Use these links to rapidly review the documentTEKTRONIX, INC. AND SUBSIDIARIES

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

For the Quarter Ended February 24, 2001

or

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

For the transition period from  to

Commission file number 1-4837

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TEKTRONIX, INC.(Exact name of registrant as specified in its charter)

OREGON(State or other jurisdiction of incorporation or organization)

93-0343990(IRS Employer Identification No.)14200 SW KARL BRAUN DRIVE
BEAVERTON, OREGON(Address of principal executive offices)

97077(zip code)


(503) 627-7111(Registrant's telephone number, including area code)

NOT APPLICABLE(Former name, former address and former fiscal year, if changed since last report)

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes /x/  No / /

AT
MARCH 24, 2001 THERE WERE 93,773,004 COMMON SHARES OF TEKTRONIX, INC. OUTSTANDING.
(Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.)

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TEKTRONIX, INC. AND SUBSIDIARIES

INDEX



|                               |                                                                                               | PAGE NO.                                                                                                                                                                                                                                  
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|PART I.  FINANCIAL INFORMATION |                                                                                               |                                                                                                                                                                                                                                           
|                               | Item 1. Financial Statements:                                                                 |                                                                                                                                                                                                                                           
|                               |                                                                                               | Condensed Consolidated Balance Sheets (Unaudited)
February 24, 2001 and May 27, 2000                                                                                                                                                     
|                               |                                                                                               | Condensed Consolidated Statements of Operations (Unaudited)
for the Quarter ended February 24, 2001
and the Quarter ended February 26, 2000
for the Three Quarters ended February 24, 2001
and the Three Quarters ended February 26, 2000
|                               |                                                                                               | Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Three Quarters ended February 24, 2001
and the Three Quarters ended February 26, 2000                                                                                
|                               |                                                                                               | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                                                                                                                          
|                               | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                                                                                                                                                           
|                               | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                                                                                                                                                           
|PART II.  OTHER INFORMATION    |                                                                                               |                                                                                                                                                                                                                                           
|                               | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                                                                                                                                           
|SIGNATURE                      |                                                                                               | 27                                                                                                                                                                                                                                        

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TEKTRONIX, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED BALANCE SHEETS        (UNAUDITED)

|                                     |                                    | Feb. 24,
2001                                                                                                                         |                                            | May 27,
2000
|------------------------------------ | ---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------------
|ASSETS                               |                                    |                                                                                                                                       |                                            |             
|                                     | Current assets:                    |                                                                                                                                       |                                            |             
|                                     |                                    | Cash and cash equivalents                                                                                                             |                                            | $           
|                                     |                                    | Short-term investments                                                                                                                |                                            |             
|                                     |                                    | Trade accounts receivable, net of allowance for doubtful accounts of $4,716 and 4,909, respectively                                   |                                            |             
|                                     |                                    | Inventories                                                                                                                           |                                            |             
|                                     |                                    | Other current assets                                                                                                                  |                                            |             
|                                     |                                    |                                                                                                                                       |                                            |             
|                                     |                                    |                                                                                                                                       | Total current assets                       |             
|                                     | Property, plant and equipment, net |                                                                                                                                       |                                            | 173,301     
|                                     | Deferred tax assets, net           |                                                                                                                                       |                                            | 31,540      
|                                     | Other long-term assets             |                                                                                                                                       |                                            | 188,349     
|                                     |                                    |                                                                                                                                       |                                            |             
|                                     |                                    |                                                                                                                                       | Total assets                               |             
|                                     |                                    |                                                                                                                                       |                                            |             
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                    |                                                                                                                                       |                                            |             
|                                     | Current liabilities:               |                                                                                                                                       |                                            |             
|                                     |                                    | Accounts payable and accrued liabilities                                                                                              |                                            | $           
|                                     |                                    | Accrued compensation                                                                                                                  |                                            |             
|                                     |                                    | Deferred revenue                                                                                                                      |                                            |             
|                                     |                                    | Other current liabilities                                                                                                             |                                            |             
|                                     |                                    |                                                                                                                                       |                                            |             
|                                     |                                    |                                                                                                                                       | Total current liabilities                  |             
|                                     | Long-term debt                     |                                                                                                                                       |                                            | 131,133     
|                                     | Other long-term liabilities        |                                                                                                                                       |                                            | 69,418      
|                                     | Shareholders' equity:              |                                                                                                                                       |                                            |             
|                                     |                                    | Common stock, no par value (authorized 200,000 shares; issued and outstanding 94,785 at February 24, 2001 and 95,083 at May 27, 2000) |                                            |             
|                                     |                                    | Retained earnings                                                                                                                     |                                            |             
|                                     |                                    | Accumulated other comprehensive income                                                                                                |                                            |             
|                                     |                                    |                                                                                                                                       |                                            |             
|                                     |                                    |                                                                                                                                       | Total shareholders' equity                 |             
|                                     |                                    |                                                                                                                                       |                                            |             
|                                     |                                    |                                                                                                                                       | Total liabilities and shareholders' equity |             
|                                     |                                    |                                                                                                                                       |                                            |             

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

2

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TEKTRONIX, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        (UNAUDITED)

|                                                                                                                                               |                                                | Quarter ended |         | Three quarters ended |  
|---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------- | ------- | -------------------- | -
|
|Net sales                                                                                                                                      |                                                | $             | 326,854 |                      | $
|Cost of sales                                                                                                                                  |                                                |               | 158,492 |                      |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Gross profit                                   |               |         | 168,362              |  
|Research and development expenses                                                                                                              |                                                |               | 40,823  |                      |  
|Selling, general and administrative expenses                                                                                                   |                                                |               | 81,235  |                      |  
|Equity in business ventures' loss (earnings)                                                                                                   |                                                |               | 148     |                      |  
|Non-recurring (credits) charges, net                                                                                                           |                                                |               | (9,104  | )                    |  
|Loss (gain) on sale of the Video and Networking division                                                                                       |                                                |               |        |                      |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Operating income (loss)                        |               |         | 55,260               |  
|Interest expense                                                                                                                               |                                                |               | (3,550  | )                    |  
|Interest income                                                                                                                                |                                                |               | 16,150  |                      |  
|Other (expense) income, net                                                                                                                    |                                                |               | (140    | )                    |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Earnings (loss) before taxes                   |               |         | 67,720               |  
|Income tax expense (benefit)                                                                                                                   |                                                |               | 26,716  |                      |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Net earnings (loss) from continuing operations |               |         | 41,004               |  
|Discontinued operations:                                                                                                                       |                                                |               |         |                      |  
|Loss from operations of Color Printing and Imaging division (less applicable income tax benefit of $0, (6,825), 0, and (2,063), respectively.) |                                                |               |        |                      |  
|Gain on sale of Color Printing and Imaging (less applicable tax of $198,476)                                                                   |                                                |               |        |                      |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Net earnings from discontinued operations      |               |         |                     |  
|                                                                                                                                               |                                                |               |         |                      |  
|                                                                                                                                               | Net earnings                                   |               | $       | 41,004               |  
|                                                                                                                                               |                                                |               |         |                      |  
|Net earnings per sharebasic                                                                                                                   |                                                | $             | 0.43    |                      | $
|Net earnings per sharediluted                                                                                                                 |                                                |               | 0.43    |                      |  
|Net earnings (loss) per share from continuing operationsbasic                                                                                 |                                                |               | 0.43    |                      |  
|Net earnings (loss) per share from continuing operationsdiluted                                                                               |                                                |               | 0.43    |                      |  
|Net earnings per share from discontinued operationsbasic                                                                                      |                                                |               |        |                      |  
|Net earnings per share from discontinued operationsdiluted                                                                                    |                                                |               |        |                      |  
|Dividends per share                                                                                                                            |                                                |               |        |                      |  
|Weighted average shares outstandingbasic                                                                                                      |                                                |               | 94,695  |                      |  
|Weighted average shares outstandingdiluted                                                                                                    |                                                |               | 96,273  |                      |  

