Segment Information

6 Months Ended

Jul. 02, 2017

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 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, including certain acquisition related transaction costs, not allocated to our segments.

As part of a continuing effort to reduce costs and improve operating performance the Company has taken actions to consolidate and relocate certain facilities and reduce headcount across various businesses, reducing our exposure to weak end markets and high cost locations. Teledyne incurred $2.0 million and $3.5 million in expense related to these efforts for the second quarter and first six months of 2017, respectively. Teledyne incurred $11.1 million and $12.2 million in expense related to these efforts for the second quarter and first six months of 2016, respectively. At July 2, 2017, Teledyne had a liability of $2.1 million included in other current liabilities related to these charges.

The following table presents Teledyne’s segment disclosures (dollars in millions):

	Second Quarter						%		Six Months						%
	2017			2016			Change		2017			2016			Change
Net sales(a):
Instrumentation	$	233.8		$	220.1		6.2	%	$	466.6		$	443.8		5.1	%
Digital Imaging	188.5			99.4			89.6	%	302.3			189.3			59.7	%
Aerospace and Defense Electronics	172.8			158.0			9.4	%	324.7			310.6			4.5	%
Engineered Systems	76.0			62.2			22.2	%	143.6			126.5			13.5	%
Total net sales	$	671.1		$	539.7		24.3	%	$	1,237.2		$	1,070.2		15.6	%
Operating income(b):
Instrumentation	$	30.8		$	20.1		53.2	%	$	61.2		$	51.5		18.8	%
Digital Imaging	26.4			10.7			146.7	%	41.7			18.9			120.6	%
Aerospace and Defense Electronics	32.4			28.0			15.7	%	58.6			52.1			12.5	%
Engineered Systems	9.1			5.6			62.5	%	18.0			13.6			32.4	%
Corporate expense	(12.5		)	(10.8		)	15.7	%	(35.2		)	(21.6		)	63.0	%
Operating income	$	86.2		$	53.6		60.8	%	$	144.3		$	114.5		26.0	%

(a)

Net sales excludes inter-segment sales of $7.5 million and $11.4 million for the second quarter and first six months of 2017, respectively, and $6.9 million and $12.0 million for the second quarter and first six months of 2016, respectively.

(b)

The second quarter of 2017 includes pretax charges of $4.0 million related to the acquisition of e2v, of which $3.7 million was recorded in the Digital Imaging segment and $0.3 million was recorded in the Aerospace and Defense Electronics segment. The first six months of 2017 includes pretax charges of $16.9 million related to the acquisition of e2v, of which $6.2 million was recorded in the Digital Imaging segment, $0.3 million was recorded in the Aerospace and Defense Electronics segment and $10.4 million was recorded in corporate expense.

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

Identifiable assets:	July 2, 2017		January 1, 2017
Instrumentation	$	1,392.3	$	1,361.0
Digital Imaging	1,513.4		671.1
Aerospace and Defense Electronics	576.2		449.4
Engineered Systems	110.4		93.9
Corporate	187.8		199.0
Total identifiable assets	$	3,780.1	$	2,774.4

Product Lines

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

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

	Second Quarter				Six Months
Instrumentation	2017		2016		2017		2016
Marine Instrumentation	$	107.0	$	103.8	$	216.5	$	216.7
Environmental Instrumentation	77.0		67.9		152.5		136.6
Test and Measurement Instrumentation	49.8		48.4		97.6		90.5
Total	$	233.8	$	220.1	$	466.6	$	443.8