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

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FORM 10-Q

(Mark One)

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarter ended February 23, 2002, or,

|o | 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

93-0343990(State or other jurisdiction of
incorporation or organization)

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

97077(Zip Code)


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

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

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 ý    No o

AT
MARCH 23, 2002 THERE WERE 91,220,928 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 23, 2002 and May 26, 2001                                                                                                                                                      |                                                                                       | 2       
|                              |         | Condensed Consolidated Statements of Operations (Unaudited) 
for the Quarter ended February 23, 2002
and the Quarter ended February 24, 2001
for the Three Quarters ended February 23, 2002
and the Three Quarters ended February 24, 2001 |                                                                                       | 3       
|                              |         | Condensed Consolidated Statements of Cash Flows (Unaudited) 
for the Three Quarters ended February 23, 2002
and the Three Quarters ended February 24, 2001                                                                                 |                                                                                       | 4       
|                              |         | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                                                                                                                                            |                                                                                       | 5       
|                              | 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                                                                                                                                                                                                                                         

1

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Part I

Item 1.            Financial Statements

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

|                                    
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|ASSETS                              
|                                    
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|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|LIABILITIES AND SHAREHOLDERS' EQUITY
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
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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                                                               |                                                                                                  | $             | 203,604 |                      | $
|Cost of sales                                                           |                                                                                                  |               | 102,482 |                      |  
|                                                                        |                                                                                                  |               |         |                      |  
|                                                                        | Gross profit                                                                                     |               |         | 101,122              |  
|Research and development expenses                                       |                                                                                                  |               | 28,986  |                      |  
|Selling, general and administrative expenses                            |                                                                                                  |               | 55,515  |                      |  
|Equity in business ventures' loss (earnings)                            |                                                                                                  |               | 1,503   |                      |  
|Non-recurring expenses (credits), net                                   |                                                                                                  |               | 2,353   |                      |  
|Gain on sale of the Video and Networking division                       |                                                                                                  |               |        |                      |  
|Other operating expense, net                                            |                                                                                                  |               | 391     |                      |  
|                                                                        |                                                                                                  |               |         |                      |  
|                                                                        | Operating income                                                                                 |               |         | 12,374               |  
|Interest expense                                                        |                                                                                                  |               | (2,829  | )                    |  
|Interest income                                                         |                                                                                                  |               | 7,713   |                      |  
|Other non-operating (expense) income, net                               |                                                                                                  |               | (1,205  | )                    |  
|                                                                        |                                                                                                  |               |         |                      |  
|                                                                        | Earnings before taxes                                                                            |               |         | 16,053               |  
|Income tax expense                                                      |                                                                                                  |               | 5,619   |                      |  
|                                                                        |                                                                                                  |               |         |                      |  
|                                                                        | Net earnings from continuing operations                                                          |               |         | 10,434               |  
|Discontinued operations:                                                |                                                                                                  |               |         |                      |  
|                                                                        | Gain on sale of Color Printing and Imaging division (less applicable income tax expense of $504) |               |         |                     |  
|                                                                        |                                                                                                  |               |         |                      |  
|                                                                        | Net earnings                                                                                     |               | $       | 10,434               |  
|                                                                        |                                                                                                  |               |         |                      |  
|Net earnings per share  basic                                          |                                                                                                  | $             | 0.11    |                      | $
|Net earnings per share  diluted                                        |                                                                                                  |               | 0.11    |                      |  
|Net earnings per share from continuing operations  basic               |                                                                                                  |               | 0.11    |                      |  
|Net earnings per share from continuing operations  diluted             |                                                                                                  |               | 0.11    |                      |  
|Net earnings per share from discontinued operations  basic and diluted |                                                                                                  |               |        |                      |  
|Weighted average shares outstanding  basic                             |                                                                                                  |               | 91,316  |                      |  
|Weighted average shares outstanding  diluted                           |                                                                                                  |               | 92,428  |                      |  

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                                                                        |                                                        | $                                                   | 26,625 
|Adjustments to reconcile net earnings to net cash provided by operating activities: |                                                        |                                                     |        
|                                                                                    | Pre-tax gain on the sale of Color Printing and Imaging |                                                     |        
|                                                                                    | Gain on sale of Video and Networking division          |                                                     |        
|                                                                                    | Depreciation and amortization expense                  |                                                     |        
|                                                                                    | Asset impairments                                      |                                                     |        
|                                                                                    | Loss on the disposition of fixed assets                |                                                     |        
|                                                                                    | Loss on the disposition of investments                 |                                                     |        
|                                                                                    | Bad debt expense                                       |                                                     |        
|                                                                                    | Deferred income taxes                                  |                                                     |        
|                                                                                    | Equity in business ventures' loss (earnings)           |                                                     |        
|                                                                                    | Changes in operating assets and liabilities:           |                                                     |        
|                                                                                    |                                                        | Accounts receivable                                 |        
|                                                                                    |                                                        | Inventories                                         |        
|                                                                                    |                                                        | Other current assets                                |        
|                                                                                    |                                                        | Accounts payable and accrued liabilities            |        
|                                                                                    |                                                        | Accrued compensation                                |        
|                                                                                    |                                                        | Deferred revenue                                    |        
|                                                                                    |                                                        | Other long-term assets and liabilities, net         |        
|                                                                                    |                                                        |                                                     |        
|                                                                                    |                                                        | Net cash provided by operating activities           |        
|CASH FLOWS FROM INVESTING ACTIVITIES                                                |                                                        |                                                     |        
|Acquisition of property, plant and equipment                                        |                                                        |                                                     | (12,322
|Proceeds from the disposition of fixed assets                                       |                                                        |                                                     | 1,139  
|Dividend received from business venture                                             |                                                        |                                                     |       
|Long-term investments                                                               |                                                        |                                                     | (66,537
|Short-term investments                                                              |                                                        |                                                     | 80,741 
|                                                                                    |                                                        |                                                     |        
|                                                                                    |                                                        | Net cash provided by (used in) investing activities |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                                |                                                        |                                                     |        
|Net change in short-term debt                                                       |                                                        |                                                     | (974   
|Repayment of long-term debt                                                         |                                                        |                                                     | (21,987
|Proceeds from employee stock plans                                                  |                                                        |                                                     | 9,661  
|Repurchase of common stock                                                          |                                                        |                                                     | (23,242
|                                                                                    |                                                        |                                                     |        
|                                                                                    |                                                        | Net cash used in financing activities               |        
|                                                                                    |                                                        |                                                     |        
|Net decrease in cash and cash equivalents                                           |                                                        |                                                     | (19,392
|Cash and cash equivalents at beginning of period                                    |                                                        |                                                     | 292,429
|                                                                                    |                                                        |                                                     |        
|Cash and cash equivalents at end of period                                          |                                                        | $                                                   | 273,037
|                                                                                    |                                                        |                                                     |        
|SUPPLEMENTAL DISCLOSURES OF CASH FLOWS                                              |                                                        |                                                     |        
|Income taxes paid  net                                                             |                                                        | $                                                   | 7,835  
|Interest paid                                                                       |                                                        |                                                     | 9,303  

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

4

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    The Company

Tektronix, Inc. ("Tektronix" or the "Company") is a test, measurement and monitoring company, providing measurement solutions to the communications,
computer and semiconductor industries worldwide. Prior to fiscal year 2001, the Company operated in three major business divisions: Measurement, Color Printing and Imaging, and Video and Networking.
During fiscal year 2000, the Company sold substantially all of the assets of the Color Printing and Imaging and Video and Networking divisions. The Company maintains operations in four major
geographies: the Americas, including the United States, Mexico, Canada and South America; Europe; the Pacific, excluding Japan; and Japan.

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

2.    Financial statement presentation

The condensed consolidated financial statements and notes thereto have been prepared by 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. The consolidated
financial statements include the accounts of Tektronix and its majority-owned subsidiaries. Investments in joint ventures and minority-owned companies where the Company exercises significant influence
are accounted for under the equity method with the Company's percentage of earnings included in Equity in business ventures' loss (earnings) on the Condensed Consolidated Statements of Operations.
Significant intercompany
transactions and balances have been eliminated. Certain prior year amounts have been reclassified to conform to the current year's presentation with no effect on previously reported earnings. The
Company's fiscal year is the 52 or 53 weeks ending the last Saturday in May. Fiscal years 2002 and 2001 are 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 record the results of discontinued operations, affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the revenues and expenses reported during the period. Actual results may differ from estimated amounts. Management
believes that the condensed consolidated 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 in the Company's annual report on
Form 10-K for the year ended May 26, 2001.

3.    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. In the first quarter
of fiscal year 2002, the Company settled certain outstanding contingencies related to the sale of this division and recognized a gain from discontinued operations of $0.9 million, net of
related income tax expense. As of February 23, 2002, the accrual for estimated liabilities related to the sale was $39.0 million, which is included in Accounts payable and accrued
liabilities on the Condensed Consolidated Balance Sheets.

5

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4.    Sale of Video and Networking

In the second quarter of fiscal year 2001, the Company resolved certain outstanding contingencies related to the sale of the Video and Networking division which
occurred in fiscal year 2000. The resolution of these items resulted in a net credit of approximately $1.5 million, which is included in Gain on sale of the Video and Networking division in the
Condensed Consolidated Statements of Operations.

5.    Repurchase of Common Stock

On March 15, 2000, the Board of Directors authorized the purchase of up to $550.0 million of the Company's common stock on the open market or
through negotiated transactions. During the third quarter of fiscal year 2002, the Company repurchased a total of 0.1 million shares for $2.6 million. During the first three quarters of
fiscal year 2002, the Company repurchased a total of 1.2 million shares for $23.2 million. As of February 23, 2002, the Company has repurchased a total of 7.4 million
shares at an average price of $25.52 per share totaling $189.3 million under this authorization.

6.    Non-recurring Expenses (Credits), Net

During the first three quarters of fiscal year 2002, the Company incurred $14.7 million of net non-recurring expenses including
$14.8 million of expenses to better align future operating expense levels with reduced sales levels offset by $0.1 million of reserve reversals related to the 2000 Plan which is
discussed below.

The
$14.8 million of non-recurring expenses included $13.4 million of severance related costs for 413 employees and $1.4 million associated with exiting
certain foreign operations. As of February 23, 2002, the Company maintained liabilities of $3.3 million related to the severance expenses of 95 employees and $0.1 million related
to the exit from certain foreign operations discussed above. These actions do not relate to the previously announced 1999 Plan, which had no activity during the quarter, or the 2000 Plan discussed
below.

The 2000 Plan

In the third quarter of fiscal year 2000, the Company announced and began to implement a series of actions (the "2000 Plan") intended to consolidate worldwide
operations and transition the Company from a portfolio of businesses to a single smaller business focused on test, measurement and monitoring products. Major actions under the 2000 Plan included the
exit from and consolidation within underutilized facilities, including the write-off of assets 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 Measurement business and to eliminate duplicative functions within the
Company's infrastructure.

During
the first three quarters of fiscal year 2002, $0.1 million of previously accrued amounts were reversed from the payables and other liabilities reserve. The reversal
resulted primarily from the favorable settlement of various international office leases.

Under
the 2000 Plan, headcount reductions, net of current and prior period adjustments and reversals, totaled 113 employees. As of February 23, 2002, severance of approximately
$7.6 million has been paid to 111 of these employees, with the remaining employees to be paid severance of approximately $0.4 million under contracts extending through fiscal year 2002.

6

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7.    Earnings Per Share

|                                                             |  | Quarter ended |        | Three quarters ended
|------------------------------------------------------------ |  | ------------- | ------ | --------------------
|
|                                                            
|Net earnings                                                 |  | $             | 10,434 |                     
|                                                             |  |               |        |                     
|Weighted average shares used for basic earnings per share    |  |               | 91,316 |                     
|Effect of dilutive stock options                             |  |               | 1,112  |                     
|                                                             |  |               |        |                     
|Weighted average shares used for dilutive earnings per share |  |               | 92,428 |                     
|                                                             |  |               |        |                     
|Net earnings per share  basic                               |  | $             | 0.11   |                     
|Net earnings per share  diluted                             |  | $             | 0.11   |                     

Options
to purchase an additional 5,034,506 and 2,309,500 shares of common stock were outstanding at February 23, 2002 and February 24, 2001 respectively, but were not included in the
computation of diluted net earnings per share because their effect would be antidilutive.

8.    Short-term and Long-term Marketable Investments

At May 26, 2001, with the exception of corporate equity securities, the Company recorded marketable investments as held-to-maturity
based on the Company's intent and ability to hold them. As such they were recorded at their amortized cost. As of February 23, 2002, the Company converted its investments to
available-for-sale to allow the Company to maximize the investment returns by reacting to fluctuations in interest rates. This resulted in unrealized holding gains of
$4.2 million which are excluded from earnings and included, net of tax, in Accumulated other comprehensive income on the Condensed Consolidated Balance Sheets.

Short-term
marketable investments held at February 23, 2002 and May 26, 2001 consisted of the following:

|                                   |  | Feb. 23, 2002 |         | 
|---------------------------------- |  | ------------- | ------- | 
|
|                                  
|Corporate notes and bonds          |  | $             | 91,384  | 
|Asset & mortgage backed securities |  |               | 66,290  | 
|Agency notes and bonds             |  |               | 38,269  | 
|Commercial paper                   |  |               |        | 
|Auction rate floaters              |  |               | 5,101   | 
|Money market                       |  |               | 220     | 
|                                   |  |               |         | 
|Short-term marketable investments  |  | $             | 201,264 | 
|                                   |  |               |         | 

7

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Long-term
marketable investments held at February 23, 2002 and May 26, 2001 consisted of the following:

|                                   |  | Feb. 23, 2002 |         | 
|---------------------------------- |  | ------------- | ------- | 
|
|                                  
|Asset & mortgage backed securities |  | $             | 106,021 | 
|Corporate notes and bonds          |  |               | 87,089  | 
|Agency notes and bonds             |  |               | 61,911  | 
|                                   |  |               |         | 
|Long-term marketable investments   |  | $             | 255,021 | 
|                                   |  |               |         | 

Investments
in marketable equity securities are classified as available-for-sale and reported at fair market value on the Condensed Consolidated Balance Sheets and are included
in 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. 23,
2002 |        | May 26,
2001
|------------------------------------------ |  | ------------- | ------ | ------------
|                                          
|Cost basis of marketable equity securities |  | $             | 15,861 |             
|Unrealized holding gains                   |  |               | 8,051  |             
|                                           |  |               |        |             
|Fair value of marketable equity securities |  | $             | 23,912 |             
|                                           |  |               |        |             

9.    Inventories, net

Inventories, net of related reserves consisted of the following:

|(In thousands)   |  | Feb. 23,
2002 |         | May 26,
2001
|---------------- |  | ------------- | ------- | ------------
|                
|Materials        |  | $             | 2,347   |             
|Work in process  |  |               | 53,264  |             
|Finished goods   |  |               | 79,756  |             
|                 |  |               |         |             
|Inventories, net |  | $             | 135,367 |             
|                 |  |               |         |             

10.  Property, Plant and Equipment

Property, plant and equipment consisted of the following:

|(In thousands)                     |  | Feb. 23,
2002 |          | May 26,
2001 |  
|---------------------------------- |  | ------------- | -------- | ------------ | -
|                                   | 
|Land                               |  | $             | 1,656    |              | $
|Buildings                          |  |               | 147,462  |              |  
|Machinery and equipment            |  |               | 265,428  |              |  
|Accumulated depreciation           |  |               | (264,399 | )            |  
|                                   |  |               |          |              |  
|Property, plant and equipment, net |  | $             | 150,147  |              | $
|                                   |  |               |          |              |  

8

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11.  Comprehensive Income

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

|                            |                                                                                                                         | Quarter ended |        | Three quarters ended |  
|--------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ------------- | ------ | -------------------- | -
|
|                            |                                                                                                                        
|Net earnings                |                                                                                                                         | $             | 10,434 |                      | $
|Other comprehensive income: |                                                                                                                         |               |        |                      |  
|                            | Currency translation adjustment, net of taxes of $(2,243), (1,208), (2,356) and (5,526), respectively                   |               |        | (3,365               | )
|                            | Unrealized gain (loss) on available-for-sale securities, net of taxes of $1,222, (1,273), (257) and (968), respectively |               |        | 1,839                |  
|                            |                                                                                                                         |               |        |                      |  
|Total comprehensive income  |                                                                                                                         | $             | 8,908  |                      | $
|                            |                                                                                                                         |               |        |                      |  

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
income |  
|--------------------------- |  | ---------------------------- | ------ | ------------------------------------------------------------------- | - | -------------------------------------- | -
|Balance as of May 26, 2001  |  | $                            | 2,050  |                                                                     | $ | 7,864                                  |  
|Q1 activity                 |  |                              | 2,310  |                                                                     |   | 1,532                                  |  
|                            |  |                              |        |                                                                     |   |                                        |  
|Balance as of Aug. 25, 2001 |  |                              | 4,360  |                                                                     |   | 9,396                                  |  
|Q2 activity                 |  |                              | (2,479 | )                                                                   |   | (3,752                                 | )
|                            |  |                              |        |                                                                     |   |                                        |  
|Balance as of Nov. 24, 2001 |  | $                            | 1,881  |                                                                     | $ | 5,644                                  |  
|Q3 activity                 |  |                              | (3,365 | )                                                                   |   | 1,839                                  |  
|                            |  |                              |        |                                                                     |   |                                        |  
|Balance as of Feb. 23, 2002 |  | $                            | (1,484 | )                                                                   | $ | 7,483                                  |  
|                            |  |                              |        |                                                                     |   |                                        |  

12.  Derivative Financial Instruments and Risk Management

The Company adopted Statement of Financial Accounting Standard ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities and the
subsequent amendments SFAS 137 and SFAS 138, on May 27, 2001. These pronouncements require that all derivatives, including foreign currency exchange contracts, be recognized on
the balance sheet at fair value. Derivatives that are not hedges
must be recorded at fair value through earnings. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in
fair value of underlying assets or liabilities through earnings or recognized in other comprehensive earnings until the underlying hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value is to be immediately recognized in earnings. The Company recorded a net-of-tax cumulative-effect-type gain adjustment of less than
$0.1 million in accumulated other comprehensive earnings to recognize at fair value all derivatives that are designated as cash-flow hedging instruments upon adoption of SFAS
No. 133 on May 27, 2001. This gain adjustment, which was reclassified to earnings during the first quarter ending August 25, 2001, consisted of gains related to foreign currency
forwards.

9

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Derivative Instruments and Hedging Activities

The Company's activities expose it to a variety of market risks, including the effects of changes in foreign currency exchange rates. The financial exposures are
monitored and managed by the Company as an integral part of its overall risk management program. The Company's risk management program seeks to reduce the potentially adverse effects that the
volatility of the markets may have on its operating results. The Company maintains a foreign currency risk management strategy that uses derivative instruments to protect its interests from
unanticipated fluctuations in earnings and cash flows caused by volatility in currency exchange rates. By using derivative financial instruments to hedge exposures to changes in exchange rates, the
Company exposes itself to credit risk and market risk. The Company manages exposure to counterparty credit risk by entering into derivative financial instruments with highly rated institutions that
can be expected to fully perform under the terms of the agreement. Market risk is the adverse effect on the value of a financial instrument that results from a change in currency exchange rates. The
market risk associated with foreign exchange contracts is managed by the establishment and monitoring of parameters that limit the types and degree of market risk that may be undertaken.

Cash Flow Hedges

Cash flow hedges are hedges of anticipated transactions or of the variability of cash flows to be received or paid related to a recognized asset or liability. The
Company purchases foreign exchange options and forward exchange contracts expiring within one year as hedges of anticipated purchases and sales that are denominated in foreign currencies. These
contracts are entered into to protect against the risk that the eventual cash flows resulting from such transactions will be adversely affected by changes in exchange rates.

Net Investment Hedges

By maintaining equity investments in foreign subsidiaries, the Company is exposed to foreign currency risk related to such investments. The Company hedges its
foreign currency risk related to certain net investments in foreign subsidiaries through the use of nonderivative intercompany financial instruments.

Accounting for Derivatives and Hedging Activities

All derivatives are recognized on the balance sheet at their fair value. Changes in the fair value of a derivative that is highly effective as  and
that is designated and qualifies as  a cash-flow hedge are recorded in other comprehensive earnings, until the underlying transactions occur at which time the gains or losses
are recorded in Net sales. As of February 23, 2002, the Company did not have any cash flow hedges, and therefore, there were no deferred cash flow hedge gains or losses accumulated in
Accumulated Other Comprehensive Earnings. Gains or losses on nonderivative intercompany financial instruments are recorded in other comprehensive earnings until the subsidiary is substantially
liquidated. As of February 23, 2002, $3.1 million of deferred gains from nonderivative financial instruments were recorded in Accumulated Other Comprehensive Income, none of which is
anticipated to be recorded in the Statement of Operations in the next twelve months. Changes in the fair value of a derivative that do not qualify as a hedge are recorded in current period earnings in
Other expense, net.

10

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The
Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge items.
This process includes linking all derivatives that are designated as cash flow hedges to specific anticipated transactions. The Company also formally assesses, both at the hedge's inception and on an
ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The Company discontinues hedge accounting
prospectively when (1) it is determined that a derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative expires or is
sold, terminated, or exercised or (3) the derivative is discontinued as a hedge instrument, because it is unlikely that an anticipated transaction will occur. If hedge accounting is
discontinued because it is probable that an anticipated transaction will not occur, the derivative will continue to be carried on the balance sheet at its fair value, and gains and losses that were
accumulated in other comprehensive earnings will be recognized immediately in earnings. In all other situations in which hedge accounting is discontinued, the derivative will be carried at its fair
value on the balance sheet, with changes in its fair value recognized in current-period earnings.

13.  Business Segments

The Company's revenue is derived principally through the development and marketing of a range of test and measurement products in several operating segments that
have similar economic characteristics as well as similar customers, production processes and distribution methods. Accordingly, the Company reports as a single Measurement segment.

Consolidated
net sales to external customers by region were as follows:

|         |                | Quarter ended |        | Three quarters ended
|-------- | -------------- | ------------- | ------ | --------------------
|
|        
|Americas |                |               |        |                     
|         | United States  |               | $      | 97,293              
|         | Other Americas |               |        | 7,465               
|Europe   |                |               | 46,162 |                     
|Pacific  |                |               | 34,121 |                     
|Japan    |                |               | 18,563 |                     
|         |                |               |        |                     
|         |                | Net sales     |        | $                   
|         |                |               |        |                     

14.  Commitments

During the third quarter of fiscal year 2002, the Company reached an agreement with Sony Corporation ("Sony") to acquire Sony's 50% interest in Sony/Tektronix
Corporation ("Sony/Tektronix") through a redemption of Sony's shares for 8 billion Yen or approximately $60 million at February 23, 2002. The Company currently accounts for its
investment in Sony/Tektronix under the equity method. The Company expects the transaction to close on September 30, 2002, subject to certain conditions, at which time the Company will have 100%
ownership of Sony/Tektronix. The transaction will be accounted for by the purchase method of accounting, and accordingly, beginning on the date of acquisition the results of operations, financial
position and cash flows of Sony/Tektronix will be consolidated in the Company's financial statements.

The
Company enters into non-cancelable minimum purchase commitments primarily for the purchase of raw materials used in the manufacturing of products. These commitments are
entered into in the ordinary course of business as they allow the Company to secure component materials for future needs through last time buy or volume discount arrangements.

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15.  Subsequent Events

On March 18, 2002, the Company signed an agreement to acquire Profile Optische Systeme GmbH, an optical component test and measurement company located in
Germany for $25.0 million.

During
the fourth quarter of fiscal year 2002, the Company received $20.6 million as prepayment in full on the notes receivable and associated interest receivable from Grass
Valley Group, Inc. ("GVG"). This resulted in a reduction of short-term notes receivable of $19.8 million. The remaining $0.8 million was recorded in interest income as
a gain on the prepayment based on the discount associated with the notes receivable. In addition, the Company received $11.8 million for its equity interest in GVG, which was recorded at
$11.5 million in Other Current Assets. The $0.3 million gain was recorded in Other non-operating income (expense), net. As a result this settlement, the long-term
portion of the notes receivable and the equity investment were reclassified from Other long-term assets to Other current assets as of February 23, 2002.

16.  Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations". This statement discontinues the use of the pooling of interest method of accounting for business combinations. This statement is effective for all business combinations after
June 30, 2001. Management has completed an evaluation of the effects of this statement and believes that it will not have a material effect on the Company's consolidated financial statements.

In
July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142 requires the use of a nonamortization approach to account for
purchased goodwill and certain intangibles. Under a nonamortization approach, goodwill and certain intangibles will not be amortized into results of operations, but instead will be reviewed for
impairment and written down in the periods in which the recorded value of goodwill and certain intangibles is determined to be greater than its fair value. The Company early adopted the provisions of
SFAS No. 142 as of May 27, 2001. This standard only permits prospective application, therefore adoption does not affect previously reported financial information. The principal effect of
adopting SFAS No. 142 was the cessation of the amortization of goodwill beginning May 27, 2001. The initial evaluation of impairment of existing goodwill resulted in no impairment at the
time of adoption. Goodwill amortization for the three quarters ended February 24, 2001 amounted to approximately $0.8 million net of tax, which would have impacted the reported basic and
diluted earnings per share by $0.01 for the three quarters ended February 24, 2001.

In
June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations," which addresses financial accounting and reporting for certain obligations
associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The provisions of SFAS No. 143 are required to be applied starting with
fiscal years beginning after June 15, 2002, however early adoption is encouraged. The Company early adopted the provisions of SFAS No. 143 as of May 27, 2001. As a result of the
early adoption of this statement, the Company recorded a liability of $1.5 million for retirement obligations of certain long-lived assets during the second quarter of fiscal year
2002.

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In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This Statement supersedes FASB Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the accounting and reporting provisions of 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," for the disposal of a segment of a business. SFAS No. 144 maintains the method for recording an impairment on assets to be held under SFAS No. 121 and establishes a single
accounting model based on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale. This statement also broadens the presentation of discontinued
operations to include more disposal transactions. The provisions of SFAS No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001.
Management believes the adoption of the provisions of this statement will not have a material effect on the Company's consolidated financial statements.

In
September 2001, the Emerging Issues Task Force ("EITF") issued EITF 01-10,"Accounting for the Impact of the
Terrorist Attacks of September 11, 2001." This pronouncement discusses the classification and the timing of reporting losses directly associated with the terrorist attacks of
September 11, 2001. This did not have a material impact on the Company's consolidated financial statements as no property or personnel were lost as a result of these attacks.

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

Forward-Looking Statements

Statements and information included in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within
the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this Quarterly Report on Form 10-Q include statements regarding
Tektronix' future expectations, intentions, beliefs and strategies regarding the future, including orders, cost reduction efforts related to the economic downturn, and the acquisition of Sony
Corporation's 50% interest in Sony/Tektronix Corporation, which is currently equally owned by Sony Corporation and Tektronix. The Company may make other forward-looking statements from time to time,
including in press releases and public conference calls and Webcasts. All forward-looking statements made by Tektronix are based on information available to Tektronix at the time the statements are
made, and Tektronix assumes no obligation to update any forward-looking statements. It is important to note that actual results are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those included in such forward-looking statements. Some of these risks and uncertainties are discussed below in the Risks and Uncertainties section of this
Management's Discussion and Analysis.

General

Tektronix, Inc. ("Tektronix" or the "Company") is a test, measurement and monitoring company, providing measurement solutions to the communications,
computer and semiconductor industries worldwide. Prior to fiscal year 2001, the Company operated in three major business divisions: Measurement, Color Printing and Imaging, and Video and Networking.
During fiscal year 2000, the Company sold substantially all of the assets of the Color Printing and Imaging and Video and Networking divisions. The Company maintains operations in four major
geographies: the Americas, including the United States, Mexico, Canada and South America; Europe; the Pacific, excluding Japan; and Japan.

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

Critical Accounting Policies

Management has identified the Company's "critical accounting policies". These policies have the potential to have a more significant impact on the Company's
financial statements, either because of the significance of the financial statement item to which they relate, or because they require judgment and estimation due to the uncertainty involved in
measuring, at a specific point in time, events which will be settled in the future.

The
Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is probable.
Generally, these criteria are met at the time the product is shipped. Upon shipment, the Company also provides for estimated costs that may be incurred for product warranties, post-sales
support and sales returns. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled. Revenue earned from service is
recognized ratably over the contractual period or as the services are performed.

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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's inventory includes raw materials, work in process, finished goods and demonstration equipment of $135.4 million as of February 23, 2002. The
Company periodically reviews its recorded inventory and estimates a reserve for obsolete or slow-moving items. Such estimates are difficult to make under current economic conditions. If
actual demand and market conditions are less favorable than those projected by management, additional reserves may be required. If actual market conditions are more favorable than anticipated, our
cost of sales will be lower than expected in that period.

The
Company regularly reviews all of its long-lived assets, including property, plant and equipment and other intangible assets, for impairment whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. If the total of future cash flows is less than the carrying amount of the assets, an impairment loss based on the excess of the
carrying amount over the fair value of the assets is recorded. As of February 23, 2002, the Company held $160.3 million of property, plant and equipment, net of accumulated depreciation,
and other intangible assets. Estimates of the future cash
flows associated with the assets and fair values are critical to these assessments. Changes in these estimates could have a material effect on the financial statements in any given period.

The
Company's provision for income taxes and the determination of the resulting deferred tax assets and liabilities involves a significant amount of management judgment. The quarterly
provision for income taxes is based upon an estimate of pre-tax financial accounting income for the full year and is impacted by various differences between financial accounting income and
taxable income. Judgment is also applied in determining whether the deferred tax assets will be realized in full or in part. In management's judgment, when it is more likely than not that all or some
portion of specific deferred tax assets such as foreign tax credit carryovers will not be realized, a valuation allowance must be established for the amount of the deferred tax assets that are
determined not to be realizable. The valuation allowance at February 23, 2002, was $30.5 million. Accordingly, if the Company's facts or financial results were to change thereby
impacting the likelihood of realizing the deferred tax assets, judgment would have to be applied to determine the amount of the valuation allowance required to be in place on the financial statements
in any given period.

Benefit
plans are a significant cost of doing business and yet represent obligations that will be settled far in the future. Pension and postretirement benefit accounting is intended to
reflect the recognition of future benefit costs over the employee's approximate service period based on the terms of the plans and the investment and funding decisions made by a Company. The
accounting requires that management make assumptions regarding such variables as the expected long-term rate of return on assets and the discount rate, which are estimated to be 10.0% and
7.75%, respectively. Changes in these key assumptions can have a significant impact on the projected benefit obligations, funding requirements and net periodic benefit cost or credit recorded by the
Company.

The
Company is subject to litigation concerning patent infringement, environmental and employment issues. In addition, through its acquisition and divestiture activities, the Company is
subject to certain indemnities and other contingencies. The Company reviews the status of its litigation, indemnities and other contingencies on a regular basis. As a result, liabilities have been
established based upon management's best estimate, at that time, of the ultimate outcome of these contingent liabilities. Included in these liabilities is a reserve of $39.0 million related to
the sale of the Color Printing and Imaging Division. Changes in these estimates or settlement of these issues that differs from the estimated amounts could have a material effect on the financial
statements in any given period.

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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. In the first quarter
of fiscal year 2002, the Company settled certain outstanding contingencies related to the sale of this division and recognized a gain from discontinued
operations of $0.9 million, net of related income tax expense. As of February 23, 2002, the accrual for estimated liabilities related to the sale was $39.0 million, which is
included in Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets.

Sale of Video and Networking

In the second quarter of fiscal year 2001, the Company resolved certain outstanding contingencies related to the sale of the Video and Networking division which
occurred in fiscal year 2000. The resolution of these items resulted in a net credit of approximately $1.5 million, which is included in Gain on sale of the Video and Networking division in the
Condensed Consolidated Statements of Operations.

Repurchase of Common Stock

On March 15, 2000, the Board of Directors authorized the purchase of up to $550.0 million of the Company's common stock on the open market or
through negotiated transactions. During the third quarter of fiscal year 2002, the Company repurchased a total of 0.1 million shares for $2.6 million. During the first three quarters of
fiscal year 2002, the Company repurchased a total of 1.2 million shares for $23.2 million. As of February 23, 2002, the Company has repurchased a total of 7.4 million
shares at an average price of $25.52 per share totaling $189.3 million under this authorization.

Non-recurring Expenses (Credits), net

During the first three quarters of fiscal year 2002, the Company incurred $14.7 million of net non-recurring expenses including
$14.8 million of expenses to better align future operating expense levels with reduced sales levels offset by $0.1 million of reserve reversals related to the 2000 Plan which is
discussed below.

The
$14.8 million of non-recurring expenses included $13.4 million of severance related costs for 413 employees and $1.4 million associated with exiting
certain foreign operations. As of February 23, 2002, the Company maintained liabilities of $3.3 million related to the severance expenses of 95 employees and $0.1 million related
to the exit from certain foreign operations discussed above. These actions do not relate to the previously announced 1999 Plan, which had no activity during the quarter, or the 2000 Plan discussed
below.

The 2000 Plan

In the third quarter of fiscal year 2000, the Company announced and began to implement a series of actions (the "2000 Plan") intended to consolidate worldwide
operations and transition the Company from a portfolio of businesses to a single smaller business focused on test, measurement and monitoring products. Major actions under the 2000 Plan included the
exit from and consolidation within underutilized facilities, including the write-off of assets 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 Measurement business and to eliminate duplicative functions within the
Company's infrastructure.

During
the first three quarters of fiscal year 2002, $0.1 million of previously accrued amounts were reversed from the payables and other liabilities reserve. The reversal
resulted primarily from the favorable settlement of various international office leases.

Under
the 2000 Plan, headcount reductions, net of current and prior period adjustments and reversals, totaled 113 employees. As of February 23, 2002, severance of approximately
$7.6 million has been paid to 111 of these employees, with the remaining employees to be paid severance of approximately $0.4 million under contracts extending through fiscal year 2002.

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Results of Operations

Economic Conditions

Beginning in fiscal year 2001 and continuing into fiscal year 2002, economic conditions have had a negative impact on many markets into which the Company sells
products including, but not limited to, optical design and manufacturing, mobile handset manufacturing, automated test equipment, telecommunications and semiconductor design and manufacturing. These
conditions have adversely impacted the Company since the latter part of fiscal year 2001 as product orders declined and order cancellations were higher than in the prior year. To reduce ongoing fixed
operating costs in response to the reduced level of orders and associated sales, the Company incurred certain non-recurring costs in the first three quarters of fiscal year 2002. The
Company anticipates approximately $5.0 million to $10.0 million of additional non-recurring costs during the fourth quarter of fiscal year 2002. Management
of the Company is unable to predict the ultimate severity and duration of the recent economic conditions or their impact on the Company.

Orders

Consolidated orders for the third quarter of fiscal year 2002 were $175.1 million, a decrease of $141.2 million or 45% from orders of
$316.3 million in the third quarter of fiscal year 2001. Consolidated orders decreased in all geographies, with the United States and Europe experiencing the steepest declines. Orders from the
United States were $79.9 million, a decrease of $75.1 million or 48% from third quarter orders in the prior year. Orders from Europe were $37.5 million, a decrease of
$31.0 million or 45% from third quarter fiscal year 2001 orders.

Consolidated
orders for the first three quarters of fiscal year 2002 were $526.4 million, a decrease of $414.0 million or 44% from orders of $940.4 million in the
first three quarters of fiscal year 2001. Consolidated orders decreased in all geographies, with the United States and Europe experiencing the steepest declines. Orders from the United States were
$229.0 million, a decrease of $257.0 million or 53% from orders in the first three quarters of the prior year. Orders from Europe were $127.4 million, a decrease of
$61.1 million or 32% from orders in the first three quarters of fiscal year 2001.

These
declines resulted from the above noted economic downturn that, during the first three quarters of fiscal year 2002, continued to negatively impact many markets into which the
Company sells products.

Net Sales

Consolidated net sales of $203.6 million for the third quarter of fiscal year 2002 decreased $123.3 million or 38% from the third quarter fiscal
year 2001 net sales of $326.9 million. Consolidated sales declines were experienced in all major geographies, with the United States and Europe experiencing the most significant declines. Net
sales in the United States were $97.3 million, a decrease of $68.0 million or 41% from net sales for the third quarter of fiscal year 2001. Net sales in Europe were $46.2 million,
a decrease of $26.6 million or 37% from net sales for the third quarter of the prior year.

Consolidated
net sales of $634.8 million for the first three quarters of fiscal year 2002 decreased $295.4 million or 32% from first three quarters of fiscal year 2001 net
sales of $930.2 million. Consolidated sales declines were experienced in all major geographies, with the United States and Europe experiencing the most significant declines. Net sales in the
United States were $317.0 million, a decrease of $165.9 million or 34% from net sales for the first three quarters of fiscal year 2001. Net sales in Europe were $141.8 million, a
decrease of $50.9 million or 26% from net sales for the first three quarters of the prior year.

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The
declines in sales for the quarter and three quarters ended February 23, 2002 can be primarily attributed to the above noted economic downturn and the resulting orders
declines. Order declines exceeding sales declines are reflected in a reduction in backlog from $170.3 million at May 26, 2001 to $99.0 million at February 23, 2002.

Gross Profit and Gross Margin

Consolidated gross profit was $101.1 million for the quarter ended February 23, 2002, a decrease of 40% from gross profit of $168.4 million
for the third quarter of fiscal year 2001. For the first three quarters ended February 23, 2001, consolidated gross profit was $316.3 million, a decrease of 34% from gross profit of
$480.9 million for the first three quarters of fiscal year 2001. These decreases were primarily due to lower sales during the first three quarters of fiscal year 2002 as compared with the first
three quarters of fiscal year 2001.

Gross
margins for the quarter and three quarters ended February 23, 2002 were 50%, a decrease from 52% for the comparable periods of fiscal year 2001. These decreases in gross
margin are attributable to certain fixed costs being spread over a lower relative sales base, increased pricing pressures and proportionately higher additions to inventory reserves in the first three
quarters of fiscal year 2002. The increase in inventory reserves is primarily due to excess demonstration equipment and other obsolescence as a result of the sustained decrease in order demand.

Operating Expenses

For the third quarter ended February 23, 2002, operating expenses were $88.7 million, a decrease of $24.7 million from $113.4 million
for the third quarter of fiscal year 2001. Operating expenses were $290.1 million for the first three quarters of fiscal year 2002, a decrease of $49.1 million from operating expenses of
$339.2 million for the first three quarters of fiscal year 2001.

Research
and development expenses were $29.0 million in the quarter ended February 23, 2002, a decrease of $11.8 million from $40.8 million in the same
quarter of the prior year. For the first three quarters of fiscal year 2002, research and development expenses were $94.5 million, a decrease of $19.3 million from $113.8 million
in the first three quarters of fiscal year 2001. These declines were primarily the result of cost reduction measures. As a percentage of net sales, research and development expenses increased to 15%
for the first three quarters of fiscal year 2002 from 12% in the same period
a year ago due to the lower net sales volumes and the Company's continued commitment to the development of new products and technologies.

Selling,
general and administrative expenses were $55.5 million or 27% of net sales for the third quarter of fiscal year 2002, a decrease of $25.7 million from
$81.2 million, which were 25% of net sales for the third quarter of the prior year. For the three quarters ended February 23, 2002, selling, general and administrative expenses were
$173.6 million or 27% of net sales, a decrease of $60.4 million from expenses of $234.0 million which were 25% of net sales for the first three quarters of fiscal year 2001. These
decreases in expenses were primarily due to effective cost control measures and the Company's efforts to reduce expenses in line with lower orders and sales. The increases of expenses as a percentage
of net sales were primarily due to lower sales volumes combined with certain fixed costs.

For
the third quarter ended February 23, 2002, equity in business ventures' loss was $1.5 million, an increase from $0.1 million for the third quarter of fiscal year
2001. Equity in business ventures' loss was $3.1 million for the first three quarters of fiscal year 2002, compared to $0.9 million of equity earnings for the first three quarters of
fiscal year 2001. These increased losses are primarily the result of a decline in the Japanese economy and its impact on the financial performance of Sony/Tektronix Corporation, in which the Company
has a 50% equity ownership.

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For
the quarter and three quarters ended February 23, 2002, the Company incurred $2.4 million and $14.7 million, respectively, of net non-recurring
expenses in an effort to better align future operating expense levels with reduced orders and sales levels as discussed in Non-recurring Expenses (Credits), net above.

Other
operating expense, net was $0.4 million and $4.2 million for the quarter and three quarters ended February 23, 2003, respectively. These expenses consisted
primarily of the impairment of a building no longer in service and costs associated with the future demolition of that building which were recorded in the second quarter of fiscal year 2002. Other
operating expense, net was $0.3 million and $3.2 million for the quarter and three quarters ended February 24, 2001, respectively. These expenses consisted primarily of the
impairment of rental property owned by the Company.

Non-Operating Income/Expense

Interest expense was $2.8 million for the quarter ended February 23, 2002, as compared with $3.6 million in the same quarter of the prior
year. For the first three quarters of fiscal year 2002, interest expense was $8.1 million as compared with $10.0 million in the first three quarters of fiscal year 2001. The
decrease in interest expense is due to a reduction in the average balance of outstanding debt due to the Company's retirement of outstanding long-term debt.

Interest
income was $7.7 million in the third quarter of fiscal year 2002 as compared with $16.2 million in the third quarter of fiscal year 2001. For the first three
quarters of fiscal year 2002, interest income was $26.3 million, a decrease from $43.7 million in the first three quarters of fiscal year 2001. The decreases in interest income can be
primarily attributed to lower returns on investments in fiscal year 2002 as compared to investment returns in fiscal year 2001 due to decreases in interest rates and to a lesser degree, a lower
average balance of cash and marketable investments during the comparative periods.

Income Taxes

Income tax expense from continuing operations was $5.6 million for the third quarter of fiscal year 2002 and $26.7 million for the third quarter of
fiscal year 2001, or 35% and 39% of earnings before taxes, respectively.

Income
tax expense from continuing operations was $13.8 million for the first three quarters of fiscal year 2002 and $61.3 million for the first three quarters of fiscal
year 2001, or 35% and 37% of earnings before taxes, respectively.

The
higher tax rates in the prior year periods can be primarily attributed to adjustments to tax valuation allowances with respect to foreign tax credit carryovers in the third quarter
of fiscal year 2001.

Discontinued Operations

During the first quarter ended August 25, 2001, the Company reached settlement on certain outstanding contingencies related to the sale of the Color
Printing and Imaging division to Xerox. The settlement of these contingencies resulted in an additional gain on the sale of $0.9 million net of tax, which was recorded as Discontinued
operations on the Condensed Consolidated Statements of Operations.

Net Earnings

The Company recognized consolidated net earnings of $10.4 million and $26.6 million for the quarter and three quarters ended February 23,
2002, respectively. This is compared with net earnings of $41.0 million and $105.2 million for the quarter and three quarters ended February 24, 2001, respectively.

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Earnings Per Share

For the quarter and three quarters ended February 23, 2002, the Company recognized $0.11 and $0.29 per basic and diluted share, respectively. For the
quarter and three quarters ended February 24, 2001 the Company recognized basic earnings per share of $0.43 and $1.11, respectively, and diluted earnings per share of $0.43 and $1.09,
respectively. These decreases in earnings per share are due primarily to decreases in net earnings, partially offset by decreases in the basic and diluted shares outstanding. Basic shares outstanding
decreased mainly due to share repurchases. Diluted shares outstanding decreased mainly due to share repurchases and a decrease in dilutive share equivalents from employee stock options.

Financial Condition, Liquidity and Capital Resources

At February 23, 2002, the Company's working capital was $545.9 million, a decrease of $71.8 million from the end of fiscal year 2001. Current
assets decreased $134.4 million primarily due to a decrease in short-term marketable investments as the Company has converted more of its investment portfolio to
long-term marketable investments and a decrease in trade accounts receivable as a result of lower sales in FY02. Current liabilities decreased $62.6 million in the first three
quarters of fiscal year 2002 as a result of decreases in accounts payable due primarily to a payment to Xerox for settlement of certain liabilities associated with the January 1, 2000 sale of
the Color Printing and Imaging division and lower operating expenses during those quarters. Accrued compensation decreased in the first three quarters of fiscal year 2002 due mainly to the payment of
incentive compensation earned in the prior year and decreased accruals for incentive compensation earned in the current year. These decreases were partially offset by a $41.8 million increase
in Current portion of long-term debt, which reflects the August 2002 maturity of a portion of the Company's debt.

At
February 23, 2002, the Company held $733.6 million in cash and cash equivalents and marketable investments, a decrease of $29.3 million from the balance of
$762.9 million at May 26, 2001. This decrease is due to the payment of accrued compensation existing at the end of fiscal year 2001, the repurchase of common stock and the payment to
Xerox Corporation described above, partially offset by other positive operating cash flow. The Company also maintains bank credit facilities totaling
$300.9 million, of which $253.8 million was unused. Unused facilities included $103.8 million in miscellaneous lines of credit and $150.0 million under revolving credit
agreements with United States and foreign banks.

Property,
plant and equipment, net, decreased $21.6 million to $150.1 million as of February 23, 2002. The decrease was due mainly to $28.5 million of
depreciation expense for the first three quarters of fiscal year 2002. This decrease was partially offset by approximately $12.3 million in capital expenditures during the same period.

Cash
on hand, cash flows from operating activities and current borrowing capacity are expected to be sufficient to fund operations, acquisitions and potential acquisitions, and capital
expenditures through fiscal year 2003.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations". This statement discontinues the use of the pooling of interest method of accounting for business combinations. This statement is effective for all business combinations after
June 30, 2001. Management has completed an evaluation of the effects of this statement and believes that it will not have a material effect on the Company's consolidated financial statements.

20

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In
July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 142 requires the use of a nonamortization approach to account for
purchased goodwill and certain intangibles. Under a nonamortization approach, goodwill and certain intangibles will not be amortized into results of operations, but instead will be reviewed for
impairment and written down in the periods in which the recorded value of goodwill and certain intangibles is determined to be greater than its fair value. The Company early adopted the provisions of
SFAS No. 142 as of May 27, 2001. This standard only permits prospective application, therefore adoption does not affect previously reported financial information. The principal effect of
adopting SFAS No. 142 was the cessation of the amortization of goodwill beginning May 27, 2001. The initial evaluation of impairment of existing goodwill resulted in no impairment at the
time of adoption. Goodwill amortization for the three quarters ended February 24, 2001 amounted to approximately $0.8 million net of tax, which would have impacted the reported basic and
diluted earnings per share by $0.01 for the three quarters ended February 24, 2001.

In
June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations," which addresses financial accounting and reporting for certain obligations
associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The provisions of SFAS No. 143 are required to be applied starting with
fiscal years beginning after June 15, 2002, however early adoption is encouraged. The Company early adopted the provisions of SFAS No. 143 as of May 27, 2001. As a result of the
early adoption of this statement, the Company recorded a liability of $1.5 million for retirement obligations of certain long-lived assets during the second quarter of fiscal year
2002.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This Statement supersedes FASB Statement
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and the accounting and reporting provisions of 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," for the disposal of a segment of a business. SFAS No. 144 maintains the method for recording an impairment on assets to be held under SFAS No. 121 and establishes a single
accounting model based on the framework established in SFAS No. 121 for long-lived assets to be disposed of by sale. This statement also broadens the presentation of discontinued
operations to include more disposal transactions. The provisions of SFAS No. 144 are effective for financial statements issued for fiscal years beginning after December 15, 2001.
Management believes the adoption of the provisions of this statement will not have a material effect on the Company's consolidated financial statements.

In
September 2001, the Emerging Issues Task Force ("EITF") issued EITF 01-10,"Accounting for the Impact of the
Terrorist Attacks of September 11, 2001." This pronouncement discusses the classification and the timing of reporting losses directly associated with the terrorist attacks of
September 11, 2001. This did not have a material impact on the Company's consolidated financial statements as no property or personnel were lost as a result of these attacks.

Commitments

During the third quarter of fiscal year 2002, the Company reached an agreement with Sony Corporation ("Sony") to acquire Sony's 50% interest in Sony/Tektronix
Corporation ("Sony/Tektronix") through a redemption of Sony's shares for 8 billion Yen or approximately $60.0 million at February 23, 2002. The Company currently accounts for its
investment in Sony/Tektronix under the equity method. The Company expects the transaction to close on September 30, 2002 at which time the Company will have 100% ownership of Sony/Tektronix.
The transaction will be accounted for by the purchase method of accounting, and accordingly, beginning on the date of acquisition the results of operations, financial position and cash flows of
Sony/Tektronix will be consolidated in the Company's financial statements.

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The
Company enters into non-cancelable minimum purchase commitments primarily for the purchase of raw materials used in the manufacturing of products. These commitments are
entered into in the ordinary course of business as they allow the Company to secure component materials for future needs through last time buy or volume discount arrangements.

Subsequent Events

On March 18, 2002, the Company signed an agreement to acquire Profile Optische Systeme GmbH, an optical component test and measurement company located in
Germany for $25.0 million.

During
the fourth quarter of fiscal year 2002, the Company received $20.6 million as prepayment in full on the notes receivable and associated interest receivable from Grass
Valley Group, Inc. ("GVG"). This resulted in a reduction of short-term notes receivable of $19.8 million. The remaining $0.8 million was recorded in Interest income as
a gain on the prepayment based on the discount associated with the notes receivable. In addition, the Company received $11.8 million for its equity interest in GVG, which was recorded at
$11.5 million in Other Current Assets. The $0.3 million gain was recorded in Other non-operating income (expense), net. As a result this settlement, the long-term
portion of the notes receivable and the equity investment were reclassified from Other long-term assets to Other current assets as of February 23, 2002.

Risks and Uncertainties

Described below and elsewhere in this Quarterly Report on Form 10-Q and in other documents the Company files with the Securities and Exchange
Commission and in its press releases are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this
quarterly report. See "Forward-Looking Statements" at the beginning of this Item 2.

Market Risk and Cyclical Downturns in the Markets in Which Tektronix Competes

Tektronix' business depends predominantly on capital expenditures of manufacturers in the telecommunications, semiconductor, and computer industries. Each of
these industries has historically been very cyclical and has experienced periodic downturns, which have had a material adverse impact on the industries' demand for equipment, including test and
measurement equipment manufactured and marketed by Tektronix. During periods of reduced and declining demand, Tektronix must rapidly align its cost structure with prevailing market conditions while at
the same time motivating and retaining key employees. As indicated in "Results of OperationsEconomic Conditions" in this Item 2, the Company's sales and orders have been affected by the
current downturn in its markets. The extent of this downturn, and how long it will last, is unknown. No assurance is given that Tektronix' net sales
and operating results will not be further adversely impacted by the current or any future downturns or slowdowns in the rate of capital investment in these industries.

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 delays 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, financial condition or cash flows of the Company.

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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 that have had and may continue to 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, financial condition or cash flows.

Supplier Risks

The Company's manufacturing operations are dependent on the ability of suppliers to deliver high 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.

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 could
adversely affect the Company's results of operations, financial position or cash flows.

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, the Company's results of operations, financial position or cash flows could be materially and adversely impacted. 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.

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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, Oregon 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.

Sony/Tektronix Corporation Acquisition

Acquisition of Sony Corporation's 50% interest in Sony/Tektronix Corporation is scheduled to be completed in September, 2002. Completion of that transaction is
subject to a number of risks, including Tektronix' right to terminate the agreement following a review period; material adverse changes in Sony/Tektronix before the completion date; and approvals by
third parties. In addition, forward looking statements related to the impact of this acquisition upon earnings are subject to the performance of Sony/Tektronix before and after the acquisition, and
such performance is subject to many of the same risks recited above.

Possible Volatility of Stock Price

The price of the Company's common stock may be subject to wide, rapid fluctuations. Such fluctuations may be due to factors specific to the Company, such as
changes in operating results or changes in analysts' estimates regarding earnings. Fluctuations in the stock price may also be due to factors relating to the telecommunications, semiconductor, and
computer industries or to the securities markets in general. Fluctuations in the stock price have often been unrelated to the operating performance of the specific companies whose stocks are traded.
Shareholders should be willing to incur the risk of such fluctuations.

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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Financial 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 and long-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, financial position or cash flows.

At
February 23, 2002 and 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, financial position 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, financial position 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, generally with maturities of one to three months, to mitigate this risk where natural hedging strategies cannot be employed. 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, financial position 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 3, 2002 |  | TEKTRONIX, INC.
|------------- |  | ---------------
|              |  | By             

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