TELEDYNE TECHNOLOGIES INCTDY
TELEDYNE TECHNOLOGIES INC Income Taxes Disclosure
Income Taxes
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.
Income (loss) before income taxes included the following (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic operations | $ | 702.9 | $ | 527.4 | $ | 532.4 | |||||||||||
| Foreign operations | 391.6 | 410.5 | 426.5 | ||||||||||||||
| Total income (loss) before income taxes | $ | 1,094.5 | $ | 937.9 | $ | 958.9 | |||||||||||
The provision for income taxes included the following (in millions):
| 2025 | 2024 | 2023 | |||||||||||||||
Current provision (benefit): | |||||||||||||||||
| Federal | $ | 144.4 | $ | 149.3 | $ | 91.2 | |||||||||||
| State | 29.7 | 25.5 | 21.4 | ||||||||||||||
| Foreign | 83.3 | 40.5 | 57.1 | ||||||||||||||
| Total current provision (benefit) | 257.4 | 215.3 | 169.7 | ||||||||||||||
Deferred provision (benefit): | |||||||||||||||||
| Federal | (27.0) | (55.8) | (78.8) | ||||||||||||||
| State | (7.4) | (7.7) | (4.6) | ||||||||||||||
| Foreign | (24.2) | (34.6) | (14.0) | ||||||||||||||
| Total deferred provision (benefit) | (58.6) | (98.1) | (97.4) | ||||||||||||||
Total provision (benefit) for income taxes: | |||||||||||||||||
| Federal | $ | 117.4 | $ | 93.5 | $ | 12.4 | |||||||||||
| State | $ | 22.3 | $ | 17.8 | $ | 16.8 | |||||||||||
| Foreign | $ | 59.1 | $ | 5.9 | $ | 43.1 | |||||||||||
Total provision (benefit) for income taxes | $ | 198.8 | $ | 117.2 | $ | 72.3 | |||||||||||
The following is a reconciliation of the statutory federal income tax rate to the actual effective income tax rate (dollars in millions):
| 2025 | |||||||||||
| Amount | % | ||||||||||
| U.S. federal statutory income tax rate | $ | 229.9 | 21.0 | % | |||||||
Domestic Federal: | |||||||||||
Tax Credits: | |||||||||||
Research and development tax credits | (16.9) | (1.5) | |||||||||
Other | (2.0) | (0.2) | |||||||||
Nontaxable or nondeductible items: | |||||||||||
Other | (3.3) | (0.3) | |||||||||
Cross-Border Taxes: | |||||||||||
Foreign-derived intangible income | (25.1) | (2.3) | |||||||||
Other | (3.8) | (0.3) | |||||||||
Changes in valuation allowances | 2.0 | 0.2 | |||||||||
Other | 15.5 | 1.4 | |||||||||
Domestic state and local income taxes, net of federal effect (a) | 17.5 | 1.6 | |||||||||
Foreign tax effects | |||||||||||
Other foreign jurisdictions (b) | 17.5 | 1.6 | |||||||||
Worldwide changes in unrecognized tax benefits | (32.5) | (3.0) | |||||||||
Total | $ | 198.8 | 18.2 | % | |||||||
(a) In 2025, state taxes in California, Illinois, New Hampshire, and New Jersey made up the majority (greater than 50%) of the tax effect in this category.
(b) No jurisdictions or categories exceeded the 5% disaggregation threshold.
