ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
Large accelerated filer | ý | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Class | Outstanding at May 4, 2016 | |
Common Stock, $.01 par value per share | 34,496,583 shares |
PAGE | |||
Part I | |||
17 | |||
24 | |||
25 | |||
Part II | 25 | ||
Item 1. Legal Proceedings | 25 | ||
25 | |||
26 | |||
27 |
First Quarter | |||||||
2016 | 2015 | ||||||
Net sales | $ | 530.5 | $ | 565.0 | |||
Costs and expenses | |||||||
Cost of sales | 324.8 | 345.9 | |||||
Selling, general and administrative expenses | 144.7 | 151.8 | |||||
Total costs and expenses | 469.5 | 497.7 | |||||
Operating income | 61.0 | 67.3 | |||||
Interest expense, net | (5.7 | ) | (5.9 | ) | |||
Other income (expense), net | (1.3 | ) | 0.8 | ||||
Income before income taxes | 54.0 | 62.2 | |||||
Provision for income taxes | 15.6 | 18.5 | |||||
Net income | $ | 38.4 | $ | 43.7 | |||
Basic earnings per common share | $ | 1.12 | $ | 1.22 | |||
Weighted average common shares outstanding | 34.4 | 35.7 | |||||
Diluted earnings per common share | $ | 1.10 | $ | 1.20 | |||
Weighted average diluted common shares outstanding | 34.9 | 36.5 |
First Quarter | |||||||
2016 | 2015 | ||||||
Net income | $ | 38.4 | $ | 43.7 | |||
Other comprehensive income (loss): | |||||||
Foreign exchange translation adjustment | 23.1 | (49.2 | ) | ||||
Hedge activity, net of tax | 4.6 | (2.3 | ) | ||||
Pension and postretirement benefit adjustments, net of tax | 3.6 | 4.9 | |||||
Other comprehensive income (loss) | 31.3 | (46.6 | ) | ||||
Comprehensive income (loss) attributable to Teledyne | $ | 69.7 | $ | (2.9 | ) |
April 3, 2016 | January 3, 2016 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 83.2 | $ | 85.1 | |||
Accounts receivable, net | 371.8 | 373.0 | |||||
Inventories, net | 322.0 | 309.2 | |||||
Prepaid expenses and other current assets | 56.4 | 60.9 | |||||
Total current assets | 833.4 | 828.2 | |||||
Property, plant and equipment, at cost, net of accumulated depreciation and amortization of $469.0 at April 3, 2016 and $454.8 at January 3, 2016 | 322.8 | 321.3 | |||||
Goodwill | 1,151.9 | 1,140.2 | |||||
Acquired intangibles, net | 240.0 | 243.3 | |||||
Prepaid pension assets | 117.8 | 111.0 | |||||
Other assets, net | 72.0 | 74.5 | |||||
Total Assets | $ | 2,737.9 | $ | 2,718.5 | |||
Liabilities and Stockholders’ Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 134.2 | $ | 136.5 | |||
Accrued liabilities | 244.7 | 238.0 | |||||
Current portion of long-term debt and capital leases | 12.4 | 19.1 | |||||
Total current liabilities | 391.3 | 393.6 | |||||
Long-term debt and capital leases | 707.1 | 762.9 | |||||
Other long-term liabilities | 212.5 | 217.9 | |||||
Total Liabilities | 1,310.9 | 1,374.4 | |||||
Commitments and contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock, $0.01 par value; outstanding shares - none | — | — | |||||
Common stock, $0.01 par value; authorized 125 million shares; issued shares: 37,697,865 at April 3, 2016 and 37,697,865 at January 3, 2016: outstanding shares: 34,479,367 at April 3, 2016 and 34,514,599 at January 3, 2016 | 0.4 | 0.4 | |||||
Additional paid-in capital | 353.5 | 345.3 | |||||
Retained earnings | 1,759.9 | 1,721.5 | |||||
Treasury stock, 3,218,498 at April 3, 2016 and 3,183,266 at January 3, 2016 | (304.9 | ) | (309.9 | ) | |||
Accumulated other comprehensive loss | (381.9 | ) | (413.2 | ) | |||
Total Stockholders’ Equity | 1,427.0 | 1,344.1 | |||||
Total Liabilities and Stockholders’ Equity | $ | 2,737.9 | $ | 2,718.5 |
Three Months | |||||||
2016 | 2015 | ||||||
Operating Activities | |||||||
Net income | $ | 38.4 | $ | 43.7 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 21.1 | 23.2 | |||||
Deferred income taxes | 4.1 | 0.4 | |||||
Stock option compensation expense | 3.3 | 3.8 | |||||
Excess income tax benefits from stock options exercised | (0.5 | ) | (0.8 | ) | |||
Changes in operating assets and liabilities, excluding the effect of businesses acquired: | |||||||
Accounts receivable | 3.6 | 7.7 | |||||
Inventories | (10.2 | ) | (15.9 | ) | |||
Prepaid expenses and other assets | (5.4 | ) | (4.6 | ) | |||
Accounts payable | (2.2 | ) | (8.8 | ) | |||
Accrued liabilities | 9.9 | (39.1 | ) | ||||
Income taxes payable, net | 11.5 | 11.4 | |||||
Long-term assets | 1.6 | (0.2 | ) | ||||
Other long-term liabilities | (5.5 | ) | 1.9 | ||||
Pension benefits | (5.9 | ) | (3.6 | ) | |||
Postretirement benefits | (0.2 | ) | (0.3 | ) | |||
Other, net | 5.5 | (2.1 | ) | ||||
Net cash provided by operating activities | 69.1 | 16.7 | |||||
Investing Activities | |||||||
Purchases of property, plant and equipment | (14.2 | ) | (7.7 | ) | |||
Purchase of businesses and other investments, net of cash acquired | — | (18.8 | ) | ||||
Proceeds from the disposal of fixed assets | 0.2 | 0.3 | |||||
Other, net | (0.5 | ) | — | ||||
Net cash used by investing activities | (14.5 | ) | (26.2 | ) | |||
Financing Activities | |||||||
Net proceeds (payments) on credit facility | (51.5 | ) | 127.1 | ||||
Payments on other debt | (10.8 | ) | — | ||||
Proceeds from exercise of stock options | 2.6 | 2.7 | |||||
Purchase of treasury stock | — | (142.0 | ) | ||||
Excess income tax benefits from stock options exercised | 0.5 | 0.8 | |||||
Other, net | — | (2.3 | ) | ||||
Net cash used by financing activities | (59.2 | ) | (13.7 | ) | |||
Effect of exchange rate changes on cash | 2.7 | (8.0 | ) | ||||
Decrease in cash | (1.9 | ) | (31.2 | ) | |||
Cash—beginning of period | 85.1 | 141.4 | |||||
Cash—end of period | $ | 83.2 | $ | 110.2 |
Foreign Currency Translation | Cash Flow Hedges and Other | Pension and Postretirement Benefits | Total | ||||||||||||
Balance as of January 3, 2016 | $ | (174.2 | ) | $ | (6.7 | ) | $ | (232.3 | ) | $ | (413.2 | ) | |||
Other comprehensive income before reclassifications | 23.1 | 3.0 | — | 26.1 | |||||||||||
Amounts reclassified from AOCI | — | 1.6 | 3.6 | 5.2 | |||||||||||
Net other comprehensive income | 23.1 | 4.6 | 3.6 | 31.3 | |||||||||||
Balance as of April 3, 2016 | $ | (151.1 | ) | $ | (2.1 | ) | $ | (228.7 | ) | $ | (381.9 | ) | |||
Foreign Currency Translation | Cash Flow Hedges and Other | Pension and Postretirement Benefits | Total | ||||||||||||
Balance as of December 28, 2014 | $ | (90.6 | ) | $ | (5.3 | ) | $ | (227.3 | ) | $ | (323.2 | ) | |||
Other comprehensive loss before reclassifications | (49.2 | ) | (3.4 | ) | — | (52.6 | ) | ||||||||
Amounts reclassified from AOCI | — | 1.1 | 4.9 | 6.0 | |||||||||||
Net other comprehensive income (loss) | (49.2 | ) | (2.3 | ) | 4.9 | (46.6 | ) | ||||||||
Balance as of March 29, 2015 | $ | (139.8 | ) | $ | (7.6 | ) | $ | (222.4 | ) | $ | (369.8 | ) |
Amount Reclassified from AOCI Three Months Ended | Amount Reclassified from AOCI Three Months Ended | Statement of Income | ||||||
April 3, 2016 | March 29, 2015 | Presentation | ||||||
Loss on cash flow hedges: | ||||||||
Loss recognized in income on derivatives | $ | 2.2 | $ | 1.4 | Costs and expenses | |||
Income tax benefit | (0.6 | ) | (0.3 | ) | Income tax benefit | |||
Total | $ | 1.6 | $ | 1.1 | ||||
Amortization of defined benefit pension and postretirement plan items: | ||||||||
Amortization of prior service cost | $ | (1.5 | ) | $ | (1.5 | ) | Costs and expenses | |
Amortization of net actuarial loss | 7.1 | 9.0 | Costs and expenses | |||||
Total before tax | 5.6 | 7.5 | ||||||
Income tax benefit | (2.0 | ) | (2.6 | ) | Income tax benefit | |||
Total | $ | 3.6 | $ | 4.9 |
Contracts to Buy | Contracts to Sell | |||||||
Currency | Amount | Currency | Amount | |||||
