H. Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The warranty balance below is included in other accrued liabilities on the balance sheet.


	For the Three Months Ended						For the Six Months Ended
	June 29, 2014			June 30, 2013			June 29, 2014			June 30, 2013
	(in thousands)
Balance at beginning of period	$	6,615		$	7,075		$	6,660		$	9,786
Accruals for warranties issued during the period		5,399			3,684			8,257			5,107
Adjustments related to pre-existing warranties		(302	)		(869	)		(442	)		(1,798	)
Settlements made during the period		(2,639	)		(2,539	)		(5,402	)		(5,744	)

Balance at end of period	$	9,073		$	7,351		$	9,073		$	7,351

When Teradyne receives revenue for extended warranty beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The extended warranty balance below is included in short and long-term deferred revenue and customer advances on the balance sheet.


	For the Three Months Ended						For the Six Months Ended
	June 29, 2014			June 30, 2013			June 29, 2014			June 30, 2013
	(in thousands)
Balance at beginning of period	$	33,949		$	28,599		$	34,909		$	26,987
Deferral of new extended warranty revenue		11,960			8,734			14,321			12,205
Recognition of extended warranty deferred revenue		(5,857	)		(2,479	)		(9,178	)		(4,338	)

Balance at end of period	$	40,052		$	34,854		$	40,052		$	34,854