TELEDYNE TECHNOLOGIES INC, S-1/A, 2000-08-08

TELEDYNE TECHNOLOGIES INC
S-1/A, 2000-08-08
ENGINEERING SERVICES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 2000

REGISTRATION NO. 333-41892

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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TELEDYNE TECHNOLOGIES INCORPORATED
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 3724 25-1843385
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
incorporation or organization) Classification Code Number)
</TABLE>

2049 CENTURY PARK EAST, SUITE 1500
LOS ANGELES, CALIFORNIA 90067-3101
(310) 277-3311
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

JOHN T. KUELBS
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
TELEDYNE TECHNOLOGIES INCORPORATED
2049 CENTURY PARK EAST, SUITE 1500
LOS ANGELES, CALIFORNIA 90067-3101
(310) 277-3311
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------

Copies to:

<TABLE>
<S> <C>
RONALD D. WEST RICHARD A. BOEHMER
KIRKPATRICK & LOCKHART LLP O'MELVENY & MYERS LLP
1500 OLIVER BUILDING 400 SOUTH HOPE STREET
PITTSBURGH, PENNSYLVANIA 15222-2312 LOS ANGELES, CALIFORNIA 90071-2899
(412) 355-6500 (213) 430-6000
</TABLE>

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Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES
IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE
OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION. DATED AUGUST 8, 2000.

4,100,000 Shares

TELEDYNE TECHNOLOGIES LOGO
Common Stock

----------------------
This is an offering of 4,100,000 shares of common stock of Teledyne
Technologies Incorporated. All of the 4,100,000 shares of common stock are being
sold by Teledyne Technologies.

The common stock is listed on the New York Stock Exchange and traded under
the symbol "TDY." The last reported sale price of the common stock on August 7,
2000 was $16 3/4 per share.

See "Risk Factors" beginning on page 5 to read about factors you should
consider before buying shares of the common stock.

----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

----------------------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial public offering price............................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to Teledyne Technologies......... $ $
</TABLE>

To the extent that the underwriters sell more than 4,100,000 shares of the
common stock, the underwriters have the option to purchase up to an additional
615,000 shares from Teledyne Technologies at the initial public offering price
less the underwriting discount.

----------------------
The underwriters expect to deliver the shares in New York, New York on
, 2000.

GOLDMAN, SACHS & CO.

BANC OF AMERICA SECURITIES LLC

A.G. EDWARDS & SONS, INC.
----------------------

Prospectus dated , 2000.
<PAGE> 3

TELEDYNE TECHNOLOGIES LOGO

FOLD-OUT PAGE

A Continuum of Capabilities

[Dispersed throughout fold-out are the following words]

Systems Engineering

Energy Systems

Microelectronics
Aerospace Engines
Information Technology
Fiber Optics
Wireless and Satellite Communication Components
Aviation Communications
Environmental Solutions

[Montage of photographs depicting products and end uses.]

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INSIDE COVER PAGE

[Background is original artwork consisting of a distorted image derived from a
photograph of one of Teledyne Electronic Technologies' products. Additional
graphics were superimposed, including grid lines and numbers.]

tele-or tel-. A prefix meaning: 1. Distance: telecommunication. 2. Television:
telecast. [From Greek tele, at a distance, far off.]

dyne (din), n. [Fr. < Gr. dynamis, power], the amount of force that causes a
mass of one gram to alter its speed by one centimeter per second for each second
during which the force acts.
<PAGE> 4

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information about our company, the common stock being sold in this offering and
our consolidated financial statements and the notes to those statements
appearing elsewhere in this prospectus.

TELEDYNE TECHNOLOGIES

We are a leading provider of sophisticated electronic and communications
products, including components and subsystems for wireless and satellite
systems, and data acquisition and communication equipment for airlines and
business aircraft. We also provide systems engineering solutions and information
technology services for space, defense and industrial applications, and
manufacture general aviation and missile engines and components, as well as
on-site power generation equipment.

We serve niche market segments where performance, precision and reliability
are critical. Our customers include major communications and other commercial
companies, government agencies, aerospace prime contractors and general aviation
companies. We have developed strong core competencies in engineering, software
development and manufacturing that we can leverage both to sustain and grow our
current niche businesses, and to become an innovator in related higher-growth
markets.

Our strategy is to focus on markets for commercial communications products,
while we continue to expand our profitable niche market businesses by enhancing
our high volume manufacturing capability and expanding strategic alliances. For
example, we intend to leverage our experience in manufacturing sophisticated
fiber optic transmitters and receivers for aerospace customers to enable us to
manufacture similar products for commercial customers in wireless and fiber
optic communications markets. We plan to continually evaluate our product lines
to ensure that they are aligned with our strategy. These actions will help us to
redirect capital and management focus to opportunities that will best utilize
our engineering resources and technical expertise. Consistent with this
strategy, we plan to divest Teledyne Cast Parts, our sand and investment
castings business.

Total sales in 1999 were $761.4 million, compared to $733.0 million and
$707.4 million in 1998 and 1997, respectively. Our segment operating profits
were $87.6 million, $85.3 million and $67.6 million in 1999, 1998 and 1997,
respectively. Approximately 56% of our total sales in 1999 were to commercial
customers and the balance was to the U.S. Government. Approximately 65% of these
U.S. Government sales were attributable to fixed price-type contracts and the
balance to cost plus fee-type contracts. International sales accounted for
approximately 18% of total sales in 1999.

We were incorporated in Delaware in August 1999. Until November 29, 1999,
we were a wholly owned subsidiary of Allegheny Technologies Incorporated
("ATI"). Our spin-off from ATI was effected on that date.

Our principal executive offices are located at 2049 Century Park East,
Suite 1500, Los Angeles, California 90067-3101 and our telephone number is (310)
277-3311. Our website is www.teledyne.com. The information on this website is
not part of this prospectus.

1
<PAGE> 5

THE OFFERING

<TABLE>
<S> <C>
Common stock offered.................................... 4,100,000 shares
Common stock to be outstanding immediately after the
offering.............................................. 30,903,225 shares
Use of proceeds......................................... For general corporate purposes to further
develop manufacturing capabilities and
production capacity, expand marketing and
research and development, and for possible
acquisitions and/or joint ventures
NYSE symbol............................................. TDY
</TABLE>

----------------------

This information is based on 26,803,225 shares outstanding as of July 3,
2000. Unless we specifically state otherwise, the information in this prospectus
does not take into account the issuance of up to 615,000 shares of common stock
that the underwriters have the option to purchase. If the underwriters exercise
in full their option to purchase additional shares, 31,518,225 shares of common
stock will be outstanding after the offering.

The number of shares of our common stock to be outstanding immediately
after the offering listed above does not take into account 5,600,000 shares of
our common stock reserved for issuance under our stock plans. As of July 3,
2000, 83,350 shares were allocated for issuance to participants under the ATI
Performance Share Program and options to purchase 2,535,967 shares had been
granted at a weighted average exercise price of $11.49 per share. The number
also does not take into account 57,036 shares of restricted stock issued on July
25, 2000 to participants under our Restricted Stock Award Program.

2
<PAGE> 6

SUMMARY CONSOLIDATED FINANCIAL DATA

The following table presents our summary consolidated financial data.
Effective November 29, 1999, Teledyne Technologies was spun off from ATI. Our
fiscal year is determined based on a 53/52-week convention and ends on or about
December 31. The historical financial information is not necessarily indicative
of the results of operations or financial position that would have occurred if
we had been a separate, independent company during the periods presented, nor is
it indicative of future performance. This historical financial information does
not include pro forma adjustments that reflect estimates of the expenses that we
would have incurred had we been operated as an independent company and as
capitalized at the time of its spin-off from ATI for each period presented. Our
financial statements have been restated to reflect Teledyne Cast Parts as a
discontinued operation. The historical financial information should be read in
conjunction with the discussion under "Management's Discussion and Analysis of
Results of Operations and Financial Condition."

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
------------------------------------------ -----------------
1995 1996 1997 1998 1999 1999 2000
------ ------ ------ ------ ------ ------- -------
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Sales......................................... $657.8 $686.1 $707.4 $733.0 $761.4 $375.4 $397.7
Costs and expenses:
Cost of sales............................... 478.6 487.9 511.8 532.1 552.1 275.3 287.4
Selling, general and administrative
expenses.................................. 127.9 133.1 135.6 123.4 130.5 65.0 85.4
------ ------ ------ ------ ------ ------ ------
Operating profit.............................. 51.3 65.1 60.0 77.5 78.8 35.1 24.9
Interest and debt expense, net................ -- -- -- -- 0.8 -- 3.6
Other income.................................. 1.8 1.8 1.4 1.6 1.0 0.5 0.4
------ ------ ------ ------ ------ ------ ------
Income from continuing operations before
income taxes................................ 53.1 66.9 61.4 79.1 79.0 35.6 21.7
Provision for income taxes.................... 21.7 28.0 24.1 32.7 31.8 14.7 8.6
------ ------ ------ ------ ------ ------ ------
Income from continuing operations............. 31.4 38.9 37.3 46.4 47.2 20.9 13.1
Discontinued operations, net of tax........... (0.5) 1.8 4.3 2.3 1.8 1.2 0.2
------ ------ ------ ------ ------ ------ ------
Net income.................................... $ 30.9 $ 40.7 $ 41.6 $ 48.7 $ 49.0 $ 22.1 $ 13.3
====== ====== ====== ====== ====== ====== ======
Basic and diluted earnings per common share:
Income from continuing operations........... $ 1.25 $ 1.42 $ 1.33 $ 1.65 $ 1.73 $ 0.76 $ 0.48
Discontinued operations..................... (0.02) 0.07 0.15 0.08 0.06 0.04 0.01
------ ------ ------ ------ ------ ------ ------
Basic and diluted earnings per common share... $ 1.23 $ 1.49 $ 1.48 $ 1.73 $ 1.79 $ 0.80 $ 0.49
====== ====== ====== ====== ====== ====== ======

CONSOLIDATED BALANCE SHEET DATA (AT PERIOD
END):
Working capital............................... $ 88.0 $ 95.6 $ 78.2 $ 72.6 $ 98.5 $ 81.6 $ 96.6
Total assets.................................. $232.3 $250.9 $250.6 $246.4 $313.4 $275.4 $342.5
Long term debt, net........................... $ -- $ -- $ -- $ -- $ 97.0 $ -- $ 91.0
Stockholders' equity.......................... $115.2 $128.0 $109.4 $106.4 $ 44.5 $116.1 $ 58.3
</TABLE>

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(1) The number of average outstanding shares used to compute earnings per share
for periods prior to the spin-off was determined based on a distribution
ratio of one share of our common stock for every seven shares of ATI common
stock in the spin-off. The treasury method is used to calculate diluted
earnings per share.

3
<PAGE> 7

SUMMARY PRO FORMA FINANCIAL DATA

Our spin-off from ATI was effected on November 29, 1999. Our fiscal year is
determined based on a 53/52-week convention and ends on or about December 31.
The unaudited pro forma financial information set forth below has been presented
for informational purposes only and may not reflect the results of operations
that would have occurred had we operated as a separate, independent company for
the periods presented. This information should not be relied upon as being
indicative of future results. Pro forma adjustments reflect the estimated
expenses (primarily interest expense and corporate expenses) that we would have
incurred had we been operated as a separate company as of the beginning of each
period presented and as capitalized at the time of the spin-off for each period
presented. As part of the spin-off, we assumed $100 million in long-term debt
incurred by ATI. Pro forma income includes pro forma interest expense on this
long-term debt as if it had been outstanding for all periods presented. Pro
forma income adjusts corporate expenses to an annual level of $15 million from
the lesser amount previously allocated. Our financial statements have been
restated to reflect Teledyne Cast Parts as a discontinued operation. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
------------------------ -----------------
1997 1998 1999 1999 2000
------ ------ ------ ------- -------
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Sales............................................ $707.4 $733.0 $761.4 $375.4 $397.7
Costs and expenses:
Cost of sales.................................. 511.8 532.1 552.1 275.3 287.4
Selling, general and administrative expenses... 143.0 130.6 136.8 68.7 85.4
------ ------ ------ ------ ------
Operating profit................................. 52.6 70.3 72.5 31.4 24.9
Interest and debt expenses, net.................. 8.1 8.0 8.1 4.0 3.6
Other income..................................... 1.4 1.6 1.0 0.5 0.4
------ ------ ------ ------ ------
Income from continuing operations before income
taxes.......................................... 45.9 63.9 65.4 27.9 21.7
Provision for income taxes....................... 18.0 26.4 26.3 11.5 8.6
------ ------ ------ ------ ------
Income from continuing operations................ 27.9 37.5 39.1 16.4 13.1
Discontinued operations, net of tax.............. 4.3 2.3 1.8 1.2 0.2
------ ------ ------ ------ ------
Net income....................................... $ 32.2 $ 39.8 $ 40.9 $ 17.6 $ 13.3
====== ====== ====== ====== ======
Basic and diluted earnings per common share:
Income from continuing operations.............. $ 1.00 $ 1.33 $ 1.44 $ 0.60 $ 0.48
Discontinued operations........................ 0.15 0.08 0.06 0.04 0.01
------ ------ ------ ------ ------
Basic and diluted earnings per common share...... $ 1.15 $ 1.41 $ 1.50 $ 0.64 $ 0.49
====== ====== ====== ====== ======
</TABLE>

---------------

4
<PAGE> 8

RISK FACTORS

You should carefully consider the risks described below and the other
information in this prospectus before investing in our common stock.

WE MAY BE UNSUCCESSFUL IN OUR EFFORTS TO INCREASE OUR PARTICIPATION IN
COMMERCIAL COMMUNICATIONS MARKETS.

We plan to use our existing technology and manufacturing capabilities to
increase our participation in commercial communications markets. We may be
unable to execute this strategy successfully. For example, we are investing in
new equipment and otherwise expanding our electronic component manufacturing
capacity to enable us to offer fiber optic component manufacturing services to
commercial telecommunications customers. We have limited experience with
manufacturing these types of components, and have no experience manufacturing
these types of components at the high production rates potential customers are
likely to demand. In addition, commercial telecommunications customers require
manufacturers to meet stringent quality and production standards over a
significant period of time. We may be unable to meet the required standards or
otherwise gain acceptance as a qualified manufacturer of these or other
communications components. We may also be unable to manufacture these or other
communications components profitably. In the future, we may face increasing
competition for providing these manufacturing services from lower cost
providers. In addition, customers for these services are seeking to build or
acquire internal manufacturing capacity for communications components, and could
in the future determine not to outsource the manufacture of these components.
Future developments such as these could have a material adverse effect on our
business, results of operations or financial condition.

OUR DEPENDENCE ON REVENUE FROM GOVERNMENT CONTRACTS SUBJECTS US TO THE RISK THAT
WE MAY NOT BE SUCCESSFUL IN BIDDING FOR FUTURE CONTRACTS AND THAT GOVERNMENT
FUNDING FOR THESE CONTRACTS MAY BE DELAYED OR CONTINUE TO DECREASE.

We perform work on a number of contracts with the Department of Defense and
other agencies and departments of the U.S. Government. Sales under contracts
with the U.S. Government as a whole, including sales under contracts with the
Department of Defense, as prime or subcontractor, represented approximately 44%
of our total revenue for 1999. Performance under government contracts has
certain inherent risks that could have a material effect on our business,
results of operations and financial condition.

Government contracts are conditioned upon the continuing availability of
Congressional appropriations. Congress typically appropriates funds for a given
program on a fiscal-year basis even though contract performance may take more
than one year. As a result, at the beginning of a major program, a contract is
typically only partially funded, and additional monies are normally committed to
the contract by the procuring agency only as appropriations are made by Congress
for future fiscal years.

The overall U.S. military budget declined in real dollars from the
mid-1980's through the early 1990's. Although U.S. military budgets have
stabilized in recent years, future levels of defense spending cannot be
predicted. Delays or further declines in U.S. military expenditures could
adversely affect our business, results of operations and financial condition,
depending upon the programs affected, the timing and size of the changes and our
ability to offset the impact with new business or cost reductions.

Most of our U.S. Government contracts are subject to termination by the
U.S. Government either at its convenience or upon the default of the contractor.
Termination-for-convenience provisions provide only for the recovery of costs
incurred or committed, settlement expenses, and profit on work completed prior
to termination. Termination-for-default imposes liability on the contractor for
excess costs incurred by the U.S. Government in reprocuring undelivered items
from another source.
5
<PAGE> 9

We obtain many U.S. Government prime and subcontracts through the process
of competitive bidding. We may not be successful in having our bids accepted. In
addition, contracts may not be profitable.

A number of our U.S. Government prime and subcontracts are fixed-price type
contracts (65% in 1999). Under this type of contract, we bear the inherent risk
that actual performance cost may exceed the fixed contract price. This is
particularly true where the contract was awarded and the price finalized in
advance of final completion of design.

We, like other government contractors, are subject to various audits,
reviews and investigations (including private party "whistleblower" lawsuits)
relating to our compliance with federal and state laws. Generally, claims
arising out of these U.S. Government inquiries and voluntary disclosures can be
resolved without resorting to litigation. However, should the business unit or
division involved be charged with wrongdoing, or should the U.S. Government
determine that the unit or division is not a "presently responsible contractor,"
that unit or division, and conceivably our company as a whole, could be
temporarily suspended or, in the event of a conviction, debarred for up to three
years from receiving new government contracts or government-approved
subcontracts. In addition, we could expend substantial amounts in defending
against such charges and in damages, fines and penalties if such charges are
proven or result in negotiated settlements.

WE MAY BE UNABLE TO SUCCESSFULLY INTRODUCE NEW AND ENHANCED PRODUCTS IN A TIMELY
AND COST-EFFECTIVE MANNER.

Our operating results will depend in part on our ability to introduce new
and enhanced products on a timely basis. Successful product development and
introduction depends on numerous factors, including our ability to anticipate
customer and market requirements, changes in technology and industry standards,
our ability to differentiate our offerings from offerings of our competitors,
and market acceptance.

We may not be able to develop and introduce new or enhanced products in a
timely and cost-effective manner or to develop and introduce products that
satisfy customer requirements. Our new products also may not achieve market
acceptance or correctly anticipate new industry standards and technological
changes.

TECHNOLOGICAL CHANGE COULD CAUSE CERTAIN OF OUR PRODUCTS OR SERVICES TO BECOME
OBSOLETE OR NON-COMPETITIVE.

The markets for a number of our products and services are generally
characterized by rapid technological development, evolving industry standards,
changes in customer requirements and new product introductions and enhancements.
A faster than anticipated change in one or more of the technologies related to
our products or services or in market demand for products or services based on a
particular technology could result in faster than anticipated obsolescence of
certain of our products or services and could have a material adverse effect on
our business, results of operation and financial condition. Currently accepted
industry standards are also subject to change, which may contribute to the
obsolescence of our products or services.

WE MAY NOT HAVE SUFFICIENT RESOURCES TO FUND ALL FUTURE RESEARCH AND DEVELOPMENT
AND CAPITAL EXPENDITURES OR POSSIBLE ACQUISITIONS.

In order to remain competitive, we must make substantial investments in
research and development to develop new and enhanced products and continuously
upgrade our process technology and manufacturing capabilities.

Although we believe that anticipated cash flows from operations and
available borrowings under our $200 million credit facility will be sufficient
to satisfy our anticipated working capital, research and development and capital
investment needs, we may be unable to fund all of these needs or possible

6
<PAGE> 10

acquisitions without additional financing. Our ability to raise additional
capital will depend on a variety of factors, some of which will not be within
our control, including investor perceptions of us, our businesses and the
industries in which we operate, and general economic and market conditions. We
may be unable to successfully raise needed capital and the amount of net
proceeds that will be available to us may not be sufficient to meet our needs.
Failure to successfully raise needed capital on a timely or cost-effective basis
could have a material adverse effect on our business, results of operations and
financial condition.

PRODUCT LIABILITY CLAIMS OR RECALLS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
REPUTATION, BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

As a manufacturer and distributor of various products, our results of
operations are susceptible to adverse publicity regarding the quality or safety
of our products. In part, product liability claims challenging the safety of our
products may result in a decline in sales for a particular product which could
adversely affect our results of operations. This could be true even if the
claims themselves are proven to not be true or settled for immaterial amounts.

While we have general liability and other insurance policies concerning
product liabilities, we have self-insured retentions or deductibles under such
policies with respect to a portion of these liabilities. For example, our annual
self-insured retention for general aviation aircraft liabilities incurred in
connection with products manufactured by Teledyne Continental Motors is $10
million.

Product recalls could also have a material adverse effect on our business,
results of operations and financial condition. For example, Teledyne Continental
Motors is engaged in a product recall of piston engine crankshafts as to which
we took a $12 million pre-tax charge in the fiscal 2000 second quarter. In the
second quarter of 1999, Teledyne Continental Motors had an unrelated recall of
piston engines for which we took a $3 million pre-tax charge. Product recalls
have the potential for tarnishing a company's reputation and could have a
material adverse effect on the sales of our products.

We cannot assure that we will not have additional product liability claims
or that we will not recall any additional products.

INCREASING COMPETITION COULD REDUCE THE DEMAND FOR OUR PRODUCTS AND SERVICES.

Each of our markets is highly competitive. Many of our competitors have,
and potential competitors could have, greater name recognition, a larger
installed base of products, more extensive engineering, manufacturing, marketing
and distribution capabilities and greater financial, technological and personnel
resources than we do. New or existing competitors may also develop new
technologies which could adversely affect the demand for our products and
services. Industry consolidation trends, particularly among aerospace and
defense contractors, could adversely affect demand for our products and services
if prime contractors seek to control more aspects of vertically-integrated
projects.

WE SELL PRODUCTS AND SERVICES TO CUSTOMERS IN INDUSTRIES WHICH ARE CYCLICAL AND
SENSITIVE TO CHANGES IN GENERAL ECONOMIC ACTIVITY.

We derive significant revenues from the commercial aerospace industry.
Domestic and international commercial aerospace markets are cyclical in nature.
Historic demand for new commercial aircraft has been related to the stability
and health of domestic and international economies. Delays or changes in
aircraft and component orders could impact the future demand for our products
and have a material adverse effect on our business, results of operations and
financial condition.

In addition, we sell products and services to customers in industries that
are sensitive to the level of general economic activity and in mature industries
that are sensitive to capacity. Adverse

7
<PAGE> 11

economic conditions affecting these industries may reduce demand for our
products and services, which may reduce our profits, or our production levels,
or both.

HAVING LIMITED OPERATING HISTORY AS AN INDEPENDENT COMPANY MAKES IT DIFFICULT TO
PREDICT OUR PROFITABILITY AS A STAND-ALONE COMPANY.

We have a limited operating history as an independent company. Prior to the
spin-off, our businesses relied on ATI for various financial, managerial and
administrative services and have been able to benefit from the earnings,
financial resources, assets and cash flows of ATI's other businesses. Since the
spin-off, ATI is only obligated to provide us with minimal transitional
assistance and services.

We expect costs and expenses associated with the management of a public
company to be greater than the amount reflected in our historical financial
statements. We also will incur interest expense and be subject to the other
requirements associated with our credit facility. While we had been profitable
as part of ATI, there can be no assurance that, as a stand-alone company, our
future profits will be comparable to historical operating results before the
spin-off.

We have been dedicating significant managerial and other resources at the
corporate level to establish the infrastructure and systems necessary for us to
operate as an independent public company. While we believe that we have
sufficient management resources, we cannot assure you that this will be the case
or that we will successfully implement our operating and growth initiatives.
Failure to implement these initiatives successfully could have a material
adverse effect on our business, results of operations and financial condition.

WE ARE SUBJECT TO THE RISKS ASSOCIATED WITH INTERNATIONAL SALES.

During 1999, international sales accounted for approximately 18% of our
total revenues. We anticipate that future international sales will continue to
account for a significant percentage of our revenues. Risks associated with
these sales include:

- political and economic instability;

- export controls;

- changes in legal and regulatory requirements;

- U.S. and foreign government policy changes affecting the markets for our
products;

- changes in tax laws and tariffs;

- convertibility and transferability of international currencies; and

- exchange rate fluctuations (which may affect sales to international
customers and the value of and profits earned on international sales when
converted into dollars).

Any of these factors could have a material adverse effect on our business,
results of operations and financial condition. Weak conditions in Asian
economies have affected our results of operations adversely.

COMPLIANCE WITH INCREASING ENVIRONMENTAL REGULATIONS AND THE EFFECTS OF
POTENTIAL ENVIRONMENTAL LIABILITIES COULD HAVE A MATERIAL ADVERSE FINANCIAL
EFFECT ON US.

We, like other industry participants, are subject to various federal,
state, local and international environmental laws and regulations. We may be
subject to increasingly stringent environmental standards in the future. Future
developments, administrative actions or liabilities relating to environmental
matters could have a material adverse effect on our business, results of
operations or financial condition.

8
<PAGE> 12

Some of our businesses work with highly dangerous substances which require
heightened standards of care. For example, as the prime contractor for the U.S.
Army's Non-Stockpile Chemical Materiel Demilitarization program, we are
responsible for the destruction of small caches of chemical munitions and
materiel located in over 30 states. The destruction of chemical weapons is an
inherently dangerous activity. Although we have not experienced any accidents or
other adverse consequences as a result of our participation in this program, we
cannot assure that we will not experience any problems in the future. Although
the federal government provides certain indemnities to contractors in this
program, these indemnities may be insufficient to offset liabilities that we may
incur in connection with our participation in this program.

For additional discussion of environmental matters, see the discussion
under the caption "Other Matters--Environmental" of "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and Notes 2 and 13 to
Notes to Consolidated Financial Statements.

OUR INABILITY TO ATTRACT AND RETAIN KEY PERSONNEL COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR FUTURE SUCCESS.

Our future success depends to a significant extent upon the continued
service of our executive officers and other key management and technical
personnel and on our ability to continue to attract, retain and motivate
qualified personnel. Recruiting and retaining skilled technical personnel is
highly competitive. The loss of the services of one or more of our key employees
or our failure to attract, retain and motivate qualified personnel could have a
material adverse effect on our business, financial condition and results of
operations.

ACQUISITIONS INVOLVE INHERENT RISKS THAT MAY ADVERSELY AFFECT OUR OPERATING
RESULTS AND FINANCIAL CONDITION.

Our growth strategy includes possible acquisitions. Acquisitions involve
various inherent risks, such as:

- our ability to assess accurately the value, strengths, weaknesses,
contingent and other liabilities and potential profitability of
acquisition candidates;

- the potential loss of key personnel of an acquired business;

- our ability to integrate acquired businesses and to achieve identified
financial and operating synergies anticipated to result from an
acquisition; and

- unanticipated changes in business and economic conditions affecting an
acquired business.

FAILURE OF REPRESENTATIONS AND ASSUMPTIONS UNDERLYING THE IRS TAX RULING COULD
CAUSE OUR SPIN-OFF FROM ATI NOT TO BE TAX-FREE TO ATI OR TO ATI'S STOCKHOLDERS
AND MAY REQUIRE US TO INDEMNIFY ATI.