Canadian Dollars | C$ | 55.8 | U.S. Dollars | US$ | 41.7 | |||
Canadian Dollars | C$ | 10.6 | Euros | € | 6.9 | |||
Euros | € | 7.1 | U.S. Dollars | US$ | 8.0 | |||
Great Britain Pounds | £ | 1.1 | Australian Dollars | A$ | 2.2 | |||
Great Britain Pounds | £ | 21.5 | U.S. Dollars | US$ | 31.4 | |||
Singapore Dollars | S$ | 1.7 | U.S. Dollars | US$ | 1.2 | |||
U.S. Dollars | US$ | 2.2 | Japanese Yen | ¥ | 250.0 |
First Quarter | |||||||
2016 | 2015 | ||||||
Net gain (loss) recognized in AOCI (a) | $ | 4.0 | $ | (4.6 | ) | ||
Net loss reclassified from AOCI into cost of sales (a) | $ | (2.2 | ) | $ | (1.4 | ) | |
Net foreign exchange gain (loss) recognized in other income and expense (b) | $ | (0.2 | ) | $ | 0.2 |
Asset/(Liability) Derivatives | Balance sheet location | April 3, 2016 | January 3, 2016 | ||||||
Derivatives designated as hedging instruments: | |||||||||
Cash flow forward contracts | Other assets | $ | 0.8 | $ | — | ||||
Cash flow forward contracts | Accrued liabilities | — | (4.7 | ) | |||||
Cash flow forward contracts | Other long-term liabilities | (0.8 | ) | (1.3 | ) | ||||
Total derivatives designated as hedging instruments | — | (6.0 | ) | ||||||
Derivatives not designated as hedging instruments: | |||||||||
Non-designated forward contracts | Other current assets | 2.8 | 0.2 | ||||||
Non-designated forward contracts | Accrued liabilities | (1.8 | ) | (6.0 | ) | ||||
Total derivatives not designated as hedging instruments | 1.0 | (5.8 | ) | ||||||
Total asset (liability) derivatives | $ | 1.0 | $ | (11.8 | ) |
First Quarter | |||||||
2016 | 2015 | ||||||
Net income attributable to Teledyne | $ | 38.4 | $ | 43.7 | |||
Basic earnings per share: | |||||||
Weighted average common shares outstanding | 34.4 | 35.7 | |||||
Basic earnings per common share | $ | 1.12 | $ | 1.22 | |||
Diluted earnings per share: | |||||||
Weighted average common shares outstanding | 34.4 | 35.7 | |||||
Effect of dilutive securities | 0.5 | 0.8 | |||||
Weighted average diluted common shares outstanding | 34.9 | 36.5 | |||||
Diluted earnings per common share | $ | 1.10 | $ | 1.20 |
2016 | |||
Expected volatility | 32.7 | % | |
Risk-free interest rate | 1.5 | % | |
Expected life in years | 7.2 | ||
Expected dividend yield | — | ||
Weighted average fair value | $ | 29.93 |
2016 | |||||
First Quarter | |||||
Shares | Weighted Average Exercise Price | ||||
Beginning balance | 2,383,870 | $ | 63.74 | ||
Granted | 518,310 | $ | 78.40 | ||
Exercised | (63,968 | ) | $ | 40.44 | |
Canceled | (14,706 | ) | $ | 79.60 | |
Ending balance | 2,823,506 | $ | 66.87 | ||
Options exercisable at end of period | 1,840,740 | $ | 58.23 |
Balance at | |||||||
Inventories (in millions): | April 3, 2016 | January 3, 2016 | |||||
Raw materials and supplies | $ | 147.2 | $ | 141.6 | |||
Work in process | 151.7 | 149.4 | |||||
Finished goods | 47.5 | 45.8 | |||||
346.4 | 336.8 | ||||||
Progress payments | (9.3 | ) | (12.3 | ) | |||
Reduction to LIFO cost basis | (15.1 | ) | (15.3 | ) | |||
Total inventories, net | $ | 322.0 | $ | 309.2 |
Balance at | |||||||||
Balance sheet items | Balance sheet classification | April 3, 2016 | January 3, 2016 | ||||||
Income tax receivable | Prepaid expenses and other current assets | $ | 18.3 | $ | 28.8 | ||||
Deferred compensation assets | Other assets, net | $ | 47.2 | $ | 47.9 | ||||
Salaries and wages | Accrued liabilities | $ | 86.8 | $ | 89.5 | ||||
Customer deposits and credits | Accrued liabilities | $ | 48.9 | $ | 37.6 | ||||
Accrued pension obligation | Other long-term liabilities | $ | 43.7 | $ | 46.7 | ||||
Accrued postretirement benefits | Other long-term liabilities | $ | 9.4 | $ | 9.6 | ||||
Deferred compensation liabilities | Other long-term liabilities | $ | 44.5 | $ | 43.9 | ||||
Deferred tax liabilities | Other long-term liabilities | $ | 41.2 | $ | 37.9 |
Three Months | |||||||
Warranty Reserve (in millions): | 2016 | 2015 | |||||
Balance at beginning of year | $ | 17.1 | $ | 18.5 | |||
Accruals for product warranties charged to expense | 1.9 | 1.5 | |||||
Cost of product warranty claims | (1.6 | ) | (2.1 | ) | |||
Balance at end of period | $ | 17.4 | $ | 17.9 |
Balance at | |||||||
Long-Term Debt (in millions): | April 3, 2016 | January 3, 2016 | |||||
$750.0 million revolving credit facility due March 2018, weighted average rate of 1.70% at April 3, 2016 and 1.67% at January 3, 2016 | 99.0 | 150.5 | |||||
Term loans due through March 2019, weighted average rate of 1.68% at April 3, 2016 and 1.55% at January 3, 2016 | 187.5 | 190.0 | |||||
4.74% Senior Notes due September 2017* | 100.0 | 100.0 | |||||
2.61% Senior Notes due December 2019* | 30.0 | 30.0 | |||||
5.30% Senior Notes due September 2020* | 75.0 | 75.0 | |||||
2.81% Senior Notes due November 2020* | 25.0 | 25.0 | |||||
3.09% Senior Notes due December 2021* | 95.0 | 95.0 | |||||
3.28% Senior Notes due November 2022* | 100.0 | 100.0 | |||||
Total debt | 711.5 | 765.5 | |||||
Less: current portion of long-term debt | (11.3 | ) | (10.0 | ) | |||
Total long-term debt | $ | 700.2 | $ | 755.5 |
First Quarter | |||||||
Net periodic pension benefit income - in millions: | 2016 | 2015 | |||||
Service cost — benefits earned during the period | $ | 2.8 | $ | 3.3 | |||
Interest cost on benefit obligation | 10.1 | 9.9 | |||||
Expected return on plan assets | (18.7 | ) | (19.2 | ) | |||
Amortization of prior service cost | (1.5 | ) | (1.5 | ) | |||
Amortization of net actuarial loss | 6.8 | 8.5 | |||||
Pension plan curtailment | — | (1.2 | ) | ||||
Net periodic pension income | $ | (0.5 | ) | $ | (0.2 | ) |
First Quarter | |||||||
Net periodic Postretirement Benefits expense - in millions: | 2016 | 2015 | |||||
Interest cost on benefit obligation | $ | 0.1 | $ | 0.1 | |||
Amortization of net actuarial gain | (0.1 | ) | — | ||||
Net periodic postretirement expense | $ | — | $ | 0.1 |
First Quarter | % | |||||||||
(Dollars in millions) | 2016 | 2015 | Change | |||||||
Net sales(a): | ||||||||||
Instrumentation | $ | 223.7 | $ | 270.3 | (17.2 | )% | ||||
Digital Imaging | 89.9 | 90.4 | (0.6 | )% | ||||||
Aerospace and Defense Electronics | 152.6 | 141.2 | 8.1 | % | ||||||
Engineered Systems | 64.3 | 63.1 | 1.9 | % | ||||||
Total net sales | $ | 530.5 | $ | 565.0 | (6.1 | )% | ||||
Operating income: | ||||||||||
Instrumentation | $ | 31.4 | $ | 42.1 | (25.4 | )% | ||||
Digital Imaging | 8.2 | 9.3 | (11.8 | )% | ||||||
Aerospace and Defense Electronics | 24.1 | 19.4 | 24.2 | % | ||||||
Engineered Systems | 8.0 | 6.7 | 19.4 | % | ||||||
Corporate expense | (10.7 | ) | (10.2 | ) | 4.9 | % | ||||
Operating income | $ | 61.0 | $ | 67.3 | (9.4 | )% |
(a) | Net sales excludes inter-segment sales of $5.1 million and $4.9 million for the first quarter of 2016 and 2015, respectively. |
First Quarter | |||||||
Instrumentation | 2016 | 2015 | |||||
Marine Instrumentation | $ | 112.9 | $ | 159.5 | |||
Environmental Instrumentation | 68.7 | 67.7 | |||||
Test and Measurement Instrumentation | 42.1 | 43.1 | |||||
Total | $ | 223.7 | $ | 270.3 | |||
First Quarter | |||||||
Engineered Systems | 2016 | 2015 | |||||
Engineered Products and Services | $ | 52.8 | $ | 49.1 | |||
Turbine Engines | 5.0 | 5.6 | |||||
Energy Systems | 6.5 | 8.4 | |||||
Total | $ | 64.3 | $ | 63.1 |
First Quarter | |||||||
(in millions) | 2016 | 2015 | |||||
Net sales | $ | 530.5 | $ | 565.0 | |||
Costs and expenses | |||||||
Cost of sales | 324.8 | 345.9 | |||||
Selling, general and administrative expenses | 144.7 | 151.8 | |||||
Total costs and expenses | 469.5 | 497.7 | |||||