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

3

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TEKTRONIX, INC. AND SUBSIDIARIES        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS        (UNAUDITED)

|                                                                                              |                                                          | Three quarters ended                                |         
|--------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | --------
|
|CASH FLOWS FROM OPERATING ACTIVITIES                                                          |                                                          |                                                     |         
|Net earnings                                                                                  |                                                          | $                                                   | 105,152 
|Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |                                                          |                                                     |         
|                                                                                              | Loss from discontinued operations                        |                                                     |         
|                                                                                              | Pre-tax gain on sale of Color Printing and Imaging       |                                                     |         
|                                                                                              | Pre-tax net non-recurring (credits) charges              |                                                     |         
|                                                                                              | (Gain) loss on sale of the Video and Networking division |                                                     |         
|                                                                                              | Payment to fund pension plan                             |                                                     |         
|                                                                                              | Depreciation and amortization expense                    |                                                     |         
|                                                                                              | Asset impairments                                        |                                                     |         
|                                                                                              | Loss (gain) on the disposition of fixed assets           |                                                     |         
|                                                                                              | Loss on the sale of investments                          |                                                     |         
|                                                                                              | Bad debt expense                                         |                                                     |         
|                                                                                              | Deferred income taxes                                    |                                                     |         
|                                                                                              | Equity in business ventures' (earnings) loss             |                                                     |         
|                                                                                              | Changes in operating assets and liabilities:             |                                                     |         
|                                                                                              |                                                          | Accounts receivable                                 |         
|                                                                                              |                                                          | Inventories                                         |         
|                                                                                              |                                                          | Other current assets                                |         
|                                                                                              |                                                          | Accounts payable and accrued liabilities            |         
|                                                                                              |                                                          | Accrued compensation                                |         
|                                                                                              |                                                          | Deferred revenue                                    |         
|                                                                                              |                                                          | Income taxes payable                                |         
|                                                                                              |                                                          | Other, net                                          |         
|                                                                                              |                                                          |                                                     |         
|                                                                                              |                                                          | Net cash provided by (used in) operating activities |         
|                                                                                              |                                                          | Net cash provided by discontinued operations        |         
|CASH FLOWS FROM INVESTING ACTIVITIES                                                          |                                                          |                                                     |         
|Acquisition of property, plant and equipment                                                  |                                                          |                                                     | (23,033 
|Acquisition of business                                                                       |                                                          |                                                     |        
|Proceeds from the sale of Color Printing and Imaging                                          |                                                          |                                                     |        
|Proceeds from the sale of Video and Networking                                                |                                                          |                                                     |        
|Proceeds from the sale of property, plant and equipment                                       |                                                          |                                                     | 3,847   
|Proceeds from the sale of investments                                                         |                                                          |                                                     |        
|Dividend received from business venture                                                       |                                                          |                                                     | 8,451   
|Change in short-term investments                                                              |                                                          |                                                     | (215,647
|                                                                                              |                                                          |                                                     |         
|                                                                                              |                                                          | Net cash (used in) provided by investing activities |         
|CASH FLOWS FROM FINANCING ACTIVITIES                                                          |                                                          |                                                     |         
|Net change in short-term debt                                                                 |                                                          |                                                     | 24      
|Repayment of long-term debt                                                                   |                                                          |                                                     | (19,236 
|Proceeds from employee stock plans                                                            |                                                          |                                                     | 23,455  
|Repurchase of common stock                                                                    |                                                          |                                                     | (56,207 
|Dividends paid to shareholders                                                                |                                                          |                                                     |        
|                                                                                              |                                                          |                                                     |         
|                                                                                              |                                                          | Net cash used in financing activities               |         
|                                                                                              |                                                          |                                                     |         

4

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|Net (decrease) increase in cash and cash equivalents                            |  |   | (190,212 | ) |   | 745,382 | 
|------------------------------------------------------------------------------- |  | - | -------- | - | - | ------- | 
|Cash and cash equivalents at beginning of period                                |  |   | 683,808  |   |   | 39,747  | 
|                                                                                |  |   |          |   |  
|Cash and cash equivalents at end of period                                      |  | $ | 493,596  |   | $ | 785,129 | 
|                                                                                |  |   |          |   |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOWS                                          |  |   |          |   |   |         | 
|Income taxes paidnet                                                           |  | $ | 40,318   |   | $ | 4,728   | 
|Interest paid                                                                   |  |   | 11,472   |   |   | 16,135  | 
|NON-CASH INVESTING ACTIVITIES                                                   |  |   |          |   |   |         | 
|Note receivable for sale of Video and Networking assets                         |  |   |         |   |   | 28,000  | 
|Note receivable for sale of receivables to Grass Valley Group Inc.              |  |   |         |   |   | 4,300   | 
|Common stock of Grass Valley Group Inc. for sale of Video and Networking assets |  |   |         |   |   | 6,300   | 

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

5

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  BASIS OF PRESENTATION

The condensed consolidated financial statements and notes thereto have been prepared by Tektronix, Inc. ("Tektronix" or the "company") without audit.
Certain information and footnote disclosures normally included in annual financial statements, prepared in accordance with accounting principles generally accepted in the United States of America,
have been condensed or omitted. Management believes that the condensed statements include all necessary adjustments, which are of a normal and recurring nature and are adequate to fairly present the
financial position, results of operations and cash flows for the interim periods. The condensed information should be read in conjunction with the financial statements and notes thereto incorporated
by reference in the company's annual report on Form 10-K for the year ended May 27, 2000. Where necessary, certain adjustments have been made to prior period amounts to
conform to current period presentation. All share and per share amounts have been restated to reflect a two-for-one stock split effective October 31, 2000. The company's
fiscal year is the 52 or 53 weeks ending the last Saturday in May. Fiscal years 2001 and 2000 consist of 52 weeks.

The
presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and
assumptions. These estimates and assumptions, including those used to prepare discontinued operations financial statements, affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the condensed consolidated financial statements and the revenues and expenses reported during the period. Actual results may differ from those
estimated.

2.  SALE OF COLOR PRINTING AND IMAGING

On January 1, 2000, the company sold substantially all of the assets of the Color Printing and Imaging division to Xerox Corporation ("Xerox"). The
purchase price was $925.0 million in cash, with certain liabilities of the division assumed by Xerox. During the third quarter of fiscal year 2000, Tektronix recorded a net gain of
$340.3 million on this sale. The gain was calculated as the excess of the proceeds received over the net book value of the assets transferred, $198.5 million in income tax expense, a
$60.0 million accrual for estimated liabilities related to the sale and $14.4 million in transaction and related costs.