| 2024 | 2023 | ||||||||||
| U.S. federal statutory income tax rate | 21.0 | % | 21.0 | % | |||||||
| State and local taxes, net of federal benefit | 2.4 | 1.8 | |||||||||
| Research and development tax credits | (1.3) | (2.4) | |||||||||
| Investment tax credits | (0.8) | (0.5) | |||||||||
| Foreign rate differential | 2.6 | 1.8 | |||||||||
| Net accruals (reversals) for unrecognized tax benefits | (8.5) | (10.8) | |||||||||
| Stock-based compensation | (1.4) | (2.1) | |||||||||
| U.S. export sales | (1.9) | (2.2) | |||||||||
| Other | 0.4 | 0.9 | |||||||||
| Effective income tax rate | 12.5 | % | 7.5 | % | |||||||
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):
| Deferred income tax assets: | 2025 | 2024 | |||||||||
| Long-term: | |||||||||||
| Accrued liabilities | $ | 31.4 | $ | 33.9 | |||||||
| Inventory valuation | 27.8 | 22.4 | |||||||||
| Accrued vacation | 8.5 | 7.9 | |||||||||
| Deferred compensation and other benefit plans | 3.7 | 15.1 | |||||||||
| Operating lease liabilities | 19.4 | 21.6 | |||||||||
| Capitalization of research and development | 173.4 | 165.0 | |||||||||
| Tax credit and net operating loss carryforward | 47.2 | 33.2 | |||||||||
Other | 16.8 | 30.0 | |||||||||
| Valuation allowance | (25.1) | (20.2) | |||||||||
| Total deferred income tax assets | 303.1 | 308.9 | |||||||||
| Deferred income tax liabilities: | |||||||||||
| Long-term: | |||||||||||
| Intangible amortization | 591.4 | 587.0 | |||||||||
| Property, plant and equipment differences | 27.0 | 28.4 | |||||||||
| Operating lease right-of-use assets | 16.9 | 18.9 | |||||||||
| Unremitted earnings of foreign subsidiaries | 13.7 | 7.4 | |||||||||
| Other | 9.3 | 9.5 | |||||||||
| Total deferred income tax liabilities | 658.3 | 651.2 | |||||||||
| Net deferred income tax liabilities | $ | 355.2 | $ | 342.3 | |||||||
There is no deferred tax liability recognized for unrepatriated prior year earnings of the Company’s material subsidiaries in Canada, which would become taxable if distributed to the United States. The unrecognized deferred tax liability for this is estimated between $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 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 $4.9 million in 2025.
At December 28, 2025, the Company had approximately $26.4 million of net operating loss carryforward from the Company’s foreign entities including France, of which $19.9 million have no expiration dates and $6.5 million have expiration dates ranging from 2028 to 2044. The Company had approximately $3.7 million of capital loss carryforward from the Company’s foreign entities including Canada, which have no expiration dates. In addition, the Company had domestic federal and state net operating loss carryforward of $14.3 million and $233.6 million, respectively. Generally, federal net operating loss carryforward amounts are limited in their use by earnings of certain acquired subsidiaries. Of the $14.3 million federal net operating loss carryforward, $13.5 million have no expiration dates and $0.8 million have expiration dates in 2036. The state net operating loss carryforward amounts have expiration dates ranging from 2026 to 2044.
The Company had aggregate Canadian federal and provincial investment tax credits of $11.8 million, which have expiration dates ranging from 2042 to 2044. The Company had U.S. federal credit carryforward of $5.0 million which have expiration dates ranging from 2031 to 2042. The Company had Spanish federal R&D credit carryforward in the amount of $1.9 million, which have expiration dates ranging from 2036 to 2041. Finally, the Company had state tax credits of $18.3 million, of which $12.4 million have no expiration date and $5.9 million have expiration dates ranging from 2026 to 2049.
| Unrecognized tax benefits (in millions): | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning of year (a) | $ | 45.2 | $ | 96.5 | $ | 162.8 | |||||||||||
| Increase due to business combinations | — | — | 18.6 | ||||||||||||||
| Increase for tax positions taken during the current period | 2.8 | 1.8 | 3.4 | ||||||||||||||
| Increase in prior year tax positions | 65.6 | 1.0 | 3.0 | ||||||||||||||
| Reduction related to settlements with taxing authorities | (26.2) | (46.6) | — | ||||||||||||||
| Reduction related to lapse of the statute of limitations | (14.1) | (17.6) | (96.3) | ||||||||||||||
| Impact of exchange rate changes | 6.3 | 10.1 | 5.0 | ||||||||||||||
| End of year (a) | $ | 79.6 | $ | 45.2 | $ | 96.5 | |||||||||||
(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 $2.4 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 the statements of income (loss) of $2.4 million of expense, $15.8 million of benefits and $10.3 million of benefits, for 2025, 2024 and 2023, respectively. Interest and penalties in the amount of $11.4 million, $8.5 million and $36.9 million were recognized in the 2025, 2024 and 2023 balance sheets, respectively. Substantially all of the unrecognized tax benefits as of December 28, 2025, if recognized, would affect the Company’s effective tax rate.
Teledyne files income tax returns in the U.S. 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 UK through 2022, and in France through 2020.
Income taxes paid (in millions): | 2025 | ||||
U.S. federal | $ | 128.6 | |||
U.S. state and local | 35.9 | ||||
Foreign: | |||||
United Kingdom | 28.5 | ||||
Canada - federal | 19.2 | ||||
Sweden | 16.9 | ||||
Other | 51.1 | ||||
Total income taxes paid | $ | 280.2 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 25, 2022 | |
| 2021 | Feb 26, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Mar 1, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.