SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

TELEDYNE TECHNOLOGIES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		25-1843385 (I.R.S. Employer Identification Number)
1049 Camino Dos Rios Thousand Oaks, California (Address of principal executive offices)		91360-2362 (Zip Code)

(805) 373-4545
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ     No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o     No þ

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at April 30, 2008
Common Stock, $.01 par value per share		35,438,789 shares

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS

						PAGE
Part I Financial Information							2
Item 1.		Financial Statements					2
		Condensed Consolidated Balance Sheets					2
		Condensed Consolidated Statements of Income					3
		Condensed Consolidated Statements of Cash Flows					4
		Notes to Condensed Consolidated Financial Statements					5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations					16
Item 3.		Quantitative and Qualitative Disclosures About Market Risk					23
Item 4.		Controls and Procedures					24
Part II Other Information							24
Item 1A.		Risk Factors					24
Item 4.		Submission of Matters to a Vote of Security Holders					24
Item 6.		Exhibits					25
Signatures							26
EXHIBIT 10.2
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in millions, except share amounts)

		March 30,				December 30,
		2008				2007
		(Unaudited)
Assets
Current Assets
Cash and cash equivalents		$	21.2			$	13.4
Accounts receivable, net			282.1				241.1
Inventories, net			204.2				174.6
Deferred income taxes, net			36.6				34.5
Prepaid expenses and other current assets			15.9				13.1
Total current assets			560.0				476.7
Property, plant and equipment, at cost, net of accumulated depreciation and amortization of $226.6 at March 30, 2008 and $218.3 at December 30, 2007			187.2				177.2
Deferred income taxes, net			49.9				56.9
Goodwill, net			450.3				351.6
Acquired intangibles, net			97.4				61.7
Other long-term assets			36.8				35.3
Total Assets		$	1,381.6			$	1,159.4
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	122.9			$	105.1
Accrued liabilities			160.8				157.1
Current portion of long-term debt and capital lease obligation			0.9				0.8
Total current liabilities			284.6				263.0
Long-term debt and capital lease obligation			299.5				142.4
Accrued pension obligation			74.2				74.3
Accrued postretirement benefits			22.4				22.9
Minority interest			9.9				8.9
Other long-term liabilities			126.0				117.7
Total Liabilities			816.6				629.2
Stockholders’ Equity
Common stock, $0.01 par value; outstanding shares 35,323,885 at March 30, 2008 and 35,150,117 at December 30, 2007			0.4				0.4
Additional paid-in capital			213.9				206.9
Retained earnings			412.0				384.1
Accumulated other comprehensive loss			(61.3	)			(61.2	)
Total Stockholders’ Equity			565.0				530.2
Total Liabilities and Stockholders’ Equity		$	1,381.6				1,159.4

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 30, 2008 AND APRIL 1, 2007
(Unaudited — Amounts in millions, except per-share amounts)

		First Quarter
		2008				2007
Net Sales		$	451.8			$	385.6
Costs and expenses
Cost of sales			315.3				272.0
Selling, general and administrative expenses			88.8				76.7
Total costs and expenses			404.1				348.7
Income before other income and expense and income taxes			47.7				36.9
Other income (expense), net			(0.2	)			0.3
Interest and debt expense, net			(3.0	)			(3.6	)
Minority interest			(1.0	)			(0.7	)
Income before income taxes			43.5				32.9
Provision for income taxes			15.6				12.4
Net income		$	27.9			$	20.5
Basic earnings per common share		$	0.79			$	0.59
Weighted average common shares outstanding			35.2				34.8
Diluted earnings per common share		$	0.77			$	0.57
Weighted average diluted common shares outstanding			36.3				35.8

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 30, 2008 AND APRIL 1, 2007
(Unaudited — Amounts in millions)

