Goodwill and Acquired Intangible Assets

3 Months Ended

Apr. 01, 2018

M. GOODWILL AND ACQUIRED INTANGIBLE ASSETS

Goodwill

Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other” on December 31 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered impaired when the net book value of a reporting unit exceeds its estimated fair value.

The changes in the carrying amount of goodwill by reportable segments for the three months ended April 1, 2018, were as follows:


	Wireless Test			Industrial Automation		System Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2017
Goodwill	$	361,819		$	233,519	$	158,699		$	260,540		$	1,014,577
Accumulated impairment losses		(353,843	)		—		(148,183	)		(260,540	)		(762,566	)

		7,976			233,519		10,516			—			252,011
Energid acquisition		—			15,654		—			—			15,654
Foreign currency translation adjustment		—			8,035		—			—			8,035

Balance at April 1, 2018
Goodwill		361,819			257,208		158,699			260,540			1,038,266
Accumulated impairment losses		(353,843	)		—		(148,183	)		(260,540	)		(762,566	)

	$	7,976		$	257,208	$	10,516		$	—		$	275,700

Intangible Assets

Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.

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


	April 1, 2018
	Gross Carrying Amount (1)		Accumulated Amortization			Foreign Currency Translation Adjustment		Net Carrying Amount
	(in thousands)
Developed technology	$	276,417	$	(231,266	)	$	3,214	$	48,365
Customer relationships		96,771		(84,940	)		340		12,171
Tradenames and trademarks		51,120		(28,108	)		825		23,837
Non-compete agreement		320		(280	)		—		40

Total intangible assets	$	424,628	$	(344,594	)	$	4,379	$	84,413


	December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment		Net Carrying Amount
	(in thousands)
Developed technology	$	270,877	$	(226,190	)	$	1,618	$	46,305
Customer relationships		92,741		(83,585	)		171		9,327
Tradenames and trademarks		50,100		(27,120	)		416		23,396
Non-compete agreement		320		(260	)		—		60

Total intangible assets	$	414,038	$	(337,155	)	$	2,205	$	79,088

(1)	Gross carrying amount includes $10.9 million of Energid acquired intangible assets.

Aggregate intangible asset amortization expense was $7.7 million and $8.0 million, respectively, for the three months ended April 1, 2018 and April 2, 2017.

Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:


Year	Amortization Expense
	(in thousands)
2018 (remainder)		24,236
2019		28,316
2020		13,171
2021		5,298
2022		4,493
Thereafter		8,899

- 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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