Mail Stop 6010
December 15, 2005
Mr. Gregory Beecher
Chief Financial Officer
Teradyne, Inc.
321 Harrison Avenue
Boston, Massachusetts 02118
Re: Teradyne, Inc.
Form 10-K for the Year Ended December 31, 2004
Forms 10-Q for the Quarter Ended March 31, 2005, June 30, 2005,
and
September 30, 2005
File No. 001-06462
Dear Mr. Beecher:
We have reviewed your filing and have the following
comments.
We have limited our review of your filing to those items we have
addressed in our comments. Where indicated, we think you should
revise your documents in future filings in response to these
comments. If you disagree, we will consider your explanation as
to
why our comments are inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation. In some
of
our comments, we may ask you to provide us with information so we
may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Year Ended December 31, 2005
Financial Statements, page 46
Notes to Consolidated Financial Statements, page 51
Note L. Restructuring and Other Charges, page 68
1. We note that you have incurred $35.8 million, $5.3 million,
$71.3
million, $125.2 million of restructuring charges during the nine
months ended September 30, and the years ended December 31, 2004,
2003 and 2002, respectively. We note that you provide summary
disclosures of the activity relating to all of your restructuring
activities. However, it appears that you have aggregated multiple
restructuring activities into one disclosure. Please revise this
note and MD&A in future filings to provide all of the disclosures
required by paragraph 20 of SFAS 146 and SAB Topic 5.P4 for each
restructuring activity.
Form 8-K Dated October 18, 2005
GAAP to Pro Forma Earnings Guidance Reconciliation
GAAP to Pro Forma Statement of Operations Reconciliation
2. We note that you present your historical non-GAAP measures in
the
form of a statement of operations for the three and nine months
ended
September 30, 2005 and provide non-GAAP earnings guidance for the
fourth quarter of 2005 in the form of a statement of operations.
This
format may be confusing to investors as it also reflects several
non-
GAAP measures, including but not limited to non-GAAP revenues,
non-
GAAP cost of revenues, non-GAAP engineering and development
expenses,
non-GAAP selling and administrative expenses, non-GAAP
restructuring
and other charges, non-GAAP (loss) income from operations, non-
GAAP
interest expense and income, non-GAAP (loss) income before income
tax
expense, and non-GAAP net income, which have not been identified
or
described to investors. In fact, it appears that management does
not
use all of these non-GAAP measures but they are shown here as a
result of the presentation format. Please note that Instruction 2
to
Item 2.02 of Form 8-K requires that when furnishing information
under
this item you must provide all the disclosures required by
paragraph
(e)(1)(i) of Item 10 of Regulation S-K and FAQ 8 Regarding the Use
of
Non-GAAP Financial Measures dated June 13, 2003 for each non-GAAP
measure presented. Specifically, you should provide a
reconciliation
of each non-GAAP measure to the most directly comparable GAAP
measure
and explain why you believe each measure provides useful
information
to investors.
* To eliminate investor confusion, please remove the non-GAAP
statements of operations format for your historical and projected
earnings from future filings and only disclose those non-GAAP
measures used by management with the appropriate reconciliations.
* Otherwise, confirm that you will revise your Forms 8-K in future
periods to provide all the disclosures required by Item
10(e)(1)(i)
of Regulation S-K for each non-GAAP measure presented in the
statement. Please provide us with a sample of your proposed
disclosure. We may have further comment.
3. Further to the above, we note that you refer to your non-GAAP
information as "pro forma" results. The pro forma terminology has
very specific meaning in accounting literature, as indicated by
Article 11 of Regulation S-X. In future filings, please revise
your
presentation to omit the pro forma terminology when referring to
your
non-GAAP information.
GAAP to Pro Forma Reconciliation-Connection Services Divestiture
4. We note that you present a pro forma statement of operations
for
the three and nine months ended September 30, 2005 that reflects
the
disposition of your Connection Systems Business. This
disposition
has not yet closed as of the date of this Form 8-K, and thus pro
forma financial information is not yet required based on Item 2.01
of
the Instructions to the Form 8-K. However, we note that you have
elected to present selected pro forma information in this Form 8-
K.
As such, please tell us why you did not include a pro forma
balance
sheet as of September 30, 2005 and a pro forma statement of
operations for the year ended December 31, 2004 to reflect the
disposition of your Connection Systems Business. Please also
confirm
that you will file full pro forma financial statements reflecting
the
disposition after the closing of the transaction. Refer to Item
2.01
of the Instructions to Form 8-K and Article 11 of Regulation S-X.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comment
and provides any requested information. Detailed cover letters
greatly facilitate our review. Please understand that we may have
additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Tara Harkins, Staff Accountant, at (202)
551-
3639, Michele Gohlke, Branch Chief at (202) 551-3327 or me at
(202)
551-3643 if you have questions regarding these comments.
Sincerely,
Kevin Vaughn
Reviewing Accountant
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Mr. Gregory Beecher
Teradyne, Inc.
December 15, 2005
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