TELEDYNE TECHNOLOGIES INC

Note 7. Supplemental Balance Sheet Information

A rollforward of the warranty reserve, including both short and long-term reserve balances, for the years 2024, 2023 or 2022 was as follows:

Note 8. Long-Term Debt

As of December 29, 2024, no borrowings were outstanding under our $1.20 billion credit facility. Excluding interest and fees, no payments are due under the $1.20 billion unsecured credit facility (“credit facility”) until it matures in June 2029. Borrowings under our credit facility and term loan are at variable rates which are, at our option, tied to a base rate, Eurocurrency rate or equivalent as defined in our credit agreements. Available borrowing capacity under the credit facility, which is reduced by borrowings and certain outstanding letters of credit, was $1,170.7 million at December 29, 2024. The credit agreement requires the Company to comply with various financial and operating covenants and at December 29, 2024, the Company was in compliance with these covenants. At December 29, 2024, Teledyne had $52.9 million in outstanding letters of credit.

During 2024, the Company repaid the $450.0 million Fixed Rate Senior Notes due April 2024 and the $150.0 million term loan due October 2024.

During 2023, the Company repaid $125.0 million of amounts outstanding on its credit facility, the $300.0 million Fixed Rate Senior Notes due April 2023, and the remaining $245.0 million on its term loan due May 2026. The Company also repurchased and retired $10.0 million of its Fixed Rate Senior Notes due April 2031, recording a $1.6 million non-cash gain on the extinguishment of this debt.

Maturities of long-term debt as of December 29, 2024 (in millions):

The Company has no sinking fund requirements.

Total net interest expense, including credit facility fees and other bank charges, was $57.9 million, $77.3 million and $89.3 million for 2024, 2023 and 2022, respectively. Cash payments for interest and credit facility fees and other bank charges totaled $73.4 million, $87.9 million and $79.3 million for 2024, 2023 and 2022, respectively.

Note 9. Income Taxes

Income (loss) before income taxes included the following (in millions):

The provision for income taxes included the following (in millions):

The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate:

Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, and differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits or costs to be recognized when those temporary differences reverse.

The categories of assets and liabilities that have resulted in differences in the timing of the recognition of income and expense were as follows (in millions):

The Company is not permanently reinvested with respect to unremitted earnings of most of its foreign subsidiaries. The Company is subject to U.S. income tax on substantially all of these foreign earnings, while any remaining foreign earnings are eligible for potential U.S. tax deductions. As of December 29, 2024, the incremental tax cost to repatriate these earnings was not material.

The Company continues to make an indefinite reinvestment assertion on the unrepatriated prior year earnings of its material subsidiaries in Canada. Those unremitted earnings were used to finance Canadian operations and investments. The Company estimates that future cash generation will be sufficient to meet future domestic cash requirements. The unrecognized deferred tax liability for the historical unremitted Canadian earnings is estimated between at $23.0 million to $26.0 million of potential tax.

In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including recent financial performance, scheduled reversals of temporary differences, projected future taxable income, availability of taxable income in carryback periods and tax planning strategies. Based on a review of such information, management believes that it is possible that some portion of deferred tax assets will not be realized as a future benefit and therefore has recorded a valuation allowance. The valuation allowance for deferred tax assets increased by $2.0 million in 2024.

At December 29, 2024, the Company had approximately $21.7 million of net operating loss carryforward from the Company’s foreign entities including Denmark and The Netherlands, of which $13.1 million have no expiration dates and $8.6 million have expiration dates ranging from 2025 to 2044. The Company had Canadian capital loss carryforward in the amount of $3.3 million which has no expiration date. In addition, the Company had domestic federal and state net operating loss carryforward of $15.3 million and $192.6 million, respectively. Generally, federal net operating loss carryforward amounts are limited in their use by earnings of certain acquired subsidiaries. Of the $15.3 million federal net operating loss carryforward, $14.5 million have no expiration dates and $0.8 million have expiration dates ranging from 2025 to 2036. The state net operating loss carryforward amounts have expiration dates ranging from 2025 to 2043.

