Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 02, 2017 | Aug. 07, 2017 | |
Document Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 2, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | TER | |
Entity Registrant Name | TERADYNE, INC | |
Entity Central Index Key | 97,210 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 197,831,996 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 598,349 | $ 307,884 | |
Marketable securities | 809,338 | 871,024 | |
Accounts receivable, less allowance for doubtful accounts of $2,236 and $2,356 at July 2, 2017 and December 31, 2016, respectively | 405,946 | 192,444 | |
Inventories, net | 153,645 | 135,958 | |
Prepayments | 105,960 | 108,454 | |
Other current assets | 6,787 | 8,039 | |
Total current assets | 2,080,025 | 1,623,803 | |
Property, plant and equipment, net | 258,017 | 253,821 | |
Marketable securities | 212,501 | 433,843 | |
Deferred tax assets | 125,204 | 107,405 | |
Other assets | 12,429 | 12,165 | |
Retirement plan assets | 9,231 | 7,712 | |
Acquired intangible assets, net | 90,603 | 100,401 | |
Goodwill | 242,215 | 223,343 | |
Total assets | 3,030,225 | [1] | 2,762,493 |
Current liabilities: | |||
Accounts payable | 103,454 | 95,362 | |
Accrued employees' compensation and withholdings | 122,246 | 109,944 | |
Deferred revenue and customer advances | 81,087 | 84,478 | |
Other accrued liabilities | 66,176 | 51,382 | |
Contingent consideration | 22,432 | 1,050 | |
Accrued income taxes | 43,812 | 30,480 | |
Total current liabilities | 439,207 | 372,696 | |
Retirement plan liabilities | 111,688 | 106,938 | |
Long-term deferred revenue and customer advances | 32,679 | 23,463 | |
Deferred tax liabilities | 10,714 | 12,144 | |
Long-term other accrued liabilities | 11,061 | 28,642 | |
Long-term contingent consideration | 16,983 | 37,282 | |
Long-term debt | 359,245 | 352,669 | |
Total liabilities | 981,577 | 933,834 | |
Commitments and contingencies (Note P) | |||
SHAREHOLDERS' EQUITY | |||
Common stock, $0.125 par value, 1,000,000 shares authorized; 197,999 and 199,177 shares issued and outstanding at July 2, 2017 and December 31, 2016, respectively | 24,750 | 24,897 | |
Additional paid-in capital | 1,613,005 | 1,593,684 | |
Accumulated other comprehensive income (loss) | 5,915 | (20,214) | |
Retained earnings | 404,978 | 230,292 | |
Total shareholders' equity | 2,048,648 | 1,828,659 | |
Total liabilities and shareholders' equity | $ 3,030,225 | $ 2,762,493 | |
[1] | Total business assets are attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Accounts receivable, less allowance for doubtful accounts | $ 2,236 | $ 2,356 |
Common stock, par value | $ 0.125 | $ 0.125 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 197,999,000 | 199,177,000 |
Common stock, shares outstanding | 197,999,000 | 199,177,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | ||
Revenues: | |||||
Products | $ 610,356 | $ 456,832 | $ 983,560 | $ 814,972 | |
Services | 86,545 | 74,960 | 170,254 | 147,815 | |
Total revenues | 696,901 | 531,792 | 1,153,814 | 962,787 | |
Cost of revenues: | |||||
Cost of products | 267,171 | 215,795 | 422,137 | 383,350 | |
Cost of services | 38,511 | 33,127 | 75,525 | 66,234 | |
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 305,682 | 248,922 | 497,662 | 449,584 | |
Gross profit | 391,219 | 282,870 | 656,152 | 513,203 | |
Operating expenses: | |||||
Engineering and development | 81,728 | 76,109 | 157,910 | 149,573 | |
Selling and administrative | 89,131 | 81,425 | 174,037 | 160,599 | |
Acquired intangible assets amortization | 8,166 | 16,244 | 16,118 | 36,238 | |
Restructuring and other | 2,288 | 2,608 | 4,799 | 4,195 | |
Goodwill impairment | 254,946 | 254,946 | |||
Acquired intangible assets impairment | 83,339 | 83,339 | |||
Total operating expenses | 181,313 | 514,671 | 352,864 | 688,890 | |
Income (loss) from operations | 209,906 | (231,801) | 303,288 | (175,687) | |
Non-operating (income) expense: | |||||
Interest income | (3,292) | (1,666) | (6,812) | (3,308) | |
Interest expense | 5,509 | 691 | 10,911 | 1,401 | |
Other (income) expense, net | 812 | (9) | 296 | (155) | |
Income (loss) before income taxes | [1],[2] | 206,877 | (230,817) | 298,893 | (173,625) |
Income tax provision (benefit) | 31,901 | (7,271) | 38,696 | (65) | |
Net income (loss) | $ 174,976 | $ (223,546) | $ 260,197 | $ (173,560) | |
Net income (loss) per common share: | |||||
Basic | $ 0.88 | $ (1.10) | $ 1.30 | $ (0.85) | |
Diluted | $ 0.87 | $ (1.10) | $ 1.29 | $ (0.85) | |
Weighted average common shares-basic | 198,774 | 203,018 | 199,390 | 203,645 | |
Weighted average common shares-diluted | 201,529 | 203,018 | 201,732 | 203,645 | |
Cash dividend declared per common share | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.12 | |
[1] | Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge. | ||||
[2] | Interest income, interest expense, contingent consideration adjustments, pension and postretirement plan actuarial gains and other income (expense) are included in Corporate and Eliminations. |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Net income (loss) | $ 174,976 | $ (223,546) | $ 260,197 | $ (173,560) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments, net of tax of $0, $0, $0, $0 | 15,981 | (5,041) | 24,944 | 5,229 |
Available-for-sale marketable securities: | ||||
Unrealized gains on marketable securities arising during period, net of tax of $765, $1,102, $1,185, $2,354, respectively | 985 | 2,375 | 1,498 | 5,446 |
Less: Reclassification adjustment for gains included in net income (loss), net of tax of $(42), $(13), $(106), $(2), respectively | (83) | (51) | (177) | (134) |
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Total | 902 | 2,324 | 1,321 | 5,312 |
Defined benefit pension and post-retirement plan: | ||||
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax of $(38), $(47), $(77), $(93), respectively | (68) | (83) | (136) | (163) |
Prior service income arising during the period, net of tax of $0, $34, $0, $34, respectively | 59 | 59 | ||
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax | (68) | (24) | (136) | (104) |
Other comprehensive income (loss) | 16,815 | (2,741) | 26,129 | 10,437 |
Comprehensive income (loss) | $ 191,791 | $ (226,287) | $ 286,326 | $ (163,123) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized gains (losses) on marketable securities arising during period, tax | 765 | 1,102 | 1,185 | 2,354 |
Reclassification adjustment for gains included in net income, tax | (42) | (13) | (106) | (2) |
Amortization of net prior service (credit) cost included in net periodic pension and post-retirement expense/income, tax | (38) | (47) | (77) | (93) |
Prior service credit, tax | $ 0 | $ 34 | $ 0 | $ 34 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 260,197 | $ (173,560) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 32,474 | 32,168 |
Amortization | 22,412 | 37,180 |
Stock-based compensation | 17,312 | 15,457 |
Provision for excess and obsolete inventory | 5,295 | 12,115 |
Contingent consideration fair value adjustment | 2,133 | 2,478 |
Deferred taxes | (3,563) | (21,458) |
Retirement plan actuarial gains | (2,504) | (1,862) |
Goodwill impairment | 254,946 | |
Acquired intangible assets impairment | 83,339 | |
Impairment of fixed assets | 4,179 | |
Property insurance recovery | (5,051) | |
Other | 1,153 | 576 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (214,189) | (138,230) |
Inventories | (8,149) | 30,222 |
Prepayments and other assets | 4,425 | (13,657) |
Accounts payable and other accrued expenses | 34,504 | (6,040) |
Deferred revenue and customer advances | 5,312 | 106,072 |
Retirement plan contributions | (1,983) | (2,298) |
Income taxes | 14,363 | 6 |
Net cash provided by operating activities | 169,192 | 216,582 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (45,967) | (46,593) |
Purchases of available-for-sale marketable securities | (334,819) | (437,311) |
Proceeds from sales of available-for-sale marketable securities | 313,254 | 334,798 |
Proceeds from maturities of available-for-sale marketable securities | 307,607 | 128,024 |
Proceeds from property insurance | 5,051 | |
Net cash provided by (used for) investing activities | 240,075 | (16,031) |
Cash flows from financing activities: | ||
Issuance of common stock under stock purchase and stock option plans | 15,215 | 17,896 |
Repurchase of common stock | (94,328) | (56,783) |
Dividend payments | (27,925) | (24,425) |
Payments related to net settlement of employee stock compensation awards | (12,438) | (9,152) |
Payments of contingent consideration | (1,050) | (11,697) |
Net cash used for financing activities | (120,526) | (84,161) |
Effects of exchange rate changes on cash and cash equivalents | 1,724 | |
Increase in cash and cash equivalents | 290,465 | 116,390 |
Cash and cash equivalents at beginning of period | 307,884 | 264,705 |
Cash and cash equivalents at end of period | $ 598,349 | $ 381,095 |
The Company
The Company | 6 Months Ended |
Jul. 02, 2017 | |
The Company | A. THE COMPANY Teradyne, Inc. (“Teradyne”) is a leading global supplier of automation equipment for test and industrial applications. Teradyne designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s industrial automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Teradyne’s automatic test equipment and industrial automation products and services include: • semiconductor test (“Semiconductor Test”) systems; • defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); • industrial automation (“Industrial Automation”) products; and • wireless test (“Wireless Test”) systems. |
Accounting Policies
Accounting Policies | 6 Months Ended |
Jul. 02, 2017 | |
Accounting Policies | B. ACCOUNTING POLICIES Basis of Presentation The consolidated interim financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such interim financial statements. Certain prior year amounts were reclassified to conform to the current year presentation. The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2017, for the year ended December 31, 2016. Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates. Stock-Based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Adoption of this ASU required recognition of a cumulative effect adjustment to retained earnings for any prior year excess tax benefits or tax deficiencies not previously recorded. The cumulative effect adjustment of $39 million was recorded as an increase to retained earnings and deferred tax assets. This ASU also required a change in how Teradyne recognizes the excess tax benefits or tax deficiencies related to stock-based compensation. Prior to adopting ASU 2016-09, these excess tax benefits or tax deficiencies were credited or charged to additional paid-in capital in Teradyne’s consolidated balance sheets. In accordance with ASU 2016-09, starting in first quarter of 2017, these excess tax benefits or tax deficiencies are recognized as a discrete tax benefit or discrete tax expense to the current income tax provision in Teradyne’s consolidated statements of operations. ASU 2016-09 requires companies to adopt the amendment related to accounting for excess tax benefits or tax deficiencies on a prospective basis. For the three and six months ended July 2, 2017, Teradyne recognized a discrete tax benefit of $0.8 and $6.0 million, respectively, related to net excess tax benefit. In addition, under ASU 2016-09, all excess tax benefits related to share-based payments are reported as cash flows from operating activities. Previously, excess tax benefits from share-based payments arrangements were reported as cash flows from financing activities. The classification amendment was applied prospectively. This ASU also clarifies that all cash payments made to taxing authorities on the employees’ behalf for withheld shares should be presented as financing activities on the statement of cash flows. Previously, Teradyne reported cash payments made to taxing authorities as operating activities on the statement of cash flows. This change was applied retrospectively. Upon adoption of ASU 2016-09, Teradyne made an accounting policy election to continue accounting for forfeitures by applying an estimated forfeiture rate. Contingencies and Litigation Teradyne may be subject to certain legal proceedings, lawsuits and other claims as discussed in Note P. Teradyne accrues for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, Teradyne accrues the amount at the low end of the range. Teradyne adjusts the accruals from time to time as additional information is received, but the loss incurred may be significantly greater than or less than the amount accrued. Loss contingencies are disclosed when they are material and there is at least a reasonable possibility that a loss has been incurred. Attorney fees related to legal matters are expensed as incurred. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jul. 02, 2017 | |
Recently Issued Accounting Pronouncements | C. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS On March 10, 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost On January 26, 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.” In October 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory ” In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” “Leases.” In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ” In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” |
Inventories
Inventories | 6 Months Ended |
Jul. 02, 2017 | |
Inventories | D. INVENTORIES Inventories, net consisted of the following at July 2, 2017 and December 31, 2016: July 2, December 31, (in thousands) Raw material $ 64,235 $ 58,530 Work-in-process 15,842 22,946 Finished Goods 73,568 54,482 $ 153,645 $ 135,958 Inventory reserves for the periods ending July 2, 2017 and December 31, 2016 were $114.8 million and $116.0 million, respectively. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jul. 02, 2017 | |
Financial Instruments | E. FINANCIAL INSTRUMENTS Cash Equivalents Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Marketable Securities Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “ Investments—Debt and Equity Securities. On a quarterly basis, Teradyne reviews its investments to identify and evaluate those that have an indication of a potential other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include: • The length of time and the extent to which the market value has been less than cost; • The financial condition and near-term prospects of the issuer; and • The intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the three and six months ended July 2, 2017 and July 3, 2016. As defined in ASC 820-10, “ Fair Value Measurements and Disclosures, Level 1: Quoted prices in active markets for identical assets as of the reporting date; Level 2: Inputs other than Level 1, that are observable either directly or indirectly as of the reporting date. For example, a common approach for valuing fixed income securities is the use of matrix pricing. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices, and is considered a Level 2 input; or Level 3: Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include Teradyne’s own data. Teradyne’s available-for-sale debt and equity securities are classified as Level 1 and Level 2. Acquisition-related contingent consideration is classified within Level 3. Teradyne determines the fair value of acquisition-related contingent consideration using a Monte Carlo simulation model. Assumptions utilized in the model include forecasted revenues, revenue volatility and discount rate. The vast majority of Level 2 securities are fixed income securities priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities. Realized gains recorded in the three and six months ended July 2, 2017 were $0.2 million and $0.5 million, respectively. Realized losses recorded in the three and six months ended July 2, 2017 were $0.1 million and $0.2 million, respectively. Realized gains in the three and six months ended July 3, 2016 were $0.3 million and $0.4 million, respectively. Realized losses recorded in the three and six months ended July 3, 2016 were $0.2 million and $0.3 million, respectively. Realized gains are included in interest income and realized losses are included in interest expense. Unrealized gains and losses are included in accumulated other comprehensive income (loss). The cost of securities sold is based on the specific identification method. During the three and six months ended July 2, 2017 and July 3, 2016, there were no transfers in or out of Level 1, Level 2 or Level 3 financial instruments. The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of July 2, 2017 and December 31, 2016. July 2, 2017 Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) Assets Cash $ 295,337 $ — $ — $ 295,337 Cash equivalents 179,293 123,719 — 303,012 Available-for-sale securities: U.S. Treasury securities — 812,477 — 812,477 Commercial paper — 73,275 — 73,275 Corporate debt securities — 64,453 — 64,453 U.S. government agency securities — 28,121 — 28,121 Certificates of deposit and time deposits — 22,253 — 22,253 Equity and debt mutual funds 20,675 — — 20,675 Non-U.S. government securities — 585 — 585 Total $ 495,305 $ 1,124,883 $ — $ 1,620,188 Derivative assets — 23 — 23 Total $ 495,305 $ 1,124,906 $ — $ 1,620,211 Liabilities Contingent consideration $ — $ — $ 39,415 $ 39,415 Derivative liabilities — 304 — 304 Total $ — $ 304 $ 39,415 $ 39,719 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 474,630 $ 123,719 $ — $ 598,349 Marketable securities — 809,338 — 809,338 Long-term marketable securities 20,675 191,826 — 212,501 Prepayments — 23 — 23 $ 495,305 $ 1,124,906 $ — $ 1,620,211 Liabilities . Other current liabilities $ — $ 304 $ — $ 304 Contingent consideration — — 22,432 22,432 Long-term contingent consideration — — 16,983 16,983 $ — $ 304 $ 39,415 $ 39,719 December 31, 2016 Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) Assets Cash $ 214,722 $ — $ — $ 214,722 Cash equivalents 37,458 55,704 — 93,162 Available for sale securities: U.S. Treasury securities — 900,038 — 900,038 Commercial paper — 161,630 — 161,630 Corporate debt securities — 100,153 — 100,153 Certificates of deposit and time deposits — 82,133 — 82,133 U.S. government agency