SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 30, 200328, 2004

OR

ORo

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

For the transition period from ___________ to ___________

Commission file number 1-15295

(310) 893-1600
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes    [X]               No    [   ]

     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    [X]þ No    [   ]o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yesþ Noo

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

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

TELEDYNE TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

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

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2.		Business Combinations and Discontinued Operations
		On SeptemberFebruary 27, 2002,2004, Teledyne Tekmar Company acquired assets of Leeman Labs, Inc., for $8.0 million in cash. Leeman Labs’ product lines augment Teledyne’s existing laboratory and continuous monitoring instruments used in environmental applications. Leeman Labs is located in Hudson, New Hampshire.
		On December 31, 2003, which is part of Teledyne’s 2004 fiscal year, Teledyne acquired certain assets of the Filtronic Solid State (Solid State) business from Filtronic plc for $12.0 million in cash. Solid State designs and manufactures customized microwave subassemblies for electronic warfare, radar and other military applications. The business, which operates as Teledyne Microwave, was relocated from Santa Clara, California to Teledyne’s operations in Mountain View, California.
		On June 27, 2003, Teledyne Technologies acquired Monitor Labs Incorporated from Spirent plc its Aviation Information Solutions businesses (collectively “AIS”), for $24$6.4 million in cash, which is net of a purchase price adjustment. AIS designs and manufactures aerospace data acquisition devices, networking products and flight deck and cabin displays.
		On May 16, 2003, Teledyne Technologies acquired Tekmar Company, a wholly owned subsidiary of Emerson Electric Co., for $13.5 million in cash. Monitor LabsTekmar Company is a supplier of environmental monitoring instrumentation for the detection, measurement and reporting of air pollutants with locations in Englewood, Colorado and Gibsonia, Pennsylvania. In November 2001, Teledyne Technologies acquired Advanced Pollution Incorporated (API) for $25 million in cash. API is a designer andpremier manufacturer of advanced air quality monitoring instruments, basedgas chromatography introduction systems and automated total organic carbon analyzers. Teledyne Tekmar Company, located in San Diego, California. Monitor Labs’ and API’s results are included in the consolidated financial statements since the date of each respective acquisition. Both API and Monitor Labs are partMason, Ohio, became a business unit of Teledyne Instruments, a group of electronic instrumentation businesses within Teledyne’s ElectronicTeledyne Technologies’ Electronics and Communications business segment.
		In bothall acquisitions, the results are included in the Company’s consolidated financial statements from the date of each respective acquisition. The Company accounts for goodwill and purchased intangible assets under SFAS No. 141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets”. Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the fair value of net assets acquired has been allocated to identifiableamounts assigned is recorded as goodwill. Purchased intangible assets includingwith finite lives are amortized over their estimated useful lives. Goodwill and intangible assets with indefinite lives are not amortized, but reviewed at least annually for impairment. The acquisitions of Tekmar Company and AIS in 2003 resulted in $5.4 million of purchased intangible assets, primarily trade names, customer relationships, software technology and patents. Of the $5.4 million of intangible assets, $3.6 million are subject to amortization over estimated useful lives ranging from five to 20 years and a weighted average life of eight years. The allocation of the purchase price for the acquisition of Tekmar Company was completed as of year-end 2003. The allocation of the purchase price for the acquisition of AIS was completed in the first quarter of 2004. The allocation of the purchase price for the Solid State and Leeman Labs acquisitions are preliminary as they were recently acquired. The preliminary amount of goodwill in accordance with SFAS No. 141.
		In July 2001, Teledyne Technologies combined its Energy Systems business unit with assets of Florida-based Energy Partners, Inc., to create majority-owned (86%) Teledyne Energy Systems, Inc. This transaction was recorded as a transfer of net assets between entities under common control in accordance with SFAS No. 141. The company focuses on supplying hydrogen gas generators and thermoelectric power systems, as well as commercialization of proton exchange membrane (PEM) fuel cell stacks, test stands and systems.March 28, 2004 for these acquisitions is $16.1 million.
		In December 2000, Teledyne Technologies sold the assets of Teledyne Cast Parts, a provider of sand and investment castings to the aerospace and defense industries. Teledyne Cast Parts was previously reportedPayment made against reserves recorded as part of the Aerospace Engines and Components segment.sale are shown in the discontinued operation caption of the cash flow statement.