Operating income | 61.0 | 67.3 | |||||
Interest expense, net | (5.7 | ) | (5.9 | ) | |||
Other income (expense), net | (1.3 | ) | 0.8 | ||||
Income before income taxes | 54.0 | 62.2 | |||||
Provision for income taxes | 15.6 | 18.5 | |||||
Net income attributable to Teledyne | $ | 38.4 | $ | 43.7 |
First Quarter | % | |||||||||
(Dollars in millions) | 2016 | 2015 | Change | |||||||
Net sales(a): | ||||||||||
Instrumentation | $ | 223.7 | $ | 270.3 | (17.2 | )% | ||||
Digital Imaging | 89.9 | 90.4 | (0.6 | )% | ||||||
Aerospace and Defense Electronics | 152.6 | 141.2 | 8.1 | % | ||||||
Engineered Systems | 64.3 | 63.1 | 1.9 | % | ||||||
Total net sales | $ | 530.5 | $ | 565.0 | (6.1 | )% | ||||
Operating income: | ||||||||||
Instrumentation | $ | 31.4 | $ | 42.1 | (25.4 | )% | ||||
Digital Imaging | 8.2 | 9.3 | (11.8 | )% | ||||||
Aerospace and Defense Electronics | 24.1 | 19.4 | 24.2 | % | ||||||
Engineered Systems | 8.0 | 6.7 | 19.4 | % | ||||||
Corporate expense | (10.7 | ) | (10.2 | ) | 4.9 | % | ||||
Total operating income | $ | 61.0 | $ | 67.3 | (9.4 | )% |
First Quarter | ||||||||
(Dollars in millions) | 2016 | 2015 | ||||||
Instrumentation | ||||||||
Sales | $ | 223.7 | $ | 270.3 | ||||
Cost of sales | $ | 121.2 | $ | 149.7 | ||||
Cost of sales % of sales | 54.2 | % | 55.4 | % | ||||
Digital Imaging | ||||||||
Sales | $ | 89.9 | $ | 90.4 | ||||
Cost of sales | $ | 55.9 | $ | 55.2 | ||||
Cost of sales % of sales | 62.2 | % | 61.1 | % | ||||
Aerospace and Defense Electronics | ||||||||
Sales | $ | 152.6 | $ | 141.2 | ||||
Cost of Sales | $ | 96.6 | $ | 90.2 | ||||
Cost of sales % of sales | 63.3 | % | 63.9 | % | ||||
Engineered Systems | ||||||||
Sales | $ | 64.3 | $ | 63.1 | ||||
Costs of sales | $ | 51.1 | $ | 50.8 | ||||
Cost of sales % of sales | 79.5 | % | 80.5 | % | ||||
Total Company | ||||||||
Sales | $ | 530.5 | $ | 565.0 | ||||
Costs of sales | $ | 324.8 | $ | 345.9 | ||||
Cost of sales % of sales | 61.2 | % | 61.2 | % |
First Quarter | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Sales | $ | 223.7 | $ | 270.3 | |||
Cost of sales | $ | 121.2 | $ | 149.7 | |||
Selling, general and administrative expenses | $ | 71.1 | $ | 78.5 | |||
Operating income | $ | 31.4 | $ | 42.1 | |||
Cost of sales % of sales | 54.2 | % | 55.4 | % | |||
Selling, general and administrative expenses % of sales | 31.8 | % | 29.0 | % | |||
Operating income % of sales | 14.0 | % | 15.6 | % |
First Quarter | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Sales | $ | 89.9 | $ | 90.4 | |||
Cost of sales | $ | 55.9 | $ | 55.2 | |||
Selling, general and administrative expenses | $ | 25.8 | $ | 25.9 | |||
Operating income | $ | 8.2 | $ | 9.3 | |||
Cost of sales % of sales | 62.2 | % | 61.1 | % | |||
Selling, general and administrative expenses % of sales | 28.7 | % | 28.6 | % | |||
Operating income % of sales | 9.1 | % | 10.3 | % |
First Quarter | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Sales | $ | 152.6 | $ | 141.2 | |||
Cost of sales | $ | 96.6 | $ | 90.2 | |||
Selling, general and administrative expenses | $ | 31.9 | $ | 31.6 | |||
Operating income | $ | 24.1 | $ | 19.4 | |||
Cost of sales % of sales | 63.3 | % | 63.9 | % | |||
Selling, general and administrative expenses % of sales | 20.9 | % | 22.4 | % | |||
Operating income % of sales | 15.8 | % | 13.7 | % |
First Quarter | |||||||
(Dollars in millions) | 2016 | 2015 | |||||
Sales | $ | 64.3 | $ | 63.1 | |||
Cost of sales | $ | 51.1 | $ | 50.8 | |||
Selling, general and administrative expenses | $ | 5.2 | $ | 5.6 | |||
Operating income | $ | 8.0 | $ | 6.7 | |||
Cost of sales % of sales | 79.5 | % | 80.5 | % | |||
Selling, general and administrative expenses % of sales | 8.1 | % | 8.9 | % | |||
Operating income % of sales | 12.4 | % | 10.6 | % |
$750.0 million Credit Facility expires December 2020 and $187.5 million term loans due through March 2019 (issued in October 2012) | |||
Financial Covenants | Requirement | Actual Measure | |
Consolidated Leverage Ratio (Net Debt/EBITDA) (a) | No more than 3.25 to 1 | 2.0 to 1 | |
Consolidated Interest Coverage Ratio (EBITDA/Interest) (b) | No less than 3.0 to 1 | 15.6 to 1 | |
$425.0 million Private Placement Senior Notes due from 2017 to 2022 | |||
Financial Covenants | Requirement | Actual Measure | |
Consolidated Leverage Ratio (Net Debt/EBITDA) (a) | No more than 3.25 to 1 | 2.0 to 1 | |
Consolidated Interest Coverage Ratio (EBITDA/Interest) (b) | No less than 3.0 to 1 | 15.6 to 1 |
a) | The Consolidated Leverage Ratio is equal to Net Debt/EBITDA as defined in our private placement note purchase agreement and our $750.0 million credit agreement. |
b) | The Consolidated Interest Coverage Ratio is equal to EBITDA/Interest as defined in our private placement note purchase agreement and our $750.0 million credit agreement. |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Fiscal Month 2016 | Total number of shares purchased | Average price paid per share* | Total number of shares purchased as part of publicly announce plans or programs | Maximum number of shares that may be purchased under the plans or programs | ||||||||
January 4 - February 7 | — | — | — | 3,396,626 | ||||||||
February 8 - March 6 | 135,374 | $ | 85.17 | 135,374 | 3,261,252 | |||||||
March 7 - April 3 | — | — | — | 3,261,252 | ||||||||
135,374 | $ | 85.17 | 135,374 |
Item 6. | Exhibits |
(a) | Exhibits | |
Exhibit 31.1 | 302 Certification – Robert Mehrabian | |
Exhibit 31.2 | 302 Certification – Susan L. Main | |
Exhibit 32.1 | 906 Certification – Robert Mehrabian | |
Exhibit 32.2 | 906 Certification – Susan L. Main | |
Exhibit 101 (INS) | XBRL Instance Document | |
Exhibit 101 (SCH) | XBRL Schema Document | |
Exhibit 101 (CAL) | XBRL Calculation Linkbase Document | |
Exhibit 101 (LAB) | XBRL Label Linkbase Document XBRL Schema Document | |
Exhibit 101 (PRE) | XBRL Presentation Linkbase Document XBRL Schema Document | |
Exhibit 101 (DEF) | XBRL Definition Linkbase Document XBRL Schema Document | |
TELEDYNE TECHNOLOGIES INCORPORATED | |||
DATE: May 6, 2016 | By: | /s/ Susan L. Main | |
Susan L. Main, Senior Vice President and | |||
Chief Financial Officer | |||
(Principal Financial Officer and Authorized Officer) | |||
Exhibit Number | Description |
Exhibit 31.1 | 302 Certification – Robert Mehrabian |
Exhibit 31.2 | 302 Certification – Susan L. Main |
Exhibit 32.1 | 906 Certification – Robert Mehrabian |
Exhibit 32.2 | 906 Certification – Susan L. Main |
Exhibit 101 (INS) | XBRL Instance Document |
Exhibit 101 (SCH) | XBRL Schema Document |
Exhibit 101 (CAL) | XBRL Calculation Linkbase Document |
Exhibit 101 (DEF) | XBRL Definition Linkbase Document XBRL Schema Document |
Exhibit 101 (LAB) | XBRL Label Linkbase Document XBRL Schema Document |
Exhibit 101 (PRE) | XBRL Presentation Linkbase Document XBRL Schema Document |
1. | I have reviewed this quarterly report on Form 10-Q 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 registrants’ 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 the 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. |
By: | /s/ Robert Mehrabian |
Robert Mehrabian | |
Chairman, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q 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 registrants’ 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 the 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. |
By: | /s/ Susan L. Main |
Susan L. Main | |
Senior Vice President and Chief Financial Officer |
1. | the Quarterly Report on Form 10-Q of Teledyne Technologies Incorporated (the “Corporation”) for the quarter ended April 3, 2016 (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. |