securities — 42,014 — 42,014 Equity and debt mutual funds 18,171 — — 18,171 Non-U.S. government securities — 728 — 728 Total $ 270,351 $ 1,342,400 $ — $ 1,612,751 Derivative assets — 1 — 1 Total $ 270,351 $ 1,342,401 $ — $ 1,612,752 Liabilities Contingent consideration $ — $ — $ 38,332 $ 38,332 Derivative liabilities — 131 — 131 Total $ — $ 131 $ 38,332 $ 38,463 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 252,180 $ 55,704 $ — $ 307,884 Marketable securities — 871,024 — 871,024 Long-term marketable securities 18,171 415,672 — 433,843 Prepayments — 1 — 1 $ 270,351 $ 1,342,401 $ — $ 1,612,752 Liabilities Other accrued liabilities $ — $ 131 $ — $ 131 Contingent consideration — — 1,050 1,050 Long-term contingent consideration — — 37,282 37,282 $ — $ 131 $ 38,332 $ 38,463 Changes in the fair value of Level 3 contingent consideration for the three and six months ended July 2, 2017 and July 3, 2016 were as follows: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 37,916 $ 23,609 $ 38,332 $ 37,436 Payments (a) — — (1,050 ) (15,000 ) Fair value adjustment (b)(c) 1,499 1,305 2,133 2,478 Balance at end of period $ 39,415 $ 24,914 $ 39,415 $ 24,914 (a) In the six months ended July 2, 2017, Teradyne paid $1.1 million of contingent consideration for the earn-out in connection with the acquisition of Avionics Interface Technology, LLC (“AIT”). In the six months ended July 3, 2016, based on Universal Robot’s calendar year 2015 EBITA results, Teradyne paid $15.0 million or 100% of the eligible EBITA contingent consideration amount in connection with the acquisition of Universal Robots. (b) In the three and six months ended July, 2, 2017, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.5 million and $2.1 million, respectively, primarily due to a decrease in the discount rate. In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $0.8 million and $1.9 million, respectively, primarily due to a decrease in the discount rate. (c) In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenue. The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments: Liability July 2, Valuation Technique Unobservable Inputs Weighted Average (in thousands) Contingent consideration (Universal Robots) $22,432 Monte Carlo Simulation Revenue for the period July 1, 2015— December 31, 2017 volatility 12.8 % Discount Rate 2.9 % $16,983 Monte Carlo Simulation Revenue for the period July 1, 2015— December 31, 2018 volatility 12.8 % Discount Rate 2.9 % As of July 2, 2017, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenue, revenue volatility and discount rate. Increases or decreases in the inputs would result in a higher or lower fair value measurement. The maximum payment for each of the two Universal Robots revenue earn-outs is $25.0 million. The carrying amounts and fair values of Teradyne’s financial instruments at July 2, 2017 and December 31, 2016 were as follows: July 2, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Assets Cash and cash equivalents $ 598,349 $ 598,349 $ 307,884 $ 307,884 Marketable securities 1,021,839 1,021,839 1,304,867 1,304,867 Derivative assets 23 23 1 1 Liabilities Contingent consideration 39,415 39,415 38,332 38,332 Derivative liabilities 304 304 131 131 Convertible debt (1) 359,245 526,976 352,669 486,754 (1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features. The fair values of accounts receivable, net and accounts payable approximate the carrying value due to the short-term nature of these instruments. The following tables summarize the composition of available-for-sale marketable securities at July 2, 2017 and December 31, 2016: July 2, 2017 Available-for-Sale Fair Market Value of Investments with Unrealized Losses Cost Unrealized Gain Unrealized (Loss) Fair Market Value (in thousands) U.S. Treasury securities $ 814,699 $ 69 $ (2,291 ) $ 812,477 $ 808,057 Commercial paper 73,291 — (16 ) 73,275 65,401 Corporate debt securities 62,766 1,954 (267 ) 64,453 33,059 U.S. government agency securities 28,135 7 (21 ) 28,121 20,800 Certificates of deposit and time deposits 22,245 8 — 22,253 — Equity and debt mutual funds 17,570 3,122 (17 ) 20,675 1,371 Non-U.S. government securities 578 7 — 585 — $ 1,019,284 $ 5,167 $ (2,612 ) $ 1,021,839 $ 928,688 Reported as follows: Cost Unrealized Gain Unrealized (Loss) Fair Market Value Fair Market Value of Investments with Unrealized Losses (in thousands) Marketable securities $ 810,544 $ 15 $ (1,221 ) $ 809,338 $ 770,963 Long-term marketable securities 208,740 5,152 (1,391 ) 212,501 157,725 $ 1,019,284 $ 5,167 $ (2,612 ) $ 1,021,839 $ 928,688 December 31, 2016 Available-for-Sale Fair Market Value of Investments with Unrealized Losses Cost Unrealized Gain Unrealized (Loss) Fair Value (in thousands) U.S. Treasury securities $ 901,975 $ 97 $ (2,034 ) $ 900,038 $ 572,284 Commercial paper 161,672 24 (66 ) 161,630 84,034 Corporate debt securities 99,708 1,065 (620 ) 100,153 53,642 Certificates of deposit and time deposits 82,080 54 (1 ) 82,133 7,760 U.S. government agency securities 42,026 7 (19 ) 42,014 13,461 Equity and debt mutual funds 16,505 1,724 (58 ) 18,171 1,661 Non-U.S. government securities 745 6 (23 ) 728 137 $ 1,304,711 $ 2,977 $ (2,821 ) $ 1,304,867 $ 732,979 Reported as follows: Cost Unrealized Gain Unrealized (Loss) Fair Market Value Fair Market Value of Investments with Unrealized Losses (in thousands) Marketable securities $ 871,321 $ 134 $ (431 ) $ 871,024 $ 423,128 Long-term marketable securities 433,390 2,843 (2,390 ) 433,843 309,851 $ 1,304,711 $ 2,977 $ (2,821 ) $ 1,304,867 $ 732,979 As of July 2, 2017, the fair market value of investments with unrealized losses totaled $928.7 million. Of this value, $1.8 million had unrealized losses of $0.2 million for greater than one year and $926.9 million had unrealized losses of $2.4 million for less than one year. As of December 31, 2016, the fair market value of investments with unrealized losses totaled $733.0 million. Of this value, $2.9 million had unrealized losses of $0.3 million for greater than one year and $730.1 million had unrealized losses of $2.5 million for less than one year. Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at July 2, 2017 and December 31, 2016 were temporary. The contractual maturities of investments held at July 2, 2017 were as follows: July 2, 2017 Cost Fair Market Value (in thousands) Due within one year $ 810,544 $ 809,338 Due after 1 year through 5 years 139,051 138,811 Due after 5 years through 10 years 14,062 13,731 Due after 10 years 38,057 39,284 Total $ 1,001,714 $ 1,001,164 Contractual maturities of investments held at July 2, 2017 exclude equity and debt mutual funds as they do not have contractual maturity dates. Derivatives Teradyne conducts business in a number of foreign countries, with certain transactions denominated in local currencies. The purpose of Teradyne’s foreign currency management is to minimize the effect of exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. Teradyne does not use derivative financial instruments for trading or speculative purposes. To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings, and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies. The notional amount of foreign currency forward contracts at July 2, 2017 and December 31, 2016 was $94.1 million and $83.9 million, respectively. The fair value of the outstanding contracts was a loss of $0.3 million at July 2, 2017 and a loss of $0.1 million at December 31, 2016. For the three and six months ended July 2, 2017, Teradyne recorded net realized gains related to foreign currency forward contracts hedging net monetary assets and liabilities of $1.6 million and $0.6 million, respectively. For the three and six months ended July 3, 2016, Teradyne recorded net realized losses related to foreign currency forward contracts hedging net monetary positions of $6.9 million and $10.2 million, respectively. Gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in other (income) expense, net. The following table summarizes the fair value of derivative instruments at July 2, 2017 and December 31, 2016: Balance Sheet Location July 2, December 31, (in thousands) Derivatives not designated as hedging instruments: Foreign exchange contracts assets Prepayments $ 23 $ 1 Foreign exchange contracts liabilities Other current liabilities (304 ) (131 ) Total derivatives $ (281 ) $ (130 ) The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three and six months ended July 2, 2017 and July 3, 2016. Location of (Gains) Losses For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Derivatives not designated as hedging instruments: Foreign exchange contracts Other (income) expense, net $ (1,586 ) $ 6,901 $ (575 ) $ 10,199 Total Derivatives $ (1,586 ) $ 6,901 $ (575 ) $ 10,199 The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. For the three and six months ended July 2, 2017, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $2.4 million and $0.9 million, respectively. For the three and six months ended July 3, 2016, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $6.9 million and $10.4 million, respectively. |
Debt
Debt | 6 Months Ended |
Jul. 02, 2017 | |
Debt | F. DEBT Convertible Senior Notes On December 12, 2016, Teradyne completed a private offering of $460.0 million convertible senior unsecured notes (the “Notes”). The Notes will mature on December 15, 2023, unless earlier repurchased or converted. The Notes bear interest from December 12, 2016 at a rate of 1.25% per year payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017. The Notes will be convertible at the option of the noteholders at any time prior to the close of business on the business day immediately preceding September 15, 2023, under the following circumstances: (1) during any calendar quarter beginning after March 31, 2017 (and only during such calendar quarter), if the closing sale price of the Teradyne’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of the Teradyne’s common stock and the conversion rate on each such trading day; and (3) upon the occurrence of specified corporate events. On or after September 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Teradyne may satisfy its conversion obligation by paying or delivering cash, shares of its common stock or a combination of cash and shares of its common stock, at Teradyne’s election. The conversion rate for the Notes will initially be 31.4102 shares per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $31.84 per share of Teradyne’s common stock. The conversion rate is subject to adjustment under certain circumstances. Concurrent with the offering of the Notes, Teradyne entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the common stock that underlie the Notes, with a strike price equal to the initial conversion price of the Notes of $31.84. The Note Hedge Transactions cover, subject to customary anti-dilution adjustments, approximately 14.4 million shares of Teradyne’s common stock. The convertible note hedge is considered indexed to Teradyne’s stock as the terms of the Note Hedge Transactions do not contain an exercise contingency and the settlement amount equals the difference between the fair value of a fixed number of Teradyne’s shares and a fixed strike price. Because the only variable that can affect the settlement amount is Teradyne’s stock price, which is an input to the fair value of a fixed-for-fixed option contract, the convertible note hedge is considered indexed to Teradyne’s stock. Separately and concurrent with the pricing of the Notes, Teradyne entered into warrant transactions with the Option Counterparties (the “Warrant Transactions”) in which it sold net-share-settled (or, at its election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions cover, subject to customary anti-dilution adjustments, approximately 14.4 million shares of common stock. The strike price of the warrants will initially be $39.95 per share (subject to adjustment). The Warrant Transactions could have a dilutive effect to Teradyne’s common stock to the extent that the market price per share of Teradyne’s common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants. The Note Hedge Transactions are expected to reduce the potential dilution to Teradyne’s common stock upon any conversion of the Notes. However, the Warrant Transactions could separately have a dilutive effect to the extent that the market value per share of Teradyne’s common stock exceeds the applicable strike price of the warrant. In connection with establishing their initial hedge of these convertible note hedge and warrant transactions, the Option Counterparties have entered into various derivative transactions with respect to Teradyne’s common stock and/or purchased shares of Teradyne’s common stock or other securities, including the Notes, concurrent with, or shortly after, the pricing of the Notes. In addition, the Option Counterparties may modify their hedge positions by entering into or unwinding various derivative transactions with respect to Teradyne’s common stock or by selling Teradyne’s common stock or other securities, including the Notes, in secondary market transactions (and may do so during any observation period related to the conversion of the Notes). These activities could adversely affect the value of Teradyne’s common stock and the Notes. Teradyne’s effective annual interest rate on the Notes is 5.0%. The Notes are classified as long-term debt in the balance sheet based on their December 15, 2023 maturity date. Debt issuance costs of approximately $7.2 million are being amortized to interest expense over the seven year term of the Notes. As of July 2, 2017, unamortized debt issuance costs were $6.7 million. The notes are classified as long-term debt in the consolidated balance sheets at July 2, 2017 and December 31, 2016. The below tables represent the key components of Teradyne’s convertible senior notes: July 2, December 31, (in thousands) Debt Principal $ 460,000 $ 460,000 Unamortized discount 100,755 107,331 Net Carrying amount of convertible debt $ 359,245 $ 352,669 For the Three Months July 2, 2017 For the Six Months July 2, 2017 (in thousands) Contractual interest expense on the coupon $ 1,438 $ 2,875 Amortization of the discount component and debt issue fees recognized as interest expense 3,308 6,576 Total interest expense on the convertible debt $ 4,746 $ 9,451 As of July 2, 2017, the remaining unamortized discount was $100.8 million, which will be amortized over 6.5 years using the effective interest rate method. The carrying amount of the equity component was $100.8 million. As of July 2, 2017, the conversion rate was equal to the initial conversion price of approximately $31.84 per share and the if-converted value of the Notes was $433.9 million. Revolving Credit Facility On April 27, 2015, Teradyne entered into a Credit Agreement (the “Credit Agreement”) with Barclays Bank PLC, as administrative agent and collateral agent, and the lenders party thereto. The Credit Agreement provides for a five-year, senior secured revolving credit facility of up to $350 million (the “Credit Facility”). The Credit Agreement further provides that, subject to customary conditions, Teradyne may seek to obtain from existing or new lenders incremental commitments under the Credit Facility in an aggregate principal amount not to exceed $150 million. Proceeds from the Credit Facility may be used for general corporate purposes and working capital. Teradyne incurred $2.3 million in costs related to the revolving credit facility. These costs are being amortized over the five-year term of the revolving credit facility and are included in interest expense in the statements of operations. As of August 11, 2017, Teradyne has not borrowed any funds under the Credit Facility. The interest rates applicable to loans under the Credit Facility are, at Teradyne’s option, equal to either a base rate plus a margin ranging from 0.00% to 1.00% per annum or LIBOR plus a margin ranging from 1.00% to 2.00% per annum, based on the Consolidated Leverage Ratio of Teradyne and its Restricted Subsidiaries. In addition, Teradyne will pay a commitment fee on the unused portion of the commitments under the Credit Facility ranging from 0.125% to 0.350% per annum, based on the then applicable Consolidated Leverage Ratio. Teradyne is not required to repay any loans under the Credit Facility prior to maturity, subject to certain customary exceptions. Teradyne is permitted to prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, other than customary LIBOR breakage costs. The Credit Agreement contains customary events of default, representations, warranties and affirmative and negative covenants that, among other things, limit Teradyne’s and its Restricted Subsidiaries’ ability to sell assets, grant liens on assets, incur other secured indebtedness and make certain investments and restricted payments, all subject to exceptions set forth in the Credit Agreement. The Credit Agreement also requires Teradyne to satisfy two financial ratios measured as of the end of each fiscal quarter: a consolidated leverage ratio and an interest coverage ratio. As of August 11, 2017, Teradyne was in compliance with all covenants. The Credit Facility is guaranteed by certain of Teradyne’s domestic subsidiaries and collateralized by assets of Teradyne and such subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries. |
Prepayments
Prepayments | 6 Months Ended |
Jul. 02, 2017 | |
Prepayments | G. PREPAYMENTS Prepayments consist of the following and are included in prepayments on the balance sheet: July 2, December 31, (in thousands) Contract manufacturer and supplier prepayments $ 72,400 $ 77,017 Prepaid taxes 9,686 4,664 Prepaid maintenance and other services 7,952 7,676 Other prepayments 15,922 19,097 Total prepayments $ 105,960 $ 108,454 |
Deferred Revenue and Customer A
Deferred Revenue and Customer Advances | 6 Months Ended |
Jul. 02, 2017 | |
Deferred Revenue and Customer Advances | H. DEFERRED REVENUE AND CUSTOMER ADVANCES Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet: July 2, December 31, (in thousands) Extended warranty $ 29,377 $ 28,200 Maintenance and training 57,544 46,803 Customer advances, undelivered elements and other 26,845 32,938 Total deferred revenue and customer advances $ 113,766 $ 107,941 |