6

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The company accounted for the Color Printing and Imaging division as a discontinued operation in accordance with Accounting Principles Board ("APB") Opinion No. 30, "Reporting
the Results of OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." Summarized results
of operations for the division were as follows:

(In thousands except per share amounts)

Quarter ended
Feb. 26, 2000

Three
quarters ended
Feb. 26, 2000Net sales

$
24,302

$
369,459Loss before taxes


(19,500
)

(6,058
)Income tax benefit


(6,825
)

(2,063
)Loss from operations


(12,675
)

(3,995
)Gain on sale of Color Printing and Imaging (less applicable tax of $198,476)


340,307


340,307Net earnings from discontinued operations

$
327,632

$
336,312Net earnings per share from discontinued operationsbasic

$
3.46

$
3.57Net earnings per share from discontinued operationsdiluted

$
3.41

$
3.51


3.  SALE OF VIDEO AND NETWORKING

On August 9, 1999, the company announced that it had reached an agreement to sell substantially all of the operating assets of its Video and Networking
division to Grass Valley Group Inc. ("GVG"). During the first quarter of fiscal year 2000, Tektronix recorded pre-tax charges of $26.1 million for losses expected to be
incurred in connection with the transaction. These charges were calculated based upon the excess of the estimated net book value of assets to be transferred over the proceeds received, as well as
asset impairments incurred as a result of the sale. The companies closed the transaction on September 24, 1999. Tektronix received cash of $23.7 million, before transaction costs of
$1.1 million, a note receivable of $22.5 million, and a 10% equity interest in GVG, which was recorded in Other long-term assets and accounted for under the cost method. The
sale of the Video and Networking division did not meet the criteria to be recorded as a discontinued operation in accordance with APB Opinion No. 30.

On
February 25, 2000, Tektronix and GVG entered into a subsequent agreement. Under this agreement, the company sold to GVG, unbilled revenue on systems contracts in progress
that were not a part of the original transaction. As consideration for the assets sold, the $22.5 million note receivable was amended to increase the principal balance and decrease the stated
interest rate from 8% to 7%. Additionally, under this subsequent agreement, a note receivable was recorded for the sale of certain trade receivables that were also excluded from the original
transaction. Charges of $5.5 million were incurred in conjunction with the subsequent agreement and were recorded in (Gain) loss on sale of the Video and Networking division on the Condensed
Consolidated Statements of Operations during the third quarter of fiscal year 2000. In addition, on May 25, 2000, Tektronix sold its 10% equity interest in GVG to the majority shareholder of
that company and received $6.5 million in cash, which approximated book value.

7

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During the second quarter of fiscal year 2001, the company resolved certain outstanding contingencies related to sale of the Video and Networking division. The resolution of these
items resulted in a net credit of approximately $1.4 million, which is included in (Gain) loss on sale of the Video and Networking division on the Condensed Consolidated Statements of
Operations.

Subsequent
to February 24, 2001, the company amended the existing notes receivable from GVG to convert a portion of the notes to preferred stock of GVG. The company now holds a
note receivable with a face value of $19.5 million and a stated interest rate of 8.75% and preferred stock of GVG with a basis of $11.8 million, which will be classified as available for
sale securities.

4.  REPURCHASE OF COMMON STOCK

On March 15, 2000, the Board of Directors approved a program to purchase up to $545.0 million of the company's common stock on the open market or
through negotiated transactions. Under this program, the company has repurchased a total of 1.9 million shares for $56.2 million in the first three quarters of fiscal year 2001, which
included 0.3 million shares for $8.3 million in the current quarter. Under the program, as of February 24, 2001, the company has repurchased a total of 3.2 million shares
at an average price of $28.16 per share totaling $91.3 million. Certain amounts above have been restated to reflect a two-for-one stock split effective
October 31, 2000.

5.  NON-RECURRING CHARGES, NET

In the third quarter of fiscal year 2000, the company announced and began to implement a series of actions (the "2000 plan") intended to further consolidate
worldwide operations and transition the company from a portfolio of businesses to a single smaller business focused on test, measurement and monitoring. Major actions under the 2000 plan include the
exit from and consolidation within underutilized facilities, including the write-off of assets that will be abandoned in conjunction with this action, the write-off and
disposal of certain excess service and other inventories and focused headcount reductions to streamline the cost structure to that of a smaller focused Measurement business and to eliminate
duplicative functions within the company's infrastructure. The company recorded pre-tax non-recurring charges of $64.8 million to account for these actions, including
$19.1 million for the impairment of assets, $16.8 million for lease cancellation fees and future payments on exited leased facilities and volume-based contracts, $15.5 million for
the write-off and disposal of excess inventories and $13.4 million for severance worldwide.

In
the second quarter of fiscal year 1999, the company announced and began to implement a series of actions (the "1999 plan") intended to align the company's worldwide operations with
market conditions and to improve the profitability of its operations. These actions included a net reduction of approximately 15% of the company's worldwide workforce, the exit from certain facilities
and the streamlining of product and service offerings. Under the 1999 plan, the company recorded pre-tax charges of $125.7 million, including restructuring charges of
$115.8 million and other non-recurring charges of $9.9 million for related actions. The $115.8 million in restructuring charges included $56.9 million in
severance expense, $27.1 million for the write-off and disposal of excess inventory, $17.0 million for the impairment of long-term assets and $14.8 million
for lease cancellation fees. The $9.9 million for related actions included $5.1 million of expected sales returns, $0.8 million of bad debt expense and $4.0 million of
costs to fulfill commitments to deliver software enhancements on previously sold product, all associated with exiting the non-linear digital editing business.

Total
pre-tax net non-recurring credits on the Condensed Consolidated Statements of Operations totaled $9.4 million for the three quarters ended
February 24, 2001. The net credits of $9.4 million consisted of a $2.3 million loss on sale of assets and approximately $2.8 million of adjustments to the existing
restructuring plans, offset by restructuring reserve reversals of $14.5 million. An expanded discussion of restructuring reserve activity is included below.

8

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Under the 2000 plan, certain assets and related employee severance costs of Maxtek Components Corporation ("Maxtek"), a wholly-owned subsidiary of Tektronix, were included in the
restructuring reserve as it was anticipated that they would be eliminated through closure. As the opportunity to dispose of these assets through sale subsequently arose during the three quarters ended
February 24, 2001, and was determined by management to be more beneficial to the company, the related reserves were deemed no longer necessary, resulting in reversals of accrued compensation of
$1.6 million and payables and other liabilities reserve of $0.2 million. The sale of these assets resulted in a non-recurring pre-tax loss on sale of assets of
$2.3 million.

The
pre-tax charges incurred and related actions taken under the 1999 and 2000 plans affected the company's financial position in the following manner:

|(In thousands)             |                                  | Equipment
and other
assets |        | Payables
and other
liabilities |   | Inventories |         | Accrued
compensation |       
|-------------------------- | -------------------------------- | -------------------------- | ------ | ------------------------------ | - | ----------- | ------- | -------------------- | ------
|1999 plan charges          |                                  | $                          | 18,200 |                                | $ | 19,894      |         | $                    | 27,760
|Fiscal year 1999 activity: |                                  |                            |        |                                |   |             |         |                      |       
|                           | Cash paid out                    |                            |        |                               |   |             | (7,415  | )                    |       
|                           | Non-cash disposals or write-offs |                            |        | (17,055                        | ) |             |        |                      |       
|                           | Adjustments to plan              |                            |        | (455                           | ) |             | 4,049   |                      |       
|                           |                                  |                            |        |                                |   |             |         |                      |       
|Balance May 29, 1999       |                                  | $                          | 690    |                                | $ | 16,528      |         | $                    |      
|                           |                                  |                            |        |                                |   |             |         |                      |       
|Fiscal year 2000 activity: |                                  |                            |        |                                |   |             |         |                      |       
|                           | 2000 plan charges                |                            | $      | 19,142                         |   | $           | 16,787  |                      | $     
|                           | Adjustments to plan              |                            |        | 361                            |   |             |        |                      |       
|                           | Reversal of excess charges       |                            |        |                               |   |             | (600    | )                    |       
|                           | Cash paid out                    |                            |        |                               |   |             | (13,765 | )                    |       
|                           | Non-cash disposals or write-offs |                            |        | (20,193                        | ) |             |        |                      |       
|                           |                                  |                            |        |                                |   |             |         |                      |       
|Balance May 27, 2000       |                                  | $                          |       |                                | $ | 18,950      |         | $                    |      
|                           |                                  |                            |        |                                |   |             |         |                      |       
|Fiscal year 2001 activity: |                                  |                            |        |                                |   |             |         |                      |       
|                           | Adjustments to plan              |                            | $      |                               |   | $           | 2,350   |                      | $     
|                           | Reversal of excess charges       |                            |        |                               |   |             | (8,357  | )                    |       
|                           | Cash paid out and disposals, net |                            |        |                               |   |             | (6,755  | )                    |       
|                           |                                  |                            |        |                                |   |             |         |                      |       
|Balance February 24, 2001  |                                  | $                          |       |                                | $ | 6,188       |         | $                    |      
|                           |                                  |                            |        |                                |   |             |         |                      |       