By: | /s/ Robert Mehrabian |
Robert Mehrabian | |
Chairman, President and Chief Executive Officer | |
May 6, 2016 |
1. | the Quarterly Report on Form 10-Q of Teledyne Technologies Incorporated (the “Corporation”) for the quarter ended April 3, 2016 (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. |
By: | /s/ Susan L. Main |
Susan L. Main | |
Senior Vice President and Chief Financial Officer | |
May 6, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
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Apr. 03, 2016 |
May. 04, 2016 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | TELEDYNE TECHNOLOGIES INC | |
Entity Central Index Key | 0001094285 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 03, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --01-01 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,496,583 |
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |||
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Apr. 03, 2016 |
Mar. 29, 2015 |
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Income Statement [Abstract] | ||||
Net sales | [1] | $ 530.5 | $ 565.0 | |
Costs and expenses | ||||
Cost of sales | 324.8 | 345.9 | ||
Selling, general and administrative expenses | 144.7 | 151.8 | ||
Total costs and expenses | 469.5 | 497.7 | ||
Operating income | 61.0 | 67.3 | ||
Interest expense, net | (5.7) | (5.9) | ||
Other income (expense), net | (1.3) | 0.8 | ||
Income before income taxes | 54.0 | 62.2 | ||
Provision for income taxes | 15.6 | 18.5 | ||
Net income | $ 38.4 | $ 43.7 | ||
Basic earnings per common share (in USD per share) | $ 1.12 | $ 1.22 | ||
Weighted average common shares outstanding (in shares) | 34.4 | 35.7 | ||
Diluted earnings per common share (in USD per share) | $ 1.10 | $ 1.20 | ||
Weighted average diluted common shares outstanding (in shares) | 34.9 | 36.5 | ||
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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | |
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Apr. 03, 2016 |
Mar. 29, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Net income | $ 38.4 | $ 43.7 |
Other comprehensive income (loss): | ||
Foreign exchange translation adjustment | 23.1 | (49.2) |
Hedge activity, net of tax | 4.6 | (2.3) |
Pension and postretirement benefit adjustments, net of tax | 3.6 | 4.9 |
Other comprehensive income (loss) | 31.3 | (46.6) |
Comprehensive income (loss) attributable to Teledyne | $ 69.7 | $ (2.9) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Apr. 03, 2016 |
Jan. 03, 2016 |
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Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 469.0 | $ 454.8 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock, shares, issued (in shares) | 37,697,865 | 37,697,865 |
Common stock, shares outstanding (in shares) | 34,479,367 | 34,514,599 |
Treasury stock (in shares) | 3,218,498 | 3,183,266 |
General |
3 Months Ended |
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Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Teledyne Technologies Incorporated (“Teledyne” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in notes to consolidated financial statements have been condensed or omitted pursuant to such rules and regulations, but resultant disclosures are in accordance with accounting principles generally accepted in the United States as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Teledyne’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016 (“2015 Form 10-K”). In the opinion of Teledyne’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, Teledyne’s consolidated financial position as of April 3, 2016 and the consolidated results of operations and consolidated comprehensive income and cash flows for the three months then ended. The results of operations and cash flows for the period ended April 3, 2016 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date by one year, but will allow early adoption as of the original adoption date. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of determining its implementation approach and assessing the impact on the consolidated financial statements and footnote disclosures. In March 2016, the FASB Issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted for any entity in any interim or annual period. The Company is currently evaluating the impact this guidance will have on its on the consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a short- term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. The new leasing standard will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact of adopting this guidance on its on the consolidated financial statements and footnote disclosures. |
Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (“AOCI”) by component, net of tax, for the first quarter ended April 3, 2016 and March 29, 2015 are as follows (in millions):
The reclassifications out of AOCI for the first quarter ended April 3, 2016 and March 29, 2015 are as follows (in millions):
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Business Combinations, Investments, Goodwill and Acquired Intangible Assets |
3 Months Ended |
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Apr. 03, 2016 | |
Business Combinations and Investments, Goodwill and Acquired Intangible Assets [Abstract] | |
Business Combinations, Investments, Goodwill and Acquired Intangible Assets | Business Combinations, Investments, Goodwill and Acquired Intangible Assets In the first quarter of 2016, Teledyne did not make any acquisitions, however, in the second quarter of 2016, Teledyne completed the acquisitions of two test and measurement instrumentation companies and one imaging software company for initial aggregate cash consideration of $60.0 million. Teledyne spent $66.7 million on acquisitions and other investments in 2015, of which $18.8 million was spent in the first quarter of 2015. In June 2015, Teledyne DALSA BV, a Netherlands-based subsidiary, acquired Industrial Control Machines SA (“ICM”). In April 2015, Teledyne DALSA, Inc. acquired the remaining 49% noncontrolling interest in the parent company of Optech Incorporated (“Optech”). In February 2015, Teledyne acquired Bowtech Products Limited (“Bowtech”) through a U.K.-based subsidiary. Also in 2015, Teledyne made an additional investment in Ocean Aero, Inc. (“Ocean Aero”). Teledyne funded the purchases from borrowings under its credit facility and cash on hand. The results of the acquisitions have been included in Teledyne’s results since the dates of the respective acquisition. For a further description of the Company’s acquisition activity for the fiscal year ended January 3, 2016, please refer to Note 3 of our 2015 Form 10-K. Teledyne’s goodwill was $1,151.9 million at April 3, 2016 and $1,140.2 million at January 3, 2016. The increase in the balance of goodwill in 2016 resulted from the impact of exchange rate changes. Teledyne’s net acquired intangible assets were $240.0 million at April 3, 2016 and $243.3 million at January 3, 2016. The decrease in the balance of acquired intangible assets in 2016 resulted from amortization, partially offset by the impact of exchange rate changes. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments Teledyne transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk management objective is to protect the United States dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency forward contracts to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in Canadian dollars for our Canadian companies, including DALSA. These contracts are designated and qualify as cash flow hedges. Cash Flow Hedging Activities The effectiveness of the cash flow hedge contracts, excluding time value, is assessed prospectively and retrospectively on a monthly basis using regression analysis, as well as using other timing and probability criteria. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedges and must be highly effective in offsetting changes to future cash flows on hedged transactions. The effective portion of the cash flow hedge contracts’ gains or losses resulting from changes in the fair value of these hedges is initially reported, net of tax, as a component of AOCI in stockholders’ equity until the underlying hedged item is reflected in our consolidated statements of income, at which time the effective amount in AOCI is reclassified to cost of sales in our consolidated statements of income. Net deferred losses recorded in AOCI, net of tax, for contracts that will mature in the next twelve months total $0.2 million. These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item. In the event that the gains or losses in AOCI are deemed to be ineffective, the ineffective portion of gains or losses resulting from changes in fair value, if any, is reclassified to other income and expense. In the event that the underlying forecasted transactions do not occur, or it becomes remote that they will occur, within the defined hedge period, the gains or losses on the related cash flow hedges will be reclassified from AOCI to other income and expense. During the current reporting period, all forecasted transactions occurred and, therefore, there were no such gains or losses reclassified to other income and expense. As of April 3, 2016, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and to sell U.S. dollars totaling $73.2 million. These foreign currency forward contracts have maturities ranging from June 2016 to February 2018. Non-Designated Hedging Activities In addition, the Company utilizes foreign currency forward contracts to mitigate foreign exchange rate risk associated with foreign-currency-denominated monetary assets and liabilities, including intercompany receivables and payables. As of April 3, 2016, Teledyne had foreign currency contracts of this type in the following pairs (in millions):
The above table includes non-designated hedges derived from terms contained in triggered or previously designated cash flow hedges. The gains and losses on these derivatives which are not designated as hedging instruments under ASC 815, Derivatives and Hedging ("ASC 815"), are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings. All derivatives are recorded on the balance sheet at fair value. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. Teledyne does not use foreign currency forward contracts for speculative or trading purposes. The effect of derivative instruments designated as cash flow hedges in our condensed consolidated financial statements for the first quarter ended April 3, 2016 and March 29, 2015 was as follows (in millions):
a) Effective portion, pre-tax b) Amount excluded from effectiveness testing The effect of derivative instruments not designated as cash flow hedges recognized in other income and expense for the first quarter ended April 3, 2016 was income of $2.7 million and expense of $4.9 million for the first quarter ended March 29, 2015. Fair Value of Derivative Financial Instruments The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy (in millions):
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Earnings Per Share |
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Earnings Per Share | Earnings Per 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. The calculation of diluted earnings per share is based on the weighted average number of common shares outstanding increased by contingent dilutive shares that could be issued under: 1) various compensation plans, including the dilutive effect of stock options based on the treasury stock method and 2) the forward contract feature of the accelerated repurchase program. On February 2, 2015, the Company entered into a $142.0 million accelerated share repurchase (“ASR”) agreement with a financial institution (“ASR Counterparty”) in a privately negotiated transaction for 1,500,000 shares of the Company's common stock. Pursuant to the ASR agreement, in February 2015, the Company advanced $142.0 million to the ASR counterparty and received 1,425,000 shares of common stock, which used $134.9 million of the $142.0 million advanced. In November 2015, the February 2015 ASR was settled with the Company making a payment of $1.2 million. In November 2015, the Company entered into a $100.5 million ASR agreement with a financial institution in a privately negotiated transaction for 1,100,000 shares of the Company's common stock. Pursuant to the ASR agreement, the Company advanced $100.5 million to the ASR counterparty and received 1,045,000 shares of common stock. On February 19, 2016, the November 2015 ASR was settled and Teledyne received 135,374 shares of common stock. In 2015, the Company spent a total of $243.8 million to repurchase a total of 2,561,815 shares of its common stock. On January 26, 2016, the Company’s Board of Directors authorized an additional stock repurchase program authorizing the Company to repurchase up to an additional 3,000,000 shares of its common stock. The 2015 and 2016 stock repurchase authorizations are expected to remain open continuously, with respect to the shares remaining thereunder, and the number of shares repurchased will depend on a variety of factors, such as share price, levels of cash and borrowing capacity available, alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. Future repurchases are expected to be funded with cash on hand and borrowings under the Company's credit facility. For a further description of the Company’s stock repurchase program, please refer to Note 8 of our 2015 Form 10-K. For the first quarter of 2016, 510,476 stock options were excluded in the computation of diluted earnings per share because they had exercise prices that were greater than the weighted average market price of the Company’s common stock during the period. In the first quarter of 2015, no stock options were excluded in the computation of diluted earnings per share. The following table sets forth the computations of basic and diluted earnings per share (amounts in millions, except per share data):
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Stock-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Plans | Stock-Based Compensation Plans Teledyne has long-term incentive plans pursuant to which it has granted non-qualified stock options, restricted stock and performance shares to certain employees. The Company also has non-employee director stock compensation plans, pursuant to which non-qualified stock options and common stock, and beginning in 2015 restricted stock units, have been issued to its directors. After 2014, non-employee directors no longer receive non-qualified stock options. Stock Incentive Plan The following disclosures are based on stock options granted to Teledyne’s employees and directors. Stock option compensation expense was $3.3 million for the first quarter of 2016 and $3.8 million for the first quarter of 2015. Employee stock option grants are charged to expense evenly over the three year vesting period. Director stock option grants are charged to expense evenly over the one-year vesting period. For 2016, the Company currently expects approximately $11.7 million in stock option compensation expense based on stock options currently outstanding. This amount can be impacted by employee retirements and terminations or stock options granted during the remainder of the year. The Company issues shares of common stock upon the exercise of stock options. No stock options were granted in 2015. The following assumptions were used in the valuation of stock options granted in 2016:
Stock option transactions for the first quarter ended April 3, 2016 are summarized as follows:
Performance Share Plan and Restricted Stock Award Program For the first of three annual distributions of the 2012 to 2014 Performance Share Plan, 1,944 shares of Teledyne common stock were issued in the first quarter of 2015. In the first quarter of 2016, the Company issued 864 shares and 1,883 shares remain to be issued in 2017. In the first quarter of 2016, the restriction was removed for 39,568 shares of Teledyne common stock related to the 2013 to 2015 Restricted Stock Award Program. In the first quarter 2016, the Company granted 37,104 shares of restricted stock securities to certain employees at a weighted average fair value of $72.91 per share for the 2016 to 2018 program. Also in the second quarter of 2016, the Company issued 10,305 shares of restricted stock units to non-employee directors at a weighted average fair value of $96.00 per share, which vest one year from the grant date. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are stated at current cost net of reserves for excess, slow moving and obsolete inventory, less progress payments. Inventories are valued under the FIFO method, LIFO method and average cost method. Inventories at cost determined on the average cost or the FIFO methods were $242.3 million at April 3, 2016 and $240.2 million at January 3, 2016. The remainder of the inventories using the LIFO method were $104.1 million at April 3, 2016 and $96.6 million at January 3, 2016. Interim LIFO calculations are based on the Company’s estimates of expected year-end inventory levels and costs since an actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Because these are subject to many factors beyond the Company’s control, interim results are subject to the final year-end LIFO inventory valuation.
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Supplemental Balance Sheet Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information The following table presents the balance of selected components of Teledyne’s balance sheet (in millions):
Some of the Company’s products are subject to specified warranties and the Company provides for the estimated cost of product warranties. The adequacy of the warranty 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. The product warranty reserve is included in current and long-term accrued liabilities on the balance sheet.
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Income Taxes |
3 Months Ended |
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Apr. 03, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which the Company operates. However, losses in certain jurisdictions and discrete items, such as the resolution of uncertain tax positions, are treated separately. The Company’s effective income tax rate for the first quarter of 2016 was 28.9%. The Company’s effective income tax rate for the first quarter 2015 was 29.8%. The first quarter of 2016 included net discrete income tax expense of $0.1 million compared with net discrete income tax expense of $0.2 million for the first quarter of 2015. Excluding net discrete income tax items in both periods, the effective tax rates would have been 28.8% for the first quarter of 2016 and 29.5% for the first quarter of 2015. |
Long-Term Debt, Capital Lease and Letters of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt, Capital Lease and Letters of Credit | Long-Term Debt, Capital Lease and Letters of Credit
* Senior Notes are at a fixed rate of interest. Available borrowing capacity under the $750.0 million credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $640.5 million at April 3, 2016. The credit agreement requires the Company to comply with various financial and operating covenants and at April 3, 2016, the Company was in compliance with these covenants. Teledyne estimates the fair value of its long-term debt based on debt of similar type, rating and maturity and at comparable interest rates. The Company’s long-term debt is considered a level 2 fair value hierarchy and is valued based on observable market data. The estimated fair value of Teledyne’s long-term debt at April 3, 2016 and January 3, 2016, approximated the carrying value. At April 3, 2016, the Company had $8.0 million in capital leases, of which $1.1 million is current. At January 3, 2016, the Company had $8.6 million in capital leases, of which $1.2 million was current. At April 3, 2016, Teledyne had $12.0 million in outstanding letters of credit. |
Lawsuits, Claims, Commitments, Contingencies and Related Matters |
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Apr. 03, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lawsuits, Claims, Commitments, Contingencies and Related Matters | Lawsuits, Claims, Commitments, Contingencies and Related Matters For a further description of the Company’s commitments and contingencies, reference is made to Note 14 of the Company’s financial statements as of and for the fiscal year ended January 3, 2016, included in our 2015 Form 10-K. At April 3, 2016, the Company’s reserves for environmental remediation obligations totaled $8.5 million, of which $4.7 million is included in current accrued liabilities. The Company periodically evaluates whether it may be able to recover a portion of future costs for environmental liabilities from its insurance carriers and from third parties. 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 30 years. A number of other lawsuits, claims and proceedings have been or may be asserted against the Company, including those pertaining to product liability, acquisitions, patent infringement, contracts, environmental, employment and employee benefits matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial statements. |
Pension Plans and Postretirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans and Postretirement Benefits | Pension Plans and Postretirement Benefits Teledyne’s pension income was $0.5 million for the first quarter of 2016, compared with pension income of $0.2 million for the first quarter of 2015. In the first quarter of 2015, Teledyne froze its non-qualified pension plan for top executives which resulted in a one-time gain of $1.2 million in the first quarter of 2015. For the domestic pension plan, the discount rate increased to 4.91 percent in 2016 compared with a 4.5 percent discount rate used in 2015. Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards (“CAS”) was $3.5 million for both the first quarters of 2016 and 2015, respectively. Pension expense determined under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government. Teledyne did not make any cash pension contributions to its domestic pension plan in the first three months of 2016 or in 2015. No cash pension contributions are planned for 2016 for the domestic pension plan. The Company sponsors several postretirement defined benefit plans that provide health care and life insurance benefits for certain eligible retirees.