Product Warranty
Product Warranty | 6 Months Ended |
Jul. 02, 2017 | |
Product Warranty | I. PRODUCT WARRANTY Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance, delivery or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The warranty balance below is included in other accrued liabilities on the balance sheet. For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 7,054 $ 7,496 $ 7,203 $ 6,925 Accruals for warranties issued during the period 5,294 4,888 8,315 8,378 Adjustments related to pre-existing warranties 7 (420 ) (464 ) (177 ) Settlements made during the period (3,262 ) (3,180 ) (5,961 ) (6,342 ) Balance at end of period $ 9,093 $ 8,784 $ 9,093 $ 8,784 When Teradyne receives revenue for extended warranties beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The extended warranty balance below is included in short and long-term deferred revenue and customer advances on the balance sheet. For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 24,969 $ 29,427 $ 28,200 $ 30,024 Deferral of new extended warranty revenue 10,442 6,966 14,490 12,398 Recognition of extended warranty deferred revenue (6,034 ) (5,971 ) (13,313 ) (12,000 ) Balance at end of period $ 29,377 $ 30,422 $ 29,377 $ 30,422 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 02, 2017 | |
Stock-Based Compensation | J. STOCK-BASED COMPENSATION Under Teradyne’s stock compensation plans, Teradyne grants stock options, restricted stock units and performance-based restricted stock units, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”). Stock options to purchase Teradyne’s common stock at 100% of the fair market value on the grant date vest in equal annual installments over four years from the grant date and have a maximum term of seven years. Time-based restricted stock unit awards granted to employees vest in equal annual installments over four years. Restricted stock unit awards granted to non-employee directors vest after a one year period, with 100% of the award vesting on the first anniversary of the grant date. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse. Commencing in January 2014, Teradyne granted performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). For TSR grants issued in 2014 and 2015, Teradyne’s three-year TSR performance is measured against the Philadelphia Semiconductor Index. For TSR grants issued in 2016 and 2017, Teradyne’s three-year TSR performance is measured against the New York Stock Exchange (“NYSE”) Composite Index. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. The TSR PRSUs are valued using a Monte Carlo simulation model. The number of units expected to be earned, based upon the achievement of the TSR market condition, is factored into the grant date Monte Carlo valuation. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized regardless of the eventual number of units that are earned based upon the market condition, provided the executive officer remains an employee at the end of the three-year period. Compensation expense is reversed if at any time during the three-year service period the executive officer is no longer an employee, subject to the retirement and termination eligibility provisions noted below. In January 2017 and 2016, Teradyne granted PRSUs to its executive officers with a performance metric based on three-year cumulative non-GAAP profit before interest and tax (“PBIT”) as a percent of Teradyne’s revenue. Non-GAAP PBIT is a financial measure equal to GAAP income from operations less restructuring and other, net; amortization of acquired intangible assets; acquisition and divestiture related charges or credits; pension actuarial gains and losses; non-cash convertible debt interest expense; and other non-recurring gains and charges. The final number of PBIT PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The PBIT PRSUs will vest upon the three-year anniversary of the grant date. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized based on the number of units that are earned based upon the three-year Teradyne PBIT as a percent of Teradyne’s revenue, provided the executive officer remains an employee at the end of the three-year period subject to the retirement and termination eligibility provisions noted below. Beginning with PRSUs granted in January 2014, if the recipient’s employment ends prior to the determination of the performance percentage due to (1) permanent disability or death or (2) retirement or termination other than for cause, after attaining both at least age sixty and at least ten years of service, then all or a portion of the recipient’s PRSUs (based on the actual performance percentage achieved on the determination date) will vest on the date the performance percentage is determined. Except as set forth in the preceding sentence, no PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period. During the six months ended July 2, 2017 and July 3, 2016, Teradyne granted 0.1 million and 0.1 million TSR PRSUs, respectively, with a grant date fair value of $35.66 and $20.29, respectively. The fair value was estimated using the Monte Carlo simulation model with the following assumptions: For the Six Months Ended July 2, July 3, Risk-free interest rate 1.5 % 1.0 % Teradyne volatility-historical 26.6 % 27.0 % NYSE Composite Index volatility-historical 13.4 % 13.1 % Dividend yield 1.0 % 1.2 % Expected volatility was based on the historical volatility of Teradyne’s stock and the NYSE Composite Index for the 2017 and 2016 grant over the most recent three-year period. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.28 per share for 2017 grants and $0.24 per share for 2016 grants, divided by Teradyne’s stock price on the grant date of $28.56 for the 2017 grant and $19.43 for the 2016 grant. During the six months ended July 2, 2017, Teradyne granted 0.1 million of PBIT PRSUs with a grant date fair value of $27.72. During the six months ended July 2, 2017, Teradyne granted 0.8 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $27.98, 0.1 million of service-based restricted stock unit awards to non-employee directors at a weighted average grant date fair value of $35.21, and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $7.13. During the six months ended July 3, 2016, Teradyne granted 0.1 million PBIT PRSUs with a grant date fair value of $18.71. During the six months ended July 3, 2016, Teradyne granted 1.2 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $18.49, 0.1 million of service-based restricted stock unit awards to non-employee directors at a weighted average grant date fair value of $18.71 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $5.30. Restricted stock unit awards granted to employees vest in equal annual installments over four years. Stock options vest in equal annual installments over four years and have a term of seven years from the date of grant. The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Six Months Ended July 2, July 3, Expected life (years) 5.0 5.0 Risk-free interest rate 2.0 % 1.4 % Volatility-historical 27.8 % 32.9 % Dividend yield 1.0 % 1.2 % Teradyne determined the stock options’ expected life based upon historical exercise data for executive officers, the age of the executive officers and the terms of the stock option grant. Volatility was determined using historical volatility for a period equal to the expected life. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.28 per share for 2017 grants and $0.24 per share for 2016 grants, divided by Teradyne’s stock price on the grant date, of $28.56 for the 2017 grant and $19.43 for the 2016 grant. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jul. 02, 2017 | |
Accumulated Other Comprehensive (Loss) Income | K. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME Changes in accumulated other comprehensive (loss) income, which is presented net of tax, consist of the following: Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Retirement Plan Prior Service Credit Total (in thousands) Six Months Ended July 2, 2017 Balance at December 31, 2016, net of tax of $0, $209, $(778) $ (21,921 ) $ (60 ) $ 1,767 $ (20,214 ) Other comprehensive income before reclassifications, net of tax of $0, $1,185, $0 24,944 1,498 — 26,442 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(106), $(77) — (177 ) (136 ) (313 ) Net current period other comprehensive income (loss), net of tax of $0, $1,079 $(77) 24,944 1,321 (136 ) 26,129 Balance at July 2, 2017, net of tax of $0, $1,288, $(855) $ 3,023 $ 1,261 $ 1,631 $ 5,915 Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Marketable Securities Retirement Plan Prior Service Credit Total (in thousands) Six Months Ended July 3, 2016 Balance at December 31, 2015, net of tax of $0, $(459), $(622) $ (8,759 ) $ (1,414 ) $ 2,029 $ (8,144 ) Other comprehensive income before reclassifications, net of tax of $0, $2,354, $34 5,229 5,446 59 10,734 Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $0, $(2), $(93) — (134 ) (163 ) (297 ) Net current period other comprehensive income (loss), net of tax of $0, $2,352, $(59) 5,229 5,312 (104 ) 10,437 Balance as July 3, 2016, net of tax of $0, $1,893, $(681) $ (3,530 ) $ 3,898 $ 1,925 $ 2,293 Reclassifications out of accumulated other comprehensive (loss) income to the statement of operations for the three and six months ended July 2, 2017 and July 3, 2016 were as follows: Details about Accumulated Other Comprehensive Income Components For the Three Months Ended For the Six Months Ended Affected Line Item in the Statements of Operations July 2, July 3, July 2, July 3, (in thousands) Available-for-sale marketable securities: Unrealized gains, net of tax of $42, $13, $106, $2 $ 83 $ 51 $ 177 $ 134 Interest income Defined benefit pension and postretirement plan: Amortization of prior service benefit, net of tax of $38, $47, $77, $93 68 83 136 163 (a) Total reclassifications, net of tax of $80, $60, $183, $95 $ 151 $ 134 $ 313 $ 297 Net income (a) The amortization of prior service credit is included in the computation of net periodic pension cost and postretirement benefit; see Note O: “Retirement Plans.” |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Acquired Intangible Assets | L. GOODWILL AND ACQUIRED INTANGIBLE ASSETS Goodwill Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other” In the second quarter of 2016, the Wireless Test reporting unit (which is Teradyne’s Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from Teradyne’s largest Wireless Test segment customer (who had previously contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. Teradyne considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test. Teradyne used the income and market approaches to determine the fair value of the Wireless Test reporting unit for step 1 of the goodwill impairment test. With respect to the income approach, Teradyne used the discounted cash flow method, which included seven year future cash flow projections and an estimated terminal value. The cash flow projections were prepared using Teradyne’s forecast, which was based upon underlying estimates of the total market size, and Teradyne’s market share in the wireless test market developed using Teradyne and independent third party data. The estimated terminal value was calculated using the Gordon Growth model. The market approach used a revenue multiple to develop an estimate of fair value. The revenue multiple was estimated using enterprise value as a ratio of next twelve months revenue for comparable companies. Teradyne equally weighted the income and market approaches to determine the fair value of the Wireless Test reporting unit. The carrying amount of the Wireless Test reporting unit exceeded its fair value; therefore, the second step of the goodwill impairment test was performed to calculate implied goodwill and to measure the amount of the impairment loss. Teradyne allocated the fair value of the Wireless Test reporting unit to all of its assets and liabilities (including unrecognized intangible assets). The net book value of raw materials inventory was estimated as an approximation of current replacement costs. The fair value of finished goods inventory was estimated at the present value of selling price less direct selling costs and profit on the selling effort. The selling price used in the inventory fair values was based upon the product gross margins included in Teradyne’s forecast. The fair value of the deferred revenue liability was estimated by assessing the costs required to service the obligation plus a reasonable profit margin. The fair value for personal property assets, which consisted of furniture and fixtures, machinery and equipment, computer equipment, software and leasehold improvements, was estimated using the replacement cost approach, which approximated carrying value. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships and customer backlog were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. Based upon this allocation, Teradyne determined that goodwill was valued at $8.0 million and recorded an impairment loss of $254.9 million in the second quarter of 2016. The changes in the carrying amount of goodwill by reportable segments for the six months ended July 2, 2017, were as follows: Industrial Automation System Test Wireless Test Semiconductor Test Total (in thousands) Balance at December 31, 2016 Goodwill $ 204,851 $ 158,699 $ 361,819 $ 260,540 $ 985,909 Accumulated impairment losses — (148,183 ) (353,843 ) (260,540 ) (762,566 ) 204,851 10,516 7,976 — 223,343 Foreign currency translation adjustment 18,872 — — — 18,872 Balance at July 2, 2017 Goodwill 223,723 158,699 361,819 260,540 1,004,781 Accumulated impairment losses — (148,183 ) (353,843 ) (260,540 ) (762,566 ) $ 223,723 $ 10,516 $ 7,976 $ — $ 242,215 Acquired Intangible Assets Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. As a result of the Wireless Test segment goodwill impairment review in the second quarter of 2016, Teradyne performed an impairment test of the Wireless Test segment’s intangible and long-lived assets. The impairment test is based on a comparison of the estimated undiscounted cash flows to the carrying value of the asset group. If undiscounted cash flows for the asset group are less than the carrying amount, the asset group is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment contain management’s best estimates using appropriate assumptions and projections at that time. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. As a result of the analysis, Teradyne recorded an $83.3 million impairment charge in the second quarter of 2016 in acquired intangible assets impairment on the statements of operations. Amortizable acquired intangible assets consist of the following and are included in acquired intangible assets, net on the balance sheet: July 2, 2017 Gross Carrying Amount Accumulated Amortization Cumulative Net Carrying Amount (in thousands) Developed technology $ 270,877 $ (215,973 ) $ (524 ) $ 54,380 Customer relationships 92,741 (81,294 ) (55 ) 11,392 Tradenames and trademarks 50,100 (25,233 ) (136 ) 24,731 Non-compete agreement 320 (220 ) — 100 Customer backlog 170 (170 ) — — Total acquired intangible assets $ 414,208 $ (322,890 ) $ (715 ) $ 90,603 December 31, 2016 Gross Carrying Amount Accumulated Amortization Cumulative Net Carrying Amount (in thousands) Developed technology $ 270,877 $ (206,376 ) $ (5,093 ) $ 59,408 Customer relationships 92,741 (76,707 ) (538 ) 15,496 Tradenames and trademarks 50,100 (23,435 ) (1,308 ) 25,357 Non-compete agreement 320 (180 ) — 140 Customer backlog 170 (170 ) — — Total acquired intangible assets $ 414,208 $ (306,868 ) $ (6,939 ) $ 100,401 Aggregate acquired intangible asset amortization expense was $8.2 million and $16.1 million, respectively, for the three and six months ended July 2, 2017 and $16.2 million and $36.2 million, respectively, for the three and six months ended July 3, 2016. Estimated acquired intangible asset amortization expense for each of the five succeeding fiscal years is as follows: Year Amortization Expense (in thousands) 2017 (remainder) 14,353 2018 28,527 2019 24,604 2020 10,800 2021 3,621 Thereafter 8,698 |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 6 Months Ended |
Jul. 02, 2017 | |
Net Income (Loss) per Common Share | M. NET INCOME (LOSS) PER COMMON SHARE The following table sets forth the computation of basic and diluted net income (loss) per common share: For the Three Months Ended For the Six Months Ended July 2, July 3, 2016 July 2, July 3, 2016 (in thousands, except per share amounts) Net income (loss) for basic and diluted net income (loss) per common share $ 174,976 $ (223,546 ) $ 260,197 $ (173,560 ) Weighted average common shares-basic 198,774 203,018 199,390 203,645 Effect of dilutive potential common shares: Restricted stock units 1,622 — 1,576 — Incremental shares from assumed conversion of convertible note (1) 752 — 376 — Stock options 318 — 354 — Employee stock purchase plan 63 — 36 — Dilutive potential common shares 2,755 — 2,342 — Weighted average common shares-diluted 201,529 203,018 201,732 203,645 Net income (loss) per common share-basic $ 0.88 $ (1.10 ) $ 1.30 $ (0.85 ) Net income (loss) per common share-diluted $ 0.87 $ (1.10 ) $ 1.29 $ (0.85 ) (1) Incremental shares from assumed conversion of the convertible notes for the three and six months ended July 2, 2017 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.84, multiplied by the 14.4 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period. The computation of diluted net income per common share for the three months ended July 2, 2017 excludes the effect of the potential exercise of stock options to purchase approximately 0.1 million shares because the effect would have been anti-dilutive. The computation of diluted net income per common share for the three and six months ended July 3, 2016 excludes the effect of the potential exercise of all outstanding stock options and restricted stock units because Teradyne had a net loss and inclusion would be anti-dilutive. |
Restructuring and Other
Restructuring and Other | 6 Months Ended |
Jul. 02, 2017 | |