The Company had aggregate Canadian federal and provincial investment tax credits of $10.8 million, which have expiration dates ranging from 2030 to 2042. The Company had United States federal credit carryforward of $4.6 million which have expiration dates ranging from 2031 to 2042. The Company had Spanish federal research and development credit carryforward in the amount of $2.8 million, which have expiration dates ranging from 2025 to 2042. Finally, the Company had state tax credits of $10.6 million, of which $5.5 million have no expiration date and $5.1 million have expiration dates ranging from 2025 to 2048.

(a) Beginning and end of year balances include amounts offset by deferred tax and amounts offset by potential refunds in other taxing jurisdictions.

In the next 12 months, the Company anticipates the total unrecognized tax benefit for various federal, state and foreign tax items may be reduced by $11.9 million due to the expiration of statutes of limitation for various federal, state and foreign tax issues.

Teledyne recognized net tax benefits and expense for interest and penalties related to unrecognized tax benefits within the provision for income taxes in our statements of income (loss) of $15.8 million of benefits, $10.3 million of benefits and $12.2 million of benefits, for 2024, 2023 and 2022, respectively. Interest and penalties in the amount of $8.5 million, $36.9 million and $45.6 million were recognized in the 2024, 2023 and 2022 balance sheets, respectively. Substantially all of the unrecognized tax benefits as of December 29, 2024, if recognized, would affect our effective tax rate.

Teledyne files income tax returns in the United States federal and state jurisdictions and in various foreign jurisdictions. The Company has substantially concluded income tax matters in the United States through 2016, in Canada through 2012, in the United Kingdom through 2016, and in France through 2020.

Cash payments for federal, state and foreign income taxes were $213.2 million for 2024, which are net of $20.1 million in tax refunds. Cash payments for federal, state and foreign income taxes were $313.0 million for 2023, which are net of $14.7 million in tax refunds. Cash payments for federal, state and foreign income taxes were $212.4 million for 2022, which are net of $20.1 million in tax refunds.

Note 10. Pension Plans and Postretirement Benefits

Pension Plans

Teledyne hastwo domestic qualified defined benefit pension plans covering substantially all U.S. employees hired before January 1, 2004. As of January 1, 2004, new Teledyne hires participate in a defined contribution plan only. The Company also has several small domestic non-qualified and foreign-based defined benefit pension plans. The measurement date for the Company’s pension plans is December 31.

The Company’s U.S. domestic qualified pension plans purchased group annuity contracts from insurance companies and paid a total annuity premium of $17.8 million in 2024. These annuity contracts transfer the obligation to the insurance companies to guarantee the full payment of all annuity payments to existing retired pension plan participants or their surviving beneficiaries. These annuity contracts assume all investment risk associated with the assets that were delivered as the annuity contract premiums. These annuity contracts covered 331 existing retired pension plan participants at the time of purchase. The Company did not have similar purchases in 2023.

The domestic qualified pension plans allow participants to elect a lump-sum payment at retirement. In 2024, 2023 and 2022, the Company made lump sum payments of $9.0 million, $17.3 million and $24.8 million, respectively, from the domestic qualified pension plans assets to certain participants in the plan. Each year beginning with 2014, the Society of Actuaries released revised mortality tables, which updated life expectancy assumptions. In consideration of these tables, each year the Company reviews the mortality assumptions used in determining our pension and postretirement obligations.

Net periodic benefit expense (income) allocation

Obligations and funded status

The expected long-term rate of return on plan assets is reviewed annually, taking into consideration the Company’s asset allocation, historical returns on the types of assets held, the current economic environment, and prospective expectations. Teledyne determines the discount rate based on a model which matches the timing and amount of expected benefit payments to maturities of high-quality corporate bonds priced as of the pension plan measurement date. The yields on the bonds are used to derive a discount rate for the obligation.

The following assumptions were used to measure the net benefit income or expense within each respective year for the domestic qualified plans and the foreign plans:

For its domestic and foreign pension plans the Company is projecting a weighted-average long-term rate of return on plan assets of 7.05% and 4.84% in 2025, respectively.

