Teledyne Technologies(TDY) - 2026 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION This section provides Teledyne Technologies Incorporated's unaudited condensed consolidated financial statements and management's discussion and analysis for the second quarter and six months ended June 29, 2025 Item 1. Financial Statements This section presents Teledyne's unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, equity, cash flows, and detailed notes for Q2 and H1 2025 Condensed Consolidated Statements of Income (Loss) This section details Teledyne's net sales, operating income, and net income for the second quarter and six months of 2025 and 2024 Second Quarter Financial Performance (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $1,513.7 | $1,374.1 | 10.2% | | Operating income (loss) | $278.2 | $247.0 | 12.6% | | Net income (loss) attributable to Teledyne | $209.9 | $180.2 | 16.5% | | Basic earnings per common share | $4.48 | $3.82 | 17.3% | | Diluted earnings per common share | $4.43 | $3.77 | 17.5% | Six Months Financial Performance (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $2,963.6 | $2,724.2 | 8.8% | | Operating income (loss) | $537.5 | $481.3 | 11.7% | | Net income (loss) attributable to Teledyne | $398.5 | $358.7 | 11.1% | | Basic earnings per common share | $8.51 | $7.58 | 12.3% | | Diluted earnings per common share | $8.41 | $7.49 | 12.3% | Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents Teledyne's comprehensive income, including foreign exchange adjustments and hedge activities, for Q2 and H1 2025 and 2024 Second Quarter Comprehensive Income (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------------------------ | :-------------- | :-------------- | | Net income (loss) including noncontrolling interest | $210.4 | $180.3 | | Foreign exchange translation adjustment | $224.4 | $(5.8) | | Hedge activity, net of tax | $2.5 | $(2.3) | | Comprehensive income (loss) attributable to Teledyne | $438.5 | $174.2 | Six Months Comprehensive Income (2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :------------------------------------------ | :-------------- | :-------------- | | Net income (loss) including noncontrolling interest | $399.2 | $359.4 | | Foreign exchange translation adjustment | $375.2 | $(94.6) | | Hedge activity, net of tax | $3.8 | $(6.5) | | Comprehensive income (loss) attributable to Teledyne | $780.7 | $261.8 | Condensed Consolidated Balance Sheets This section provides a snapshot of Teledyne's assets, liabilities, and equity as of June 29, 2025, and December 29, 2024 Balance Sheet Highlights (June 29, 2025 vs. December 29, 2024) | Metric | June 29, 2025 (Millions USD) | Dec 29, 2024 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :----------------------- | :---------------------- | :---------------- | :--------- | | Total Assets | $15,135.2 | $14,200.5 | $934.7 | 6.6% | | Cash and cash equivalents | $310.9 | $649.8 | $(338.9) | (52.2)% | | Goodwill | $8,675.8 | $7,990.5 | $685.3 | 8.6% | | Total current liabilities | $1,758.0 | $1,261.6 | $496.4 | 39.3% | | Current portion of long-term debt | $450.2 | $0.3 | $449.9 | * | | Total Stockholders' Equity | $10,376.9 | $9,549.4 | $827.5 | 8.7% | Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in Teledyne's stockholders' equity, including net income, other comprehensive income, and stock transactions for the six months ended June 29, 2025 Stockholders' Equity Changes (Six Months Ended June 29, 2025) | Item | Amount (Millions USD) | | :-------------------------------- | :---------------- | | Balance, December 29, 2024 | $9,549.4 | | Net income (loss) | $398.5 | | Other comprehensive income (loss), net of tax | $382.2 | | Treasury stock repurchased, including excise tax | $(2.9) | | Stock-based compensation and other | $15.5 | | Exercise of stock options | $34.2 | | Balance, June 29, 2025 | $10,376.9 | Condensed Consolidated Statements of Cash Flows This section details Teledyne's cash flows from operating, investing, and financing activities for the six months ended June 29, 2025, and June 30, 2024 Cash Flow Highlights (Six Months 2025 vs. 2024) | Activity | 2025 (Millions USD) | 2024 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :---------------- | :--------- | | Net cash provided by operating activities | $469.2 | $609.7 | $(140.5) | (23.0)% | | Net cash used in investing activities | $(805.2) | $(157.1) | $(648.1) | 412.5% | | Purchases of businesses, net of cash acquired | $(757.6) | $(123.6) | $(634.0) | 512.9% | | Net cash provided by (used in) financing activities | $(4.8) | $(637.9) | $633.1 | (99.2)% | | Cash and cash equivalents—end of period | $310.9 | $443.2 | $(132.3) | (29.8)% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of Teledyne's accounting policies, significant transactions, and financial statement components - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim reporting and should be read in conjunction with the 2024 Form 10-K[20] - Management believes the financial statements