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 | Smaller reporting company | ¨ | |
Emerging growth company | ¨ |
PAGE | ||
Part I | ||
Condensed Consolidated Statements of Stockholders' Equity | ||
Part II | ||
Item 1. Legal Proceedings | ||
First Quarter | |||||||
2019 | 2018 | ||||||
Net sales | $ | 745.2 | $ | 695.6 | |||
Costs and expenses | |||||||
Cost of sales | 463.9 | 438.2 | |||||
Selling, general and administrative expenses | 184.0 | 169.0 | |||||
Total costs and expenses | 647.9 | 607.2 | |||||
Operating income | 97.3 | 88.4 | |||||
Interest and debt expense, net | (5.4 | ) | (7.1 | ) | |||
Non-service retirement benefit income | 2.2 | 3.4 | |||||
Other expense, net | (1.2 | ) | (2.5 | ) | |||
Income before income taxes | 92.9 | 82.2 | |||||
Provision for income taxes | 17.6 | 15.7 | |||||
Net income | $ | 75.3 | $ | 66.5 | |||
Basic earnings per common share | $ | 2.09 | $ | 1.87 | |||
Weighted average common shares outstanding | 36.1 | 35.6 | |||||
Diluted earnings per common share | $ | 2.02 | $ | 1.81 | |||
Weighted average diluted common shares outstanding | 37.2 | 36.8 |
First Quarter | |||||||
2019 | 2018 | ||||||
Net income | $ | 75.3 | $ | 66.5 | |||
Other comprehensive income (loss): | |||||||
Foreign exchange translation adjustment | 17.0 | 17.2 | |||||
Hedge activity, net of tax | 1.8 | (1.6 | ) | ||||
Pension and postretirement benefit adjustments, net of tax | 4.6 | 4.3 | |||||
Other comprehensive income | 23.4 | 19.9 | |||||
Comprehensive income | $ | 98.7 | $ | 86.4 |
March 31, 2019 | December 30, 2018 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash | $ | 106.2 | $ | 142.5 | |||
Accounts receivable, net | 410.4 | 416.5 | |||||
Unbilled receivables, net | 154.0 | 145.3 | |||||
Inventories, net | 393.0 | 364.3 | |||||
Prepaid expenses and other current assets | 53.9 | 45.8 | |||||
Total current assets | 1,117.5 | 1,114.4 | |||||
Property, plant and equipment, net of accumulated depreciation and amortization of $579.6 at March 31, 2019 and $566.0 at December 30, 2018 | 450.7 | 442.6 | |||||
Goodwill | 1,885.1 | 1,735.2 | |||||
Acquired intangibles, net | 389.0 | 344.3 | |||||
Prepaid pension assets | 94.8 | 88.2 | |||||
Operating lease right-of-use assets | 134.3 | — | |||||
Other assets, net | 90.3 | 84.6 | |||||
Total Assets | $ | 4,161.7 | $ | 3,809.3 | |||
Liabilities and Stockholders’ Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 227.3 | $ | 227.8 | |||
Accrued liabilities | 364.6 | 355.6 | |||||
Current portion of long-term debt and other debt | 131.8 | 137.4 | |||||
Total current liabilities | 723.7 | 720.8 | |||||
Long-term debt | 724.6 | 610.1 | |||||
Long-term operating lease liabilities | 126.0 | — | |||||
Other long-term liabilities | 237.9 | 248.7 | |||||
Total Liabilities | 1,812.2 | 1,579.6 | |||||
Commitments and contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock, $0.01 par value; outstanding shares - none | — | — | |||||
Common stock, $0.01 par value; authorized 125,000,000 shares; issued shares: 37,697,865 at March 31, 2019 and December 30, 2018; outstanding shares: 36,232,598 at March 31, 2019 and 36,087,297 at December 30, 2018 | 0.4 | 0.4 | |||||
Additional paid-in capital | 349.8 | 343.7 | |||||
Retained earnings | 2,599.0 | 2,523.7 | |||||
Treasury stock, 1,465,267 shares at March 31, 2019 and 1,610,568 shares at December 30, 2018 | (129.9 | ) | (144.9 | ) | |||
Accumulated other comprehensive loss | (469.8 | ) | (493.2 | ) | |||
Total Stockholders’ Equity | 2,349.5 | 2,229.7 | |||||
Total Liabilities and Stockholders’ Equity | $ | 4,161.7 | $ | 3,809.3 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance, December 30, 2018 | $ | 0.4 | $ | 343.7 | $ | (144.9 | ) | $ | 2,523.7 | $ | (493.2 | ) | $ | 2,229.7 | |||||||||
Net income | — | — | — | 75.3 | — | 75.3 | |||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | 23.4 | 23.4 | |||||||||||||||||
Treasury stock issued | — | (15.0 | ) | 15.0 | — | — | — | ||||||||||||||||
Stock-based compensation | — | 10.9 | — | — | — | 10.9 | |||||||||||||||||
Exercise of stock options and other | — | 10.2 | — | — | — | 10.2 | |||||||||||||||||
Balance, March 31, 2019 | $ | 0.4 | $ | 349.8 | $ | (129.9 | ) | $ | 2,599.0 | $ | (469.8 | ) | $ | 2,349.5 |
Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total | ||||||||||||||||||
Balance, December 31, 2017 | $ | 0.4 | $ | 337.3 | $ | (200.7 | ) | $ | 2,139.6 | $ | (329.3 | ) | $ | 1,947.3 | |||||||||
Net income | — | — | — | 66.5 | — | 66.5 | |||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | 19.9 | 19.9 | |||||||||||||||||
Treasury stock issued | — | (20.4 | ) | 20.4 | — | — | — | ||||||||||||||||
Stock-based compensation | — | 6.6 | — | — | — | 6.6 | |||||||||||||||||
Exercise of stock options and other | — | 12.3 | — | — | — | 12.3 | |||||||||||||||||
Cumulative effect of new accounting standards | — | — | — | 50.9 | (47.6 | ) | 3.3 | ||||||||||||||||
Balance, April 1, 2018 | $ | 0.4 | $ | 335.8 | $ | (180.3 | ) | $ | 2,257.0 | $ | (357.0 | ) | $ | 2,055.9 |
Three Months | |||||||
2019 | 2018 | ||||||
Operating Activities | |||||||
Net income | $ | 75.3 | $ | 66.5 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 27.6 | 28.8 | |||||
Stock-based compensation | 10.8 | 6.5 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 6.7 | (27.0 | ) | ||||
Inventories | (12.4 | ) | (6.0 | ) | |||
Prepaid expenses and other assets | (10.0 | ) | (3.6 | ) | |||
Accounts payable | (1.1 | ) | 9.7 | ||||
Accrued liabilities | (15.1 | ) | (9.0 | ) | |||
Deferred and income taxes receivable/payable, net | (2.8 | ) | 10.9 | ||||
Long-term assets | (13.4 | ) | (8.8 | ) | |||
Other long-term liabilities | 16.2 | 0.1 | |||||
Other operating, net | (1.7 | ) | 3.5 | ||||
Net cash provided by operating activities | 80.1 | 71.6 | |||||
Investing Activities | |||||||
Purchases of property, plant and equipment | (21.3 | ) | (19.8 | ) | |||
Purchase of businesses, net of cash acquired | (222.5 | ) | — | ||||
Proceeds from the sale of assets | — | 0.2 | |||||
Net cash used in investing activities | (243.8 | ) | (19.6 | ) | |||
Financing Activities | |||||||
Net proceeds from (payments on) credit facility | 120.0 | (54.5 | ) | ||||
Proceeds from (payments on) other debt, net | (5.9 | ) | 1.6 | ||||
Proceeds from exercise of stock options | 10.2 | 12.3 | |||||
Other financing, net | — | (2.0 | ) | ||||
Net cash provided by (used in) financing activities | 124.3 | (42.6 | ) | ||||
Effect of exchange rate changes on cash | 3.1 | (0.4 | ) | ||||
Change in cash | (36.3 | ) | 9.0 | ||||
Cash—beginning of period | 142.5 | 70.9 | |||||
Cash—end of period | $ | 106.2 | $ | 79.9 |
Remainder of 2019 | $ | 22.5 | |
2020 | 21.0 | ||
2021 | 19.3 | ||
2022 | 16.9 | ||
2023 | 15.6 | ||
Thereafter | 79.9 | ||
Total minimum lease payments | 175.2 | ||
Less: | |||
Imputed interest | (31.2 | ) | |
Current portion | (18.0 | ) | |
Present value of minimum lease payments, net of current portion | $ | 126.0 |
As of December 30, 2018 | |||
2019 | $ | 23.2 | |
2020 | 20.6 | ||
2021 | 18.4 | ||
2022 | 18.4 | ||
2023 | 11.8 | ||
Thereafter | 48.2 | ||
Total minimum lease payments | $ | 140.6 |
Foreign Currency Translation | Cash Flow Hedges and Other | Pension and Postretirement Benefits | Total | ||||||||||||
Balance as of December 30, 2018 | $ | (181.5 | ) | $ | (4.9 | ) | $ | (306.8 | ) | $ | (493.2 | ) | |||
Other comprehensive income before reclassifications | 17.0 | 3.3 | — | 20.3 | |||||||||||
Amounts reclassified from AOCI | — | (1.5 | ) | 4.6 | 3.1 | ||||||||||
Net other comprehensive income | 17.0 | 1.8 | 4.6 | 23.4 | |||||||||||
Balance as of March 31, 2019 | $ | (164.5 | ) | $ | (3.1 | ) | $ | (302.2 | ) | $ | (469.8 | ) | |||
Foreign Currency Translation | Cash Flow Hedges and Other | Pension and Postretirement Benefits | Total | ||||||||||||
Balance as of December 31, 2017 | $ | (102.0 | ) | $ | 0.5 | $ | (227.8 | ) | $ | (329.3 | ) | ||||
Other comprehensive income/(loss) before reclassifications | 17.2 | (2.7 | ) | — | 14.5 | ||||||||||
Amounts reclassified from AOCI | — | 1.1 | 4.3 | 5.4 | |||||||||||
Net other comprehensive income/(loss) | 17.2 | (1.6 | ) | 4.3 | 19.9 | ||||||||||
Reclassification of income tax effects for ASU 2018-02 | — | — | (47.6 | ) | (47.6 | ) | |||||||||
Balance as of April 1, 2018 | $ | (84.8 | ) | $ | (1.1 | ) | $ | (271.1 | ) | $ | (357.0 | ) |
