million was paid in the second quarter of 2006. Net cash used by investing activities in 2005 included the receipt of $5.4 million from the sale of the assets of STIP-Isco, a German subsidiary and $2.9 million from the sale of SWIFT™ assets. These assets were acquired as part of the Isco acquisition in 2004. In accordance with purchase accounting, no gain was recorded on the sales and goodwill was reduced by $5.0 million. Capital expenditures for the first nine months of 2006 and 2005 were $16.3 million and $12.3 million, respectively.

The Company is in the process of specifically identifying the amount to be assigned to intangible assets and certain fixed assets for the acquisitions made in 2006. The Company made preliminary estimates as of October 1, 2006, since there was insufficient time between the acquisition date and the end of the third quarter to finalize the valuations. The preliminary amount of goodwill and acquired intangible assets recorded as of October 1, 2006 for the Benthos acquisition was $19.0 million and $5.7 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of October 1, 2006 for the KW Microwave acquisition was $6.7 million and $2.4 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of October 1, 2006 for the ODI acquisition was $17.2 million and $11.9 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of October 1, 2006 for the CollaborX acquisition was $13.9 million and $2.4 million, respectively. The preliminary amount of goodwill and acquired intangible assets recorded as of October 1, 2006 for the Rockwell Scientific acquisition was $47.4 million and $19.0 million, respectively. Additionally, included in the preliminary estimate of acquired intangible assets is an estimate of in-process research and development of $0.3 million which was expensed in the third quarter of 2006. These amounts were based on estimates that are subject to change pending the completion of the Company’s internal review and the receipt of third party appraisals.

Cash used by financing activities for the first nine months of 2006 included net borrowings of $208.1 million, primarily to fund acquisitions, partially offset by debt repayments. The first nine months of 2005 included the repayment of $8.9 million of debt. The first nine months of 2006 included $7.8 million in excess tax benefits related to stock-based compensation. Proceeds from the exercise of stock options were $11.1 million and $8.6 million for the first nine months of 2006 and 2005, respectively.

Working capital was $220.6 million at October 1, 2006, compared with $154.0 million at January 1, 2006. The increase in working capital was due to higher accounts receivables resulting from higher sales and the timing of customer payments, greater inventory balances due to anticipated sales and the addition of working capital from our recent acquisitions.

Our principal capital requirements are to fund working capital needs, capital expenditures, pension contributions and debt service requirements, as well as to fund acquisitions. It is anticipated that operating cash flow, together with available borrowings under the amended and restated credit facility described below, will be sufficient to meet these requirements over the next twelve months. To support acquisitions, we may need to raise additional capital. We currently expect capital expenditures to be approximately $28.0 million in 2006, of which $16.3 million has been spent in the first nine months of 2006.

Effective July 14, 2006, Teledyne amended and restated its $280.0 million credit facility. The amended and restated credit facility has lender commitments totaling $400.0 million and expires on July 14, 2011. Excluding interest and fees, no payments are due under the amended and restated credit facility until it matures. The credit agreement requires the Company to comply with various financial and operating covenants, including maintaining certain consolidated leverage and interest coverage ratios, as well as minimum net worth levels and limits on acquired debt. At October 1, 2006, the Company was in compliance with these covenants. Available borrowing capacity under the $400.0 million credit facility, which is reduced by borrowings, outstanding letters of credit and certain guarantees was $135.5 million at October 1, 2006.

Our liquidity is not dependent upon the use of off-balance sheet financial arrangements. We have no off-balance sheet financing arrangements that incorporate the use of special purpose entities or unconsolidated entities.

Contractual obligations

During the quarter ended October 1, 2006, we had $250.0 million in long-term debt outstanding under our amended and restated credit facility, which was incurred primarily to fund the purchase price for the acquisitions consummated during the year. We are not required to make payments of principal under this indebtedness until July 2011, assuming we are in compliance with various financial and operating covenants.

Critical Accounting Policies

Our critical accounting policies are those that are reflective of significant judgments and uncertainties, and may potentially result in materially different results under different assumptions and conditions. Our critical accounting policies are the following: contract revenue recognition and contract estimates; aircraft product liability reserve; accounting for pension plans; and accounting for business combinations, goodwill and other long-lived assets. For additional discussion of the application of these and other accounting policies, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Note 2 of the Notes to Consolidated Financial Statements included in Teledyne Technologies’ Annual Report on Form 10-K for the fiscal year ended January 1, 2006 (2005 Form 10-K).