contain all necessary adjustments for fair presentation[21] - New accounting standards (ASU 2023-09 and ASU 2024-03) are being evaluated for impact, but other ASUs are not expected to have a material effect[22][23][24] Note 2. Business Acquisitions This note details Teledyne's business acquisitions in 2025 and 2024, including consideration transferred, goodwill, and acquired intangible assets - In Q1 2025, Teledyne acquired Micropac Industries, Inc. for $51.2 million and select aerospace and defense electronics businesses (Qioptiq) from Excelitas Technologies Corp. for $706.4 million, both integrated into the Aerospace & Defense Electronics segment[25][26] - In Q2 2024, the company acquired Adimec Holding B.V. for $88.7 million (Digital Imaging segment) and Valeport Holdings 2019 Limited for $35.0 million (Instrumentation segment)[27][28] Acquisition Details (2025 & 2024) | Acquisitions | Consideration Transferred (a) (Millions USD) | Goodwill Acquired (Millions USD) | Acquired Intangible Assets (Millions USD) | | :--------------------------------- | :--------------------------------------- | :--------------------------- | :------------------------------------ | | 2025 Acquisitions | | | | | OS and AES businesses (Qioptiq) | $706.4 | $451.0 | $183.6 | | Micropac | $51.2 | $5.0 | $8.1 | | Total 2025 | $757.6 | $456.0 | $191.7 | | 2024 Acquisitions | | | | | Adimec | $88.7 | $65.6 | $17.9 | | Valeport | $35.0 | $23.6 | $7.8 | | Total 2024 | $123.7 | $89.2 | $25.7 | Note 3. Business Segments This note outlines Teledyne's four reportable business segments and their financial performance in terms of net sales and operating income - Teledyne operates in four reportable segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems, providing sophisticated digital imaging products, instrumentation, aerospace and defense electronics, and engineered systems[31] Net Sales by Segment (Second Quarter 2025 vs. 2024) | Segment | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :------------------------------ | :-------------- | :-------------- | :--------- | | Digital Imaging | $771.0 | $739.4 | 4.3% | | Instrumentation | $367.6 | $333.5 | 10.2% | | Aerospace and Defense Electronics | $264.8 | $194.4 | 36.2% | | Engineered Systems | $110.3 | $106.8 | 3.3% | | Total net sales | $1,513.7 | $1,374.1 | 10.2% | Operating Income by Segment (Second Quarter 2025 vs. 2024) | Segment | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :------------------------------ | :-------------- | :-------------- | :--------- | | Digital Imaging | $119.6 | $113.5 | 5.4% | | Instrumentation | $101.6 | $87.2 | 16.5% | | Aerospace and Defense Electronics | $66.6 | $57.1 | 16.6% | | Engineered Systems | $12.1 | $7.5 | 61.3% | | Total operating income (loss) | $278.2 | $247.0 | 12.6% | Note 4. Revenue Recognition and Contract Balances This note describes Teledyne's revenue recognition policies, contract balances, and sales breakdown by customer type - Approximately 70% of net sales are recognized at a point in time, with the remaining 30% recognized over time[38] Net Sales by Customer Type (Second Quarter 2025) | Segment | U.S. Govt. (Millions USD) | Other (Millions USD) | Total (Millions USD) | | :------------------------------ | :-------------------- | :--------------- | :--------------- | | Digital Imaging | $141.3 | $629.7 | $771.0 | | Instrumentation | $32.6 | $335.0 | $367.6 | | Aerospace and Defense Electronics | $114.2 | $150.6 | $264.8 | | Engineered Systems | $91.4 | $18.9 | $110.3 | | Total | $379.5 | $1,134.2 | $1,513.7 | - Remaining performance obligations totaled $4,452.8 million as of June 29, 2025, with 73% expected to be recognized within the next 12 months[46] Note 5. Goodwill and Acquired Intangible Assets This note details the changes in goodwill and acquired intangible assets by segment, including impairment testing information Goodwill by Segment (June 29, 2025 vs. December 29, 2024) | Segment | June 29, 2025 (Millions USD) | Dec 29, 2024 (Millions USD) | Change (Millions USD) | | :------------------------------ | :----------------------- | :---------------------- | :---------------- | | Digital Imaging | $7,019.6 | $6,854.6 | $165.0 | | Instrumentation | $988.4 | $955.3 | $33.1 | | Aerospace and Defense Electronics | $650.2 | $163.0 | $487.2 | | Engineered Systems | $17.6 | $17.6 | $0.0 | | Total | $8,675.8 | $7,990.5 | $685.3 | - Acquired intangible assets (net) increased to $2,174.6 million at June 29, 2025, from $2,012.9 million at December 29, 2024[50] - The FLIR reporting unit's estimated fair value exceeded its carrying value by approximately $420 million (5%) at the end of 2024, with $5,922.1 million of goodwill as of June 29, 2025; no interim impairment review was required for goodwill or indefinite-lived trademarks[51][54][57] Note 6. Supplemental Balance Sheet Information This note provides additional details on specific balance sheet items, including cash equivalents, inventories, and product warranty reserves - Cash equivalents decreased