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Segment Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Teledyne is a leading provider of sophisticated instrumentation, digital imaging products and software, aerospace and defense electronics, and engineered systems. Our customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies and airlines. The Company has four reportable segments: Instrumentation; Digital Imaging; Aerospace and Defense Electronics; and Engineered Systems. Segment results include net sales and operating income by segment but excludes noncontrolling interest, equity income or loss, unusual non-recurring legal matter settlements, interest income and expense, 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. Corporate expense includes various administrative expenses relating to the corporate office and certain non-operating expenses not allocated to our segments. The following table presents Teledyne’s segment disclosures.
Product Lines The Instrumentation segment includes three product lines: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation. 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 following tables provide a summary of the net sales by product line for the Instrumentation segment and the Engineered Systems segment (in millions):
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Subsequent events |
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Apr. 03, 2016 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events In the second quarter of 2016, Teledyne completed the acquisitions of two test and measurement instrumentation companies and one imaging software company for initial aggregate cash consideration of $60.0 million. Also in the second quarter of 2016, Teledyne entered into an agreement to sell assets of Teledyne’s printed circuit technology business for $9.3 million in cash. The completion of the transaction, which is subject to certain conditions and approvals, is anticipated to occur in the second quarter of 2016. |
General (Policies) |
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Apr. 03, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Teledyne Technologies Incorporated (“Teledyne” or the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in notes to consolidated financial statements have been condensed or omitted pursuant to such rules and regulations, but resultant disclosures are in accordance with accounting principles generally accepted in the United States as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Teledyne’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016 (“2015 Form 10-K”). In the opinion of Teledyne’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, Teledyne’s consolidated financial position as of April 3, 2016 and the consolidated results of operations and consolidated comprehensive income and cash flows for the three months then ended. The results of operations and cash flows for the period ended April 3, 2016 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. In July 2015, the FASB deferred the effective date by one year, but will allow early adoption as of the original adoption date. This new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of determining its implementation approach and assessing the impact on the consolidated financial statements and footnote disclosures. In March 2016, the FASB Issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. The ASU is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted for any entity in any interim or annual period. The Company is currently evaluating the impact this guidance will have on its on the consolidated financial statements and footnote disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new guidance will require lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability, other than leases that meet the definition of a short- term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. The new leasing standard will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, requiring application at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact of adopting this guidance on its on the consolidated financial statements and footnote disclosures. |
Accumulated Other Comprehensive Income (Loss) (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in AOCI by Component | The changes in accumulated other comprehensive income (“AOCI”) by component, net of tax, for the first quarter ended April 3, 2016 and March 29, 2015 are as follows (in millions):
The reclassifications out of AOCI for the first quarter ended April 3, 2016 and March 29, 2015 are as follows (in millions):
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Derivative Instruments (Tables) |
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Schedule of Notional Amounts of Outstanding Foreign Currency Contracts | As of April 3, 2016, Teledyne had foreign currency contracts of this type in the following pairs (in millions):
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Effect of Derivative Instruments Designated as Cash Flow Hedges | The effect of derivative instruments designated as cash flow hedges in our condensed consolidated financial statements for the first quarter ended April 3, 2016 and March 29, 2015 was as follows (in millions):
a) Effective portion, pre-tax b) Amount excluded from effectiveness testing |
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Fair Values of Derivative Financial Instruments | The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy (in millions):
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Basic and Diluted Earnings per Share | The following table sets forth the computations of basic and diluted earnings per share (amounts in millions, except per share data):
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Stock-Based Compensation Plans (Tables) |
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Apr. 03, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following assumptions were used in the valuation of stock options granted in 2016:
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Stock Option Transactions for Employee Stock Option Plans | Stock option transactions for the first quarter ended April 3, 2016 are summarized as follows:
|
Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
|
Supplemental Balance Sheet Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Components of Balance Sheet | The following table presents the balance of selected components of Teledyne’s balance sheet (in millions):
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Company's Product Warranty Reserve |
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Long-Term Debt and Capital Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt |
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Pension Plans and Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Postretirement Benefit Plans |
|
Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 03, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Segment Disclosures for Net Sales and Operating Profit Including Other Segment Income | The following table presents Teledyne’s segment disclosures.
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Summary of the sales by product line | The following tables provide a summary of the net sales by product line for the Instrumentation segment and the Engineered Systems segment (in millions):
|
Business Combinations and Investments, Goodwill and Acquired Intangible Assets (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
May. 06, 2016
USD ($)
business
|
Mar. 29, 2015
USD ($)
|
Jan. 03, 2016
USD ($)
|
Apr. 03, 2016
USD ($)
|
Apr. 29, 2015 |
|
Business Acquisition [Line Items] | |||||
Payments to acquire businesses, net of cash acquired | $ 18.8 | $ 66.7 | |||
Goodwill | 1,140.2 | $ 1,151.9 | |||
Acquired intangibles, net | $ 243.3 | $ 240.0 | |||
Subsidiaries | Optech Incorporated | |||||
Business Acquisition [Line Items] | |||||
Remaining percentage of voting interests acquired | 49.00% | ||||
Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | business | 2 | ||||
Payments to acquire businesses, net of cash acquired | $ 60.0 |
Derivative Instruments (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
|
Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Income (expense) related to derivative instruments not designated as cash flow hedges recognized in other income and expense | $ 2.7 | $ (4.9) |
Foreign Exchange Forward | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Expected reclassification of gain (loss) over the next 12 months | 0.2 | |
Foreign Exchange Forward | Designated as Hedging Instrument | Sell US Dollars and Buy Canadian Dollars | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of foreign currency contract | $ 73.2 |
Derivative Instruments (Effect of Derivative Instruments) (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||
Net gain (loss) recognized in AOCI | [1] | $ 4.0 | $ (4.6) | ||||
Net loss reclassified from AOCI into cost of sales | [1] | (2.2) | (1.4) | ||||
Net foreign exchange gain (loss) recognized in other income and expense | [2] | $ (0.2) | $ 0.2 | ||||
|