Restructuring and Other | N. RESTRUCTURING AND OTHER During the three months ended July 2, 2017, Teradyne recorded $1.5 million for the increase in the fair value of the Universal Robots contingent consideration liability and $0.8 million for employee severance charges. During the six months ended July 2, 2017, Teradyne recorded $2.1 million for the increase in the fair value of the Universal Robots contingent consideration liability, $1.4 million for employee severance charges, primarily in Corporate and Industrial Automation, and $1.3 million was for a lease impairment of a Wireless Test facility in Sunnyvale, CA. The Sunnyvale, CA lease expires in 2020. The accrual for the future lease payments liability is reflected in other accrued liabilities and is expected to be paid over the term of the lease. During the three months ended July 3, 2016, Teradyne recorded $1.3 million for employee severance charges related to headcount reductions of 62 people, of which 47 people were in Wireless Test and 15 people were in Semiconductor Test, and $1.3 million of other charges for the increase in the fair value of contingent consideration liability, of which $0.8 million was related to Universal Robots and $0.6 million was related to AIT. During the three and six months ended July 3, 2016, Teradyne recorded $4.2 million for an impairment charge of fixed assets and $0.9 million for expenses related to an earthquake in Kumamoto, Japan. The $5.1 million of total charges were offset by $5.1 million of property insurance recovery related to the Japan earthquake. During the six months ended July 3, 2016, Teradyne recorded $2.5 million for the increase in the fair value of contingent consideration liability, of which $1.9 million was related to Universal Robots and $0.6 million was related to AIT, and $1.7 million for employee severance charges related to headcount reductions of 74 people, of which 47 people were in Wireless Test and 27 people were in Semiconductor Test. |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jul. 02, 2017 | |
Retirement Plans | O. RETIREMENT PLANS ASC 715, “Compensation—Retirement Benefits” Defined Benefit Pension Plan Teradyne has defined benefit pension plan covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under this plan are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to this plan in accordance with local laws and to the extent that such contributions are tax deductible. The assets of this plan consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”), as well as unfunded qualified foreign plan. In the six months ended July 2, 2017, Teradyne contributed $1.3 million to the U.S. supplemental executive defined benefit pension plan and $0.4 million to certain qualified plans for non-U.S. subsidiaries. For the three and six months ended July 2, 2017 and July 3, 2016, Teradyne’s net periodic pension (income) cost was comprised of the following: For the Three Months Ended July 2, 2017 July 3, 2016 United States Foreign United States Foreign (in thousands) Service cost $ 560 $ 206 $ 575 $ 199 Interest cost 3,264 179 3,401 199 Expected return on plan assets (3,004 ) (6 ) (3,472 ) (5 ) Amortization of prior service cost 18 — 24 — Net actuarial (gain) loss (2,732 ) 243 (654 ) — Total net periodic pension (income) cost $ (1,894 ) $ 622 $ (126 ) $ 393 For the Six Months Ended July 2, 2017 July 3, 2016 United States Foreign United States Foreign (in thousands) Service cost $ 1,120 $ 392 $ 1,151 $ 406 Interest cost 6,576 342 6,815 405 Expected return on plan assets (6,004 ) (12 ) (6,915 ) (11 ) Amortization of prior service cost 35 — 48 — Net actuarial (gain) loss (2,732 ) 243 (1,848 ) — Settlement — — — (238 ) Total net periodic pension (income) cost $ (1,005 ) $ 965 $ (749 ) $ 562 Postretirement Benefit Plan In addition to receiving pension benefits, U.S. Teradyne employees who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees. For the three and six months ended July 2, 2017 and July 3, 2016, Teradyne’s net periodic postretirement income was comprised of the following: For the Three For the Six July 2, July 3, July 2, July 3, (in thousands) Service cost $ 7 $ 9 $ 17 $ 19 Interest cost 50 53 100 109 Amortization of prior service benefit (124 ) (154 ) (248 ) (304 ) Actuarial gain (15 ) (15 ) (15 ) (15 ) Total net periodic post-retirement benefit $ (82 ) $ (107 ) $ (146 ) $ (191 ) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 02, 2017 | |
Commitments and Contingencies | P. COMMITMENTS AND CONTINGENCIES Purchase Commitments As of July 2, 2017, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $218.3 million, of which $206.1 million is for less than one year. Legal Claims Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on Teradyne’s results of operations, financial condition or cash flows. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 02, 2017 | |
Income Taxes | Q. INCOME TAXES The effective tax rate for the three months ended July 2, 2017 and July 3, 2016 was 15.4% and 3.2%, respectively. The effective tax rate for the six months ended July 2, 2017 and July 3, 2016 was 12.9% and 0.0%, respectively. The increase in the effective tax rate from the three and six months ended July 3, 2016 to the three and six months ended July 2, 2017 is primarily attributable to the effect of a U.S. non-deductible goodwill impairment charge, a shift in the geographic distribution of income which increased income subject to taxation in the U.S. relative to lower tax rate jurisdictions, decreases in the discrete benefits from tax reserve releases and non-taxable foreign exchange gains and an increase in the discrete benefit from stock-based compensation. The effective tax rates for the three and six months ended July 2, 2017 differed from the expected federal statutory rate of 35% primarily because of the favorable effect of statutory rates applicable to income earned outside the U.S. The tax rates for the three and six months ended July 2, 2017 were also reduced by the benefit from U.S. research and development tax credits, partially offset by additions to the uncertain tax positions for transfer pricing, both of which are included in the projected annual effective tax rate. Discrete tax items recorded in the three and six months ended July 2, 2017 amounted to expense of $0.5 million and benefit of $6.5 million, respectively. The $0.5 million of discrete tax expense recorded in the three months ended July 2, 2017 was primarily composed of $1.0 million of expense related to actuarial gains, $0.7 million of expense from non-taxable foreign exchange loss and $1.0 million of benefit from stock based compensation. The $6.5 million of discrete tax benefit recorded in the six months ended July 2, 2017 was primarily composed of $6.5 million of benefit from stock-based compensation, $1.0 million of expense related to actuarial gains, $0.7 million of benefit related to U.S. research and development tax credits and $0.3 million of expense from non-taxable foreign exchange loss. The effective tax rates for the three and six months ended July 3, 2016 differed from the expected federal statutory rate of 35% as a result of a non-deductible goodwill impairment charge, which reduced the benefit of the U.S. loss before income taxes, and increases in uncertain tax positions for transfer pricing, offset by the effect of lower statutory rates applicable to income earned outside the U.S. and the benefit of U.S. research and development tax credits, all of which were included in the projected annual effective tax rate. Discrete tax benefits recorded in the three and six months ended July 3, 2016 amounted to $4.4 million and $6.9 million, respectively. The $4.4 million of discrete tax benefits recorded in the three months ended July 3, 2016 was primarily composed of $2.6 million of tax reserve releases resulting from the settlement of a U.S. tax audit and $2.2 million from non-taxable foreign exchange gains net of $0.4 million of expense from other discrete tax items. The $6.9 million of discrete tax benefits recorded in the six months ended July 3, 2016 was primarily composed of $3.4 million from non-taxable foreign exchange gains, $2.6 million of tax reserve releases resulting from the settlement of a U.S. tax audit, and $0.9 million related to marketable securities. On a quarterly basis, Teradyne evaluates the realizability of the deferred tax assets by jurisdiction and assesses the need for a valuation allowance. As of July 2, 2017, Teradyne believes that it will ultimately realize the deferred tax assets recorded on the condensed consolidated balance sheets. However, should Teradyne believe that it is more-likely-than-not that the deferred tax assets would not be realized, the tax provision would increase in the period in which Teradyne determined that the realizability was not likely. Teradyne considers the probability of future taxable income and historical profitability, among other factors, in assessing the realizability of the deferred tax assets. As of July 2, 2017 and December 31, 2016, Teradyne had $42.5 million and $39.0 million, respectively, of reserves for uncertain tax positions. The $3.5 million net increase in reserves for uncertain tax positions is primarily composed of additions related to transfer pricing exposures and tax credits. As of July 2, 2017, Teradyne estimates that it is reasonably possible that the balance of uncertain tax positions may decrease approximately $0.8 million in the next twelve months as a result of a lapse of statutes of limitation. The estimated decrease is comprised primarily of reserves relating to tax credits. Teradyne recognizes interest and penalties related to income tax matters in income tax expense. As of July 2, 2017 and December 31, 2016, $0.4 million and $0.4 million, respectively, of interest and penalties were accrued for uncertain tax positions. For the six months ended July 2, 2017, benefit of $0.1 million was recorded for interest and penalties related to income tax items. For the six months ended July 3, 2016, an expense of $0.3 million was recorded for interest and penalties related to income tax items. Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings due to the tax holiday for the six months ended July 2, 2017 was $15.1 million, or $0.07 per diluted share. The tax savings due to the tax holiday for the six months ended July 3, 2016 was $30.7 million, or $0.15 per diluted share. The tax holiday is scheduled to expire on December 31, 2020. |
Segment Information
Segment Information | 6 Months Ended |
Jul. 02, 2017 | |
Segment Information | R. SEGMENT INFORMATION Teradyne has four operating segments (Semiconductor Test, Industrial Automation, System Test and Wireless Test), which are its reportable segments. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robots. The System Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. Each operating segment has a segment manager who is directly accountable to and maintains regular contact with Teradyne’s chief operating decision maker (Teradyne’s chief executive officer) to discuss operating activities, financial results, forecasts, and plans for the segment. Teradyne evaluates performance based on several factors, of which the primary financial measure is business segment income (loss) before income taxes. The accounting policies of the business segments in effect are described in Note B: “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2016. Segment information for the three and six months ended July 2, 2017 and July 3, 2016 is as follows: Semiconductor Test Industrial Automation System Test Wireless Test Corporate and Eliminations Consolidated (in thousands) Three Months Ended July 2, 2017 Revenues $ 593,152 $ 39,337 $ 36,732 $ 27,680 $ — $ 696,901 Income (loss) before income taxes (1)(2) 211,278 (1,081 ) (5,692 ) 4,514 (2,142 ) 206,877 Total assets (3) 766,395 349,023 108,083 62,900 1,743,824 3,030,225 Three Months Ended July 3, 2016 Revenues $ 435,323 $ 25,102 $ 48,940 $ 22,427 $ — $ 531,792 Income (loss) before income taxes (1)(2) 121,163 (4,501 ) 8,992 (356,505 ) 34 (230,817 ) Total assets (3) 731,394 346,290 91,374 61,618 1,177,182 2,407,858 Six Months Ended July 2, 2017 Revenues $ 948,679 $ 75,610 $ 76,578 $ 52,947 $ — $ 1,153,814 Income (loss) before income taxes (1)(2) 309,244 (3,652 ) (8,451 ) 6,046 (4,294 ) 298,893 Total assets (3) 766,395 349,023 108,083 62,900 1,743,824 3,030,225 Six Months Ended July 3, 2016 Revenues $ 775,588 $ 41,848 $ 102,610 $ 42,741 $ — $ 962,787 Income (loss) before income taxes (1)(2) 194,417 (11,669 ) 18,484 (376,645 ) 1,788 (173,625 ) Total assets (3) 731,394 346,290 91,374 61,618 1,177,182 2,407,858 (1) Interest income, interest expense, contingent consideration adjustments, pension and postretirement plan actuarial gains and other income (expense) are included in Corporate and Eliminations. (2) Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge. (3) Total business assets are attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. Included in the Semiconductor Test segment are charges and credits in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 1,624 $ 2,234 $ 2,943 $ 5,919 Restructuring and other—employee severance 132 337 (133 ) 751 Included in the Industrial Automation segment are charges in the following line item in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Restructuring and other—employee severance 321 — 945 — Included in the System Test segment are charges in the following line item in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 473 $ 237 $ 1,358 $ 320 Included in the Wireless Test segment are charges in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 472 $ 5,271 $ 994 $ 5,876 Restructuring and other—lease impairment — — 1,313 — Goodwill impairment — 254,946 — 254,946 Acquired intangible assets impairment — 83,339 — 83,339 Restructuring and other—employee severance — 967 — 967 Included in Corporate and Eliminations are charges and credits in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Restructuring and other—Universal Robots contingent consideration adjustment $ 1,499 $ 755 $ 2,133 $ 1,928 Restructuring and other—employee severance 325 — 530 — Restructuring and other—impairment of fixed assets and expenses related to Japan earthquake — 5,051 — 5,051 Restructuring and other—property insurance recovery and proceeds — (5,051 ) — (5,051 ) Restructuring and other—AIT contingent consideration adjustment — 550 — 550 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jul. 02, 2017 | |
Shareholders' Equity | S. SHAREHOLDERS’ EQUITY Stock Repurchase Program In December 2016, the Board of Directors approved a $500 million share repurchase authorization which commenced on January 1, 2017. Teradyne intends to repurchase at least $200 million in 2017. During the six months ended July 2, 2017, Teradyne repurchased 3.0 million shares of common stock at an average price of $31.77 per share, for a total price of $94.3 million. During the six months ended July 3, 2016, Teradyne repurchased 2.9 million shares of common stock at an average price per share of $19.29, for a total price of $56.8 million. The total price includes commissions and is recorded as a reduction to retained earnings. Dividend Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors. In January 2017 and May 2017, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.07 per share. Dividend payments for the three and six months ended July 2, 2017 were $13.9 million and $27.9 million, respectively. In January 2016 and May 2016, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.06 per share. Dividend payments for the three and six months ended July 3, 2016 were $12.2 million and $24.4 million, respectively. While Teradyne declared a quarterly cash dividend and authorized a share repurchase program, it may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of Teradyne’s Board of Directors which will consider, among other things, Teradyne’s earnings, capital requirements and financial condition. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Basis of Presentation | Basis of Presentation The consolidated interim financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such interim financial statements. Certain prior year amounts were reclassified to conform to the current year presentation. The December 31, 2016 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2017, for the year ended December 31, 2016. |
Preparation of Financial Statements and Use of Estimates | Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates. |
Stock-Based Compensation | Stock-Based Compensation In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Adoption of this ASU required recognition of a cumulative effect adjustment to retained earnings for any prior year excess tax benefits or tax deficiencies not previously recorded. The cumulative effect adjustment of $39 million was recorded as an increase to retained earnings and deferred tax assets. This ASU also required a change in how Teradyne recognizes the excess tax benefits or tax deficiencies related to stock-based compensation. Prior to adopting ASU 2016-09, these excess tax benefits or tax deficiencies were credited or charged to additional paid-in capital in Teradyne’s consolidated balance sheets. In accordance with ASU 2016-09, starting in first quarter of 2017, these excess tax benefits or tax deficiencies are recognized as a discrete tax benefit or discrete tax expense to the current income tax provision in Teradyne’s consolidated statements of operations. ASU 2016-09 requires companies to adopt the amendment related to accounting for excess tax benefits or tax deficiencies on a prospective basis. For the three and six months ended July 2, 2017, Teradyne recognized a discrete tax benefit of $0.8 and $6.0 million, respectively, related to net excess tax benefit. In addition, under ASU 2016-09, all excess tax benefits related to share-based payments are reported as cash flows from operating activities. Previously, excess tax benefits from share-based payments arrangements were reported as cash flows from financing activities. The classification amendment was applied prospectively. This ASU also clarifies that all cash payments made to taxing authorities on the employees’ behalf for withheld shares should be presented as financing activities on the statement of cash flows. Previously, Teradyne reported cash payments made to taxing authorities as operating activities on the statement of cash flows. This change was applied retrospectively. Upon adoption of ASU 2016-09, Teradyne made an accounting policy election to continue accounting for forfeitures by applying an estimated forfeiture rate. |