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3.		Comprehensive Income
		Teledyne Technologies’ comprehensive income is composedcomprised of net income and foreign currency translation adjustments and the unrealized gain or loss on marketable equity securities.adjustments. Teledyne Technologies’ total comprehensive income for the first three monthsquarter of 20032004 and 20022003 consist of the following:

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, and thisshare. 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):

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5.		Stock-Based Compensation
		The following disclosures are based on stock options held by Teledyne Technologies’ employees and include the stock options that have been converted from ATI options to Teledyne Technologies’ options as noted above.employees. Teledyne Technologies accounts for its stock option plans in accordance with APB Opinion No. 25—“Accounting25, “Accounting for Stock Issued to Employees” (APB Opinion No. 25) and related Interpretations. Under APB Opinion No. 25, no compensation expense is recognized because the exercise price of the Company’s employee stock options equals the market price of the underlying stock at the date of the grant. In December 2002,The Company follows the FASB issuedrequirements of APB Opinion No. 25, “Accounting for Stock Issued to Employees” and related Interpretations and the disclosure only provision of SFAS No. 123, “Accounting for Stock-based Compensation” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-based Compensation” (SFAS No. 123) and was effective immediately upon issuance. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure requirements of Statement No. 123Disclosure” to require interim and annual

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		disclosures about the method of accounting for stock basedstock-based compensation and the effect of the method used on reported results. The Company follows the requirements of APB Opinion No. 25 and the disclosure only provision of SFAS No. 123, as amended by SFAS No. 148.

As noted in the preceding paragraph, Teledyne Technologies accounts for its stock options under APB Opinion No. 25. If compensation cost for these options had been determined usingunder the SFAS No. 123 fair-value method using the Black-Scholes option-pricing model, the impact on net income and earnings per share is presented in the following table (amounts in millions, except per-share data):

6.		Cash and 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 $9.6$19.4 million and $15.4$32.9 million at March 30, 200328, 2004 and December 29, 2002,28, 2003, respectively.

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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 (amounts in millions):

8.		Supplemental Balance Sheet Information
		Goodwill primarilyThe increase in goodwill in 2004 includes $16.1 million of goodwill acquired as part of the Solid State and Leeman Labs acquisitions of APIas described in 2001 and Monitor Labs in 2002.Note 2. Accrued liabilities included salaries and wages of $25.6 $28.7

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million and $27.8$30.2 million at March 30, 200328, 2004 and December 29, 2002,28, 2003, respectively. Other long-term liabilities included reserves for self-insurance, deferred compensation liabilities and environmental reserves.

Some of the Company’s products are subject to specified warranties. The Company maintains a warranty reserve for the estimated future costs of repair, replacement or customer accommodation and periodically reviews this reserve for adequacy. Such review would generally include 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. Changes in the Company’s product warranty reserve during the period are as follows (in millions):

9.		Income Taxes
9.		The Company’s effective tax rate was 39.6% and 39.0% for the first quarter of 2004 and 2003, respectively.
10.		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. The Company has been identified as a potentially responsible party at approximately 17 such sites, excluding those at which the Company believes it has no future liability.
		In accordance with the Company’s accounting policy disclosed in Note 2 to the consolidated financial statements in the 20022003 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 further subject to uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and estimates of appropriate cleanup technology, methodology and cost, the extent of corrective actions that may be required, and the number and financial condition of other potentially responsible parties, as well as the extent of their responsibility for the remediation. Accordingly, 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 or liquidity. However, resolution of one or more of these environmental matters or future accrual adjustments in any one reporting period could have a material adverse effect on results of operations for that period. Additionally,

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		there can be no 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.