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (“SFAS 158”), which provides guidance for recognition of a net liability or asset to report the funded status of company defined benefit pension and other postretirement benefit plans (collectively referred to herein as “benefit plans”) on company balance sheets. The pronouncement clarifies (1) recognition of the funded status of a benefit plan in its statement of financial position; (2) recognition as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost pursuant to FASB Statement No. 87, “Employers’ Accounting for Pensions”, or No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”, (3) measurement of defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position (with limited exceptions); and (4) disclosure requirements in the notes to financial statements with additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. SFAS 158 is effective as of the end of the fiscal year ending after December 15, 2006. The Company expects the adoption of SFAS 158 to decrease stockholders’s equity approximately $25.0 million in December 2006. The adoption of SFAS 158 is not expected to have a material impact to pension expense over the next 5 years.

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). This interpretation, among other things, creates a two step approach for evaluating uncertain tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that more-likely-than-not will be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. FIN 48 specifically prohibits the use of a valuation allowance as a substitute for derecognition of tax positions, and it has expanded disclosure requirements. FIN 48 is effective for fiscal years beginning after December 15, 2006, in which the impact of adoption should be accounted for as a cumulative-effect adjustment to the beginning balance of retained earnings. The Company is currently evaluating FIN 48 and has not yet determined the impact the adoption may have on the condensed consolidated financial statements.

On January 2, 2006, we adopted SFAS No. 154, “Accounting Changes and Error Corrections Disclosure,” (SFAS No. 154). SFAS No. 154 replaces APB Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” SFAS No. 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle unless it is impracticable. SFAS No. 154 applies to all voluntary changes in accounting principle. It also applies to changes required by a new accounting pronouncement in the unusual instance that the pronouncement does not include explicit transition provisions. The

adoption of SFAS No. 154 did not have a material impact on the condensed consolidated financial statements of the Company.

In December 2004, the FASB issued SFAS No. 123(R) that requires compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation costs will be measured based on the grant date fair value of the equity or liability instrument issued. Compensation cost will be recognized over the period that an employee provides service in exchange for the award. SFAS No. 123(R) replaces SFAS No. 123, “Accounting for Stock-Based Compensation” and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” The Company adopted SFAS No. 123(R) effective January 2, 2006, using the modified prospective method, and accordingly did not restate prior year financial statements. No modifications to outstanding stock options were made prior to the adoption of SFAS No. 123(R). The valuation methodologies and assumptions in estimating the fair value of stock options granted in 2006 were similar to those used in estimating the fair value of stock options granted in 2005. Stock option compensation expense is recorded on a straight line basis over the appropriate vesting period, generally three years. For the third quarter and first nine months of 2006, the Company recorded a total of $1.5 million and $4.4 million, respectively, in its consolidated statements of income for stock option expense related to stock options awarded after the adoption of SFAS No. 123(R) and for stock options which were not vested by the date of adoption of SFAS No. 123(R). No compensation expense related to stock options was recorded in the consolidated statements of income for 2005 or in prior years since it was not required. The adoption of SFAS No. 123R is expected to reduce pretax earnings by approximately $5.9 million in fiscal year 2006 based on the fair value of stock options granted after the adoption of SFAS No. 123(R) and stock options which were not vested by the date of adoption of SFAS No. 123(R), as well as current assumptions regarding the estimated fair value of expected stock option grants during the remainder of the year. However, our assessment of the estimated compensation expense is affected by our stock price as well as assumptions regarding a number of complex and subjective variables and the related tax impact. These variables include, but are not limited to, the volatility of our stock price and employee stock option exercise behaviors. During the third quarter and first nine months of 2006, the total intrinsic value of stock options exercised was $6.7 million and $20.0 million respectively. As of October 1, 2006, there was $7.3 million of unrecognized compensation cost related to nonvested stock options, which is expected to be recognized over a weighted-average period of approximately 1.3 years. The Company issues shares of common stock upon the exercise of stock options.

We used a combination of the historical volatility of Teledyne’s stock price and the implied volatility based on the price of traded options on Teledyne’s stock to calculate the expected volatility assumption to value stock options. We used our actual stock trading history since January 2001 in the volatility calculation. The expected dividend yield is based on Teledyne’s practice of not paying dividends. The risk-free rate of return is based on the yield of U. S. Treasury Strips with terms equal to the expected life of the option as of the grant date. The expected life in years is based on historical actual stock option exercise experience.

On January 2, 2006, we adopted SFAS No. 151, “Inventory Costs — an amendment of ARB No. 43 Chapter 4” (SFAS No. 151). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS No. 151 requires that those items be recognized as current-period charges. The adoption of SFAS No. 151 did not have a material impact on the condensed consolidated financial statements of the Company.