The key assumptions used to measure the benefit obligation at each respective year-end were:

Plan assets

The following tables sets forth the funded status and amounts recognized in the consolidated balance sheets at year-end 2024 and 2023 for the domestic qualified and nonqualified pension plans and the foreign-based pension plans for benefits provided to certain employees (in millions):

Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows (in millions):

At year-end 2024 and 2023 the Company had an accumulated non-cash reduction to stockholders’ equity of $235.4 million and $249.6 million, respectively, related to its pension and postretirement plans. The accumulated non-cash reductions to stockholders’ equity did not affect net income and were recorded net of accumulated deferred taxes of $74.3 million at year end 2024 and $77.0 million at year end 2023.

Investments

The Company has an active management policy for the pension assets in the qualified domestic pension plans. As of December 29, 2024, the long-term asset allocation target for the domestic plans consists of approximately 45% in equity instruments and approximately 55% in fixed income instruments.

The pension plans’ investments are stated at fair value. Plan investments that are considered a level 1 fair value hierarchy and are valued at quoted market prices in active markets. Plan investments that are considered a level 2 fair value hierarchy and are valued based on observable market data. Plan investments that would be considered a level 3 fair value hierarchy are valued based on management’s own assumption about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

Certain investments are measured at fair value using net asset values as a practical expedient and are not required to be categorized in the fair value hierarchy table listed below. As such, the balance of these investments measured at net asset value has been included in the table below to permit reconciliation to the plan asset amounts previously disclosed.

The fair values of the Company’s net pension assets, by fair value hierarchy, for both the U.S. and foreign pension plans as of December 29, 2024, by asset category are as follows (in millions):

(a) There were no transfers of plan assets between the three levels of the fair value hierarchy during the year.

(b) Reflects cash and cash equivalents held in overnight cash investments.

(c) The mutual funds are invested in equity securities.

The fair values of the Company’s net pension assets, by fair value hierarchy, for both the U.S. and foreign pension plans as of December 31, 2023, by asset category are as follows (in millions):

(a) There were no transfers of plan assets between the three levels of the fair value hierarchy during the year.

(b) Reflects cash and cash equivalents held in overnight cash investments.

(c) The mutual funds are invested in equity securities.

U.S. equities are valued at the closing price reported in an active market on which the individual securities are traded. U.S. equities and non-U.S. equities are also valued at the net asset value provided by the independent administrator or custodian of the commingled fund. The net asset value is based on the value of the underlying equities, which are traded on an active market. Corporate bonds are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments. Fixed income investments are also valued at the net asset value provided by the independent administrator or custodian of the fund. The net asset value is based on the underlying assets, which are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments. Alternative investments are primarily valued at the net asset value as determined by the independent administrator or custodian of the fund. The net asset value is based on the underlying investments, which are valued using inputs such as quoted market prices of identical instruments or values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments.

Defined Benefit Postretirement Plans

The Company sponsors several postretirement defined benefit plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for certain eligible retirees. Total cost for these plans was less than $1.0 million for each fiscal year 2024, 2023 and 2022.

Deferred Contribution Plans

The Company’s contributions associated with its 401(k) plans were $30.3 million, $31.4 million and $29.7 million, for 2024, 2023 and 2022, respectively.

Deferred Compensation Plans

The Company has non-qualified executive deferred compensation plans that provide supplemental retirement income benefits for a select group of management. This plan permits eligible employees to make salary and bonus deferrals that are 100% vested. Teledyne has an unsecured obligation to pay in the future the value of the deferred compensation adjusted to reflect the performance, whether positive or negative, of selected investment measurement options chosen by each participant during the deferral period. In addition, the Company has separate deferred compensation plans acquired in connection with the FLIR and ETM acquisitions, and these plans were frozen at the end of fiscal years 2021 and 2022, respectively.

As of December 29, 2024 and December 31, 2023, $111.3 million and $102.2 million, respectively, is included in other long-term liabilities related to deferred compensation liabilities on the consolidated balance sheets. Additionally, the Company purchased life insurance policies on certain participants to potentially offset these unsecured obligations. These policies are recorded at their cash surrender value as determined by the insurance carrier. The cash surrender value of these policies was $111.0 million and $101.3 million, as of December 29, 2024 and December 31, 2023, respectively, and is primarily included in other non-current assets on the consolidated balance sheets.