Contingencies and Litigation | Contingencies and Litigation Teradyne may be subject to certain legal proceedings, lawsuits and other claims as discussed in Note P. Teradyne accrues for a loss contingency, including legal proceedings, lawsuits, pending claims and other legal matters, when the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the reasonable estimate of the loss is within a range of amounts, and no amount in the range constitutes a better estimate than any other amount, Teradyne accrues the amount at the low end of the range. Teradyne adjusts the accruals from time to time as additional information is received, but the loss incurred may be significantly greater than or less than the amount accrued. Loss contingencies are disclosed when they are material and there is at least a reasonable possibility that a loss has been incurred. Attorney fees related to legal matters are expensed as incurred. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Composition of Inventories, Net | Inventories, net consisted of the following at July 2, 2017 and December 31, 2016: July 2, December 31, (in thousands) Raw material $ 64,235 $ 58,530 Work-in-process 15,842 22,946 Finished Goods 73,568 54,482 $ 153,645 $ 135,958 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of July 2, 2017 and December 31, 2016. July 2, 2017 Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) Assets Cash $ 295,337 $ — $ — $ 295,337 Cash equivalents 179,293 123,719 — 303,012 Available-for-sale securities: U.S. Treasury securities — 812,477 — 812,477 Commercial paper — 73,275 — 73,275 Corporate debt securities — 64,453 — 64,453 U.S. government agency securities — 28,121 — 28,121 Certificates of deposit and time deposits — 22,253 — 22,253 Equity and debt mutual funds 20,675 — — 20,675 Non-U.S. government securities — 585 — 585 Total $ 495,305 $ 1,124,883 $ — $ 1,620,188 Derivative assets — 23 — 23 Total $ 495,305 $ 1,124,906 $ — $ 1,620,211 Liabilities Contingent consideration $ — $ — $ 39,415 $ 39,415 Derivative liabilities — 304 — 304 Total $ — $ 304 $ 39,415 $ 39,719 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 474,630 $ 123,719 $ — $ 598,349 Marketable securities — 809,338 — 809,338 Long-term marketable securities 20,675 191,826 — 212,501 Prepayments — 23 — 23 $ 495,305 $ 1,124,906 $ — $ 1,620,211 Liabilities . Other current liabilities $ — $ 304 $ — $ 304 Contingent consideration — — 22,432 22,432 Long-term contingent consideration — — 16,983 16,983 $ — $ 304 $ 39,415 $ 39,719 December 31, 2016 Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (in thousands) Assets Cash $ 214,722 $ — $ — $ 214,722 Cash equivalents 37,458 55,704 — 93,162 Available for sale securities: U.S. Treasury securities — 900,038 — 900,038 Commercial paper — 161,630 — 161,630 Corporate debt securities — 100,153 — 100,153 Certificates of deposit and time deposits — 82,133 — 82,133 U.S. government agency securities — 42,014 — 42,014 Equity and debt mutual funds 18,171 — — 18,171 Non-U.S. government securities — 728 — 728 Total $ 270,351 $ 1,342,400 $ — $ 1,612,751 Derivative assets — 1 — 1 Total $ 270,351 $ 1,342,401 $ — $ 1,612,752 Liabilities Contingent consideration $ — $ — $ 38,332 $ 38,332 Derivative liabilities — 131 — 131 Total $ — $ 131 $ 38,332 $ 38,463 Reported as follows: (Level 1) (Level 2) (Level 3) Total (in thousands) Assets Cash and cash equivalents $ 252,180 $ 55,704 $ — $ 307,884 Marketable securities — 871,024 — 871,024 Long-term marketable securities 18,171 415,672 — 433,843 Prepayments — 1 — 1 $ 270,351 $ 1,342,401 $ — $ 1,612,752 Liabilities Other accrued liabilities $ — $ 131 $ — $ 131 Contingent consideration — — 1,050 1,050 Long-term contingent consideration — — 37,282 37,282 $ — $ 131 $ 38,332 $ 38,463 |
Schedule of Changes in Fair Value of Level 3 Contingent Consideration | Changes in the fair value of Level 3 contingent consideration for the three and six months ended July 2, 2017 and July 3, 2016 were as follows: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 37,916 $ 23,609 $ 38,332 $ 37,436 Payments (a) — — (1,050 ) (15,000 ) Fair value adjustment (b)(c) 1,499 1,305 2,133 2,478 Balance at end of period $ 39,415 $ 24,914 $ 39,415 $ 24,914 (a) In the six months ended July 2, 2017, Teradyne paid $1.1 million of contingent consideration for the earn-out in connection with the acquisition of Avionics Interface Technology, LLC (“AIT”). In the six months ended July 3, 2016, based on Universal Robot’s calendar year 2015 EBITA results, Teradyne paid $15.0 million or 100% of the eligible EBITA contingent consideration amount in connection with the acquisition of Universal Robots. (b) In the three and six months ended July, 2, 2017, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.5 million and $2.1 million, respectively, primarily due to a decrease in the discount rate. In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $0.8 million and $1.9 million, respectively, primarily due to a decrease in the discount rate. (c) In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenue. |
Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument | The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments: Liability July 2, Valuation Technique Unobservable Inputs Weighted Average (in thousands) Contingent consideration (Universal Robots) $22,432 Monte Carlo Simulation Revenue for the period July 1, 2015— December 31, 2017 volatility 12.8 % Discount Rate 2.9 % $16,983 Monte Carlo Simulation Revenue for the period July 1, 2015— December 31, 2018 volatility 12.8 % Discount Rate 2.9 % |
Schedule of Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts and fair values of Teradyne’s financial instruments at July 2, 2017 and December 31, 2016 were as follows: July 2, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Assets Cash and cash equivalents $ 598,349 $ 598,349 $ 307,884 $ 307,884 Marketable securities 1,021,839 1,021,839 1,304,867 1,304,867 Derivative assets 23 23 1 1 Liabilities Contingent consideration 39,415 39,415 38,332 38,332 Derivative liabilities 304 304 131 131 Convertible debt (1) 359,245 526,976 352,669 486,754 (1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features. |
Schedule of Available-for-Sale Marketable Securities | The following tables summarize the composition of available-for-sale marketable securities at July 2, 2017 and December 31, 2016: July 2, 2017 Available-for-Sale Fair Market Value of Investments with Unrealized Losses Cost Unrealized Gain Unrealized (Loss) Fair Market Value (in thousands) U.S. Treasury securities $ 814,699 $ 69 $ (2,291 ) $ 812,477 $ 808,057 Commercial paper 73,291 — (16 ) 73,275 65,401 Corporate debt securities 62,766 1,954 (267 ) 64,453 33,059 U.S. government agency securities 28,135 7 (21 ) 28,121 20,800 Certificates of deposit and time deposits 22,245 8 — 22,253 — Equity and debt mutual funds 17,570 3,122 (17 ) 20,675 1,371 Non-U.S. government securities 578 7 — 585 — $ 1,019,284 $ 5,167 $ (2,612 ) $ 1,021,839 $ 928,688 Reported as follows: Cost Unrealized Gain Unrealized (Loss) Fair Market Value Fair Market Value of Investments with Unrealized Losses (in thousands) Marketable securities $ 810,544 $ 15 $ (1,221 ) $ 809,338 $ 770,963 Long-term marketable securities 208,740 5,152 (1,391 ) 212,501 157,725 $ 1,019,284 $ 5,167 $ (2,612 ) $ 1,021,839 $ 928,688 December 31, 2016 Available-for-Sale Fair Market Value of Investments with Unrealized Losses Cost Unrealized Gain Unrealized (Loss) Fair Value (in thousands) U.S. Treasury securities $ 901,975 $ 97 $ (2,034 ) $ 900,038 $ 572,284 Commercial paper 161,672 24 (66 ) 161,630 84,034 Corporate debt securities 99,708 1,065 (620 ) 100,153 53,642 Certificates of deposit and time deposits 82,080 54 (1 ) 82,133 7,760 U.S. government agency securities 42,026 7 (19 ) 42,014 13,461 Equity and debt mutual funds 16,505 1,724 (58 ) 18,171 1,661 Non-U.S. government securities 745 6 (23 ) 728 137 $ 1,304,711 $ 2,977 $ (2,821 ) $ 1,304,867 $ 732,979 Reported as follows: Cost Unrealized Gain Unrealized (Loss) Fair Market Value Fair Market Value of Investments with Unrealized Losses (in thousands) Marketable securities $ 871,321 $ 134 $ (431 ) $ 871,024 $ 423,128 Long-term marketable securities 433,390 2,843 (2,390 ) 433,843 309,851 $ 1,304,711 $ 2,977 $ (2,821 ) $ 1,304,867 $ 732,979 |
Contractual Maturities of Investments Held | The contractual maturities of investments held at July 2, 2017 were as follows: July 2, 2017 Cost Fair Market Value (in thousands) Due within one year $ 810,544 $ 809,338 Due after 1 year through 5 years 139,051 138,811 Due after 5 years through 10 years 14,062 13,731 Due after 10 years 38,057 39,284 Total $ 1,001,714 $ 1,001,164 |
Schedule of Derivative Instruments in Statement of Financial Position at Fair Value | The following table summarizes the fair value of derivative instruments at July 2, 2017 and December 31, 2016: Balance Sheet Location July 2, December 31, (in thousands) Derivatives not designated as hedging instruments: Foreign exchange contracts assets Prepayments $ 23 $ 1 Foreign exchange contracts liabilities Other current liabilities (304 ) (131 ) Total derivatives $ (281 ) $ (130 ) |
Schedule of Effect of Derivative Instruments on Statement of Operations Recognized | The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three and six months ended July 2, 2017 and July 3, 2016. Location of (Gains) Losses For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Derivatives not designated as hedging instruments: Foreign exchange contracts Other (income) expense, net $ (1,586 ) $ 6,901 $ (575 ) $ 10,199 Total Derivatives $ (1,586 ) $ 6,901 $ (575 ) $ 10,199 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Components of Convertible Senior Notes | The below tables represent the key components of Teradyne’s convertible senior notes: July 2, December 31, (in thousands) Debt Principal $ 460,000 $ 460,000 Unamortized discount 100,755 107,331 Net Carrying amount of convertible debt $ 359,245 $ 352,669 For the Three Months July 2, 2017 For the Six Months July 2, 2017 (in thousands) Contractual interest expense on the coupon $ 1,438 $ 2,875 Amortization of the discount component and debt issue fees recognized as interest expense 3,308 6,576 Total interest expense on the convertible debt $ 4,746 $ 9,451 |
Prepayments (Tables)
Prepayments (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Schedule of Prepayments | Prepayments consist of the following and are included in prepayments on the balance sheet: July 2, December 31, (in thousands) Contract manufacturer and supplier prepayments $ 72,400 $ 77,017 Prepaid taxes 9,686 4,664 Prepaid maintenance and other services 7,952 7,676 Other prepayments 15,922 19,097 Total prepayments $ 105,960 $ 108,454 |
Deferred Revenue and Customer32
Deferred Revenue and Customer Advances (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Deferred Revenue and Customer Advances | Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet: July 2, December 31, (in thousands) Extended warranty $ 29,377 $ 28,200 Maintenance and training 57,544 46,803 Customer advances, undelivered elements and other 26,845 32,938 Total deferred revenue and customer advances $ 113,766 $ 107,941 |
Product Warranty (Tables)
Product Warranty (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Other Accrued Liabilities | The warranty balance below is included in other accrued liabilities on the balance sheet. For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 7,054 $ 7,496 $ 7,203 $ 6,925 Accruals for warranties issued during the period 5,294 4,888 8,315 8,378 Adjustments related to pre-existing warranties 7 (420 ) (464 ) (177 ) Settlements made during the period (3,262 ) (3,180 ) (5,961 ) (6,342 ) Balance at end of period $ 9,093 $ 8,784 $ 9,093 $ 8,784 |
Extended Product Warranty of Short and Long-Term Deferred Revenue and Customer Advances | The extended warranty balance below is included in short and long-term deferred revenue and customer advances on the balance sheet. For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Balance at beginning of period $ 24,969 $ 29,427 $ 28,200 $ 30,024 Deferral of new extended warranty revenue 10,442 6,966 14,490 12,398 Recognition of extended warranty deferred revenue (6,034 ) (5,971 ) (13,313 ) (12,000 ) Balance at end of period $ 29,377 $ 30,422 $ 29,377 $ 30,422 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions | The fair value was estimated using the Monte Carlo simulation model with the following assumptions: For the Six Months Ended July 2, July 3, Risk-free interest rate 1.5 % 1.0 % Teradyne volatility-historical 26.6 % 27.0 % NYSE Composite Index volatility-historical 13.4 % 13.1 % Dividend yield 1.0 % 1.2 % |
Stock Options | |
Fair Value of Stock Options Using Assumptions | The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions: For the Six Months Ended July 2, July 3, Expected life (years) 5.0 5.0 Risk-free interest rate 2.0 % 1.4 % Volatility-historical 27.8 % 32.9 % Dividend yield 1.0 % 1.2 % |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Changes in Accumulated Other Comprehensive (Loss) Income | Changes in accumulated other comprehensive (loss) income, which is presented net of tax, consist of the following: Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Retirement Plan Prior Service Credit Total (in thousands) Six Months Ended July 2, 2017 Balance at December 31, 2016, net of tax of $0, $209, $(778) $ (21,921 ) $ (60 ) $ 1,767 $ (20,214 ) Other comprehensive income before reclassifications, net of tax of $0, $1,185, $0 24,944 1,498 — 26,442 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(106), $(77) — (177 ) (136 ) (313 ) Net current period other comprehensive income (loss), net of tax of $0, $1,079 $(77) 24,944 1,321 (136 ) 26,129 Balance at July 2, 2017, net of tax of $0, $1,288, $(855) $ 3,023 $ 1,261 $ 1,631 $ 5,915 Foreign Currency Translation Adjustments Unrealized Gains (Losses) on Marketable Securities Retirement Plan Prior Service Credit Total (in thousands) Six Months Ended July 3, 2016 Balance at December 31, 2015, net of tax of $0, $(459), $(622) $ (8,759 ) $ (1,414 ) $ 2,029 $ (8,144 ) Other comprehensive income before reclassifications, net of tax of $0, $2,354, $34 5,229 5,446 59 10,734 Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $0, $(2), $(93) — (134 ) (163 ) (297 ) Net current period other comprehensive income (loss), net of tax of $0, $2,352, $(59) 5,229 5,312 (104 ) 10,437 Balance as July 3, 2016, net of tax of $0, $1,893, $(681) $ (3,530 ) $ 3,898 $ 1,925 $ 2,293 |
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income to Statements of Operations | Reclassifications out of accumulated other comprehensive (loss) income to the statement of operations for the three and six months ended July 2, 2017 and July 3, 2016 were as follows: Details about Accumulated Other Comprehensive Income Components For the Three Months Ended For the Six Months Ended Affected Line Item in the Statements of Operations July 2, July 3, July 2, July 3, (in thousands) Available-for-sale marketable securities: Unrealized gains, net of tax of $42, $13, $106, $2 $ 83 $ 51 $ 177 $ 134 Interest income Defined benefit pension and postretirement plan: Amortization of prior service benefit, net of tax of $38, $47, $77, $93 68 83 136 163 (a) Total reclassifications, net of tax of $80, $60, $183, $95 $ 151 $ 134 $ 313 $ 297 Net income (a) The amortization of prior service credit is included in the computation of net periodic pension cost and postretirement benefit; see Note O: “Retirement Plans.” |
Goodwill and Acquired Intangi36
Goodwill and Acquired Intangible Assets (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Changes in Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by reportable segments for the six months ended July 2, 2017, were as follows: Industrial Automation System Test Wireless Test Semiconductor Test Total (in thousands) Balance at December 31, 2016 Goodwill $ 204,851 $ 158,699 $ 361,819 $ 260,540 $ 985,909 Accumulated impairment losses — (148,183 ) (353,843 ) (260,540 ) (762,566 ) 204,851 10,516 7,976 — 223,343 Foreign currency translation adjustment 18,872 — — — 18,872 Balance at July 2, 2017 Goodwill 223,723 158,699 361,819 260,540 1,004,781 Accumulated impairment losses — (148,183 ) (353,843 ) (260,540 ) (762,566 ) $ 223,723 $ 10,516 $ 7,976 $ — $ 242,215 |
Schedule of Estimated Acquired Intangible Asset Amortization Expense | Estimated acquired intangible asset amortization expense for each of the five succeeding fiscal years is as follows: Year Amortization Expense (in thousands) 2017 (remainder) 14,353 2018 28,527 2019 24,604 2020 10,800 2021 3,621 Thereafter 8,698 |
Wireless Test | |
Schedule of Amortizable Acquired Intangible Assets | Amortizable acquired intangible assets consist of the following and are included in acquired intangible assets, net on the balance sheet: July 2, 2017 Gross Carrying Amount Accumulated Amortization Cumulative Net Carrying Amount (in thousands) Developed technology $ 270,877 $ (215,973 ) $ (524 ) $ 54,380 Customer relationships 92,741 (81,294 ) (55 ) 11,392 Tradenames and trademarks 50,100 (25,233 ) (136 ) 24,731 Non-compete agreement 320 (220 ) — 100 Customer backlog 170 (170 ) — — Total acquired intangible assets $ 414,208 $ (322,890 ) $ (715 ) $ 90,603 December 31, 2016 Gross Carrying Amount Accumulated Amortization Cumulative Net Carrying Amount (in thousands) Developed technology $ 270,877 $ (206,376 ) $ (5,093 ) $ 59,408 Customer relationships 92,741 (76,707 ) (538 ) 15,496 Tradenames and trademarks 50,100 (23,435 ) (1,308 ) 25,357 Non-compete agreement 320 (180 ) — 140 Customer backlog 170 (170 ) — — Total acquired intangible assets $ 414,208 $ (306,868 ) $ (6,939 ) $ 100,401 |
Net Income (Loss) per Common 37
