Operating Segment, Geographic and Significant Customer Information

12 Months Ended

Dec. 31, 2013

Operating Segment, Geographic and Significant Customer Information

R.    OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER 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 the design, manufacturing and marketing of wireless test products and services. The System Test 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, 2013, 2012 and 2011 is as follows:

	Semiconductor Test		Wireless Test			System Test		Corporate And Eliminations			Consolidated
	(in thousands)
2013
Net revenue	$	1,023,041	$	251,871		$	153,021	$	—		$	1,427,933
Income from continuing operations before taxes (1)(2)		153,797		23,153			3,115		21,857			201,922
Total assets (3)		632,840		645,001			79,983		1,272,000			2,629,824
Property additions		94,303		5,358			7,070		—			106,731
Depreciation and amortization expense		72,472		51,675			5,180		21,360			150,687
2012
Net revenue	$	1,127,726	$	286,355		$	242,669	$	—		$	1,656,750
Income from continuing operations before taxes (1)(2)		185,985		83,077			34,164		(37,250	)		265,976
Total assets (3)		604,127		672,048			71,116		1,082,054			2,429,345
Property additions		105,074		7,608			6,398		—			119,080
Depreciation and amortization expense		73,537		50,362			4,549		17,066			145,514
2011
Net revenue	$	1,106,191	$	28,390		$	294,480	$	—		$	1,429,061
Income (loss) from continuing operations before taxes (1)(2)		219,651		(20,579	)		53,298		(37,949	)		214,421
Total assets (3)		581,026		725,940			77,277		804,396			2,188,639
Property additions		80,606		794			4,697		—			86,097
Depreciation and amortization expense		74,278		13,057			4,192		15,154			106,681

(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 and inventory charges.

(3) Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

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

	For the Year Ended December 31,
	2013		2012		2011
	(in thousands)
Cost of revenues—inventory charge (1)	$	5,218	$	18,433	$	10,370
Restructuring and other		1,016		386		2,142

(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 System Test segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2013		2012		2011
	(in thousands)
Cost of revenues—inventory charge	$	4,168	$	4,271	$	1,090
Restructuring and other		1,431		451		(300	)

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

	For the Year Ended December 31,
	2013		2012		2011
	(in thousands)
Cost of revenues—inventory step-up (2)	$	—	$	6,089	$	12,178
Cost of revenues—inventory charge		7,206		4,145		141
Restructuring and other		82		236		—

(2) 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,
	2013			2012			2011
	(in thousands)
Restructuring and other	$	(449	)	$	(8,794	)	$	4,901

Information as to Teradyne’s revenues by country is as follows:

	2013		2012		2011
	(in thousands)
Revenues from customers (1):
China	$	323,564	$	351,335	$	180,441
Taiwan		272,919		299,359		172,700
United States		222,731		238,280		221,895
Korea		119,286		216,445		145,958
Singapore		114,765		101,502		90,622
Europe		90,797		77,099		101,208
Malaysia		86,900		69,064		138,107
Japan		81,806		100,807		148,699
Philippines		63,392		111,571		130,484
Thailand		32,209		80,518		80,539
Rest of the World		19,564		10,770		18,408
	$	1,427,933	$	1,656,750	$	1,429,061

(1) Revenues attributable to a country are based on location of customer site.

In 2013 and 2012, one customer accounted for 12% and 10%, respectively, of total consolidated revenues. The customer is a customer of Teradyne’s Wireless Test and Semiconductor Test segments. In 2011, 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, 2013	$	211,455	$	63,781	$	275,236
December 31, 2012		211,422		54,360		265,782