		Three Months
		2008				2007
Cash flow from operating activities
Net income		$	27.9			$	20.5
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization			10.7				7.7
(Gain) loss on disposal of fixed assets			0.1				(0.1	)
Deferred income taxes			3.7				(3.1	)
Stock option compensation expense			1.9				1.7
Excess income tax benefits from stock options			(1.1	)			(0.6	)
Minority interest in net income of consolidated subsidiaries			1.0				0.7
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Increase in accounts receivable			(26.6	)			(14.5	)
Increase in inventories			(10.7	)			(2.8	)
Decrease in prepaid expenses and other assets			—				1.1
Increase in accounts payable			12.9				6.2
Increase (decrease) in accrued liabilities			(8.2	)			3.6
Increase in income taxes payable, net			5.9				12.6
Increase (decrease) in long-term assets			(1.4	)			0.3
Increase in other long-term liabilities			7.4				0.9
Increase (decrease) in accrued pension obligation			(0.1	)			2.8
Decrease in accrued postretirement benefits			(0.5	)			(0.5	)
Other operating, net			(0.3	)			—
Net cash provided by operating activities			22.6				36.5
Cash flow from investing activities
Purchases of property, plant and equipment			(8.7	)			(12.3	)
Purchase of businesses, net of cash acquired			(166.2	)			(36.1	)
Proceeds from sale of assets			—				0.5
Net cash used by investing activities			(174.9	)			(47.9	)
Cash flow from financing activities
Net proceeds from debt, net			157.2				12.5
Proceeds from exercise of stock options			1.8				1.6
Excess income tax benefits from stock options			1.1				0.6
Net cash provided by financing activities			160.1				14.7
Increase in cash and cash equivalents			7.8				3.3
Cash and cash equivalents—beginning of period			13.4				13.0
Cash and cash equivalents—end of period		$	21.2			$	16.3

The accompanying notes are an integral part of these financial statements.

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2008

Note 1. General

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Teledyne Technologies Incorporated (Teledyne Technologies 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 as they apply to interim reporting. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto in Teledyne Technologies’ Annual Report on Form 10-K for the fiscal year ended December 30, 2007 (2007 Form 10-K).

In the opinion of Teledyne Technologies’ 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 Technologies’ consolidated financial position as of March 30, 2008, and the consolidated results of operations and cash flows for the three months then ended. The results of operations and cash flows for the period ended March 30, 2008 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 reclassifications have been made to the financial statements and notes for the prior year to conform to the 2008 presentation. In the fourth quarter of 2007, the company realigned Teledyne Energy Systems, Inc., Teledyne Turbine Engines and Teledyne Battery Products in a new segment called Energy and Power Systems. Both the turbine engine business and the battery products business were previously part of the Aerospace Engines and Components segment. In addition, the Systems Engineering Solutions segment was renamed Engineered Systems. Previously reported segment financial data for the first quarter of 2007 reflects the new segment presentation to provide comparability between periods. This segment realignment had no effect on the Company’s consolidated financial position, results of operations or cash flows for the periods presented and also did not affect the results of the Electronics and Communications or Engineered Systems segments.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company adopted SFAS No. 159 effective, December 31, 2007 and did not elect the fair value measurement option for any of our financial assets or liabilities.

In June 2007 the FASB ratified EITF No. 07-3, (“EITF 07-3”), “Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities”. EITF 07-3 requires non-refundable advance payments for goods and services to be used in future research and development activities to be recorded as an asset and the payments to be expensed when the research and development activities are performed. EITF 07-3 is effective for fiscal years beginning after December 15, 2007. The Company adopted EITF 07-3 effective, December 31, 2007 and it did not have an effect on the Company’s consolidated results of operations or financial position.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” (“SFAS No. 157”) which defines fair value, establishes a framework in generally accepted accounting principles for measuring fair value, and expands disclosures about fair value measurements. This standard only applies when other standards require or permit the fair value measurement of assets and liabilities. It does not increase the use of fair value measurement. SFAS No. 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position (“FSP”) 157-1 “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” which removed leasing transactions accounted for under SFAS No. 13 and related guidance from the scope of SFAS No. 157. Also in February 2008, the FASB issued FSP 157-2 “Partial Deferral of the Effective Date of Statement No. 157” (FSP 157-2), deferred the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The implementation of SFAS No. 157 for financial assets and financial liabilities, effective December 31, 2007, did not have a material impact on our consolidated financial position and results of operations. The Company is currently assessing the impact of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities on its consolidated financial position and results of operations.

