OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

62 Months Ended

Dec. 31, 2012

OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

S.    OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

Teradyne has three operating segments (Semiconductor Test, Wireless Test and Systems Test Group), 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 Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. The Systems Test Group segment includes operations related to the design, manufacturing and marketing of products and services for military/aerospace instrumentation test, storage test and circuit-board test. 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 using several factors, of which the primary financial measure is business segment income from continuing operations before taxes. The accounting policies of the business segments are the same as those described in Note B: “Accounting Policies”.

Segment information for the years ended December 31, 2012, 2011 and 2010 is as follows:

	Semiconductor Test		Wireless Test			Systems Test Group			Corporate And Eliminations			Consolidated
	(in thousands)
2012
Net revenue	$	1,127,726	$	286,355		$	242,669		$	—		$	1,656,750
Income (loss) from continuing operations before taxes (1)(2)		185,985		83,077			34,164			(37,250	)		265,976
Total assets from continuing operations (3)		604,127		672,048			71,116			1,082,054			2,429,345
Property additions (4)		96,590		7,608			5,146			9,736			119,080
Depreciation and amortization expense (4)		67,922		50,242			3,747			20,888			142,799
2011
Net revenue	$	1,106,191	$	28,390		$	294,480		$	—		$	1,429,061
Income (loss) from continuing operations before taxes (1)(2)		212,201		(20,579	)		51,802			(29,003	)		214,421
Total assets from continuing operations (3)		581,026		725,940			77,277			804,396			2,188,639
Property additions (4)		76,164		794			4,043			5,096			86,097
Depreciation and amortization expense (4)		60,985		13,057			1,857			28,479			104,378
2010
Net revenue	$	1,413,295	$	—		$	152,867		$	—		$	1,566,162
Income (loss) from continuing operations before taxes (1)(2)		414,994		—			(8,877	)		(9,770	)		396,347
Total assets from continuing operations (3)		611,694		—			95,402			1,094,077			1,801,173
Property additions (4)		69,935		—			3,142			2,967			76,044
Depreciation and amortization expense (4)		66,709		—			1,854			24,953			93,516

(1) Interest income, interest expense and other, and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

(2) Included in income (loss) from continuing operations before taxes are charges and credits related to restructuring and other, net and inventory charges.

(3) Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities, unallocated fixed assets of support departments, common facilities and certain other assets.

(4) Corporate property additions and depreciation and amortization expense include items attributable to the unallocated fixed assets of support departments and common facilities.

Included in the Semiconductor Test segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2012		2011		2010
	(in thousands)
Cost of revenues—inventory charge (1)	$	18,433	$	10,370	$	4,521
Restructuring and other, net		386		2,142		1,437

(1) Included in the cost of revenues for the years ended December 31, 2012 and 2011 are charges for excess inventory provisions recorded primarily as a result of product transition.

Included in the Systems Test Group segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2012		2011			2010
	(in thousands)
Cost of revenues—inventory charge	$	4,271	$	1,090		$	1,450
Restructuring and other, net		451		(300	)		(2,133	)

Included in the Wireless Test segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2012		2011		2010
	(in thousands)
Cost of revenues—inventory step-up (1)	$	6,089	$	12,178		—
Cost of revenues—inventory charge		4,145		141		—
Restructuring and other, net		236		—		—

(1) Included in the cost of revenues for the years ended December 31, 2012 and 2011 is the cost for purchase accounting inventory step-up.

Included in the Corporate and Eliminations segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2012			2011		2010
	(in thousands)
Restructuring and other, net	$	(8,794	)	$	4,901	$	(3,104	)

Information as to Teradyne’s revenues in different geographical areas is as follows:

	2012		2011		2010
	(in thousands)
Revenues from customers (1):
China	$	354,076	$	180,441	$	136,628
Taiwan		303,360		172,700		286,138
United States		233,573		221,895		235,171
Korea		225,099		145,958		124,738
Japan		105,981		148,699		77,518
Philippines		106,609		130,484		185,533
Europe		84,508		101,208		99,580
Singapore		80,571		90,622		145,543
Thailand		76,069		80,539		56,978
Malaysia		71,151		138,107		207,471
Rest of the World		15,753		18,408		10,864
	$	1,656,750	$	1,429,061	$	1,566,162

(1) Revenues are attributable to geographic areas based on location of customer site.

In 2012, one customer accounted for 10% of total consolidated revenues. In 2011 and 2010, no customer accounted for 10% or more of total consolidated revenues.

Long-lived assets by geographic area:

	United States		Foreign Countries		Total
	(in thousands)
December 31, 2012	$	211,422	$	54,360	$	265,782
December 31, 2011		192,336		39,871		232,207