Business Segments

12 Months Ended

Jan. 01, 2017

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 micro electro-mechanical systems (“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. In the third quarter of 2016, Teledyne completed the disposition of the net assets of its PCT business for $9.3 million in cash resulting in no gain or loss. PCT, which was part of the Aerospace and Defense Electronics segment, had sales of $10.1 million, $16.6 million and $18.8 million for 2016, 2015 and 2014, respectively. For 2016, PCT reported a pretax loss of $3.1 million, compared with a pretax loss of $3.9 million in 2015 and pretax income of $1.1 million in 2014. 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.

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 nonoperating expenses not allocated to our segments.

As part of a continuing effort to reduce costs and improve operating performance the Company took actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weak end markets and high cost locations.

The following pre-tax charges were incurred related to severance and facility consolidations (in millions):

	2016		2015		2014
Instrumentation	$	10.6	$	3.9	$	1.0
Digital Imaging	2.0		3.2		2.7
Aerospace and Defense Electronics	4.6		1.2		0.9
Engineered Systems	0.1		0.1		(0.2		)
Total	$	17.3	$	8.4	$	4.4

At January 1, 2017, $3.7 million remains to be paid related to these actions.

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

Net sales:	2016			2015			2014
Instrumentation	$	876.7		$	1,051.1		$	1,115.5
Digital Imaging	398.7			379.0			403.6
Aerospace and Defense Electronics	615.9			593.4			603.0
Engineered Systems	258.6			274.6			271.9
Total net sales	$	2,149.9		$	2,298.1		$	2,394.0
Operating income:	2016			2015			2014
Instrumentation	$	109.8		$	171.0		$	181.6
Digital Imaging	45.9			40.0			37.1
Aerospace and Defense Electronics	112.1			84.8			88.3
Engineered Systems	32.1			26.1			31.4
Corporate expense	(46.1		)	(40.2		)	(43.9		)
Total operating income	253.8			281.7			294.5

Depreciation and amortization:	2016		2015		2014
Instrumentation	$	37.3	$	41.2	$	41.1
Digital Imaging	26.2		26.1		29.6
Aerospace and Defense Electronics	14.4		15.0		15.9
Engineered Systems	4.1		3.5		3.7
Corporate	5.3		4.5		4.0
Total depreciation and amortization	$	87.3	$	90.3	$	94.3

Capital expenditures:	2016		2015		2014
Instrumentation	$	50.9	$	20.9	$	17.0
Digital Imaging	12.5		9.2		10.3
Aerospace and Defense Electronics	12.6		9.1		8.8
Engineered Systems	5.9		5.7		4.3
Corporate	5.7		2.1		3.1
Total capital expenditures	$	87.6	$	47.0	$	43.5

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.

Identifiable assets:	2016		2015		2014
Instrumentation	$	1,361.0	$	1,339.6	$	1,415.4
Digital Imaging	671.1		634.9		708.4
Aerospace and Defense Electronics	449.4		451.6		462.5
Engineered Systems	93.9		92.2		84.9
Corporate (a)	199.0		198.8		191.0
Total identifiable assets	$	2,774.4	$	2,717.1	$	2,862.2
(a) The amount for 2016, 2015 and 2014 includes $88.5 million, $111.0 million and $86.3 million prepaid pension asset, respectively.

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

Sales by country:	2016		2015		2014
United States	$	1,653.6	$	1,805.4	$	1,852.0
Canada	209.2		208.8		230.1
United Kingdom	109.6		124.6		139.8
All other countries	177.5		159.3		172.1
Total sales	$	2,149.9	$	2,298.1	$	2,394.0

Long-lived assets:	2016		2015		2014
United States	$	1,408.1	$	1,332.5	$	1,364.7
Canada	273.5		249.9		310.5
United Kingdom	103.3		127.3		120.6
All other countries	138.1		139.3		128.2
Total long-lived assets	$	1,923.0	$	1,849.0	$	1,924.0

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. The all other countries category primarily consists of Teledyne’s operations in Europe.

Product Lines

The Instrumentation segment includes three product lines: Environmental Instrumentation, Marine Instrumentation and Test and Measurement Instrumentation. All other segments each contain one product line.

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

Instrumentation:	2016		2015		2014
Environmental Instrumentation	$	270.1	$	268.7	$	268.4
Marine Instrumentation	418.7		614.0		654.8
Test and Measurement Instrumentation	187.9		168.4		192.3
Total	$	876.7	$	1,051.1	$	1,115.5

Sales to the U.S. Government included sales to the U.S. Department of Defense of $449.4 million in 2016, $447.2 million in 2015, and $472.8 million in 2014. Total sales to international customers were $919.4 million in 2016, $1,020.4 million in 2015, and $1,069.3 million in 2014. Of these amounts, sales by operations in the United States to customers in other countries were $539.4 million in 2016, $628.2 million in 2015, and $624.0 million in 2014. 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 generally were priced at prevailing market prices and were $20.2 million, $19.4 million and $20.1 million for 2016, 2015 and 2014, respectively.