, which is part of the marine instrumentation product line. Previously reported segment data has been restated to reflect this change. Total sales for the two business units transferred to the Instrumentation segment from the Aerospace and Defense Electronics segment were $55.3 million for fiscal year 2012.

Segment operating profit includes other income and expense directly related to the segment, but excludes noncontrolling 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.

During 2013, we incurred pretax charges totaling $24.0 million for severance and facility consolidation expense and environmental reserves. The charges were comprised of $10.4 million in severance related costs and $13.6 million in facility closure and relocation costs, which included $5.3 million of environmental reserves. The actions were substantially completed by year-end 2013, although we incurred approximately $4.4 million in similar expenses in 2014. For 2013 the charges impacted each business segment as follows: Aerospace and Defense Electronics, $15.7 million; Digital Imaging, $3.9 million; Instrumentation, $2.5 million; and Engineered Systems, $1.9 million. For 2014 the charges impacted each business segment as follows: Digital Imaging, $2.7 million; Instrumentation $1.0 million; and Aerospace and Defense Electronics, $0.9 million. The Aerospace and Defense Electronics 2012 results reflected $1.7 million for severance and facility consolidation costs.

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):

Sales	2014			2013			2012
Instrumentation	$	1,115.5		$	1,022.8		$	804.7
Digital Imaging	403.6			414.8			415.9
Aerospace and Defense Electronics	603.0			625.1			605.3
Engineered Systems	271.9			275.9			301.4
Total net sales	$	2,394.0		$	2,338.6		$	2,127.3
Income before taxes	2014			2013			2012
Instrumentation	$	181.6		$	162.0		$	146.0
Digital Imaging	37.1			28.2			24.8
Aerospace and Defense Electronics	88.3			65.7			80.5
Engineered Systems	31.4			22.0			28.5
Total segment operating profit	338.4			277.9			279.8
Corporate expense	(43.9		)	(37.6		)	(36.7		)
Interest and debt expense, net	(19.0		)	(20.4		)	(17.8		)
Other income, net	6.6			4.1			2.9
Income before taxes	$	282.1		$	224.0		$	228.2

Depreciation and amortization	2014		2013		2012
Instrumentation	$	41.1	$	38.2	$	26.1
Digital Imaging	29.6		30.3		30.5
Aerospace and Defense Electronics	15.9		16.5		17.1
Engineered Systems	3.7		4.2		4.4
Corporate	4.0		1.9		0.2
Total depreciation and amortization	$	94.3	$	91.1	$	78.3

Capital expenditures	2014		2013		2012
Instrumentation	$	17.0	$	22.0	$	14.4
Digital Imaging	10.3		20.2		23.5
Aerospace and Defense Electronics	8.8		15.3		12.6
Engineered Systems	4.3		3.6		4.2
Corporate	3.1		11.5		10.6
Total capital expenditures	$	43.5	$	72.6	$	65.3

Identifiable assets	2014		2013		2012
Instrumentation	$	1,415.4	$	1,204.5	$	1,022.5
Digital Imaging	708.4		745.1		778.1
Aerospace and Defense Electronics	462.5		436.9		457.6
Engineered Systems	84.9		92.3		102.3
Corporate (a)	191.0		272.3		45.9
Total identifiable assets	$	2,862.2	$	2,751.1	$	2,406.4
(a) The amount for 2014 and 2013 includes the $86.3 million and $222.0 million prepaid pension asset, respectively. The Company had no prepaid pension assets in 2012.

Information on the Company’s sales by country of origin and long-lived assets by major geographic area was as follows (in millions):

Sales	2014		2013		2012
United States	$	1,852.0	$	1,776.8	$	1,699.5
Canada	230.1		221.7		224.4
United Kingdom	139.8		174.2		118.2
All other countries	172.1		165.9		85.2
Total sales	$	2,394.0	$	2,338.6	$	2,127.3

Long-lived assets	2014		2013		2012
United States	$	1,364.7	$	1,320.2	$	1,068.0
Canada	310.5		354.1		393.4
United Kingdom	120.6		131.5		122.8
All other countries	128.2		146.2		77.4
Total long-lived assets	$	1,924.0	$	1,952.0	$	1,661.6

The all other countries category primarily consists of the operations in Europe. Long-lived assets consist of property, plant and equipment, goodwill, acquired intangible assets, prepaid pension assets and other long-term assets including deferred compensation assets but excluding any deferred tax assets.

Product Lines

The Instrumentation segment includes three product lines: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation. Beginning in the first quarter of 2014, within the Instrumentation segment, one business unit previously reported in the environmental instrumentation product line is now reported as part of the test and measurement instrumentation product line. Total sales for the business unit for 2013 were $9.4 million. Previously reported product line data has been restated to reflect this change. The Digital Imaging segment contains one product line as does the Aerospace and Defense Electronics segment. The Engineered Systems segment includes three product lines: Engineered Products and Services, Turbine Engines and Energy Systems.

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

Instrumentation	2014		2013		2012
Environmental Instrumentation	$	268.4	$	248.6	$	250.2
Marine Instrumentation	654.8		580.4		473.7
Test and Measurement Instrumentation	192.3		193.8		80.8
Total	$	1,115.5	$	1,022.8	$	804.7
Engineered Systems	2014		2013		2012
Engineered Products and Services	$	211.4	$	217.5	$	241.3
Turbine Engines	26.5		26.0		24.6
Energy Systems	34.0		32.4		35.5
Total	$	271.9	$	275.9	$	301.4

Sales to the U.S. Government included sales to the U.S. Department of Defense of $472.8 million in 2014, $487.9 million in 2013, and $542.6 million in 2012. Total sales to international customers were $1,069.3 million in 2014, $1,031.8 million in 2013, and $831.7 million in 2012. Of these amounts, sales by operations in the United States to customers in other countries were $624.0 million in 2014, $566.0 million in 2013, and $492.2 million in 2012. There were no sales to individual countries outside of the United States in excess of 10 percent of the Company’s sales. Sales between business segments, which were not material, generally were priced at prevailing market prices.