from $304.1 million at December 29, 2024, to $102.1 million at June 29, 2025[58] - Inventories, net, increased from $914.4 million at December 29, 2024, to $1,047.0 million at June 29, 2025[60] - The product warranty reserve increased from $50.2 million at the beginning of 2025 to $56.5 million at June 29, 2025[62] Note 7. Long-Term Debt This note details Teledyne's long-term debt, including total debt, current portion, and available credit facility, as of June 29, 2025 - Total debt, net, was $2,617.4 million at June 29, 2025, down from $2,649.0 million at December 29, 2024, due to payments on fixed rate senior notes[63] - The current portion of long-term debt significantly increased to $450.2 million at June 29, 2025, from $0.3 million at December 29, 2024[63] - $1,168.0 million was available under the $1.2 billion credit facility as of June 29, 2025, and the company was in compliance with all financial and operating covenants[63] Note 8. Income Taxes This note provides information on Teledyne's income tax provision and effective tax rate for the second quarter of 2025 and 2024 Income Tax Provision and Effective Tax Rate (Second Quarter 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | | :-------------------------------- | :-------------- | :-------------- | | Provision (benefit) for income taxes | $50.2 | $51.4 | | Income (loss) before income taxes | $260.6 | $231.7 | | Effective tax rate | 19.3% | 22.2% | - The second quarter of 2025 includes $8.4 million in net discrete income tax benefits, compared to $0.7 million in 2024[65] Note 9. Pension Plans This note details Teledyne's pension service and non-service costs, along with the weighted-average discount rate for domestic qualified pension plans - Pension service cost remained consistent at $1.5 million for the second quarter of both 2025 and 2024[66] - Pension non-service cost (income) was $(2.6) million for Q2 2025 and $(2.7) million for Q2 2024[66] - The weighted-average discount rate for domestic qualified pension plans increased to 7.05% in 2025 from 6.86% in 2024[106] Note 10. Stock-Based Compensation This note outlines Teledyne's stock-based compensation expense and the number of stock options and restricted stock shares granted - Stock-based compensation expense increased to $11.3 million in Q2 2025 from $9.3 million in Q2 2024, and was $20.2 million for the first six months of 2025 compared to $21.3 million in 2024[68] - In Q2 2025, the company granted 63,062 stock options and 75,289 restricted stock shares[68][69] Note 11. Earnings Per Share This note provides Teledyne's diluted earnings per share and weighted average shares outstanding, along with information on stock repurchase programs - Diluted EPS for Q2 2025 was $4.43, up from $3.77 in Q2 2024, and $8.41 for the first six months of 2025, up from $7.49 in H1 2024[9] - Weighted average diluted common shares outstanding were 47.4 million for Q2 2025 and 47.8 million for Q2 2024[70] - A new $2.0 billion stock repurchase program was approved in July 2025, superseding prior authorizations; no repurchases were made in Q2 or H1 2025[71] Note 12. Accumulated Other Comprehensive Income (Loss) This note explains the changes in Teledyne's Accumulated Other Comprehensive Income (AOCI), primarily driven by foreign currency translation adjustments - Accumulated Other Comprehensive Income (AOCI) improved significantly, moving from a loss of $(839.9) million at December 29, 2024, to $(457.7) million at June 29, 2025[72] - The improvement was primarily driven by positive foreign currency translation adjustments of $375.2 million for the six months ended June 29, 2025[72] Note 13. Derivative Instruments and Hedging Activities This note describes Teledyne's use of derivative instruments, including foreign currency forward contracts and cross-currency swaps, to manage market risks - Teledyne uses foreign currency forward contracts for cash flow hedges (Canadian dollars, British pounds) and non-designated hedges (foreign currency monetary assets/liabilities) to manage foreign currency risk[76][79] - In H1 2025, the company entered cross-currency swaps with a total notional amount of €450.0 million to hedge euro-denominated net investments, maturing between September 2026 and September 2030[77] - Net gain recognized in AOCI from foreign exchange contracts was $4.3 million for the six months ended June 29, 2025, while cross-currency swaps resulted in a net loss of $(37.5) million[80] Note 14. Fair Value Measurement This note details Teledyne's financial assets and liabilities measured at fair value, primarily derivative contracts and long-term debt - The company's financial assets and liabilities carried at fair value primarily consist of derivative contracts, measured using Level 2 hierarchy information[83] - Net derivatives at fair value were $(25.9) million at June 29, 2025, compared to $(15.9) million at December 29, 2024[83] - The aggregate fair value of long-term debt was $2,446.0 million at June 29, 2025, which was lower