Net Income (Loss) per Common Share (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Computation of Basic and Diluted Net Income (loss) Per Common Share | The following table sets forth the computation of basic and diluted net income (loss) per common share: For the Three Months Ended For the Six Months Ended July 2, July 3, 2016 July 2, July 3, 2016 (in thousands, except per share amounts) Net income (loss) for basic and diluted net income (loss) per common share $ 174,976 $ (223,546 ) $ 260,197 $ (173,560 ) Weighted average common shares-basic 198,774 203,018 199,390 203,645 Effect of dilutive potential common shares: Restricted stock units 1,622 — 1,576 — Incremental shares from assumed conversion of convertible note (1) 752 — 376 — Stock options 318 — 354 — Employee stock purchase plan 63 — 36 — Dilutive potential common shares 2,755 — 2,342 — Weighted average common shares-diluted 201,529 203,018 201,732 203,645 Net income (loss) per common share-basic $ 0.88 $ (1.10 ) $ 1.30 $ (0.85 ) Net income (loss) per common share-diluted $ 0.87 $ (1.10 ) $ 1.29 $ (0.85 ) (1) Incremental shares from assumed conversion of the convertible notes for the three and six months ended July 2, 2017 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.84, multiplied by the 14.4 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Defined Benefit Pension Plans | |
Net Periodic Pension and Postretirement Cost (Income) | For the three and six months ended July 2, 2017 and July 3, 2016, Teradyne’s net periodic pension (income) cost was comprised of the following: For the Three Months Ended July 2, 2017 July 3, 2016 United States Foreign United States Foreign (in thousands) Service cost $ 560 $ 206 $ 575 $ 199 Interest cost 3,264 179 3,401 199 Expected return on plan assets (3,004 ) (6 ) (3,472 ) (5 ) Amortization of prior service cost 18 — 24 — Net actuarial (gain) loss (2,732 ) 243 (654 ) — Total net periodic pension (income) cost $ (1,894 ) $ 622 $ (126 ) $ 393 For the Six Months Ended July 2, 2017 July 3, 2016 United States Foreign United States Foreign (in thousands) Service cost $ 1,120 $ 392 $ 1,151 $ 406 Interest cost 6,576 342 6,815 405 Expected return on plan assets (6,004 ) (12 ) (6,915 ) (11 ) Amortization of prior service cost 35 — 48 — Net actuarial (gain) loss (2,732 ) 243 (1,848 ) — Settlement — — — (238 ) Total net periodic pension (income) cost $ (1,005 ) $ 965 $ (749 ) $ 562 |
Postretirement Benefit Plans | |
Net Periodic Pension and Postretirement Cost (Income) | For the three and six months ended July 2, 2017 and July 3, 2016, Teradyne’s net periodic postretirement income was comprised of the following: For the Three For the Six July 2, July 3, July 2, July 3, (in thousands) Service cost $ 7 $ 9 $ 17 $ 19 Interest cost 50 53 100 109 Amortization of prior service benefit (124 ) (154 ) (248 ) (304 ) Actuarial gain (15 ) (15 ) (15 ) (15 ) Total net periodic post-retirement benefit $ (82 ) $ (107 ) $ (146 ) $ (191 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Segment Information | Segment information for the three and six months ended July 2, 2017 and July 3, 2016 is as follows: Semiconductor Test Industrial Automation System Test Wireless Test Corporate and Eliminations Consolidated (in thousands) Three Months Ended July 2, 2017 Revenues $ 593,152 $ 39,337 $ 36,732 $ 27,680 $ — $ 696,901 Income (loss) before income taxes (1)(2) 211,278 (1,081 ) (5,692 ) 4,514 (2,142 ) 206,877 Total assets (3) 766,395 349,023 108,083 62,900 1,743,824 3,030,225 Three Months Ended July 3, 2016 Revenues $ 435,323 $ 25,102 $ 48,940 $ 22,427 $ — $ 531,792 Income (loss) before income taxes (1)(2) 121,163 (4,501 ) 8,992 (356,505 ) 34 (230,817 ) Total assets (3) 731,394 346,290 91,374 61,618 1,177,182 2,407,858 Six Months Ended July 2, 2017 Revenues $ 948,679 $ 75,610 $ 76,578 $ 52,947 $ — $ 1,153,814 Income (loss) before income taxes (1)(2) 309,244 (3,652 ) (8,451 ) 6,046 (4,294 ) 298,893 Total assets (3) 766,395 349,023 108,083 62,900 1,743,824 3,030,225 Six Months Ended July 3, 2016 Revenues $ 775,588 $ 41,848 $ 102,610 $ 42,741 $ — $ 962,787 Income (loss) before income taxes (1)(2) 194,417 (11,669 ) 18,484 (376,645 ) 1,788 (173,625 ) Total assets (3) 731,394 346,290 91,374 61,618 1,177,182 2,407,858 (1) Interest income, interest expense, contingent consideration adjustments, pension and postretirement plan actuarial gains and other income (expense) are included in Corporate and Eliminations. (2) Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge. (3) Total business assets are attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. |
System Test | |
Schedule of Segment Reporting Information by Segment Charges | Included in the System Test segment are charges in the following line item in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 473 $ 237 $ 1,358 $ 320 |
Wireless Test | |
Schedule of Segment Reporting Information by Segment Charges | Included in the Wireless Test segment are charges in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 472 $ 5,271 $ 994 $ 5,876 Restructuring and other—lease impairment — — 1,313 — Goodwill impairment — 254,946 — 254,946 Acquired intangible assets impairment — 83,339 — 83,339 Restructuring and other—employee severance — 967 — 967 |
Semiconductor Test | |
Schedule of Segment Reporting Information by Segment Charges | Included in the Semiconductor Test segment are charges and credits in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Cost of revenues—inventory charge $ 1,624 $ 2,234 $ 2,943 $ 5,919 Restructuring and other—employee severance 132 337 (133 ) 751 |
Industrial Automation | |
Schedule of Segment Reporting Information by Segment Charges | Included in the Industrial Automation segment are charges in the following line item in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Restructuring and other—employee severance 321 — 945 — |
Corporate And Eliminations | |
Schedule of Segment Reporting Information by Segment Charges | Included in Corporate and Eliminations are charges and credits in the following line items in the statements of operations: For the Three Months Ended For the Six Months Ended July 2, July 3, July 2, July 3, (in thousands) Restructuring and other—Universal Robots contingent consideration adjustment $ 1,499 $ 755 $ 2,133 $ 1,928 Restructuring and other—employee severance 325 — 530 — Restructuring and other—impairment of fixed assets and expenses related to Japan earthquake — 5,051 — 5,051 Restructuring and other—property insurance recovery and proceeds — (5,051 ) — (5,051 ) Restructuring and other—AIT contingent consideration adjustment — 550 — 550 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Income tax provision (benefit) | $ 31,901 | $ (7,271) | $ 38,696 | $ (65) |
ASU 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Cumulative effect adjustment to increase retained earnings and deferred tax assets | 39,000 | 39,000 | ||
Income tax provision (benefit) | $ (800) | $ (6,000) |
Composition of Inventories, Net
Composition of Inventories, Net (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw material | $ 64,235 | $ 58,530 |
Work-in-process | 15,842 | 22,946 |
Finished Goods | 73,568 | 54,482 |
Inventories, net | $ 153,645 | $ 135,958 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Millions | Jul. 02, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Inventory reserves | $ 114.8 | $ 116 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2016 | |
Financial Instruments and Fair Value [Line Items] | |||||
Available-for-sale securities, realized loss | $ 100,000 | $ 200,000 | $ 200,000 | $ 300,000 | |
Available-for-sale securities, realized gain | 200,000 | 300,000 | 500,000 | 400,000 | |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 928,688,000 | 928,688,000 | $ 732,979,000 | ||
Fair market value of investments with unrealized losses greater than one year | 1,800,000 | 1,800,000 | 2,900,000 | ||
Aggregate loss of investments with unrealized losses greater than one year | 200,000 | 300,000 | |||
Fair market value of investments with unrealized losses less than one year | 926,900,000 | 926,900,000 | 730,100,000 | ||
Aggregate loss of investments with unrealized losses less than one year | 2,400,000 | 2,500,000 | |||
Gains (losses) on foreign currency transactions | (2,400,000) | 6,900,000 | (900,000) | 10,400,000 | |
Realized (losses) gains on foreign currency contracts | 1,600,000 | $ (6,900,000) | 600,000 | $ (10,200,000) | |
Universal Robots | |||||
Financial Instruments and Fair Value [Line Items] | |||||
Maximum payment per earn-out | 25,000,000 | ||||
Foreign Exchange Contracts | |||||
Financial Instruments and Fair Value [Line Items] | |||||
Notional amount of foreign currency forward contracts | $ 94,100,000 | 94,100,000 | 83,900,000 | ||
Gains (losses) on foreign currency transactions | $ (300,000) | $ (100,000) |
Schedule of Fair Value of Finan
Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | $ 1,021,839 | $ 1,304,867 |
U.S. Treasury Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 812,477 | 900,038 |
Corporate Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 64,453 | 100,153 |
Certificates of Deposit and Time Deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 22,253 | 82,133 |
Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 73,275 | 161,630 |
U.S. Government Agency Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 28,121 | 42,014 |
Equity And Debt Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 20,675 | 18,171 |
Non-U.S. Government Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 585 | 728 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 1,620,188 | 1,612,751 |
Derivative assets | 23 | 1 |
Total | 1,620,211 | 1,612,752 |
Contingent consideration | 39,415 | 38,332 |
Derivative liabilities | 304 | 131 |
Total | 39,719 | 38,463 |
Fair Value, Measurements, Recurring | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash and cash equivalents | 295,337 | 214,722 |
Fair Value, Measurements, Recurring | Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash and cash equivalents | 303,012 | 93,162 |
Fair Value, Measurements, Recurring | U.S. Treasury Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 812,477 | 900,038 |
Fair Value, Measurements, Recurring | Corporate Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 64,453 | 100,153 |
Fair Value, Measurements, Recurring | Certificates of Deposit and Time Deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 22,253 | 82,133 |
Fair Value, Measurements, Recurring | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 73,275 | 161,630 |
Fair Value, Measurements, Recurring | U.S. Government Agency Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 28,121 | 42,014 |
Fair Value, Measurements, Recurring | Equity And Debt Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 20,675 | 18,171 |
Fair Value, Measurements, Recurring | Non-U.S. Government Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 585 | 728 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 495,305 | 270,351 |
Total | 495,305 | 270,351 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash and cash equivalents | 295,337 | 214,722 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash and cash equivalents | 179,293 | 37,458 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Equity And Debt Mutual Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 20,675 | 18,171 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Total | 1,124,883 | 1,342,400 |
Derivative assets | 23 | 1 |
Total | 1,124,906 | 1,342,401 |
Derivative liabilities | 304 | 131 |
Total | 304 | 131 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Cash and cash equivalents | 123,719 | 55,704 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Treasury Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 812,477 | 900,038 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Corporate Debt Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 64,453 | 100,153 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Certificates of Deposit and Time Deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 22,253 | 82,133 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 73,275 | 161,630 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Government Agency Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 28,121 | 42,014 |
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Non-U.S. Government Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Available for sale securities | 585 | 728 |
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Contingent consideration | 39,415 | 38,332 |
Total | $ 39,415 | $ 38,332 |
Schedule of Reported Financial
Schedule of Reported Financial Assets and Liabilities (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | $ 1,620,211 | $ 1,612,752 |
Liabilities | 39,719 | 38,463 |
Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 304 | |
Other Accrued Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 131 | |
Cash and Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 598,349 | 307,884 |
Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 809,338 | 871,024 |
Long-term marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 212,501 | 433,843 |
Prepayments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 23 | 1 |
Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 22,432 | 1,050 |
Long Term Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 16,983 | 37,282 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 495,305 | 270,351 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Cash and Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 474,630 | 252,180 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Long-term marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 20,675 | 18,171 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 1,124,906 | 1,342,401 |
Liabilities | 304 | 131 |
Significant Other Observable Inputs (Level 2) | Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 304 | |
Significant Other Observable Inputs (Level 2) | Other Accrued Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 131 | |
Significant Other Observable Inputs (Level 2) | Cash and Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 123,719 | 55,704 |
Significant Other Observable Inputs (Level 2) | Marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 809,338 | 871,024 |
Significant Other Observable Inputs (Level 2) | Long-term marketable securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 191,826 | 415,672 |
Significant Other Observable Inputs (Level 2) | Prepayments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Assets | 23 | 1 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 39,415 | 38,332 |
Significant Unobservable Inputs (Level 3) | Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | 22,432 | 1,050 |
Significant Unobservable Inputs (Level 3) | Long Term Contingent Consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Liabilities | $ 16,983 | $ 37,282 |
Schedule of Changes in Fair Val
Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Balance at beginning of period | $ 37,916 | $ 23,609 | $ 38,332 | $ 37,436 | |
Payments | [1] | (1,050) | (15,000) | ||
Fair value adjustment | [2],[3] | 1,499 | 1,305 | 2,133 | 2,478 |
Ending Balance | $ 39,415 | $ 24,914 | $ 39,415 | $ 24,914 | |
[1] | In the six months ended July 2, 2017, Teradyne paid $1.1 million of contingent consideration for the earn-out in connection with the acquisition of Avionics Interface Technology, LLC ("AIT"). In the six months ended July 3, 2016, based on Universal Robot's calendar year 2015 EBITA results, Teradyne paid $15.0 million or 100% of the eligible EBITA contingent consideration amount in connection with the acquisition of Universal Robots. | ||||
[2] | In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenue. | ||||
[3] | In the three and six months ended July, 2, 2017, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.5 million and $2.1 million, respectively, primarily due to a decrease in the discount rate. In the three and six months ended July 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $0.8 million and $1.9 million, respectively, primarily due to a decrease in the discount rate. |
Schedule of Changes in Fair V47
Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Payments of contingent consideration | $ 1,050 | $ 11,697 | ||
Increase(decrease)in contingent consideration | $ 1,300 | 2,133 | 2,478 | |
Universal Robots | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Payments of contingent consideration | $ 15,000 | |||
EBITDA contingent consideration amount, percentage | 100.00% | 100.00% | ||
Increase(decrease)in contingent consideration | $ 1,500 | $ 800 | 2,100 | $ 1,900 |
Avionics Interface Technologies, LLC | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Payments of contingent consideration | $ 1,100 | |||
Increase(decrease)in contingent consideration | $ 600 | $ 600 |
Quantitative Information Associ
Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument (Detail) - Monte Carlo Simulation $ in Thousands | 6 Months Ended |
Jul. 02, 2017USD ($) | |
Significant Unobservable Inputs (Level 3) | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Contingent consideration | $ 16,983 |
Significant Unobservable Inputs (Level 3) | Universal Robots | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Contingent consideration | $ 22,432 |
Revenue for the period July 1, 2015-December 31, 2017 | Universal Robots | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Target achievement, volatility | 12.80% |
Discount Rate | 2.90% |
Revenue for the period July 1, 2015-December 31, 2018 | Universal Robots | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Target achievement, volatility | 12.80% |
Discount Rate | 2.90% |
Schedule of Carrying Amounts an
Schedule of Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Marketable securities | $ 1,021,839 | $ 1,304,867 | |
Fair Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Cash and cash equivalents | 598,349 | 307,884 | |
Marketable securities | 1,021,839 | 1,304,867 | |
Derivative assets | 23 | 1 | |
Contingent consideration | 39,415 | 38,332 | |
Derivative liabilities | 304 | 131 | |
Convertible debt | [1] | 526,976 | 486,754 |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||
Cash and cash equivalents | 598,349 | 307,884 | |
Marketable securities | 1,021,839 | 1,304,867 | |