Note 2. Business Combinations

On February 1, 2008, Teledyne Technologies through its subsidiary, Teledyne Scientific & Imaging, LLC, completed the acquisition of assets of Judson Technologies, LLC (“Judson”) for $27.0 million in cash. Judson, headquartered in Montgomeryville, Pennsylvania, manufactures high performance infrared detectors utilizing a wide variety of materials such as Mercury Cadmium Telluride (“HgCdTe”), Indium Antimonide (“InSb”), and Indium Gallium Arsenide (“InGaAs”), as well as tactical dewar and cooler assemblies and other specialized standard products for military, space, industrial and scientific applications. Judson had sales of $13.8 million for its fiscal year ended December 31, 2006. Teledyne operates this business under the name Teledyne Judson Technologies.

On January 31, 2008, Teledyne Technologies through its subsidiary, Teledyne Limited, acquired all of the outstanding stock of S G Brown Limited and its wholly-owned subsidiary TSS (International) Limited (together “TSS International”) for GBP 29.1 million in cash (approximately $57.1 million). Total cash paid, net of cash acquired was $54.8 million. TSS International, headquartered in Watford, United Kingdom, designs and manufactures inertial sensing, gyrocompass navigation and subsea pipe and cable detection systems for offshore energy, oceanographic and military marine markets. TSS International had sales of GBP 12.0 million (approximately $23.9 million) for its fiscal year ended March 31, 2007. The acquired businesses operate under the names Teledyne SG Brown Limited and Teledyne TSS Limited.

On December 31, 2007, Teledyne Technologies through its subsidiary, Teledyne Instruments, Inc., completed the acquisition of assets of Impulse Enterprise (“Impulse”) for $34.9 million in cash, net of a $0.1 million purchase price adjustment. Impulse, headquartered in San Diego, California, manufactures waterproof neoprene and glass reinforced epoxy connector products for harsh environments. Impulse had sales of $16.8 million for its fiscal year ended December 31, 2006. Teledyne operates this business under the name Teledyne Impulse.

On December 31, 2007, Teledyne Technologies through its subsidiary, Teledyne Reynolds, Inc., acquired Storm Products Co. (“Storm”) for $47.5 million in cash. Storm, with principal operations in Dallas, Texas and Woodridge, Illinois, manufactures specialty wire, cable and interconnect products, as well as flexible and semi-rigid microwave cable assemblies for defense, environmental monitoring, energy exploration and industrial customers. Storm had sales of $45.7 million for its fiscal year ended March 31, 2007. Teledyne operates this business under the name Teledyne Storm Products, Inc.

On March 30, 2007, Teledyne Technologies through its subsidiary, Teledyne Instruments, Inc., completed the acquisition of assets of D.G. O’Brien, Inc. (“DGO”) for consideration of $37.1 million, which includes a $1.0 million purchase price adjustment. DGO, headquartered in Seabrook, New Hampshire, manufacturers highly reliable electrical and fiber-optic interconnect systems, primarily for subsea military and offshore oil and gas

applications. DGO had sales of $26.2 million for its fiscal year ended September 30, 2006. Teledyne Technologies operates this business under the name Teledyne D.G. O’Brien.

On August 16, 2006, Teledyne Technologies through its subsidiary, Teledyne Instruments, Inc., acquired an initial majority interest in Ocean Design, Inc. (“ODI”) for approximately $30 million in cash. The ODI minority stockholders have the option to sell their shares of ODI to Teledyne Instruments following the end of each quarter through the quarter ended March 31, 2009, at a formula-determined price. In 2006, Teledyne Instruments acquired an additional 9.9% of ownership in ODI for $5.8 million. In 2007, Teledyne Instruments acquired an additional 0.9% of ownership in ODI for $0.9 million. In the first quarter of 2008, Teledyne Instruments acquired an additional 1.2% of ownership in ODI for $1.7 million. At March 30, 2008, Teledyne Instruments owns 63.0% of ODI. All shares not sold to Teledyne Instruments following the quarter ended March 31, 2009, will be purchased by Teledyne Instruments following the quarter ended June 30, 2009, at the same formula-determined price, at which time Teledyne Instruments will own all of the ODI shares held by the participating stockholders. Based on the formula-determined purchase price as of the quarter ended March 30, 2008, the aggregate amount of funds required to repurchase all the shares held by the remaining minority ODI stockholders would be approximately $59.4 million. However, the actual aggregate amount of funds that we will spend to repurchase the shares held by minority stockholders through June 30, 2009, could be significantly higher or lower than this amount, as this amount will depend on when individual stockholders elect to exercise their put options and on the actual financial performance of ODI.

