I. Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance 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 Nine Months Ended
	October 4, 2015			September 28, 2014			October 4, 2015			September 28, 2014
	(in thousands)
Balance at beginning of period	$	8,228		$	9,073		$	8,942		$	6,660
Acquisition		—			—			372			—
Accruals for warranties issued during the period		3,261			4,419			9,548			12,675
Adjustments related to pre-existing warranties		(1,211	)		(559	)		(3,039	)		(1,000	)
Settlements made during the period		(2,370	)		(2,982	)		(7,915	)		(8,384	)

Balance at end of period	$	7,908		$	9,951		$	7,908		$	9,951

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 Nine Months Ended
	October 4, 2015			September 28, 2014			October 4, 2015			September 28, 2014
	(in thousands)
Balance at beginning of period	$	43,299		$	40,052		$	43,300		$	34,909
Acquisition		—			—			699			—
Deferral of new extended warranty revenue		10,442			9,896			22,818			24,218
Recognition of extended warranty deferred revenue		(6,252	)		(6,451	)		(19,328	)		(15,630	)

Balance at end of period	$	47,489		$	43,497		$	47,489		$	43,497