Derivative assets | 23 | 1 | |
Contingent consideration | 39,415 | 38,332 | |
Derivative liabilities | 304 | 131 | |
Convertible debt | [1] | $ 359,245 | $ 352,669 |
[1] | The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features. |
Schedule of Available for Sale
Schedule of Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | $ 1,019,284 | $ 1,304,711 |
Available-for-sale marketable securities, Unrealized Gain | 5,167 | 2,977 |
Available-for-sale marketable securities, Unrealized (Loss) | (2,612) | (2,821) |
Available-for-sale marketable securities, Fair Market Value | 1,021,839 | 1,304,867 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 928,688 | 732,979 |
U.S. Treasury Securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 814,699 | 901,975 |
Available-for-sale marketable securities, Unrealized Gain | 69 | 97 |
Available-for-sale marketable securities, Unrealized (Loss) | (2,291) | (2,034) |
Available-for-sale marketable securities, Fair Market Value | 812,477 | 900,038 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 808,057 | 572,284 |
Corporate Debt Securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 62,766 | 99,708 |
Available-for-sale marketable securities, Unrealized Gain | 1,954 | 1,065 |
Available-for-sale marketable securities, Unrealized (Loss) | (267) | (620) |
Available-for-sale marketable securities, Fair Market Value | 64,453 | 100,153 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 33,059 | 53,642 |
U.S. Government Agency Securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 28,135 | 42,026 |
Available-for-sale marketable securities, Unrealized Gain | 7 | 7 |
Available-for-sale marketable securities, Unrealized (Loss) | (21) | (19) |
Available-for-sale marketable securities, Fair Market Value | 28,121 | 42,014 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 20,800 | 13,461 |
Certificates of Deposit and Time Deposits | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 22,245 | 82,080 |
Available-for-sale marketable securities, Unrealized Gain | 8 | 54 |
Available-for-sale marketable securities, Unrealized (Loss) | (1) | |
Available-for-sale marketable securities, Fair Market Value | 22,253 | 82,133 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 7,760 | |
Commercial Paper | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 73,291 | 161,672 |
Available-for-sale marketable securities, Unrealized Gain | 24 | |
Available-for-sale marketable securities, Unrealized (Loss) | (16) | (66) |
Available-for-sale marketable securities, Fair Market Value | 73,275 | 161,630 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 65,401 | 84,034 |
Equity And Debt Mutual Funds | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 17,570 | 16,505 |
Available-for-sale marketable securities, Unrealized Gain | 3,122 | 1,724 |
Available-for-sale marketable securities, Unrealized (Loss) | (17) | (58) |
Available-for-sale marketable securities, Fair Market Value | 20,675 | 18,171 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 1,371 | 1,661 |
Non-U.S. Government Securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 578 | 745 |
Available-for-sale marketable securities, Unrealized Gain | 7 | 6 |
Available-for-sale marketable securities, Unrealized (Loss) | (23) | |
Available-for-sale marketable securities, Fair Market Value | $ 585 | 728 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | $ 137 |
Schedule of Reported Available
Schedule of Reported Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | $ 1,019,284 | $ 1,304,711 |
Available-for-sale marketable securities, Unrealized Gain | 5,167 | 2,977 |
Available-for-sale marketable securities, Unrealized (Loss) | (2,612) | (2,821) |
Available-for-sale marketable securities, Fair Market Value | 1,021,839 | 1,304,867 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 928,688 | 732,979 |
Marketable securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 810,544 | 871,321 |
Available-for-sale marketable securities, Unrealized Gain | 15 | 134 |
Available-for-sale marketable securities, Unrealized (Loss) | (1,221) | (431) |
Available-for-sale marketable securities, Fair Market Value | 809,338 | 871,024 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | 770,963 | 423,128 |
Long-term marketable securities | ||
Schedule of Available-for-sale Securities | ||
Available-for-sale marketable securities, Cost | 208,740 | 433,390 |
Available-for-sale marketable securities, Unrealized Gain | 5,152 | 2,843 |
Available-for-sale marketable securities, Unrealized (Loss) | (1,391) | (2,390) |
Available-for-sale marketable securities, Fair Market Value | 212,501 | 433,843 |
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses | $ 157,725 | $ 309,851 |
Contractual Maturities of Inves
Contractual Maturities of Investments Held (Detail) $ in Thousands | Jul. 02, 2017USD ($) |
Schedule of Available-for-sale Securities | |
Due within one year, cost | $ 810,544 |
Due after 1 year through 5 years, cost | 139,051 |
Due after 5 years through 10 years, cost | 14,062 |
Due after 10 years, cost | 38,057 |
Total, cost | 1,001,714 |
Due within one year, fair market value | 809,338 |
Due after 1 year through 5 years, fair market value | 138,811 |
Due after 5 years through 10 years, fair market value | 13,731 |
Due after 10 years, fair market value | 39,284 |
Total, fair market value | $ 1,001,164 |
Schedule of Derivative Instrume
Schedule of Derivative Instruments in Statement of Financial Position at Fair Value (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets (liabilities), net | $ (281) | $ (130) |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Prepayments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 23 | 1 |
Not Designated as Hedging Instrument | Foreign Exchange Contracts | Other Current Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ (304) | $ (131) |
Schedule of Effect of Derivativ
Schedule of Effect of Derivative Instruments in Statement of Operations Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Losses on derivatives recognized in statements of operations | $ (1,586) | $ 6,901 | $ (575) | $ 10,199 |
Other (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Losses on derivatives recognized in statements of operations | $ (1,586) | $ 6,901 | $ (575) | $ 10,199 |
Debt - Additional Information (
Debt - Additional Information (Detail) $ / shares in Units, shares in Millions | Apr. 27, 2015USD ($) | Jul. 02, 2017USD ($)d$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 12, 2016USD ($) |
Debt Instrument | ||||
Term of loan, years | 5 years | |||
Pledge percentage of capital stock | 65.00% | |||
1.25% Convertible Senior Unsecured Notes Due December 15, 2023 | ||||
Debt Instrument | ||||
Debt instrument, interest rate, stated percentage | 1.25% | |||
Aggregate principal amount | $ 460,000,000 | $ 460,000,000 | $ 460,000,000 | |
Senior notes maturity date | Dec. 15, 2023 | |||
Trading days measurement period | d | 20 | |||
Consecutive trading days measurement period | d | 30 | |||
Percentage of conversion price | 130.00% | |||
Debt instrument conversion ratio | 0.314102 | |||
Initial debt conversion price | $ / shares | $ 31.84 | |||
Shares that would be issued upon conversion | shares | 14.4 | |||
Strike price per share of warrant | $ / shares | $ 39.95 | |||
Debt instrument, effective annual interest rate | 5.00% | |||
Financing cost | $ 6,700,000 | $ 7,200,000 | ||
Debt issuance costs, amortization period | 7 years | |||
Unamortized discount | $ 100,800,000 | |||
Debt Instrument, convertible, remaining discount amortization period | 6 years 6 months | |||
Debt instrument, convertible, carrying amount of equity component | $ 100,800,000 | |||
Value of notes converted | $ 433,900,000 | |||
Conversion option two | ||||
Debt Instrument | ||||
Trading days measurement period | d | 5 | |||
Consecutive trading days measurement period | d | 5 | |||
Percentage of closing sale price of common stock and conversion rate product | 98.00% | |||
Maximum | ||||
Debt Instrument | ||||
Aggregate principal amount | $ 150,000,000 | |||
Commitment fee percentage of unused portion of credit facility | 0.35% | |||
Minimum | ||||
Debt Instrument | ||||
Commitment fee percentage of unused portion of credit facility | 0.125% | |||
Base Rate | Maximum | ||||
Debt Instrument | ||||
Debt instrument, basis spread on variable rate | 1.00% | |||
Base Rate | Minimum | ||||
Debt Instrument | ||||
Debt instrument, basis spread on variable rate | 0.00% | |||
London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument | ||||
Debt instrument, basis spread on variable rate | 2.00% | |||
London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument | ||||
Debt instrument, basis spread on variable rate | 1.00% | |||
Revolving Credit Facility | ||||
Debt Instrument | ||||
Financing cost | $ 2,300,000 | |||
Financing cost, amortization term | 5 years | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument | ||||
Credit facility, borrowing capacity | $ 350,000,000 |
Components of Convertible Senio
Components of Convertible Senior Notes (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 | Dec. 12, 2016 |
Debt Instrument | |||
Net Carrying amount of convertible debt | $ 359,245 | $ 352,669 | |
1.25% Convertible Senior Unsecured Notes Due December 15, 2023 | |||
Debt Instrument | |||
Debt Principal | 460,000 | 460,000 | $ 460,000 |
Unamortized discount | 100,755 | 107,331 | |
Net Carrying amount of convertible debt | $ 359,245 | $ 352,669 |
Interest Expense on Convertible
Interest Expense on Convertible Senior Notes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 02, 2017 | Jul. 02, 2017 | |
Debt Instrument | ||
Contractual interest expense on the coupon | $ 1,438 | $ 2,875 |
Amortization of the discount component and debt issue fees recognized as interest expense | 3,308 | 6,576 |
Total interest expense on the convertible debt | $ 4,746 | $ 9,451 |
Schedule of Prepayments (Detail
Schedule of Prepayments (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Dec. 31, 2016 |
Prepaid And Other Current Assets [Line Items] | ||
Contract manufacturer and supplier prepayments | $ 72,400 | $ 77,017 |
Prepaid taxes | 9,686 | 4,664 |
Prepaid maintenance and other services | 7,952 | 7,676 |
Other prepayments | 15,922 | 19,097 |
Total prepayments | $ 105,960 | $ 108,454 |
Deferred Revenue and Customer59
Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2016 | Jul. 03, 2016 | Apr. 03, 2016 | Dec. 31, 2015 |
Deferred Revenue Arrangement | ||||||
Extended warranty | $ 29,377 | $ 24,969 | $ 28,200 | $ 30,422 | $ 29,427 | $ 30,024 |
Maintenance and training | 57,544 | 46,803 | ||||
Customer advances, undelivered elements and other | 26,845 | 32,938 | ||||
Total deferred revenue and customer advances | $ 113,766 | $ 107,941 |
Warranty Accrual Included in Ot
Warranty Accrual Included in Other Accrued Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Product Warranty Liability [Line Items] | ||||
Balance at beginning of period | $ 7,054 | $ 7,496 | $ 7,203 | $ 6,925 |
Accruals for warranties issued during the period | 5,294 | 4,888 | 8,315 | 8,378 |
Adjustments related to pre-existing warranties | 7 | (420) | (464) | (177) |
Settlements made during the period | (3,262) | (3,180) | (5,961) | (6,342) |
Balance at end of period | $ 9,093 | $ 8,784 | $ 9,093 | $ 8,784 |
Extended Product Warranty Inclu
Extended Product Warranty Included in Short and Long-Term Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Product Warranty Liability [Line Items] | ||||
Balance at beginning of period | $ 24,969 | $ 29,427 | $ 28,200 | $ 30,024 |
Deferral of new extended warranty revenue | 10,442 | 6,966 | 14,490 | 12,398 |
Recognition of extended warranty deferred revenue | (6,034) | (5,971) | (13,313) | (12,000) |
Balance at end of period | $ 29,377 | $ 30,422 | $ 29,377 | $ 30,422 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - $ / shares shares in Millions | 1 Months Ended | 6 Months Ended | ||
Jan. 31, 2016 | Jan. 31, 2014 | Jul. 02, 2017 | Jul. 03, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock options term | 7 years | |||
Service-Based Restricted Stock Units | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Restricted stock unit awards granted | 0.8 | 1.2 | ||
Weighted average grant date fair value of restricted stock units granted | $ 27.98 | $ 18.49 | ||
Service-Based Restricted Stock Units | Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Restricted stock unit awards granted | 0.1 | |||
Weighted average grant date fair value of restricted stock units granted | $ 7.13 | $ 5.30 | ||
Restricted stock unit awards granted | 0.1 | |||
Service-Based Restricted Stock Units | Non Employee Directors And Certain Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Restricted stock unit awards granted | 0.1 | 0.1 | ||
Weighted average grant date fair value of restricted stock units granted | $ 35.21 | $ 18.71 | ||
Restricted Stock Units | Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Period of stock granted to employees and executive officers vest in equal annual installments | 4 years | |||
Restricted Stock Units | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Period of stock granted to employees and executive officers vest in equal annual installments | 1 year | |||
Percentage of awards vesting on the first anniversary of grant date | 100.00% | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of common stock price paid | 100.00% | |||
Period of stock granted to employees and executive officers vest in equal annual installments | 4 years | |||
Stock options term | 7 years | |||
TSR Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Total shareholder return performance measurement period | 3 years | |||
Minimum age of retirement to be eligible for PRSUs | 60 years | |||
Minimum years of service for retirement to be eligible for PRSUs | 10 years | |||
Restricted stock unit awards granted | 0.1 | 0.1 | ||
Weighted average grant date fair value of restricted stock units granted | $ 35.66 | $ 20.29 | ||
Estimated annual dividend amount per share | 0.28 | 0.24 | ||
Stock price | $ 28.56 | $ 19.43 | ||
TSR Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of vesting of target shares upon performance achieved | 200.00% | |||
TSR Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of vesting of target shares upon performance achieved | 0.00% | |||
PBIT Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Total shareholder return performance measurement period | 3 years | |||
Restricted stock unit awards granted | 0.1 | 0.1 | ||
Weighted average grant date fair value of restricted stock units granted | $ 27.72 | $ 18.71 | ||
PBIT Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of vesting of target shares upon performance achieved | 200.00% | |||
PBIT Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Percentage of vesting of target shares upon performance achieved | 0.00% |
Schedule of Estimated Fair Valu
Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions (Detail) - TSR Performance-Based Restricted Stock Units | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Risk-free interest rate | 1.50% | 1.00% |
Expected historical volatility | 26.60% | 27.00% |
Dividend yield | 1.00% | 1.20% |
New York Stock Exchange Composite Index | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected historical volatility | 13.40% | 13.10% |
Schedule of Estimated Fair Va64
Schedule of Estimated Fair Value of Stock Options Grant Using Black Scholes Option Pricing Model (Detail) - Stock Options | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected life (years) | 5 years | 5 years |
Risk-free interest rate | 2.00% | 1.40% |
Volatility-historical | 27.80% | 32.90% |
Dividend yield | 1.00% | 1.20% |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive (Loss) Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 1,828,659 | |||
Other comprehensive income before reclassifications, net of tax | 26,442 | $ 10,734 | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | (313) | (297) | ||
Other comprehensive income (loss) | $ 16,815 | $ (2,741) | 26,129 | 10,437 |
Ending balance | 2,048,648 | 2,048,648 | ||
Foreign currency translation reclassification adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (21,921) | (8,759) | ||
Other comprehensive income before reclassifications, net of tax | 24,944 | 5,229 | ||
Other comprehensive income (loss) | 24,944 | 5,229 | ||
Ending balance | 3,023 | (3,530) | 3,023 | (3,530) |
Unrealized Gains (Losses) on Marketable Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (60) | (1,414) | ||
Other comprehensive income before reclassifications, net of tax | 1,498 | 5,446 | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | (177) | (134) | ||
Other comprehensive income (loss) | 1,321 | 5,312 | ||
Ending balance | 1,261 | 3,898 | 1,261 | 3,898 |
Amortization of prior service credit | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 1,767 | 2,029 | ||
Other comprehensive income before reclassifications, net of tax | 59 | |||
Amounts reclassified from accumulated other comprehensive income, net of tax | (68) | (83) | (136) | (163) |
Other comprehensive income (loss) | (136) | (104) | ||
Ending balance | 1,631 | 1,925 | 1,631 | 1,925 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (20,214) | (8,144) | ||
Amounts reclassified from accumulated other comprehensive income, net of tax | (151) | (134) | (313) | (297) |
Ending balance | $ 5,915 | $ 2,293 | $ 5,915 | $ 2,293 |
Changes in Accumulated Other 66
Changes in Accumulated Other Comprehensive (Loss) Income (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Amounts reclassified from accumulated other comprehensive income, tax | $ (80) | $ (60) | $ (183) | $ (95) | ||
Foreign currency translation adjustments, tax | 0 | 0 | 0 | 0 | $ 0 | $ 0 |
Unrealized gains on marketable securities, tax | 1,288 | 1,893 | 1,288 | 1,893 | 209 | (459) |
Retirement plans prior service benefit, tax | (855) | (681) | (855) | (681) | $ (778) | $ (622) |
Foreign currency translation reclassification adjustments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive (loss) income before reclassifications, tax | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income, tax | 0 | 0 | ||||