Amount Reclassified from AOCI Three Months Ended | Amount Reclassified from AOCI Three Months Ended | Statement of Income | ||||||
March 31, 2019 | April 1, 2018 | Presentation | ||||||
(Gain) loss on cash flow hedges: | ||||||||
(Gain) loss recognized in income on derivatives | $ | (2.0 | ) | $ | 1.3 | See Note 4 | ||
Income tax impact | 0.5 | (0.2 | ) | Provision for income taxes | ||||
Total | $ | (1.5 | ) | $ | 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 | 7.6 | 7.3 | Costs and expenses | |||||
Total before tax | 6.1 | 5.8 | ||||||
Income tax impact | (1.5 | ) | (1.5 | ) | Provision for income taxes | |||
Total | $ | 4.6 | $ | 4.3 |
First Quarter | |||||||
2019 | 2018 | ||||||
Net gain (loss) recognized in AOCI (a) | $ | 4.3 | $ | (3.7 | ) | ||
Net gain (loss) reclassified from AOCI into cost of sales (a) | $ | (0.6 | ) | $ | 1.2 | ||
Net gain reclassified from AOCI into interest expense (a) | $ | 0.8 | $ | 0.5 | |||
Net gain (loss) reclassified from AOCI into other income and expense, net (b) | $ | 1.8 | $ | (3.0 | ) | ||
Net foreign exchange gain (loss) recognized in other income and expense, net (c) | $ | (0.2 | ) | $ | — |
Contracts to Buy | Contracts to Sell | |||||||
Currency | Amount | Currency | Amount | |||||
Canadian Dollars | C$ | 24.4 | U.S. Dollars | US$ | 18.5 | |||
Canadian Dollars | C$ | 13.2 | Euros | € | 8.7 | |||
Great Britain Pounds | £ | 1.1 | Australian Dollars | A$ | 2.1 | |||
Great Britain Pounds | £ | 33.1 | U.S. Dollars | US$ | 43.2 | |||
Singapore Dollars | S$ | 2.3 | U.S. Dollars | US$ | 1.7 | |||
Euros | € | 31.2 | U.S. Dollars | US$ | 35.1 | |||
U.S. Dollars | US$ | 2.7 | Japanese Yen | ¥ | 300.0 | |||
Danish Krone | DKR | 63.0 | U.S. Dollars | US$ | 9.5 | |||
Great Britain Pounds | £ | 7.3 | Euros | € | 8.5 | |||
Great Britain Pounds | £ | 2.4 | Hong Kong Dollars | HK$ | 24.6 |
Asset/(Liability) Derivatives | Balance sheet location | March 31, 2019 | December 30, 2018 | ||||||
Derivatives designated as hedging instruments: | |||||||||
Cash flow forward contracts | Other assets | $ | 0.1 | $ | — | ||||
Cash flow cross currency swap | Accrued liabilities | (4.3 | ) | (6.3 | ) | ||||
Cash flow forward contracts | Accrued liabilities | (2.1 | ) | (4.2 | ) | ||||
Total derivatives designated as hedging instruments | (6.3 | ) | (10.5 | ) | |||||
Derivatives not designated as hedging instruments: | |||||||||
Non-designated forward contracts | Other current assets | 0.3 | — | ||||||
Non-designated forward contracts | Accrued liabilities | (0.7 | ) | (0.6 | ) | ||||
Total derivatives not designated as hedging instruments | (0.4 | ) | (0.6 | ) | |||||
Total liability derivatives, net | $ | (6.7 | ) | $ | (11.1 | ) |
First Quarter | |||||
2019 | 2018 | ||||
Weighted average basic common shares outstanding | 36.1 | 35.6 | |||
Effect of dilutive securities (primarily stock options) | 1.1 | 1.2 | |||
Weighted average diluted common shares outstanding | 37.2 | 36.8 |
2019 | |
Expected volatility | 26.7% |
Risk-free interest rate range | 2.47% to 2.70% |
Expected life in years | 6.6 |
Expected dividend yield | — |
2019 | ||||||
First Quarter | ||||||
Shares | Weighted Average Exercise Price | |||||
Beginning balance | 2,064,740 | $ | 104.66 | |||
Granted | 390,789 | $ | 217.58 | |||
Exercised | (120,783 | ) | $ | 84.76 | ||
Canceled | (17,223 | ) | $ | 171.49 | ||
Ending balance | 2,317,523 | $ | 124.24 | |||
Options exercisable at end of period | 1,549,179 | $ | 79.52 |
Shares | Weighted average fair value per share | |||||
Balance, December 30, 2018 | 74,220 | $ | 108.05 | |||
Granted | 17,522 | $ | 200.00 | |||
Vested | (35,330 | ) | $ | 72.91 | ||
Balance, March 31, 2019 | 56,412 | $ | 158.62 |
Balance at | |||||||
Inventories (in millions): | March 31, 2019 | December 30, 2018 | |||||
Raw materials and supplies | $ | 221.1 | $ | 205.6 | |||
Work in process | 125.4 | 117.5 | |||||
Finished goods | 55.6 | 50.5 | |||||
402.1 | 373.6 | ||||||
Reduction to LIFO cost basis | (9.1 | ) | (9.3 | ) | |||
Total inventories, net | $ | 393.0 | $ | 364.3 |
First Quarter | |||||||
Warranty Reserve (in millions): | 2019 | 2018 | |||||
Balance at beginning of year | $ | 21.0 | $ | 21.1 | |||
Accruals for product warranties charged to expense | 2.2 | 3.1 | |||||
Cost of product warranty claims | (2.9 | ) | (2.2 | ) | |||
Acquisition | 0.3 | — | |||||
Balance at end of period | $ | 20.6 | $ | 22.0 |
Balance at | |||||||
Long-Term Debt (in millions): | March 31, 2019 | December 30, 2018 | |||||
$750.0 million credit facility due March 2024, weighted average rate of 3.45% at March 31, 2019 and 5.50% at December 30, 2018 | $ | 149.0 | $ | 29.0 | |||
Term loan due October 2019, variable rate of 3.61% at March 31, 2019 and 3.63% at December 30, 2018, swapped to a Euro fixed rate of 0.7055% | 100.0 | 100.0 | |||||
2.61% Fixed Rate Senior Notes due December 2019 | 30.0 | 30.0 | |||||
5.30% Fixed Rate Senior Notes due September 2020 | 75.0 | 75.0 | |||||
2.81% Fixed Rate Senior Notes due November 2020 | 25.0 | 25.0 | |||||
3.09% Fixed Rate Senior Notes due December 2021 | 95.0 | 95.0 | |||||
3.28% Fixed Rate Senior Notes due November 2022 | 100.0 | 100.0 | |||||
0.70% €50 Million Fixed Rate Senior Notes due April 2022 | 56.1 | 57.2 | |||||
0.92% €100 Million Fixed Rate Senior Notes due April 2023 | 112.2 | 114.4 | |||||
1.09% €100 Million Fixed Rate Senior Notes due April 2024 | 112.2 | 114.4 | |||||
Other debt | 3.0 | 8.8 | |||||
Total debt | 857.5 | 748.8 | |||||
Less: current portion of long-term debt and debt issuance costs | (132.9 | ) | (138.7 | ) | |||
Total long-term debt | $ | 724.6 | $ | 610.1 |
First Quarter | |||||||
2019 | 2018 | ||||||
Service cost — benefits earned during the period (in millions) | $ | 2.4 | $ | 2.7 | |||
Pension non-service income (in millions): | |||||||
Interest cost on benefit obligation | $ | 8.4 | $ | 8.1 | |||
Expected return on plan assets | (16.5 | ) | (17.9 | ) | |||
Amortization of prior service cost | (1.5 | ) | (1.5 | ) | |||
Amortization of net actuarial loss | 7.7 | 7.9 | |||||
Curtailment/settlements | (0.3 | ) | — | ||||
Pension non-service income | $ | (2.2 | ) | $ | (3.4 | ) |
First Quarter | |||||||
Postretirement benefits non-service (income)/expense (in millions): | 2019 | 2018 | |||||
Interest cost on benefit obligation | $ | 0.1 | $ | 0.1 | |||
Amortization of net actuarial gain | — | (0.1 | ) | ||||
Postretirement benefits non-service (income)/expense | $ | 0.1 | $ | — |
First Quarter | % | |||||||||
2019 | 2018 | Change | ||||||||
Net sales(a): | ||||||||||
Instrumentation | $ | 256.5 | $ | 239.0 | 7.3 | % | ||||
Digital Imaging | 235.3 | 211.0 | 11.5 | % | ||||||
Aerospace and Defense Electronics | 180.4 | 173.6 | 3.9 | % | ||||||
Engineered Systems | 73.0 | 72.0 | 1.4 | % | ||||||
Total net sales | $ | 745.2 | $ | 695.6 | 7.1 | % | ||||
Operating income: | ||||||||||
Instrumentation | $ | 39.9 | $ | 27.8 | 43.5 | % | ||||
Digital Imaging | 37.0 | 34.6 | 6.9 | % | ||||||
Aerospace and Defense Electronics | 33.8 | 31.7 | 6.6 | % | ||||||
Engineered Systems | 4.7 | 7.2 | (34.7 | )% | ||||||
Corporate expense | (18.1 | ) | (12.9 | ) | 40.3 | % | ||||
Operating income | $ | 97.3 | $ | 88.4 | 10.1 | % |
(a) | Net sales excludes inter-segment sales of $6.4 million and $5.2 million for the first quarter of 2019 and 2018, respectively. |
Identifiable assets: | March 31, 2019 | December 30, 2018 | ||||||
Instrumentation | $ | 1,422.2 | $ | 1,392.7 | ||||
Digital Imaging | 1,832.2 | 1,600.9 | ||||||
Aerospace and Defense Electronics | 597.4 | 521.4 | ||||||
Engineered Systems | 117.6 | 116.6 | ||||||
Corporate | 192.3 | 177.7 | ||||||
Total identifiable assets | $ | 4,161.7 | $ | 3,809.3 |
First Quarter | |||||||
Instrumentation | 2019 | 2018 | |||||
Marine Instrumentation | $ | 105.2 | $ | 104.2 | |||
Environmental Instrumentation | 86.4 | 81.2 | |||||
Test and Measurement Instrumentation | 64.9 | 53.6 | |||||
Total | $ | 256.5 | $ | 239.0 |
First Quarter Ended March 31, 2019 | First Quarter Ended April 1, 2018 | |||||||||||||||||||||||
Customer Type | Customer Type | |||||||||||||||||||||||
(in millions) | United States Government (a) | Other, Primarily Commercial | Total | United States Government (a) | Other, Primarily Commercial | Total | ||||||||||||||||||
Net Sales: | ||||||||||||||||||||||||