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		At March 30, 2003,28, 2004, the Company’s reserves for environmental remediation obligations totaled approximately $2.2$2.0 million, of which approximately $0.6$0.3 million were included in 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 other than participating potentially responsible 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 willexpects to 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) have been or 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 or liquidity. The resolution in any reporting period of one or more of these matters, however, could have a material adverse effect on the Company’s results of operations for that period.
		The Company learns from time to time that it has been named as a defendant in civil actions filed under seal pursuant to the False Claims Act. SuchGenerally, since such cases are under seal, and remain so until the U.S. Government decides if it will intervene and the Company therefore does not generallyin all cases possess sufficient information to determine whether the Company could sustain a material loss in connection with such cases, or to reasonably estimate the amount of any loss attributable to such cases. TheIn October 2002, the Company was informed that the U.S. Government hashad declined to intervene in a civil lawsuit filed under seal more than four years ago.before under seal pursuant to the False Claims Act. The Company intends to vigorously defend this continuing civil action against its Electronic Safety Products unit, which action continues to defend vigorouslynotwithstanding the on-going civil lawsuit.
		The Tax Sharing and Indemnification Agreement between ATI and Teledyne Technologies provides that the Company will indemnify ATI and its agents and representatives for taxes imposed on, and other amounts paid by, them or ATI stockholders if the Company takes actions or fails to take actions that result in the spin-off not qualifying as a tax-free distribution. If the Company were required to so indemnify ATI, such an obligation could have a material adverse effect on its financial condition, results of operations and cash flowU.S. Government’s non-intervention and the amountcourt’s granting of the Company could be requiredCompany’s motion to pay could exceed its net worth by a substantial amount. The Company believes that itdismiss the civil action (which decision has satisfied all principal spin-off requirements to assure such tax-free treatment.been appealed).
		A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to aircraft and other product liability, patent infringement, contract disputes, 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 or liquidity. 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. The Company’s current aircraft product liability policy has a self-insured retention of $15 million and will expire in May 2004. The Company is currently reviewing placement and structuring alternatives.

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Note 11. Pension Plans and Postretirement Benefits

		operationsTeledyne Technologies’ has a defined benefit pension plan covering substantially all employees hired before January 1, 2004, both active and inactive, at its companies that perform government contract work and for Teledyne Technologies’ active employees at its companies that period.do not perform government contract work. As of January 1, 2004, non-union new hires participate in an enhanced defined contribution plan as opposed to the company’s existing defined benefit pension plan.
10.		Teledyne Technologies’ net periodic pension expense was $2.2 million for the first quarter of 2004, compared with net periodic pension expense of $1.7 million for the first quarter of 2003.
		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.
		The following table sets forth the components of net period pension benefit (income) expense for Teledyne Technologies’ defined benefit pension plans and postretirement benefit plans for the first quarters of 2004 and 2003 (in millions):

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. The Act expanded Medicare to include, for the first time, coverage for prescription drugs. The Company sponsors retiree medical programs for certain of its locations and the Company expects that this legislation will eventually reduce the Company’s cost for some of these programs. At present, only estimates of the potential reduction in the Company’s costs or obligations have been performed. Under the Company’s accounting policy, the financial effect of this legislation will be reflected during fiscal 2004.

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12.		Industry Segments
		The following table presents Teledyne Technologies’ interim industry segment disclosures (amounts in millions):

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13.		Subsequent Event
		On April 8, 2004 Teledyne Technologies and Isco, Inc. jointly announced that they signed a definitive agreement which provides for the merger of Isco, Inc. with a wholly-owned subsidiary of Teledyne Technologies. Upon the consummation of the merger, which is subject to the approval of Isco’s shareholders as well as other customary closing conditions, Teledyne will acquire all of the outstanding shares of Isco for $16.00 per share in cash. The aggregate consideration for the outstanding Isco shares will be approximately $96 million (including payments for the settlement of outstanding stock options) or approximately $80 million taking into account Isco’s net cash at January 23, 2004.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Strategy

Principally through focused acquisitions of complementary product lines and businesses, Teledyne Technologies seeks to build growth platforms around three core markets: aerospace and defense electronics; electronic instrumentation; and government systems engineering. The Company also intends to continue to focus on managing costs and operational excellence in every aspect of its business, from finance to manufacturing, as well as with the integration of its acquisitions. The Company continually evaluates its product lines to ensure that they are aligned with its strategy.

First Quarter 2004 Acquisitions and Pending Acquisition

On December 31, 2003, to broaden our microwave product lines to customers, Teledyne Wireless, Inc. acquired certain assets of the Filtronic Solid State (Solid State) business located in Santa Clara, California. Solid State designs and manufactures customized microwave assemblies for electronic warfare, radar and other military applications. The business, which now operates as “Teledyne Microwave”, was relocated to Teledyne operations in Mountain View, California.