Outlook

Based on its current outlook, the Company’s management believes that fourth quarter 2006 earnings per share will be in the range of approximately $0.47 to $0.49. The full year 2006 earnings per share outlook is expected to be in the range of approximately $2.20 to $2.22. The Company’s estimated effective income tax rate for 2006 is 34.4% including the impact of the reversal of the income tax contingency reserve. Excluding the reversal of the income tax contingency reserves in the third quarter the Company’s estimated effective income tax rate for 2006 would have been 37.2%.

Our 2006 outlook reflects anticipated sales growth in its defense electronics and instrumentation businesses, due primarily to the contribution of our acquisitions completed in 2005, the Benthos acquisition in the first quarter of 2006 and the third quarter acquisitions of Rockwell Scientific Company LLC, CollaborX, Inc. and a majority interest in Ocean Design, Inc. The Company’s fourth quarter and full year 2006 earnings per share outlook reflects anticipated expenses, such as intangible asset amortization, from the third quarter acquisitions. In addition, sales of geophysical sensors are currently expected to decline in the fourth quarter of 2006, compared with the third quarter of 2006.

The full year 2006 earnings outlook includes approximately $15.4 million in pension expense under SFAS No. 87, or $4.9 million in net pension expense after recovery of allowable pension costs from our CAS covered government contracts. Full year 2005 earnings included $12.7 million in pension expense under SFAS No. 87, or $3.4 million in net pension expense after recovery of allowable pension costs from our CAS covered government contracts. The increase in full year 2006 pension expense reflects, in part, the reduction of the discount rate assumption for the Company’s defined benefit plan from 6.25% in 2005 to 6.00% in 2006. In addition, the current full year 2006 earnings outlook reflects changes to the Company’s pension assets and liabilities resulting from the merger of the Rockwell Scientific Company pension plan with Teledyne Technologies pension plan following the acquisition of Rockwell Scientific Company LLC.

The Company’s 2006 earnings outlook also reflects $5.9 million ($0.10 per share) in stock option compensation expense based on the fair value of stock options granted after the adoption of SFAS No. 123(R) and stock options which were not vested by the date of adoption of SFAS No. 123(R), as well as current assumptions regarding the estimated fair value of expected stock option grants during the remainder of the year.

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

		2006 Full Year Outlook								2005				2004
		Low				High				Actual				Actual
Earnings per share (excluding net pension expense, stock option expense and excluding income tax benefit)		$	2.30			$	2.32			$	1.91			$	1.39
Pension expense — SFAS No. 87			(0.27	)			(0.27	)			(0.23	)			(0.16	)
Pension expense — CAS (b)			0.18				0.18				0.17				0.01
Earnings per share (excluding stock option expense and income tax benefit)			2.21				2.23				1.85				1.24
Stock option expense (c)			(0.10	)			(0.10	)			—				—
Income tax benefit (d)			0.09				0.09				—				—
Earnings per share — GAAP		$	2.20			$	2.22			$	1.85			$	1.24

Safe Harbor Cautionary Statement Regarding Outlook and Forward-Looking Information

From time to time we make, and this report contains forward looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities, product sales, pension matters, stock option expense and strategic plans. All statements made in this Management’s Discussion and Analysis of Financial Condition and Results of Operations that are not historical in nature should be considered forward-looking. Actual results could differ materially from these forward-looking statements. Many factors, including changes in demand for products sold to the semiconductor, defense electronics, communications, commercial aviation and energy exploration markets, funding, continuation and award of government programs, continued liquidity of our customers (including commercial airline customers) and economic and political conditions, could change the anticipated results. In addition, financial market fluctuations affect the value of our pension assets.

Global responses to terrorism and other perceived threats increase uncertainties associated with forward-looking statements about our businesses. Various responses to terrorism and perceived threats could realign government programs, and affect the composition, funding or timing of our programs. Flight restrictions would negatively impact the market for general aviation aircraft piston engines and components.

We continue to take action to assure compliance with the internal controls, disclosure controls and other requirements of the Sarbanes-Oxley Act of 2002. While we believe our control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.

While our growth strategy includes pending and possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. The announced pending acquisitions are subject to conditions to closing and if these conditions are not satisfied or waived prior to closing, then such acquisitions may not occur. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses and to achieve identified financial and operating synergies.

Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Teledyne Technologies’ periodic filings with the Securities and Exchange Commission, including its 2005 Form 10-K and this Form 10-Q. We assume no duty to update forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Other than as set forth below, there were no material changes to the information provided under “Item 7A, Quantitative and Qualitative Disclosure About Market Risk” included in our 2005 Annual Report on Form 10-K. At October 1, 2006, there were no hedging contracts outstanding.