During
the first three quarters of fiscal year 2001 the payables and other liabilities reserve was increased approximately $2.3 million and the accrued compensation reserve was
increased approximately $0.5 million. The increase of $2.3 million to the payables and other liabilities reserve was primarily to provide for additional estimated costs related to exit
activities previously included in the restructuring plan. The increase of $0.5 million to the accrued compensation reserve was attributable to the subsequent clarification and amendment of an
employment agreement.

9

---

During the first three quarters of fiscal year 2001, $8.3 million and $6.2 million of previously accrued amounts were reversed from the payables and other liabilities
reserve and the accrued compensation reserve, respectively. The reversal of $8.3 million of the payables and other liabilities reserve was primarily attributable to certain obligations which
were assumed by a third party, favorable contract buy-out settlements, and reserve reversals related to Maxtek, as discussed above. The reversal of $6.2 million of accrued
compensation resulted from severance reversals of $4.6 million for 187 individuals who either left the company voluntarily or were re-assigned to future-benefiting operations and
$1.6 million of severance related to individuals associated with the assets sold by Maxtek discussed above.

Including
current and prior period adjustments and reversals, headcount reduction under the 1999 plan totaled 1,297 employees. As of February 24, 2001, severance of
approximately $41.3 million has been paid to 1,293 of these employees, with the remaining employees to be paid severance of approximately $0.1 million under contract through 2002. Under
the 2000 plan, headcount reductions, net of current and prior period adjustments and reversals, totaled 118 employees. As of February 24, 2001, severance of approximately $6.2 million
has been paid to 92 of these employees, with the remaining employees to be paid severance of approximately $1.8 million under contracts extending through 2002.

6.  EARNINGS PER SHARE

|                                                             |  | Quarter ended |        | Three quarters ended
|------------------------------------------------------------ |  | ------------- | ------ | --------------------
|
|Net earnings                                                 |  | $             | 41,004 |                     
|                                                             |  |               |        |                     
|Weighted average shares used for basic earnings per share    |  |               | 94,695 |                     
|Effect of dilutive stock options                             |  |               | 1,578  |                     
|                                                             |  |               |        |                     
|Weighted average shares used for dilutive earnings per share |  |               | 96,273 |                     
|                                                             |  |               |        |                     
|Net earnings per sharebasic                                 |  | $             | 0.43   |                     
|Net earnings per sharediluted                               |  | $             | 0.43   |                     

All
share and per share amounts have been restated to reflect a two-for-one stock split effective October 31, 2000. Options to purchase an additional
2,309,500 and 1,413,600 shares of common stock were outstanding at February 24, 2001 and February 26, 2000, respectively, but were not included in the computation of diluted net earnings
per share because their effect would be antidilutive.

10

---

7.  SHORT-TERM INVESTMENTS

Short-term investments include investments with maturities of greater than three months and less than one year from the date of purchase.
Short-term investments held at February 24, 2001 and May 27, 2000 consisted of:

(In thousands)

Feb. 24,
2001

May 27,
2000Corporate notes and bonds

$
202,577

$
52,977Asset backed securities


62,005


7,486Federal agency bonds and notes


36,345


Commercial paper


9,833


29,353Mortgage backed securities


2,841


Money market


1,095


Certificates of deposit


848


10,081Short-term investments

$
315,544

$
99,897


8.  INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined based on a currently-adjusted standard basis, which approximates actual cost on a
first-in, first-out basis. The company periodically reviews its inventory for obsolete or slow-moving items. Inventories, net of related reserves consisted of:

(In thousands)

Feb. 24,
2001

May 27,
2000Materials

$
2,926

$
3,995Work in process


62,557


54,047Finished goods


71,972


55,959Inventories

$
137,455

$
114,001


9.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of:

(In thousands)

Feb. 24,
2001

May 27,
2000Land

$
1,656

$
1,656Buildings


150,267


154,466Machinery and equipment


270,964


274,251Accumulated depreciation and amortization


(249,586
)

(241,829
)Property, plant and equipment, net

$
173,301

$
188,544


11

---

10. INVESTMENTS IN MARKETABLE EQUITY SECURITIES

Investments in marketable equity securities are classified as available-for-sale and reported at fair market value on the Condensed
Consolidated Balance Sheets as Other long-term assets. The related unrealized holding gains and losses are excluded from earnings and included, net of tax, in Accumulated other
comprehensive income on the Condensed Consolidated Balance Sheets.

(In thousands)

Feb. 24,
2001

May 27,
2000Unamortized cost basis of marketable equity securities

$
4,191

$
6,704Gross unrealized holding gains


5,830


9,991Gross unrealized holding losses





(1,707
)Fair value of marketable equity securities

$
10,021

$
14,988


11. COMPREHENSIVE INCOME

Comprehensive income and its components, net of tax, are as follows:

|                            |                                                                                                                      | Quarter ended |        | Three quarters ended
|--------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------- | ------ | --------------------
|
|Net earnings                |                                                                                                                      | $             | 41,004 |                     
|Other comprehensive income: |                                                                                                                      |               |        |                     
|                            | Currency translation adjustment, net of taxes of $(1,208), (2,507), (5,526) and, 931, respectively                   |               |        | (1,812              
|                            | Unrealized gain (loss) on available-for-sale securities, net of taxes of $(1,273), 507, (968), and 321, respectively |               |        | (1,889              
|                            | Reclassification adjustment for realized losses, net of taxes of $0, 0, 0 and 248, respectively                      |               |        |                    
|                            |                                                                                                                      |               |        |                     
|Total comprehensive income  |                                                                                                                      | $             | 37,303 |                     
|                            |                                                                                                                      |               |        |                     

12

---

Accumulated other comprehensive income consisted of the following:

(In thousands)

Foreign
currency
translation

Unrealized
holding gains
(losses) on
available-for-sale
securities

Accumulated
other
comprehensive
incomeBalance as of May 27, 2000

$
19,956

$
4,974

$
24,930Q1 activity


(2,315
)

14,852


12,537Balance as of Aug. 26, 2000


17,641


19,826


37,467Q2 activity


(4,163
)

(14,435
)

(18,598
)Balance as of Nov. 25, 2000


13,478


5,391


18,869Q3 activity


(1,812
)

(1,889
)

(3,701
)Balance as of Feb. 24, 2001

$
11,666

$
3,502

$
15,168


12. BUSINESS SEGMENTS

Historically, the company was organized based on the products and services that it offered. Under this organizational structure, the company operated in three
main segments: Measurement, Color Printing and Imaging, and Video and Networking. The Color Printing and Imaging division was accounted for as a discontinued operation and as such the results of
operations and the financial position of the division were not presented to management for decision-making purposes and are not included in the table below. The company now operates as a single
segmentMeasurement. Measurement revenue is derived principally through the development and marketing of a range of test and measurement products including: oscilloscopes; logic analyzers;
communications test equipment including products for network monitoring and protocol test, broadband transmission test and mobile production test; video test equipment; and related services and
accessories.