On February 27, 2004, Teledyne Tekmar Company acquired assets of Leeman Labs, Inc., located in Hudson, New Hampshire. Leeman Labs’ inductively coupled plasma laboratory spectrometers are used by environmental and quality control laboratories to detect low levels of inorganic contaminants in water and other environmental samples, and complement Teledyne Tekmar Company’s organic analysis instrumentation.

On April 8, 2004 Teledyne Technologies and Isco, Inc. jointly announced that they signed a definitive agreement which provides for the merger of Isco, Inc. with a wholly-owned subsidiary of Teledyne Technologies. Upon the consummation of the merger, which is subject to the approval of Isco’s shareholders as well as other customary closing conditions, Teledyne will acquire all of the outstanding shares of Isco for $16.00 per share in cash. The aggregate consideration for the outstanding Isco shares will be approximately $96 million (including payments for the settlement of outstanding stock options) or approximately $80 million taking into account Isco’s net cash at January 23, 2004.

Results of Operations

Teledyne Technologies’ first quarter 20032004 sales were $197.2$219.6 million, compared with sales of $183.3$197.2 million for the same period in 2002.2003. Net income for the first quarter of 20032004 was $5.5$5.9 million ($0.170.18 per diluted share), compared with net income of $5.1$5.5 million ($0.160.17 per diluted share) for the first quarter of 2002.2003.

The first quarter of 2003,2004, compared with the same period in 2002,2003, reflected higher sales in each business segment. The higher sales in the Electronics and Communications segment resulted from both organic growth and Systems Engineeringstrategic acquisitions, including Leeman Labs, acquired February 27, 2004, Solid State, acquired on December 31, 2003, Tekmar Company, acquired in May 2003, and Spirent’s Aviation Information Solutions segment, partially offset by lower salesbusinesses, acquired in the Aerospace Engines and Components and the Energy Systems segments.June 2003.

The increase in earnings for the first quarter of 2003,2004, compared with the same period of 2002,2003, reflected improved results in the Electronics and Communications, Systems Engineering Solutions segment,and Energy Systems segments, partially offset by lower results in the Company’s other segments.Aerospace Engines and Components segment. The first quarter of 20032004 included pretax non-cash pension expense of $1.7$2.2 million compared with pretax non-cash pension incomeexpense of $0.6$1.7 million in the first quarter of 2002.2003.

Cost of sales in total dollars was higher in the first quarter of 2003,2004, compared with the same period in 2002, which increased2003. The increase was in line with higher sales and also reflected higher pension expense, as well aspartially offset by product mix differences. Cost of sales as a percentage of sales for the first quarter of 20032004 was slightly lower compared with the same period of 2003 and reflected sales mix differences, partially offset by higher pension expense.

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Selling, general and administrative expenses, including research and development and bid and proposal expense, in total dollars were higher in the first quarter of 2004, compared with the same period in 2002,2003. This increase was in line with higher sales which primarily reflectedresulted from organic growth and acquisitions and higher pension expense.aircraft product liability insurance costs. Selling, general and administrative expenses for the first quarter of 20032004, as a percentage of sales were lower,slightly higher, compared with the same period in 2002,2003, which reflected lower selling, generalhigher aircraft product liability insurance costs and administrative and research and development expenses. Selling, general and administrative expenses in total dollars were higher in the first quarterimpact of 2003, compared with the same period in 2002. This increase was in line with higher sales and also included selling, general and administrative expenses from Monitor Labs, acquired in September 2002, and higher severance costs, offset in part, by lower research and development expenses. The first quarter of 2003 includes a $0.3 million charge, in other expense, relatedrecent acquisitions, which due to the partial write-downnature of the Company’s $2.3 million cost-based investment intheir business, carry a private company engaged in manufacturing and developmenthigher selling expense as a percentage of micro optics and microelectromechanical devices. sales than most of Teledyne’s other businesses.

The Company’s effective tax rate for the first quarter of 20032004 was 39.0%39.6%, compared with an effective tax rate of 39.7%to 39.0% for the first quarter of 2002.2003.