Instrumentation | $ | 14.2 | $ | 242.3 | $ | 256.5 | $ | 12.8 | $ | 226.2 | $ | 239.0 | ||||||||||||
Digital Imaging | 26.2 | 209.1 | 235.3 | 22.4 | 188.6 | 211.0 | ||||||||||||||||||
Aerospace and Defense Electronics | 68.0 | 112.4 | 180.4 | 65.3 | 108.3 | 173.6 | ||||||||||||||||||
Engineered Systems | 61.5 | 11.5 | 73.0 | 59.0 | 13.0 | 72.0 | ||||||||||||||||||
$ | 169.9 | $ | 575.3 | $ | 745.2 | $ | 159.5 | $ | 536.1 | $ | 695.6 |
First Quarter Ended March 31, 2019 | First Quarter Ended April 1, 2018 | |||||||||||||||||||||||
Contract Type | Contract Type | |||||||||||||||||||||||
(in millions) | Fixed Price | Cost Type | Total | Fixed Price | Cost Type | Total | ||||||||||||||||||
Net Sales: | ||||||||||||||||||||||||
Instrumentation | $ | 251.0 | $ | 5.5 | $ | 256.5 | $ | 234.1 | $ | 4.9 | $ | 239.0 | ||||||||||||
Digital Imaging | 213.3 | 22.0 | 235.3 | 191.2 | 19.8 | 211.0 | ||||||||||||||||||
Aerospace and Defense Electronics | 180.1 | 0.3 | 180.4 | 173.4 | 0.2 | 173.6 | ||||||||||||||||||
Engineered Systems | 18.2 | 54.8 | 73.0 | 23.2 | 48.8 | 72.0 | ||||||||||||||||||
$ | 662.6 | $ | 82.6 | $ | 745.2 | $ | 621.9 | $ | 73.7 | $ | 695.6 |
First Quarter Ended March 31, 2019 | First Quarter Ended April 1, 2018 | |||||||||||||||||||||||||||||||
Geographic Region (a) | Geographic Region (a) | |||||||||||||||||||||||||||||||
(in millions) | United States | Europe | All other | Total | United States | Europe | All other | Total | ||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||||||
Instrumentation | $ | 211.1 | $ | 33.6 | $ | 11.8 | $ | 256.5 | $ | 191.0 | $ | 39.4 | $ | 8.6 | $ | 239.0 | ||||||||||||||||
Digital Imaging | 72.4 | 70.3 | 92.6 | 235.3 | 56.8 | 67.0 | 87.2 | 211.0 | ||||||||||||||||||||||||
Aerospace and Defense Electronics | 165.1 | 15.1 | 0.2 | 180.4 | 154.1 | 18.8 | 0.7 | 173.6 | ||||||||||||||||||||||||
Engineered Systems | 71.2 | 1.8 | — | 73.0 | 70.2 | 1.8 | — | 72.0 | ||||||||||||||||||||||||
$ | 519.8 | $ | 120.8 | $ | 104.6 | $ | 745.2 | $ | 472.1 | $ | 127.0 | $ | 96.5 | $ | 695.6 |
First Quarter | |||||||
(in millions) | 2019 | 2018 | |||||
Net sales | $ | 745.2 | $ | 695.6 | |||
Costs and expenses | |||||||
Cost of sales | 463.9 | 438.2 | |||||
Selling, general and administrative expenses | 184.0 | 169.0 | |||||
Total costs and expenses | 647.9 | 607.2 | |||||
Operating income | 97.3 | 88.4 | |||||
Interest expense, net | (5.4 | ) | (7.1 | ) | |||
Non-service retirement benefit income | 2.2 | 3.4 | |||||
Other expense, net | (1.2 | ) | (2.5 | ) | |||
Income before income taxes | 92.9 | 82.2 | |||||
Provision for income taxes | 17.6 | 15.7 | |||||
Net income | $ | 75.3 | $ | 66.5 |
First Quarter | % | |||||||||
(dollars in millions) | 2019 | 2018 | Change | |||||||
Net sales(a): | ||||||||||
Instrumentation | $ | 256.5 | $ | 239.0 | 7.3 | % | ||||
Digital Imaging | 235.3 | 211.0 | 11.5 | % | ||||||
Aerospace and Defense Electronics | 180.4 | 173.6 | 3.9 | % | ||||||
Engineered Systems | 73.0 | 72.0 | 1.4 | % | ||||||
Total net sales | $ | 745.2 | $ | 695.6 | 7.1 | % | ||||
Operating income: | ||||||||||
Instrumentation | $ | 39.9 | $ | 27.8 | 43.5 | % | ||||
Digital Imaging | 37.0 | 34.6 | 6.9 | % | ||||||
Aerospace and Defense Electronics | 33.8 | 31.7 | 6.6 | % | ||||||
Engineered Systems | 4.7 | 7.2 | (34.7 | )% | ||||||
Corporate expense | (18.1 | ) | (12.9 | ) | 40.3 | % | ||||
Total operating income | $ | 97.3 | $ | 88.4 | 10.1 | % |
(a) | Net sales excludes inter-segment sales of $6.4 million and $5.2 million for the first quarter of 2019 and 2018, respectively. |
First Quarter | ||||||||
(dollars in millions) | 2019 | 2018 | ||||||
Instrumentation | ||||||||
Net sales | $ | 256.5 | $ | 239.0 | ||||
Cost of sales | $ | 147.0 | $ | 139.3 | ||||
Cost of sales as a % of net sales | 57.3 | % | 58.3 | % | ||||
Digital Imaging | ||||||||
Net sales | $ | 235.3 | $ | 211.0 | ||||
Cost of sales | $ | 141.8 | $ | 128.1 | ||||
Cost of sales as a % of net sales | 60.3 | % | 60.7 | % | ||||
Aerospace and Defense Electronics | ||||||||
Net sales | $ | 180.4 | $ | 173.6 | ||||
Cost of sales | $ | 112.9 | $ | 112.1 | ||||
Cost of sales as a % of net sales | 62.6 | % | 64.6 | % | ||||
Engineered Systems | ||||||||
Net sales | $ | 73.0 | $ | 72.0 | ||||
Costs of sales | $ | 62.2 | $ | 58.7 | ||||
Cost of sales as a % of net sales | 85.2 | % | 81.5 | % | ||||
Total Company | ||||||||
Net sales | $ | 745.2 | $ | 695.6 | ||||
Costs of sales | $ | 463.9 | $ | 438.2 | ||||
Cost of sales as a % of net sales | 62.3 | % | 63.0 | % |
First Quarter | |||||||
(dollars in millions) | 2019 | 2018 | |||||
Net sales | $ | 256.5 | $ | 239.0 | |||
Cost of sales | $ | 147.0 | $ | 139.3 | |||
Selling, general and administrative expenses | $ | 69.6 | $ | 71.9 | |||
Operating income | $ | 39.9 | $ | 27.8 | |||
Cost of sales as a % of net sales | 57.3 | % | 58.3 | % | |||
Selling, general and administrative expenses % of sales | 27.1 | % | 30.1 | % | |||
Operating income as a % of net sales | 15.6 | % | 11.6 | % |
First Quarter | |||||||
(dollars in millions) | 2019 | 2018 | |||||
Net sales | $ | 235.3 | $ | 211.0 | |||
Cost of sales | $ | 141.8 | $ | 128.1 | |||
Selling, general and administrative expenses | $ | 56.5 | $ | 48.3 | |||
Operating income | $ | 37.0 | $ | 34.6 | |||
Cost of sales as a % of net sales | 60.3 | % | 60.7 | % | |||
Selling, general and administrative expenses % of sales | 24.0 | % | 22.9 | % | |||
Operating income as a % of net sales | 15.7 | % | 16.4 | % |
First Quarter | |||||||
(dollars in millions) | 2019 | 2018 | |||||
Net sales | $ | 180.4 | $ | 173.6 | |||
Cost of sales | $ | 112.9 | $ | 112.1 | |||
Selling, general and administrative expenses | $ | 33.7 | $ | 29.8 | |||
Operating income | $ | 33.8 | $ | 31.7 | |||
Cost of sales as a % of net sales | 62.6 | % | 64.6 | % | |||
Selling, general and administrative expenses % of sales | 18.7 | % | 17.1 | % | |||
Operating income as a % of net sales | 18.7 | % | 18.3 | % |
First Quarter | |||||||
(dollars in millions) | 2019 | 2018 | |||||
Net sales | $ | 73.0 | $ | 72.0 | |||
Cost of sales | $ | 62.2 | $ | 58.7 | |||
Selling, general and administrative expenses | $ | 6.1 | $ | 6.1 | |||
Operating income | $ | 4.7 | $ | 7.2 | |||
Cost of sales as a % of net sales | 85.2 | % | 81.5 | % | |||
Selling, general and administrative expenses % of sales | 8.4 | % | 8.5 | % | |||
Operating income as a % of net sales | 6.4 | % | 10.0 | % |
$750.0 million Credit Facility expires March 2024 and $100.0 million term loan due October 2019 (issued in March 2017) | |||
Financial Covenants | Requirement | Actual Measure | |
Consolidated Leverage Ratio (Net Debt/EBITDA) (a) | No more than 3.25 to 1 | 1.6 to 1 | |
Consolidated Interest Coverage Ratio (EBITDA/Interest) (b) | No less than 3.0 to 1 | 20.4 to 1 | |
$605.5 million Private Placement Senior Notes due from 2019 to 2024 | |||
Financial Covenants | Requirement | Actual Measure | |
Consolidated Leverage Ratio (Net Debt/EBITDA) (a) | No more than 3.25 to 1 | 1.6 to 1 | |
Consolidated Interest Coverage Ratio (EBITDA/Interest) (b) | No less than 3.0 to 1 | 20.4 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 |
Item 6. | Exhibits |
(a) | Exhibits | |
Exhibit 10.1 | ||
Exhibit 31.1 | ||
Exhibit 31.2 | ||
Exhibit 32.1 | ||
Exhibit 32.2 | ||
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: April 26, 2019 | 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 10.1 | |
Exhibit 31.1 | |
Exhibit 31.2 | |
Exhibit 32.1 | |
Exhibit 32.2 | |
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/ Aldo Pichelli |
Aldo Pichelli | |
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 March 31, 2019 (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/ Aldo Pichelli |
Aldo Pichelli | |
President and Chief Executive Officer | |
April 26, 2019 |
1. | the Quarterly Report on Form 10-Q of Teledyne Technologies Incorporated (the “Corporation”) for the quarter ended March 31, 2019 (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 | |
April 26, 2019 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 24, 2019 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TELEDYNE TECHNOLOGIES INC | |
Entity Central Index Key | 0001094285 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 36,236,354 |
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Income Statement [Abstract] | ||
