Goodwill and Intangible Assets

9 Months Ended

Oct. 04, 2015

L. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segments for the nine months ended October 4, 2015, were as follows:


	Wireless Test			Industrial Automation			System Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2014:
Goodwill	$	361,819		$	—		$	158,699		$	260,540		$	781,058
Accumulated impairment losses		(98,897	)		—			(148,183	)		(260,540	)		(507,620	)

		262,922			—			10,516			—			273,438
Universal Robots acquisition		—			226,501			—			—			226,501
Universal Robots adjustment		—			520			—			—			520
Foreign currency translation adjustment		—			(2,113	)		—			—			(2,113	)

Balance at October 4, 2015:
Goodwill		361,819			224,908			158,699			260,540			1,005,966
Accumulated impairment losses		(98,897	)		—			(148,183	)		(260,540	)		(507,620	)

	$	262,922		$	224,908		$	10,516		$	—		$	498,346

Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:


	October 4, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	381,071	$	206,256	$	174,815		6.0 years
Customer relationships		110,464		59,395		51,069		7.9 years
Tradenames and trademarks		51,588		17,418		34,170		9.5 years
Non-compete agreement		320		80		240		4.0 years
Customer order backlog		170		170		—		0.3 years

Total intangible assets	$	543,613	$	283,319	$	260,294		6.7 years


	December 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	345,513	$	224,059	$	121,454		6.2 years
Customer relationships		146,635		93,998		52,637		7.7 years
Tradenames and trademarks		30,414		14,205		16,209		9.0 years
Non-compete agreement		320		20		300		4.0 years
Customer order backlog		170		170		—		0.3 years

Total intangible assets	$	523,052	$	332,452	$	190,600		6.8 years

During the nine months ended October 4, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

Aggregate intangible asset amortization expense was $20.1 million and $49.1 million, respectively, for the three and nine months ended October 4, 2015 and $18.3 million and $54.8 million, respectively, for the three and nine months ended September 28, 2014. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:


Year	Amortization Expense
	(in thousands)
2015 (remainder)	$	20,029
2016		80,117
2017		71,498
2018		44,647
2019		23,785
Thereafter		20,218

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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