than its carrying value of $2,632.7 million[85] Note 15. Commitments and Contingencies This note outlines Teledyne's legal proceedings, including trade compliance violations, environmental remediation, and a civil investigation - Teledyne has made voluntary disclosures regarding potential trade compliance violations, including an incorrect de minimis calculation methodology under Export Administration Regulations and local export laws[87] - Environmental remediation reserves totaled $6.3 million at June 29, 2025[88] - The company is working to resolve a civil investigation by the U.S. Department of Justice relating to an ejection seat sequencer program[89] - Management does not believe the disposition of any pending legal matters is likely to have a material adverse effect on the company's financial condition[89] Note 16. Subsequent Events This note reports on significant events occurring after the reporting period, specifically an acquisition in the third quarter of 2025 - In the third quarter of 2025, Teledyne acquired the assets of Maretron, including the brand's Octoplex, MPower, and MConnect product lines from Littelfuse, Inc[90] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of Teledyne's financial performance, strategic direction, and factors affecting its business, including segment results, liquidity, and critical accounting policies Overall Financial Performance (Second Quarter 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $1,513.7 | $1,374.1 | 10.2% | | Operating income (loss) | $278.2 | $247.0 | 12.6% | | Net income (loss) attributable to Teledyne | $209.9 | $180.2 | 16.5% | Overall Financial Performance (Six Months 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :----------------------------------- | :-------------- | :-------------- | :--------- | | Net sales | $2,963.6 | $2,724.2 | 8.8% | | Operating income (loss) | $537.5 | $481.3 | 11.7% | | Net income (loss) attributable to Teledyne | $398.5 | $358.7 | 11.1% | Overview This section provides a general description of Teledyne's business, focusing on its enabling technologies and product offerings across various markets - Teledyne provides enabling technologies for industrial growth markets requiring advanced technology and high reliability, including aerospace and defense, factory automation, environmental monitoring, and medical imaging[91] - Products include digital imaging sensors, cameras, monitoring and control instrumentation, electronic test and measurement equipment, and engineered systems[91] Strategy This section outlines Teledyne's strategic priorities, including growth in its four segments, targeted acquisitions, product development, and operational excellence - Teledyne's strategy emphasizes growth in its four business segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems[92] - The company aims to strengthen and expand its business through targeted acquisitions and product development, focusing on markets with high barriers to entry[92] - Operational excellence, including rapid integration of acquired businesses and cost containment, is a key focus to improve margins and earnings[92] Trends and Other Matters Affecting Our Business This section discusses key trends and external factors, such as tariffs, export restrictions, tax law changes, and foreign currency risks, impacting Teledyne's business - New U.S. tariffs and export restrictions, along with retaliatory measures from certain countries (e.g., China's rare earth mineral restrictions), could result in revenue reductions, cost increases, or production delays[94] - The company is evaluating the impact of the recently enacted 'One Big Beautiful Bill Act,' which includes changes to U.S. tax law[95] - Teledyne is exposed to foreign currency exchange rate movements, which it mitigates using derivative instruments, and continues to consolidate facilities, reduce headcount, and seek cost reductions[96][97] Results of Operations This section analyzes Teledyne's financial performance for the second quarter and first six months of 2025 compared to 2024, detailing changes in sales, income, and expenses Second Quarter Results This section provides a detailed analysis of Teledyne's financial performance for the second quarter of 2025, highlighting key revenue and income drivers - Net sales increased 10.2% to $1,513.7 million, with $70.1 million in incremental sales from recent acquisitions, and net income attributable to Teledyne rose 16.5% to $209.9 million, resulting in diluted EPS of $4.43[100][101] - Cost of sales as a percentage of net sales increased to 57.4% from 56.9% primarily due to unfavorable product mix[102] - Selling, general and administrative (SG&A) expense as a percentage of net sales decreased to 15.2% from 16.4%, while Research and Development (R&D) expense increased $10.7 million[103][104] - Operating income for the second quarter of 2025 increased 12.6%, with all segments reflecting higher operating income[107] First six months of 2025 compared with the first six months