13

---

The information provided below was obtained from internal information that was provided to the company's executive management group for the purpose of corporate management. Assets,
liabilities and expenses attributable to corporate activity were not all allocated to the operating segments. Certain facility, information systems and other expenses were incurred by corporate and
allocated to the divisions based on a percentage of sales, number of employees or payroll costs. Depreciation expense by division was not included in the internal information provided to the executive
management group and was therefore not presented below. Inter-segment sales were not material and were included in net sales to external customers below.

|                                                        |                         | Quarter ended |         | Three quarters ended |  
|------------------------------------------------------- | ----------------------- | ------------- | ------- | -------------------- | -
|
|Net sales to external customers by division:            |                         |               |         |                      |  
|Measurement                                             |                         | $             | 326,854 |                      | $
|Video and Networking                                    |                         |               |        |                      |  
|Other                                                   |                         |               |        |                      |  
|                                                        |                         |               |         |                      |  
|                                                        | Net sales               |               | $       | 326,854              |  
|                                                        |                         |               |         |                      |  
|Consolidated net sales to external customers by region: |                         |               |         |                      |  
|United States                                           |                         | $             | 165,348 |                      | $
|Europe                                                  |                         |               | 72,845  |                      |  
|Pacific                                                 |                         |               | 41,101  |                      |  
|Japan                                                   |                         |               | 32,577  |                      |  
|Americas                                                |                         |               | 14,983  |                      |  
|                                                        |                         |               |         |                      |  
|                                                        | Net sales               |               | $       | 326,854              |  
|                                                        |                         |               |         |                      |  
|Measurement net sales to external customers by region:  |                         |               |         |                      |  
|United States                                           |                         | $             | 165,348 |                      | $
|Europe                                                  |                         |               | 72,845  |                      |  
|Pacific                                                 |                         |               | 41,101  |                      |  
|Japan                                                   |                         |               | 32,577  |                      |  
|Americas                                                |                         |               | 14,983  |                      |  
|                                                        |                         |               |         |                      |  
|                                                        | Net sales               |               | $       | 326,854              |  
|                                                        |                         |               |         |                      |  
|Operating income (loss):                                |                         |               |         |                      |  
|Measurement                                             |                         | $             | 46,133  |                      | $
|Video and Networking                                    |                         |               |        |                      |  
|(Loss) gain on sale of Video and Networking division    |                         |               |        |                      |  
|Non-recurring credits (charges)                         |                         |               | 9,127   |                      |  
|All other                                               |                         |               |        |                      |  
|                                                        |                         |               |         |                      |  
|                                                        | Operating income (loss) |               | $       | 55,260               |  
|                                                        |                         |               |         |                      |  

14

---

13. RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." The statement will require recognition of all derivatives as either assets or liabilities on the balance sheet at fair value. The statement is effective
for the company's fiscal year 2002, as deferred by SFAS No. 137, but early adoption is permitted. Management has completed an evaluation of the effects of this statement and does not believe
that it will have a material effect on the company's consolidated financial statements.

In
December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." The effective
date of the bulletin was delayed according to SAB No. 101A and SAB No. 101B and will be effective for the company's fourth quarter of fiscal year 2001. Management has completed an
evaluation of the effects of this bulletin and does not believe that it will have a material effect on the company's consolidated financial statements.

15

---



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

GENERAL

Tektronix, Inc. ("Tektronix" or the "company") operated in three major business divisions prior to fiscal year 2001: Measurement, Color Printing and
Imaging, and Video and Networking. During fiscal year 2000, the company sold the Color Printing and Imaging and Video and Networking divisions and now operates as a focused test, measurement and
monitoring company, providing measurement solutions to customers in many industries, including computers, telecommunications and semiconductors. The company operates in five major geographies: the
United States; Europe; the Americas, including Mexico, Canada and South America; the Pacific, excluding Japan; and Japan. For additional information on the fiscal year 2000 divestitures, see the Sale
of Color Printing and Imaging and the Sale of Video and Networking footnotes included in the Notes to the Condensed Consolidated Financial Statements.

As
a focused measurement company, Tektronix enables its customers to design, build, deploy and manage next-generation global communications networks and internet
technologies. Revenue is derived principally through the development and marketing of a range of test and measurement products including: oscilloscopes; logic analyzers; communications test equipment,
including products for network monitoring and protocol test, broadband transmission test and mobile production test; video test equipment; and related services and accessories.

RECENT ECONOMIC CONDITIONS

Recent economic conditions have had a negative impact on many of the markets into which the company sells products including, but not limited to, mobile
handset manufacturing, automated test equipment and semiconductor manufacturing. Management of the company is unable to predict the ultimate severity and duration of the recent economic conditions or
their impact on Tektronix. These conditions adversely impacted Tektronix during the later part of the third quarter of fiscal year 2001, as the trend of product orders declined. As a result of this
trend, management of the company anticipates that orders for the fourth quarter of fiscal year 2001 will decline relative to the prior year comparable period. In addition, future sales growth rates
may be reduced as a result of the anticipated decline in orders.

NON-RECURRING CHARGES, NET

Total pre-tax net non-recurring credits on the Condensed Consolidated Statements of Operations totaled $9.4 million for the
three quarters ended February 24, 2001. The net credits of $9.4 million consisted of a $2.3 million loss on sale of assets and approximately $2.8 million of adjustments to
the existing restructuring plans, offset by restructuring reserve reversals of $14.5 million.

Under
the 2000 plan, certain assets and related employee severance costs of Maxtek Components Corporation ("Maxtek"), a wholly-owned subsidiary of Tektronix, were included in the
restructuring reserve as it was anticipated that they would be eliminated through closure. As the opportunity to dispose of these assets through sale subsequently arose during the three quarters ended
February 24, 2001, and was determined by management to be more beneficial to the company, the related reserves were deemed no longer necessary, resulting in reversals of accrued compensation of
$1.6 million and payables and other liabilities reserve of $0.2 million. The sale of these assets resulted in a non-recurring pre-tax loss on sale of assets of
$2.3 million.

16

---

During the first three quarters of fiscal year 2001 the payables and other liabilities reserve was increased approximately $2.3 million and the accrued compensation reserve was
increased approximately $0.5 million. The increase of $2.3 million to the payables and other liabilities reserve was primarily to provide for additional estimated costs related to exit
activities previously included in the restructuring plan. The increase of $0.5 million to the accrued compensation reserve was attributable to the subsequent clarification and amendment of an
employment agreement.

During
the first three quarters of fiscal year 2001, $8.3 million and $6.2 million of previously accrued amounts were reversed from the payables and other liabilities
reserve and the accrued compensation reserve, respectively. The reversal of $8.3 million of the payables and other liabilities reserve was primarily attributable to certain obligations which
were assumed by a third party, favorable contract buy-out settlements, and reserve reversals related to Maxtek, as discussed above. The reversal of $6.2 million of accrued
compensation resulted from severance reversals of $4.6 million for 187 individuals who either left the company voluntarily or were re-assigned to future-benefiting operations and
$1.6 million of severance related to individuals associated with the assets sold by Maxtek discussed above.

Including
current and prior period adjustments and reversals, headcount reduction under the 1999 plan totaled 1,297 employees. As of February 24, 2001, severance of
approximately $41.3 million has been paid to 1,293 of these employees, with the remaining employees to be paid severance of approximately $0.1 million under contract through 2002. Under
the 2000 plan, headcount reductions, net of current and prior period adjustments and reversals, totaled 118 employees. As of February 24, 2001, severance of approximately $6.2 million
has been paid to 92 of these employees, with the remaining employees to be paid severance of approximately $1.8 million under contracts extending through 2002.

RESULTS OF OPERATIONS

Consolidated net earnings for the quarter and three quarters ended February 24, 2001, were $41.0 million or $0.43 per diluted share and
$105.2 million or $1.09 per diluted share, respectively, as compared with net earnings of $310.8 million or $3.23 per diluted share and $317.5 million or $3.32 per diluted share,
for the quarter and three quarters ended February 26, 2000, respectively. Included in consolidated net earnings for the quarter and three quarters ended February 26, 2000, were net
earnings from discontinued operations related to the Color Printing and Imaging division of $327.6 million or $3.41 per diluted share and $336.3 million or $3.51 per diluted share,
respectively.

Consolidated
net earnings, excluding non-recurring credits and charges and other non-recurring items, for the quarter and three quarters ended
February 24, 2001, were $35.5 million or $0.37 per diluted share and $97.8 million or $1.01 per diluted share, respectively. For the quarter and three quarters ended
February 26, 2000, excluding non-recurring and other business transition items, Measurement net earnings were $20.2 million or $0.21 per diluted share and
$49.0 million or $0.51 per diluted share, respectively.

ORDERS

Consolidated third quarter fiscal year 2001 orders of $316.3 million increased $48.6 million or 18% from consolidated orders of
$267.7 million for the third quarter of fiscal year 2000. Consolidated orders for the three quarters ended February 24, 2001 were $940.4 million, an increase of
$148.4 million or 19% from consolidated orders of $792.0 million for the three quarters ended February 26, 2000.

17

---

Measurement orders of $316.3 million for the third quarter of fiscal year 2001, grew $48.6 million or 18% from orders of $267.7 million in the prior year
comparable period. Orders growth occurred in nearly all geographies with the largest increases in the United States and Europe which grew $15.2 million or 11% and $14.0 million or 26%,
respectively, over the prior year comparable period. Orders declined $3.6 million or 20% in the Americas (excluding the United States). Measurement orders of $940.4 million for the first
three quarters of fiscal year 2001, grew $187.4 million or 25% from Measurement orders of $753.0 million for the first three quarters of fiscal year 2000. Orders growth during this
period was realized in all geographies, with the largest increases in the United States and the Pacific, which grew $96.9 million or 25% and $38.4 million or 41%, respectively, over the
prior year comparable period. Growth in Measurement orders was the result of continued strong demand for existing products and customer acceptance of new products.

As
noted above in "Recent Economic Conditions" and below in "Forward-Looking Statements", the company experienced a declining trend in the rate of orders beginning in the second half
of the third quarter of fiscal year 2001 as a result of the impact of the current economic conditions. As a result of this trend, management of the
company expects orders to decline during the fourth quarter of fiscal year 2001 relative to the prior year comparable period.

NET SALES

Consolidated net sales of $326.9 million for the third quarter of fiscal year 2001, increased $49.9 million from consolidated net sales of
$277.0 million for the third quarter of fiscal year 2000. Consolidated net sales were $930.2 million for the first three quarters of fiscal year 2001, as compared with net sales of
$819.1 million for the first three quarters of fiscal year 2000.

Third
quarter fiscal year 2001 Measurement net sales of $326.9 million increased $56.3 million or 21% from Measurement net sales of $270.6 million for the third
quarter of fiscal year 2000, with the largest increases in the United States and Europe. Net sales in these regions increased $33.1 million or 25% and $16.2 million or 29%, respectively.
Growth in the United States and Europe was slightly offset by a decrease in Measurement net sales in the Americas (excluding the United States), which decreased $3.9 million or 21% during the
third quarter of fiscal year 2001. Net sales for the first three quarters of fiscal year 2001 were $930.2 million, an increase of $178.2 million or 24% from Measurement net sales of
$752.0 million during the first three quarters of fiscal year 2000. The largest increases in net sales, by region, were realized in the United States and the Pacific regions with increases of
$97.0 million or 25% and $31.5 million or 36%, respectively.

The
growth in sales during the quarter and three quarters ended February 24, 2001 is attributable to the growth in orders realized during these same time periods. As noted
above, the growth in orders during these time periods was primarily attributable to continued strong demand for the company's existing products and customer acceptance of new products.

GROSS PROFIT

Consolidated gross profit was $168.4 million for the third quarter of fiscal year 2001, a 36% increase over $123.4 million for the comparable
period in fiscal year 2000. Gross margins for the same periods increased to 51.5% from 44.6%, respectively. Consolidated gross profit was $480.9 million for the first three quarters of fiscal
year 2001, an increase of 31% over $367.7 million for the comparable period in fiscal year 2000. Gross margins for the same periods increased to 51.7% from 44.9%, respectively.

The
increase in gross margin during the quarter and three quarters ended February 24, 2001 was primarily attributable to non-recurring charges in the third quarter of fiscal
year 2000. In addition, for the three quarters ended February 24, 2001, the prior year comparable period was diluted by the lower margin Video and Networking products and the company
experienced a favorable increase in mix for the current year resulting from increased sales of higher margin products.

18

---

Measurement gross profit was $168.4 million for the third quarter of fiscal year 2001, an increase of 21% over $139.6 million for the prior year comparable period. Gross
margins remained fairly constant at 51.5% and 51.6% for the same periods. Measurement gross profit was $480.9 million for the first three quarters of fiscal year 2001, an increase of 29% over
$372.3 million for the first three quarters of fiscal year 2000. Gross margin increased to 51.7% for the first three quarters of fiscal year 2001 from 49.5% for the prior year comparable
period. The 2.2 percentage point increase in Measurement gross margin during the first three quarters of fiscal year 2001 was primarily attributable to a stronger mix of high-end
Measurement products, which typically have higher gross margins.

OPERATING EXPENSES

Consolidated operating expenses were $113.1 million and $336.0 million, for the quarter and three quarters ended February 24, 2001,
respectively. Included in operating expenses during these periods were $9.1 million and $9.4 million, respectively, of non-recurring credits, as well as an approximate
$1.4 million reduction to the previously recognized loss related to the sale of the Video and Networking division.

Consolidated
operating expenses were $154.8 million and $395.6 million for the quarter and three quarters ended February 26, 2000, respectively. Included in
operating expenses for those periods were $5.5 million and $31.6 million, respectively, of loss on sale of the Video and Networking division. In addition $36.6 million of
non-recurring charges were included in operating expenses for the quarter and three quarters ended February 26, 2000.

For
the quarter and three quarters ended February 24, 2001, Measurement operating expenses, excluding non-recurring charges and credits, and the gain or loss on the
sale of the Video and Networking division were $122.2 million and $346.8 million, respectively. Expenses for the current year periods increased 16% and 20%, respectively, over
Measurement operating expenses of $105.3 million and $289.3 million for the quarter and three quarters ended February 26, 2000.

Measurement
research and development expenses were $40.8 million for the third quarter of fiscal year 2001 and $113.8 million for the first three quarters of the current
year, increases of 35% and 29%, respectively, over research and development expenses of $30.3 million and $88.2 million for the same periods in the prior year. As a percentage of net
sales, Measurement research and development expenses have remained relatively constant between 11% and 12% in all periods.

Measurement
selling, general and administrative expenses were $81.2 million and $234.0 million or 25% of net sales for the quarter and three quarters ended
February 24, 2001. For the quarter and three quarters ended February 26, 2000, Measurement selling, general and administrative expenses were $74.6 million or 28% of net sales and
$200.5 million or 27% of net sales, respectively. The decrease in the percentage of net sales was primarily due to higher sales volume combined with effective control of expenses.

19

---

NON-OPERATING INCOME AND EXPENSE

Interest income was $16.2 million for the third quarter of fiscal year 2001 as compared with $8.2 million in the same quarter ended a year ago.
Interest income for the first three quarters of fiscal year 2001 was $43.7 million as compared with $9.3 million for the same period in the prior year. The increase in interest income
was primarily the result of interest earned on a portion of the proceeds from the sale of the Color Printing and Imaging division held as cash and cash equivalents and short-term
investments. Cash proceeds from the sale of the Color Printing and Imaging division were received in January 2000. Therefore, only two months of interest income earned on these increased
balances was reflected in the first three quarters of fiscal year 2000, as compared to the same period in fiscal year 2001, where the company earned interest income on the higher balances throughout
the first three quarters. Interest expense was $3.6 million and $10.0 million for the quarter and three quarters ended February 24, 2001, respectively, as compared with
$3.4 million and $12.6 million for the same periods a year ago. The year over year decrease can be attributed to the reduction in the balance of short-term and
long-term debt.

Other
income (expense), net was ($0.1) million and ($12.1) million of expense for the quarter and three quarters ended February 24, 2001, respectively, as compared with income
of $0.7 million and $3.2 million for the comparable periods in the prior year. The change was primarily attributable to the impairment of certain investments and other assets during the
three quarters ended February 24, 2001, as compared with gains on the disposition of certain assets during the prior year comparable period.

NET EARNINGS FROM CONTINUING OPERATIONS

Net earnings from continuing operations were $41.0 million or $0.43 per diluted share for the third quarter of fiscal year 2001. For the same quarter
ended a year ago, net losses from continuing operations were $16.8 million or $0.18 per diluted share. For the three quarters ended February 24, 2001, net earnings from continuing
operations were $105.2 million or $1.09 per diluted share, as compared with net losses of $18.8 million or $0.20 per diluted share for the same period in fiscal year 2000.

Excluding
pre-tax, net non-recurring credits of $9.1 million, net earnings for the third quarter of fiscal year 2001, would have been
$35.5 million or $0.37 per diluted share. For the same quarter ended a year ago, the company would have recognized net income of $20.0 million or $0.21 per diluted share, excluding
pre-tax, net non-recurring charges of $56.7 million. Included in the $56.7 million were: $36.6 million of net, non-recurring charges; ($0.2)
million of selling, general and administrative credits; $14.8 million of charges to cost of sales; and the $5.5 million loss related to the sale of the Video and Networking division.

Excluding
pre-tax, net non-recurring credits of $11.6 million, net earnings from continuing operations for the three quarters ended February 24,
2001, would have been $97.8 million or $1.01 per diluted share. Included in the credits
of $11.6 million were: $9.4 million of net non-recurring credits; $0.8 million of credits to cost of sales; and an approximate $1.4 million reduction to the
previously recognized loss related to the sale of the Video and Networking division.

Net
earnings for the same period a year ago would have been $35.0 million or $0.37 per diluted share, excluding pre-tax, net non-recurring charges of
$82.8 million. Included in the $82.8 million were: $36.6 million of net, non-recurring charges; ($0.2) million of selling, general and administrative credits;
$14.8 million of charges to cost of sales related to the 2000 plan; and the $31.6 million loss related to the sale of the Video and Networking division.

Increases
in earnings from continuing operations was due to higher earnings before income taxes as discussed above. Higher pre-tax earnings were offset in part by an
increase in the company's effective tax rate from 35% in previous quarters to 39% in the current quarter. The increase in the tax rate was primarily due to adjustments to tax valuation allowances with
respect to foreign tax credit carryovers.

20

---

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

At February 24 2001, the company's working capital was $847.6 million, an increase of $65.8 million from the end of fiscal year 2000 due
mainly to $88.1 million cash provided by operations. Current assets increased $61.4 million during the first three quarters of fiscal year 2001, while current liabilities decreased
$4.3 million over the same period.

At
February 24, 2001, the company held $809.1 million in cash and cash equivalents and short-term investments, as well as bank credit facilities totaling
$262.3 million, of which $257.4 million was unused. Unused facilities included $107.4 million in miscellaneous lines of credit and $150.0 million under revolving credit
agreements with United States and foreign banks.

Cash
and cash equivalents decreased $190.2 million from year-end due mainly to the investment of an additional $215.6 million in short-term
instruments over year-end and the repurchase of approximately 1.9 million shares of the company's common stock for $56.2 million during the first three quarters of fiscal
year 2001, offset by approximately $88.1 million of cash provided by operations. The share amount above has been restated to reflect the two-for-one stock split
effective October 31, 2000.

Net
property, plant and equipment decreased $15.2 million to $173.3 million at the end of the third quarter of fiscal year 2001. The decrease was due mainly to
$6.9 million of net disposals and $30.5 million in depreciation expense for the first three quarters of fiscal year 2001. These decreases were offset by approximately
$23.0 million in capital expenditures during the same period.

Cash
on hand, cash flows from operating activities and borrowing capacity are expected to be sufficient to fund operations and capital expenditures through May 2002.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." The statement will require recognition of all derivatives as either assets or liabilities on the balance sheet at fair value. The statement is effective
for the company's fiscal year 2002, as deferred by SFAS No. 137, but early adoption is permitted. Management has completed an evaluation of the effects of this statement and does not believe
that it will have a material effect on the company's consolidated financial statements.

In
December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." The effective
date of the bulletin was delayed according to SAB No. 101A and SAB No. 101B and will be effective for the company's fourth quarter of fiscal year 2001. Management has completed an
evaluation of the effects of this bulletin and does not believe that it will have a material effect on the company's consolidated financial statements.

FORWARD-LOOKING STATEMENTS

Statements and information included in this report that relate to future results and events (including new products) are based on the company's current
expectations. Words such as "may," "could," "expects," "believes," "forecasts," "plans," "estimates," "intends" and "anticipates" constitute forward-looking statements subject to a number of risk
factors, assumptions and uncertainties that could cause actual results to differ materially from those currently expected or desired. These risks are related to, but are not limited to, current
domestic and worldwide economic and market conditions, timely delivery of competitive products, competition, supplier risks, comparability of results, intellectual property risks, environmental risks
and other risk factors listed here and from time-to-time in the company's filings with the Securities and Exchange Commission and press releases.

