RETIREMENT PLANS (Tables)

62 Months Ended

Dec. 31, 2012

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2012			2011
Assets and Obligations		(in thousands)
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	390,278		$	337,796
Service cost		2,787			2,735
Interest cost		15,670			17,466
Actuarial loss		31,912			54,248
Benefits paid		(65,650	)		(13,260	)
Curtailment		—			210
Settlement		—			(7,637	)
Transfers		—			(564	)
Non-U.S. currency movement		1,501			(716	)
End of year		376,498			390,278
Change in plan assets:
Fair value of plan assets:
Beginning of year		339,580			294,988
Company contributions		3,306			10,169
Plan participants’ contributions		108			51
Actual return on plan assets		24,621			55,345
Benefits paid		(65,650	)		(13,260	)
Settlement		—			(7,637	)
Non-U.S. currency movement		934			(76	)
End of year		302,899			339,580
Funded status	$	(73,599	)	$	(50,698	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statement of financial position as of December 31:

	2012			2011
	(in thousands)
Retirement plans assets	$	3,282		$	8,840
Accrued employees’ compensation and withholdings		(2,810	)		(2,524	)
Retirement plans liabilities		(74,071	)		(57,014	)
Funded status	$	(73,599	)	$	(50,698	)

Amounts Recognized in Accumulated Other Comprehensive Loss

The following table provides amounts recognized in accumulated other comprehensive income (loss) as of December 31:

	2012		2011
	(in thousands)
Prior service cost	$	656	$	888
Total recognized in other comprehensive income (loss), before tax		656		888
Deferred taxes		321		236
Total recognized in other comprehensive income (loss), net of tax	$	977	$	1,124

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2012		2011
	(in millions)
Projected benefit obligation	$	75.6	$	60.2
Accumulated benefit obligation		65.7		52.2
Fair value of plan assets		0.8		0.7

Net Periodic Pension Costs

For the years ended December 31, 2012, 2011 and 2010, Teradyne’s net periodic pension cost was comprised of the following:

	2012			2011			2010
	(in thousands)
Components of Net Periodic Pension Cost:
Service cost	$	2,787		$	2,735		$	3,655
Interest cost		15,670			17,466			17,716
Expected return on plan assets		(15,946	)		(15,602	)		(17,585	)
Amortization of prior service cost		232			621			726
Net actuarial loss (gain)		23,237			12,583			(469	)
Settlement loss (gain)		—			1,567			(3,113	)
Total net periodic pension cost	$	25,980		$	19,370		$	930
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		(232	)		(621	)		(726	)
Total recognized in other comprehensive income		(232	)		(621	)		(726	)
Total recognized in net periodic pension cost and other comprehensive income	$	25,748		$	18,749		$	204

Weighted Average Assumptions to Determine Net Periodic Pension Cost

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1

	United States Plans									Foreign Plans
	2012			2011			2010			2012			2011			2010
Discount rate		4.2	%		5.3	%		5.8	%		4.9	%		5.0	%		5.4	%
Expected return on plan assets		5.0			5.5			7.5			3.1			3.5			3.7
Salary progression rate		3.0			4.0			4.0			3.4			4.0			4.2

Weighted Average Assumptions to Determine Pension Obligations

Weighted Average Assumptions to Determine Pension Obligations at December 31

	United States Plans						Foreign Plans
	2012			2011			2012			2011
Discount rate		3.6	%		4.2	%		3.7	%		4.9	%
Salary progression rate		3.0			3.0			3.5			3.4

Weighted Average Pension Asset Allocations by Category

Teradyne’s weighted average pension asset allocation at December 31, 2012 and 2011, by asset category is as follows:

	United States Plan						Foreign Plans
	2012			2011			2012			2011
Fixed Income Securities		85.8	%		86.7	%		49.2	%		49.7	%
Equity Securities		13.0			12.3			49.6			48.3
Other		1.2			1.0			1.2			2.0
		100.0	%		100.0	%		100.0	%		100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, is as follows:

Asset Category:	Policy Index:	Target Allocation
Passive and Active Fixed Income	Barclays Capital Long Government Credit Index	85%
Equity (Large cap)	S&P 500 Stock Index	10
International Equity	MSCI EAFE Index (Net Dividends)	5

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2012 and December 31, 2011 were as follows:

	December 31, 2012
	Level 1		Level 2		Level 3		Total
			(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	157,263	$	—	$	157,263
U.S. government securities		23,712		58,962		—		82,674
U.K. government securities		—		8,593		—		8,593
Asset backed securities		—		2,042		—		2,042
U.S. equity (large cap)		—		23,832		—		23,832
International equity		—		23,990		—		23,990
Guarantee annuity contract		—		3,108		—		3,108
Other		—		839		—		839
Cash and cash equivalents		—		558		—		558
Total	$	23,712	$	279,187	$	—	$	302,899

	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	172,401	$	—	$	172,401
U.S. government securities		5,136		96,891		—		102,027
U.K. government securities		—		7,553		—		7,553
Asset backed securities		—		4,604		—		4,604
U.S. equity (large cap)		—		27,725		—		27,725
International equity		—		21,285		—		21,285
Guarantee annuity contract		—		2,863		—		2,863
Other		—		711		—		711
Cash and cash equivalents		—		411		—		411
Total	$	5,136	$	334,444	$	—	$	339,580

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2013	$	14,398	$	2,109
2014		15,283		1,499
2015		16,248		1,397
2016		17,368		2,070
2017		17,868		2,206
2018-2022		97,607		10,395

Post-Retirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

Teradyne uses a December 31 measurement date for its plan. The December 31 balances of the postretirement assets and obligations are shown below:

	2012			2011
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	12,793		$	12,896
Service cost		67			59
Interest cost		437			539
Actuarial loss		82			981
Benefits paid		(1,472	)		(1,682	)
Plan amendment		—			—
End of year		11,907			12,793
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		1,472			1,682
Benefits paid		(1,472	)		(1,682	)
End of year		—			—
Funded status	$	(11,907	)	$	(12,793	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2012			2011
	(in thousands)
Accrued employees’ compensation and withholdings	$	(1,322	)	$	(1,484	)
Retirement plans liability		(10,585	)		(11,309	)
Funded status	$	(11,907	)	$	(12,793	)

Amounts Recognized in Accumulated Other Comprehensive Loss

The following table provides amounts recognized in accumulated other comprehensive loss (income) as of December 31:

	2012			2011
	(in thousands)
Prior service credit	$	(3,427	)	$	(4,025	)
Total recognized in other comprehensive (income) loss before tax		(3,427	)		(4,025	)
Deferred taxes		(445	)		(227	)
Total recognized in other comprehensive income, net of tax	$	(3,872	)	$	(4,252	)

Net Periodic Pension Costs

For the years ended December 31, 2012, 2011 and 2010, Teradyne’s net periodic postretirement benefit (income) cost was comprised of the following:

	2012			2011			2010
	(in thousands)
Components of Net Periodic Postretirement Benefit (Income) Cost:
Service cost	$	67		$	59		$	57
Interest cost		437			539			668
Amortization of prior service cost		(599	)		(598	)		(416	)
Net actuarial loss (gain)		83			981			(882	)
Total net periodic postretirement (income) cost		(12	)		981			(573	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Net prior service credit arising during period		—			—			(3,279	)
Reversal of amortization items:
Prior service credit		599			598			416
Total recognized in other comprehensive income		599			598			(2,863	)
Total recognized in net periodic postretirement benefit cost and other comprehensive income	$	587		$	1,579		$	(3,436	)

Weighted Average Assumptions to Determine Net Periodic Pension Cost

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Cost as of January 1

	2012			2011			2010
Discount rate		3.7	%		4.5	%		5.1	%
Initial Health Care Cost Trend Rate		9.0			8.5			8.5
Ultimate Health Care Cost Trend Rate		5.0			5.0			5.0
Year in which Ultimate Health Care Cost Trend Rate is reached		2018			2018			2018

Weighted Average Assumptions to Determine Pension Obligations

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31

	2012			2011			2010
Discount rate		3.1	%		3.7	%		4.5	%
Initial Medical Trend		8.5			9.0			8.5
Ultimate Health Care Trend		5.0			5.0			5.0
Medical cost trend rate decrease to ultimate rate in year		2018			2018			2018

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefits Payments
	(in thousands)
2013	$	1,322
2014		1,202
2015		1,111
2016		1,106
2017		966
2018-2022		3,943

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2012, would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	16	$	(15	)
Effect on postretirement benefit obligations		322		(302	)