of 2024 This section analyzes Teledyne's financial performance for the first six months of 2025 compared to 2024, detailing sales, income, and expense changes - Net sales for the first six months of 2025 increased 8.8% to $2,963.6 million, including $125.7 million from recent acquisitions, and net income rose 11.1% to $398.5 million, with diluted EPS of $8.41[111][112] - Cost of sales as a percentage of net sales increased to 57.3% from 57.0%, while SG&A expense as a percentage of net sales decreased to 15.6% from 16.3%[113][114] - R&D expense increased $8.5 million, primarily in the Instrumentation and Aerospace and Defense Electronics segments[115] - Operating income for the first six months of 2025 increased 11.7%, with all segments contributing to the growth[118] Segment Results This section provides a detailed breakdown of net sales and operating income for each of Teledyne's four reportable segments, highlighting key performance drivers - This section provides a detailed breakdown of net sales and operating income for each of Teledyne's four reportable segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems, highlighting key drivers for changes in performance[122] Digital Imaging This section details the financial performance of the Digital Imaging segment, including net sales and operating income, and their key drivers Digital Imaging Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $771.0 | $739.4 | 4.3% | | Operating income | $119.6 | $113.5 | 5.4% | - Q2 sales growth was primarily driven by higher sales of unmanned air systems (+$20.6 million) and commercial infrared imaging components (+$16.1 million)[126] - Operating income increased due to higher net sales and lower SG&A, partially offset by unfavorable product mix and higher R&D expense[128] Instrumentation This section details the financial performance of the Instrumentation segment, including net sales and operating income, and their key drivers Instrumentation Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $367.6 | $333.5 | 10.2% | | Operating income | $101.6 | $87.2 | 16.5% | - Q2 sales increased due to higher sales in Marine Instrumentation (+$23.7 million), Environmental Instrumentation (+$6.4 million), and Test and Measurement Instrumentation (+$4.0 million)[134] - Operating income increased primarily due to higher Marine Instrumentation sales and favorable product mix, leading to an increase in operating income as a percentage of net sales[136] Aerospace and Defense Electronics This section details the financial performance of the Aerospace and Defense Electronics segment, including net sales and operating income, and their key drivers Aerospace and Defense Electronics Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $264.8 | $194.4 | 36.2% | | Operating income | $66.6 | $57.1 | 16.6% | - Q2 net sales increased significantly due to a $72.6 million increase in defense electronics and $64.3 million in incremental sales from recent acquisitions[142] - Operating income as a percentage of net sales decreased primarily due to unfavorable product mix, lower gross margins on sales from 2025 acquisitions, and higher acquired intangible asset amortization[144] Engineered Systems This section details the financial performance of the Engineered Systems segment, including net sales and operating income, and their key drivers Engineered Systems Performance (Q2 2025 vs. 2024) | Metric | 2025 (Millions USD) | 2024 (Millions USD) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | | Net sales | $110.3 | $106.8 | 3.3% | | Operating income | $12.1 | $7.5 | 61.3% | - Q2 net sales increased due to higher sales of engineered products (+$4.0 million)[150] - Operating income and operating income as a percentage of net sales increased primarily due to higher net sales and favorable program mix[151] Financial Condition, Liquidity and Capital Resources This section discusses Teledyne's financial position, liquidity, and capital management, including cash flows, debt, and stock repurchases - Teledyne's principal cash and capital requirements are to fund working capital, capital expenditures, income tax payments, debt service, and acquisitions, with cash on hand, operating cash flow, and available borrowings expected to be sufficient[154] - Cash and cash equivalents decreased from $649.8 million at December 29, 2024, to $310.9 million at June 29, 2025, primarily due to funding 2025 acquisitions[156] - A new $2.0 billion stock repurchase program was approved in July 2025, with no repurchases made in the second quarter or first six months of 2025[160] Cash and Cash Equivalents This section details the changes in Teledyne's cash and cash equivalents, primarily influenced by funding for recent acquisitions - Cash and cash equivalents totaled $310.9 million at June 29, 2025, a decrease from $649.8 million at December 29, 2024, primarily due to funding 2025 acquisitions[156] Long-term Debt This section provides information on Teledyne's total debt, available credit, and