Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2013 and 2012.

	December 31, 2013
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	117,242	$	—	$	—	$	117,242
Cash equivalents		165,865		58,531		—		224,396
Available for sale securities:
U.S. Treasury securities		467,895		—		—		467,895
U.S. government agency securities		—		202,588		—		202,588
Commercial paper		—		105,598		—		105,598
Corporate debt securities		—		65,387		—		65,387
Equity and debt mutual funds		13,156		—		—		13,156
Certificates of deposit and time deposits		—		3,258		—		3,258
Non-U.S. government securities		—		78		—		78
Total		764,158		435,440		—		1,199,598
Derivatives		—		153		—		153
Total	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	283,107	$	58,531	$	—	$	341,638
Marketable securities		371,101		215,781		—		586,882
Long-term marketable securities		109,950		161,128		—		271,078
Other current assets		—		153		—		153
	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

	December 31, 2012
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	139,354	$	—	$	—	$	139,354
Cash equivalents		183,039		16,527		—		199,566
Available for sale securities:
U.S. Treasury securities		312,116		—		—		312,116
U.S. government agency securities		—		217,655		—		217,655
Commercial paper		—		70,434		—		70,434
Corporate debt securities		—		55,755		—		55,755
Equity and debt mutual funds		9,717		—		—		9,717
Certificates of deposit and time deposits		—		1,627		—		1,627
Non-U.S. government securities		—		84		—		84
Total		644,226		362,082		—		1,006,308
Derivatives		—		121		—		121
Total	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Contingent consideration	$	—	$	—	$	388	$	388
Total	$	—	$	—	$	388	$	388

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	322,393	$	16,527	$	—	$	338,920
Marketable securities		239,192		192,324		—		431,516
Long-term marketable securities		82,641		153,231		—		235,872
Other current assets		—		121		—		121
	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Other accrued liabilities	$	—	$	—	$	388	$	388
	$	—	$	—	$	388	$	388

Schedule of Changes in Fair Value of Level 3 Financial Assets

Changes in the fair value of Level 3 contingent consideration for the year ended December 31, 2013 and December 31, 2012 were as follows:

	Contingent Consideration
	(in thousands)
Balance at December 31, 2011	$	68,892
Fair value adjustment		(8,794	)
Payments		(59,710	)
Balance at December 31, 2012		388
Acquisition of ZTEC		2,230
Payments		(388	)
Balance at December 31, 2013	$	2,230

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2013 and 2012 were as follows:

	December 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	341,638	$	341,638	$	338,920	$	338,920
Marketable securities		857,960		857,960		667,388		667,388
Convertible debt (1)		185,708		611,433		169,896		589,000
Japan loan		955		955		3,491		3,491

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion feature.

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available for sale marketable securities at December 31, 2013 and 2012:

	December 31, 2013
	Available-for-Sale									Fair Market Value of Investments with Unrealized  Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	468,084	$	94	$	(283	)	$	467,895	$	108,212
U.S. government agency securities		202,573		75		(60	)		202,588		84,498
Commercial paper		105,583		16		(1	)		105,598		7,993
Corporate debt securities		65,747		762		(1,122	)		65,387		40,355
Equity and debt mutual funds		10,463		2,742		(49	)		13,156		702
Certificates of deposit and time deposits		3,258		—		—			3,258		—
Non-U.S. government securities		78		—		—			78		—
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	586,818	$	85	$	(21	)	$	586,882	$	137,670
Long-term marketable securities		268,968		3,604		(1,494	)		271,078		104,090
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

	December 31, 2012
	Available-for-Sale									Fair Market Value of Investments with Unrealized  Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	311,915	$	216	$	(15	)	$	312,116	$	1,018
U.S. government agency securities		217,396		262		(3	)		217,655		9,018
Commercial paper		70,431		9		(6	)		70,434		25,209
Corporate debt securities		53,405		2,414		(64	)		55,755		23,255
Equity and debt mutual funds		8,767		961		(11	)		9,717		600
Certificates of deposit and time deposits		1,627		—		—			1,627		—
Non-U.S. government securities		84		—		—			84		—
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	431,324	$	203	$	(11	)	$	431,516	$	41,110
Long-term marketable securities		232,301		3,659		(88	)		235,872		17,990
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Contractual Maturities of Available-for-Sale Marketable Securities

The contractual maturities of investments held at December 31, 2013 were as follows:

	Cost		Fair Value
	(in thousands)
Due within one year	$	586,818	$	586,882
Due after 1 year through 5 years		231,188		231,201
Due after 5 years through 10 years		3,924		3,941
Due after 10 years		23,393		22,780
Total	$	845,323	$	844,804

Schedule of Notional Amount of Derivatives

At December 31, 2013 and 2012, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	December 31, 2013								December 31, 2012
	Buy Position			Sell Position		Net Total			Buy Position			Sell Position		Net Total
	(in millions)
Japanese Yen	$	—		$	32.6	$	32.6		$	—		$	36.3	$	36.3
Taiwan Dollar		—			4.0		4.0			—			4.2		4.2
British Pound Sterling		—			6.9		6.9			—			5.5		5.5
Korean Won		—			5.8		5.8			—			—		—
Euro		(24.8	)		0.7		(24.1	)		(16.8	)		1.3		(15.5	)
Total	$	(24.8	)	$	50.0	$	25.2		$	(16.8	)	$	47.3	$	30.5

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments as of December 31, 2013 and 2012:

	Balance Sheet Location	December 31, 2013		December 31, 2012
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets	$	153	$	121
Total derivatives		$	153	$	121

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments in the statement of operations recognized for the years ended December 31, 2013, 2012 and 2011. The table does not reflect the corresponding (losses) gains from the remeasurement of the monetary assets and liabilities denominated in currencies. For the years ended December 31, 2013, 2012, and 2011, (losses) gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $(6.9) million, $(4.5) million, and $0.9 million, respectively.

	Location of Gains (Losses) Recognized in Statement of Operations		December 31, 2013		December 31, 2012		December 31, 2011
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Interest expense and other	$	5,933	$	3,974	$	(1,327	)
Total derivatives			$	5,933	$	3,974	$	(1,327	)