TELEDYNE TECHNOLOGIES INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 27, 2026

Note 1. 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 U.S. Securities and Exchange Commission (“SEC”). 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 generally accepted accounting principles 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 28, 2025 (“2025 Form 10-K”).

In the opinion of 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 September 27, 2026, and the consolidated results of operations, consolidated comprehensive income (loss) and consolidated cash flows for the third quarter and nine months ended September 27, 2026. The results of operations and cash flows for the third quarter ended September 27, 2026, are not necessarily indicative of the results of operations or cash flows to be expected for any subsequent quarter or the full fiscal year.

Recent Accounting Standards

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires public entities, on an interim and annual basis, to provide disclosure of specified information about costs and expenses in the notes to the financial statements. The new standard is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements.

Other ASUs issued but not effective until after September 27, 2026, are not expected to have a material effect on the Company’s consolidated financial position, annual results of operations and/or cash flows.

Note 2. Business Acquisitions

Pending Acquisition

Varex

On August 10, 2026, Teledyne and Varex Imaging Corporation (“Varex”) entered into a definitive agreement under which Teledyne will acquire Varex in a cash transaction valued at approximately $1.1 billion, which considers Varex’s outstanding equity awards and net debt. The Company plans to fund the Varex acquisition from cash on hand as well as available borrowings under its credit facility. The transaction is expected to close in early 2027 and is subject to customary closing conditions, including regulatory approvals and approval by Varex’s stockholders. After close, Varex will be included within the Digital Imaging segment. Prior to entering into the agreement, Teledyne acquired approximately 1.3 million shares of Varex for $13.9 million, and during the third quarter of 2026, Teledyne recorded a $10.6 million gain within Other income (expense), net, related to adjusting these shares to the market price at the end of the quarter. As of September 27, 2026, the investment in Varex is included within prepaid expenses and other current assets on the condensed consolidated balance sheet. Given its immateriality, other disclosures relating to this investment are not provided.

See Note 7 to these condensed consolidated financial statements for information regarding financing activities undertaken in connection with the pending acquisition.

2026 Acquisition

DD-Scientific

During the first quarter of 2026, the Company acquired DD-Scientific Holdings Limited and its subsidiary DD-Scientific Limited (together, “DD-Scientific”) for approximately $53.6 million in cash, net of cash acquired and certain adjustments. DD-Scientific, founded in 2011 and headquartered in Fareham, United Kingdom (“UK”), develops and manufactures high-performance gas sensors for critical applications in industries including industrial safety, healthcare and environmental compliance. DD-Scientific is included within the Instrumentation segment. Goodwill resulting from the DD-Scientific acquisition will not be deductible for tax purposes.

2025 Acquisitions

TransponderTech

During the fourth quarter of 2025, the Company acquired the TransponderTech business headquartered in Linkoping, Sweden from Saab AB for approximately $58.2 million in cash, net of cash acquired. The TransponderTech business includes a portfolio of connected commercial maritime products, including Automatic Identification System, Very High Frequency Data Exchange System and Global Navigation Satellite System technologies. TransponderTech is part of the Digital Imaging segment. The Company funded the acquisition from cash on hand. Goodwill resulting from the TransponderTech acquisition will not be deductible for tax purposes.

NL Acoustics

During the third quarter of 2025, the Company acquired the redeemable noncontrolling interest of NL Acoustics for $27.2 million in cash, with the acquisition of the noncontrolling interest treated as an equity transaction during the period.

Micropac

During the first quarter of 2025, the Company acquired Micropac Industries, Inc. (“Micropac”) for approximately $51.2 million in cash, net of cash acquired. 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 is part of the Aerospace and Defense Electronics segment. The Company funded the acquisition from cash on hand. Goodwill resulting from the Micropac acquisition will not be deductible for tax purposes.