Other comprehensive income (loss), tax | 0 | 0 | ||||
Unrealized Gains (Losses) on Marketable Securities | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive (loss) income before reclassifications, tax | 1,185 | 2,354 | ||||
Amounts reclassified from accumulated other comprehensive income, tax | (42) | (13) | (106) | (2) | ||
Other comprehensive income (loss), tax | 1,079 | 2,352 | ||||
Amortization of prior service credit | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other comprehensive (loss) income before reclassifications, tax | 0 | 34 | ||||
Amounts reclassified from accumulated other comprehensive income, tax | $ (38) | $ (47) | (77) | (93) | ||
Other comprehensive income (loss), tax | $ (77) | $ (59) |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income to Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | $ (3,292) | $ (1,666) | $ (6,812) | $ (3,308) |
Reclassifications, net of tax | 313 | 297 | ||
Unrealized Gains (Losses) on Marketable Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, net of tax | 177 | 134 | ||
Amortization of prior service credit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, net of tax | 68 | 83 | 136 | 163 |
Accumulated Other Comprehensive Income (Loss) | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, net of tax | 151 | 134 | 313 | 297 |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Marketable Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | $ 83 | $ 51 | $ 177 | $ 134 |
Reclassifications Out of Accu68
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income to Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, tax | $ 80 | $ 60 | $ 183 | $ 95 |
Unrealized Gains (Losses) on Marketable Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, tax | 42 | 13 | 106 | 2 |
Amortization of prior service credit | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications, tax | $ 38 | $ 47 | $ 77 | $ 93 |
Goodwill and Acquired Intangi69
Goodwill and Acquired Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Goodwill impairment | $ 254,946 | $ 254,946 | |||
Goodwill | $ 242,215 | $ 242,215 | $ 223,343 | ||
Intangible assets impairment | 83,339 | 83,339 | |||
Acquired intangible assets amortization | 8,166 | $ 16,244 | 16,118 | 36,238 | |
Wireless Test | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Employee reduction, percentage | 11.00% | ||||
Goodwill impairment | $ 254,946 | 254,946 | |||
Goodwill | $ 7,976 | 8,000 | $ 7,976 | 8,000 | $ 7,976 |
Intangible assets impairment | $ 83,339 | $ 83,339 | |||
Wireless Test | Sales Revenue, Segment | Customer Concentration Risk | Minimum | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Concentration risk, percentage | 51.00% | ||||
Wireless Test | Sales Revenue, Segment | Customer Concentration Risk | Maximum | |||||
Goodwill and Intangible Assets Disclosure [Line Items] | |||||
Concentration risk, percentage | 73.00% |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jul. 02, 2017 | Dec. 31, 2016 | Jul. 03, 2016 | |
Goodwill [Line Items] | |||
Foreign currency translation adjustment | $ 18,872 | ||
Goodwill | 1,004,781 | $ 985,909 | |
Accumulated impairment losses | (762,566) | (762,566) | |
Goodwill | 242,215 | 223,343 | |
Industrial Automation | |||
Goodwill [Line Items] | |||
Foreign currency translation adjustment | 18,872 | ||
Goodwill | 223,723 | 204,851 | |
Goodwill | 223,723 | 204,851 | |
System Test | |||
Goodwill [Line Items] | |||
Goodwill | 158,699 | 158,699 | |
Accumulated impairment losses | (148,183) | (148,183) | |
Goodwill | 10,516 | 10,516 | |
Wireless Test | |||
Goodwill [Line Items] | |||
Goodwill | 361,819 | 361,819 | |
Accumulated impairment losses | (353,843) | (353,843) | |
Goodwill | 7,976 | 7,976 | $ 8,000 |
Semiconductor Test | |||
Goodwill [Line Items] | |||
Goodwill | 260,540 | 260,540 | |
Accumulated impairment losses | $ (260,540) | $ (260,540) |
Schedule of Acquired Amortizabl
Schedule of Acquired Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 02, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 414,208 | $ 414,208 |
Accumulated Amortization | (322,890) | (306,868) |
Cumulative Foreign Currency Translation Adjustment | (715) | (6,939) |
Net Carrying Amount | 90,603 | 100,401 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 270,877 | 270,877 |
Accumulated Amortization | (215,973) | (206,376) |
Cumulative Foreign Currency Translation Adjustment | (524) | (5,093) |
Net Carrying Amount | 54,380 | 59,408 |
Customer Relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 92,741 | 92,741 |
Accumulated Amortization | (81,294) | (76,707) |
Cumulative Foreign Currency Translation Adjustment | (55) | (538) |
Net Carrying Amount | 11,392 | 15,496 |
Trademarks and tradenames | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 50,100 | 50,100 |
Accumulated Amortization | (25,233) | (23,435) |
Cumulative Foreign Currency Translation Adjustment | (136) | (1,308) |
Net Carrying Amount | 24,731 | 25,357 |
Non-compete Agreements | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 320 | 320 |
Accumulated Amortization | (220) | (180) |
Net Carrying Amount | 100 | 140 |
Customer backlog | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 170 | 170 |
Accumulated Amortization | $ (170) | $ (170) |
Schedule of Estimated Acquired
Schedule of Estimated Acquired Intangible Asset Amortization Expense (Detail) $ in Thousands | Jul. 02, 2017USD ($) |
Finite-Lived Intangible Assets | |
2017 (remainder) | $ 14,353 |
2,018 | 28,527 |
2,019 | 24,604 |
2,020 | 10,800 |
2,021 | 3,621 |
Thereafter | $ 8,698 |
Computation of Basic and Dilute
Computation of Basic and Diluted Net Income (loss) Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | ||
Net Income Loss Per Common Share | |||||
Net income (loss) for basic and diluted net income (loss) per common share | $ 174,976 | $ (223,546) | $ 260,197 | $ (173,560) | |
Weighted average common shares-basic | 198,774 | 203,018 | 199,390 | 203,645 | |
Incremental shares from assumed conversion of convertible note | [1] | 752 | 376 | ||
Employee stock purchase plan | 63 | 36 | |||
Dilutive potential common shares | 2,755 | 2,342 | |||
Weighted average common shares-diluted | 201,529 | 203,018 | 201,732 | 203,645 | |
Net income (loss) per common share-basic | $ 0.88 | $ (1.10) | $ 1.30 | $ (0.85) | |
Net income (loss) per common share-diluted | $ 0.87 | $ (1.10) | $ 1.29 | $ (0.85) | |
Restricted Stock Units | |||||
Net Income Loss Per Common Share | |||||
Incremental shares attributable to share based payment arrangements | 1,622 | 1,576 | |||
Stock Options | |||||
Net Income Loss Per Common Share | |||||
Incremental shares attributable to share based payment arrangements | 318 | 354 | |||
[1] | Incremental shares from assumed conversion of the convertible notes for the three and six months ended July 2, 2017 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.84, multiplied by the 14.4 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period. |
Computation of Basic and Dilu74
Computation of Basic and Diluted Net Income (loss) Per Common Share (Parenthetical) (Detail) - Convertible Notes shares in Millions | 3 Months Ended | 6 Months Ended |
Jul. 02, 2017$ / sharesshares | Jul. 02, 2017$ / sharesshares | |
Net Income Loss Per Common Share | ||
Initial debt conversion price | $ / shares | $ 31.84 | $ 31.84 |
Shares that would be issued upon conversion | shares | 14.4 | 14.4 |
Net Income (loss) per Common 75
Net Income (loss) per Common Share - Additional Information (Detail) shares in Millions | 3 Months Ended |
Jul. 02, 2017shares | |
Net Income Loss Per Common Share | |
Exercise of stock options | 0.1 |
Restructuring and Other - Addit
Restructuring and Other - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($)Employee | Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($)Employee | |
Restructuring Cost and Reserve | ||||
Contingent consideration adjustment | $ 1,300 | $ 2,133 | $ 2,478 | |
Severance benefit and charges | $ 800 | |||
Lease expiration year | 2,020 | |||
Property, Plant and Equipment | ||||
Restructuring Cost and Reserve | ||||
Impairment of fixed assets and other expenses | 4,200 | 4,200 | ||
Industrial Automation | ||||
Restructuring Cost and Reserve | ||||
Severance benefit and charges | $ 1,400 | |||
Wireless Test | ||||
Restructuring Cost and Reserve | ||||
Lease impairment | 1,300 | |||
Impairment of fixed assets and expenses related to the Japan earthquake | ||||
Restructuring Cost and Reserve | ||||
Property insurance, recovery | 5,100 | 5,100 | ||
Impairment of fixed assets and expenses related to the Japan earthquake | Earthquake Related Expenses | ||||
Restructuring Cost and Reserve | ||||
Impairment of fixed assets and other expenses | $ 900 | $ 900 | ||
Semiconductor Test | ||||
Restructuring Cost and Reserve | ||||
Reduction in employees headcount | Employee | 15 | 27 | ||
Semiconductor Test and Wireless Test | ||||
Restructuring Cost and Reserve | ||||
Severance benefit and charges | $ 1,300 | $ 1,700 | ||
Reduction in employees headcount | Employee | 62 | 74 | ||
Wireless Test | ||||
Restructuring Cost and Reserve | ||||
Reduction in employees headcount | Employee | 47 | 47 | ||
Universal Robots | ||||
Restructuring Cost and Reserve | ||||
Contingent consideration adjustment | $ 1,500 | $ 800 | $ 2,100 | $ 1,900 |
Avionics Interface Technologies, LLC | ||||
Restructuring Cost and Reserve | ||||
Contingent consideration adjustment | $ 600 | $ 600 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jul. 02, 2017USD ($) | |
U.S. Supplemental Executive Defined Benefit Pension Plan | |
Defined Benefit Plan Disclosure | |
Contribution to defined benefit pension plans | $ 1.3 |
Non-United States Subsidiaries | |
Defined Benefit Plan Disclosure | |
Contribution to defined benefit pension plans | $ 0.4 |
Schedule of Net Periodic Pensio
Schedule of Net Periodic Pension and Postretirement Cost (Income) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Defined Benefit Plan Disclosure | ||||
Net actuarial (gain) loss | $ (2,504) | $ (1,862) | ||
United States Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 560 | $ 575 | 1,120 | 1,151 |
Interest cost | 3,264 | 3,401 | 6,576 | 6,815 |
Expected return on plan assets | (3,004) | (3,472) | (6,004) | (6,915) |
Amortization of prior service cost | 18 | 24 | 35 | 48 |
Net actuarial (gain) loss | (2,732) | (654) | (2,732) | (1,848) |
Total net periodic pension (income) cost | (1,894) | (126) | (1,005) | (749) |
Foreign Pension Plans, Defined Benefit | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 206 | 199 | 392 | 406 |
Interest cost | 179 | 199 | 342 | 405 |
Expected return on plan assets | (6) | (5) | (12) | (11) |
Net actuarial (gain) loss | 243 | 243 | ||
Settlement | (238) | |||
Total net periodic pension (income) cost | 622 | 393 | 965 | 562 |
Postretirement Benefit Plans | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 7 | 9 | 17 | 19 |
Interest cost | 50 | 53 | 100 | 109 |
Amortization of prior service benefit | (124) | (154) | (248) | (304) |
Actuarial gain | (15) | (15) | (15) | (15) |
Total net periodic pension (income) cost | $ (82) | $ (107) | $ (146) | $ (191) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Jul. 02, 2017USD ($) |
Purchase Commitment, Excluding Long-term Commitment | |
Aggregate purchase commitments | $ 218.3 |
Purchase commitments less than one year | $ 206.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2016 | |
Income Taxes [Line Items] | |||||
Effective tax rate | 15.40% | 3.20% | 12.90% | 0.00% | |
U.S. statutory federal tax rate | 35.00% | 35.00% | 35.00% | 35.00% | |
Discrete tax expense (benefits) | $ 0.5 | $ (4.4) | $ (6.5) | $ (6.9) | |
Gains (loss) on non-taxable foreign exchange | 0.7 | (2.2) | 0.3 | (3.4) | |
Discrete tax expense, actuarial gains | 1 | 1 | |||
Discrete tax benefits, stock based compensation | (1) | (6.5) | |||
Discrete tax benefits, U.S. research and development tax credits | 0.7 | ||||
Discrete tax benefits, Other | 0.4 | ||||
Discrete tax benefits, marketable securities | 0.9 | ||||
Tax reserve releases resulting from the settlement of a U.S. tax audit | $ 2.6 | 2.6 | |||
Uncertain tax positions | 42.5 | 42.5 | $ 39 | ||
Net Increase in uncertain tax positions | 3.5 | ||||
Decrease in uncertain tax position resulting from expiration of statutes of limitations | 0.8 | ||||
Accrued interest and penalties | $ 0.4 | 0.4 | $ 0.4 | ||
Interest and penalties related to income tax, expense (benefit) | 0.1 | 0.3 | |||
Tax savings due to the tax holiday | $ 15.1 | $ 30.7 | |||
Tax savings due to the tax holiday, per share | $ 0.07 | $ 0.15 | |||
Tax holiday expiration date | December 31, 2020 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jul. 02, 2017Segment | |
Segment Reporting Information [Line Items] | |
Operating segments | 4 |
Schedule of Segment Information
Schedule of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2016 | ||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | $ 696,901 | $ 531,792 | $ 1,153,814 | $ 962,787 | ||||||
Income (loss) before income taxes | [1],[2] | 206,877 | (230,817) | 298,893 | (173,625) | |||||
Total assets | 3,030,225 | [3] | 2,407,858 | [3] | 3,030,225 | [3] | 2,407,858 | [3] | $ 2,762,493 | |
Semiconductor Test | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 593,152 | 435,323 | 948,679 | 775,588 | ||||||
Income (loss) before income taxes | [1],[2] | 211,278 | 121,163 | 309,244 | 194,417 | |||||
Total assets | [3] | 766,395 | 731,394 | 766,395 | 731,394 | |||||
Industrial Automation | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 39,337 | 25,102 | 75,610 | 41,848 | ||||||
Income (loss) before income taxes | [1],[2] | (1,081) | (4,501) | (3,652) | (11,669) | |||||
Total assets | [3] | 349,023 | 346,290 | 349,023 | 346,290 | |||||
System Test | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 36,732 | 48,940 | 76,578 | 102,610 | ||||||
Income (loss) before income taxes | [1],[2] | (5,692) | 8,992 | (8,451) | 18,484 | |||||
Total assets | [3] | 108,083 | 91,374 | 108,083 | 91,374 | |||||
Wireless Test | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 27,680 | 22,427 | 52,947 | 42,741 | ||||||
Income (loss) before income taxes | [1],[2] | 4,514 | (356,505) | 6,046 | (376,645) | |||||
Total assets | [3] | 62,900 | 61,618 | 62,900 | 61,618 | |||||
Corporate And Eliminations | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Income (loss) before income taxes | [1],[2] | (2,142) | 34 | (4,294) | 1,788 | |||||
Total assets | [3] | $ 1,743,824 | $ 1,177,182 | $ 1,743,824 | $ 1,177,182 | |||||
[1] | Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge. | |||||||||
[2] | Interest income, interest expense, contingent consideration adjustments, pension and postretirement plan actuarial gains and other income (expense) are included in Corporate and Eliminations. | |||||||||
[3] | Total business assets are attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. |
Schedule of Segment Reporting I
Schedule of Segment Reporting Information by Segment Charges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Segment Reporting Information [Line Items] | ||||
Goodwill impairment | $ 254,946 | $ 254,946 | ||
Acquired intangible assets impairment | 83,339 | 83,339 | ||
Restructuring and other-employee severance | $ 2,288 | 2,608 | $ 4,799 | 4,195 |
Contingent consideration adjustment | 1,300 | 2,133 | 2,478 | |
Property insurance recovery | 5,051 | |||
Universal Robots | ||||
Segment Reporting Information [Line Items] | ||||
Contingent consideration adjustment | 1,500 | 800 | 2,100 | 1,900 |
Avionics Interface Technologies, LLC | ||||
Segment Reporting Information [Line Items] | ||||
Contingent consideration adjustment | 600 | 600 | ||
Semiconductor Test | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenues-inventory charge | 1,624 | 2,234 | 2,943 | 5,919 |
Restructuring and other-employee severance | 132 | 337 | (133) | 751 |
Industrial Automation | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and other-employee severance | 321 | 945 | ||
Wireless Test | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenues-inventory charge | 472 | 5,271 | 994 | 5,876 |
Restructuring and other-lease impairment | 1,313 | |||
Goodwill impairment | 254,946 | 254,946 | ||
Acquired intangible assets impairment | 83,339 | 83,339 | ||
Restructuring and other-employee severance | 967 | 967 | ||
Corporate And Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring and other-employee severance | 325 | 530 | ||
Property insurance recovery | (5,051) | (5,051) | ||
Corporate And Eliminations | Universal Robots | Restructuring and other | ||||
Segment Reporting Information [Line Items] | ||||
Contingent consideration adjustment | $ 1,499 | 755 | $ 2,133 | 1,928 |
Corporate And Eliminations | Impairment of fixed assets and expenses related to the Japan earthquake | ||||
Segment Reporting Information [Line Items] | ||||
Building impairment and other expenses | 5,051 | 5,051 | ||
Corporate And Eliminations | Avionics Interface Technologies, LLC | ||||
Segment Reporting Information [Line Items] | ||||
Contingent consideration adjustment | $ 550 | $ 550 |
Schedule of Segment Reporting84
Schedule of Segment Reporting Information by Segment Charges and Credit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
System Test | ||||
Segment Reporting Information [Line Items] | ||||
Cost of revenues-inventory charge | $ 473 | $ 237 | $ 1,358 | $ 320 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Dec. 31, 2017 | May 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | May 31, 2016 | Jan. 31, 2016 | |
Stockholders Equity Note Disclosure [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 500,000,000 | |||||||||
Repurchase of stock, value | $ 56,800,000 | |||||||||
Cumulative repurchases, shares | 3 | 3 | ||||||||
Cumulative repurchases, value | $ 94,300,000 | $ 94,300,000 | ||||||||
Common stock average price | $ 31.77 | $ 19.29 | ||||||||
Repurchase of stock, shares | 2.9 | |||||||||
Dividends payable, amount per share | $ 0.07 | $ 0.07 | $ 0.06 | $ 0.06 | ||||||
Dividend payment | $ 13,900,000 | $ 12,200,000 | $ 27,925,000 | $ 24,425,000 | ||||||
Minimum | Scenario, Forecast | ||||||||||
Stockholders Equity Note Disclosure [Line Items] | ||||||||||
Repurchase of stock, value | $ 200,000,000 |