Note 11. Stockholders’ Equity

Shares issued from treasury stock include stock options exercised as well as shares issued under certain other compensation plans.

Treasury Stock

During 2024, the Company repurchased approximately 0.9 million shares for $354.0 million with a weighted-average price of $399.78 per share. All of the Company’s share repurchases were settled between April 2024 and October 2024.

Stock Options

The Company recorded $12.3 million, $12.4 million, and $17.9 million for stock option expense for 2024, 2023 and 2022, respectively. The Company issues shares of common stock upon the exercise of stock options.

During 2024 and 2023, the amount of cash received from the exercise of stock options was $37.9 million and $45.4 million, respectively. The total pretax intrinsic value of options exercised during 2024 and 2023 (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) was $72.4 million and 111.0 million, respectively. At December 29, 2024, the intrinsic value of stock options outstanding was $219.3 million and the intrinsic value of stock options exercisable was $213.1 million.

At December 29, 2024, there was $10.3 million of total unrecognized compensation cost related to non-vested stock option awards which is expected to be recognized over a weighted-average period of 1.7 years. This amount can be impacted by employee retirements or terminations.

The Company didnot grant stock options in 2023. Based on the assumptions used in the valuation of stock options, the grant date weighted average fair value of stock options granted in 2024 and 2022 was $171.20 and $124.44, respectively.

Stock option transactions for Teledyne’s stock option plans are summarized as follows:

The following table provides certain information with respect to stock options outstanding and stock options exercisable at December 29, 2024, under the stock option plans.

Restricted Stock

The following table shows restricted stock award activity:

Employee Time-based Restricted Stock Units

The Company recorded $15.6 million, $14.2 million and $7.8 million in compensation expense related to restricted stock units to employees for fiscal years 2024, 2023 and 2022 respectively, which is primarily recorded in the Digital Imaging segment. At December 29, 2024, there was $28.1 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.8 years. This amount can be impacted by employee retirements or terminations.

Employee Performance-based Restricted Stock Awards

Under Teledyne’s restricted stock award program key officers and executives receive a grant of stock equal to a specified percentage of the participant’s annual base salary at the date of grant. The restricted stock is subject to transfer and forfeiture restrictions during an applicable “restricted period”. The restrictions have both time-based and performance-based components. The restricted period expires (and the restrictions lapse) on the third anniversary of the date of grant, subject to the achievement of stated performance objectives over a specified three-year performance period. If employment is terminated (other than by death, retirement or disability) during the restricted period, the stock grant is forfeited.

The estimated expense for restricted stock awards with both time-based and performance-based components to employees is based on a lattice-based simulation which takes into consideration several factors including volatility, risk free interest rates and the correlation of Teledyne’s stock price with the comparator, which has been the S&P 500 Index for awards granted since 2021. The Company recorded $6.6 million, $5.2 million and $5.1 million in compensation expense related to restricted stock awards to employees for fiscal years 2024, 2023 and 2022, respectively. At December 29, 2024, there was $6.8 million of total estimated unrecognized compensation cost related to non-vested awards which is expected to be recognized over a weighted-average period of approximately 1.3 years.

Non-Employee Directors Restricted Stock

Non-employee directors each received restricted stock units valued at $170,000 in 2024, 2023 and 2022 or valued at half the amount for a person who becomes a director for the first time after the date of the Annual Meeting. The restricted stock units generally vestone year following the date of grant and are settled in shares of common stock on the date of vesting unless a director has elected to defer settlement of the award until his or her separation from Board service. The annual expense related to non-employee director’s restricted stock units was $1.7 million for 2024, 2023 and 2022, with an immaterial amount of unrecognized compensation cost that will be recognized over the first half of 2025.

Note 12. Earnings Per Share

The following table sets forth the computations of basic and diluted earnings per common share (amounts in millions, except per share data):

In 2024, 2023 and 2022, the Company excluded 0.2 million of stock options in the computation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive.