Interest Rate Exposure
We are exposed to market risk through the interest rate on our borrowings under our amended and restated credit facility. Borrowings under our credit facility are at fixed rates that vary with the term and timing of each loan under the facility. Loans under the facility typically have terms of one, three or six months and the interest rate for each such loan is subject to change if the loan is continued or converted following the applicable maturity date. Interest rates are also subject to change based on our debt to earnings before interest, taxes, depreciation and amortization (EBITDA) ratio. As of October 1, 2006, we had $250.0 million in outstanding indebtedness under our amended and restated credit facility. A 100 basis point change in interest rates would result in an increase in annual interest expense of approximately $2.5 million, assuming the $250.0 million in debt was outstanding for the full year.

Item 4. Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit, under the Securities Exchange Act of 1934, are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our Chairman, President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer, with the participation and assistance of other members of management, have reviewed the effectiveness of our disclosure controls and procedures and have concluded that the disclosure controls and procedures, as of October 1, 2006, are effective in timely alerting them to material information relating to the Company that is required to be included in its SEC periodic filings.

In connection with our evaluation during the quarterly period ended October 1, 2006, we have made no change in our internal controls over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting. There also were no significant deficiencies or material weaknesses identified for which corrective action needed to be taken.

PART II OTHER INFORMATION

Item 1A. Risk Factors

Other than the additional risk factor below, there are no material changes to the risk factors previously disclosed in our 2005 Annual Report on Form 10-K in response to Item 1A to Part 1 of Form 10-K. See also our “Outlook” discussion beginning at page 30 for some factors reflected in our 2006 earnings per share guidance.

Our indebtedness could materially and adversely affect our business.

As of October 1, 2006, we had $258.5 in total outstanding indebtedness including $250.0 million under our $400.0 million credit facility, a $3.8 million capital lease, of which $0.1 million is current and $4.7 million of other debt, of which $4.6 million is current. Our indebtedness could harm our business by, among other things, reducing the funds available to make new strategic acquisitions. General adverse economic and industry conditions or a downturn in our business could result in our inability to repay this indebtedness in a timely manner, which would have a material adverse effect on our business.

Item 6. Exhibits

(a) Exhibits

Exhibit 10.1		Amended and Restated Credit Agreement, dated as of July 14, 2006, among Teledyne Technologies Incorporated, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, certain lenders thereunder and certain subsidiaries of Teledyne Technologies Incorporated as guarantors (incorporated by reference to Exhibit 10.1 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 14, 2006 and filed July 17, 2006)
Exhibit 10.2		Purchase Agreement dated as of July 26, 2006, by and among Rockwell Automation, Inc., Rockwell Collins, Inc. and Teledyne Brown Engineering, Inc. (incorporated by reference to Exhibit 10.1 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 25, 2006 and filed July28, 2006)
Exhibit 10.3		Guarantee of Teledyne Technologies Incorporated relating to the Purchase Agreement (incorporated by reference to Exhibit 10.2 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 25, 2006 and filed July 28, 2006)
Exhibit 31.1		302 Certification — Robert Mehrabian
Exhibit 31.2		302 Certification — Dale A. Schnittjer
Exhibit 32.1		906 Certification — Robert Mehrabian
Exhibit 32.2		906 Certification — Dale A. Schnittjer

SIGNATURES

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.

Teledyne Technologies Incorporated

Index to Exhibits

Exhibit Number		Description
Exhibit 10.1		Amended and Restated Credit Agreement, dated as of July 14, 2006, among Teledyne Technologies Incorporated, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, certain lenders thereunder and certain subsidiaries of Teledyne Technologies Incorporated as guarantors (incorporated by reference to Exhibit 10.1 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 14, 2006 and filed July 17, 2006)
Exhibit 10.2		Purchase Agreement dated as of July 26, 2006, by and among Rockwell Automation, Inc., Rockwell Collins, Inc. and Teledyne Brown Engineering, Inc. (incorporated by reference to Exhibit 10.1 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 25, 2006 and filed July 28, 2006)
Exhibit 10.3		Guarantee of Teledyne Technologies Incorporated relating to the Purchase Agreement (incorporated by reference to Exhibit 10.2 of Teledyne Technologies Incorporated Current Report on Form 8-K dated July 25, 2006 and filed July 28, 2006)
Exhibit 31.1		302 Certification — Robert Mehrabian
Exhibit 31.2		302 Certification — Dale A. Schnittjer
Exhibit 32.1		906 Certification — Robert Mehrabian
Exhibit 32.2		906 Certification — Dale A. Schnittjer