Segment Information

3 Months Ended

Mar. 30, 2014

Segment Information

Q. 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, 2013. Segment information is as follows:

	Semiconductor Test		Wireless Test			System Test		Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended March 30, 2014:
Net revenues	$	261,737	$	21,210		$	38,063	$	—		$	321,010
Income (loss) before income taxes(1)(2)		34,600		(25,085	)		448		(11,836	)		(1,873	)
Three months ended March 31, 2013:
Net revenues	$	211,506	$	33,598		$	35,263	$	—		$	280,367
Income (loss) before income taxes(1)(2)		13,766		(9,997	)		1,530		(6,725	)		(1,426	)

(1) 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 months ended March 30, 2014 and March 31, 2013 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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	6,205	$	213

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	3,093	$	2,668

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	741	$	919
Restructuring and other		—		244
Total	$	741	$	1,163