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CURRENT ECONOMIC AND MARKET CONDITIONS

Tektronix is subject to economic and market conditions in the U.S., including the current conditions affecting the results of Tektronix' customers in the
semiconductor, communications, network, automated test equipment and other markets. During the latter part of the third quarter of fiscal year 2001, Tektronix experienced a slowdown in orders,
primarily in the manufacturing test areas such as mobile handset test products and products sold to
automated test equipment vendors. In addition, orders are cancelable by customers and consequently orders outstanding at the end of a quarter may not result in realized sales in the future. The
company may experience a decline in the sales growth rate as a result of the current economic conditions and the anticipated decline in orders. In response to the current economic conditions,
Tektronix is managing the company's cost structure to reduce spending where appropriate. A failure by the company to reduce expenses in a timely manner could adversely affect the company's future
operating results. In addition, notwithstanding such cost control measures, a continuing decline in the economy that adversely affects Tektronix' customers would likely adversely affect Tektronix.

WORLDWIDE ECONOMIC AND MARKET CONDITIONS

Tektronix currently maintains operations in the U.S., Europe, the Pacific, the Americas and Japan. During the last fiscal year, nearly one-half of
the company's revenues were from international sales. In addition, some of the company's manufacturing operations and key suppliers are located in foreign countries. As a result, the business is
subject to the worldwide economic and market conditions risks generally associated with doing business abroad, such as fluctuating exchange rates, the stability of international monetary conditions,
tariff and trade policies, domestic and foreign tax policies, foreign governmental regulations, political unrest, disruptions or delays in shipments and changes in other economic conditions. These
factors, among others, could influence the company's ability to sell in international markets, as well as its ability to manufacture products or procure supplies. A significant downturn in the global
economy or in the communications, internet, semiconductor, computer and electronic markets into which the company's customers sell their products could affect customer buying decisions. This could
adversely affect the company's results of operations, balance sheet or cash flows.

TIMELY DELIVERY OF COMPETITIVE PRODUCTS

Tektronix sells its products to customers that participate in rapidly changing high technology markets, which are characterized by short product life cycles.
The company's ability to deliver a timely flow of competitive new products and market acceptance of those products, as well as the ability to increase production or to develop and maintain effective
sales channels, is essential to growing the business. Because Tektronix sells test and measurement products that enable its customers to develop new technologies, the company must accurately predict
the ever-evolving needs of those customers and deliver appropriate products and technologies at competitive prices to meet customer demands. The company's ability to deliver such products
could be affected by engineering or other development program slippage as well as the availability of parts and supplies from third party providers on a timely basis and at reasonable prices. Failure
to deliver competitive products in a timely manner and at a reasonable price could have an adverse effect on the results of operations, balance sheet or cash flows of the company.

COMPETITION

Tektronix participates in the highly competitive test, measurement and monitoring industry, competing directly with Agilent Technologies, Inc., Acterna
Corporation, LeCroy Corporation and others for customers. Competition in the company's business is based primarily on product performance, technology, customer service, product availability and price.
Some of the company's competitors may have greater resources to apply to each of these
factors and in some cases have built significant reputations with the customer base in each market in which Tektronix competes. The company faces pricing pressures and may have an adverse impact on
the company's earnings. If the company is unable to compete effectively on these and other factors, it could have a material adverse effect on the company's results of operations, balance sheet or
cash flows.

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In the current business environment, the company must also compete with these and other companies to attract and retain talented employees who will be key to the ongoing success of
the company. Risks relating to this competition could include higher than anticipated compensation expense, additional stock option issuances, new product delays and other related delays in the
execution of the company's strategic plan.

SUPPLIER RISKS

The company's manufacturing operations are dependent on the ability of suppliers to deliver quality components, subassemblies and completed products in time to
meet critical manufacturing and distribution schedules. The company periodically experiences constrained supply of certain component parts in some product lines as a result of strong demand in the
industry for those parts. Such constraints, if persistent, may adversely affect operating results until alternate sourcing can be developed. Volatility in the prices of these component parts, an
inability to secure enough components at reasonable prices to build new products in a timely manner in the quantities and configurations demanded or, conversely, a temporary oversupply of these parts,
could adversely affect the company's future operating results.

INTELLECTUAL PROPERTY RISKS

As a technology-based company, Tektronix' success depends on developing and protecting its intellectual property. Tektronix relies generally on patent,
copyright, trademark and trade secret laws in the United States and abroad. Electronic equipment as complex as most of the company's products, however, is generally not patentable in its entirety.
Tektronix also licenses intellectual property from third parties and relies on those parties to maintain and protect their technology. The company cannot be certain that actions the company takes to
establish and protect proprietary rights will be adequate. If the company is unable to adequately protect its technology, or if the company is unable to continue to obtain or maintain licenses for
protected technology from third parties, it could have a material adverse effect on the company's results of operations and financial condition. From time to time in the usual course of business, the
company receives notices from third parties regarding intellectual property infringement or takes action against others with regard to intellectual property rights. Even where the company is
successful in defending or pursuing such claims, the company may incur significant costs. In the event of a successful claim against the company, Tektronix could lose its rights to needed technology
or be required to pay license fees for the infringed rights, either of which could have an adverse impact on the company's business.

ENVIRONMENTAL RISKS

Tektronix is subject to a variety of federal, state, local and foreign environmental regulations relating to the use, storage, discharge and disposal of its
hazardous chemicals used during the company's manufacturing process. The company operates a licensed hazardous waste management facility at its Beaverton campus. If Tektronix fails to comply with any
present and future regulations, the company could be subject to future liabilities or the suspension of production. In addition, such regulations could restrict the company's ability to expand its
facilities or could require Tektronix to acquire costly equipment, or to incur other significant expenses to comply with environmental regulations.

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OTHER RISK FACTORS

Other risk factors include but are not limited to changes in the mix of products sold, regulatory and tax legislation, changes in effective tax rates,
inventory risks due to changes in market demand or the company's business strategies, potential litigation and claims arising in the normal course of business, credit risk of customers, the fact that
a substantial portion of the company's sales are generated from orders received during each quarter and other risk factors.

The
company may make other forward-looking statements from time to time. Forward-looking statements speak only as of the date made. The company undertakes no obligation to publicly
release the result of any revisions to forward-looking statements which may be made to reflect subsequent events or circumstances or to reflect the occurrence of unanticipated events.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The company is exposed to financial market risks, including interest rate, equity price, and foreign currency exchange rate risks.

The
company maintains a short-term investment portfolio consisting primarily of fixed rate commercial paper, corporate notes and bonds, and asset backed securities with
maturities less than one year. An increase in interest rates would decrease the value of certain of these investments. However, a 10% increase in interest rates would
not have a material impact on the company's results of operations, balance sheet or cash flows as the company has the ability to hold these fixed rate investments until maturity.

At
February 24, 2001, the company's debt obligations had fixed interest rates. In management's opinion, a 10% change in interest rates would not be material to the company's
results of operations, balance sheet or cash flows.

The
company is exposed to equity price risk primarily through its marketable equity securities portfolio, including investments in Merix Corporation and other companies. The company
has not entered into any hedging programs to mitigate equity price risk. In management's opinion, an adverse change of 20% in the value of these securities would not be material to the company's
results of operations, balance sheet or cash flows.

The
company is exposed to foreign currency exchange rate risk primarily through transactions and commitments denominated in foreign currencies. The company utilizes derivative
financial instruments, primarily forward foreign currency exchange contracts, to mitigate this risk. The company's policy is to only enter into derivative transactions when the company has an
identifiable exposure to risk, thus not creating additional foreign currency exchange rate risk. In management's opinion, a 10% adverse change in foreign currency exchange rates would not have a
material effect on these instruments and therefore the company's results of operations, balance sheet or cash flows.

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PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|April 9, 2001 |  | TEKTRONIX, INC.
|------------- |  | ---------------
|              |  | By             

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