Restructuring and Other, Net

9 Months Ended

Sep. 30, 2012

M. Restructuring and Other, Net

Other

During the nine months ended September 30, 2012, due to a decrease in specified new product revenue through the December 31, 2012 earn-out period end date, Teradyne recorded an $8.4 million fair value adjustment to decrease the LitePoint acquisition contingent consideration. As of September 30, 2012, the estimated undiscounted range of outcomes for the contingent consideration is $16.0 million to $17.0 million. The decrease in the range from December 31, 2011 is due to $44.0 million of contingent consideration payments and the $8.4 million fair value decrease.

During the nine months ended October 2, 2011, Teradyne recorded $1.3 million of acquisition costs related to its LitePoint acquisition and a $0.7 million charge related to a non-U.S. pension settlement.

Restructuring

In response to a downturn in the industry in 2008 and 2009, Teradyne initiated restructuring activities across its Semiconductor Test and Systems Test Group segments to reduce costs, principally through headcount reductions and facility consolidations. The remaining accrual for lease payments on vacated facilities of $1.3 million is reflected in the other accrued liabilities and is expected to be paid over the next twelve months, which expires in 2013. Teradyne’s future lease commitments are net of expected sublease income of $0.2 million as of September 30, 2012. The table below represents activity related to these actions.


	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
*Pre-2011 Activities*
Balance at December 31, 2010	$	712		$	3,263		$	3,975
Provision		117			—			117
Change in estimate		155			(485	)		(330	)
Cash payments		(984	)		(916	)		(1,900	)

Balance at December 31, 2011		—			1,862			1,862
Cash payments		—			(189	)		(189	)

Balance at April 1, 2012		—			1,673			1,673
Cash payments		—			(209	)		(209	)

Balance at July 1, 2012		—			1,464			1,464
Cash payments		—			(175	)		(175	)

Balance at September 30, 2012	$	—		$	1,289		$	1,289

*2011 Activities*
Q1 2011 Activity:
Provision	$	572		$	—		$	572
Cash payments		(476	)		—			(476	)

Balance at December 31, 2011		96			—			96
Cash payments		(96	)		—			(96	)

Balance at April 1, 2012	$	—		$	—		$	—

Q2 2011 Activity:
Provision	$	344		$	—		$	344
Cash payments		(115	)		—			(115	)

Balance at December 31, 2011		229			—			229
Cash payments		(229	)		—			(229	)

Balance at April 1, 2012	$	—		$	—		$	—

*2012 Activities*
Q2 2012 Activity:
Provision	$	286		$	—		$	286

Balance at July 1, 2012		286			—			286
Change in estimate		(4	)		—			(4	)
Cash payments		(282	)		—			(282	)

Balance at September 30, 2012	$	—		$	—		$	—

Q3 2012 Activity:
Provision	$	687		$	—		$	687
Cash payments		(327	)		—			(327	)

Balance at September 30, 2012	$	360		$	—		$	360

Balance at September 30, 2012	$	360		$	1,289		$	1,649

During the nine months ended September 30, 2012, Teradyne recorded the following restructuring charges:

Q3 2012 Action:

•

$0.7 million of severance charges related to headcount reductions of 9 people, of which $0.5 million and 7 people were in Systems Test Group, $0.2 million and 2 people in Wireless Test.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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