The primary reason for the above acquisitions was to strengthen and expand our core businesses by adding complementary product and service offerings, allowing greater integration of products and services, enhancing our technical capabilities and/or increasing our addressable markets. The significant factors that resulted in recognition of goodwill were: (a) the purchase price was based on cash flow and return on capital projections assuming integration with our businesses; and (b) the calculation of the fair value of tangible and intangible assets acquired that qualified for recognition.

Teledyne Technologies funded the acquisitions primarily from borrowings under its credit facility and cash on hand.

The following is a summary at the acquisition date of the estimated fair values allocated to the assets acquired and liabilities assumed for the acquisitions made in 2008 (in millions):

Current assets		$	37.6
Property, plant and equipment			8.9
Goodwill			97.8
Acquired intangible assets			37.9
Current liabilities			(15.0	)
Long-term liabilities			(3.0	)
Total net assets acquired		$	164.2

Teledyne Technologies’ goodwill was $450.3 million at March 30, 2008 and $351.6 million at December 30, 2007. Teledyne Technologies’ net acquired intangible assets were $97.4 million at March 30, 2008 and $61.7 million at December 30, 2007. The change in the balance of goodwill in 2008 primarily resulted from the acquisitions made in fiscal 2008 and additional share purchases of ODI. The change in the balance of acquired intangible assets in 2008 resulted from the acquisitions made in fiscal 2008, an adjustment for the DGO acquisition and amortization of acquired intangible assets. In all acquisitions, the results of operations and cash flows are included in the Company’s consolidated financial statements from the date of each respective acquisition. Each of the companies acquired is part of the Electronics and Communications segment. The Company completed the process of specifically identifying the amount to be assigned to intangible assets, as well as certain assets and liabilities for the DGO and Tindall acquisitions made in 2007. The amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the DGO acquisition was $16.6 million and $9.0 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of December 30, 2007 for the DGO acquisition was $17.7 million and $7.9 million, respectively. The change in goodwill from December 30, 2007 reflects a $1.1 million adjustment to acquired intangible assets based on the completed appraisal report for the valuation of acquired intangible assets. The amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the Tindall acquisition was $4.1 million and $1.5 million, respectively, and did not change from December 30, 2007. The Company is in the process of specifically identifying the amount to be assigned to intangible assets, as well as certain assets and liabilities for the four acquisitions made in fiscal 2008. The Company made preliminary estimates as of March 30, 2008, since there was insufficient time between the acquisition dates and the end of the period to finalize the valuations. The preliminary amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the Judson acquisition was $14.8 million and $5.0 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the TSS acquisition was $32.7 million and $15.9 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the Impulse acquisition was $22.7 million and $9.0 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of March 30, 2008 for the Storm acquisition was $27.6 million and $8.0 million, respectively. These amounts were based on estimates that are subject to change pending the receipt of certain valuation information and the completion of the Company’s internal review. Goodwill resulting from the Judson, TSS, Impulse and DGO acquisitions will be deductible for tax purposes.

Note 3. Comprehensive Income

Teledyne Technologies’ comprehensive income is comprised of net income and foreign currency translation adjustments. Teledyne Technologies’ total comprehensive income for the first quarter of 2008 and 2007 consists of the following (in millions):

		First Quarter
		2008				2007
Net income		$	27.9			$	20.5
Other comprehensive gain, net of tax:
Foreign currency translation losses			(0.1	)			(0.1	)
Total other comprehensive loss			(0.1	)			(0.1	)
Total comprehensive income		$	27.8			$	20.4

Note 4. Earnings Per Share

Basic and diluted earnings per share were computed based on net earnings. The weighted average number of common shares outstanding during the period was used in the calculation of basic earnings per share. This number of shares was increased by contingent shares that could be issued under various compensation plans as well as by the dilutive effect of stock options based on the treasury stock method in the calculation of diluted earnings per share.

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

		First Quarter
		2008				2007
Basic earnings per share
Net income		$	27.9			$	20.5
Weighted average common shares outstanding			35.2				34.8
Basic earnings per common share		$	0.79			$	0.59
Diluted earnings per share
Net income		$	27.9			$	20.5
Weighted average common shares outstanding			35.2				34.8
Dilutive effect of exercise of options outstanding			1.1				1.0
Weighted average diluted common shares outstanding			36.3				35.8
Diluted earnings per common share		$	0.77			$	0.57

Note 5. Stock-Based Compensation Plans

Teledyne Technologies 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 director stock compensation plans, pursuant to which non-qualified stock options and common stock have been issued to its directors.