Net sales | $ 745.2 | $ 695.6 |
Costs and expenses | ||
Cost of sales | 463.9 | 438.2 |
Selling, general and administrative expenses | 184.0 | 169.0 |
Total costs and expenses | 647.9 | 607.2 |
Operating income | 97.3 | 88.4 |
Interest and debt expense, net | (5.4) | (7.1) |
Non-service retirement benefit income | 2.2 | 3.4 |
Other expense, net | (1.2) | (2.5) |
Income before income taxes | 92.9 | 82.2 |
Provision for income taxes | 17.6 | 15.7 |
Net income | $ 75.3 | $ 66.5 |
Basic earnings per common share: | ||
Basic earnings per common share (in USD per share) | $ 2.09 | $ 1.87 |
Weighted average basic common shares outstanding (in shares) | 36.1 | 35.6 |
Diluted earnings per common share: | ||
Diluted earnings per common share (in USD per share) | $ 2.02 | $ 1.81 |
Weighted average diluted common shares outstanding (in shares) | 37.2 | 36.8 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 75.3 | $ 66.5 |
Other comprehensive income (loss): | ||
Foreign exchange translation adjustment | 17.0 | 17.2 |
Hedge activity, net of tax | 1.8 | (1.6) |
Pension and postretirement benefit adjustments, net of tax | 4.6 | 4.3 |
Other comprehensive income | 23.4 | 19.9 |
Comprehensive income | $ 98.7 | $ 86.4 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 30, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 579.6 | $ 566.0 |
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) | 36,232,598 | 36,087,297 |
Treasury stock (in shares) | 1,465,267 | 1,610,568 |
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2017 | $ 1,947.3 | $ 0.4 | $ 337.3 | $ (200.7) | $ 2,139.6 | $ (329.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 66.5 | 66.5 | ||||
Other comprehensive loss, net of tax | 19.9 | 19.9 | ||||
Treasury stock issued | 0.0 | (20.4) | 20.4 | |||
Stock-based compensation | 6.6 | 6.6 | ||||
Exercise of stock options and other | 12.3 | 12.3 | ||||
Ending balance at Apr. 01, 2018 | 2,055.9 | 0.4 | 335.8 | (180.3) | 2,257.0 | (357.0) |
Beginning balance at Dec. 30, 2018 | 2,229.7 | 0.4 | 343.7 | (144.9) | 2,523.7 | (493.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 75.3 | 75.3 | ||||
Other comprehensive loss, net of tax | 23.4 | 23.4 | ||||
Treasury stock issued | 0.0 | (15.0) | 15.0 | |||
Stock-based compensation | 10.9 | 10.9 | ||||
Exercise of stock options and other | 10.2 | 10.2 | ||||
Ending balance at Mar. 31, 2019 | $ 2,349.5 | $ 0.4 | $ 349.8 | $ (129.9) | $ 2,599.0 | $ (469.8) |
General |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (“GAAP”) as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes in Teledyne’s Annual Report on Form 10-K for the fiscal year ended December 30, 2018 (“2018 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 March 31, 2019 and the consolidated results of operations, consolidated comprehensive income and consolidated cash flows for the three months then ended. The results of operations and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year. Certain prior year amounts have been reclassified to conform to the current period presentation. In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings. These products, acquired with the acquisition of e2v technologies plc (“e2v”) were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Digital Imaging segment. Previously reported segment data has been adjusted to reflect this change. Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, to address a specific consequence of the Tax Cuts and Jobs Act (“Tax Act”) by allowing a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Act reduction of the U.S. federal corporate income tax rate. The guidance is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted. In 2018, we elected to early adopt this ASU and elected to reclassify, in the period of enactment, stranded tax effects totaling $47.6 million from AOCI to retained earnings in our condensed consolidated balance sheet. The reclassification amount primarily included income tax effects related to our pension and postretirement benefit plans. Income tax effects remaining in AOCI will be released into earnings as the related pretax amounts are reclassified to earnings. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities.” This new guidance better aligns an entity’s risk management activities and financial reporting for hedging relationships and expands and refines hedge accounting for both nonfinancial and financial risk components. This new guidance also simplifies and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This new guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods therein, with early adoption permitted. We adopted the new guidance as of December 31, 2018 using the modified retrospective approach, there was no cumulative adjustment to retained earnings related to hedge ineffectiveness for the year ended December 31, 2018. Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the cash flow hedging instruments aside from components excluded from the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to earnings in the period the hedged item impacts earnings. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the computation of the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record a goodwill impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We expect the adoption of this guidance will reduce the complexity surrounding the evaluation of goodwill for impairment. The impact of this new guidance for the Company will depend on the outcomes of future goodwill impairment tests. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new guidance requires lessees to recognize most 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. We adopted the new guidance on December 31, 2018, the beginning of our 2019 fiscal year using the modified retrospective transition method. Prior period comparative information was not adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The adoption of this guidance did not have a material impact related to existing leases and as a result, a cumulative-effect adjustment was not recorded. Also, the adoption of the new guidance did not have a material impact on our results of operations or cash flows. Lease Commitments We determine if an arrangement is a lease at inception. Effective December 31, 2018, operating leases are recorded as right-of-use assets, other long-term lease liabilities and current accrued liabilities in our condensed consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our condensed consolidated balance sheets. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of our leases do not provide an implicit rate, we use our incremental borrowing rate to determine the present value of lease payments at the commencement date. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Many lease agreements contain renewal options at either a fixed cost, fixed increase or market value adjustment. For those leases with renewal options, we will include the renewal options that are reasonably certain to be exercised, for purposes of calculating the lease liability and corresponding right of use asset. Teledyne will evaluate the likelihood of exercising each renewal option based on many factors, including the length of the renewal option and the future new lease cost, if known, or the estimated future new lease cost if it is not a fixed amount. Operating Leases Teledyne has approximately 120 operating lease agreements, which are primarily for manufacturing facilities and office space. These agreements frequently include one or more renewal options and require the Company to pay for utilities, taxes, insurance and maintenance expense. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements. At March 31, 2019, Teledyne has right-of-use assets of $134.3 million and a total lease liability for operating leases of $144.0 million of which $126.0 million is included in long-term lease liabilities and $18.0 million is included in current accrued liabilities. At March 31, 2019, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in millions):
The weighted average remaining lease term for operating leases is approximately 10 years and the weighted average discount rate is 4.09%. Operating lease expense was $5.8 million for the first quarter of 2019. As previously disclosed in Note 13 of the Notes to Consolidated Financial Statements included in our 2018 Form 10-K and under the previous lease accounting, future minimum lease payments for operating leases having initial or remaining non-cancelable lease terms in excess of one year were as follows (in millions):
