Segment Information |
R. Segment Information
Teradyne has four operating segments (Semiconductor Test, Wireless
Test, System Test and Industrial Automation), 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 the design, manufacturing and
marketing of wireless test products and services. The System Test
segment includes operations related to the design, manufacturing
and marketing of products and services for defense/aerospace
instrumentation test, storage test and circuit-board test. The
Industrial Automation segment includes operations related to the
design, manufacturing and marketing of collaborative robots. 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 in
effect are described in Note B: “Accounting Policies”
in Teradyne’s Annual Report on Form 10-K for the year ended
December 31, 2014, unless updated in this form 10-Q, where
applicable.
Segment information for the three and nine months ended
October 4, 2015 and September 28, 2014 is as follows:
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Semiconductor
Test |
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Wireless
Test |
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System
Test |
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Industrial
Automation |
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Corporate
and
Eliminations |
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Consolidated |
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(in
thousands) |
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Three months ended October 4, 2015:
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Revenues
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$ |
325,516 |
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$ |
55,359 |
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$ |
69,062 |
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$ |
16,057 |
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$ |
— |
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$ |
465,994 |
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Income (loss) before income taxes (1)(2)
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73,957 |
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2,997 |
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13,751 |
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(4,847 |
) |
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1,550 |
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87,408 |
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Total assets (3)
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591,445 |
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447,461 |
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109,078 |
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360,068 |
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1,153,832 |
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2,661,884 |
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Three months ended September 28, 2014:
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Revenues
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$ |
380,083 |
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$ |
54,838 |
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$ |
43,089 |
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$ |
— |
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$ |
— |
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$ |
478,010 |
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Income before income taxes (1)(2)
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91,900 |
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2,379 |
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5,779 |
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— |
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612 |
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100,670 |
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Total assets (3)
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748,499 |
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614,911 |
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83,769 |
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— |
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1,247,828 |
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2,695,007 |
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Nine months ended October 4, 2015:
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Revenues
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$ |
996,748 |
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$ |
152,285 |
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$ |
152,320 |
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$ |
19,780 |
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$ |
— |
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$ |
1,321,133 |
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Income (loss) before income taxes (1)(2)
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246,627 |
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(603 |
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10,423 |
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(6,547 |
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12,081 |
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261,981 |
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Total assets (3)
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591,445 |
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447,461 |
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109,078 |
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360,068 |
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1,153,832 |
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2,661,884 |
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Nine months ended September 28, 2014:
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Revenues
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$ |
1,063,254 |
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$ |
144,747 |
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$ |
116,586 |
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$ |
— |
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$ |
— |
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$ |
1,324,587 |
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Income (loss) before income taxes (1)(2)
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233,770 |
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(8,477 |
) |
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5,512 |
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— |
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(10,616 |
) |
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220,189 |
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Total assets (3)
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748,499 |
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614,911 |
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83,769 |
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— |
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1,247,828 |
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2,695,007 |
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(1) |
Interest income, interest expense,
and other (income) expense, net are included in Corporate and
Eliminations. |
(2) |
Included in the income (loss) before
income taxes for each of the segments are charges related to
inventory and other. |
(3) |
Total business assets are directly
attributable to each business. Corporate assets consist of cash and
cash equivalents, marketable securities and certain other
assets. |
Included in the Semiconductor Test segment are charges in the
following line items in the statements of operations:
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For the Three Months
Ended |
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For the Nine Months
Ended |
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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in
thousands) |
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Cost of revenues—inventory charge
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$ |
1,697 |
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$ |
4,404 |
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$ |
8,637 |
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$ |
14,322 |
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Restructuring and other
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194 |
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— |
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499 |
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— |
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Total
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$ |
1,891 |
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$ |
4,404 |
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$ |
9,136 |
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$ |
14,322 |
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Included in the Wireless Test segment are charges in the following
line items in the statements of operations:
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For the Three Months
Ended |
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For the Nine Months
Ended |
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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in
thousands) |
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Cost of revenues—inventory charge
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$ |
901 |
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$ |
1,267 |
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$ |
2,077 |
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$ |
5,239 |
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Restructuring and other
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— |
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— |
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— |
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426 |
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Total
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$ |
901 |
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$ |
1,267 |
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$ |
2,077 |
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$ |
5,665 |
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Included in the System Test segment are charges in the following
line items in the statements of operations:
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For the Three Months
Ended |
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For the Nine Months
Ended |
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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in
thousands) |
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Cost of revenues—inventory charge
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$ |
460 |
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$ |
763 |
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$ |
8,225 |
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$ |
1,944 |
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Restructuring and other
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923 |
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225 |
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923 |
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371 |
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Total
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$ |
1,383 |
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$ |
988 |
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$ |
9,148 |
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$ |
2,315 |
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Included in the Industrial Automation segment are charges in the
following line item in the statements of operations:
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For the Three Months
Ended |
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For the Nine Months
Ended |
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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in
thousands) |
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Cost of revenues—inventory step-up (1)
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$ |
972 |
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$ |
— |
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$ |
1,567 |
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$ |
— |
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Total
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$ |
972 |
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$ |
— |
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$ |
1,567 |
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$ |
— |
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Included in Corporate and Eliminations are charges and credits in
the following line items in the statements of operations:
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For the Three Months
Ended |
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For the Nine Months
Ended |
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October 4,
2015 |
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September 28,
2014 |
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October 4,
2015 |
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September 28,
2014 |
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(in
thousands) |
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Restructuring and other—AIT contingent consideration
adjustment
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$ |
(1,000 |
) |
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$ |
— |
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$ |
(1,000 |
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$ |
— |
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Restructuring and other—Universal Robots acquisition
costs
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144 |
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— |
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1,104 |
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— |
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Restructuring and other—ZTEC contingent consideration
adjustment
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— |
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(630 |
) |
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(1,600 |
) |
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(630 |
) |
Other (income) expense, net—gain from the sale of an equity
investment
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— |
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— |
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(5,406 |
) |
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— |
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Selling and administrative—stock based compensation
expense (2)
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— |
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— |
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— |
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6,598 |
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Total
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$ |
(856 |
) |
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$ |
(630 |
) |
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$ |
(6,902 |
) |
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$ |
5,968 |
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(1) |
Included in the cost of revenues for
the three and nine months ended October 4, 2015 is the cost
for purchase accounting inventory step-up. |
(2) |
Expense related to the January 2014
retirement of Teradyne’s former chief executive officer; see
Note J: “Stock-Based Compensation.” |
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