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Review of Operations:

The following table sets forth the sales and operating profit for each segment (amounts in millions):

Electronics and Communications

The Electronics and Communications segment’s first quarter 20032004 sales were $103.6$116.4 million, compared with first quarter 20022003 sales of $90.5$103.6 million. First quarter 20022004 operating profit was $7.3$8.0 million, compared with operating profit of $8.3$7.3 million in the first quarter of 2002.2003.

First quarter 20032004 sales, compared with the same period of 2002,2003, reflected revenue growth in defense electronic manufacturing services,products, medical microelectronics, avionics products, electronic instruments, defense electronicrelay products and commercial lighting products. This growth was partially offset by lower sales from electronic manufacturing services, primarily driven by lower government sales. The revenue growth in defense electronic manufacturing servicesproducts was primarily driven by increased sales to militarytraveling wave tubes, ejection seat sequencers and medical markets. The revenuethe acquisition of assets of Solid State on December 31, 2003. Revenue growth in electronic instrumentsavionics products resulted from the acquisition of Monitor Labs Incorporated at the endAviation Information Solutions businesses on June 27, 2003. Electronic instruments revenue was favorably impacted by the acquisition of the third quarter of 2002, strongerTekmar-Dohrmann on May 16, 2003, and increased demand for geophysical sensors for the petroleum exploration market and stronger demand for other electronic measuring equipment. These sales increases were partially offset by continued weakness in the commercial aviation market. Segment operating profit was negativelyfavorably impacted by the sales growth partially offset by an increase in

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pension expense. Pension expense was $1.6 million in the first quarter of 2004 compared with pension expense of $1.3 million in the first quarter of 2003 compared with pension income of $0.5 million in the first quarter of 2002. In addition, operating profit was favorably impacted by increased sales, a reduction in the Company’s commercial broadband communications investments and an improved cost structure.2003.

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Systems Engineering Solutions

The Systems Engineering Solutions segment’s first quarter 20032004 sales were $52.4$54.6 million, compared with first quarter 20022003 sales of $46.9$52.4 million. First quarter 20032004 operating profit was $5.7$6.1 million, compared with operating profit of $3.8$5.7 million in the first quarter of 2002.2003.

First quarter 20032004 sales, compared with the same period of 2002,2003, reflected revenue growth in core defense and aerospace programs and increased work in environmental programs. Operating profit reflectedwas favorably impacted by increased sales and the mix and timing of certain government programs, profit improvement due to the close out of a number of contracts and improved margins for environmental programs. Additionally, segmentSegment operating profit was unfavorably impacted byincluded $0.1 million of pension expense of $0.1 million in the first quarterquarters of 2003 compared with no pension cost in 2002.2004 and 2003.

Aerospace Engines and Components

The Aerospace Engines and Components segment’s first quarter 20032004 sales were $37.8$42.9 million, compared with first quarter 20022003 sales of $41.9$37.8 million. FirstThe first quarter 20032004 operating profitloss was $0.5$0.7 million, compared with operating profit of $0.7$0.5 million in the first quarter of 2002.2003.

First quarter 20032004 sales, compared with the same period of 2002,2003, reflected revenue growth in turbine engines, OEM piston engines, which was more than offset by reduced sales of aftermarket productsengines and services. Operating profit in the piston engine business was positively impacted by an improved cost structure, productivity improvements and lower requirements for product liability reserves partially offset by higher insurance premium costs.parts. Sales from turbine engines were unfavorablyfavorably impacted by lowerhigher revenue from spare parts for Air Force training aircraft, partially offset by favorable Joint Air-to-Surface Standoff Missile (JASSM) sales. Operating profitand Improved Tactical Air-Launched Decoy (ITALD) engines. Improved operating results for turbine engines resulted from increased sales. Piston engine operating results were unfavorably impacted by the increase in aircraft product liability insurance costs, partially offset by revenue growth. Segment operating loss was lowerunfavorably impacted by pension expense of $0.4 million in the first quarter of 2003,2004 compared with the first quarter of 2002, which corresponded with lower sales. Additionally, segment operating profit was unfavorably impacted by pension expense of $0.3 million in the first quarter of 2003 compared with pension income of $0.1 million in the first quarter of 2002.2003.

Teledyne Energy Systems

The Energy Systems segment’s first quarter 20032004 sales were $3.4$5.7 million, compared with first quarter 20022003 sales of $4.0$3.4 million. The firstFirst quarter 20032004 operating lossprofit was $0.5$0.3 million, compared with an operating loss of $0.3$0.5 million in the first quarter of 2002.2003.

