INCOME TAXES (Tables)

62 Months Ended

Dec. 31, 2012

Income (Loss) from Continuing Operations Before Income Taxes

The components of income (loss) from continuing operations before income taxes and the provision (benefit) for income taxes from continuing operations as shown in the consolidated statements of operations were as follows:

	2012			2011			2010
	(in thousands)
Income from continuing operations before income taxes:
U.S.	$	112,008		$	68,943		$	120,330
Non-U.S.		153,968			145,478			276,017
	$	265,976		$	214,421		$	396,347
Provision (benefit) for income taxes from continuing operations:
Current:
U.S. Federal	$	22,695		$	3,668		$	(1,555	)
Non-U.S.		18,261			23,994			16,547
State		(12	)		760			553
		40,944			28,422			15,545
Deferred:
U.S. Federal		8,158			(139,929	)		—
Non-U.S.		5,997			(10,549	)		1,110
State		(6,172	)		(7,480	)		—
		7,983			(157,958	)		1,110
Total provision (benefit) for income taxes from continuing operations:	$	48,927		$	(129,536	)	$	16,655

Provision (Benefit) for Income Taxes from Continuing Operations

The total income tax provision (benefit) for the years ended December 31, 2012, 2011 and 2010 was as follows:

	2012		2011			2010
	(in thousands)
Continuing operations	$	48,927	$	(129,536	)	$	16,655
Discontinued operations		—		4,311			278
Total income tax provision (benefit)	$	48,927	$	(125,225	)	$	16,933

Total Income Tax Provision (Benefit)

Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2012 and 2011 were as follows:

	2012			2011
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	36,674		$	37,899
Tax credits		64,123			76,248
Inventory valuations		50,886			42,760
Pension liability		28,674			21,119
Research and development		284			10,028
Accruals		14,246			13,817
Equity compensation		9,355			8,729
Vacation accrual		6,452			6,267
Other		282			398
Deferred revenue		15,118			35,869
Gross deferred tax assets		226,094			253,134
Less: valuation allowance		(55,446	)		(51,066	)
Total deferred tax assets		170,648			202,068
Deferred tax liabilities:
Marketable securities		(996	)		(827	)
Intangible assets		(114,730	)		(144,925	)
Excess of tax over book depreciation		(22,446	)		(18,417	)
Total deferred tax liabilities		(138,172	)		(164,169	)
Net deferred assets	$	32,476		$	37,899

Operating Loss Carryforwards

At December 31, 2012, Teradyne had operating loss carryforwards that expire in the following years:

	U.S. Federal Operating Loss Carryforwards		State Net Operating Loss Carryforwards		Foreign Net Operating Loss Carryforwards
	(in thousands)
2013	$	—	$	2,708	$	—
2014		—		2		—
2015		—		2		—
2016		—		58		—
2017		—		847		—
2018-2023		22,354		3,592		—
2024-2026		—		269		9
Beyond 2026		—		3,667		622
Non-expiring		—		—		8,038
Total	$	22,354	$	11,145	$	8,669

Reconciliation of Effective Tax Rate

A reconciliation of the effective tax rate for the years 2012, 2011 and 2010 follows:

	2012			2011			2010
U.S. statutory federal tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal tax benefit		(1.7	)		—			0.4
Foreign taxes		(11.5	)		(12.6	)		(13.9	)
Valuation allowance		(0.5	)		(87.7	)		(17.4	)
Other U.S. permanent items		(2.8	)		5.7			—
Other, net		(0.1	)		(0.8	)		0.1
		18.4	%		(60.4	)%		4.2	%

Unrecognized Tax Benefits

Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2012, 2011 and 2010 were as follows:

	2012			2011			2010
	(in thousands)
Beginning balance, as of January 1	$	19,678		$	12,028		$	12,767
Additions:
Tax positions for current year		459			6,131			106
Tax positions for prior years		1,402			1,296			2,435
Acquired tax positions		—			1,388			—
Reductions:
Tax positions for prior years		(4,072	)		(1,165	)		(3,280	)
Settlements with tax authorities		—			—			—
Ending Balance as of December 31	$	17,467		$	19,678		$	12,028