Other Our finance leases and subleases are not material. |
Accumulated Other Comprehensive Loss |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in AOCI by component, net of tax, for the first quarter ended March 31, 2019 and April 1, 2018 are as follows (in millions):
The reclassifications out of AOCI to net income for the first quarter ended March 31, 2019 and April 1, 2018 are as follows (in millions):
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Business Combinations, Goodwill and Acquired Intangible Assets |
3 Months Ended |
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Mar. 31, 2019 | |
Business Combinations and Investments, Goodwill and Acquired Intangible Assets [Abstract] | |
Business Combinations, Goodwill and Acquired Intangible Assets | Business Combinations, Goodwill and Acquired Intangible Assets Acquisition of the scientific imaging businesses of Roper Technologies, Inc. On February 5, 2019, we acquired the scientific imaging businesses of Roper Technologies, Inc. for $225.0 million in cash, subject to a working capital purchase price adjustment. Principally located in the United States and Canada, the acquired businesses are part of the Digital Imaging segment. The acquired businesses include Princeton Instruments, Photometrics and Lumenera. The acquired businesses provide a range of imaging solutions, primarily for life sciences, academic research and customized OEM industrial imaging solutions. Princeton Instruments and Photometrics manufacture state-of-the-art cameras, spectrographs and optics for advanced research in physical sciences, life sciences research and spectroscopy imaging. Applications and markets include materials analysis, quantum technology and cell biology imaging using fluorescence and chemiluminescence. Lumenera primarily provides rugged USB-based customized cameras for markets such as traffic management, as well as life sciences applications. Teledyne funded the acquisition with borrowings under its credit facility and cash on hand. The results of the acquisition have been included in Teledyne’s results since the date of the acquisition. Goodwill and Acquired Intangible Assets Teledyne’s goodwill was $1,885.1 million at March 31, 2019 and $1,735.2 million at December 30, 2018. The increase in the balance of goodwill in 2019 resulted from $145.4 million in goodwill from the acquisition of the scientific imaging businesses of Roper Technologies, Inc. Teledyne’s net acquired intangible assets were $389.0 million at March 31, 2019 and $344.3 million at December 30, 2018. The increase in the balance of net acquired intangible assets resulted from $52.4 million in acquired intangible assets from the acquisition of the scientific imaging businesses of Roper Technologies, Inc., partially offset by amortization of acquired intangible assets. The Company is in the process of specifically identifying the amount to be assigned to certain assets, including acquired intangible assets, and liabilities and the related impact on taxes and goodwill for the acquisition of the scientific imaging businesses of Roper Technologies, Inc. since there was insufficient time between the acquisition date and the end of the period to finalize the analysis. |
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 U.S. dollar value of future cash flows and minimize the volatility of reported 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. 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 and in British pounds for our UK companies, including e2v. These contracts are designated and qualify as cash flow hedges. The Company has converted a U.S. dollar denominated, variable rate debt obligation into a euro fixed rate obligation using a receive float, pay fixed cross currency swap. This cross currency swap is designated as a cash flow hedge. Cash Flow Hedging Activities The effectiveness of the forward contract cash flow hedge, which exclude time value, and the cross currency swap cash flow hedge 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 forward 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. For the cross currency swap cash flow hedge, effective amounts are recorded in AOCI, and reclassified into interest expense in the consolidated statements of income. In addition, for the cross currency swap an amount is reclassified from AOCI to other income and expense each reporting period, to offset the earnings impact of the remeasurement of the hedged liability. Net deferred losses recorded in AOCI, net of tax, for the forward contracts that will mature in the next twelve months total $1.2 million. These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item. Amounts related to the cross currency swap expected to be reclassified from AOCI into income in the next twelve months total $0.1 million. 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 March 31, 2019, Teledyne had foreign currency forward contracts designated as cash flow hedges to buy Canadian dollars and to sell U.S. dollars totaling $80.9 million. These foreign currency forward contracts have maturities ranging from June 2019 to May 2020. Teledyne had foreign currency forward contracts designated as cash flow hedges to buy British pounds and to sell U.S. dollars totaling $17.4 million. These foreign currency forward contracts have maturities ranging from June 2019 to May 2020. Together the contracts had a negative fair value of $2.0 million. The cross currency swap has notional amounts of €93.0 million equivalent to $100.0 million, and matures in October 2019. The effect of derivative instruments designated as cash flow hedges in the condensed consolidated financial statements for the first quarter ended March 31, 2019 and April 1, 2018 was as follows (in millions):
a) Effective portion, pre-tax b) Amount reclassified to offset earnings impact of liability hedged by cross currency swap c) Amount excluded from effectiveness testing 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 March 31, 2019, Teledyne had non-designated 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 are intended to, at a minimum, partially offset the transaction gains and losses recognized in earnings. Teledyne does not use foreign currency forward contracts for speculative or trading purposes. The effect of derivative instruments not designated as cash flow hedges recognized in other income and expense for the first quarter ended March 31, 2019 was income of $1.6 million. The effect of derivative instruments not designated as cash flow hedges in other income and expense for the first quarter ended April 1, 2018 was expense of $0.8 million. The income/expense was largely offset by losses/gains in the value of the underlying hedged item excluding the impact of forward points. Fair Value of Derivative Financial Instruments The Company has elected to use the income approach to value the derivatives, using observable Level 2 market expectations at measurement date and standard valuation techniques to convert future amounts to a single present amount. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets (specifically futures contracts on LIBOR and EURIBOR) and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and EURIBOR cash and swap rates, foreign currency forward rates and cross currency basis spreads). Mid-market pricing is used as a practical expedient for fair value measurements. The fair value measurement of an asset or liability must reflect the nonperformance risk of the entity and the counterparty. Therefore, the impact of the counterparty’s creditworthiness when in an asset position and the Company’s creditworthiness when in a liability position has also been factored into the fair value measurement of the derivative instruments and did not have a material impact on the fair value of these derivative instruments. Both the counterparty and the Company are expected to continue to perform under the contractual terms of the 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 [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share For the first quarter of 2019, 6,480 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. For the first quarter of 2018, 370,583 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. The weighted average number of common shares used in the calculation of basic and diluted earnings per share consisted of the following (in millions):