First quarter 2003 sales reflected lower revenues from certain government cost-plus-fixed-fee contracts due to an improved cost structure that resultedThe increase in lower revenue, as well as lower contract billings under our NASA PEM Fuel Cell program as the first phase of the contract came to conclusion. Commercial sales were relatively flat in the first quarter of2004 sales resulted from multi-year government contracts which were awarded, in 2003, compared withfor fuel cell and thermoelectric power generator work. Operating profit was favorably impacted by the first quarter of 2002.growth in sales and a reduction in research and development costs.

The first quarter 2003 operating loss included charges for contract claims, offset in part by lower manufacturing overhead and general administrative expenses.

Financial Condition, Liquidity and Capital Resources

Teledyne Technologies’ net cash usedprovided by operating activities from continuing operations was $1.7$8.2 million for the first three months of 2003,2004, compared with net cash provided from continuing operationsused of $9.0$1.8 million for the same period of 2002.2003. The higher net usage of cash in the first quarter of 2003, compared with cash provided in the first three months of 2004, compared with the first three months of 2003, was due to an aircraft product liability settlement payment in 2003, as well as improved working capital management in 2004 and positive operating cash flow from acquisitions made since the first quarter of 2002, was primarily driven by an increase in inventories from year-end 2002 due to purchases of long lead-time items in our defense electronics and medical businesses.

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Working capital increased to $107.2 million at March 30, 2003, compared with $102.6 million at the end of 2002. The increase in working capital was primarily due to the increase in inventory noted above. Some of the Company’s customers have been undergoing bankruptcies, none of which currently are expected to have a material adverse effect on the Company.2003.

Teledyne Technologies’ net cash used by investing activities was $3.1$23.3 million and $3.5$3.1 million for the first three months of 2004 and 2003, respectively. The 2004 amount included $20.0 million for the purchase of businesses and 2002, respectively and was primarily$3.3 million for capital expenditures.

On September 27, 2002, Teledyne Technologies acquired Monitor Labs from Spirent plc The 2003 amount included $2.9 million for $24 million in cash. Monitor Labs is a supplier of environmental monitoring instrumentation for the detection, measurement, and reporting of air pollutants with locations in Englewood, Colorado and Gibsonia, Pennsylvania. The excess of the purchase price over the fair value of net assets acquired has been allocated to identifiable intangible assets including goodwill in accordance with SFAS No. 141.capital expenditures.

Financing activities provided net cash of $1.3 million in the first three months of 2004 and 2003 compared with cash used of $9.9 million for the same period of 2002. The 2002 amount primarily reflected net repayments of long-term debt. Both periods include proceeds from the exercise of stock options.

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Working capital was $123.6 million at March 28, 2004, compared with $129.5 million at the end of 2003. The decrease in working capital was primarily due to the use of cash to fund acquisitions.

On February 27, 2004, Teledyne Tekmar Company acquired assets of Leeman Labs, Inc., for $8.0 million in cash. On December 31, 2003, which is part of Teledyne’s 2004 fiscal year, Teledyne Wireless, Inc. acquired certain assets of the Filtronic Solid State business from Filtronic plc for $12.0 million in cash. On June 27, 2003, Teledyne Technologies acquired from Spirent plc its Aviation Information Solutions businesses (collectively “AIS”), for $6.4 million in cash, which is net of a purchase price adjustment. On May 16, 2003, Teledyne Technologies acquired Tekmar Company, a wholly owned subsidiary of Emerson Electric Co. for $13.5 million in cash.

In all acquisitions, the results are included in the Company’s consolidated financial statements from the date of each respective acquisition. The Company accounts for goodwill and purchased intangible assets under SFAS No. 141 “Business Combinations” and SFAS No. 142 “Goodwill and Other Intangible Assets”. Business acquisitions are accounted for under the purchase method by assigning the purchase price to tangible and intangible assets acquired and liabilities assumed. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Purchased intangible assets with finite lives are amortized over their estimated useful lives. Goodwill and intangible assets with indefinite lives are not amortized, but reviewed at least annually for impairment. The acquisitions of Tekmar Company and AIS in 2003 resulted in $5.4 million of purchased intangible assets, primarily trade names, customer relationships, software technology and patents. Of the $5.4 million of intangible assets, $3.6 million is subject to amortization over estimated useful lives ranging from five to 20 years and a weighted average life of eight years. The allocation of the purchase price for the acquisition of Tekmar Company was completed as of year-end 2003. The allocation of the purchase price for the acquisition of AIS was completed in the first quarter of 2004. The allocation of the purchase price for the Solid State and Leeman Labs acquisitions are preliminary as they were recently acquired. The preliminary amount of goodwill recorded as of March 28, 2004 for these acquisitions is $16.1 million.

