Segment Information

6 Months Ended

Jun. 29, 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 June 29, 2014:
Net revenues	$	421,434	$	68,699		$	35,434		$	—		$	525,567
Income (loss) before income taxes(1)(2)		107,270		14,229			(715	)		608			121,392
Three months ended June 30, 2013:
Net revenues	$	292,431	$	99,386		$	37,072		$	—		$	428,889
Income (loss) before income taxes(1)(2)		58,606		23,913			779			(2,941	)		80,357
Six months ended June 29, 2014:
Net revenues	$	683,171	$	89,909		$	73,497		$	—		$	846,577
Income (loss) before income taxes(1)(2)		141,870		(10,856	)		(267	)		(11,228	)		119,519
Six months ended June 30, 2013:
Net revenues	$	503,937	$	132,984		$	72,335		$	—		$	709,256
Income (loss) before income taxes(1)(2)		72,372		13,916			2,309			(9,666	)		78,931

(1) Pension and postretirement 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 six months ended June 29, 2014 and June 30, 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				For the Six Months Ended
	June 29,  2014		June 30,  2013		June 29,  2014		June 30,  2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	3,713	$	287	$	9,918	$	500
Total	$	3,713	$	287	$	9,918	$	500

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

	For the Three Months Ended				For the Six Months Ended
	June 29,  2014		June 30,  2013		June 29,  2014		June 30,  2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	879	$	1,398	$	3,972	$	4,066
Restructuring and other		426		—		426		—
Total	$	1,305	$	1,398	$	4,398	$	4,066

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

	For the Three Months Ended				For the Six Months Ended
	June 29,  2014		June 30,  2013		June 29,  2014		June 30,  2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	440	$	290	$	1,181	$	1,209
Restructuring and other		146		131		146		375
Total	$	586	$	421	$	1,327	$	1,584