Note 13. Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in AOCI for the fiscal years ended December 29, 2024, and December 31, 2023:

The reclassification out of AOCI for the fiscal years ended December 29, 2024, and December 31, 2023, are as follows:

Note 14. Derivative Instruments

The Company periodically enters into foreign currency forward contracts designated as cash flow hedges to minimize foreign currency risk, primarily to Canadian dollars and British pounds. As of December 29, 2024, foreign currency forward contracts in Canadian dollars designated as cash flow hedges have maturities ranging from March 2025 to February 2026. There were no open contracts forward currency forward contracts in British pounds designated as cash flow hedges as of December 29, 2024.

We converted a U.S. dollar denominated, variable rate obligation of a European subsidiary, into a euro fixed rate obligation using a receive float, pay fixed cross currency swap. This cross-currency swap was designated as a cash flow hedge and matured in October 2024.

In addition, the Company utilizes foreign currency forward contracts which are not designated as hedging instruments for accounting purposes to mitigate foreign exchange rate risk associated with foreign currency denominated monetary assets and liabilities, including intercompany receivables and payables. 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.

The following is a summary of notional amounts outstanding under foreign currency forward contracts, cross-currency swap agreements and their respective fair value amounts recorded in the consolidated balance sheets (in millions):

All derivatives are recorded on the balance sheet at fair value. The accounting for income and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and qualifies for hedge accounting. Teledyne does not use foreign currency forward contracts for speculative or trading purposes.

The following is a summary of the gain (loss) included in the consolidated statements of income (loss) and comprehensive income (loss) related to the derivative instruments described above (in millions):

(a) Effective portion

(b) Amount reclassified to offset earnings impact of liability hedged by cross currency swap

Net deferred losses recorded in AOCI, net of tax, for forward contracts that will mature in the next 12 months total $2.2 million. These losses are expected to be offset by anticipated gains in the value of the forecasted underlying hedged item.

Note 15. Fair Value Measurements

The Company’s financial assets and liabilities carried at fair value are primarily comprised of derivative contracts used to hedge the Company’s foreign currency risk. The Company has not elected to measure any additional financial instruments or other items at fair value.

Financial Instruments Recorded at Fair Value

The fair values of the Company’s derivative financial instruments are presented below. All fair values for these derivatives were measured using Level 2 hierarchy information as defined by the accounting policies (in millions):

Gross derivative assets and liabilities are subject to legally enforceable master netting agreements, for which we have not elected to present net amounts on the consolidated balance sheets. The effect of such right of setoff on the Company’s financial position were $0.2 million and $0.6 million, as of December 29, 2024, and December 31, 2023, respectively.

Financial Instruments Not Recorded at Fair Value

The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturities of these assets and liabilities.

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 and is valued based on observable market data. As of December 29, 2024 and December 31, 2023, the aggregate fair values of our borrowings were $2,395.0 million and $2,965.3 million, respectively, and the carrying values were $2,666.2 million and $3,266.0 million, respectively.

The cost, if any, to terminate off-balance sheet financial instruments (primarily letters of credit) is not significant.

Note 16. Leases

Operating Leases

Teledyne has more than 150 long-term operating lease agreements for manufacturing facilities and office space. These agreements frequently includeone or more renewal options and may require the Company to pay for non-lease components such as utilities, taxes, insurance and maintenance expense. The Company accounts for lease and non-lease components as a single lease component when the payments are fixed. Variable payments included in the lease agreement are expensed as incurred. No lease agreement imposes a restriction on the Company’s ability to engage in financing transactions or enter into further lease agreements. At December 29, 2024, Teledyne has right-of-use assets of $128.6 million included in non-current other assets, net on the consolidated balance sheets.

At December 29, 2024, 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 5.7 years and the weighted average discount rate is approximately 4.25%. Rental expense under operating leases, including leases with a term of 12 months or less, net of immaterial sublease income, was $47.9 million in 2024, $43.9 million in 2023 and $45.1 million in 2022. Variable lease expense was $1.3 million in 2024, $1.6 million in 2023 and $5.9 million in 2022. Cash paid for amounts included in the measurement of lease liabilities was $39.5 million for 2024 and $39.5 million for 2023. Right-of-use assets obtained in exchange for lease obligations was $13.8 million for 2024 and $21.7 million for 2023.