The following disclosures are based on stock options granted to Teledyne Technologies’ employees and directors. The Company recorded a total of $1.9 million and $1.7 million in stock option compensation expense for the first quarter of 2008 and the first quarter of 2007, respectively. In 2008, the Company expects approximately $7.8 million in stock option compensation expense based on current assumptions regarding the estimated fair value of expected stock option grants during the remainder of the year. However, our assessment of the estimated compensation expense is affected by our stock price and actual stock option grants during the year as well as assumptions regarding a number of complex and subjective variables and the related tax impact. These variables include, but are not limited to, the volatility of our stock price and employee stock option exercise behaviors. The Company issues shares of common stock upon the exercise of stock options.

The Company used a combination of its historical stock price volatility and the volatility of exchange traded options on the Company stock to compute the expected volatility for purposes of valuing stock options issued. The period used for the historical stock price corresponded to the expected term of the options and was between five and six years. The period used for the exchange traded options extended to the longest-dated options publicly available, generally six to nine months. The expected dividend yield is based on Teledyne’s practice of not paying dividends. The risk-free rate of return is based on the yield of U. S. Treasury Strips with terms equal to the expected life of the option as of the grant date. The expected life in years is based on historical actual stock option exercise experience. The following assumptions were used in the valuation of stock options granted in 2008 and 2007:

		2008				2007
Expected dividend yield			—				—
Expected volatility			34.7	%			33.0	%
Risk-free interest rate			3.3	%			4.9	%
Expected life in years			5.6				5.6

Based on the assumptions in the table above, the grant date fair value of stock options granted in 2008 and 2007 was $19.35 and $15.54, respectively.

Stock option transactions for Teledyne Technologies’ employee stock option plans for the quarter ended March 30, 2008 are summarized as follows:

						Weighted Average
		Shares				Exercise Price
Beginning balance			2,702,157			$	24.71
Granted			352,798			$	50.79
Exercised			(93,278	)		$	19.31
Canceled or expired			(16,750	)		$	27.76
Ending balance			2,944,927			$	27.98
Options exercisable at quarter-end			2,138,744			$	22.15

Stock option transactions for Teledyne Technologies’ non-employee director stock option plan for the first quarter ended March 30, 2008 are summarized as follows:

						Weighted
						Average
						Exercise
		Shares				Price
Beginning balance			348,266			$	22.44
Granted			3,268			$	34.14
Ending balance			351,534			$	22.55
Options exercisable at quarter-end			305,850			$	19.50

Note 6. Cash Equivalents

Cash equivalents consist of highly liquid money-market mutual funds and bank deposits with maturities of three months or less when purchased. Cash equivalents totaled $8.3 million at March 30, 2008 and $1.0 million at December 30, 2007.

Note 7. Inventories

Inventories are primarily valued under the LIFO method. 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, interim LIFO calculations must necessarily be based on the Company’s estimates of expected year-end inventory levels and costs. Because these are subject to many factors beyond the Company’s control, interim results are subject to the final year-end LIFO inventory valuation. Inventories consist of the following (in millions):

Balance at		March 30, 2008				December 30, 2007
Raw materials and supplies		$	78.3			$	64.7
Work in process			133.0				122.6
Finished goods			23.1				17.6
			234.4				204.9
Progress payments			(4.4	)			(4.7	)
LIFO reserve			(25.8	)			(25.6	)
Total inventories, net		$	204.2			$	174.6

Note 8. Supplemental Balance Sheet Information

Other long-term assets included amounts related to deferred compensation of $24.1 million and $24.2 million at March 30, 2008 and December 30, 2007, respectively. Accrued liabilities included salaries and wages and other related compensation liabilities of $67.3 million and $69.9 million at March 30, 2008 and December 30, 2007, respectively. Accrued liabilities also included customer related deposits and credits of $25.7 million and $28.1 million at March 30, 2008 and December 30, 2007, respectively. Other long-term liabilities included aircraft product liability reserves of $53.9 million and $50.6 million at March 30, 2008 and December 30, 2007, respectively and deferred compensation liabilities of $23.9 million and $23.8 million at March 30, 2008 and December 30, 2007, respectively. Other long-term liabilities also included reserves for workers’ compensation, environmental liabilities and the long-term portion of compensation liabilities.

