Robert Mehrabian
Chairman, President and Chief Executive Officer at Teledyne Technologies
Thank you, Jason. Good morning and thank you for joining our earnings call. 2022 ended up being an excellent year. We concluded it with all time record quarterly and full-year sales and earnings per share. During 2022, Teledyne as with many other companies found itself faced with external forces beyond our control. These were inflation, strong dollar and parts shortages. Nevertheless with continued -- we continued our long history of navigating difficult market environments and we ultimately delivered earnings in excess of our own expectations.
Excluding foreign currency headwind, which negatively impacted fourth quarter sales growth by approximately 2.6%, growth in local currency would have been 5.7%. Excluding ETM acquisition, core growth in local currency, would have been approximately 5%. GAAP operating margin of 19.3% was an all-time record and non-GAAP operating margin of 22.4% increased 95 basis-points from last year. GAAP and non-GAAP earnings of $4.74 and $4.94, respectively were also records for Teledyne.
Fourth quarter free cash flow was reasonably healthy, but included interest payments of approximately $30 million which last year were made in the third quarter of 2021. While we completed the acquisition of ETM, our levered ratio continued to decline from 3.8 times in May of 2021 when we acquired cleared to 2.4 times at the end of 2022. Finally, our acquisition pipeline remains healthy, as evidenced by the recent addition of ChartWorld whose maritime navigation software and hardware tools breach a product and technology gap between our Teledyne Marine and Raymarine businesses.
Turning to our 2023 full-year outlook. While still very early in 2023 and with many unknowns, including projections of a recession, we're inclined to offer an initial revenue and earnings outlook in line with consensus expectations. On revenue, we see total 2023 sales growth of approximately 5%, including incremental sales from recent bolton acquisitions. For our backlog-driven long cycle businesses, we expect growth to be higher than average. For the majority of our short-cycle commercial businesses, foreign currency headwinds will impact the first quarter of 2023 where comparisons are tough and economic uncertainty and exports regulations remain fluid.
We continue to see overall growth, not contractual in these businesses, but expect that growth will be less than the total company average. On the other hand, supply chain constraints are improving albeit modestly. There are a few minor other known puts and takes, such as increased scope on our NASA contracts that Engineered Systems equally offset by the 2022 completion of our one web contract in the Aerospace and Electronics segments. But no other significant items to highlight this early in the year.
Our earnings outlook approximately 50 basis points of margin improvement in 2023 and we currently think instrumentation and digital imaging with the be above average contributors to this. While margins at Aerospace and Defense Electronics maybe flat or decline slightly given especially tough comps as a greater mix in 2023 of Defense Electronics, relative to commercial aerospace aftermarket sets.
I will now further comment on the performance of our four segments. In our digital Imaging segment, fourth quarter sales were relatively flat despite currency translation headwind of approximately 3.5%. Sales increased year-over-year for our industrial and scientific vision systems as well as our low-dose high resolution digital X-ray detectors. Sales of commercial infrared imaging cameras and components also increased and we're at record drivers since closing the FLIR acquisition in May of 2021.
While total FLIR related sales increased sequentially from the third quarter, sales of some surveillance and unmanned ground systems declined from last year on especially tough comparison. On the other hand, sales of unmanned air systems increased considerably year-over-year. GAAP segment upgrading margin was 18.8% and adjusted for intangible asset amortization only, segment margin was 23.8%, approximately 50 basis points greater then the fourth quarter of last year.
In our Instrumentation segment, overall, fourth-quarter sales increased 7.9% versus last year despite approximately 2.4% of FX translation headwind. Sales of electronic test and measurement systems, which include oscilloscopes, digitizers and protocol analyzers, increased 3.8% year-over-year despite a tough comparison with the fourth quarter of last year's. Sales of volatile oscilloscopes and protocol analyzers remained healthy. We continued strength in products for industry standards, such as Peripheral Component Interconnect Express or PCI Express and Universal Serial Bus or USB.
Sales of environmentally digital instruments increased 9% compared with last year with greater sales of both drug discovery and laboratory instruments, as well as air monitoring and process gas analyzers. Sales of marine instrumentation increased 9.8% in the quarter, primarily due to a strong marine defense sales and the ongoing recovery in offshore energy markets. Overall, instrumentation segment operating profit increased 18.4% in the fourth quarter with up -- GAAP operating margin increasing 215 basis points to 24.2% and 163 basis points on a non-GAAP basis, excluding intangible asset amortization, which brought the non-GAAP margins to 25.3%.
In Aerospace and Defense Electronics segment, fourth quarter sales increased 8.9%, driven by broad-based growth of both defense and commercial aerospace products. GAAP and non-GAAP segment operating profit increased approximately 30% with margins over 480 basis points greater than last year. In the Engineered Systems segment, fourth quarter revenue increased 6.7%, with operating profit declined given lower margins for some of our electronic manufacturing service product.
Before I turn the call over to Sue, I want to make a couple of concluding remarks. First, I was very pleased that Teledyne was able to overcome issues faced by most companies in 2022. Despite the macroeconomic and supply chain challenges noted earlier, our results exceeded the top end of our earnings outlook issued at any point during the year. While difficult to predict outcomes in 2023, we are reasonably confident that a number of our long cycle businesses serving defense, medical, energy and aerospace markets will grow.
While demand is more difficult to predict in our short-cycle instrumentation and imaging businesses, supply chain constraints and the previous -- premiums for grain market electronic components have begun to is modestly. Given the strength of our balanced business portfolio and our management's long history of navigating challenging markets, I am optimistic that Teledyne will continue on its successful path in 2023.
I will now turn the call over to Sue.