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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 Board of Director stock compensation plans, pursuant to which common stock, stock options and restricted stock units have been issued to its directors. Stock Incentive Plan Stock option compensation expense was $8.9 million for the first quarter of 2019 and was $4.9 million for the first quarter of 2018. Employee stock option grants are charged to expense evenly over the three year vesting period except for stock options that were granted in 2019 to Teledyne’s President and Chief Executive Officer and Teledyne’s Executive Chairman which were expensed immediately. For 2019, the Company currently expects approximately $26.6 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. The following assumptions were used in the valuation of stock options granted in 2019:
Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2019 was $72.00 per share. Stock option transactions for the first quarter of 2019 are summarized as follows:
Performance Share Plan and Restricted Stock Award Program Under the 2015 to 2017 Performance Share Plan, in the first quarter of 2019 the Company issued 8,586 shares of Teledyne common stock and in the first quarter of 2018, the Company issued 6,481 shares of Teledyne common stock. A total of 15,578 shares remain to be issued in 2020, subject to the terms of the plan. In the first quarter of 2018, the performance cycle for the three-year period ending December 31, 2020, was set. Under the plan, the maximum number of shares that could be issued in three equal installments in 2021, 2022 and 2023, is 58,729. The following table shows the restricted stock activity for the first three months of 2019:
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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 $360.2 million at March 31, 2019 and $331.3 million at December 30, 2018. The remainder of the inventories using the LIFO method were $41.9 million at March 31, 2019 and $42.3 million at December 30, 2018. 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 estimates 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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Disclosures for Customer Contracts |
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Disclosures for Customer Contracts | Customer Contracts Estimate at Completion Process For over time contracts using the cost-to-cost method, we have an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of our performance obligations. This EAC process requires management judgment relative to assessing risks, estimating contract revenue and cost, and making assumptions for schedule and technical issues. Since certain contracts extend over a longer period of time, the impact of revisions in cost and revenue estimates during the progress of work may adjust the current period earnings through a cumulative catch-up basis. This method recognizes, in the current period, the cumulative effect of the changes on current and prior quarters. Additionally, if the current contract estimate indicates a loss, a provision is made for the total anticipated loss in the period that it becomes evident. Contract cost and revenue estimates for significant contracts are reviewed and reassessed quarterly. The majority of revenue recognized over time uses an EAC process. The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in the first three months of 2019 and 2018 was approximately $2.8 million and $0.2 million of favorable operating income, primarily related to changes in estimates that favorably impacted revenue. None of the effects of changes in estimates on any individual contract were material to the condensed consolidated statements of income for any period presented. Contract Liabilities We recognize a liability for interim and advance payments in excess of revenue recognized and present it as a contract liability which is included within accrued liabilities and other long-term liabilities on the Condensed Consolidated Balance Sheet, which represented $111.2 million and $20.5 million as of March 31, 2019, and $111.5 million and $15.3 million as of December 30, 2018, respectively. The Company recognized revenue of $35.4 million during the three months ended March 31, 2019 from contract liabilities that existed at the beginning of year. The Company recognizes the incremental costs of obtaining or fulfilling a contract as expense when incurred if the amortization period of the asset is one year or less. Incremental costs to obtain or fulfill contracts with an amortization period greater than one year were not material. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for which work has not been performed as of the period end date and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,760.0 million. The Company expects approximately 79% of remaining performance obligations to be recognized into revenue within the next twelve months, with the remaining 21% recognized thereafter. Product Warranty Costs Some of the Company’s products are subject to specified warranties, and the Company provides for the estimated cost of product warranties. The adequacy of the warranty reserve 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 warranty reserve is included in current and long-term accrued liabilities on the Condensed Consolidated Balance Sheet.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2019 | |
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 2019 was 18.9%. The Company’s effective income tax rate for the first quarter of 2018 was 19.1%. The first quarter of 2019 and 2018 include net discrete income tax benefits of $3.1 million and $2.1 million, respectively. The 2019 first quarter net discrete tax benefits includes $2.9 million related to share-based accounting. The 2018 first quarter net discrete tax benefits includes $3.0 million related to share-based accounting. |
Long-Term Debt and Letters of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Letters of Credit | Long-Term Debt and Letters of Credit
On March 15, 2019, Teledyne amended its $750.0 million credit agreement to extend the maturity date from December 2020 to March 2024. While the borrowing capacity remains at $750.0 million, the amendment permits Teledyne to increase the aggregate amount of the borrowing capacity by up to $250.0 million subject to certain conditions. Available borrowing capacity under the $750.0 million credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $571.2 million at March 31, 2019. The credit agreements require the Company to comply with various financial and operating covenants and at March 31, 2019, 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 March 31, 2019 and December 30, 2018, approximated the carrying value. At March 31, 2019, Teledyne had $34.7 million in outstanding letters of credit. |
Lawsuits, Claims, Commitments, Contingencies and Related Matters |
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Mar. 31, 2019 | |
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 December 30, 2018, included in the 2018 Form 10-K. At March 31, 2019, the Company’s reserves for environmental remediation obligations totaled $6.4 million, of which $1.5 million is included in current accrued liabilities. At December 30, 2018, the Company’s reserves for environmental remediation obligations totaled $6.0 million. The Company 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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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans and Postretirement Benefits | Pension Plans and Postretirement Benefits For the domestic pension plans, the discount rate increased to 4.59% in 2019 compared with a 4.02% discount rate used in 2018. Teledyne has not made any cash pension contributions to its domestic qualified pension plan since 2013. No cash pension contributions are planned for 2019 for the domestic qualified pension plan.