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to Teledyne | $ 38.4 | $ 43.7 |
Basic earnings per share: | ||
Weighted average common shares outstanding (in shares) | 34.4 | 35.7 |
Basic earnings per common share (in USD per share) | $ 1.12 | $ 1.22 |
Diluted earnings per share: | ||
Weighted average common shares outstanding (in shares) | 34.4 | 35.7 |
Effect of dilutive securities (in shares) | 0.5 | 0.8 |
Weighted average diluted common shares outstanding (in shares) | 34.9 | 36.5 |
Diluted earnings per common share (in USD per share) | $ 1.10 | $ 1.20 |
Stock-Based Compensation Plans Stock-Based Compensation Plans (Stock Option Valuation Assumptions) (Details) |
3 Months Ended |
---|---|
Apr. 03, 2016
$ / shares
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected volatility rate (as a percent) | 32.70% |
Risk-free interest rate (as a percent) | 1.50% |
Expected life in years | 7 years 2 months |
Expected dividend yield (as a percent) | 0.00% |
Weighted average fair value (in USD per share) | $ 29.93 |
Stock-Based Compensation Plans (Options Plans) (Details) - $ / shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Apr. 03, 2016 |
Jan. 03, 2016 |
|
Shares | ||
Granted (in shares) | 0 | |
Stock Options | ||
Shares | ||
Beginning balance (in shares) | 2,383,870 | |
Granted (in shares) | 518,310 | |
Exercised (in shares) | (63,968) | |
Canceled (in shares) | (14,706) | |
Ending balance (in shares) | 2,823,506 | 2,383,870 |
Options exercisable at end of period (in shares) | 1,840,740 | |
Weighted Average Exercise Price | ||
Beginning balance (in USD per share) | $ 63.74 | |
Granted (in USD per share) | 78.40 | |
Exercised (in USD per share) | 40.44 | |
Canceled (in USD per share) | 79.60 | |
Ending balance (in USD per share) | 66.87 | $ 63.74 |
Options exercisable at end of period (in USD per share) | $ 58.23 |
Inventories (Narrative) (Details) - USD ($) $ in Millions |
Apr. 03, 2016 |
Jan. 03, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventories at average cost or FIFO methods | $ 242.3 | $ 240.2 |
Inventories at cost as per LIFO | $ 104.1 | $ 96.6 |
Inventories (Details) - USD ($) $ in Millions |
Apr. 03, 2016 |
Jan. 03, 2016 |
---|---|---|
Inventories | ||
Raw materials and supplies | $ 147.2 | $ 141.6 |
Work in process | 151.7 | 149.4 |
Finished goods | 47.5 | 45.8 |
Total inventories, gross | 346.4 | 336.8 |
Progress payments | (9.3) | (12.3) |
Reduction to LIFO cost basis | (15.1) | (15.3) |
Total inventories, net | $ 322.0 | $ 309.2 |
Supplemental Balance Sheet Information (Balance Sheet Components) (Details) - USD ($) $ in Millions |
Apr. 03, 2016 |
Jan. 03, 2016 |
---|---|---|
Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Income tax receivable | $ 18.3 | $ 28.8 |
Other assets, net | ||
Derivatives, Fair Value [Line Items] | ||
Deferred compensation assets | 47.2 | 47.9 |
Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Salaries and wages | 86.8 | 89.5 |
Customer deposits and credits | 48.9 | 37.6 |
Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Accrued pension obligation | 43.7 | 46.7 |
Accrued postretirement benefits | 9.4 | 9.6 |
Deferred compensation liabilities | 44.5 | 43.9 |
Deferred tax liabilities | $ 41.2 | $ 37.9 |
Supplemental Balance Sheet Information (Product Warranty) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
|
Company's product warranty reserve | ||
Balance at beginning of year | $ 17.1 | $ 18.5 |
Accruals for product warranties charged to expense | 1.9 | 1.5 |
Cost of product warranty claims | (1.6) | (2.1) |
Balance at end of period | $ 17.4 | $ 17.9 |
Income Taxes (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016
USD ($)
|
Mar. 29, 2015
USD ($)
|
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 28.90% | 29.80% |
Net discrete income tax expense | $ 0.1 | $ 0.2 |
Effective income tax rate, excluding discrete items | 0.288 | 0.295 |
Long-Term Debt and Capital Leases - Credit Facility and Capital Lease (Details) - USD ($) |
Apr. 03, 2016 |
Jan. 03, 2016 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 750,000,000 | |
Available borrowings capacity under letters of credit | 640,500,000 | |
Total capital leases | 8,000,000 | $ 8,600,000 |
Capital leases, current | 1,100,000 | $ 1,200,000 |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit, outstanding | $ 12,000,000 |
Lawsuits, Claims, Commitments, Contingencies and Related Matters (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016 |
Jan. 03, 2016 |
|
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Reserves for environmental remediation obligations | $ 8.5 | |
Portion of reserves included in current accrued liabilities | $ 244.7 | $ 238.0 |
Maximum | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Estimated duration of remediation | 30 years | |
Environmental Reserves | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Portion of reserves included in current accrued liabilities | $ 4.7 |
Pension Plans and Postretirement Benefits (Narrative) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
Jan. 03, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Pension plan curtailment | $ 1,200,000 | ||
Contributions by employer by during period | $ 0 | 0 | |
Estimated contributions in current fiscal year | 0 | ||
Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net expense (income) | $ (500,000) | (200,000) | |
Pension Benefits - U.S. Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate used to determine the benefit obligation | 4.91% | 4.50% | |
Pension Benefits Allocated to Contracts Pursuant to U.S. Government Cost Accounting Standards | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards | $ 3,500,000 | $ 3,500,000 |
Pension Plans and Postretirement Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
|
Components of net period pension benefit expense | ||
Pension plan curtailment | $ 1.2 | |
Pension Plan | ||
Components of net period pension benefit expense | ||
Service cost — benefits earned during the period | $ 2.8 | 3.3 |
Interest cost on benefit obligation | 10.1 | 9.9 |
Expected return on plan assets | (18.7) | (19.2) |
Amortization of prior service cost | (1.5) | (1.5) |
Amortization of net actuarial losses (gains) | 6.8 | 8.5 |
Pension plan curtailment | 0.0 | (1.2) |
Net periodic expense (income) | (0.5) | (0.2) |
Other Postretirement Benefit Plan | ||
Components of net period pension benefit expense | ||
Interest cost on benefit obligation | 0.1 | 0.1 |
Amortization of net actuarial losses (gains) | (0.1) | 0.0 |
Net periodic expense (income) | $ 0.0 | $ 0.1 |
Segment Information (Narrative) (Details) |
3 Months Ended |
---|---|
Apr. 03, 2016
segment
product_line
| |
Revenue from External Customer [Line Items] | |
Number of reportable segments | segment | 4 |
Instrumentation | |
Revenue from External Customer [Line Items] | |
Number of product lines | 3 |
Digital Imaging | |
Revenue from External Customer [Line Items] | |
Number of product lines | 1 |
Engineered Systems | |
Revenue from External Customer [Line Items] | |
Number of product lines | 3 |
Segment Information (Sales) (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Apr. 03, 2016 |
Mar. 29, 2015 |
||||
Revenue from External Customer [Line Items] | |||||
Net sales | [1] | $ 530.5 | $ 565.0 | ||
Operating Segments | Instrumentation | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | [1] | 223.7 | 270.3 | ||
Operating Segments | Instrumentation | Marine Instrumentation | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 112.9 | 159.5 | |||
Operating Segments | Instrumentation | Environmental Instrumentation | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 68.7 | 67.7 | |||
Operating Segments | Instrumentation | Test and Measurement Instrumentation | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 42.1 | 43.1 | |||
Operating Segments | Engineered Systems | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | [1] | 64.3 | 63.1 | ||
Operating Segments | Engineered Systems | Engineered Products and Services | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 52.8 | 49.1 | |||
Operating Segments | Engineered Systems | Turbine Engines | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 5.0 | 5.6 | |||
Operating Segments | Engineered Systems | Energy Systems | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 6.5 | $ 8.4 | |||
|
Subsequent events (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended |
---|---|---|---|
May. 06, 2016
USD ($)
business
|
Mar. 29, 2015
USD ($)
|
Jan. 03, 2016
USD ($)
|
|
Subsequent Event [Line Items] | |||
Payments to acquire businesses, net of cash acquired | $ | $ 18.8 | $ 66.7 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of businesses acquired | business | 2 | ||
Payments to acquire businesses, net of cash acquired | $ | $ 60.0 | ||
Circut and Technology Business | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Consideration received | $ | $ 9.3 | ||
Test and Measurement Instrumentation | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of businesses acquired | business | 2 | ||
Digital Imaging | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of businesses acquired | business | 1 |
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