Teledyne Technologies’ principal capital requirements are to fund working capital needs, capital expenditures and debt service requirements.requirements, as well as to fund acquisitions, if and when they arise. It is anticipated that operating cash flow, together with available borrowings under the credit facility described below, will be sufficient to meet these requirements in the year 2003.2004, including the planned acquisition of Isco, Inc. Teledyne Technologies currently expects capital expenditures to be in the range of approximately $20 million to $21 million in 2003.2004, of which $3.3 million has been spent in the first three months of 2004.

A $200.0 million five-year revolving credit agreement that terminates in November 2004 was arranged with a syndicate of banks in connection with the Company’s 1999 spin-off from Allegheny Technologies Incorporated (ATI). At March 30, 2003,28, 2004, Teledyne Technologies had no amounts outstanding under the facility. Excluding interest and fees, no payments are due under the credit facility until the facility terminates. Available borrowing capacity under the credit facility was $200.0 million at March 30, 200328, 2004 and at year end 2002.year-end 2003. The credit agreement requires the Company to comply with various financial covenants and restrictions. It prohibits stock repurchases, the declaration of dividends or making other specified distributions in aggregate amounts exceeding 25% of cumulative net income ($18.926.4 million as of March 30, 2003)28, 2004) after the effective date of the credit agreement. The Company is currently in the process of replacing this agreement. Teledyne expects to have a new revolving credit agreement in place before November 2004.

In March 2003, Teledyne Technologies announced that its Board of Directors authorized the Company to purchase from time to time up to one million shares of its Common Stock in open market or privately negotiated transactions through March 31, 2004. No repurchases have beenwere made under this program.

Critical Accounting Policies

Our critical accounting policies are those that are reflective of significant judgments and uncertainties, and may potentially result in materially different results under different assumptions and conditions. Our critical accounting policies continue to be the following: revenue recognition; impairment of long-lived assets; accounting for income taxes; inventories and related allowance for obsolete and excess inventory; aircraft product liability reserve; and

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accounting for pension plans. For additional discussion of the application of these and other accounting policies, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Note 2 of the Notes to Consolidated Financial Statements. included in Teledyne Technologies’ Annual Report on Form 10-K for the fiscal year ended December 29, 2002 (200228, 2003 (2003 Form 10-K).

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Recent Accounting Pronouncements

In June 2001,December 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (SFAS No. 143—“Accounting for Asset Retirement Obligations,” which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. Teledyne Technologies’ initial adoption of132). SFAS No. 143,132 requires additional information regarding the types of plan assets, investment strategy, measurement date, plan obligations, cash flows and components of net periodic benefit cost recognized during interim periods as is effective January 1, 2003, did not have a material effect on its financial position or results of operations.immediately upon issuance. The Company has included the required interim disclosures in Note 11 to the Notes to Consolidated Condensed Financial Statements.

In AprilJanuary 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. In particular, SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003 and is not expected to have a material impact on Teledyne Technologies’ financial position or results of operations.

In November 2002, the FASB issued FASB Interpretation No. 4546, “Consolidation of Variable Interest Entities” (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others — an Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34.”46). FIN 45 elaborates on46 requires companies to evaluate variable interest entities to determine whether to apply the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurementconsolidation provisions of FIN 45 are applicable on46 to those entities. Companies must apply FIN 46 to entities created after January 31, 2003, and to variable interest entities in which a prospective basiscompany obtains an interest after that date. In October 2003, the FASB deferred the effective date to guarantees issuedthe first fiscal year or modifiedinterim period ending after December 31, 2002, irrespective of the guarantor’s fiscal year end. The Company adopted the initial recognition and initial measurement provisions15, 2003, to variable interest entities in the first quarter ofwhich a company holds a variable interest that is acquired before February 1, 2003. TheTeledyne Technologies’ adoption of FIN 4546 had no impact on Teledyne Technologies’ financial position orthe Company’s consolidated results of operations.operations or financial position.