Teledyne 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 includes net sales and operating income by segment but excludes non-service retirement benefit income, 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. The following table presents Teledyne’s segment disclosures (dollars in millions):
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):
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):
We also disaggregate our revenue from contracts with customers by customer type, contract-type and geographic region for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
a) Includes sales as a prime contractor or subcontractor.
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General (Policies) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (“GAAP”) as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes in Teledyne’s Annual Report on Form 10-K for the fiscal year ended December 30, 2018 (“2018 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 March 31, 2019 and the consolidated results of operations, consolidated comprehensive income and consolidated cash flows for the three months then ended. The results of operations and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year. Certain prior year amounts have been reclassified to conform to the current period presentation. In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings. These products, acquired with the acquisition of e2v technologies plc (“e2v”) were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Digital Imaging segment. Previously reported segment data has been adjusted to reflect this change. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income”, to address a specific consequence of the Tax Cuts and Jobs Act (“Tax Act”) by allowing a reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effects resulting from the Tax Act reduction of the U.S. federal corporate income tax rate. The guidance is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted. In 2018, we elected to early adopt this ASU and elected to reclassify, in the period of enactment, stranded tax effects totaling $47.6 million from AOCI to retained earnings in our condensed consolidated balance sheet. The reclassification amount primarily included income tax effects related to our pension and postretirement benefit plans. Income tax effects remaining in AOCI will be released into earnings as the related pretax amounts are reclassified to earnings. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities.” This new guidance better aligns an entity’s risk management activities and financial reporting for hedging relationships and expands and refines hedge accounting for both nonfinancial and financial risk components. This new guidance also simplifies and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. This new guidance is effective for fiscal years beginning after December 15, 2018 and for interim periods therein, with early adoption permitted. We adopted the new guidance as of December 31, 2018 using the modified retrospective approach, there was no cumulative adjustment to retained earnings related to hedge ineffectiveness for the year ended December 31, 2018. Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the cash flow hedging instruments aside from components excluded from the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to earnings in the period the hedged item impacts earnings. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the computation of the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record a goodwill impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted. We expect the adoption of this guidance will reduce the complexity surrounding the evaluation of goodwill for impairment. The impact of this new guidance for the Company will depend on the outcomes of future goodwill impairment tests. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new guidance requires lessees to recognize most 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. We adopted the new guidance on December 31, 2018, the beginning of our 2019 fiscal year using the modified retrospective transition method. Prior period comparative information was not adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The adoption of this guidance did not have a material impact related to existing leases and as a result, a cumulative-effect adjustment was not recorded. Also, the adoption of the new guidance did not have a material impact on our results of operations or cash flows. Lease Commitments We determine if an arrangement is a lease at inception. Effective December 31, 2018, operating leases are recorded as right-of-use assets, other long-term lease liabilities and current accrued liabilities in our condensed consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our condensed consolidated balance sheets. Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of our leases do not provide an implicit rate, we use our incremental borrowing rate to determine the present value of lease payments at the commencement date. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Many lease agreements contain renewal options at either a fixed cost, fixed increase or market value adjustment. For those leases with renewal options, we will include the renewal options that are reasonably certain to be exercised, for purposes of calculating the lease liability and corresponding right of use asset. Teledyne will evaluate the likelihood of exercising each renewal option based on many factors, including the length of the renewal option and the future new lease cost, if known, or the estimated future new lease cost if it is not a fixed amount. Operating Leases Teledyne has approximately 120 operating lease agreements, which are primarily for manufacturing facilities and office space. These agreements frequently include one or more renewal options and require the Company to pay for utilities, taxes, insurance and maintenance expense. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements. At March 31, 2019, Teledyne has right-of-use assets of $134.3 million and a total lease liability for operating leases of $144.0 million of which $126.0 million is included in long-term lease liabilities and $18.0 million is included in current accrued liabilities. At March 31, 2019, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in millions):
The weighted average remaining lease term for operating leases is approximately 10 years and the weighted average discount rate is 4.09%. Operating lease expense was $5.8 million for the first quarter of 2019. As previously disclosed in Note 13 of the Notes to Consolidated Financial Statements included in our 2018 Form 10-K and under the previous lease accounting, future minimum lease payments for operating leases having initial or remaining non-cancelable lease terms in excess of one year were as follows (in millions):
Other Our finance leases and subleases are not material. |
General (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Schedule of Maturity | At March 31, 2019, future minimum lease payments for operating leases with non-cancelable terms of more than one year were as follows (in millions):
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Operating Lease Schedule of Maturity | As previously disclosed in Note 13 of the Notes to Consolidated Financial Statements included in our 2018 Form 10-K and under the previous lease accounting, future minimum lease payments for operating leases having initial or remaining non-cancelable lease terms in excess of one year were as follows (in millions):
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in AOCI by Component | The changes in AOCI by component, net of tax, for the first quarter ended March 31, 2019 and April 1, 2018 are as follows (in millions):
The reclassifications out of AOCI to net income for the first quarter ended March 31, 2019 and April 1, 2018 are as follows (in millions):
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Derivative Instruments (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of Derivative Instruments Designated as Cash Flow Hedges | The effect of derivative instruments designated as cash flow hedges in the condensed consolidated financial statements for the first quarter ended March 31, 2019 and April 1, 2018 was as follows (in millions):
a) Effective portion, pre-tax b) Amount reclassified to offset earnings impact of liability hedged by cross currency swap c) Amount excluded from effectiveness testing |
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Schedule of Notional Amounts of Outstanding Foreign Currency Contracts | As of March 31, 2019, Teledyne had non-designated foreign currency contracts of this type in the following pairs (in millions):
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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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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Computations of Basic and Diluted Earnings per Share | The weighted average number of common shares used in the calculation of basic and diluted earnings per share consisted of the following (in millions):
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Stock-Based Compensation Plans (Tables) |
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Valuation Assumptions | The following assumptions were used in the valuation of stock options granted in 2019:
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Stock Option Transactions for Employee Stock Option Plans | Stock option transactions for the first quarter of 2019 are summarized as follows:
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Schedule of Restricted Stock Activity | The following table shows the restricted stock activity for the first three months of 2019:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Supplemental Disclosures for Customer Contracts (Tables) |
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Product Warranty Reserve |
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Long-Term Debt and Letters of Credit (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Postretirement Benefit Plans |
Teledyne sponsors several postretirement defined benefit plans that provide health care and life insurance benefits for certain eligible retirees.
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Segment Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Segment Disclosures | The following table presents Teledyne’s segment disclosures (dollars in millions):
Corporate assets primarily consist of cash, deferred taxes, net pension assets/liabilities and other assets (in millions):
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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 (in millions):
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Disaggregation of Revenue | We also disaggregate our revenue from contracts with customers by customer type, contract-type and geographic region for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
a) Includes sales as a prime contractor or subcontractor.