Optical Systems and Advanced Electronics Systems (“Qioptiq”) businesses

During the first quarter of 2025, the Company acquired select aerospace and defense electronics businesses of Excelitas Technologies Corp. (“Excelitas”) for approximately$702.8 million in cash, net of cash acquired and certain adjustments. The acquisition includes the Optical Systems (“OS”) business, which is based in Northern Wales, UK, as well as the U.S.-based Advanced Electronics Systems (“AES”) business (collectively, “OS and AES businesses,” or “Qioptiq”). Qioptiq is part of the Aerospace and Defense Electronics segment. The Company funded the acquisition from available borrowings on the credit facility as well as from cash on hand. Goodwill resulting from the acquisition of the UK operations will not be deductible for tax purposes, but goodwill resulting from the acquisition of the U.S. operations will be deductible for tax purposes.

The following tables show the purchase price (net of cash acquired), goodwill acquired and acquired intangible assets for theacquisitions made in 2026 and 2025 (in millions):

(a) Net of cash acquired

(a) Net of cash acquired

The Company’s cost to acquire these acquisitions was allocated to the assets acquired and liabilities assumed based upon their respective fair values as of the date of the completion of the acquisition. The differences between the fair value of the consideration paid and the estimated fair value of the assets and liabilities acquired were recorded as goodwill. The fair value of the acquired identifiable assets and liabilities for TransponderTech and DD-Scientific is provisional pending finalization of the Company’s acquisition accounting, including the measurement of tax basis in certain jurisdictions and the resulting deferred taxes that might arise from book and tax basis differences, if any. Pro forma results of operations, the revenue and net income subsequent to the acquisition date, and a more detailed breakout of the major classes of assets and liabilities acquired for these acquisitions have not been presented because the effects of these acquisitions both individually and in the aggregate were not material to the Company’s financial results. The significant factors that resulted in recognition of goodwill for the 2026 and 2025 acquisitions included the acquired businesses’ market positions, growth opportunities in the markets in which they operate, experienced work force and established operating infrastructures. The results of these acquisitions have been included in Teledyne’s results since the dates of their respective acquisitions.

Note 3. Business Segments

Teledyne is a leading provider of sophisticated digital imaging products and software, instrumentation, aerospace and defense electronics, and engineered systems. The Company’s customers include government agencies, aerospace prime contractors, energy exploration and production companies, major industrial companies, and airlines. The Company hasfour reportable segments: Digital Imaging, Instrumentation, Aerospace and Defense Electronics, and Engineered Systems.

Segment results include net sales and operating income by segment but exclude corporate expenses. Corporate expense primarily includes administrative expenses relating to the corporate office not allocated to the segments.

In 2026, the Company completedone acquisition, and the financial results of this acquisition have been included since the date of the acquisition and is part of the Instrumentation segment. In 2025, the Company completed four acquisitions, and the financial results of these acquisitions have been included since the date of the acquisition and are part of the Digital Imaging and Aerospace and Defense Electronics segments. See Note 2 to these condensed consolidated financial statements for information regarding these 2026 and 2025 acquisitions.

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

(a) Net sales exclude inter-segment sales of $13.1 million for the third quarter of 2026.

(a) Net sales exclude inter-segment sales of $36.4 million for the first nine months of 2026.

(a) Net sales exclude inter-segment sales of $6.6 million for the third quarter of 2025.

(a) Net sales exclude inter-segment sales of $17.5 million for the first nine months of 2025.

Product Lines

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

The table below provides a summary of the net sales by product line for the Instrumentation segment (in millions):

Identifiable assets are those assets used in the operations of the segments. Corporate assets primarily consist of cash and cash equivalents, deferred taxes, pension assets, and other assets.

Identifiable assets for the Company’s business segments was as follows (in millions):

Note 4. Revenue Recognition and Contract Balances

Approximately 60% of the Company’s revenue was recognized at a point in time, with the remaining 40% of revenue recognized over time. The Company disaggregates its revenue from contracts with customers by customer type and geographic region for each segment, as management believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

With the exception of the Engineered Systems segment, net sales in each segment are primarily derived from fixed-price contracts. Net sales in the Engineered Systems segment are typically between 45% and 55% fixed-price contracts in a given reporting period, with the balance of net sales derived from cost-reimbursable type contracts. For the nine months ended September 27, 2026, approximately 48% of net sales in the Engineered Systems segment was derived from fixed-price contracts.

