Segment Information

9 Months Ended

Sep. 29, 2013

Segment Information

P. Segment Information

Teradyne has three operating segments (Semiconductor Test, Wireless Test and System Test), 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 design, manufacturing and marketing of wireless test products and services. The System Test segment includes operations related to 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 based on several factors, of which the primary financial measure is business segment income before income taxes. The accounting policies of the business segments are the same as those described in Note B “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012. Segment information is as follows:

	Semiconductor Test		Wireless Test		System Test			Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended September 29, 2013:
Net revenues	$	304,131	$	93,132	$	36,113		$	—		$	433,376
Income (loss) before income taxes(1)(2)		68,932		27,575		(2,462	)		(6,493	)		87,552
Three months ended September 30, 2012:
Net revenues	$	310,979	$	118,571	$	33,844		$	—		$	463,394
Income (loss) before income taxes(1)(2)		55,348		58,902		(2,642	)		(8,583	)		103,025
Nine months ended September 29, 2013:
Net revenues	$	808,068	$	226,116	$	108,448		$	—		$	1,142,632
Income (loss) before income taxes(1)(2)		141,304		41,491		(153	)		(16,159	)		166,483
Nine months ended September 30, 2012:
Net revenues	$	943,625	$	261,827	$	202,894		$	—		$	1,408,346
Income (loss) before income taxes(1)(2)		181,594		97,729		30,964			(14,026	)		296,261

(1) Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

Included in the Semiconductor Test segment are charges for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013		September 30,  2012			September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	1,378	$	3,085		$	1,878	$	9,254
Restructuring and other		282		(4	)		416		315
Total	$	1,660	$	3,081		$	2,294	$	9,569

Included in the Wireless Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	2,059	$	2,018	$	6,125	$	4,134
Cost of revenues—inventory step-up		—		—		—		6,089
Restructuring and other		—		236		82		236
Total	$	2,059	$	2,254	$	6,207	$	10,459

Included in the System Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	404	$	378	$	1,613	$	3,020
Restructuring and other		1,055		451		1,430		451
Total	$	1,459	$	829	$	3,043	$	3,471

Included in Corporate and Eliminations are credits for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013			September 30,  2012		September 29,  2013			September 30,  2012
	(in thousands)
Restructuring and other	$	(448	)	$	—	$	(448	)	$	(8,406	)
Total	$	(448	)	$	—	$	(448	)	$	(8,406	)