Finance Leases and Subleases

The Company’s finance leases and subleases are not material.

Note 17. Commitments and Contingencies

Trade Compliance Matters

Teledyne has made voluntary disclosures to the U.S. Department of State and the U.S. Department of Commerce, including to the Bureau of Industry and Security (“BIS”) with respect to Teledyne FLIR shipments of products from non-U.S. jurisdictions which were not authorized due to a potentially incorrect de minimis calculation methodology under section 734.4 and Supplement No. 2 of the Export Administration Regulations (“EAR”). Furthermore, Teledyne has made voluntary disclosures to export authorities in jurisdictions outside the United States for certain potential violations of local export laws, which may increase its penalty exposure.

At this time, based on available information, the Company is unable to reasonably estimate the time it may take to resolve these matters or the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection with these matters. However, an unfavorable outcome could result in substantial fines and penalties or loss or suspension of export privileges or of particular authorizations that could be material to the Company’s financial position, results of operations or cash flows in and following the period in which such an outcome becomes estimable or known.

Environmental Remediation Obligations

The Company is subject to federal, state and local environmental laws and regulations which require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations, including sites at which the Company has been identified as a potentially responsible party under the federal Superfund laws and comparable state laws.

At December 29, 2024, the Company’s reserves for environmental remediation obligations totaled $6.5 million, of which $3.0 million is included incurrent accrued liabilities and the remainder included inother long-term liabilities. The Company periodically evaluates whether it may be able to recover a portion of future costs for environmental liabilities from its insurance carriers and from third parties. The timing of expenditures depends on a number of factors that vary by site, including the nature and extent of contamination, the number of potentially responsible parties, the timing of regulatory approvals, the complexity of the investigation and remediation, and the standards for remediation. The Company expects that it will expend present accruals over many years and will complete remediation of all sites with which it has been identified in up tothirty years.

Other Claims and Legal Matters

The Company is working to resolve a civil investigation by the U.S. Department of Justice relating to an ejection seat sequencer program and deliveries to the U.S. Government between 2006 and 2018. Various claims (whether based on U.S. Government or Company audits and investigations or otherwise) may be asserted against the Company related to its U.S. Government contract work, including claims based on business practices and cost classifications and actions under the False Claims Act. Although such claims are generally resolved by detailed fact-finding and negotiation, on those occasions when they are not so resolved, civil or criminal legal or administrative proceedings may ensue. Depending on the circumstances and the outcome, such proceedings could result in fines, penalties, compensatory and treble damages or the cancellation or suspension of payments under one or more U.S. Government contracts. Under government regulations, a company, or one or more of its operating divisions or units, can also be suspended or debarred from government contracts based on the results of investigations. However, although the outcome of these matters cannot be predicted with certainty, management does not believe there is any audit, review or investigation currently pending against the Company of which management has knowledge that is likely to result in suspension or debarment of the Company, or that is otherwise likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

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, commercial contracts, employment and employee benefits. 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 condition.

Note 18. Subsequent Events

Micropac

On December 30, 2024, the Company acquired Micropac Industries, Inc. (“Micropac”) for approximately $57.6 million in cash, net of cash acquired, and subject to certain adjustments. Micropac, founded in 1963 and headquartered in Garland, Texas designs and manufactures microelectronic circuits, optoelectronic components, and sensor and display assemblies, primarily for military, aerospace, and medical applications. Micropac will be part of the Aerospace & Defense Electronics segment. The Company funded the acquisition from cash on hand.

Qioptiq and Advanced Electronics Systems businesses

On February 3, 2025, the Company acquired select aerospace and defense electronics businesses of Excelitas Technologies Corp. for approximately $700.3 million in cash, net of cash acquired, and subject to certain adjustments. The acquisition includes the Optical Systems (“OS”) business known under the Qioptiq® brand based in Northern Wales, UK, as well as the United States based Advanced Electronic Systems (“AES”) business. The OS and AES businesses will be part of the Aerospace and Defense Electronics segment. The Company funded the acquisition from available borrowings on the credit facility as well as cash on hand.