Outlook

Teledyne Technologies maintains a balanced portfolio of approximately 45% government and 55% commercial businesses. The Company’s 2003 outlook reflects anticipated growth in the Company’s defense electronics and instrumentation businesses, but no recovery in the Company’s commercial aviation and certain short cycle markets. In its Systems Engineering Solutions segment, while the Company anticipates receiving government award and incentive fees under certain contracts in 2003, there is no assurance that such award and incentive fees will be equal to similar fees received in 2002.

Furthermore, given the current state of the economy, rising insurance premiums, the increasingly litigious product liability claims environment, and the Company’s dependence on aftermarket aviation sales, the Company does not expect a recovery in 2003 operating profit for the Aerospace Engines and Components segment relative to 2002. The Company’s existing aircraft product liability policy expires in May 2003, and the Company is currently evaluating options relating to its insurance coverage. The Company’s current total cost for its aircraft product liability insurance is approximately $1.4 million per month, and the Company’s management had previously anticipated a 40% increase in cost for its aircraft product liability insurance after May 2003. However, based on recent discussions with several insurance carriers, the Company expects the total monthly cost of its aircraft product liability insurance to increase between approximately 70% and 85% after May 2003. The Company continues to explore strategic alternatives for its Aerospace Engines and Components segment.

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Although 20032004 earnings visibility is limited, based on its current outlook, the Company’s management believes that second quarter and full year 20032004 earnings per share will be in the range of approximately $0.17$0.20 to $0.19 and $0.62 to $0.72, respectively, including the higher insurance costs noted above and approximately $0.13$0.22. The full year 2004 earnings per share outlook is expected to be in the range of non-cashapproximately $0.84 to $0.88, an increase from prior guidance of $0.80 to $0.86.

The Company’s 2004 outlook reflects anticipated growth in the Company’s defense electronics and instrumentation businesses, a slight recovery in some of the Company’s short cycle electronics and commercial aviation markets and $0.16 per share of pension expense for the full year 2004. Given the finalization of actual fee negotiations for work performed on certain government contracts in prior periods, operating margin in the Company’s Systems Engineering Solutions segment is expected to be lower in the remainder of 2004, compared with 2003 and the first quarter of 2004. The Company’s previous multi-year aircraft product liability policy expired in May 2003. As of June 1, 2003, the total cost of the Company’s aircraft product liability insurance increased approximately $1.0 million per month or approximately 75%. The Company’s current aircraft product liability policy will expire in May 2004, and the Company is currently reviewing placement and structuring alternatives. The Company does not anticipate a significant increase in the total cost of its aircraft product liability insurance.

Full year 20022003 earnings included $2.3$6.9 million or $0.04$0.13 per share in non-cash pension income.expense. The Company currently expects approximately $7.0$8.7 million or $0.13$0.16 per share of non-cash pension expense in 2003.2004. The increase in pension expense reflects, in part, a reduction in non-cash pension income reflects the continued decline in the value of the Company’s pension assets during 2002 and reductions in the expected rate of return and discount rate assumptionsassumption for the Company’s defined benefit pension plan. The Company’s assumed expecteddiscount rate of return is currently 8.5%,will be 6.5% in 2004, compared to 9.0%7.0% in 2002, and its assumed discount rate is currently 7.0%, compared2003. As of January 1, 2004, new hires will participate in an enhanced defined contribution plan as opposed to 7.5% in 2002. Based on the Company’s currentexisting defined benefit pension assumptions and the value of its pension assets as of March 31, 2003, the Company expects that non-cash pension expense in 2004 will be in the range of approximately $10.0 million to $12.0 million or $0.18 to $0.22 per share.plan. Currently, Teledyne Technologies does not anticipateanticipates making an after-tax cash contributionscontribution of approximately $3.0 million to its pension plan untilin 2004. Also, under one of its spin-off agreements, after November 29, 2004, the Company will be able to charge pension costs to the U.S. Government under various government contracts.

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EARNINGS PER SHARE SUMMARY
(Diluted earnings per common share from continuing operations)