compliance with debt covenants - Total debt, net, decreased to $2,617.4 million at June 29, 2025, from $2,649.0 million at December 29, 2024, due to payments on fixed rate senior notes[157] - $1,168.0 million was available under the $1.20 billion credit facility at June 29, 2025, and the company was in compliance with all debt covenants[157][158] Stock Repurchases This section details Teledyne's stock repurchase programs, including the approval of a new $2.0 billion authorization - In July 2025, the Board of Directors approved a new stock repurchase program authorizing up to $2.0 billion of common stock, superseding prior authorizations[160] - No repurchases were made under any authorizations in the second quarter or first six months of 2025[160] Cash Flows This section analyzes Teledyne's cash flows from operating, investing, and financing activities, highlighting key changes and capital expenditure plans - Net cash provided by operating activities decreased to $469.2 million for the first six months of 2025 from $609.7 million in 2024, primarily due to higher income tax payments and timing of accounts receivable collections[161] - Net cash used in investing activities significantly increased to $805.2 million for the first six months of 2025 from $157.1 million in 2024, primarily due to $757.6 million spent on acquisitions[162] - Capital expenditures for the first six months of 2025 were $48.3 million, with plans to invest approximately $130 million for capital expenditures in 2025[162] Critical Accounting Policies and Estimates This section identifies Teledyne's critical accounting policies that involve significant judgments and uncertainties, such as revenue recognition and business combinations - Teledyne's critical accounting policies, involving significant judgments and uncertainties, include revenue recognition, accounting for business combinations, goodwill and acquired intangible assets, and income taxes[164] Safe Harbor Cautionary Statement Regarding Forward-Looking Information This section warns that forward-looking statements involve risks and uncertainties, and actual results may differ due to various factors, including government policies and acquisitions - Forward-looking statements in the report involve risks and uncertainties, and actual results could differ materially due to various factors[166] - Key risk factors include government policies (tariffs, funding), U.S.-China trade tensions, tax law changes, foreign currency exchange risks, rising interest rates, supply chain shortages, inflation, labor shortages, global economic disruptions, and cybersecurity threats[167] - Acquisitions involve inherent risks such as integration challenges, retaining key management and customers, and achieving identified synergies[168] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there were no material changes to the market risk disclosures from the company's 2024 Form 10-K - No material changes to market risk disclosures from the 2024 Form 10-K[172] Item 4. Controls and Procedures This section confirms the effectiveness of Teledyne's disclosure controls and procedures and reports no material changes to internal controls over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of June 29, 2025[173] - No material changes in internal controls over financial reporting occurred during the quarter ended June 29, 2025[174] PART II OTHER INFORMATION This section covers other required information, including legal proceedings, risk factors, officer trading arrangements, and a list of exhibits Item 1. Legal Proceedings This section refers to Note 15 of the financial statements for detailed information regarding legal proceedings, including trade compliance and environmental matters - Legal proceedings information is detailed in Note 15 of Part I, 'Financial Statements—Note 15—Commitments and Contingencies'[177] Item 1A. Risk Factors This section states no material changes to previously disclosed risk factors, with additional details on tariffs and foreign currency risks in Item 2 - No material changes to risk factors from the 2024 Form 10-K[177] - Additional information on tariffs and foreign currency exchange rate risks is provided in Item 2[177] Item 5. Other Information This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer trading arrangements (Rule 10b5-1 or non-Rule 10b5-1) were adopted or terminated in Q2 2025[178] Item 6. Exhibits This section lists all exhibits filed with the 10-Q report, including corporate organizational documents, agreements, and certifications - Exhibits include Restated Certificate of Incorporation, Bylaws, a Retirement, Severance and General Release Agreement, 302 and 906 Certifications, and various XBRL documents[179] Signatures This section confirms the official signing of the report by Stephen F. Blackwood, Executive Vice President and Chief Financial Officer, on July 25, 2025 - The report was signed by Stephen F. Blackwood, Executive Vice President and Chief Financial Officer, on July 25, 2025[181]