|
General - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
lease
|
Sep. 30, 2018
USD ($)
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reclassification of income tax effects for ASU 2018-02 | $ 47.6 | |
Number of operating leases | lease | 120 | |
Operating lease right-of-use assets | $ 134.3 | |
Operating lease liability | 144.0 | |
Long-term operating lease liabilities | 126.0 | |
Short term lease liability | $ 18.0 | |
Operating lease weighted average remaining term | 10 years | |
Operating lease discount rate | 4.09% | |
Operating lease expense | $ 5.8 |
General - Schedule of Lease Commitments (Details) $ in Millions |
Mar. 31, 2019
USD ($)
|
---|---|
Operating | |
2019 | $ 22.5 |
2020 | 21.0 |
2021 | 19.3 |
2022 | 16.9 |
2023 | 15.6 |
Thereafter | 79.9 |
Total minimum lease payments | 175.2 |
Less: | |
Imputed interest | (31.2) |
Current portion | (18.0) |
Present value of minimum lease payments, net of current portion | $ 126.0 |
General - Schedule of Lease Commitments Prior to Adoption of Topic 842 (Details) $ in Millions |
Dec. 30, 2018
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2019 | $ 23.2 |
2020 | 20.6 |
2021 | 18.4 |
2022 | 18.4 |
2023 | 11.8 |
Thereafter | 48.2 |
Total minimum lease payments | $ 140.6 |
Business Combinations, Goodwill and Acquired Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Feb. 05, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
|
Business Acquisition [Line Items] | |||
Payments to acquire businesses, net of cash acquired | $ 222.5 | ||
Goodwill | 1,885.1 | $ 1,735.2 | |
Acquired intangibles, net | 389.0 | $ 344.3 | |
Roper Technologies, Inc | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses, net of cash acquired | $ 225.0 | ||
Goodwill acquired during period | 145.4 | ||
Intangible assets acquired during period | $ 52.4 |
Derivative Instruments (Effect of Derivative Instruments) (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) recognized in AOCI | $ 4.3 | $ (3.7) |
Net foreign exchange gain (loss) recognized in other income and expense, net | (0.2) | 0.0 |
Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) reclassified from AOCI | (0.6) | 1.2 |
Interest Expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) reclassified from AOCI | 0.8 | 0.5 |
Other Operating Income (Expense) | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gain (loss) reclassified from AOCI | $ 1.8 | $ (3.0) |
Earnings Per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Earnings Per Share [Abstract] | ||
Stock options excluded in computation of diluted earnings per share (in shares) | 6,480 | 370,583 |
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Earnings Per Share [Abstract] | ||
Weighted average basic common shares outstanding (in shares) | 36.1 | 35.6 |
Effect of dilutive securities (primarily stock options) (in shares) | 1.1 | 1.2 |
Weighted average diluted common shares outstanding (in shares) | 37.2 | 36.8 |
Stock-Based Compensation Plans (Stock Option Valuation Assumptions) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 26.70% |
Expected life in years | 6 years 6 months 30 days |
Expected dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate range | 2.47% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate range | 2.70% |
Stock-Based Compensation Plans (Options Plans) (Details) - Stock Options |
3 Months Ended |
---|---|
Mar. 31, 2019
$ / shares
shares
| |
Shares | |
Beginning balance (in shares) | shares | 2,064,740 |
Granted (in shares) | shares | 390,789 |
Exercised (in shares) | shares | (120,783) |
Canceled (in shares) | shares | (17,223) |
Ending balance (in shares) | shares | 2,317,523 |
Options exercisable at end of period (in shares) | shares | 1,549,179 |
Weighted Average Exercise Price | |
Beginning balance (in USD per share) | $ / shares | $ 104.66 |
Granted (in USD per share) | $ / shares | 217.58 |
Exercised (in USD per share) | $ / shares | 84.76 |
Canceled (in USD per share) | $ / shares | 171.49 |
Ending balance (in USD per share) | $ / shares | 124.24 |
Options exercisable at end of period (in USD per share) | $ / shares | $ 79.52 |
Stock-Based Compensation Plans (Restricted Stock Activity) (Details) - Restricted Stock |
3 Months Ended |
---|---|
Mar. 31, 2019
$ / shares
shares
| |
Shares | |
Beginning balance (in shares) | shares | 74,220,000 |
Granted (in shares) | shares | 17,522,000 |
Vested (in shares) | shares | (35,330,000) |
Ending balance (in shares) | shares | 56,412,000 |
Weighted average fair value per share | |
Beginning balance (in USD per share) | $ / shares | $ 108.05 |
Granted (in USD per share) | $ / shares | 200.00 |
Vested (in USD per share) | $ / shares | 72.91 |
Ending balance (in USD per share) | $ / shares | $ 158.62 |
Inventories (Narrative) (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 30, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventories at average cost or FIFO methods | $ 360.2 | $ 331.3 |
Inventories at cost as per LIFO | $ 41.9 | $ 42.3 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 30, 2018 |
---|---|---|
Inventories | ||
Raw materials and supplies | $ 221.1 | $ 205.6 |
Work in process | 125.4 | 117.5 |
Finished goods | 55.6 | 50.5 |
Total inventories, gross | 402.1 | 373.6 |
Reduction to LIFO cost basis | (9.1) | (9.3) |
Total inventories, net | $ 393.0 | $ 364.3 |
Disclosures for Customer Contracts - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
Dec. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | |||
Change in estimate | $ 2.8 | $ 0.2 | |
Contract with customer, current liability | 111.2 | $ 111.5 | |
Contract with customer, noncurrent liability | 20.5 | $ 15.3 | |
Revenue recognized from contract liabilities | 35.4 | ||
Remaining performance obligation | $ 1,760.0 |
Disclosures for Customer Contracts - (Product Warranty) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Company's product warranty reserve | ||
Balance at beginning of year | $ 21.0 | $ 21.1 |
Accruals for product warranties charged to expense | 2.2 | 3.1 |
Cost of product warranty claims | (2.9) | (2.2) |
Acquisition | 0.3 | 0.0 |
Balance at end of period | $ 20.6 | $ 22.0 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 18.90% | 19.10% |
Discrete items | $ 3.1 | $ 2.1 |
Discrete tax expense (benefit), share-based accounting | $ 2.9 | $ 3.0 |
Long-Term Debt and Letters of Credit - Credit Facility and Capital Lease (Details) |
Mar. 31, 2019
USD ($)
|
---|---|
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of credit, outstanding | $ 34,700,000 |
Credit facility | $750.0 million credit facility due March 2024, weighted average rate of 3.45% at March 31, 2019 and 5.50% at December 30, 2018 | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | 750,000,000 |
Credit facility | Letter of Credit | |
Line of Credit Facility [Line Items] | |
Available borrowings capacity under letters of credit | $ 571,200,000 |
Lawsuits, Claims, Commitments, Contingencies and Related Matters (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 30, 2018 |
|
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Reserves for environmental remediation obligations | $ 6.4 | |
Accrued liabilities | $ 364.6 | $ 355.6 |
Accrual for environmental loss contingencies | $ 6.0 | |
Maximum | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Estimated duration of remediation | 30 years | |
Environmental Reserves | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Accrued liabilities | $ 1.5 |
Pension Plans and Postretirement Benefits (Narrative) (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 30, 2018 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Estimated contributions in current fiscal year | $ 0 | |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate used to determine the benefit obligation | 4.59% | 4.02% |
Pension Plans and Postretirement Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Pension Plan | ||
Components of net period pension benefit expense | ||
Service cost — benefits earned during the period | $ 2.4 | $ 2.7 |
Interest cost on benefit obligation | 8.4 | 8.1 |
Expected return on plan assets | (16.5) | (17.9) |
Amortization of prior service cost | (1.5) | (1.5) |
Amortization of net actuarial loss | 7.7 | 7.9 |
Curtailment/settlements | (0.3) | 0.0 |
Net periodic (income) expense | (2.2) | (3.4) |
Other Postretirement Benefits Plan | ||
Components of net period pension benefit expense | ||
Interest cost on benefit obligation | 0.1 | 0.1 |
Amortization of net actuarial loss | 0.0 | (0.1) |
Net periodic (income) expense | $ 0.1 | $ 0.0 |
Segment Information (Narrative) (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
segment
product_line
|
Apr. 01, 2018
USD ($)
|
|
Revenue from External Customer [Line Items] | ||
Number of reportable segments | segment | 4 | |
Net sales | $ 745.2 | $ 695.6 |
Aerospace and Defense Electronics | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 180.4 | 173.6 |
Number of Product Lines | product_line | 1 | |
Engineered Systems | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 73.0 | 72.0 |
Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 256.5 | 239.0 |
Number of Product Lines | product_line | 3 | |
Digital Imaging | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 235.3 | $ 211.0 |
Segment Information (Identifiable Assets) (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 30, 2018 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 4,161.7 | $ 3,809.3 |
Operating Segments | Instrumentation | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 1,422.2 | 1,392.7 |
Operating Segments | Digital Imaging | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 1,832.2 | 1,600.9 |
Operating Segments | Aerospace and Defense Electronics | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 597.4 | 521.4 |
Operating Segments | Engineered Systems | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | 117.6 | 116.6 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Identifiable assets | $ 192.3 | $ 177.7 |
Segment Information (Sales) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 01, 2018 |
|
Revenue from External Customer [Line Items] | ||
Net sales | $ 745.2 | $ 695.6 |
Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | 256.5 | 239.0 |
Operating Segments | Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | 256.5 | 239.0 |
Operating Segments | Instrumentation | Marine Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | 105.2 | 104.2 |
Operating Segments | Instrumentation | Environmental Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | 86.4 | 81.2 |
Operating Segments | Instrumentation | Test and Measurement Instrumentation | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 64.9 | $ 53.6 |
Label | Element | Value |
---|---|---|
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 50,900,000 |
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