Goodwill and Acquired Intangible Assets

9 Months Ended

Oct. 03, 2021

Goodwill and Intangible Assets

N. 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 nine months ended October 3, 2021, were as follows:

	Industrial Automation			System Test			Wireless Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2020
Goodwill	$	433,752		$	158,699		$	361,819		$	262,155		$	1,216,425
Accumulated impairment losses		—			(148,183	)		(353,843	)		(260,540	)		(762,566	)
		433,752			10,516			7,976			1,615			453,859
Foreign currency translation adjustment		(20,373	)		—			—			(88	)		(20,461	)
Balance at October 3, 2021
Goodwill		413,379			158,699			361,819			262,067			1,195,964
Accumulated impairment losses		—			(148,183	)		(353,843	)		(260,540	)		(762,566	)
	$	413,379		$	10,516		$	7,976		$	1,527		$	433,398

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:

	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation Adjustment			Net Carrying Amount
Balance at October 3, 2021		(in thousands)
Developed technology	$	272,547	$	(220,147	)	$	(3,489	)	$	48,911
Customer relationships		57,739		(48,351	)		174			9,562
Tradenames and trademarks		70,120		(46,643	)		(273	)		23,204
Total intangible assets	$	400,406	$	(315,141	)	$	(3,588	)	$	81,677
Balance, December 31, 2020
Developed technology	$	272,547	$	(210,479	)	$	(1,610	)	$	60,458
Customer relationships		66,239		(54,524	)		305			12,020
Tradenames and trademarks		70,120		(42,344	)		685			28,461
Total intangible assets	$	408,906	$	(307,347	)	$	(620	)	$	100,939

Aggregate intangible asset amortization expense was $5.4 million and $16.3 million, respectively, for the three and nine months ended October 3, 2021 and $6.2 million and $25.1 million, respectively, for the three and nine months ended September 27, 2020.

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

Year	Amortization Expense
	(in thousands)
2021 (remainder)	$	5,199
2022		20,299
2023		19,815
2024		19,507
2025		11,645
Thereafter		5,212