While the tax ruling relating to the qualification of our spin-off from ATI
as a tax-free distribution within the meaning of Section 355 of the Internal
Revenue Code generally is binding on the IRS, the continuing validity of the tax
ruling is subject to certain factual representations and assumptions, including
the assumption that we will complete a required public offering of our common
stock within one year following the spin-off, and use the proceeds for research
and development and related capital projects, for the further development of our
manufacturing capabilities and for acquisitions and/or joint ventures.

If the spin-off were not to qualify as a tax-free distribution within the
meaning of Section 355 of the Code, ATI would recognize taxable gain generally
equal to the amount by which the fair market value of the Teledyne Technologies
common stock distributed to ATI's stockholders exceeded the tax basis in our
assets. In addition, the distribution of our common stock to each ATI
stockholder would

9
<PAGE> 13

generally be treated as taxable in an amount equal to the fair market value of
the Teledyne Technologies common stock such stockholder received.

If the spin-off qualified as a distribution under Section 355 of the Code
but failed to be tax-free to ATI because of certain post-spin-off circumstances
(such as an acquisition of Teledyne Technologies) ATI would recognize taxable
gain as described above, but the distribution of our common stock in the
spin-off would generally be tax-free to each ATI stockholder.

The Tax Sharing and Indemnification Agreement between Teledyne Technologies
and ATI provides that we will be responsible for any taxes imposed on, or other
amounts paid by, ATI, its agents and representatives and its stockholders as a
result of the failure of the spin-off to qualify as a tax-free distribution
within the meaning of Section 355 of the Code if the failure or disqualification
is caused by certain post-spin-off actions by or with respect to us (including
our subsidiaries) or our stockholders. For example, the acquisition of Teledyne
Technologies by a third party during the two-year period following the spin-off
could cause such a failure or disqualification. If any of the taxes or other
amounts described above were to become payable by us, the payment could have a
material adverse effect on our financial condition, results of operations and
cash flow and could exceed our net worth by a substantial amount.

PROVISIONS OF OUR GOVERNING DOCUMENTS, APPLICABLE LAW, THE TAX SHARING AND
INDEMNIFICATION AGREEMENT WITH ATI AND OUR CHANGE IN CONTROL SEVERANCE
AGREEMENTS COULD MAKE AN ACQUISITION OF TELEDYNE TECHNOLOGIES MORE DIFFICULT.

Our Restated Certificate of Incorporation, Amended and Restated Bylaws and
Stockholder Rights Plan and the General Corporation Law of the State of Delaware
contain several provisions that could make the acquisition of control of
Teledyne Technologies in a transaction not approved by our board of directors
more difficult. Certain tax aspects of our spin-off from ATI could also
discourage an acquisition of control of Teledyne Technologies for some period of
time. For example, the acquisition of Teledyne Technologies by a third party
during the two-year period following the spin-off could result in the spin-off
not qualifying as a tax-free distribution within the meaning of Section 355 of
the Internal Revenue Code and trigger indemnification obligations of Teledyne
Technologies under the Tax Sharing and Indemnification Agreement. We have
entered into Change in Control Severance Agreements with 14 members of our
management, which could have an anti-takeover effect.

WE MAY NOT BE ABLE TO SELL TELEDYNE CAST PARTS ON ACCEPTABLE TERMS.

Consistent with our strategy to focus on markets for commercial
communications products and expand our profitable niche market businesses, our
Board of Directors has authorized the sale of Teledyne Cast Parts, which
provides sand and investment castings to the aerospace and defense industries.
Accordingly, our consolidated financial statements have been restated to reflect
Teledyne Cast Parts as a discontinued operation. Our ability to dispose of this
business will depend on many factors, including the terms and conditions of any
definitive asset purchase and sale agreement, as well as industry and business
conditions. In recent years, this business has been adversely affected by
production inefficiencies, delays in shipments and difficult market conditions.
We cannot provide any assurance as to when, if or on what terms Teledyne Cast
Parts will be sold.

THE MARKET PRICE OF OUR COMMON STOCK HAS FLUCTUATED SIGNIFICANTLY SINCE OUR
SPIN-OFF FROM ATI, AND COULD CONTINUE TO DO SO AFTER THIS OFFERING.

Since the spin-off on November 29, 1999, the market price of our common
stock has ranged from a low of $7 13/16 to a high of $28 1/2. Our stock price
could fluctuate significantly after this offering. Among the factors that could
affect our stock price are:

- quarterly variations in our operating results;

10
<PAGE> 14

- strategic actions by us or our competitors, such as acquisitions;

- adverse business developments, such as the recent engine recall by
Teledyne Continental Motors;

- general market conditions; and

- general economic factors unrelated to our performance.

The stock markets in general, and the markets for high technology companies
in particular, have experienced a high degree of volatility not necessarily
related to the operating performance of particular companies. We cannot assure
you that you will be able to sell shares you acquire in this offering at or
above the initial public offering price.

FORWARD-LOOKING STATEMENTS

You should not rely on forward-looking statements in this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as "anticipates," "believes," "plans,"
"expects," "future," "intends," "may," "will," "should," "estimates,"
"predicts," "potential," "continue" and similar expressions to identify these
forward-looking statements. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause our actual
results, as well as those of the markets we serve, levels of activity,
performance, achievements and prospects to be materially different from those
expressed or implied by the forward-looking statements. Our actual results could
differ materially from the results contemplated by these forward-looking
statements due to a number of factors, including those discussed in "Risk
Factors," "Management's Discussion and Analysis of Results of Operations and
Financial Condition" and elsewhere in this prospectus. We assume no duty to
update any forward-looking statements.

USE OF PROCEEDS

We estimate that our net proceeds from this offering will be approximately
$64.2 million, based on an assumed public offering price of $16 3/4 per share
and after deducting the underwriting discount and estimated offering expenses
payable by us. We intend to use the proceeds of this offering for general
corporate purposes to enable us to further develop our manufacturing
capabilities and production capacity and expand marketing and research and
development, and for possible acquisitions or joint ventures. We are currently
not a party to any acquisition agreement or involved in any negotiations with
respect to any specific acquisition. Pending their use for these purposes, we
may use the proceeds of this offering to repay borrowings under our revolving
credit facility.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Our common stock is listed on the New York Stock Exchange and traded under
the symbol "TDY." The following table sets forth, for the periods indicated, the
high and low sale prices for the common stock as reported by the New York Stock
Exchange.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1999
4th Quarter (from November 29, 1999)........................ $10 1/2 $ 7 13/16

2000
1st Quarter................................................. $28 1/2 $ 8 1/2
2nd Quarter................................................. $19 13/16 $10 3/4
3rd Quarter (through August 7, 2000)........................ $21 $14 11/16
</TABLE>

11
<PAGE> 15

On August 7, 2000, the closing sale price of our common stock as reported
by the New York Stock Exchange was $16 3/4 per share. As of July 3, 2000, there
were approximately 8,600 holders of record of the common stock.

We currently intend to retain any future earnings to fund the development
and growth of our business. Therefore, we do not anticipate paying any cash
dividends in the foreseeable future. Provisions of our credit agreement limit
our ability to pay dividends in amounts exceeding 25% of cumulative net income
subsequent to the effective date of the credit agreement. As of July 2, 2000,
approximately $4.7 million was available for the payment of dividends under
these provisions.

CAPITALIZATION

The following table sets forth our capitalization at July 2, 2000, and as
adjusted to give effect to our receipt of the net proceeds from the sale of
4,100,000 shares of common stock offered hereby at an assumed public offering
price of $16 3/4 per share, after deducting the underwriting discount and
estimated offering expenses payable by us. As adjusted data reflect the use of
net proceeds to repay borrowings under our revolving credit facility, pending
their intended use as described under "Use of Proceeds".

<TABLE>
<CAPTION>
JULY 2, 2000
--------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
<S> <C> <C>
Long-term debt.............................................. $ 91.0 $ 26.8
====== ======
Stockholders' equity:
Preferred stock, $.01 par value; 15,000,000 authorized,
none outstanding....................................... $ -- $ --
Common stock, $.01 par value; 125,000,000 authorized,
26,801,505 issued and outstanding actual, 30,901,505
issued and outstanding, as adjusted(1)................. 0.3 0.3
Additional paid-in capital................................ 38.9 103.1
Retained earnings......................................... 18.9 18.9
Accumulated other comprehensive income.................... 0.2 0.2
------ ------
Total stockholders' equity............................. $ 58.3 $122.5
====== ======
Total capitalization................................... $149.3 $149.3
====== ======
</TABLE>

---------------

(1) The number of shares excludes 5,600,000 shares of common stock reserved for
issuance under our stock plans. As of July 3, 2000, 83,350 shares were
allocated for issuance to participants under the ATI Performance Share
Program and options to purchase 2,535,967 shares had been granted at a
weighted average exercise price of $11.49 per share. The number also does
not take into account 57,036 shares of restricted stock issued on July 25,
2000 to participants under our Restricted Stock Award Program.

12
<PAGE> 16

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents our selected consolidated financial data. Our
fiscal year is determined based on a 53/52-week convention and ends on or about
December 31. The information set forth below should be read together with
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and our historical consolidated financial statements and notes to
those statements included in this prospectus. Our consolidated income statement
data set forth below for fiscal 1997, 1998 and 1999 and the consolidated balance
sheet data as of the end of fiscal years 1998 and 1999 are derived from our
consolidated financial statements included in this prospectus which have been
audited by Ernst & Young LLP, independent auditors, whose report is also
included in this prospectus. The consolidated income statement data for fiscal
1995 and 1996 and the consolidated balance sheet data as of the end of fiscal
years 1995, 1996 and 1997 are derived from our unaudited consolidated financial
data that are not included in this prospectus. The consolidated income statement
data for the first fiscal quarters of 1999 and 2000 and the consolidated balance
sheet data as of the end of the first fiscal quarter of 2000 are derived from
unaudited consolidated financial statements included in this prospectus and, in
the opinion of management, include all adjustments, consisting only of normal
recurring accruals, that are necessary for a fair presentation of our financial
position and results of operations for these periods.

Effective November 29, 1999, Teledyne Technologies was spun-off from ATI.
Our historical financial information is not necessarily indicative of the
results of operations or financial position that would have occurred if we had
been a separate, independent company during the periods presented, nor is it
indicative of future performance. The historical financial information does not
include pro forma adjustments that reflect estimates of the expenses that we
would have incurred had we been operated as an independent company and as
capitalized at the time of the spin-off for each period presented.

In the second quarter of 2000, our Board of Directors authorized the sale
of Teledyne Cast Parts. Accordingly, our consolidated financial statements have
been restated to reflect Teledyne Cast Parts as a discontinued operation.

13
<PAGE> 17

---------------

14
<PAGE> 18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION

Our strategy is to focus on markets for commercial communications products,
while we continue to expand our profitable niche market businesses. For example,
we intend to leverage our experience in manufacturing sophisticated fiber optic
transmitters and receivers for aerospace customers to enable us to manufacture
similar products for commercial customers in wireless and fiber optic
communications markets. We plan to continually evaluate our product lines to
ensure that they are aligned with our strategy. These actions will help us to
redirect capital and management focus to opportunities that will best utilize
our engineering resources and technical expertise. Consistent with this
strategy, we plan to divest Teledyne Cast Parts, our sand and investment
castings business. Accordingly, our financial statements have been restated to
reflect Teledyne Cast Parts as a discontinued operation.

Our fiscal year is determined based on a 53/52-week convention and ends on
or about December 31. The following is our pro forma unaudited financial
information for 1997, 1998, 1999 and each of the first six months of 1999 and
2000.

The pro forma financial information above has been presented for
informational purposes only and may not reflect the results of operations that
would have occurred had we operated as a separate, independent company for the
periods presented. The pro forma financial information should not be relied upon
as being indicative of future results. Pro forma adjustments reflect the
estimated expenses (primarily interest expense and corporate expenses) that we
would have incurred had we been operated as a separate company as of the
beginning of each year and as capitalized at the time of the spin-off for each
period presented. As part of the spin-off, we assumed

15
<PAGE> 19

$100 million in long-term debt incurred by ATI. Pro forma income includes pro
forma interest expense on this long-term debt as if it had been outstanding for
all periods presented. Pro forma income adjusts corporate expenses to an annual
level of $15 million from the lesser amount previously allocated.

We operate in three business segments: Electronics and Communications;
Systems Engineering Solutions; and Aerospace Engines and Components. Our
segments' respective contributions to our total sales for 1997, 1998 and 1999
and the first six months of 1999 and 2000 are summarized in the following table:

<TABLE>
<CAPTION>
FIRST
FISCAL YEAR SIX MONTHS
-------------------- ------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Electronics and Communications.......................... 48% 47% 45% 45% 44%
Systems Engineering Solutions........................... 30 30 30 30 30
Aerospace Engines and Components........................ 22 23 25 25 26
--- --- --- --- ---
100% 100% 100% 100% 100%
=== === === === ===
</TABLE>

RESULTS OF OPERATIONS

FIRST SIX MONTH PERIODS

Sales for the first six months of 2000 were $397.7 million, compared with
sales of $375.4 million for the same period in 1999. Net income from continuing
operations was $13.1 million ($0.48 per diluted share) for the first six months
of 2000, compared with pro forma net income from continuing operations of $16.4
million ($0.60 per diluted share) for the same period of 1999.

The second quarters of 2000 and 1999 included pretax charges of $12 million
and $3 million, respectively, for piston engine product recall reserves.
Excluding these reserves, net income from continuing operations was $20.4
million ($0.75 per diluted share) for the first six months of 2000, compared
with pro forma net income from continuing operations of $18.2 million ($0.66 per
diluted share) for the same period of 1999. For the first six months of 2000,
net income including discontinued operations was $13.3 million ($0.49 per
diluted share). For the six months of 1999, pro forma net income including
discontinued operations was $17.6 million ($0.64 per diluted share).

In the second quarter of 2000, our Board of Directors authorized the sale
of the assets of Teledyne Cast Parts, which provides sand and investment
castings to the aerospace and defense industries and was previously reported as
part of our Aerospace Engines and Components segment. Accordingly, the
consolidated financial statements have been restated to reflect Teledyne Cast
Parts as a discontinued operation. No loss on disposal is anticipated.

Teledyne Technologies was spun off from ATI, effective November 29, 1999.
Pro forma adjustments in 1999 reflect the estimated expense impacts (primarily
interest expense and corporate expenses) that would have been incurred had
Teledyne Technologies operated as a separate company and as capitalized at the
time of the spin-off for the 1999 period presented. Net income, before pro forma
adjustments, was $22.1 million ($0.80 per diluted share) for the first six
months of 1999.

The increase in sales for the first six months of 2000, compared with the
same 1999 period, reflected higher sales in each operating segment.

The increase in earnings, excluding product recall reserves, for the first
six months of 2000, compared with the pro forma earnings for the same period in
1999, reflected higher operating profit in each operating segment. Net pension
income for the first six months of 2000 was $4.4 million, compared with net
pension income of $3.2 million for the same period of 1999. Prior to the product
recall reserves, earnings from continuing operations before interest, taxes,
depreciation and

16
<PAGE> 20

amortization (EBITDA) for the first six months of 2000 were $45.1 million,
compared with pro forma EBITDA of $40.8 million for the same period of 1999.

Gross profit from continuing operations on a historical basis was higher in
the first six months of 2000, compared with the same period in 1999. Net income,
prior to product recall reserves, decreased due to interest expense on the debt
assumed as part of the spin-off, higher research and development spending and
higher administrative expense compared with the allocation from ATI which was
based on sales. The higher gross margins for the first six months of 2000,
compared with the same period of 1999, were attributable to changes in product
mix within the operating segments offset by reduced margins on electronic
manufacturing services. Our effective tax rate for the first six months of 2000
was 39.6% and was 41.3% for the same period of 1999.

ANNUAL PERIODS

We reported 1999 sales of $761.4 million, compared with sales of $733.0
million for 1998 and $707.4 million for 1997. Pro forma net income was $40.9
million, or $1.50 per diluted share, for 1999, compared with pro forma net
income of $39.8 million, or $1.41 per diluted share, for 1998 and pro forma net
income of $32.2 million, or $1.15 per diluted share, for 1997.

International sales represented approximately 18%, 22% and 21% of our total
sales for 1999, 1998 and 1997, respectively. Sales under contracts with the U.S.
Government, which included contracts with the Department of Defense, were
approximately 44%, 40% and 41% of our total sales for 1999, 1998 and 1997,
respectively.

In 1999, segment operating profit was $87.6 million, compared with $85.3
million in 1998 and $67.6 million in 1997. Included in operating profit was
pension income of $6.6 million in 1999, $1.7 million in 1998 and pension expense
of $722 thousand in 1997.

Net income, before pro forma adjustments, was $49.0 million, or $1.79 per
diluted share, in 1999, compared with $48.7 million, or $1.73 per diluted share,
in 1998 and $41.6 million, or $1.48 per diluted share, in 1997. The historical
financial statements reflect allocations representing corporate expense from ATI
of $7.3 million, $7.8 million and $7.6 million for 1999, 1998 and 1997,
respectively. These allocations were based on sales. The historical financial
statements for 1999 also include one month of actual corporate expenses incurred
by us after the spin-off and one month of interest costs on long-term debt. Cost
of sales increased from 1997 to 1998 and from 1998 to 1999 in line with sales.
Selling, general and administrative expenses decreased in 1998, compared with
1997, reflecting lower research and development and selling costs for each
segment.

2001 EARNINGS OUTLOOK

We currently estimate 2001 segment operating profit from continuing
operations should be 10% to 12% lower than total reported 1999 segment operating
profit. This estimate is due to the cumulative effect of the following factors.

We have announced plans for additional capital expenditures and product
development expenses totaling approximately $20 million in the latter half of
2000, which would impact profitability in the third and fourth quarters. We
currently expect additional similar expenditures at approximately the same
annual rate in 2001 to continue funding our strategic initiatives, which are
principally focused on broadband communications, including fiber optic, wireless
and satellite communication applications.

Additionally, several developments at our Aerospace Engines and Components
segment, including the expected sale of Teledyne Cast Parts and softness in the
small turbine engine business due to a decrease in military spare parts sales,
reduced foreign demand for HARPOON missiles and the delay of the Joint
Air-to-Surface Standoff Missile (JASSM) production start until 2002, will
negatively impact 2001 results.

17
<PAGE> 21

SEGMENTS

The following discussion of our three business segments should be read in
conjunction with Note 12 to Notes to Consolidated Financial Statements.

ELECTRONICS AND COMMUNICATIONS

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
-------------------------- ----------------
1997 1998 1999 1999 2000
------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR PERCENTAGE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Sales...................................... $340.0 $342.1 $340.7 $170.5 $177.1
Operating profit........................... $ 36.8 $ 42.6 $ 42.6 $ 19.2 $ 20.4
Operating profit as a % of sales........... 10.8% 12.5% 12.5% 11.3% 11.5%
International sales as a % of sales........ 23.0% 22.2% 17.3% 19.0% 19.5%
Governmental sales as a % of sales......... 30.2% 29.9% 29.6% 30.3% 28.0%
Capital expenditures....................... $ 10.8 $ 10.3 $ 13.5 $ 3.9 $ 5.4
</TABLE>

Our Electronics and Communications segment, through Teledyne Electronic
Technologies, applies proprietary technology, advanced software and hardware
design skills and manufacturing capabilities in data acquisition and
communications, precision electronic devices and electronic manufacturing.

FIRST SIX MONTHS OF 2000 COMPARED WITH FIRST SIX MONTHS OF 1999. Our
Electronics and Communications segment sales for the first six months of 2000
were $177.1 million, up 3.9% from $170.5 million for the same period of 1999.
Operating profit for the first six months of 2000 rose 6.3% to $20.4 million,
from $19.2 million for the same period of 1999.

For the first six months of 2000, compared with the same period of 1999,
sales grew significantly in electronic manufacturing services, relay products,
business and commuter aircraft communications equipment and microwave products.
Sales from electronic manufacturing services and microwave products grew as a
result of new orders from military and commercial customers. Relay products
reported improved sales based on demand from the communications and
semiconductor test equipment markets. Sales of medical and military
microelectronics were down from the same periods last year. Segment operating
profit improved due to growth in sales, partially offset by reduced margins on
electronic manufacturing services and increased spending in optoelectronics and
broadband wireless initiatives.

1999 COMPARED WITH 1998. Our Electronics and Communications segment sales
were $340.7 million in 1999, down slightly from 1998 sales of $342.1 million.
Operating profit was $42.6 million, the same as 1998.

Improved revenue growth and operating profit margins in the second half of
1999 allowed the segment to recover from a weak first half. For the year, sales
of data acquisition and communications products increased by 3%, led by strong
sales growth in communications equipment for business and commuter aircraft.
Precision electronic device sales declined by 6% as strong sales increases in
medical devices were offset by declines in other lines, particularly military
microelectronics. Electronic manufacturing sales grew modestly. Operating
profit, which was unchanged from 1998, reflected the sales impacts and included
the licensing of certain intellectual property.

1998 COMPARED WITH 1997. Sales for our Electronics and Communications
segment increased 1% and operating profit increased 16% in 1998, compared with
1997. Improvements in sales and operating profit for the segment in 1998 were
due primarily to increases in sales and operating profit of data acquisition and
communications products, which increased by $9.8 million and $11.8 million,
respectively. These increases were attributable to expanded demand by commercial
airlines as well as by the business and commuter aircraft market. Improved sales
and operating profit for electronic contract manufacturing services of $7.4
million and $2.6 million, respectively, reflected continued strength in this
market. These improvements offset declines in sales and operating profit with
respect to precision electronic devices during the period, which decreased by
$15.8 million and $9.4 million,

18
<PAGE> 22

respectively, due to continuing economic difficulties in Asia and the continued
weakness in the semiconductor equipment market. Results for 1998 included a loss
of $1.4 million associated with the contract development of a low-level
windshear alert system which was terminated in 1998.

SYSTEMS ENGINEERING SOLUTIONS

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
-------------------------- ----------------
1997 1998 1999 1999 2000
------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR PERCENTAGE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Sales...................................... $210.4 $223.2 $226.5 $112.4 $118.2
Operating profit........................... $ 13.1 $ 20.5 $ 20.2 $ 9.4 $ 10.4
Operating profit as a % of sales........... 6.2% 9.2% 8.9% 8.4% 8.8%
International sales as a % of sales........ 17.4% 21.8% 13.3% 16.7% 6.0%
Governmental sales as a % of sales......... 75.1% 71.3% 81.9% 77.4% 81.9%
Capital expenditures....................... $ 2.3 $ 2.6 $ 2.0 $ 0.9 $ 1.3
</TABLE>

Our Systems Engineering Solutions segment, through Teledyne Brown
Engineering, offers a wide range of engineering solutions and information
services to government defense, aerospace and commercial customers.

FIRST SIX MONTHS OF 2000 COMPARED WITH FIRST SIX MONTHS OF 1999. Our
Systems Engineering Solutions segment sales for the first six months of 2000
were $118.2 million, up 5.2% from $112.4 million for the same period of 1999.
Operating profit for the first six months of 2000 rose 10.6% to $10.4 million,
from $9.4 million for the same period of 1999.

Our results for the first six months of 2000, compared with the same period
in 1999, reflect strong sales growth in environmental programs, systems
engineering and integration, information technology and space programs. Sales
for the first six months of 2000 were negatively impacted by the significant
decline in demand for our marine products for the petroleum exploration market,
which has been very weak since the second quarter of 1999. Operating results
reflected increased revenue, partially offset by mix differences in systems
engineering and integration and environmental sales. Lower general and
administrative expenses reflect a first quarter 2000 benefit of $1.4 million
related to chemical weapon demilitarization reserves no longer needed due to
additional program funding, which was partially offset by lower gross profit due
to a writedown of approximately $0.9 million in our process control software
business.

1999 COMPARED WITH 1998. Sales for the Systems Engineering Solutions
segment were $226.5 million, up slightly from 1998 sales of $223.2 million. For
1999, operating income was $20.2 million, down from $20.5 million for 1998.

The aerospace, defense and environmental businesses all reported sales
increases in double digits, with our environmental business growing by 24%
relative to 1998. This strong performance was offset by a decline of $20.9
million in marine instrumentation products sales due to industry conditions
affecting petroleum exploration activity. While operating profit was down
slightly overall, significant increases in the rest of the business unit nearly
offset a decline of approximately $4 million in marine products.

1998 COMPARED WITH 1997. Sales for our Systems Engineering Solutions
segment increased 6% and operating profit increased 56% in 1998 compared with
1997. The improvement in sales and operating profit was principally due to the
increased sales and operating profit of $18.6 million and $5.2 million,
respectively. The increase in sales was primarily associated with marine
instrumentation products (due to favorable conditions in the oil industry), as
well as increased participation in defense programs, primarily ballistic missile
defense activities. Aerospace program sales decreased by $6.9 million in 1998 as
a result of the winding down of the NASA payload integration contract, but
operating profit for aerospace programs increased by $800 thousand due to
increased deliveries of international aerospace hardware.

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<PAGE> 23

AEROSPACE ENGINES AND COMPONENTS

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
-------------------------- ----------------
1997 1998 1999 1999 2000
------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR PERCENTAGE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Sales...................................... $157.0 $167.7 $194.2 $ 92.5 $102.4
Operating profit........................... $ 17.7 $ 22.2 $ 24.8 $ 10.5 $ 2.0
Operating profit as a % of sales........... 11.3% 13.2% 12.8% 11.4% 2.0%
International sales as a % of sales........ 22.1% 23.6% 24.6% 22.2% 28.7%
Governmental sales as a % of sales......... 17.6% 19.9% 24.5% 25.3% 25.3%
Capital expenditures....................... $ 2.3 $ 3.8 $ 12.8 $ 1.6 $ 2.6
</TABLE>

Our Aerospace Engines and Components segment, through Teledyne Continental
Motors, focuses on the design, development and manufacture of piston engines,
turbine engines, electronic engine controls and batteries.

FIRST SIX MONTHS OF 2000 COMPARED WITH FIRST SIX MONTHS OF 1999. Our
Aerospace Engines and Components segment sales for the first six months of 2000
were $102.4 million, up 10.7 % from $92.5 million in the same period of 1999.
Excluding piston engine product recall reserves taken in the second quarters of
2000 and 1999, operating profit for the first six months of 2000 was $14.0
million, compared with operating profit of $13.5 million for the same period of
1999. Including product recall reserves, operating profit was $2.0 million for
the first six months of 2000, compared with operating profit of $10.5 million in
the same period of 1999.

In the second quarter of 2000, we initiated a recall program to inspect up
to 3,000 general aircraft engines to investigate possible metallurgical flaws in
engine crankshafts. We recorded a $12 million pre-tax charge in the second
quarter of 2000 for estimated costs associated with this program including the
replacement of affected crankshafts. We are reviewing our options with regard to
cost recovery and have commenced legal action against certain suppliers.

Increased sales for piston engines in the first six months of 2000 were
driven by aftermarket new engine sales and overhaul services. For the first six
months of 2000, sales and operating profit in the turbine engine business were
flat compared with the same period of 1999. In the second half of 1999, sales of
new J69 turbine engines totaled $5.3 million, whereas no new J69 turbine engine
sales are expected during the latter half of 2000. We expect that military spare
parts sales will decrease since such parts are no longer on the military
critical shortage list. Reduced foreign demand for HARPOON missiles is expected
to create a break in production during 2001. Under our agreement with Lockheed
Martin Corporation to supply turbine engines for the Joint Air-to-Surface
Standoff Missile (JASSM) program, engineering development is expected to
continue through the second quarter of 2001, with production deliveries not
scheduled to begin until mid-2002. These developments will negatively impact the
2001 results for our Aerospace Engines and Components segment.

Improved gross profit for the first six months of 2000 compared to the same
period of 1999, reflects favorable product mix which was offset by higher
general and administrative expenses resulting from increased research and
development spending, selling expense and the product recall reserve.

The results of the Aerospace Engines and Components segment have been
restated to reflect Teledyne Cast Parts, which manufactures a wide range of
castings for the aerospace and defense industries, as a discontinued operation.

1999 COMPARED WITH 1998. Our Aerospace Engines and Components segment's
1999 sales were $194.2 million, which represented an increase of 16% from 1998
sales of $167.7 million. For the year, 1999 operating profit rose 12% to $24.8
million compared with $22.2 million for 1998.

20
<PAGE> 24

Engine related sales grew by over 15% in 1999, led by revenue increases of
over 50% in turbine engines relative to 1998. Strong profit improvement in
turbines was partially offset by a $3 million charge taken in the second quarter
for a piston engine product recall.

1998 COMPARED WITH 1997. Sales for our Aerospace Engines and Components
segment increased 7% and operating profit increased 25% in 1998 compared with
1997. These sales and operating profit increases were due principally to a $10.7
million increase in sales and a $4.5 million increase in operating profit for
new piston engine and turbine engine programs. These increases offset higher
costs associated with manufacturing plant reconfiguration and the development of
new products, including new digital electronic piston engine controls and a
NASA-sponsored new piston engine program.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our principal capital requirements are to fund working capital needs,
capital expenditures and debt service requirements. 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 2000. Teledyne Technologies currently expects to spend approximately $40.0
million on capital expenditures in 2000, of which $9.3 million was spent during
the first six months of 2000.

Net cash provided by operating activities from continuing operations was
$10.2 million for the first six months of 2000, compared with $19.6 million for
the same period of 1999. The $9.4 million decrease in cash provided from
operations in 2000, compared with 1999, reflected an increase in prepaid and
deferred income taxes.

In 1999, cash provided from operations amounted to $47.4 million, compared
with $67.1 million in 1998 and $72.9 million in 1997. The decrease in cash
provided from operations in 1999, compared with 1998, reflected an increase in
accounts receivable in 1999 compared with 1998, while in 1998 accounts
receivable decreased from the prior year. The impact of the increase in accounts
receivable in 1999 was partially offset by higher accounts payable and income
taxes payable compared with the prior year.

The January 2, 2000 balance sheet includes several accounts that were
transferred to Teledyne Technologies in connection with the spin-off that were
not included in the historical balance sheet at year end 1998. These amounts
include certain deferred tax assets of $10.8 million, deferred compensation
assets of $9.7 million, deferred compensation liabilities of $9.3 million, and
net unrecognized actuarial gains on pension obligation of $14.7 million.

Working capital was $96.6 million at the end of the first six months of
2000, compared with $98.5 million at the end of 1999. The higher balances in
accounts receivable, inventory and accounts payable were due to higher sales in
the later part of the second quarter of 2000 relative to the fourth quarter of
1999. The higher balance in accrued liabilities reflect the current portion of
the product recall reserve and increases in advances from customers, as well as
insurance and payroll accruals.

Working capital increased to $98.5 million at year end 1999, compared with
$72.6 million at year end 1998. The increase in working capital was primarily
due to the increase in accounts receivable and current deferred tax asset
balances.

Net cash used in investing activities was primarily for capital
expenditures as presented below.

<TABLE>
<CAPTION>
FIRST
FISCAL YEAR SIX MONTHS
----------------------- ------------
1997 1998 1999 1999 2000
----- ----- ----- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Electronics and Communications..................... $10.8 $10.3 $13.5 $3.9 $5.4
Systems Engineering Solutions...................... 2.3 2.6 2.0 0.9 1.3
Aerospace Engines and Components................... 2.3 3.8 12.8 1.6 2.6
----- ----- ----- ---- ----
$15.4 $16.7 $28.3 $6.4 $9.3
===== ===== ===== ==== ====
</TABLE>

21
<PAGE> 25

Financing activities used net cash of $5.2 million in the first six months
of 2000, compared with cash used of $12.2 million for the same period of 1999.
The 2000 amount primarily reflected net payments of $6.0 million on our
revolving credit agreement.

Cash used in financing activities for 1999 primarily reflected net
transactions with ATI as well as net payments on long-term debt. Cash used in
financing activities for 1998 and 1997 only reflected net transactions with ATI.

A $200 million five-year revolving credit agreement that terminates in
November 2004 was arranged with a syndicate of banks in connection with the
spin-off. ATI drew $100 million under the facility prior to our assumption of
the facility. Teledyne Technologies assumed the repayment obligation for the
amount drawn by ATI. At July 2, 2000 we had $91.0 million outstanding under the
facility. Excluding interest and fees, no payments are due under the credit
facility until the facility terminates.

At July 2, 2000, Teledyne Technologies had approximately $109.0 million of
borrowing availability remaining under the credit facility. Borrowings under the
credit facility bear interest at variable rates based on the prevailing prime or
Eurodollar rates (or, in certain circumstances, the prevailing federal funds
rate) and these rates will depend, in part, on the ratio of consolidated total
indebtedness to consolidated total capitalization from time to time. The credit
facility requires us to comply with various financial covenants and
restrictions, including covenants and restrictions relating to indebtedness,
liens, investments, dividend payments, consolidated net worth, interest coverage
and the relationship of total consolidated indebtedness to earnings before
interest, taxes and depreciation and amortization. The credit agreement
prohibits the declaration of dividends or making other specified payments in
amounts exceeding 25% of cumulative net income after the effective date of the
credit agreement (which was $4.7 million as of July 2, 2000). The stock of our
wholly-owned subsidiary, Teledyne Brown Engineering, Inc., was pledged to the
lenders under the credit agreement as collateral to secure the obligations under
the credit agreement until certain conditions related to a public offering of
our common stock are satisfied.

In connection with the spin-off, a new defined benefit pension plan was
established and we assumed the existing pension obligations for all of the
employees, both active and inactive, at the operations which perform government
contract work and for active employees at operations which do not perform
government contract work. ATI transferred pension assets to fund the new defined
benefit pension plan, which at the time of the transfer then had assets in
excess of liabilities.

In connection with the spin-off, ATI received a tax ruling from the IRS
stating in principle that the spin-off will be tax-free to ATI and to ATI's
stockholders. The continuing validity of the IRS tax ruling is subject to
certain factual representations and assumptions, including the completion of a
public offering of our common stock within one year following the spin-off and
use of proceeds for research and development and related capital projects, for
the further development of manufacturing capabilities and for acquisitions
and/or joint ventures. This offering is intended to satisfy this requirement.

The Tax Sharing and Indemnification Agreement between ATI and Teledyne
Technologies provides that we will indemnify ATI and its agents or
representatives for taxes imposed on, and other amounts paid by, them or ATI's
stockholders if we take actions or fail to take actions (such as completing the
public offering) that result in the spin-off not qualifying as a tax-free
distribution. If any of the taxes or other amounts described above were to
become payable by Teledyne Technologies, the payment could have a material
adverse effect on our financial condition, results of operations and cash flow
and could exceed Teledyne Technologies net worth by a substantial amount.

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<PAGE> 26

OTHER MATTERS

TAXES

The effective income tax rate was 39.6%, 41.3%, 40.2%, 41.3% and 39.4% in
the first six months of 2000 and 1999 and in 1999, 1998 and 1997, respectively.
Based on our history of operating earnings, expectations of future operating
earnings and potential tax planning strategies, it is more likely than not that
the deferred income tax assets at January 2, 2000 will be realized.

COSTS AND PRICING

Inflationary trends in recent years have been moderate. We primarily use
the last-in, first-out method of inventory accounting which reflects current
costs in the costs of products sold. These costs, the increasing costs of
equipment and other costs are considered in establishing sales pricing polices.
We emphasize cost containment in all aspects of our business.

HEDGING ACTIVITIES; MARKET RISK DISCLOSURES

Teledyne Technologies generally does not actively engage in derivative
financial instruments such as futures contracts, options and swaps, forward
exchange contracts or interest rate swaps and futures. While we believe that
adequate controls are in place to monitor any hedging activities in which we may
engage, many factors, including those beyond our control such as changes in
domestic and foreign political and economic conditions, could adversely affect
these activities. There are no hedging contracts outstanding.

Our primary exposure to market risk relates to changes in interest rates
and foreign currency exchange rates. We periodically evaluate these risks and
have taken measures to mitigate these risks. We own assets and operate
facilities in countries that have been politically stable. Also, our foreign
risk management objectives are geared towards stabilizing cash flow from the
effects of foreign currency fluctuations. We will, whenever practical, offset
local investments in foreign currencies with borrowings denominated in the same
currencies. All of our long-term debt is based on a market interest rate and,
consequently, the fair value should not be affected materially by changes in
market interest rates. Overall, we believe that our exposure to interest rate
risk and foreign currency exchange rate changes is not material to our financial
condition or results of operations.

ENVIRONMENTAL

Teledyne Technologies is subject to various federal, state, local and
international environmental laws and regulations which require that we
investigate and remediate the effects of the release or disposal of materials at
sites associated with past and present operations. This includes sites at which
we have been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, commonly
known as Superfund, and comparable state laws. We are currently involved in the
investigation and remediation of a number of sites. Reserves for environmental
investigation and remediation totaled approximately $1.4 million at July 2,
2000. As investigation and remediation of these sites proceed and new
information is received, we expect that accruals will be adjusted to reflect new
information. Based on current information, we do not believe that future
environmental costs, in excess of those already accrued, will materially and
adversely affect our 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 our results of
operations for that period.

With respect to proceedings brought under the federal Superfund laws, or
similar state statutes, we have been identified as a potentially responsible
party at approximately 17 such sites, excluding those sites at which we believe
we have no future liability. Our involvement is very limited or de minimis at
approximately 10 of these sites, and the potential loss exposure with respect to
any of the remaining seven sites is not considered to be material.

For additional discussion of environmental matters, see Notes 2 and 13 to
Notes to Consolidated Financial Statements.

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<PAGE> 27

GOVERNMENT CONTRACTS

Teledyne Technologies performs work on a number of contracts with the
Department of Defense and other agencies and departments of the U.S. Government.
Sales under contracts with the U.S. Government, which included contracts with
the Department of Defense, were approximately 44% of total sales in 1999 and 40%
in 1998 and 41% in 1997. For a breakdown of sales to the U.S. Government by
segment, see Note 12 to Notes to Consolidated Financial Statements. U.S.
Government sales to the Department of Defense represented approximately 30%, 27%
and 26% of our total sales for 1999, 1998 and 1997, respectively.

Performance under government contracts has certain inherent risks that
could have a material adverse effect on our business, results of operations and
financial condition. Government contracts are conditioned upon the continuing
availability of Congressional appropriations, which usually occurs on a fiscal
year basis even though contract performance may take more than one year. The
overall U.S. military budget declined in real dollars from the mid-1980s through
the early 1990s. Although U.S. military budgets have stabilized in recent years,
future levels of defense spending cannot be predicted. Delays or further
declines in U.S. military expenditures could adversely affect our business,
results of operations and financial condition, depending on the programs
affected, the timing and size of the changes and our ability to offset the
impact with new business or cost reductions.

For information on accounts receivable from the U.S. Government, see Note 4
to Notes to Consolidated Financial Statements.

ACCOUNTING PRONOUNCEMENTS

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements (SAB
No. 101). SAB No. 101 provides the Commission's views in applying generally
accepted accounting principles to selected revenue recognition issues. We have
reviewed the requirements of SAB No. 101 and have determined that we are in
compliance with SAB No. 101.

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133 -- "Accounting for
Derivative Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and hedging activities. It
requires that an entity recognize all derivatives in the statement of financial
position and measure those instruments at fair value. In 1999, the FASB issued
SFAS No. 137 -- "Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133 -- an
amendment of FASB Statement No. 133," which defers the effective date of SFAS
No. 133 for one year. In June 2000, the FASB issued SFAS No. 138 -- "Accounting
for Certain Derivative Instruments and Certain Hedging Activities -- an
amendment of SFAS No. 133," which amends the accounting and reporting standards
of SFAS No. 133 for certain derivative instruments and hedging activities.
Teledyne Technologies must implement SFAS No. 133 by the first quarter of 2001
and has not yet made a final determination of its impact on the financial
statements.

24
<PAGE> 28

BUSINESS

We plan to capitalize on our existing technology and experience to increase
our participation in commercial communications markets. For example, we intend
to leverage our experience in manufacturing fiber optic transmitters and
receivers for aerospace customers to enable us to manufacture similar products
for commercial customers in wireless and fiber optic communications markets.

MARKET OPPORTUNITIES

We believe that our core competencies in manufacturing sophisticated fiber
optic and microwave components and subsystems for aerospace customers should
provide a platform for growth in the commercial fiber optic and wireless
communications markets. In addition, we intend to continue to pursue growth in
key niche businesses such as data acquisition systems and distributed power
systems, where we have established market positions.

COMMUNICATIONS PRODUCTS

Our corporate focus on both fiber optic and microwave communications is
driven by the demand for bandwidth, which has increased dramatically in recent
years. The growth in electronic mail and web access, and new applications such
as streaming media, have stressed the capacity of the communications
infrastructure. Communications service providers are rapidly expanding wireline,
mobile wireless, fixed wireless, fiber optic, and satellite communication
networks to meet the increasing demand and to prepare for the next generation of
service offerings.

FIBER OPTIC COMPONENTS. RHK, a leading market research and consulting firm,
recently estimated that North American Internet traffic will grow from 350,000
to over 15 million terabytes per month between 1999 and 2003. With the bulk of
this traffic transmitted over optical fiber, RHK also forecast that the
worldwide market for optical components used in long distance telecommunication
and cable television applications will grow from $6.6 billion to over $23
billion in the same period.

We have manufactured sophisticated fiber optic transmitters and receivers
for aerospace customers for over 10 years for use in projects such as the
International Space Station. The engineering experience and manufacturing
technology that we have developed provide us with a strong base to support
commercial customers in the production of fiber optic transmitters and receivers
in the rapidly growing market for commercial telecommunication components.
Accordingly, we are installing new automatic assembly and alignment equipment to
increase our production capacity for these types of components. We recently
received an initial $1.8 million order from Corning Lasertron for the contract
manufacture of fiber option transmission laser modules to be sold to Corning
Lasertron's customers.

MICROWAVE COMPONENTS. While fiber optic communication systems provide very
high data rates, the cost of installation of fiber networks is prohibitive for
most residential and commercial uses.
25
<PAGE> 29

Wireline, fixed wireless and satellite systems can all be used to provide last
mile broadband connectivity. Very Small Aperture Terminal (VSAT) satellite
systems, which have traditionally been used for relatively low rate data
transmission, are now evolving to provide high-speed Internet access and video
transmission. Similarly, suppliers of Direct Broadcast Satellite (DBS) satellite
systems are adding two-way broadband Internet access capabilities. For example,
Hughes Network Systems' DirecPC(R) is a broadband satellite service providing
high speed Internet access as well as broadcast IP multimedia applications. We
recently signed a multi-year agreement to supply our MMIC power amplifiers to
Hughes Network Systems for use in both their DirecPC(R) and broadcast VSAT
systems.

Several suppliers offer, or have announced plans to offer, fixed wireless
multipoint Internet access systems for business and residential customers. Our
monolithic microwave integrated circuit (MMIC) devices provide power
amplification for new Unlicensed National Information Infrastructure (UNII) band
systems that have been developed by Adaptive Broadband Corporation and other
customers. Our microwave relays are used in a variety of communications
applications where preservation of signal fidelity is essential. These include
data routers, tower mounted amplifiers and high frequency test equipment.

We have increased our research and development activities for microwave
communication components to broaden our range of products, both to serve our
current customers and to expand into new market segments. Examples of these
products include new relays and traveling wave tubes that operate at higher
microwave frequencies, and integrated transceivers for satellite communication
systems.

NICHE MARKET BUSINESSES

We intend to pursue growth in markets where we have an established position
by introducing new products and services for applications where a combination of
market dynamics and our existing skills provide new opportunities.

DATA ACQUISITION AND COMMUNICATION PRODUCTS. We are one of the leading
suppliers of systems that collect and communicate essential performance data for
the commercial airline industry. Although our systems were originally developed
to meet FAA requirements, both commercial airlines and operators of business and
commuter aircraft have realized that data acquisition systems can be used to
improve aircraft maintenance and fuel management, as well as provide a permanent
record of each aircraft's performance throughout its life.

Our new Wireless Ground Link, which will enter operational trials later
this year, automates the transfer of in-flight data via wireless systems to an
airline's operations center, greatly improving the timeliness and efficiency of
the data management system. In addition, data management software, such as our
Flight Data Replay and Analysis System, can be used to analyze events that
occurred during flight and can also be used to predict maintenance needs and
implement safety procedures.

The market for high functionality data acquisition systems aboard business
and commuter aircraft continues to expand as these aircraft have begun to mirror
commercial air transport aircraft in data gathering and aircraft monitoring. Our
new Mini Flight Data Acquisition Unit (MFDAU) is specifically designed to meet
the needs of business and commuter aircraft customers, and we have recently
received orders from aircraft manufacturers, such as Gulfstream and Bombardier,
and from regional carriers such as Continental Express.

With the prevalence of electronic mail and wireless communications,
airborne travelers, especially those aboard business and commuter aircraft, are
seeking advanced office-like connectivity at all times. We continue to see
strong demand for our systems that provide air-to-ground voice, data and
facsimile communications for business and commuter aircraft. We recently renewed
a multi-year airborne telephony agreement with Raytheon Company. Under the
agreement, we will be the exclusive distributor of the MagnaStar(R) Air
Telephone System through mid-2006. MagnaStar(R), designed specifically for
corporate and regional jets, is a digital cellular air telephone

26
<PAGE> 30

system through which GTE Airfone provides air-to-ground voice, data and
facsimile communications. MagnaStar(R) also supports analog and digital Satcom
services.

ENERGY SYSTEMS. The continued global growth in demand for electric power,
the ongoing deregulation of the electric industry and concern for the
environment have converged to create an emerging market opportunity for a
variety of distributed, or on-site electric power and gas micro-generation
technologies. We believe that our current portfolio of products and
technologies, including on-site electrical generators, fuel cell technologies
and hydrogen generation equipment, provide an attractive growth platform in the
emerging market for distributed power systems.

For over 40 years we have developed and manufactured small electrical power
generators and hydrogen generation equipment. We currently provide on-site
electrical generators and services to the U.S. Government and several commercial
customers. Current products include our 2.5-kW Minotaur(TM) engine-generator
system which is powered by natural gas and designed for long-term, continuous,
low-maintenance prime power generation. Product development efforts are also
focused on designing fuel cells in the 10-watt to 5.0-kW range. We recently
signed a strategic license agreement with Humboldt State University to produce
fuel cell systems based on proton exchange membrane technology developed at the
University.

INFORMATION TECHNOLOGY. Defense systems have become so complex that it is
no longer practical or cost-effective to test large multiforce systems in the
field against all possible threats. The Department of Defense (DoD) increasingly
relies on computerized modeling and simulation tools to test performance and
conduct training on these systems.

We have developed hundreds of simulation programs, including the Extended
Air Defense Simulation (EADSIM). Originally developed for the U.S. Army, EADSIM
is now used by the U.S. Navy, Air Force and Marine Corps. The FAA is currently
evaluating EADSIM for training air traffic controllers to better manage
congested air space, and the U.S. Coast Guard is assessing the software as a
tool to assist in analyzing strategies to address oceanic drug trafficking.

The DoD is expanding its use of modeling and simulation technology to all
phases of the acquisition process for systems, from initial concept development,
through development, operational testing, training and support. We are now
focusing on expanding the capabilities of our simulation tools to address this
new initiative, known as Simulation Based Acquisition.

GENERAL AVIATION AIRCRAFT ENGINES. The market for piston powered general
aviation aircraft has shown a strong resurgence in recent years. According to
the General Aviation Manufacturers Association, domestic production of new
aircraft has increased from 444 new units in 1994 to over 1,700 units in 1999,
with shipments of piston-engine aircraft increasing by 13.9 percent in 1999.

We estimate that our Teledyne Continental Motors engines power
approximately one-half of the active fleet of piston-powered aircraft. We
believe that our installed base and brand recognition provide leverage for the
introduction of new aftermarket products and services, such as our digital
electronic engine controls which can be retrofitted to existing aircraft.

STRATEGY

Our strategy is to focus on markets for commercial communications products,
while we continue to expand our profitable niche market businesses. We plan to
continually evaluate our product lines to ensure that they are aligned with our
strategy. These actions will help us to redirect capital and management focus to
opportunities that will best utilize our engineering resources and technical
expertise. Specific elements of our strategy include:

CAPITALIZE ON OUR EXISTING TECHNOLOGY AND EXPERIENCE TO PENETRATE
COMMUNICATIONS MARKETS. We believe that certain broadband communications
markets, especially wireless and satellite communications equipment and fiber
optic communications components, offer a number of attractive opportunities to
leverage our current technologies and capabilities. Our experience in

27
<PAGE> 31

manufacturing fiber optic modules for aerospace applications and high frequency
microwave products places us in a strong position to manufacture similar
components for the commercial communications market. We have formed a new
business unit to pursue fiber optic component manufacturing opportunities and
have already received an initial $1.8 million order from Corning Lasertron for
the contract manufacture of fiber optic transmission laser modules to be sold to
Corning Lasertron's customers. We have also increased our focus on wireless and
satellite communication applications and are expanding our product lines with
new power amplifiers, integrated microwave modules and high frequency relays.

ENHANCE HIGH VOLUME MANUFACTURING CAPABILITY. We intend to increase our
automated manufacturing capability to both lower the manufacturing cost of our
existing products and enable us to meet the high volume needs of commercial
customers in the expanding communications markets. For example, we have recently
added state-of-the-art automated equipment for high volume manufacturing of
components for fiber optic systems at our microelectronics facility. We also
intend to expand our foreign manufacturing operations in Mexico and Scotland,
when appropriate, in order to lower our costs or to access an available
workforce. We plan to offer manufacturing services to fiber optic component and
equipment OEMs who need high volume manufacturing of their own products either
because of capacity constraints or lack of manufacturing expertise.

EXPAND STRATEGIC ALLIANCES. We intend to establish relationships with
companies where our combined financial, marketing, operational or technological
resources can accelerate the introduction of new technologies and the
penetration of new markets. Examples of current alliances include a strategic
license agreement with Humboldt State University to produce fuel cell systems
based on proton membrane technology developed at the University, a joint venture
that is developing alternative technologies to incineration for the destruction
of chemical weapons, an agreement with Pratt and Whitney to pursue teaming in
the development of new applications for small turbine engines, and an alliance
with Microcosm Technologies for the manufacturing of Microelectromechanical
Systems (MEMS).

LEVERAGE NICHE MARKET LEADERSHIP. We have developed strong, proprietary
technical capabilities that have enabled us to achieve leading positions in many
of our niche markets, including those for high frequency electromechanical
relays, high frequency microwave power amplifiers, data acquisition avionics,
piston engines for general aviation, small turbine engines and medical
microelectronics. We intend to leverage our leadership position in several niche
markets to accelerate the introduction of new products and to increase our
value-added service offerings. For example, we are extending our position in
data acquisition avionics by introducing new data acquisition products
specifically designed for the business and commuter aircraft market.

OUR BUSINESS SEGMENTS

ELECTRONICS AND COMMUNICATIONS

Our Electronics and Communications segment, through Teledyne Electronic
Technologies, provides a wide range of electronic systems, components and
services that are focused primarily on advanced communications and data
acquisition applications, and encompasses precision electronic components and
subsystems that are used in medical, commercial, military and industrial
instrumentation applications.

COMMUNICATIONS PRODUCTS. Our innovative communications technologies include
data acquisition and communication systems for commercial aviation, microwave
power amplifiers for wireless and satellite systems, lightweight microwave
filters and high-frequency relays. We are seeking to leverage our experience
building sophisticated fiber optic transmitters and receivers for military and
space applications to support the rapidly growing market for commercial fiber
optic communication products.

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<PAGE> 32

We have enhanced our leading position in air-to-ground telephony for
business aircraft with new data transmission capabilities, and are extending our
airline data management technology by developing a system that automates the
transfer of information from aircraft to the airline via the Internet.

Data Acquisition and Communication Products. Our aircraft information
management solutions are designed to increase the safety and efficiency of
airline transportation. With over 200 commercial airline customers, we are a
leading supplier of digital flight data acquisition systems for the commercial
airline industry. We have provided these systems to our airline customers for
over one-half of Boeing aircraft currently in production. We also provide our
systems to certain aircraft customers of Airbus Industrie's partner,
Daimler-Chrysler Aerospace-Airbus. These systems acquire both data for use by
the aircraft's flight data recorder, and record additional data for the
airline's use, such as performance and engine condition monitoring.

Our newest digital flight data acquisition units have some of the most
advanced features in the industry. These systems conform to the required
expansion of data recording capabilities, which were mandated by the FAA in
1997. At that time, the FAA increased the number of mandatory parameters to be
monitored from 17 to 88 by the year 2002.

Our new Wireless Ground Link automates the transfer of in-flight data
recorded by our data acquisition systems to an airline's operations center.
Transmission of the data can occur anytime an aircraft is on the ground
utilizing existing digital wireless infrastructure. The raw data are then
forwarded to the airline through the Internet, where our Flight Data Replay and
Analysis System can process them into useful formats. Such data can then be used
by the airline to schedule maintenance services and implement safety procedures.

The market for data acquisition systems aboard business and commuter
aircraft is growing rapidly as these aircraft have begun to mirror air transport
aircraft in data gathering and aircraft monitoring. We are one of the largest
suppliers of air-to-ground telephony, facsimile and data transmission products
to the business and commuter aircraft market.

Wireless and Satellite Communication Components. Our communication
components and subsystems are used in satellite earth terminals, communication
satellites, and base stations for Personal Communication Services (PCS) and
wireless loops.

We supply power amplifiers used in the L, C and Ku band satellite uplink
transmitters. These products encompass both solid state MMICs and high power
helix traveling wave tubes. Applications include Very Small Aperture Terminals
(VSATs) used for credit card verification, corporate networking and mobile news
gathering.

A new and rapidly growing application for our MMIC transmitters is in the
terminals for satellite-based Internet access systems that will be sold to
consumers and businesses. Another new MMIC application is for broadband
point-to-multipoint systems, operating in the Unlicensed National Information
Infrastructure band, that are being deployed to provide wireless Internet
access.

Our Teledyne Relays miniature electromechanical relays are used where
maintenance of signal fidelity is essential. Wireless applications include
cellular base stations, tower mounted amplifiers and satellites. Other
communications applications include Internet switches and routers, and fiber
optic systems.

Fiber Optic Communication Components. We have manufactured fiber optic
transmitters and receivers for aerospace applications for over 10 years. In late
1999, the Harris Corporation awarded us a contract to manufacture rugged fiber
optic transmitters and receivers for the new F-22 fighter program. Approximately
50 transmit and receive modules are used on each aircraft to route data to and
from avionics equipment and the aircraft's central processor. Our fiber optic
transmitter and receiver modules are also used for video distribution on the
International Space Station.

29
<PAGE> 33

While these devices typically have sophisticated designs, the production
volumes for aerospace applications are much lower than those required for
commercial communications products. We are, therefore, expanding our
manufacturing capacity for fiber optic communication products by dedicating
additional clean room facilities to optical component manufacturing and are
continuing to add automatic and semiautomatic assembly equipment.

Our newly formed Teledyne OptoElectronics unit has received an initial $1.8
million order from Corning Lasertron for the contract manufacture of fiber optic
transmission laser modules to be sold to Corning Lasertron's customers. The
laser modules have passed the preliminary stages of qualification to Bellcore
specifications and production is expected to begin in the third quarter of 2000,
after the qualification process is completed. This contract requires delivery
before the end of 2000.

Electronic Manufacturing Services. We serve the market for low volume, high
mix electronic component manufacturing through facilities in Tennessee, Mexico
and Scotland. Examples of the types of products that we manufacture include
sophisticated military electronics equipment, key subsystems in medical
equipment such as Magnetic Resonance Imaging (MRI) systems, and subsystems for
wireless and high data rate communication equipment. We are one of five
companies of more than 37,000 suppliers to have been chosen by Lockheed Martin
to receive their Star Supplier Facility award for 1999. Selection for this award
requires 100% performance in quality and delivery of all products from the
supplier to all Lockheed Martin companies.

We also supply patented rigid-flex printed circuit boards that combine
rigid circuit boards and flexible printed circuits in a single continuous unit,
reducing the size of electronic equipment by permitting tighter packaging
density and improving reliability by minimizing interconnections. We have added
quick-turn manufacturing capability to provide our customers with prototypes in
much less time than previously required.

OTHER ELECTRONIC PRODUCTS

Instruments and Equipment. We produce gas analyzers and vacuum
instrumentation for semiconductor manufacturing and other industrial processes.
Our new Model 2002(TM) Dual Sensor vacuum gauge was selected by the editors of
Research and Development as one of the most significant new technologies for
1999. We have expanded our line of equipment for printed circuit board
manufacturing with an innovative copper plating system designed to plate panels
in less time than conventional systems.

Defense and Aerospace Electronics. We are a leading supplier of high power
traveling wave tubes for electronic warfare systems, radar systems, and military
satellite communications systems for both domestic and international
applications. Our hybrid microcircuits are used in applications such as military
(including F-18 and F-22 aircraft and the M1A2 tank), aerospace, medical and
instrumentation systems. We also manufacture military and space qualified
relays, electronic sequencing devices for military ejection seats, and runway
visual range detectors used in airport operations.

Medical Electronics. We have applied our multi-chip modules technology to
the manufacture of life sustaining and life enhancing implantable medical
devices, including cardiac pacemakers and defibrillators, neural stimulators and
cochlear implant hearing aids. Newer products include biological signal sensors
and ambulatory digital recorders for the diagnosis and monitoring of epilepsy
and sleep disorders.

High-Density Connectors. We supply custom, low profile, surface mount
connectors for applications in computer disk drives and consumer medical
electronic devices, and are targeting their use in high-volume applications such
as personal computers and workstations.

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<PAGE> 34

SYSTEMS ENGINEERING SOLUTIONS

Teledyne Brown Engineering, Inc. applies the skills of its extensive staff
of engineers and scientists to solve the increasingly complex problems of our
defense, aerospace and commercial customers. We also manufacture small
electrical power generators and hydrogen supply systems to support the emerging
market for distributed electrical power.

AEROSPACE SOLUTIONS

We provide a broad range of highly sophisticated engineering solutions and
services to U.S. space programs. As the payload integration contractor for
NASA's Marshall Space Flight Center, we have had major responsibilities in the
numerous scientific missions of the Space Shuttle. This work has ranged from
experiment planning, through designing and fabricating interface hardware, to
manning the mission control center during flight operations.

The centerpiece of our current space activities is the International Space
Station. We are involved in both space-borne and ground-support hardware
development and we participate in mission planning and operations.

DEFENSE SOLUTIONS

For over 45 years, we have played a key role in the development of U.S.
defense systems. In ballistic missile defense programs, we have provided
solutions in systems engineering, integration, and testing; real-time
distributed testing and training; radar and optical systems design; command
center development; and intelligence studies and threat analysis. We provide
battle simulation software as part of our role for the U.S. Ballistic Missile
Defense Organization's National Missile Defense program.

We also provide an array of engineering solutions related to combat systems
technologies, including research and development test support, operational test
and evaluation, systems survivability analysis, and body armor development.

INFORMATION SERVICES

Our software products, most of which are certified to ISO 9001, are used
for highly diverse applications, such as high-fidelity simulations, multi-media
training, Internet website development, distributed real-time testing, and
command and control centers.

We have developed hundreds of simulation programs, including the Extended
Air Defense Simulation, which is used by friendly governments worldwide and was
combat-proven during Operation Desert Storm and more recent operations. We have
recently upgraded the U.S. Army's land-combat model to include amphibious and
tactical air operations.

We are recognized as a leader in the development of real-time, vehicle and
weapons-integrated simulations for systems testing and training. Our Systems
Exerciser is a simulation tool used to verify the inter-operational
compatibility of geographically separated, complex defense systems. The Systems
Exerciser "drives" actual weapons systems with a simulated environment including
threats, weather, and terrain, creating a robust virtual world in which real
systems can operate and interact.

We have been continuously involved in weapons signature management
development efforts since 1989, with over 47 successful programs, of which 37
were sole source contracts. We are particularly well known for systems that
limit the detection of soldiers on the battlefield by radar or infrared sensors,
as to which we hold several issued and pending patents. The Optical Signatures
Code, which we developed and maintain, is the recognized standard in missile
defense. We also developed the world's largest on-line database for optical
signatures.

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<PAGE> 35

ENVIRONMENTAL SOLUTIONS

We utilize our systems engineering solutions to assist the U.S. Government
in complying with terms of the Chemical Weapons Convention Treaty. This Treaty
requires the United States to destroy all chemical weapons and material by 2007.
As a 50% participant in a joint venture, we are developing alternative
technologies to incineration for the destruction of stockpile chemical
munitions. As the prime contractor for the U.S. Army's Non-Stockpile Chemical
Materiel Demilitarization program, we are designing, fabricating, integrating,
and testing equipment to safely destroy small caches of chemical munitions and
materiel located in over 30 states.

We also support the United States government's efforts to clean up nuclear
weapon production complexes, and to safely store nuclear waste. A key need, both
for temporary and permanent storage of these nuclear wastes, is the availability
of a reliable containment method, or canisters for waste containment. We have
targeted our efforts within this market on the production of containers and
equipment to support the nation's efforts to clean up hazardous waste. We have
been selected by the Air Force to establish and operate a highly specified
analysis laboratory for performing nuclear forensic analysis of gas samples.

ENERGY SYSTEMS

We currently provide on-site electrical power generators and services to
the U.S. Government and several commercial customers. Current products include
our 2.5kW Minotaur(TM) engine-generator system which is powered by natural gas
and designed for long-term, continuous, low-maintenance prime power generation
and the Telan(R) thermoelectric generator series for prime power generation in
the range of three to 500 watts. Product development efforts are also focused on
designing fuel cells in the 10-watt to 5.0kW range. We recently signed a
strategic license agreement with Humboldt State University to produce fuel cell
systems based on proton exchange membrane technology developed at the
University.

We also manufacture and sell a broad line of hydrogen generation systems.
Using electrolysis of water, our current line of generators meet a wide range of
customer needs for on-site production of high-purity gas. Products include the
Altus(R) and Titan(TM) gas generation systems used for high purity hydrogen and
oxygen supply in the range of one to 2,000 standard liters per minute. Our
product development efforts in hydrogen generation are also focused on gas
reformer systems which convert hydrocarbon fuels, such as natural gas, propane
or methanol into a hydrogen-rich stream for direct use in fuel cells.

AEROSPACE ENGINES AND COMPONENTS

PISTON ENGINES

We design, develop and manufacture piston engines and ignition systems for
major general aviation airframe manufacturers and provide spare parts and engine
rebuilding services. We are one of two primary worldwide original equipment
producers of piston engines and after-market service providers for the general
aviation marketplace.

Our product lines include engines powering the Raytheon Beech Bonanza and
Baron aircraft, the Mooney Aircraft line of advanced single engine aircraft, and
the popular New Piper Seneca V twin-engine aircraft. In addition to these
long-standing products, our engines will power four new high-speed composite
aircraft currently entering production. These are the Cirrus SR-20, Lancair
Columbia, Diamond Katana C1, and the Extra 400.

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<PAGE> 36

In addition to the sales of new aircraft engines to aircraft producers, we
also actively support the aircraft engine aftermarket. Piston aircraft engines
are produced with a finite utilization life generally expressed as time between
overhaul. Our after-market support includes the rebuilding of nearly 3,000 of
these units annually with our Gold Medallion(R) Rebuilt Engine. We provide a
full complement of spare parts such as cylinders, crankcases, fuel systems,
crankshafts, camshafts and ignition products. In addition, our Gill(R) line of
lead acid batteries is widely recognized as the premier power source for general
aviation.

We have developed the first full authority digital electronic controls for
piston aircraft engines. These controls are designed to automate many functions
that currently require manual control, such as fuel flow and power management.
This system also saves fuel as a result of improved engine management. We
believe that these control systems, which are in the process of FAA
certification testing, will become standard equipment on new aircraft, and will
be retrofitted on higher-end, piston-powered general aviation aircraft. We
anticipate FAA certification of these systems in 2000.

In November 1999, we acquired certain assets of Long Island, New York-based
Mattituck Aviation Corporation, a privately owned aftermarket supplier and
piston engine overhauler to the general aviation marketplace. This acquisition
is expected to bring additional service capabilities to Teledyne Continental
Motors. These service capabilities should leverage our investments in
manufacturing excellence and the development of digital electronic controls for
piston aircraft engines.

TURBINE ENGINES

We design, develop and manufacture small turbine engines for missiles and
unmanned aerial vehicles. We also produce engines that power military trainer
aircraft.

Our J402 engine powers the HARPOON missile system. This engine also powers
the Standoff Land Attack Missile and the Standoff Land Attack Missile Expanded
Response. A derivative of the J402 engine has been selected by Lockheed Martin
Corporation to power the Joint Air-to-Surface Standoff Missile (JASSM) that is
scheduled to start production in 2002. We are the sole source provider for
engines for the JASSM system. The JASSM production requirement, which initially
was projected at 2,400 units, has been increased in recent months to 3,700
units.

Another of our engines provides the turbine power for the Improved Tactical
Air Launched Decoy being built for the U.S. Navy. This system enhances combat
aircraft survivability by both serving as a decoy and identifying enemy radar
sources. This low-cost turbine engine is the first of a family of lower-thrust
engines to enter production.

We are the sole source for major spare parts for the engine for the T-37
aircraft, the primary jet trainer for the U.S. Air Force. This engine has been
in service for over 40 years and will continue to power the T-37 well into this
decade.

We recently signed an agreement with Pratt & Whitney's Small Military
Engines unit to pursue teaming in areas of development, manufacturing, and
technical and product support of small military engine products and services.
This product line would include Uninhabited Air Vehicle engines producing up to
16,000 pounds of thrust which would be provided to the U.S. Government.

DISCONTINUED OPERATIONS

Teledyne Cast Parts offers a wide range of complex sand-cast aluminum and
magnesium castings and nickel-based superalloy and stainless steel investment
castings to the aerospace and defense industries. Premium quality castings are
produced from various processes in accordance with military, aerospace and
commercial customer specifications to exacting tolerances and mechanical
strengths.

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<PAGE> 37

This unit, which we plan to divest, was previously reported as part of the
Aerospace Engines and Components segment but now is reported as a discontinued
operation.

CUSTOMERS

We have hundreds of customers in the communications, electronics, aerospace
and defense industries. No commercial customer accounted for more than 10% of
our total sales during 1999, 1998 or 1997. Examples of our customers include
Hughes Network Systems for communications products, Boeing and Gulfstream in
commercial aviation, St. Jude Medical and General Electric for medical products,
and the Department of Defense, Lockheed Martin and NASA for government products
and services.

Approximately 44%, 40% and 41% of our total sales for 1999, 1998 and 1997,
respectively, were derived from contracts with agencies of, and prime
contractors to, the U.S. Government. Our principal U.S. Government customer is
the Department of Defense. Our largest program with the U.S. Government, the
Systems Engineering and Technical Assistance contract with the Space and
Missiles Defense Command, represented 6.2%, 7.7% and 7.7% of total sales for
1999, 1998 and 1997, respectively. Set forth below are sales by our segments to
agencies of and prime contractors to the U.S. Government for the periods
presented.

<TABLE>
<CAPTION>
1997 1998 1999
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Electronics and Communications.............................. $102.7 $102.4 $101.1
Systems Engineering Solutions............................... 158.0 159.2 185.4
Aerospace Engines and Components............................ 27.6 33.3 47.5
------ ------ ------
$288.3 $294.9 $334.0
====== ====== ======
</TABLE>

Our backlog of confirmed orders was approximately $348.0 million at January
2, 2000, $363.7 million at January 3, 1999 and $352.6 million at July 2, 2000.

SALES AND MARKETING

Our sales and marketing approach varies by segment and by product within
our segments. A shared fundamental tenet is the commitment to work closely with
our customers to understand their needs, with an aim to secure preferred
supplier and longer-term relationships.

Our business segments use a combination of internal sales forces,
distributors and commissioned sales representatives to market and sell our
products and services. Products are also advertised in appropriate trade
journals and by means of various web sites. To promote our products and other
capabilities, our personnel regularly participate in relevant trade shows and
professional associations. Many of our government contracts are awarded after a
competitive bidding process in which we seek to emphasize our ability to provide
superior products and technical solutions in addition to competitive pricing.

COMPETITION

We believe that technological capabilities and innovation and the ability
to invest in the development of new and enhanced products are critical to
obtaining and maintaining leadership in our markets and the industries in which
we generally compete. Although we have certain advantages that we believe help
us compete in our markets effectively, each of our markets is highly
competitive. Our businesses vigorously compete on the basis of quality, product
performance and reliability, technical expertise, price and service. Many of our
competitors have, and potential competitors could have, greater name
recognition, a larger installed base of products, more extensive engineering,
manufacturing, marketing and distribution capabilities and greater financial,
technological and personnel resources than we do.

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<PAGE> 38

RESEARCH AND DEVELOPMENT

Our research and development efforts primarily involve engineering and
design relating to improving existing product lines and developing new products
and technologies in the same or related fields. We spent a total of $215.9
million, $175.0 million and $188.4 million on research and development for 1999,
1998 and 1997, respectively. Customer-funded research and development, most of
which was attributable to work under contracts with the U.S. Government,
represented approximately 87%, 86% and 85% of total research and development
costs for 1999, 1998 and 1997, respectively.

In 1999, approximately 56% of the $27.8 million in company-funded research
and development costs were incurred in our electronics and communications
businesses. We expect the level of company funded research and development to
increase to approximately $35.0 million in 2000 as we increase our manufacturing
capabilities and product development efforts in the fiber optic and wireless
communications businesses.

INTELLECTUAL PROPERTY

While we own and control various intellectual property rights, including
patents, trade secrets, confidential information, trademarks, trade names, and
copyrights, which, in the aggregate, are of material importance to our business,
our management believes that our business as a whole is not materially dependent
upon any one intellectual property or related group of such properties. We own
several hundred active patents and are licensed to use certain patents,
technology and other intellectual property rights owned and controlled by
others. Similarly, other companies are licensed to use certain patents,
technology and other intellectual property rights owned and controlled by us.

Patents, patent applications and license agreements will expire or
terminate over time by operation of law, in accordance with their terms or
otherwise. We do not expect the expiration or termination of these patents,
patent applications and license agreements to have a material adverse effect on
our business, results of operations or financial condition.

EMPLOYEES

Out of a total workforce of approximately 5,800 (including Teledyne Cast
Parts), about 1,400 individuals have engineering, physics, mathematics or
computer science degrees. The International Union of United Automobile,
Aerospace and Agricultural Implement Workers of America represents approximately
385 of our employees under a collective bargaining agreement that expires on
December 16, 2000 and another approximately 130 of our employees under a
collective bargaining agreement that expires on November 24, 2001. We consider
our relations with our employees to be good.

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<PAGE> 39

OUR FACILITIES

Our principal facilities are listed below. Although the facilities vary in
terms of age and condition, our management believes that these facilities have
generally been well maintained and are adequate for current operations.

<TABLE>
<CAPTION>
FACILITY LOCATION PRINCIPAL USE OWNED/LEASED
----------------- ------------- ------------
<S> <C> <C>
ELECTRONICS AND COMMUNICATIONS SEGMENT
Teledyne Electronic Technologies
Los Angeles, California Development and production of electronic Owned and
components and subsystems. Leased
Los Angeles, California Production of digital data acquisition Leased
systems for monitoring commercial aircraft
and engines.
Lewisburg, Tennessee Development and production of electronic Owned
components and subsystems.
Mountain View, California Production of ferrite components, switching Owned
devices, filters and monolithic microwave
integrated circuits.
Hawthorne, California Production of electronic components. Owned
Rancho Cordova, California Development of production of traveling wave Owned and
tubes and power supplies for use in Leased
commercial markets.

SYSTEMS ENGINEERING SOLUTIONS SEGMENT
Teledyne Brown Engineering
Huntsville, Alabama Provision of engineered services and Owned
products, including systems engineering,
optical engineering, software and hardware
engineering, and instrumentation
technology.
Hunt Valley, Maryland Manufacturing, assembling and maintenance Leased
of power generating systems.
Knoxville, Tennessee Laboratories and offices in support of Leased
environmental services.
Washington, D.C. Defense program offices supporting Leased
governmental customers.

AEROSPACE ENGINES AND COMPONENTS SEGMENT
Teledyne Continental Motors
Mobile, Alabama Design, development and production of new Leased
and rebuilt piston engines, ignition
systems and spare parts for the general
aviation market.
Redlands, California Manufacturing of batteries for the general Owned
aviation market.
Toledo, Ohio Design, development and production of small Leased
turbine engines for aerospace and military
markets.
</TABLE>

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<PAGE> 40

We also own or lease facilities elsewhere in the United States and in
countries outside the United States, including Tijuana, Mexico, Gloucester,
England and Cumbernauld, Scotland. Our executive offices are currently located
at 2049 Century Park East, Suite 1500, Los Angeles, California 90067-3101 and
are subleased from a subsidiary of ATI.

LITIGATION

From time to time, we become involved in various lawsuits, claims and
proceedings related to the conduct of our business. While we cannot predict the
outcome of any lawsuits, claims or proceedings, our management does not believe
that the disposition of any pending matters is likely to have a material adverse
effect on our 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 our results of operations for that period.

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<PAGE> 41

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND SEGMENT PRESIDENTS

Set forth below is information concerning our directors, executive officers
and segment presidents and their ages as of July 1, 2000.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
Robert Mehrabian 58 President and Chief Executive Officer and a
Director
John T. Kuelbs 57 Senior Vice President, General Counsel and
Secretary
Nicholas L. Blauwiekel 44 Vice President - Human Resources
Dale A. Schnittjer 56 Acting Chief Financial Officer, Treasurer and
Controller
Thomas A. Corcoran 55 Chairman of the Board and Director
Robert P. Bozzone 66 Director
Paul S. Brentlinger 73 Director
Frank V. Cahouet 68 Director
Diane C. Creel 51 Director
C. Fred Fetterolf 71 Director
Charles J. Queenan, Jr. 70 Director

SEGMENT PRESIDENTS:
Marvin H. Fink 64 President, Teledyne Electronic Technologies
Richard A. Holloway 58 President, Teledyne Brown Engineering, Inc.
Bryan L. Lewis 51 President, Teledyne Continental Motors
Charles E. McGill 64 President, Teledyne Cast Parts
</TABLE>

ROBERT MEHRABIAN has been the President and Chief Executive Officer of
Teledyne Technologies since its formation. Prior to November 29, 1999, he was
the President and Chief Executive Officer of ATI's Aerospace and Electronics
segment since July 1999 and had served ATI in various senior executive
capacities since July 1997. Before joining ATI, Dr. Mehrabian served as
President of Carnegie Mellon University. He is also a director of Mellon
Financial Corporation and PPG Industries, Inc.

JOHN T. KUELBS has been the Senior Vice President, General Counsel and
Secretary of Teledyne Technologies since November 29, 1999, having joined ATI's
Aerospace and Electronics segment in October 1999. Mr. Kuelbs was Senior Vice
President -- Acquisition Policy for Raytheon Company from November 1998 to
September 1999 and Senior Vice President -- Legal of Raytheon Systems Company
from January 1998 to November 1998. Before Raytheon's acquisition of Hughes
Aircraft Company, Mr. Kuelbs spent 17 years at Hughes Aircraft Company where he
served as Senior Vice President, General Counsel and Secretary from 1994 to
1998.

NICHOLAS L. BLAUWIEKEL became Vice President -- Human Resources of Teledyne
Technologies on March 1, 2000. From October 1998 through February 2000, he was
Corporate Vice President, Human Resources, of Shiloh Industries, a manufacturer
of steel and advanced materials located in Cleveland, Ohio. From July 1996 to
October 1998, Mr. Blauwiekel was Vice President, Human Resources, of Cooper
Automotive Company, located in Chesterfield, Missouri. For over 16 years prior
thereto he held various human resources management positions with Eaton
Corporation, a global manufacturer of highly engineered products which serve
industrial, vehicle, construction, commercial and semiconductor markets.

DALE A. SCHNITTJER has been the Controller of Teledyne Technologies since
November 29, 1999 and acting Chief Financial Officer and Treasurer since June 1,
2000. From 1998 to November 29, 1999, Mr. Schnittjer served as a financial
executive to the Aerospace and Electronics and Industrial segments of ATI. Prior
to that, he was Vice President -- Finance of Teledyne Wah Chang from 1997 to
1998 and Vice President -- Finance of Teledyne Specialty Equipment from 1995 to
1997.

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<PAGE> 42

Mr. Schnittjer has held various financial positions with several of Teledyne's
aerospace and electronics companies since 1971.

THOMAS A. CORCORAN has been the Chairman of the Board since November 29,
1999. He has been the President and Chief Executive Officer of ATI since October
1999 and became Chairman of the Board of ATI in May 2000. He served as the
President and Chief Operating Officer of the Electronics Sector of Lockheed
Martin Corporation from March 1995 through October 1998 and he was President and
Chief Operating Officer of the Lockheed Martin Space Sector from October 1998
through September 1999. Previously, he was President of Martin Marietta
Corporation's Electronics Group beginning in 1993, and prior to that, he was a
Vice President of General Electric. Mr. Corcoran is also a director of ATI, L-3
Communications Holdings, Inc., The PNC Financial Services Group, Inc. and REMEC,
Inc. Mr. Corcoran is a member of our Governance Committee.

ROBERT P. BOZZONE has been Vice Chairman of the Board of ATI since August
1996. He had served as Vice Chairman of Allegheny Ludlum Corporation, a
subsidiary of ATI, since August 1994 and previously was President and Chief
Executive Officer of Allegheny Ludlum. He is also a Director of ATI, Water Pik
Technologies, Inc. and DQE, Inc., whose principal subsidiary is Duquesne Light
Company. Mr. Bozzone is a member of our Audit Committee.

PAUL S. BRENTLINGER is a Partner of Morgenthaler Ventures, a venture
capital group located in Cleveland, Ohio and Menlo Park, California. He led
Morgenthaler's investment in such companies such as Microchip Technology, Inc.
and Dispatch Communications (now part of Nextel Communications, Inc.). Prior to
joining Morgenthaler, he was Senior Vice President -- Finance of Harris
Corporation, a manufacturer of communications equipment. Mr. Brentlinger is also
a director of ATI. Mr. Brentlinger is a member of our Audit Committee.

FRANK V. CAHOUET served as the Chairman, President and Chief Executive
Officer of Mellon Financial Corporation, a bank holding company, and Mellon
Bank, N.A., prior to his retirement on December 31, 1998. He is also a director
of ATI, Avery Dennison Corporation, Korn Ferry International and Saint-Gobain
Corporation. Mr. Cahouet is Chair of our Audit Committee and a member of our
Governance Committee.

On January 5, 1998, as a consequence of assuming a position as the Chairman
of the Board of Trustees of Allegheny General Hospital ("AGH"), Mr. Cahouet
became a Trustee of AGH's parent entity, the Allegheny County Health Education
and Research Foundation ("AHERF"). AHERF filed for bankruptcy seven months later
in July, 1998. AGH has not filed for bankruptcy. Several civil suits have been
filed against the former officers and trustees of AHERF, including Mr. Cahouet,
in connection with its bankruptcy.

DIANE C. CREEL is Chief Executive Officer and President of EarthTech, an
international consulting engineering firm. Ms. Creel is also a director of ATI
and The B.F. Goodrich Company and a member of the Boards of the Corporations and
Trusts that comprise the Fixed Income funds of the American Funds Group. Ms.
Creel is a member of our Personnel and Compensation Committee and our Governance
Committee.

C. FRED FETTEROLF was President and Chief Operating Officer of Alcoa, Inc.
prior to his retirement in 1991. He is also a director of ATI, Commonwealth
Industries, Dentsply International Inc., Union Carbide Corporation and Praxair,
Inc. Mr. Fetterolf is a member of our Personnel and Compensation Committee. He
is Chair of our Governance Committee.

CHARLES J. QUEENAN, JR. is Senior Counsel to Kirkpatrick & Lockhart LLP,
attorneys-at-law. Prior to January 1996, he was a partner of that firm. He is
also a director of ATI, Water Pik Technologies, Inc. and Crane Co. Mr. Queenan
is Chair of our Personnel and Compensation Committee.

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<PAGE> 43

MARVIN H. FINK has been the President of Teledyne Electronic Technologies
since 1993. Mr. Fink has held various management positions with several of
Teledyne's aerospace and electronic companies for over 37 years.

RICHARD A. HOLLOWAY has been the President of Teledyne Brown Engineering
since February 1998. Prior thereto, he was Senior Vice President, Government
Division of SCI Systems, Inc., a provider of manufacturing and design services
to commercial companies, the U.S. military and foreign governments.

BRYAN L. LEWIS has been the President of Teledyne Continental Motors since
1992. Prior to that time, he was President of the Turbine Engine operations of
Teledyne, Inc. (1990-1992) and has held various technical and general management
positions during his 20 years with Teledyne Technologies and its predecessors.

CHARLES E. MCGILL has been the President of Teledyne Cast Parts since March
1999. Prior thereto, he was Vice President of ATI's Aerospace and Electronics
segment and from 1993 through 1997, he was Vice President, Finance and
Administration of Teledyne Electronic Technologies. Mr. McGill has held various
management and financial positions with several of Teledyne's aerospace and
electronics companies for over 34 years.

BOARD STRUCTURE AND COMPENSATION

Our Board of Directors is divided into three classes; only one class of
directors stands for election each year and the directors elected serve a
three-year term. We have agreed with ATI, and our Bylaws provide, that until the
third annual meeting of our stockholders held after November 29, 1999 at least a
majority of our directors will be persons who are also directors of ATI.

Directors who are not our employees are paid an annual retainer fee of
$24,000. The non-executive chairman of the Board of Directors is paid an
additional annual retainer fee of $25,000. Directors are also paid $1,200 for
each Board meeting and $1,000 for each committee meeting attended, although the
Chairman of the Board of Directors does not receive any compensation for
attending these meetings. Each non-employee chair of a committee is paid an
annual fee of $2,500. Directors who are our employees do not receive any
compensation for their services on our Board or its committees.

The non-employee directors also participate in the 1999 Non-Employee
Director Stock Compensation Plan. The purpose of the Director Stock Plan is to
provide non-employee directors with an increased personal interest in our
performance.

Under the Director Stock Plan, options to purchase 2,000 shares of our
common stock were granted to non-employee directors on the date of our spin-off
from ATI. Under the Director Stock Plan, options to purchase 2,000 shares of our
common stock are granted at the conclusion of each Annual Meeting of
Stockholders. If a non-employee director first becomes a director on a date
other than an Annual Meeting date, an option covering 2,000 shares of our common
stock will be granted to such non-employee director on his or her first date of
Board service. The purchase price of our common stock covered by these options
is the fair market value of our common stock on the date the option is granted.

The Director Stock Plan also provides that each non-employee director will
receive at least 25% of the annual retainer fee in the form of our common stock
and/or options to acquire our common stock. Each director may elect a greater
percentage. Options granted under this part of the Director Stock Plan are
intended to provide each electing director with options having an exercise value
on the date of grant equal to the foregone fees; that is, the difference between
the exercise price and the market price of the underlying shares of common stock
on the date of grant is intended to be equal to the foregone fees.

40
<PAGE> 44

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following Summary Compensation Table sets forth information about the
compensation paid by Teledyne Technologies and, pre-spin-off, by ATI to our
President and Chief Executive Officer for fiscal 1999, 1998 and 1997. It also
sets forth information about compensation paid to each of our officers who was
required to file reports under Section 16 of the Securities Exchange Act of 1934
(the "named officers") for fiscal 1999.

Dr. Mehrabian, our President and Chief Executive Officer, is the only
executive officer who was employed as an executive officer by ATI during fiscal
1997 and 1998. Mr. Riesenfeld and Mr. Kuelbs joined ATI in anticipation of the
spin-off on July 26, 1999 and October 18, 1999, respectively. Mr. Riesenfeld
resigned effective June 6, 2000 to pursue another business opportunity. Mr.
Schnittjer became an executive officer of Teledyne Technologies on November 29,
1999 in connection with the spin-off and has acted as Chief Financial Officer
and Treasurer since June 1, 2000. Current annual base salaries of Dr. Mehrabian
and Messrs. Kuelbs and Schnittjer are $565,000, $310,000 and $185,000,
respectively.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------------------
----------------------------------------- RESTRICTED
NAME AND OTHER ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($)(2) (SHARES) COMPENSATION($)
------------------ ----------- --------- -------- ------------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Mehrabian........ 1999 411,540 450,000 359,508(4) 188,853 300,000 740,424(5)
President and Chief 1998 370,833 501,120 6,171 170,991 61,068(3) 226,492(6)
Executive Officer 1997 145,833 160,000 0 0 0 9,696
(5 months)
Stefan C. Riesenfeld.... 1999 130,769 78,852 0 0 75,000 87,663(7)
Executive Vice (from
President and Chief July 26)
Financial Officer
John T. Kuelbs.......... 1999 92,497 34,498 0 0 70,000 0
Senior Vice President, (from
General Counsel October 18)
and Secretary
Dale A. Schnittjer...... 1999 144,655 65,113 0 0 0 13,337(8)
Controller
</TABLE>

---------------
(1) In accordance with applicable regulations, the amounts do not include
perquisites and other personal benefits received by the named officers
because the aggregate value of such benefits did not exceed the lesser of
$50,000 or 10 percent of the total salary and bonus for the named officers.

(2) Represents the closing market price on the award date of ATI restricted
stock awarded to Dr. Mehrabian under the ATI Stock Acquisition and Retention
Program. Such shares were converted into shares of our common stock in
connection with the spin-off. ATI had paid dividends on the restricted
shares. On December 31, 1999, the number of shares (and closing price of
such shares, if unrestricted) held by Dr. Mehrabian under the Program were:
24,921 shares ($235,192). Prior to 1998, Dr. Mehrabian was not eligible to
participate in the Program.

(3) Reflects options granted under ATI's Incentive Plan as converted into
options to purchase shares of our common stock in connection with the
spin-off. Does not include options awarded to Dr. Mehrabian in 1998 under
ATI's Non-Employee Director Stock Compensation Plan for his service as a
director of ATI before becoming an employee of ATI.

(4) Includes a one-time tax reimbursement of $353,658 relating to the ATI Stock
Acquisition and Retention Program.

(5) Includes annual accruals for possible future payments to Dr. Mehrabian under
the ATI Supplemental Pension Plan in the amount of $314,846, company
contributions pursuant to the

41
<PAGE> 45

retirement portion of the ATI Retirement Savings Plan in the amount of
$10,400, company contributions to the ATI Benefit Restoration Plan in the
amount of $46,006, the dollar value of the benefits to Dr. Mehrabian of
company paid premiums of split dollar life insurance in the amount of
$11,960 and one-time non-cash imputed income of $357,212 arising in
connection with the ATI Stock Acquisition and Retention Program.

(6) Includes annual accruals for possible future payments to Dr. Mehrabian under
the ATI Supplemental Pension Plan in the amount of $182,068, company
contributions pursuant to the retirement portion of the ATI Retirement
Savings Plan in the amount of $10,920, company contributions to the ATI
Benefit Restoration Plan in the amount of $24,104, and the dollar value of
the benefit to Dr. Mehrabian of the remainder of company-paid premiums for
split-dollar life insurance in the amount of $9,400.

(7) Reflects aggregate relocation expenses paid on behalf of Mr. Riesenfeld.

(8) Includes company contributions pursuant to the retirement portion of the ATI
Retirement Savings Plan of $10,400 and company contributions to the ATI
Benefit Restoration Plan in the amount of $2,937.

OPTION GRANTS IN LAST FISCAL YEAR

Shown below is information on grants to Messrs. Mehrabian, Riesenfeld and
Kuelbs of options to purchase Teledyne Technologies common stock pursuant to our
1999 Incentive Plan during the year ended December 31, 1999, which are reflected
in the Summary Compensation Table. Options reflected below as having been
granted to Mr. Riesenfeld were forfeited effective upon his resignation. No
options were granted to Mr. Schnittjer during such year.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------- VALUE AT ASSUMED
NUMBER OF RATES OF STOCK PRICE
SECURITIES % OF TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5%$ 10%$
---- ---------- ------------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert Mehrabian...... 300,000 61.5 8.94 11/30/2009 1,686,695 4,274,417
Stefan C.
Riesenfeld.......... 75,000 15.4 8.94 11/30/2009 421,674 1,068,604
John T. Kuelbs........ 70,000 14.4 8.94 11/30/2009 393,562 997,364
</TABLE>

---------------
(1) No gain to the optionee is possible without stock price appreciation, which
will benefit all stockholders commensurately. The assumed "potential
realizable values" are mathematically derived from certain prescribed rates
of stock price appreciation. The actual value of these option grants depends
on the future performance of our common stock and overall stock market
condition. There is no assurance that the values reflected in this table
will be realized.

Under the Employee Benefits Agreement entered into with ATI in connection
with the spin-off, at the time of our spin-off from ATI, options to purchase
shares of ATI common stock that were held by Dr. Mehrabian and other Teledyne
Technologies employees were converted into options to purchase shares of our
common stock.

42
<PAGE> 46

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED IN-
SHARES UNDERLYING UNEXERCISED THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END(#) FISCAL YEAR END($)(2)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ----------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert Mehrabian(1)... 0 0 33,580/340,712 45/150,000
Stefan C.
Riesenfeld.......... 0 0 0/75,000 */37,500
John T. Kuelbs........ 0 0 0/70,000 */35,000
Dale A. Schnittjer.... 0 0 22,327/15,268 14,989/*
</TABLE>

---------------
(1) Includes options to purchase shares of our common stock converted from
options to purchase ATI common stock in connection with the spin-off under
the Employee Benefits Agreement, which included options granted to Dr.
Mehrabian under ATI's Non-Employee Director Stock Compensation Plan with
respect to his service as a non-employee director of ATI.

(2) The "value of unexercised in-the-money options" is calculated by subtracting
the exercise price per share from $9.44, which was the average of the high
and low sale prices of a share of our common stock on the New York Stock
Exchange on December 31, 1999. The "*" denotes that the relevant options
were "out-of-the-money" at December 31, 1999, meaning the exercise price per
share was greater than $9.44.

ATI PERFORMANCE SHARE PROGRAM AWARDS

The following table sets forth information about awards for the three-year
award period made in 1998 under the ATI Performance Share Program, which, as a
result of the spin-off and in accordance with the Employee Benefits Agreement,
was terminated and the award period shortened to cover the two-year period of
January 1, 1998 through December 31, 1999. The amounts included in the Estimated
Future Payouts columns represent the potential payment of Teledyne Technologies
common stock and cash to the named officers depending on whether they remain
employed by Teledyne Technologies (with exceptions for retirement, death and
disability). The 2000 payout has been made.

<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF NON-STOCK PRICE-BASED PLANS
SHARES, UNITS PERFORMANCE ---------------------------------------
OR OTHER OR OTHER PERIOD UNTIL 2000 PAYOUT 2001 PAYOUT 2002 PAYOUT
NAME RIGHTS(#) MATURATION OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
---- ------------- ------------------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Robert Mehrabian * 1998-1999 award period 7,646 shs. 7,646 shs. 7,645 shs.
(2000-2002 payout period) $36,967 $36,966 $36,966
Dale A. Schnittjer * 1998-1999 award period 1,807 shs. 1,806 shs. 1,806 shs.
(2000-2002 payout period) $8,733 $8,733 $8,732
</TABLE>

---------------
* The amount of the award is based on base salary at the beginning of the award
period. Two-thirds of the award is to be paid in Teledyne Technologies common
stock, with the number of shares based on the average of the high and low sale
prices of a share of Teledyne Technologies common stock on the New York Stock
Exchange on January 25, 2000 ($9.67). One-third of the award is to be paid in
cash.

PENSION PLAN

In connection with the spin-off, we adopted the Teledyne Technologies
Incorporated Pension Plan on terms substantially similar to the parts of the ATI
Pension Plan applicable to all of our employees, both active and inactive at our
operations which perform government contract work and for our active employees
at our operations which do not perform government contract work. The annual
benefits payable under these parts of the pension plans to participating
salaried employees

43
<PAGE> 47

retiring at or after age 65 is calculated under a formula which takes into
account the participant's compensation and years of service. The Internal
Revenue Code limits the amounts payable to participants under a qualified
pension plan. We have also adopted a Benefit Restoration Plan, which is designed
to restore benefits which would be payable under the pension plan provisions but
for the limits imposed by the Internal Revenue Code, to the levels calculated
pursuant to the formulas contained in the pension plan provisions.

The following table illustrates the approximate annual pension that may
become payable to a Teledyne Technologies employee in the higher salary
classifications under our regular and supplemental pension plans.

ESTIMATED ANNUAL PENSIONS(1)

<TABLE>
<CAPTION>
AVERAGE ANNUAL PAY IN HIGHEST YEARS OF SERVICE(3)
60 MONTHS OF LAST 120 ------------------------------
MONTHS OF EMPLOYMENT(2) 15 20 30
----------------------------- -------- -------- --------
<S> <C> <C> <C>
$ 200,000.................................................. $ 46,277 $ 61,702 $ 92,553
300,000.................................................. 71,027 94,702 142,053
400,000.................................................. 95,777 127,702 191,553
500,000.................................................. 120,527 160,702 241,053
600,000.................................................. 145,277 193,702 290,553
700,000.................................................. 170,027 226,702 340,053
800,000.................................................. 194,777 259,702 389,553
1,000,000................................................. 244,277 325,702 488,553
</TABLE>

---------------
(1) The estimated amounts assume retirement at age 65 (normal retirement age)
with a straight-life annuity without reduction for a survivor annuity or for
optional benefits. They are not subject to reduction for Social Security
benefits.

(2) For the period through December 31, 1994, for Teledyne Technologies
employees who are in the higher salary classifications, compensation for the
purposes of the plan was limited to an individual's base salary. Thereafter,
plan compensation for those employees includes base salary and up to five
annual incentive payments received on and after January 1, 1995.

(3) The maximum amount of service credited under the pension provisions
applicable to our employees is 30 years of credited service.

EMPLOYMENT/CHANGE IN CONTROL AGREEMENTS

Teledyne Technologies has an Employment Agreement with Dr. Mehrabian, which
provides that we will employ him as the President and Chief Executive Officer.
The agreement terminates on December 31, 2000, but effective November 1, 2000
will be extended annually unless either party gives the other written notice
prior to October 31 of each year of such term that it will not be extended. Dr.
Mehrabian has a base salary of $565,000 for 2000. The agreement provides that
Dr. Mehrabian is entitled to participate in Teledyne Technologies' annual
incentive bonus plan and other executive compensation and benefit programs. The
agreement provides Dr. Mehrabian with a non-qualified pension arrangement, under
which Teledyne Technologies will pay Dr. Mehrabian following his retirement, as
payments supplemental to any accrued pension under our qualified pension plan,
an amount equal to 50 percent of his base compensation as in effect at
retirement. The number of years for which such annual amount shall be paid will
be equal to the number of years of his service to Teledyne Technologies
(including service to ATI), but not more than 10 years.

We have entered into Change in Control Severance Agreements with Dr.
Mehrabian, Messrs. Kuelbs, Blauwiekel and Schnittjer and 10 other key employees.
The agreements have a three-year, automatically renewing term. Under the
agreements, the executive is entitled to severance benefits if (1) there is a
change in control of Teledyne Technologies and (2) within three months before or
24 months after the change in control, either we terminate the executive's

44
<PAGE> 48

employment for reasons other than for cause or the executive terminates the
employment for good reason. "Severance benefits" consist of:

- A cash payment equal to three times (in the case of Messrs. Mehrabian,
Kuelbs and Blauwiekel and three other executives) or two times (in the
case of eight other executives) the sum of (i) the executive's highest
annual base salary within the year preceding the change in control and
(ii) the Annual Incentive Plan bonus target for the year in which the
change in control occurs or the year immediately preceding the change in
control, whichever is higher.

- A cash payment for the current Annual Incentive Plan bonus based on the
fraction of the year worked times the Annual Incentive Plan target
objectives at 120 percent (with payment of the prior year bonus if not
yet paid).

- Payment in cash for unpaid Performance Share Plan awards, assuming
applicable goals are met at 120 percent of performance.

- Continued equivalent health and welfare (e.g., medical, dental, vision,
life insurance and disability) benefits at our expense for a period of 36
months after termination (with the executive bearing any portion of the
cost the executive bore prior to the change in control); provided,
however, such benefits would be discontinued to the extent the executive
receives similar benefits from a subsequent employer.

- Immediate vesting of all stock options, with options being exercisable
for the full remaining term.

- Removal of restrictions on restricted stock issued by us under any Stock
Acquisition and Retention Program or any replacement plans (i.e. the
Restricted Stock Award Program).

- Full vesting under our pension plans (within legal parameters).

- Up to $25,000 reimbursement for actual professional outplacement
services.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Personnel and Compensation Committee of our Board of
Directors is an officer or employee of Teledyne Technologies. Mr. Queenan serves
as senior counsel to a law firm that provided services to Teledyne Technologies
during 1999 and 2000. Mr. Queenan does not participate in the firm's earnings or
profits. No other member of the Committee has a current or prior relationship,
and no officer who is a statutory insider of Teledyne Technologies has a
relationship to any other company, that is required to be described under the
Securities and Exchange Commission rules relating to disclosure of executive
compensation.

45
<PAGE> 49

OTHER RELATIONSHIPS

We retained the law firm of Kirkpatrick & Lockhart LLP to perform services
for the Company during 1999 and 2000. Charles J. Queenan, Jr., a member of our
Board of Directors, is Senior Counsel to that law firm.

Dr. Mehrabian is a director of Mellon Financial Corporation. Mr. Cahouet
had served as Chairman, President and Chief Executive Officer of Mellon
Financial Corporation and Mellon Bank, N.A., having retired on December 31,
1998. Mr. Cahouet ceased being a director of Mellon Financial Corporation on
April 18, 2000. We maintain various arms-length banking relationships with
Mellon Bank, N.A. Mellon Bank, N.A. is one of nine lenders under our $200
million credit facility, having committed to lend up to $33,750,000 under the
facility. Mellon Bank, N.A. also serves as trustee under the Teledyne
Technologies Incorporated Pension Plan. ChaseMellon Shareholder Services L.L.C.
serves as the transfer agent and registrar. Notwithstanding these relationships,
our Board of Directors has determined that Mr. Cahouet is "independent," within
the meaning of the rules of the New York Stock Exchange, to serve on the Audit
Committee of the Board of Directors.

PRINCIPAL STOCKHOLDERS

The following table sets forth the number of shares of our common stock
owned beneficially by (i) each person known to us who owns beneficially more
than five percent of our outstanding common stock, (ii) our directors and named
executive officers and (iii) all of our directors and executive officers as a
group, in each case based upon the beneficial ownership of such persons of
common stock reported to us as of July 3, 2000, including shares as to which a
right to acquire ownership exists (for example, through the exercise of stock
options) within the meaning of Rule 13d3(d)(1) under the Securities Exchange Act
of 1934.

<TABLE>
<CAPTION>
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
---------------- ---------------- ----------------
<S> <C> <C>
Richard P. Simmons (1)................................... 2,529,667 9.5%
Birchmere
Quaker Hollow Road
Sewickley, PA 15143

Singleton Group LLC (2).................................. 1,999,900 7.5%
335 North Maple Drive, Suite 177
Beverly Hills, CA 90210

Robert Mehrabian......................................... 91,222(3) *
John T. Kuelbs........................................... 20,000(3) *
Nicholas L. Blauwiekel................................... 0(3) *
Dale A. Schnittjer....................................... 28,268(3) *
Thomas A. Corcoran....................................... 22,741 *
Robert P. Bozzone........................................ 759,697(4) 2.8%
Paul S. Brentlinger...................................... 8,456(4) *
Frank V. Cahouet......................................... 527 *
Diane C. Creel........................................... 820 *
C. Fred Fetterolf........................................ 3,932(4) *
Charles J. Queenan, Jr. ................................. 109,716(4) *
All directors and executive officers as a group (11
persons)............................................... 1,045,379 3.9%
</TABLE>

---------------
* Less than 1%

46
<PAGE> 50

(1) Mr. Simmons filed an amendment to his Schedule 13G on February 14, 2000. Mr.
Simmons has the sole power to direct the voting of 2,495,682 shares, and
sole power to direct the disposition of 1,341,198 of these shares. Mrs.
Richard P. Simmons has the sole power to direct the disposition of 1,154,484
of these shares. Mr. Simmons disclaims beneficial ownership of 33,985
shares, shown in the table, that are owned by R. P. Simmons Family
Foundation, a private charitable foundation with respect to which Mr.
Simmons serves as trustee.

(2) Caroline W. Singleton, as sole trustee of the Singleton Family Trust, filed
an amendment to a Schedule 13G on April 19, 2000 reporting that the
Survivor's Trust of the Singleton Family Trust (the "Trust") transferred
1,999,900 shares to Singleton Group LLC, a Delaware limited liability
company of which the Trust is the sole member. Singleton Group LLC, jointly
with William W. Singleton, Carolyn W. Singleton and Donald E. Rugg, filed a
Schedule 13G on the same date. Mr. Singleton, Mrs. Singleton and Mr. Rugg
reported that they share voting and dispositive power with respect to
1,999,900 shares in their capacities as managers of Singleton Group LLC. Mr.
Rugg reported that he owns an additional 45 shares of our common stock
directly, with respect to which he has sole voting and dispositive power.

(3) The amounts exclude restricted shares of common stock issued on July 25,
2000 under our newly established Restricted Stock Award Program to Dr.
Mehrabian (9,619 shares), Mr. Kuelbs (5,306 shares), Mr. Blauwiekel (3,576
shares), and Mr. Schnittjer (2,980 shares). Such shares are generally
subject to forfeiture if a participant terminates employment with us prior
to July 25, 2003 and certain performance goals established under our
Performance Share Program for the 2000-2002 performance cycle are not met.

(4) The amounts shown include shares to which beneficial ownership is disclaimed
as follows: 34,285 shares owned by Mr. Bozzone's wife; 28 shares held by Mr.
Brentlinger's wife; 371 shares owned by the Fetterolf Family Foundation; and
12,428 shares owned by Mr. Queenan's wife.

47
<PAGE> 51

ARRANGEMENTS WITH ATI

We entered into several agreements with ATI in connection with the spin-off
under which we have continuing obligations, which are described briefly below.

SEPARATION AND DISTRIBUTION AGREEMENT

The Separation and Distribution Agreement provided for the principal
corporate transactions required to effect the separation of our businesses from
ATI, the spin-off and certain other matters governing the relationship among us
following the spin-off. The agreement requires that we initiate a public
offering of our common stock within eight months following the spin-off and
complete the public offering within one year following the spin-off. It also
requires that we use the proceeds of the offering as contemplated by the
tax-ruling request. In addition, it provides that until the third Annual Meeting
of our stockholders held following the spin-off, at least a majority of our
directors will also be members of the Board of Directors of ATI.

EMPLOYEE BENEFITS AGREEMENT

The Employee Benefit Agreement contains various agreements between ATI and
us concerning employees, pension and employee benefit plans and other
compensation arrangements for current and former employees of our businesses.

Under the terms of the ATI Stock Acquisition and Retention Program, Dr.
Robert Mehrabian had delivered promissory notes, payable to ATI, as payment for
the purchase price of ATI common stock purchased under the program. Under the
Employee Benefits Agreement, notwithstanding the conversion of the restricted
ATI shares into restricted Teledyne Technologies common stock, the loans
evidenced by the promissory notes remain payable to ATI. On December 22, 1999,
ATI reduced the total amount of the loans payable by Dr. Mehrabian by
$357,211.97. As of December 31, 1999, after this reduction, Dr. Mehrabian was
indebted to ATI under this program in the amount of $403,010.62.

TAX SHARING AND INDEMNIFICATION AGREEMENT

The Tax Sharing and Indemnification Agreement allocates certain federal,
state, local and foreign tax responsibilities and liabilities between ATI and
us. This agreement provides that we will indemnify ATI and its directors,
officers, employees, agents and representatives for any taxes imposed on, or
other amounts paid by, them, or ATI's stockholders, if we take actions or fail
to take actions (such as completing the public offering) that result in the
spin-off not qualifying as a tax-free distribution.

INTERIM SERVICES AGREEMENT

Under the Interim Services Agreement, ATI provides us with transitional
administration and support services for a period of time not expected to exceed
12 months. The Interim Services Agreement provides that we pay ATI a fee
approximating ATI's cost for such services plus 10 percent.

TRADEMARK LICENSE AGREEMENT

Pursuant to the Trademark License Agreement, an affiliate of ATI granted us
an exclusive license to use the "Teledyne" name and related logos, symbols and
marks in connection with our operations. We pay an annual fee of $100,000 for
this license and on November 24, 2004 have an option to purchase all rights and
interests in the Teledyne marks for $412,000.

48
<PAGE> 52

DESCRIPTION OF CAPITAL STOCK

Our Restated Certificate of Incorporation provides that our authorized
capital consists of (i) 125,000,000 shares of common stock, $.01 par value, of
which 26,803,225 shares were outstanding as of July 3, 2000, and (ii) 15,000,000
shares of preferred stock, par value $.01 per share, of which 1,250,000 shares
have been designated as Series A Junior Participating Preferred Stock for
issuance in connection with the exercise of rights issued under our Stockholder
Rights Plan.

COMMON STOCK

Each share of our common stock entitles its holder of record to one vote
for the election of directors and all other matters to be voted on by the
stockholders. Holders of our common stock do not have cumulative voting rights,
and therefore the holders of a majority of the shares of our common stock voting
for the election of directors may elect all nominees standing for election as
our directors.

Subject to the rights of holders of preferred stock, holders of our common
stock are entitled to receive such dividends, if any, as may be declared from
time to time by our Board of Directors in its discretion from funds legally
available for that use. Subject to the rights of holders of preferred stock,
holders of our common stock will be entitled to share on a pro rata basis in any
distribution to stockholders upon our liquidation, dissolution or winding up. No
holder of our common stock has any preemptive right to subscribe for any of our
stock or other security.

PREFERRED STOCK

Our Board of Directors, without further action by the stockholders, may
from time to time authorize the issuance of shares of our preferred stock in one
or more series and, within certain limitations, fix the powers, preferences and
rights and the qualifications, limitations or restrictions thereof and the
number of shares constituting any series or designations of such series.
Satisfaction of any dividend preferences of our outstanding preferred stock
would reduce the amount of funds available for the payment of dividends on our
common stock. Holders of our preferred stock would normally be entitled to
receive a preference payment in the event of our liquidation, dissolution or
winding up before any payment is made to the holders of our common stock.

Under certain circumstances, the issuance of our preferred stock may render
more difficult or tend to discourage our change in control. Although we
currently have no plans to issue shares of our preferred stock, our Board of
Directors, without stockholder approval, may issue our preferred stock with
voting and conversion rights which could adversely affect the rights of holders
of shares of our common stock. For a description of the terms of our Series A
Junior Participating Preferred Stock. See "-- Rights Plan."

RIGHTS PLAN

We have a stockholder rights plan under which preferred share purchase
rights are held by holders of our common stock. The rights are generally
exercisable only if a person or group acquires 15% or more of our common stock
or announces a tender or exchange offer the completion of which would result in
ownership by a person or group of 15% or more of our common stock. Each right
entitles the holder to buy one-hundredth of a share of a series of junior
participating preferred stock for $60, or in certain circumstances and with
certain exceptions will entitle the holder to purchase our common stock or
voting stock of an acquiring person at a discount. The rights will expire on
November 29, 2009, subject to earlier redemption or exchange as described in the
plan.

49
<PAGE> 53

CERTAIN PROVISIONS OF OUR GOVERNING DOCUMENTS

The following is a description of certain provisions of our Certificate and
Bylaws. The description is qualified in its entirety by reference to the full
texts of the Certificate and Bylaws. Certain provisions of our Certificate and
Bylaws could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, control of
us, without the approval of our Board of Directors.

CHARTER PROVISIONS AFFECTING CONTROL AND OTHER TRANSACTIONS. Our
Certificate requires the affirmative vote of the holders of at least two-thirds
of the outstanding shares of our common stock to approve certain fundamental
changes such as a merger, consolidation, sale of substantially all of our
assets, dissolution, certain purchases by us or one of our subsidiaries of
shares of our common stock or other assets from a "significant shareholder," any
merger of a "significant shareholder" into us or one of our subsidiaries, or any
reclassification or recapitalization of us consummated within five years after a
"significant shareholder" becomes such, if the result of such reclassification
or recapitalization is to reduce the number of outstanding shares of our common
stock or convert any such shares into cash or other securities. This
supermajority voting requirement is not applicable if the fundamental change has
been approved at a meeting of our Board of Directors by the vote of more than
two-thirds of the incumbent directors. A "significant shareholder" is defined as
any person who owns beneficially a number of shares of our common stock that is
greater than 15% of the outstanding shares of our common stock, and any and all
associates and affiliates of such person.

CLASSIFICATION OF DIRECTORS. Our Certificate provides that our board of
directors consists of three classes of directors. At each annual meeting of our
stockholders, only the election of directors of the class whose term is expiring
is voted upon, and upon election each director serves a three-year term.

RIGHT TO CALL A SPECIAL MEETING. Our Certificate provides that special
meetings of the stockholders may only be called by the Chairman of our Board of
Directors or the Chief Executive Officer or by our Board of Directors pursuant
to a resolution passed by a majority of the directors then in office.
Accordingly, our stockholders do not have the right to call a special meeting of
the stockholders. Our Certificate further provides that only such business will
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to our notice of the special meeting.

Nominations of persons for election to our Board of Directors may be made
at a special meeting of stockholders at which directors are to be elected
pursuant to our notice of meeting (i) by or at the direction of our Board of
Directors or (ii) by any stockholder of record at the time of the giving of
notice of such meeting. Nominations by a stockholder of persons for election to
our Board of Directors may be made if the stockholder's notice is delivered to
our Secretary not earlier than the 90th day prior to the special meeting and not
later than the 75th day prior to the special meeting or the 10th day following
the day on which a public announcement is first made of the special meeting and
of the nominees proposed by the Board of Directors to be elected at the meeting.

PROCEDURES TO BRING BUSINESS BEFORE A MEETING AND ACTION BY CONSENT. Our
Certificate provides that in order for nominations or other business to be
properly brought before an annual meeting by a stockholder, the stockholder must
give timely notice thereof in writing to our Secretary. To be timely, a
stockholder's notice must be delivered to our Secretary not less than 60 days
nor more than 90 days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event the date of the annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
the anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and not
later than the 60th day prior to such annual meeting or the 10th day following
the day on which public announcement of the date of such meeting is first made.

50
<PAGE> 54

Our Certificate also provides that any action required to be taken by our
stockholders must be effected at a duly called annual or special meeting of our
stockholders and may not be effected by the written consent of our stockholders.

FIDUCIARY DUTIES OF DIRECTORS. Our Certificate provides that our directors
may take into account the effects of their actions on our employees, suppliers,
distributors and customers and the effect upon communities in which our offices
or facilities are located or any other factors considered pertinent.

Under the Delaware General Corporation Law, a Delaware corporation may
include in its certificate of incorporation a provision eliminating the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director except for liability (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful payment
of a dividend or an unlawful stock purchase or redemption, and (iv) for any
transaction from which the director derives an improper personal benefit. Our
Certificate contains such a provision and further provides that, if the Delaware
General Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of our directors shall be eliminated or limited to the fullest extent so
permitted. Our Certificate also specifies that no amendment to or repeal of this
provision shall apply to or have any effect on the liability or alleged
liability of any of our directors for or with respect to any acts or omissions
of such director occurring prior to the amendment or repeal.

CHARTER AMENDMENTS. Our Certificate provides that the affirmative vote of
the holders of at least 75% of the combined voting power of the outstanding
shares of our capital stock is required to amend or rescind, or adopt any
provision inconsistent with the purpose or intent of the provisions of our
Certificate relating to the adoption, amendment and repeal of our Bylaws,
limitations of certain liabilities of directors, actions of stockholders,
classification of directors, certain factors permitted to be considered by the
directors, approval of certain fundamental changes, and amendments to our
Certificate.

BYLAW PROVISIONS REGARDING ATI DIRECTORS. Our Bylaws contain provisions
designed to ensure that at least a majority of our directors are also directors
of ATI until the third annual meeting of our stockholders held after the
spin-off. The Bylaws also provide that no quorum of the board will be deemed
present unless at least a majority of the directors present are also members of
the Board of Directors of ATI.

BYLAW AMENDMENTS. Our Certificate authorizes our board of directors to
adopt, amend or repeal our Bylaws. Our Certificate also provides that our
stockholders may not adopt, amend or repeal our Bylaws other than by the same
affirmative vote that is required to amend certain provisions of our
Certificate.

51
<PAGE> 55

ANTI-TAKEOVER LEGISLATION

Section 203 of the Delaware General Corporation Law ("Section 203")
provides that any person who acquires 15% or more of a corporation's voting
stock (thereby becoming an "interested stockholder") may not engage in a
"business combination" with the corporation for a period of three years
following the time the person became an interested stockholder, unless (i) the
board of directors of the corporation approved, prior to such time, either the
business combination or the transaction that resulted in the person becoming an
interested stockholder, (ii) upon consummation of the transaction that resulted
in that person becoming an interested stockholder, that person owns at least 85%
of the corporation's voting stock outstanding at the time the transaction
commenced (excluding shares owned by persons who are directors and officers of
that corporation and shares owned by employee stock plans in which participants
do not have the right to determine confidentially whether shares will be
tendered in a tender or exchange offer), or (iii) the business combination is
approved by the board of directors and authorized by the affirmative vote (at an
annual or special meeting and not by written consent) of at least 66 2/3% of the
outstanding shares of voting stock not owned by the interested stockholder.

In determining whether a stockholder is the "owner" of 15% or more of a
corporation's voting stock for purposes of Section 203, ownership is defined to
include the right, directly or indirectly, to acquire stock or to control the
voting or disposition of stock. A "business combination" is defined to include
(i) mergers or consolidations of a corporation with an interested stockholder,
(ii) sales or other dispositions of ten percent or more of the assets of a
corporation with or to an interested stockholder, (iii) certain transactions
resulting in the issuance or transfer to an interested stockholder of any stock
of a corporation or its subsidiaries, (iv) certain transactions which would
result in increasing the proportionate share of the stock of a corporation or
its subsidiaries owned by an interested stockholder, and (v) receipt by an
interested stockholder of the benefit (except proportionately as a stockholder)
of any loans, advances, guarantees, pledges or other financial benefits from, by
or to a corporation or any of its majority-owned subsidiaries.

Since neither our Certificate nor our Bylaws contain a provision expressly
electing not to be governed by Section 203, we are subject to Section 203.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is ChaseMellon
Shareholder Services, L.L.C.

52
<PAGE> 56

UNDERWRITING

Teledyne Technologies and the underwriters for the offering named below
have entered into an underwriting agreement with respect to the shares being
offered. Subject to certain conditions, each underwriter has severally agreed to
purchase the number of shares indicated in the following table. Goldman, Sachs &
Co., Banc of America Securities LLC and A.G. Edwards & Sons, Inc. are the
representatives of the underwriters.

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Goldman, Sachs & Co........................................
Banc of America Securities LLC.............................
A.G. Edwards & Sons, Inc. .................................
----------
Total................................................. 4,100,000
==========
</TABLE>

If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have an option to buy up to an additional 615,000
shares from Teledyne Technologies to cover such sales. They may exercise that
option for 30 days. If any shares are purchased pursuant to this option, the
underwriters will severally purchase shares in approximately the same proportion
as set forth in the table above.

The following table shows the per share and total underwriting discounts
and commissions to be paid to the underwriters by Teledyne Technologies. Such
amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase 615,000 additional shares.

Paid by Teledyne Technologies

<TABLE>
<CAPTION>
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per Share......................................... $ $
Total............................................. $ $
</TABLE>

Shares sold by the underwriters to the public will initially be offered at
the initial price to public set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $ per share from the initial price to public. Any such securities
dealers may resell any shares purchased from the underwriters to certain other
brokers or dealers at a discount of up to $ per share from the initial price
to public. If all the shares are not sold at the initial price to public, the
representatives may change the offering price and the other selling terms.

Teledyne Technologies and each of its directors and executive officers have
agreed with the underwriters not to dispose of or hedge any of Teledyne
Technologies' common stock or securities convertible into or exchangeable for
shares of common stock during the period from the date of this prospectus
continuing through the date 90 days after the date of this prospectus, except
with the prior written consent of the representatives. This agreement does not
apply to any existing employee benefit plans.

In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from Teledyne Technologies in the offering.
The underwriters may close out any covered short position by either exercising
their option to purchase additional shares or purchasing shares in the open
market. In determining the source of shares to close out the covered short
position, the underwriters will consider, among other things, the price of
shares available for purchase in the open market as compared to the price at
which they may purchase shares through the overallotment option. "Naked" short
sales are any sales in excess of such option. The underwriters must close out

53
<PAGE> 57

any naked short position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the common stock in the open
market after pricing that could adversely affect investors who purchase in the
offering. Stabilizing transactions consist of various bids for or purchases of
common stock made by the underwriters in the open market prior to the completion
of the offering.

The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of Teledyne
Technologies' stock, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common stock. As
a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued at any time. These transactions may be effected on the
New York Stock Exchange, in the over-the-counter market or otherwise.

Teledyne Technologies estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $400,000.

Teledyne Technologies has agreed to indemnify the several underwriters
against certain liabilities, including liabilities under the Securities Act of
1933.

Goldman, Sachs & Co. served as ATI's financial advisor in connection with
our spin-off from ATI.

Bank of America, N.A., an affiliate of Banc of America Securities LLC, is
Administrative Agent, Swing Line Lender and Issuing Lender under our bank credit
agreement. Bank of America, N.A. also periodically issues letters of credit for
Teledyne Technologies.

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Kirkpatrick & Lockhart LLP, Pittsburgh, Pennsylvania. O'Melveny & Myers LLP,
Los Angeles, California, is acting as counsel for the underwriters in connection
with certain legal matters relating to the sale of the common stock offered
hereby.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule at January 2, 2000 and January 3, 1999, and
for each of the three years in the period ended January 2, 2000, as set forth in
their report. We have included our financial statements and schedule in the
prospectus and elsewhere in the registration statement in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.

54
<PAGE> 58

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the reporting requirements of the Securities and Exchange
Act of 1934 and in accordance with that Act file annual and quarterly reports,
proxy statements and other information with the Securities and Exchange
Commission. These reports, proxy statements and other information may be
inspected and copies of these materials may be obtained upon payment of fees at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, as well as the regional offices of the
Commission located at 500 West Madison Street, Chicago, Illinois, and Seven
World Trade Center, New York, New York. You may obtain information on the
operation of the public reference facilities by calling the Commission at
1-800-SEC-0330. In addition, we are required to file electronic versions of
these materials with the Commission through the Commission's Electronic and Data
Gathering, Analysis and Retrieval system. The Commission maintains a World Wide
Web site at www.sec.gov that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission. Our common stock is listed on the New York Stock Exchange, and
reports and other information concerning us may be inspected at the New York
Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005.

We have filed with the Commission a registration statement on Form S-1
under the Securities Act of 1933 with respect to the common stock offered in
this prospectus. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules thereto. For
further information with respect to us and our common stock, you should read the
registration statement and its exhibits and schedules. Statements contained in
this prospectus as to the contents of any contract or any other document are not
necessarily complete and, in each instance, reference is made to the copy of
each such statement being qualified in all respects by such reference. Copies of
the registration statement, including all exhibits thereto, may be obtained from
the Commission's principal office in Washington, D.C. upon the payment of the
fees prescribed by the Commission, or may be examined without charge at the
offices of the Commission described above. Copies of these materials may also be
obtained from the EDGAR database.

55
<PAGE> 59

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Ernst & Young LLP, Independent Auditors........... F-2

Consolidated Statements of Income for Fiscal 1997, 1998 and
1999 and for the Six Month Periods Ended July 4, 1999 and
July 2, 2000.............................................. F-3

Consolidated Balance Sheets as of Fiscal Year-End 1998 and
1999 and as of July 2, 2000............................... F-4

Consolidated Statements of Stockholders' Equity for Fiscal
1997, 1998 and 1999 and for the Six Month Period Ended
July 2, 2000.............................................. F-5

Consolidated Statements of Cash Flows for Fiscal 1997, 1998
and 1999 and for the Six Month Periods Ended July 4, 1999
and July 2, 2000.......................................... F-6

Notes to Consolidated Financial Statements.................. F-7

Schedule II--Valuation and Qualifying Accounts for Fiscal
1997, 1998 and 1999 and for the Six Month Period Ended
July 2, 2000.............................................. F-27
</TABLE>

F-1
<PAGE> 60

REPORT OF INDEPENDENT AUDITORS

To the Stockholders and Board of Directors
Teledyne Technologies Incorporated:

We have audited the accompanying consolidated balance sheets of Teledyne
Technologies Incorporated as of January 2, 2000 and January 3, 1999, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three fiscal years in the period ended January 2, 2000. Our
audits also included the related financial statement schedule included in the
index. These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Teledyne
Technologies Incorporated at January 2, 2000 and January 3, 1999, and the
consolidated results of their operations and their cash flows for each of the
three fiscal years in the period ended January 2, 2000, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

/s/ Ernst & Young LLP
Los Angeles, California

January 26, 2000,

except for the third paragraph

of Note 1, as to which the

date is June 1, 2000

F-2
<PAGE> 61

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
-------------------------- ----------------
1997 1998 1999 1999 2000
------ ------ ------ ------ ------
(UNAUDITED)
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Sales........................................... $707.4 $733.0 $761.4 $375.4 $397.7
Costs and expenses
Cost of sales................................. 511.8 532.1 552.1 275.3 287.4
Selling, general and administrative
expenses.................................... 135.6 123.4 130.5 65.0 85.4
------ ------ ------ ------ ------
647.4 655.5 682.6 340.3 372.8
------ ------ ------ ------ ------
Operating profit................................ 60.0 77.5 78.8 35.1 24.9
Interest and debt expense, net................ -- -- 0.8 -- 3.6
Other income.................................. 1.4 1.6 1.0 0.5 0.4
------ ------ ------ ------ ------
Income from continuing operations before income
taxes......................................... 61.4 79.1 79.0 35.6 21.7
Provision for income taxes...................... 24.1 32.7 31.8 14.7 8.6
------ ------ ------ ------ ------
Income from continuing operations............... 37.3 46.4 47.2 20.9 13.1
Discontinued operations, net of tax............. 4.3 2.3 1.8 1.2 0.2
------ ------ ------ ------ ------
Net income...................................... $ 41.6 $ 48.7 $ 49.0 $ 22.1 $ 13.3
====== ====== ====== ====== ======
Basic and diluted earnings per common share:
Income from continuing operations............. $ 1.33 $ 1.65 $ 1.73 $ 0.76 $ 0.48
Discontinued operations....................... 0.15 0.08 0.06 0.04 0.01
------ ------ ------ ------ ------
Basic and diluted earnings per common share..... $ 1.48 $ 1.73 $ 1.79 $ 0.80 $ 0.49
====== ====== ====== ====== ======
</TABLE>

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

F-3
<PAGE> 62

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JANUARY 3, 1999 JANUARY 2, 2000 JULY 2, 2000
--------------- --------------- -------------
(UNAUDITED)
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C>
Current Assets
Cash and cash equivalents........................ $ -- $ 7.1 $ 3.2
Accounts receivable, net......................... 96.5 109.1 123.4
Inventories, net................................. 49.6 51.4 57.4
Deferred income taxes, net....................... 12.9 21.7 20.2
Prepaid expenses income taxes and other current
assets........................................ 1.7 4.5 8.6
------ ------ ------
Total Current Assets.......................... 160.7 193.8 212.8
------ ------ ------
Property, plant and equipment, net............... 39.5 56.0 58.5
Deferred income taxes, net....................... 22.1 25.6 31.6
Cost in excess of net assets acquired, net....... 9.4 8.2 7.8
Other assets..................................... 5.3 16.9 19.4
Net assets of discontinued operations............ 9.4 12.9 12.4
------ ------ ------
Total Assets.................................. $246.4 $313.4 $342.5
====== ====== ======
Liabilities and Stockholders' Equity
Accounts payable................................. $ 39.9 $ 44.2 $ 54.6
Accrued liabilities.............................. 48.2 47.3 61.6
Income taxes payable............................. -- 3.8 --
------ ------ ------
Total Current Liabilities..................... 88.1 95.3 116.2
Long-term debt................................... -- 97.0 91.0
Net unrecognized actuarial gains on pension
obligation.................................... -- 14.7 10.0
Accrued postretirement benefits.................. 32.9 33.6 32.5
Other long-term liabilities...................... 19.0 28.3 34.5
------ ------ ------
Total Liabilities............................. 140.0 268.9 284.2
------ ------ ------
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $.01 par value; authorized 15
million shares; none outstanding.............. -- -- --
Common stock, $.01 par value; authorized 125
million shares; outstanding shares:
January 2, 2000--26,687,002 and July 2,
2000--26,801,505............................ -- 0.3 0.3
Additional paid-in capital....................... -- 37.9 38.9
Net advances from ATI............................ 104.7 -- --
Retained earnings................................ -- 5.6 18.9
Accumulated other comprehensive income........... 1.7 0.7 0.2
------ ------ ------
Total Stockholders' Equity.................... 106.4 44.5 58.3
------ ------ ------
Total Liabilities and Stockholders' Equity.... $246.4 $313.4 $342.5
====== ====== ======
</TABLE>

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

F-4
<PAGE> 63

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
ADVANCES ADDITIONAL OTHER TOTAL
(TO) FROM COMMON PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS'
ATI STOCK CAPITAL EARNINGS INCOME EQUITY
--------- ------ ---------- -------- ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Balance, December 29, 1996........ $126.1 $ -- $ -- $ -- $ 1.9 $128.0
Net income/comprehensive
income.......................... 41.6 -- -- -- -- 41.6
Net transactions with ATI......... (60.2) -- -- -- -- (60.2)
------ ---- ----- ----- ----- ------
Balance, December 28, 1997........ $107.5 $ -- $ -- $ $ 1.9 $109.4
Net income........................ 48.7 -- -- -- -- 48.7
Other comprehensive income, net of
tax:
Foreign currency translation
losses...................... -- -- -- -- (0.2) (0.2)
------ ---- ----- ----- ----- ------
Comprehensive income.............. 48.7 -- -- -- (0.2) 48.5
Net transactions with ATI......... (51.5) -- -- -- -- (51.5)
------ ---- ----- ----- ----- ------
Balance, January 3, 1999.......... $104.7 $ -- $ -- $ -- $ 1.7 $106.4
Net income........................ 43.4 -- -- -- -- 43.4
Other comprehensive income, net of
tax:
Foreign currency translation
losses...................... -- -- -- -- (0.1) (0.1)
------ ---- ----- ----- ----- ------
Comprehensive income.............. 43.4 -- -- -- (0.1) 43.3
Net transactions with ATI......... (47.5) -- -- -- -- (47.5)
------ ---- ----- ----- ----- ------
Balance prior to spin-off,
November 29, 1999............... $100.6 $ -- $ -- $ -- $ 1.6 $102.2
Spin-off capitalization
transactions.................... (100.6) 0.3 37.9 -- (0.9) (63.3)
------ ---- ----- ----- ----- ------
Balance after spin-off............ $ -- $0.3 $37.9 $ -- $ 0.7 $ 38.9
Net income/comprehensive income... -- -- -- 5.6 -- 5.6
------ ---- ----- ----- ----- ------
Balance, January 2, 2000.......... $ -- $0.3 $37.9 $ 5.6 $ 0.7 $ 44.5
Net income (unaudited)............ -- -- -- 13.3 -- 13.3
Other comprehensive income, net of
tax:
Foreign currency translation
losses (unaudited).......... -- -- -- -- (0.5) (0.5)
------ ---- ----- ----- ----- ------
Comprehensive income (unaudited).. -- -- -- 13.3 (0.5) 12.8
Issuance of common stock
(unaudited)..................... -- -- 1.0 -- -- 1.0
------ ---- ----- ----- ----- ------
Balance, July 2, 2000
(unaudited)..................... $ -- $0.3 $38.9 $18.9 $ 0.2 $ 58.3
====== ==== ===== ===== ===== ======
</TABLE>

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

F-5
<PAGE> 64

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIRST
FISCAL YEAR SIX MONTHS
----------------------------- -------------
1997 1998 1999 1999 2000
----- ----- ------------- ----- -----
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Operating Activities
Net income from continuing operations............ $37.3 $46.4 $47.2 $20.9 $13.1
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of assets....... 10.8 10.6 11.3 5.9 7.8
Deferred income taxes......................... 0.3 (0.4) (1.4) -- (4.4)
Gains on sale of property, plant and
equipment................................... -- (0.4) (0.1) -- --
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable.... 1.7 15.6 (12.6) (9.4) (14.3)
Increase in inventories....................... (0.9) (7.8) (1.8) (0.7) (6.0)
Increase in prepaid expenses and other
assets...................................... -- -- (2.8) -- --
Increase in other long-term assets............ -- -- -- -- (1.4)
Increase in accounts payable.................. 12.4 0.4 4.3 6.0 10.4
Increase (decrease) in accrued liabilities.... 2.0 (4.8) (0.8) 0.4 14.3
Increase (decrease) in current income taxes
payable..................................... -- -- 3.8 -- (6.9)
Increase (decrease) in other long-term
liabilities................................. 3.1 2.9 -- (2.6) 4.7
Decrease in net unrecognized actuarial gains
on pension obligation....................... -- -- -- -- (4.7)
Increase (decrease) in accrued postretirement
benefits.................................... 0.4 0.2 0.6 0.2 (1.1)
Other operating, net............................. 1.8 (2.0) (1.8) (1.1) (1.3)
----- ----- ----- ----- -----
Net cash provided by operating activities..... 68.9 60.7 45.9 19.6 10.2
Net cash from discontinued operations......... 4.0 6.4 1.5 0.2 1.9
----- ----- ----- ----- -----
Net cash provided by operating activities..... 72.9 67.1 47.4 19.8 12.1
----- ----- ----- ----- -----
Investing Activities
Purchases of property, plant and equipment....... (15.4) (16.7) (28.3) (6.4) (9.3)
Disposals of property, plant and equipment....... 0.1 0.7 0.1 -- 0.1
Other investing, net............................. 2.9 1.7 (0.7) (0.1) (0.5)
----- ----- ----- ----- -----
Net cash used by investing activities......... (12.4) (14.3) (28.9) (6.5) (9.7)
Investing cash flow from discontinued
operations.................................. (0.4) (1.3) (3.2) (1.1) (1.1)
----- ----- ----- ----- -----
Net cash used by investing activities......... (12.8) (15.6) (32.1) (7.6) (10.8)
----- ----- ----- ----- -----
Financing Activities
Net payments on revolving credit agreement....... -- -- (3.0) -- (6.0)
Proceeds from issuance of common stock........... -- -- -- -- 0.8
Net advances/spin-off capitalization with ATI.... (60.2) (51.5) (5.2) (12.2) --
----- ----- ----- ----- -----
Net cash used by financing activities......... (60.2) (51.5) (8.2) (12.2) (5.2)
----- ----- ----- ----- -----
Increase (decrease) in cash and cash equivalents... (0.1) -- 7.1 -- (3.9)
Cash and cash equivalents -- beginning of year..... 0.1 -- -- -- 7.1
----- ----- ----- ----- -----
Cash and cash equivalents -- end of period......... $ -- $ -- $ 7.1 $ -- $ 3.2
===== ===== ===== ===== =====
</TABLE>

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

F-6
<PAGE> 65

TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ALLEGHENY TELEDYNE INCORPORATED'S SPIN-OFF OF TELEDYNE TECHNOLOGIES
INCORPORATED

Effective November 29, 1999 (the Distribution Date), Teledyne Technologies
Incorporated (Teledyne Technologies or the Company) became an independent,
public company as a result of the distribution by Allegheny Teledyne
Incorporated, now known as Allegheny Technologies Incorporated (ATI) of the
Company's Common Stock, $.01 par value per share, to holders of ATI Common Stock
at a distribution ratio of one for seven (the spin-off). The spin-off has been
treated as a tax-free distribution for federal income tax purposes. Immediately
prior to the spin-off, ATI transferred certain of the businesses of ATI's
Aerospace and Electronics segment to the new corporation. ATI no longer has a
financial investment in Teledyne Technologies.

Teledyne Technologies consists of the operations of the Teledyne Electronic
Technologies division with operations in the United States, United Kingdom and
Mexico; Teledyne Brown Engineering division with operations in the United States
and United Kingdom; Teledyne Continental Motors and Teledyne Cast Parts
divisions, both with operations in the United States. Prior to the spin-off,
these operations were divisions of wholly-owned subsidiaries of ATI.

On June 1, 2000, Teledyne Technologies' board of directors authorized the
divestiture of the assets of Teledyne Cast Parts, a provider of sand and
investment castings to the aerospace and defense industries and part of the
Aerospace Engines and Components segment. Accordingly, the consolidated
financial statements have been restated to reflect Teledyne Cast Parts as a
discontinued operation. The operating assets and liabilities of Teledyne Cast
Parts have been reclassified as net assets of discontinued operations on the
balance sheet and primarily consist of net accounts receivables of $7.2 million,
inventory of $3.1 million, property, plant and equipment of $6.7 million and
liabilities of $4.6 million at July 2, 2000. Net assets of discontinued
operations at January 2, 2000 primarily consist of net accounts receivables of
$8.5 million, inventory of $2.2 million, property, plant and equipment of $6.1
million and liabilities of $3.9 million. Net assets of discontinued operations
at January 3, 1999 primarily consist of net accounts receivables of $6.7
million, inventory of $3.6 million, property, plant and equipment of $3.5
million and liabilities of $4.4 million. Sales for Teledyne Cast Parts were
$42.0 million, $47.4 million and $49.1 million for the 1999, 1998 and 1997
fiscal years, respectively. Sales were $16.4 million and $22.0 million for the
first six months of 2000 and 1999, respectively. The results of Teledyne Cast
Parts were net of income taxes of $1.2 million, $1.5 million and $3.0 million
for the 1999, 1998 and 1997 fiscal years, respectively, and $141 thousand and
$811 thousand for the first six months of 2000 and 1999, respectively.

A $200 million five-year revolving credit agreement was arranged with a
syndicate of banks in connection with the spin-off. ATI drew $100 million under
the facility prior to the assumption of the facility by Teledyne Technologies.
Teledyne Technologies assumed the repayment obligation for the amount drawn by
ATI. In addition, prior to and in connection with the spin-off, Teledyne
Technologies and ATI entered into agreements providing for the separation of the
companies and governing various relationships for separating employee benefits
and tax obligations, indemnification and transition services.

The consolidated financial statements for periods prior to the spin-off
included certain expenses (primarily corporate expenses) based on an allocation
of the overall expense of ATI. ATI's historical cost basis of assets and
liabilities has been reflected in Teledyne Technologies' financial statements.
The financial information in these financial statements is not necessarily
indicative of results of operations, financial position and cash flows that
would have occurred if Teledyne Technologies had been a separate stand-alone
entity during the periods presented or of future results. The consolidated
financial statements included herein do not reflect changes that occurred in the

F-7
<PAGE> 66
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

capitalization and operations of Teledyne Technologies as a result of, or after,
the spin-off other than for the periods following the spin-off.

The following unaudited pro forma financial information is presented for
informational purposes only and may not reflect the results of operations or
financial position of Teledyne Technologies that would have occurred had
Teledyne Technologies operated as a separate, independent company for the
periods presented. The pro forma financial information should not be relied upon
as being indicative of future results. Pro forma adjustments reflect the
estimated expense impacts (primarily interest expense and corporate expenses)
that would have been incurred had Teledyne Technologies been operated as a
separate company as of the beginning of each year and as capitalized at the time
of the spin-off for each period presented. As part of the spin-off, Teledyne
Technologies assumed $100 million of long-term debt incurred by ATI.

Pro forma income includes pro forma interest expense on the long-term debt
as if it had been outstanding for all periods presented. Pro forma income
adjusts corporate expenses to an annual level of $15 million from the amount
previously allocated, which was lower. The following is Teledyne Technologies
unaudited pro forma financial information for the 1999, 1998 and 1997 fiscal
years and for the first six months of 2000 and 1999:

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of Teledyne Technologies include the
accounts of the businesses distributed by ATI and its subsidiaries as described
in Note 1. Significant intercompany accounts and transactions have been
eliminated.

F-8
<PAGE> 67
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FISCAL YEAR

The Company is on a 53/52-week fiscal year convention. Fiscal years 1999
and 1997 were 52-week years and ended on January 2, 2000 and December 28, 1997,
respectively and fiscal year 1998 was a 53-week year and ended on January 3,
1999. References to 1999, 1998 and 1997 are intended to refer to the respective
fiscal year unless otherwise noted. The second quarter of 2000 was a 26-week
period and ended on July 2, 2000. The second quarter of 1999 was a 26-week
period and ended on July 4, 1999.

ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles in the United States requires management to make
estimates and assumptions that affect reported amounts and related disclosures.
Actual results could differ from those estimates. Management believes that the
estimates are reasonable.

REVENUE RECOGNITION

Commercial sales and revenue from U.S. Government fixed-price type
contracts generally are recorded as shipments are made or as services are
rendered. Occasionally, for certain fixed-price type contracts that require
substantial performance over a long time period (one or more years) before
shipments begin, sales may be recorded based upon attainment of scheduled
performance milestones which could be time, event or expense driven. In these
few instances, invoices are submitted to the customer under a contractual
agreement and payments are made by the customer. Sales under cost-reimbursement
contracts are recorded as costs are incurred and fees are earned. Since certain
contracts extend over a long period of time, all revisions in cost and funding
estimates during the progress of work have the effect of adjusting the current
period earnings on a cumulative catch-up basis. If the current contract estimate
indicates a loss, provision is made for the total anticipated loss.

RESEARCH AND DEVELOPMENT

Company-funded research and development costs were $27.8 million in 1999,
$24.8 million in 1998 and $27.7 million in 1997, and include bid and proposal
costs, are expensed as incurred. Costs related to customer-funded research and
development contracts were $188.1 million in 1999, $150.2 million in 1998 and
$160.7 million in 1997 and are charged to costs and expenses as the related
sales are recorded. A portion of the costs incurred for Company-funded research
and development is recoverable through overhead cost allowances on government
contracts.

INCOME TAXES

Provision for income taxes includes deferred taxes resulting from temporary
differences in income for financial and tax purposes using the liability method.
Such temporary differences result primarily from differences in the carrying
value of assets and liabilities.

NET INCOME PER COMMON SHARE

The Company uses the treasury method to calculate diluted earnings per
share. The average number of shares of Teledyne Technologies' Common Stock used
in the computation of basic net income per common share was 27,303,421,
28,107,241 and 28,085,823 for the fiscal years ended January 2, 2000, January 3,
1999 and December 28, 1997, respectively. Prior to the spin-off, the number of
shares outstanding was based on a distribution ratio of one share of Teledyne

F-9
<PAGE> 68
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Technologies' Common Stock for every seven shares of ATI Common Stock. The
average number of shares of Teledyne Technologies' Common Stock used in the
computation of diluted net income per common share was 27,334,737, 28,133,879
and 28,120,380 for the fiscal years ended January 2, 2000, January 3, 1999 and
December 28, 1997, respectively.

The average number of shares of Teledyne Technologies' Common Stock used in
the computation of basic net income per common share was 26,854,770 and
27,617,857 for the six months ended July 2, 2000 and July 4, 1999, respectively.
The average number of shares of Teledyne Technologies' Common Stock used in the
computation of diluted net income per common share was 27,345,859 and 27,644,542
for the six months ended July 2, 2000 and July 4, 1999, respectively. A
distribution ratio of 1.527 shares of Teledyne Technologies' Common Stock for
every one share of ATI Common Stock was used to adjust stock options converted
at the spin-off date.

ACCOUNTS RECEIVABLE

Receivables are presented net of a reserve for doubtful accounts of $3.3
million at January 2, 2000 and $2.8 million at January 3, 1999. Expense recorded
for the reserve for doubtful accounts was $551 thousand, $1.4 million and $1.2
million for the 1999, 1998 and 1997 fiscal years, respectively. The Company
markets its products and services principally throughout the United States,
Europe, Japan and Canada to commercial customers and agencies of, and prime
contractors to, the U.S. Government. Trade credit is extended based upon
evaluations of each customer's ability to perform its obligations, which are
updated periodically.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of highly liquid money-market mutual funds and
bank deposits with initial maturities of three months or less. Cash equivalents
totaled approximately $5.5 million at January 2, 2000. There were no cash
equivalents at July 2, 2000.

INVENTORIES

Inventories are stated at the lower of cost (last-in, first-out; first-in,
first-out; and average cost methods) or market, less progress payments. Costs
include direct material, direct labor, applicable manufacturing and engineering
overhead, and other direct costs.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is capitalized at cost. The method of
depreciation adopted for all property, plant and equipment placed into service
after July 1, 1996 is the straight-line method. For property, plant and
equipment acquired prior to July 1, 1996, depreciation is computed using a
combination of accelerated and straight-line methods. The Company believes the
straight-line method more appropriately reflects its financial results by better
allocating costs of new property over the useful lives of these assets.

COST IN EXCESS OF NET ASSETS ACQUIRED

Cost in excess of net assets acquired related to businesses purchased prior
to November 1970 is not being amortized. Cost in excess of net assets acquired
related to businesses purchased after November 1970 is being amortized on a
straight-line basis over periods not exceeding 15 years. Goodwill amortization
expense was $672 thousand, $582 thousand and $510 thousand in 1999, 1998 and
1997, respectively.

F-10
<PAGE> 69
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OTHER LONG-LIVED ASSETS

The carrying value of long-lived assets is periodically evaluated in
relation to the operating performance and future undiscounted cash flows of the
underlying businesses. Adjustments are made if the sum of expected future net
cash flows is less than book value. In 1997, the Company recorded an impairment
loss of approximately $1.8 million in general and administrative expenses
primarily to write off its investment in a limited liability corporation that
was determined to have no value. This determination was made as a result of
programs that were discontinued in the Systems Engineering Solutions business
segment in 1997.

ENVIRONMENTAL

Costs that mitigate or prevent future environmental contamination or extend
the life, increase the capacity or improve the safety or efficiency of property
utilized in current operations are capitalized. Other costs that relate to
current operations or an existing condition caused by past operations are
expensed. Environmental liabilities are recorded when the Company's liability is
probable and the costs are reasonably estimable, but generally not later than
the completion of the feasibility study or the Company's recommendation of a
remedy or commitment to an appropriate plan of action. The accruals are reviewed
periodically and, as investigations and remediations proceed, adjustments are
made as necessary. Accruals for losses from environmental remediation
obligations do not consider the effects of inflation, and anticipated
expenditures are not discounted to their present value. The accruals are not
reduced by possible recoveries from insurance carriers or other third parties,
but do reflect anticipated allocations among potentially responsible parties at
federal Superfund sites or similar state-managed sites and an assessment of the
likelihood that such parties will fulfill their obligations at such sites. The
measurement of environmental liabilities by the Company is based on currently
available facts, present laws and regulations, and current technology. Such
estimates take into consideration the Company's prior experience in site
investigation and remediation, the data concerning cleanup costs available from
other companies and regulatory authorities, and the professional judgment of the
Company's environmental experts in consultation with outside environmental
specialists, when necessary.

FOREIGN CURRENCY TRANSLATION

The Company's foreign entities' accounts are measured using local currency
as the functional currency. Assets and liabilities are translated at the
exchange rate in effect at year-end. Revenues and expenses are translated at the
rates of exchange prevailing during the year. Unrealized translation gains and
losses arising from differences in exchange rates from period to period are
included as a component of accumulated other comprehensive income in
stockholders' equity.

ACCOUNTING PRONOUNCEMENTS

SAB No. 101 -- In December 1999, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements (SAB No. 101). SAB No. 101 provides the Commission's views in
applying generally accepted accounting principles to selected revenue
recognition issues. The Company has reviewed the requirements of SAB No. 101 and
has determined that it is in compliance with SAB No. 101.

SFAS No. 138, 137 and 133 -- In June 1998, the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 133--"Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments and
hedging activities. It requires that an entity recognize all derivatives in the
statement of financial position and measure those instruments at fair value. In
1999, the FASB issued SFAS No. 137--"Accounting for Derivative Instruments and
Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133--an
amendment of FASB
F-11
<PAGE> 70
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Statement No. 133," which defers the effective date of SFAS No. 133 for one
year. In June 2000, the FASB issued SFAS No. 138 -- "Accounting for Certain
Derivative Instruments and Certain Hedging Activities -- an amendment of SFAS
No. 133," which amends the accounting and reporting standards of SFAS No. 133
for certain derivative instruments and hedging activities. Teledyne Technologies
must implement SFAS No. 133 by the first quarter of 2001 and has not yet made a
final determination of its impact on the financial statements.

SFAS No. 132 -- Effective for 1998, Teledyne Technologies adopted the
provisions of SFAS No. 132--"Employers' Disclosures about Pensions and Other
Postretirement Benefits." This statement standardized the disclosure
requirements for pensions and other postretirement benefits and amends SFAS No.
87--"Employers' Accounting for Pensions", SFAS No. 88--"Employers' Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans" and SFAS No.
106--"Employers' Accounting for Postretirement Benefits Other Than Pensions."
The provisions of SFAS No. 132 are disclosure oriented and do not change the
measurement or recognition of the plans. Accordingly, the implementation of SFAS
No. 132 did not have an impact on Teledyne Technologies' consolidated financial
position or results of operations.

SFAS No. 131 -- Effective for 1998, Teledyne Technologies adopted the
provisions of SFAS No. 131--"Disclosures about Segments of an Enterprise and
Related Information." This statement establishes standards for reporting and
display of information about operating segments. It supersedes or amends several
FASB statements, most notably, SFAS No. 14--"Financial Reporting for Segments of
a Business Enterprise." The implementation of SFAS No. 131 did not have an
impact on Teledyne Technologies' consolidated financial position or results of
operations.

SFAS No. 130 -- Effective for 1998, Teledyne Technologies adopted the
provisions of SFAS No. 130--"Reporting Comprehensive Income." This statement
establishes standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. The
implementation of SFAS No. 130 did not have an impact on Teledyne Technologies'
results of operations. Teledyne Technologies' comprehensive income is primarily
composed of net income and foreign currency translation adjustments. Teledyne
Technologies' comprehensive income was $12.8 million, $22.0 million, $48.9
million, $48.5 million and $41.6 million for the first six months of 2000 and
1999 and for the years 1999, 1998 and 1997, respectively.

HEDGING ACTIVITIES

Teledyne Technologies generally does not actively engage in derivative
financial instruments such as futures contracts, options and swaps, forward
exchange contracts or interest rate swaps and futures. While Teledyne
Technologies believes that adequate controls are in place to monitor any hedging
activities in which the Company may engage, many factors, including those beyond
its control such as changes in domestic and foreign political and economic
conditions, could adversely affect these activities. At January 2, 2000, January
3, 1999 and July 2, 2000, there were no hedging contracts outstanding.

SUPPLEMENTAL CASH FLOW INFORMATION

Until the spin-off date, ATI was responsible for cash payments for federal,
foreign and state income taxes. No tax payments were made by Teledyne
Technologies from the date of the spin-off through year end. Interest paid by
Teledyne Technologies from the date of the spin-off to year end 1999 totaled
approximately $565 thousand.

F-12
<PAGE> 71
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3. FINANCIAL INSTRUMENTS

Teledyne Technologies values financial instruments as required by SFAS No.
107-- "Disclosures about Fair Value of Financial Instruments." The carrying
amounts of cash and cash equivalents approximate fair value because of the short
maturity of those instruments. Teledyne Technologies estimates the fair value of
its long-term debt based on the value of debt of similar maturity and
characteristics. The estimated fair value of Teledyne Technologies' long-term
debt at January 2, 2000 approximated the carrying value of $97 million.

The carrying value of other on-balance sheet financial instruments
approximates fair value, and the cost, if any, to terminate off-balance sheet
financial instruments is not significant.

NOTE 4. ACCOUNTS RECEIVABLE

Accounts receivable are summarized as follows:

<TABLE>
<CAPTION>
JAN 3, 1999 JAN 2, 2000
----------- -------------
(IN MILLIONS)
<S> <C> <C>
Balance at year end U.S. Government and prime contractors
contract receivables:
Billed receivables........................................ $18.1 $ 27.1
Unbilled receivables...................................... 21.3 20.4
Other receivables, primarily commercial..................... 59.9 64.9
----- ------
99.3 112.4
Reserve for doubtful accounts............................... (2.8) (3.3)
----- ------
Total accounts receivable, net......................... $96.5 $109.1
===== ======
</TABLE>

The billed contract receivables from the U.S. Government and prime
contractors contain $9.8 million and $5.9 million at January 2, 2000 and January
3, 1999, respectively, due to long-term contracts. The unbilled contract
receivables from the U.S. Government and prime contractors contain $10.5 million
and $21.3 million at January 2, 2000 and January 3, 1999, respectively, due to
long-term contracts. At July 2, 2000 the unaudited accounts receivable were
$123.4 million, net of a reserve for doubtful accounts of $1.8 million.

Unbilled contract receivables represent accumulated costs and profits
earned but not yet billed to customers. The Company believes that substantially
all such amounts will be billed and collected within one year.

F-13
<PAGE> 72
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5. INVENTORIES

Inventories consisted of the following:

<TABLE>
<CAPTION>
JAN 3, 1999 JAN 2, 2000 JULY 2, 2000
----------- ------------- -------------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C>
Balance at period end:
Raw materials and supplies............................... $22.5 $23.6 $24.9
Work in process.......................................... 61.2 59.4 64.6
Finished goods........................................... 10.4 9.1 9.2
----- ----- -----
Total inventories at current cost (first-in,
first-out)........................................ 94.1 92.1 98.7
LIFO reserve............................................. (37.7) (35.4) (35.1)
Progress payments........................................ (6.8) (5.3) (6.2)
----- ----- -----
Total inventories, net.............................. $49.6 $51.4 $57.4
===== ===== =====
</TABLE>

Inventories, before progress payments, determined on the last-in, first-out
method were $53.7 million at January 2, 2000 and $53.4 million at January 3,
1999. The remainder of the inventory was determined using the first-in,
first-out and average cost methods. These inventory values do not differ
materially from current cost.

During 1999, 1998 and 1997, inventory usage resulted in liquidations of
last-in, first-out inventory quantities. These inventories were carried at the
lower costs prevailing in prior years as compared with the cost of current
purchases. The effect of these last-in, first-out liquidations was to increase
net income by $2.2 million in 1999, $264 thousand in 1998 and $2.2 million in
1997.

Total inventories at current cost were net of $6.1 million and $5.1 million
at January 2, 2000 and January 3, 1999, respectively, which were related to
reserves for obsolete inventories.

Inventories, before progress payments, related to long-term contracts were
$8.8 million and $2.0 million at January 2, 2000 and January 3, 1999,
respectively. Progress payments related to long-term contracts were $1.9 million
and $125 thousand at January 2, 2000 and January 3, 1999, respectively.

Under the contractual arrangements by which progress payments are received,
the customer has a security interest in the inventories associated with specific
contracts.

NOTE 6. SUPPLEMENTAL BALANCE SHEET INFORMATION

Property, plant and equipment were as follows:

<TABLE>
<CAPTION>
JAN 3, 1999 JAN 2, 2000 JULY 2, 2000
----------- ----------- -------------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C>
Balance at period end:
Land..................................................... $ 4.9 $ 4.9 $ 4.9
Buildings................................................ 32.5 31.9 32.0
Equipment................................................ 121.8 135.9 140.9
------- ------- -------
159.2 172.7 177.8
Accumulated depreciation and amortization................ (119.7) (116.7) (119.3)
------- ------- -------
Total property, plant and equipment, net............ $ 39.5 $ 56.0 $ 58.5
======= ======= =======
</TABLE>

F-14
<PAGE> 73
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Accrued liabilities included salaries and wages of $27.2 million, $23.9
million and $21.9 million at July 2, 2000, January 2, 2000 and January 3, 1999,
respectively and $9.0 million at July 2, 2000 for product recall reserves. Other
long-term liabilities included reserves for self-insurance and deferred
compensation liabilities and the long-term portion of product recall reserves.

NOTE 7. STOCKHOLDERS' EQUITY

COMMON STOCK

In connection with the spin-off 26,687,002 shares of Teledyne Technologies'
Common Stock were issued and are outstanding at year end 1999. This amount
includes 943 shares issued under the Non-Employee Director Stock Compensation
Plan. At July 2, 2000, 26,801,505 shares were outstanding.

PREFERRED STOCK

Authorized preferred stock may be issued with designations, powers and
preferences designated from time to time by the Board of Directors. At January
2, 2000, there were no shares of preferred stock issued.

STOCKHOLDER RIGHTS PLAN

On November 12, 1999, the Company's Board of Directors unanimously adopted
a stockholder rights plan under which preferred share purchase rights were
distributed as a dividend on each share of Teledyne Technologies' Common Stock
distributed to ATI's stockholders in connection with the spin-off and each share
to become outstanding between the effective date of the spin-off and the
earliest of the distribution date, redemption date and final expiration date.
The rights will be exercisable only if a person or group acquires 15 percent or
more of the Company's Common Stock or announces a tender offer, the consummation
of which would result in ownership by a person or group of 15 percent or more of
the Common Stock. Each right will entitle stockholders to then buy one-hundredth
of a share of a new series of junior participating preferred stock at an
exercise price of $60. There are 1,250,000 shares of Series A Junior
Participating Preferred Stock authorized for issuance under the plan. The record
date for the distribution was the close of business of November 22, 1999. The
rights will expire on November 12, 2009, subject to earlier redemption or
exchange by Teledyne Technologies as described in the plan. The rights
distribution is not taxable to stockholders.

STOCK INCENTIVE PLAN

ATI sponsored an incentive plan that provided for stock option awards to
officers and key employees. Teledyne Technologies has officers and key employees
that have participated in this plan. In connection with the spin-off,
outstanding stock options held by Teledyne Technologies' employees were
converted into options to purchase Teledyne Technologies' Common Stock. The
number of shares and the exercise price of each ATI option that was converted to
a Teledyne Technologies' option was converted based upon a formula designed to
preserve the inherent economic value, vesting and term provisions of such ATI
options as of the Distribution Date. The exchange ratio and fair market value of
the Teledyne Technologies' Common Stock, upon active trading, also impacted the
number of options issued to Teledyne Technologies' employees.

Teledyne Technologies has established its own long-term incentive plan
which provides its Board of Directors the flexibility to grant restricted stock,
incentive stock options, stock appreciation rights and non-qualified stock
options to officers and employees of Teledyne Technologies.

F-15
<PAGE> 74
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following disclosures are based on stock options held by Teledyne
Technologies' employees and have been converted from ATI options to Teledyne
Technologies' options as noted above. Teledyne Technologies accounts for its
stock option plans in accordance with APB Opinion 25--"Accounting for Stock
Issued to Employees" (APB 25), and related Interpretations. Under APB 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.

If compensation cost for these options had been determined using the
fair-value method prescribed by FASB Statement No. 123, "Accounting for
Stock-based Compensation" (SFAS No. 123) net income would have been reduced by
$1.6 million, $673 thousand and $154 thousand for the fiscal years 1999, 1998
and 1997, respectively. Under SFAS No. 123, the fair value of each option grant
is estimated on the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions (there were no option grants in
1997):

<TABLE>
<CAPTION>
1998 1999
----- -----
<S> <C> <C>
Expected dividend yield..................................... 2.8% --
Expected volatility......................................... 31.0% 40.1%
Risk-free interest rate..................................... 5.0% 5.5%
Expected lives.............................................. 8.0 8.0
Weighted-average fair value of options granted during the
year...................................................... $7.25 $4.91
</TABLE>

Stock option transactions in ATI common stock under ATI's incentive plan
for Teledyne Technologies' employees have been converted to Teledyne
Technologies as noted above and are summarized as follows:

<TABLE>
<CAPTION>
1997 1998 1999
------------------ -------------------- ---------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Beginning balance............. 708,816 $7.58 643,985 $ 7.66 1,757,392 $12.36
Granted or issued............. -- $ -- 1,125,620 $14.99 487,500 $ 8.93
Exercised..................... (64,831) $6.87 (12,213) $ 6.64 (91,329) $ 5.76
Canceled or expired........... -- $ -- -- $ -- (30,266) $13.42
------- ----- --------- ------ ---------- ------
Ending balance................ 643,985 $7.66 1,757,392 $12.36 2,123,297 $11.84
======= ===== ========= ====== ========== ======
Options exercisable at
year-end.................... 409,997 $6.85 495,891 $ 7.27 856,087 $10.93
======= ===== ========= ====== ========== ======
</TABLE>

For options outstanding at year end 1999, the exercise prices were between
$5.57 and $17.60 and the weighted-average remaining contractual life was
approximately 8 years. For options exercisable at year end 1999 the exercise
prices were also between $5.57 and $17.60.

NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN

Teledyne Technologies also sponsors a stock option plan for non-employee
directors. At year end 1999, options for 15,073 shares were issued and
outstanding under the plan with exercise prices between $6.62 and $9.94 and a
weighted-average exercise price of $9.70. All of these options become
exercisable on November 29, 2000.

F-16
<PAGE> 75
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8. RELATED PARTY TRANSACTIONS

The accompanying financial statements include transactions with ATI for the
year-to-date period ended November 29, 1999 and the 1998 and 1997 fiscal years:

<TABLE>
<CAPTION>
1997 1998 1999(A)
------ ------------- -------
(IN MILLIONS)
<S> <C> <C> <C>
Net advances from ATI, beginning of the year................ $126.1 $107.5 $104.7
Net cash transactions with ATI:
Current provision for income taxes........................ 26.8 34.7 26.5
Insurance expense......................................... 18.6 17.2 15.9
Pension expense (income).................................. 0.7 (1.7) (5.8)
Corporate general and administrative expense.............. 7.6 7.8 7.3
Other net cash to ATI(b).................................. (113.9) (109.5) (91.4)
------ ------ ------
Net cash transactions with ATI............................ (60.2) (51.5) (47.5)
Net income.................................................. 41.6 48.7 43.4
------ ------ ------
Net advances from ATI, end of period........................ $107.5 $104.7 $100.6
====== ====== ======
</TABLE>

---------------
a) For the year-to-date period ending November 29, 1999.

b) Includes $100 million in long-term debt incurred by ATI and assumed by
Teledyne Technologies.

Until the spin-off date, Teledyne Technologies participated in ATI's
centralized cash management system. Cash receipts in excess of cash requirements
were transferred to ATI. These transactions with ATI were non-interest bearing
and the net advances fluctuated on a daily basis.

Corporate general and administrative expenses represent allocations for
expenses incurred by ATI on the Company's behalf including costs for finance,
legal, tax and human resources functions. Amounts above were allocated based on
net sales, which management believes to be reasonable. Teledyne Technologies
participated in the defined benefit pension plan sponsored by ATI through the
date of the spin-off. The expense for the plan was allocated to Teledyne
Technologies based upon actuarially-determined amounts for the pension
obligation and assets ultimately transferred from ATI to Teledyne Technologies
at the time of the spin-off. Teledyne Technologies also participated in
casualty, medical and life insurance programs sponsored by ATI. Insurance
expense was allocated to Teledyne Technologies based upon actual losses incurred
plus a share of pooled catastrophic losses under the ATI self-insurance program.
In the opinion of management, the allocations of these expenses were reasonable.

In addition, prior to and in connection with the spin-off, Teledyne
Technologies and ATI entered into agreements providing for the separation of the
companies and governing various relationships for separating employee benefits
and tax obligations, indemnification and transition services.

Net sales include $1.4 million, $1.1 million and $293 thousand of sales to
other ATI subsidiaries for the eleven month period ended November 30, 1999 and
the fiscal years ended January 3, 1999 and December 28, 1997, respectively.
There was a receivable of $532 thousand at year end 1998 from other ATI
subsidiaries.

NOTE 9. LONG-TERM DEBT

Long-term debt at January 2, 2000 and July 2, 2000, was $97.0 million and
$91.0 million, respectively, in the form of bank borrowings under a $200 million
long-term, revolving credit agreement. Borrowings under the agreement are on a
revolving basis under commitments available

F-17
<PAGE> 76
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

until November 2004. The Company had approximately $103.0 million of borrowing
availability under the credit facility at January 2, 2000 and $109.0 million at
July 2, 2000.

The interest-rate applicable to borrowings under the agreement is, indexed
to the bank prime rate or the London Interbank Offered Rate (LIBOR), plus
appropriate spreads over such indices during the period of the credit agreement
and was 7.63% at January 2, 2000. The agreement also provides for a facility fee
which are currently equal to .35% of the credit line. The facility fee will vary
between .35% and .20% depending on Teledyne Technologies' capitalization ratio
as calculated from time to time. Interest expense incurred on long-term debt and
facility fees in 1999 were $796 thousand from the date of the spin-off.

The financial covenants of the revolving credit agreement require the
Company to maintain specified minimum consolidated net worth and ratios of
consolidated debt and interest expense to certain measures of income. Under the
most restrictive of these covenants, approximately $1.4 million of stockholders'
equity was available for dividends as of January 2, 2000 and $4.7 million at
July 2, 2000.