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 preexisting warranty liabilities 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, which are typically one year. The product warranty reserve is included in current accrued liabilities on the balance sheet. Changes in the Company’s product warranty reserve during the first quarter are as follows (in millions):

		First Three Months
		2008				2007
Balance at beginning of year		$	11.4			$	11.4
Accruals for product warranties charged to expense			3.4				1.6
Cost of product warranty claims			(2.2	)			(1.7	)
Acquisitions			0.8				0.1
Balance at end of period		$	13.4			$	11.4

Note 9. Income Taxes

The Company’s effective tax rate for the first quarter of 2008 was 35.9% compared with 37.7% for the first quarter of 2007. The Company completed an analysis of research and development spending for 2007, as well as the base period years, and anticipates the receipt of income tax refunds for the 2007 tax year. The effective tax rate for the first quarter of 2008 reflects the impact of an expected research and development income tax refund of $1.3 million for the 2007 tax year. Excluding this item, the company’s effective tax rate for the first quarter of 2008 would have been 38.8%. The effective tax rate for the first quarter of 2007 reflects the reversal of $0.5 million in income tax contingency reserves which were determined to be no longer needed due to the expiration of applicable statutes of limitations. Excluding this item, the company’s effective tax rate for the first quarter of 2007 would have been 39.0%.

Except for claims for refunds related to credits for research activities, the Company has concluded all U.S. federal income tax matters for years through 2003. Substantially all material state and local, and foreign income tax matters have been concluded for years through 2002. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years.

During the first quarter of 2008, the unrecognized tax benefits increased $0.8 million for tax positions taken during a prior period, and $5.0 million for tax positions taken during the current period. The total amount of unrecognized tax benefits that would affect the effective tax rate increased $5.0 million during the quarter.

Note 10. Long-Term Debt and Capital Lease

At March 30, 2008, Teledyne Technologies had $295.0 million outstanding under its $590.0 million credit facility. Excluding interest and fees, no payments are due under the credit facility until it matures in July 2011. Available borrowing capacity under the $590.0 million credit facility, which is reduced by borrowings and outstanding letters of credit, was $285.9 million at March 30, 2008. The credit agreement requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits on acquired debt. At March 30, 2008, the Company was in compliance with these covenants. The Company also has two $5.0 million uncommitted credit lines available. These credit lines are utilized, as needed, for periodic cash needs. Total debt at March 30, 2008 includes $295.0 million outstanding under the $590.0 million credit facility at a weighted average interest rate of 3.5% and $1.3 million in other debt, of which $0.7 million is current. No amounts were outstanding under the uncommitted credit lines at March 30, 2008. The Company also has a $4.1 million capital lease, of which $0.2 million is current. At March 30, 2008, Teledyne Technologies had $9.1 million in outstanding letters of credit.

Note 11. Lawsuits, Claims, Commitments, Contingencies and Related Matters

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.

In accordance with the Company’s accounting policy disclosed in Note 2 to the consolidated financial statements in the 2007 Form 10-K, environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, investigations are not yet at a stage where the Company has been able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss, or certain components thereof. Estimates of the Company’s liability are subject to uncertainties as described in Note 15 to the consolidated financial statements in the 2007 Form
10-K. As investigation and remediation of these sites proceeds, it is likely that adjustments in the Company’s accruals will be necessary to reflect new information. The amounts of any such adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the amounts, and the possible range of loss in excess of the amounts accrued, are not reasonably estimable. Based on currently available information, management does not believe that future environmental costs in excess of those

accrued, with respect to sites with which the Company has been identified, are likely to have a material adverse effect on the Company’s financial condition. The Company cannot provide assurance that additional future developments, administrative actions or liabilities relating to environmental matters will not have a material adverse effect on the Company’s financial condition or results of operations.

At March 30, 2008, the Company’s reserves for environmental remediation obligations totaled $3.9 million, of which $0.7 million is included in other current 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 to 30 years.

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. 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 is aware, 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. The resolution in any reporting period of one or more of these matters could, however, 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 liabil