Company: TDY
Filing Date: 2025-04-28
Form Type: 10-Q
Source: 0001094285-25-000105
Chunk: 64

Company: TELEDYNE TECHNOLOGIES INC
Filing Date: 2025-04-28
Form: 10-Q
Item: Part I, Item 8
Chunk 64
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 value.  At the assessment date in the fourth quarter of 2024, the estimated fair value of the FLIR reporting unit exceeded its carrying value by approximately $420 million, or 5%, and the FLIR reporting unit had $5,856.5 million of goodwill at the prior year assessment date.  As of March 30, 2025, the FLIR reporting unit had $5,873.4 million of goodwill, with the change in value from the prior year assessment date related to the impact of foreign currency translation.Although the assumptions used in the Company’s prior year discounted cash flow model and market approach are based on assumptions that are considered reasonable by management and consistent with the plans and estimates management uses to operate the underlying businesses, there is significant judgment in determining the expected results of the FLIR reporting unit.  Changes in forecast estimates or the application of alternative assumptions could produce significantly different results.  The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure.Although no impairment existed for the FLIR reporting unit as of the prior year assessment date, a non-cash impairment of goodwill could result from a number of circumstances, including different assumptions used in determining the fair value of the reporting unit, changes to customer spending priorities, or a sharp increase in interest rates without a corresponding increase in future net sales.For all reporting units, including the FLIR reporting unit, there have been no events or changes in circumstances which indicate that it is more likely than not that the fair value of the reporting unit is below its carrying value.  As such, no interim impairment review was required.  The Company will perform its annual analysis during the fourth quarter of 2025.Based on the results of the Company’s annual assessment in the fourth quarter of 2024, the estimated fair value of all material indefinite-lived trademarks, with the exception of the FLIR indefinite-lived trademark, significantly exceeded their respective carrying value. At the prior year annual assessment date, the FLIR indefinite-lived trademark value was reduced to $635.8 million, which represented the estimated fair value of the asset as of the prior year assessment date. The most significant assumptions utilized in the determination of the fair value of the FLIR trademark were the net sales growth rates (including residual growth rates), discount rate, and royalty rate.  Although the FLIR sales forecasts were based on