Contract Liabilities

The Company recognized revenue of $212.5 million during the nine months ended September 27, 2026, from contract liabilities that existed at the beginning of the year.

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 exclude unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity). As of September 27, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $5,514.4 million. The Company expects approximately 72% of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 28% recognized thereafter.

Changes in Contract Estimates at Completion

For over time contracts using the cost-to-cost method, the Company has an Estimate at Completion (“EAC”) process in which management reviews the progress and execution of the performance obligations. This EAC process requires management’s judgment relative to assessing risks, estimating contract revenue, determining reasonably dependable cost estimates, and making assumptions for scheduling and technical issues. The majority of revenue recognized over time uses an EAC process. Since certain contracts extend over a long 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 generally reviewed and reassessed quarterly.

The net aggregate effects of these changes in estimates on contracts accounted for under the cost-to-cost method in the first nine months of 2026 was $31.0 million of favorable operating income compared with $8.6 million of favorable operating income in the first nine months of 2025, with the first nine months of 2026 primarily related to favorable changes within the Digital Imaging segment. None of the effects of changes in estimates on any individual contract were material to the condensed consolidated statements of income (loss) for any period presented.

Note 5. Goodwill and Acquired Intangible Assets

Goodwill

The carrying value of goodwill by segment was as follows (in millions):

Acquired intangible assets

Acquired intangible assets consisted of the following (in millions):

An evaluation of the carrying value of goodwill and indefinite-lived intangibles is required to be performed on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

Based on the results of the Company’s annual assessment in the fourth quarter of 2025, all reporting units with the exception of the FLIR reporting unit in the Digital Imaging segment had estimated fair values that significantly exceeded their respective carrying value. For all reporting units, including the FLIR reporting unit, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the reporting unit is below its carrying value. As such, no interim impairment review was required. The Company will perform its annual analysis during the fourth quarter of 2026.

Based on the results of the Company’s annual assessment in the fourth quarter of 2025, the estimated fair value of all material indefinite-lived trademarks, with the exception of the FLIR indefinite-lived trademark, significantly exceeded their respective carrying value. For all indefinite-lived trademarks, including the FLIR trademark, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the trademark is below its carrying value. As such, no interim impairment review was required. The Company will perform its annual analysis during the fourth quarter of 2026.

Note 6. Supplemental Balance Sheet Information

Cash Equivalents

The Company had $164.7 million and $136.0 million of cash equivalents at September 27, 2026, and December 28, 2025, respectively. Cash equivalents consist of highly liquid money-market mutual funds with maturities of three months or less when purchased.

Accounts Receivable, Net

Accounts receivable is presented net of an allowance for estimated credit losses of $10.8 million at September 27, 2026 and $11.0 million at December 28, 2025.

Inventories, Net

Inventories are stated at the lower of cost or net realizable value and primarily valued on an average cost or first-in, first-out method. Inventory adjustments are recorded when inventory is considered to be excess or obsolete based upon an analysis of actual on-hand quantities on a part-level basis to forecasted product demand and historical usage. Inventory balances are summarized as follows (in millions):

Product Warranty Costs

Some of the Company’s products are subject to specified warranties, and the Company reserves for the estimated cost of product warranties on a product-specific basis. Facts and circumstances related to a product warranty matter and cost estimates to return, repair and/or replace the product are considered when establishing a product warranty reserve. The adequacy of the preexisting warranty reserve is assessed regularly, and the reserve is adjusted as necessary based on a review of historical warranty experience with respect to the applicable business or products, as well as the length and actual terms of the warranties, which are typically one year. The product warranty reserve is included in current accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets.