Tektronix

Financial Performance

19 MANAGEMENT REVIEW 25 MANAGEMENT’S LETTER 25 INDEPENDENT AUDITORS’ REPORT 2 6 C O N S O L I D AT E D S TAT E M E N T S O F O P E R AT I O N S 2 7 C O N S O L I D AT E D B A L A N C E S H E E T S 2 8 C O N S O L I D AT E D S TAT E M E N T S O F C A S H F L O W S 2 9 C O N S O L I D AT E D S TAT E M E N T S O F S H A R E H O L D E R S ’ E Q U I T Y 3 0 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 4 0 S E L E C T E D F I N A N C I A L D ATA 4 1 C O R P O R AT E I N F O R M AT I O N

1 8 Te k t r o n i x 1 9 9 9 A n n u a l R e p o r t

Management Review

GENERAL

Tektronix, Inc. (Tektronix or the Company) operates in three major business divisions: Measurement, Color Printing and Imaging, and Video and Networking, as well as in five major geographies: the United States; Europe; the Americas, including Mexico, Canada, and South America; the Pacific, excluding Japan; and Japan. The Measurement division derives revenue principally through the development and marketing of seven key product groups: oscilloscopes, signal sources, probing solutions, digital systems development products, handheld communication test instruments, and video and audio test instruments. The Color Printing and Imaging division derives revenue principally through the development and marketing of color printers and supplies. The Company’s color printer technologies include solid ink and color laser. The Video and Networking division derives revenue principally through the development and marketing of digital storage products, production switchers, digital picture manipulators, routing switchers, linear editing systems, on-air master control solutions, and video transmission products. All three divisions also derive revenue through providing support services for products sold worldwide. In June 1999, the Company’s Board of Directors unanimously approved a plan that is intended to result in the formation of two separate publicly traded...