Teledyne repaid $187.0 million of debt during the second quarter of 2022, including making $112.0 million of floating rate debt payments which reduced its term loan due May 2026 by $80.0 million and reduced its outstanding credit facility balance by $32.0 million. In addition, during the second quarter of 2022, Teledyne repurchased and retired $75.0 million of its Fixed Rate Senior Notes due August 2030 and April 2031, recording a $10.6 million non-cash gain on the extinguishment of this debt. During the second quarter of 2022, Teledyne terminated and re-designated certain cross-currency swaps, receiving $18.3 million of cash which is included in cash provided by financing activities. Teledyne received $4.8 million from the exercise of stock options in the second quarter of 2022 compared with $5.1 million.

As of July 3, 2022, net debt was $3,666.9 million which is calculated as total debt of $3,945.7 million, net of cash and cash equivalents of $278.8 million. As of January 2, 2022, net debt was $3,624.7 million and included total debt of $4,099.4 million, net of cash and cash equivalents of $474.7 million. As of July 3, 2022, approximately $1,004.0 million was available under the $1.15 billion credit facility, after reductions of $125.0 million in outstanding borrowings and $21.0 million in outstanding letters of credit.

Income Taxes

The effective tax rate for the second quarter of 2022 was 22.7%, compared with 29.8%. The second quarter of 2022 reflected net discrete income tax benefits of $1.0 million, which included a $1.8 million income tax benefit related to share-based accounting. The second quarter of 2021 reflected net discrete income tax expense of $4.1 million, which included $11.5 million expense related to foreign tax rate changes, partially offset by a $5.3 million income tax benefit related to the release of a valuation allowance and a $2.1 million income tax benefit related to share-based accounting. Excluding the net discrete income tax items in both periods, the effective tax rates would have been 23.1% for the second quarter of 2022, compared with 25.3%.

Other

Corporate expense decreased to $14.7 million for the second quarter of 2022, compared with $84.2 million. Corporate expense in the second quarter of 2021 included $70.5 million of transaction costs related to the FLIR acquisition. Stock option expense was $3.6 million for both the second quarter of 2022 and 2021. Non-service retirement benefit income was $2.9 million for the second quarter of 2022 compared with $2.8 million. Interest expense, net of interest income, was $22.5 million for the second quarter of 2022 compared with $21.2 million.

Outlook

Based on its current outlook, the company’s management believes that third quarter 2022 GAAP diluted earnings per share will be in the range of $3.36 to $3.54 and full year 2022 GAAP diluted earnings per share will be in the range of $15.13 to $15.45. The company's management further believes that third quarter 2022 non-GAAP diluted earnings per share will be in the range of $4.20 to $4.35 and full year 2022 non-GAAP diluted earnings per share will be in the range of $17.45 to $17.70. The non-GAAP outlook excludes acquired intangible asset amortization for all acquisitions and benefits or charges for acquisition-related tax matters. The company’s annual expected tax rate for 2022 is 23.1%, before discrete tax items.