NOTE 10. INCOME TAXES

Until the effective date of the spin-off, Teledyne Technologies was
included in the consolidated federal and certain state income tax returns of
ATI. ATI is responsible for paying the taxes related to such returns including
any subsequent adjustment resulting from the redetermination of such tax
liability by the applicable taxing authorities. Provision for income taxes was
calculated as if Teledyne Technologies had filed separate income tax returns for
all years presented. Provision for income taxes was as follows:

<TABLE>
<CAPTION>
1997 1998 1999
----- ----- -----
(IN MILLIONS)
<S> <C> <C> <C>
Current
Federal......................................... $19.8 $27.7 $26.7
State........................................... 3.6 4.9 6.2
Foreign......................................... 0.4 0.5 0.3
----- ----- -----
23.8 33.1 33.2
----- ----- -----
Deferred
Federal......................................... 0.2 (0.4) (1.3)
State........................................... 0.1 -- (0.1)
----- ----- -----
0.3 (0.4) (1.4)
----- ----- -----
Provision for income taxes........................ $24.1 $32.7 $31.8
===== ===== =====
</TABLE>

Income from continuing operations before income taxes included income from
domestic operations of $78.1 million for 1999, $77.9 million for 1998 and $60.5
million for 1997. The following is a reconciliation of the statutory federal
income tax rate to the actual effective income tax rate:

<TABLE>
<CAPTION>
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
U.S. federal statutory tax rate....................... 35.0% 35.0% 35.0%
State and local taxes, net of federal benefit......... 3.8 4.5 5.2
Other................................................. 0.6 1.8 --
---- ---- ----
Effective income tax rate............................. 39.4% 41.3% 40.2%
==== ==== ====
</TABLE>

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

F-18
<PAGE> 77
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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. No valuation allowance has been recorded for 1999
or 1998. The categories of assets and liabilities that have resulted in
differences in the timing of the recognition of income and expense were as
follows:

<TABLE>
<CAPTION>
1998 1999
----- -----
(IN MILLIONS)
<S> <C> <C>
Deferred income tax assets:
Postretirement benefits other than pensions.............. $12.9 $12.6
Reserves................................................. 10.0 16.1
Deferred compensation and other benefit plans............ -- 9.8
Inventory valuation...................................... 5.3 6.6
Accrued vacation......................................... 4.0 5.0
Other items.............................................. 4.3 --
----- -----
Total deferred income tax assets...................... 36.5 50.1
----- -----
Deferred income tax liabilities:
Property, plant and equipment differences................ 1.5 2.8
----- -----
Total deferred income tax liabilities................. 1.5 2.8
----- -----
Net deferred income tax asset.............................. $35.0 $47.3
===== =====
</TABLE>

NOTE 11. PENSION PLANS AND POSTRETIREMENT BENEFITS

Prior to the spin-off, certain Teledyne Technologies' employees
participated in the noncontributory defined benefit plan sponsored by ATI.
Benefits under the defined benefit plan are generally based on years of service
and/or final average pay. ATI funded the pension plan in accordance with the
requirements of the Employee Retirement Income Security Act of 1974, as amended,
and the Internal Revenue Code.

Net periodic pension income or expense allocated to Teledyne Technologies
was $6.6 million of income, $1.7 million of income and $722 thousand of expense
in the years ended January 2, 2000, January 3, 1999 and December 28, 1997,
respectively.

As of the spin-off date, Teledyne Technologies assumed the existing defined
benefit plan obligations for all of Teledyne Technologies' employees, both
active and inactive, at its companies that perform government contract work and
for Teledyne Technologies' active employees at its companies that do not perform
government contract work. ATI transferred pension assets to fund the new
Teledyne Technologies' defined benefit pension plan, which at the time of the
transfer then had assets in excess of liabilities.

Teledyne Technologies also participates in a 401(k) plan that is open to
all full time U.S. employees which is currently sponsored by ATI. The costs
associated with this plan were $2.8 million, $3.1 million, and $1.2 million for
fiscal 1999, 1998 and 1997, respectively. Teledyne Technologies established its
own 401(k) plan effective April 2000.

The Company sponsors several postretirement defined benefit plans covering
certain salaried and hourly employees. The plans provide health care and life
insurance benefits for eligible retirees. The following table sets forth the
components of net period pension benefit (income) expense for

F-19
<PAGE> 78
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Teledyne Technologies' defined benefit pension plans and post-retirement benefit
plans for fiscal 1999, 1998 and 1997:

<TABLE>
<CAPTION>
POSTRETIREMENT
PENSION BENEFITS BENEFITS
------------------------ ------------------
1997 1998 1999 1997 1998 1999
------ ------ ------ ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Service cost -- benefits earned during the
period......................................... $ 13.2 $ 12.8 $ 12.7 $0.3 $0.3 $0.4
Interest cost on benefit obligation.............. 21.0 22.6 23.6 1.8 1.7 1.8
Expected return on plan assets................... (28.4) (32.4) (35.9) -- -- --
Amortization of net transition asset............. (6.4) (6.4) (6.4) -- -- --
Amortization of prior service cost............... 1.3 2.1 2.1 (0.4) (0.4) (0.4)
Recognized actuarial (gain) loss................. -- (0.4) (2.7) -- (0.1) (0.4)
------ ------ ------ ---- ---- ----
Net periodic benefit (income) expense............ $ 0.7 $ (1.7) $ (6.6) $1.7 $1.5 $1.4
====== ====== ====== ==== ==== ====
</TABLE>

The following table sets forth the reconciliation of the beginning and
ending balances of the benefit obligation of the defined benefit pension and
postretirement benefit plans:

<TABLE>
<CAPTION>
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------- ---------------
1998 1999 1998 1999
------- ------- ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Changes in benefit obligation:
Benefit obligation -- beginning of year................... $329.3 $344.8 $25.1 $26.6
Service cost -- benefits earned during the period......... 12.8 12.7 0.3 0.3
Interest cost on projected benefit obligation............. 22.6 23.6 1.8 1.7
Actuarial (gain) loss..................................... (16.1) (0.2) 0.7 (2.2)
Amendments................................................ 9.5 -- -- --
Benefits paid............................................. (13.3) (13.9) (0.8) (1.3)
------ ------ ----- -----
Benefit obligation -- end of year........................... $344.8 $367.0 $27.1 $25.1
====== ====== ===== =====
</TABLE>

The following table sets forth the reconciliation of the beginning and
ending balances of the fair value of plan assets for Teledyne Technologies'
defined benefit pension plans:

<TABLE>
<CAPTION>
PENSION BENEFITS
-----------------
1998 1999
------- -------
(IN MILLIONS)
<S> <C> <C>
Changes in plan assets:
Fair value of plan assets -- beginning of year.............. $367.0 $403.9
Actual return on plan assets.............................. 50.0 47.5
Employer contribution..................................... 0.2 0.2
Benefits paid............................................. (13.3) (13.9)
------ ------
Fair value of plan assets -- end of year.................... $403.9 $437.7
====== ======
</TABLE>

The weighted average discount rate used in determining the benefit
obligations was 7.0% as of January 2, 2000 and January 3, 1999. The weighted
average rate of increase in future compensation levels used in determining the
benefit obligations was approximately 4.5% in 1999 and 1998. The expected
weighted average long-term rate of return on assets was 9.0% in 1999 and 1998.

The following table sets forth the funded status and amounts recognized in
Teledyne Technologies' consolidated balance sheets for the postretirement
benefit plans at year end 1999 and year end 1998. The following table also sets
forth the funded status and amounts recognized in

F-20
<PAGE> 79
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Teledyne Technologies' consolidated balance sheets for the defined benefit
pension plan at year end 1999. The amounts shown for 1998 for the defined
benefit pension plan are not reflected in consolidated balance sheet at year end
1998 since the plan was not transferred until the date of the spin-off:

<TABLE>
<CAPTION>
POSTRETIREMENT
PENSION BENEFITS BENEFITS
---------------- ----------------
1998 1999 1998 1999
------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Funded status.......................................... $ 59.1 $ 70.7 $(25.1) $(27.1)
Unrecognized net transition obligation (asset)......... (17.6) (11.1) -- --
Unrecognized prior service cost........................ 17.6 15.4 (1.4) (1.1)
Unrecognized net gain.................................. (80.5) (89.7) (6.4) (5.4)
------ ------ ------ ------
Net amount recognized.................................. $(21.4) $(14.7) $(32.9) $(33.6)
====== ====== ====== ======
Prepaid benefit cost................................... $(18.2) $(10.6) $ -- $ --
Accrued benefit liability.............................. (5.0) (5.5) (32.9) (33.6)
Intangible asset....................................... 1.7 1.4 -- --
Other.................................................. 0.1 -- -- --
------ ------ ------ ------
Net amount recognized.................................. $(21.4) $(14.7) $(32.9) $(33.6)
====== ====== ====== ======
</TABLE>

The annual assumed rate of increase in the per capita cost of covered
benefits (the health care cost trend rate) for health care plans was 8.4% in
2000 and was assumed to decrease to 5.0% in the year 2002 and remain at that
level thereafter. Assumed health care cost trend rates have a significant effect
on the amounts reported for the health care plans. A one percentage point
increase in the assumed health care cost trend rates would result in an increase
in the annual service and interest costs by $273 thousand for 1999 and would
result in an increase in the postretirement benefit obligation by $3.4 million
at January 2, 2000. A one percentage point decrease in the assumed health care
cost trend rates would result in a decrease in the annual service and interest
costs by $238 thousand for 1999 and would result in a decrease in the
postretirement benefit obligation by $3.0 million at January 2, 2000.

NOTE 12. BUSINESS SEGMENTS

Effective January 1, 1998, Teledyne Technologies adopted the provisions of
SFAS No. 131--"Disclosures about Segments of an Enterprise and Related
Information." Teledyne Technologies operates in three business segments:
Electronics and Communications, Systems Engineering Solutions and Aerospace
Engines and Components. The factors for determining the reportable segments were
based on the distinct nature of their operations. They are managed as separate
business units because each requires and is responsible for executing a unique
business strategy. The Electronics and Communications segment, through Teledyne
Electronic Technologies, applies proprietary technology, advanced software and
hardware design skills and manufacturing capabilities in three areas: Data
Acquisition and Communications Products; Precision Electronic Devices; and
Electronic Manufacturing Services. The Systems Engineering Solutions segment,
through Teledyne Brown Engineering, offers a wide range of engineering solutions
and information services to government defense, aerospace and commercial
customers. The Aerospace Engines and

F-21
<PAGE> 80
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Components segment, through Teledyne Continental Motors, focuses on the design,
development and manufacture of piston engines, turbine engines, electronic
engine controls and batteries.

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

Segment data excludes Teledyne Cast Parts which has been classified as a
discontinued operation.

Information on the Company's business segments was as follows:

<TABLE>
<CAPTION>
FISCAL YEAR FIRST SIX MONTHS
------------------------ -----------------
1997 1998 1999 1999 2000
------ ------ ------ ------- -------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Sales
Electronics and Communications................. $340.0 $342.1 $340.7 $170.5 $177.1
Systems Engineering Solutions.................. 210.4 223.2 226.5 112.4 118.2
Aerospace Engines and Components............... 157.0 167.7 194.2 92.5 102.4
------ ------ ------ ------ ------
Total sales................................. $707.4 $733.0 $761.4 $375.4 $397.7
====== ====== ====== ====== ======
Operating profit
Electronics and Communications................. $ 36.8 $ 42.6 $ 42.6 $ 19.2 $ 20.4
Systems Engineering Solutions.................. 13.1 20.5 20.2 9.4 10.4
Aerospace Engines and Components............... 17.7 22.2 24.8 10.5 2.0
------ ------ ------ ------ ------
Segment operating profit.................... 67.6 85.3 87.6 39.1 32.8
Corporate expense including interest........ (7.6) (7.8) (9.6) (4.0) (11.5)
Other income................................ 1.4 1.6 1.0 0.5 0.4
------ ------ ------ ------ ------
Income from continuing operations before
taxes....................................... $ 61.4 $ 79.1 $ 79.0 $ 35.6 $ 21.7
====== ====== ====== ====== ======
Depreciation and amortization
Electronics and Communications................. $ 5.7 $ 5.7 $ 6.6 $ 3.3 $ 4.8
Systems Engineering Solutions.................. 3.1 2.9 2.5 1.4 1.5
Aerospace Engines and Components............... 2.0 2.0 2.2 1.2 1.5
------ ------ ------ ------ ------
Total depreciation and amortization......... $ 10.8 $ 10.6 $ 11.3 $ 5.9 $ 7.8
====== ====== ====== ====== ======
Capital expenditures
Electronics and Communications................. $ 10.8 $ 10.3 $ 13.5 $ 3.9 $ 5.4
Systems Engineering Solutions.................. 2.3 2.6 2.0 0.9 1.3
Aerospace Engines and Components............... 2.3 3.8 12.8 1.6 2.6
------ ------ ------ ------ ------
Total capital expenditures.................. $ 15.4 $ 16.7 $ 28.3 $ 6.4 $ 9.3
====== ====== ====== ====== ======
Identifiable assets
Electronics and Communications................. $ 93.1 $ 96.2 $109.0 $108.9 $122.2
Systems Engineering Solutions.................. 70.7 63.4 62.2 60.1 68.8
Aerospace Engines and Components............... 40.3 42.3 62.0 44.5 66.0
Corporate...................................... 46.5 44.5 80.2 46.6 85.5
------ ------ ------ ------ ------
Total identifiable assets................... $250.6 $246.4 $313.4 $260.1 $342.5
====== ====== ====== ====== ======
</TABLE>

F-22
<PAGE> 81
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's backlog of confirmed orders was approximately $348.0 million
at January 2, 2000, $363.7 million at January 3, 1999 and $352.6 million at July
2, 2000.

Information on the Company's sales to the U.S. Government, including direct
sales as a prime contractor and indirect sales as a subcontractor, were as
follows:

Sales to the U.S. Government included sales to the Department of Defense of
$232.1 million in 1999, $200.1 million in 1998 and $183.5 million in 1997.

Total international sales were $136.9 million in 1999, $164.2 million in
1998 and $149.6 million in 1997. Of these amounts, sales by operations in the
United States to customers in other countries were $119.9 million in 1999,
$150.5 million in 1998 and $134.4 million in 1997. There were no sales to
individual countries outside of the United States in excess of 10% of the
Company's net sales. Sales between business segments, which were not material,
generally were priced at prevailing market prices.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Rental expense, under operating leases, net of sublease income, was $9.9
million in 1999, $10.4 million in 1998 and $10.0 million in 1997. Future minimum
rental commitments under operating leases with non-cancelable terms of more than
one year as of January 2, 2000, were as follows (in millions unless noted): $6.0
in 2000, $5.2 in 2001, $4.6 in 2002, $2.9 in 2003, $73 thousand in 2004 and $3.4
thereafter.

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,
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 proceed, 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

F-23
<PAGE> 82
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

currently available information, however, 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, 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.

At January 2, 2000, the Company's reserves for environmental remediation
obligations totaled approximately $1.2 million, of which approximately $836
thousand were included in other current liabilities. At July 2, 2000, the
Company's reserves for environmental remediation obligation totaled
approximately $1.4 million, of which $960 thousand were included in other
current liabilities. The Company is evaluating 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 will complete remediation of all sites with which it has been
identified in up to thirty 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. While 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. Generally,
since such cases are under seal, the Company does not in 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.

In connection with the spin-off, ATI received a tax ruling from the
Internal Revenue Service stating that the spin-off will be tax-free to ATI and
to ATI's stockholders. The continuing validity of the Internal Revenue Service
tax ruling is subject to certain factual representations and assumptions,
including the Company's completion of a public offering of the Company's Common
Stock within one year following the spin-off and use of the gross proceeds for
research and development and related capital projects, for the further
development of the Company's manufacturing capabilities and for acquisitions
and/or joint ventures. Pursuant to the Separation and Distribution Agreement
that

F-24
<PAGE> 83
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Teledyne Technologies signed prior to the spin-off, the Company agreed with ATI
to undertake such a public offering.

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 (such as
completing the public offering) 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 flow and the amount the Company could be required
to pay could exceed its net worth by a substantial amount.

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 product liability, patent infringement, commercial,
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, however, could have a material
adverse effect on the Company's results of operations for that period.

F-25
<PAGE> 84
TELEDYNE TECHNOLOGIES INCORPORATED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is Teledyne Technologies' quarterly information:

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
(IN MILLIONS, EXCEPT PER-SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Fiscal year 2000(a)
Sales................................ $195.4 $202.3
Gross profit......................... 54.9 55.4

Income from continuing operations.... 10.3 2.8
Discontinued operations, net of
tax................................ (0.1) 0.3
------ ------
Net income........................... 10.2 3.1
====== ======
Basic and diluted earnings per share:
Continuing operations.............. 0.38 0.10
Discontinued operations............ -- 0.01
------ ------
Net income........................... 0.38 0.11
====== ======

Fiscal year 1999(a,b)
Sales................................ $191.0 $184.4 $195.0 $191.0
Gross profit......................... 49.0 48.1 58.3 53.9

Income from continuing operations.... 11.5 9.4 13.2 13.1
Discontinued operations, net of
tax................................ 0.4 0.8 0.6 --
------ ------ ------ ------
Net income........................... 11.9 10.2 13.8 13.1
====== ====== ====== ======
Basic and diluted earnings per share:
Continuing operations.............. 0.42 0.34 0.48 0.49
Discontinued operations............ 0.01 0.03 0.02 --
------ ------ ------ ------
Net income........................... 0.43 0.37 0.50 0.49
====== ====== ====== ======

Fiscal year 1998(c)
Sales................................ $185.4 $188.1 $177.8 $181.7
Gross profit......................... 49.8 52.6 47.2 51.3

Income from continuing operations.... 10.0 13.1 12.2 11.1
Discontinued operations, net of
tax................................ 1.3 0.8 0.4 (0.2)
------ ------ ------ ------
Net income........................... 11.3 13.9 12.6 10.9
====== ====== ====== ======
Basic and diluted earnings per share:
Continuing operations.............. 0.36 0.47 0.44 0.38
Discontinued operations............ 0.04 0.03 0.01 --
------ ------ ------ ------
Net income........................... 0.40 0.50 0.45 0.38
====== ====== ====== ======
</TABLE>

---------------

(a) Includes pretax charges of $12 million and $3 million in the second quarter
of 2000 and 1999, respectively, for product recall reserves.

(b) Teledyne Technologies spun-off from ATI effective November 29, 1999.

(c) The 1998 third quarter results reflect the favorable impact of an adjustment
to product liability self-insurance reserves as a result of favorable
experience.

F-26
<PAGE> 85

SCHEDULE II

TELEDYNE TECHNOLOGIES INCORPORATED
VALUATION AND QUALIFYING ACCOUNTS

(IN MILLIONS)

<TABLE>
<CAPTION>
ADDITIONS
----------------------------
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS(A) PERIOD
-------------------------- ---------- ---------- --------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
FIRST SIX MONTHS 2000
(UNAUDITED)
Reserve for doubtful
accounts $3.3 -- -- (1.5) $1.8
FISCAL 1999
Reserve for doubtful
accounts $2.8 0.5 -- -- $3.3
FISCAL 1998
Reserve for doubtful
accounts $3.1 1.4 -- (1.7) $2.8
FISCAL 1997
Reserve for doubtful
accounts $2.0 1.2 -- (0.1) $3.1
</TABLE>

(a) The 2000 amount primarily reflects the collection of a doubtful account. The
1998 amount represents write-offs of doubtful accounts.

F-27
<PAGE> 86

INSIDE BACK COVER PAGE

[Original artwork consists of an image derived from a photograph of one of
Teledyne Electronic Technologies' products. Additional graphic elements are
superimposed, including grid lines and numbers.]

<PAGE> 87

------------------------------------------------------
------------------------------------------------------

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

-------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary........................ 1
Risk Factors.............................. 5
Forward-Looking Statements................ 11
Use of Proceeds........................... 11
Price Range of Common Stock and Dividend
Policy.................................. 11
Capitalization............................ 12
Selected Consolidated Financial Data...... 13
Management's Discussion and Analysis of
Results of Operations and Financial
Condition............................... 15
Business.................................. 25
Management................................ 38
Principal Stockholders.................... 46
Arrangements with ATI..................... 48
Description of Capital Stock.............. 49
Underwriting.............................. 53
Legal Matters............................. 54
Experts................................... 54
Where You Can Find More Information....... 55
Index to Financial Statements............. F-1
</TABLE>

------------------------------------------------------
------------------------------------------------------

------------------------------------------------------
------------------------------------------------------
4,100,000 Shares

TELEDYNE TECHNOLOGIES INCORPORATED

Common Stock
------------------------------

TELEDYNE TECHNOLOGIES LOGO
------------------------------
GOLDMAN, SACHS & CO.

BANC OF AMERICA
SECURITIES LLC

A.G. EDWARDS & SONS, INC.

Representatives of the Underwriters
------------------------------------------------------
------------------------------------------------------
<PAGE> 88

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth estimated expenses expected to be incurred
in connection with the issuance and distribution of the securities being
registered.

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 21,550
NASD and Blue Sky Fees and Expenses......................... 13,663
NYSE Listing Fee............................................ 17,500
Printing Costs.............................................. 150,000
Legal Fees and Expenses..................................... 75,000
Accounting Fees and Expenses................................ 175,000
Registrar and Transfer Agent Fees........................... 5,000
Miscellaneous............................................... 67,287
--------
Total.................................................. $525,000
========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL")
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL, or (d) for any transaction from which
the director derived an improper personal benefit. Our Certificate of
Incorporation provides that the personal liability of directors of the Company
is eliminated to the fullest extent permitted by Section 102(b)(7) of the DGCL.

Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of his being a director or officer of the
corporation if it is determined that he acted in accordance with the applicable
standard of conduct set forth in such statutory provision. Our Certificate
provides that we will indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that he or she is or was one of our
directors or officers, or is or was serving at our request as a director,
officer, employee or agent of another entity, against certain liabilities, costs
and expenses. We are also authorized to maintain insurance on behalf of any
person who is or was one of our directors or officers, or is or was serving at
our request as a director, officer, employee or agent of another entity against
any liability asserted against such person and incurred by such person in any
such capacity or arising out of his or her status as such, whether or not we
would have the power to indemnify such person against such liability under the
DGCL. We also maintain directors' and officers' liability insurance.

The Underwriting Agreement filed as an exhibit hereto contains provisions
pursuant to which the Underwriter agrees to indemnify us, any person controlling
us within the meaning of Section 15 of the Securities Act of 1933, as amended,
or Section 20 of the Securities Exchange Act of 1934, as amended, each of our
directors, and each of our officers who signs this registration statement with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter expressly for use in this registration statement.

II-1
<PAGE> 89

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

None

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed or incorporated by reference as part
of this registration statement:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement (filed herewith)
3.1 Restated Certificate of Incorporation of Teledyne
Technologies Incorporated (incorporated by reference to
Exhibit 2.1 to the registrant's Annual Report on Form 10-K
for the fiscal year ended January 2, 2000)
3.2 Amended and Restated Bylaws of Teledyne Incorporated
(incorporated by reference to Exhibit 3.2 to the
registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 2000)
4.1 Rights Agreement dated as of November 29, 1999 between
Teledyne Technologies Incorporated (including Certificate of
Designation of Series A Junior Participating Preferred
Stock) (incorporated by reference to Exhibit 4.1 to the
registrant's Current Report on Form 8-K dated as of November
29, 1999)
4.2 Credit Agreement dated as of October 29, 1999 among
Allegheny Teledyne Incorporated, Teledyne Technologies
Incorporated, Bank of America, N.A., as Administrative
Agent, Swing Line Lender and Issuing Lender, and the other
financial institutions party thereto (incorporated by
reference to Exhibit 4.2 to the registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 2000)
4.3 First Amendment to the Credit Agreement dated as of November
20, 1999 (incorporated by reference to the registration's
Annual Report on Form 10-K for the fiscal year ended January
2, 2000)
4.4 Second Amendment to the Credit Agreement dated as of July
28, 2000 (incorporated by reference to Exhibit 4 to the
registrant's Quarterly Report on Form 10-Q for the quarter
ended July 2, 2000)
5.1 Opinion of Kirkpatrick & Lockhart LLP (previously filed)
10.1 Tax Sharing and Indemnification Agreement between Allegheny
Teledyne Incorporated and Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 10.1 to the
registrant's Current Report on Form 8-K dated as of November
29, 1999)
10.2 Interim Services Agreement between Allegheny Teledyne
Incorporated and Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 10.2 to the
registrant's Current Report on Form 8-K dated as of November
29, 1999)
10.3 Employee Benefits Agreement between Allegheny Teledyne
Incorporated and Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 10.3 to the
registrant's Current Report on Form 8-K dated as of November
29, 1999)
10.4 Trademark License Agreement between Allegheny Teledyne
Incorporated and Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 10.4 to the
registrant's Current Report on Form 8-K dated as of November
29, 1999)
10.5 Teledyne Technologies Incorporated 1999 Incentive Plan, as
amended (incorporated by reference to Exhibit 10.5 to the
registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 2000)
</TABLE>

II-2
<PAGE> 90

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.6 Teledyne Technologies Incorporated 1999 Non-Employee
Director Stock Compensation Plan (incorporated by reference
to Exhibit 10.6 to the registrant's Annual Report on Form
10-K for the fiscal year ended January 2, 2000)
10.7 Employment Agreement dated as of December 31, 1999 between
Robert Mehrabian and Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 10.8 to the
registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 2000)
10.8 Form of Change of Control Severance Agreement (incorporated
by reference to Exhibit 10.9 to the registrant's Annual
Report on Form 10-K for the fiscal year ended January 2,
2000)
10.9 Teledyne Technologies Incorporated Executive Deferred
Compensation Plan (incorporated by reference to Exhibit
10.10 to the registrant's Annual Report on For 10-K for the
fiscal year ended January 2, 2000)
10.10 Teledyne Technologies Incorporated Pension
Equalization/Benefit Restoration Plan (incorporated by
reference to Exhibit 10.11 to the registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 2000)
21.1 Significant Subsidiary of Teledyne Technologies Incorporated
(incorporated by reference to Exhibit 21 to the registrant's
Annual Report on Form 10-K for the fiscal year ended January
2, 2000)
23.1 Consent of Kirkpatrick & Lockhart LLP (included in opinion
filed as Exhibit 5.1)
23.2 Consent of Independent Auditors (filed herewith)
24.1 Power of Attorney (previously filed)
24.2 Power of Attorney (Diane C. Creel) (previously filed)
27.1 Restated Financial Data Scheduled (filed herewith)
</TABLE>

The registrant hereby agrees to furnish supplementally to the Commission,
upon request, a copy of any omitted schedule to any of the agreements contained
herein.

(b) The following financial statement schedule is filed at page F-27:

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

Financial statement schedules not listed above have been omitted because
they are inapplicable, are not required under applicable provisions of
Regulation S-X, or the information that would otherwise be included in such
schedules is contained in the registrant's financial statements or accompanying
notes.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit

II-3
<PAGE> 91

to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the
time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

II-4
<PAGE> 92

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Los
Angeles, State of California, on August 7, 2000.

TELEDYNE TECHNOLOGIES INCORPORATED

By: /s/ ROBERT MEHRABIAN
------------------------------------
Name: Robert Mehrabian
Title: President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment
to registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>

* Chairman of the Board and a Director
---------------------------------------
Thomas A. Corcoran

/s/ ROBERT MEHRABIAN President and Chief Executive Officer August 7, 2000
--------------------------------------- (Principal Executive Officer) and a
Robert Mehrabian Director

/s/ DALE A. SCHNITTJER Acting Chief Financial Officer, August 7, 2000
--------------------------------------- Treasurer and Controller (Principal
Dale A. Schnittjer Financial and Accounting Officer)

* Director
---------------------------------------
Robert P. Bozzone

* Director
---------------------------------------
Paul S. Brentlinger

* Director
---------------------------------------
Frank V. Cahouet

* Director
---------------------------------------
Diane C. Creel

* Director
---------------------------------------
C. Fred Fetterolf

* Director
---------------------------------------
Charles J. Queenan, Jr.

*By: /s/ MELANIE S. CIBIK August 7, 2000
---------------------------------
Melanie S. Cibik
Attorney-in-Fact
</TABLE>

<PAGE> 93

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>

1.1 Form of Underwriting Agreement
23.2 Consent of Independent Auditors
27.1 Restated Financial Data Schedule
</TABLE>