Segment Information

9 Months Ended

Oct. 03, 2021

Segment Reporting [Abstract]

Segment Information

T. SEGMENT INFORMATION

Teradyne has four reportable segments (Semiconductor Test, System Test, Industrial Automation and Wireless Test). Each of the reportable segments is also an individual operating segment.

The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor 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 and system level test, and circuit-board test. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms, autonomous mobile robots and advanced robotic control software. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. 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 (loss) 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, 2020.

Segment information for the three and nine months ended October 3, 2021 and September 27, 2020 is as follows:

	Semiconductor Test		System Test		Industrial Automation			Wireless Test		Corporate and Other			Consolidated
	(in thousands)
Three Months Ended October 3, 2021
Revenues	$	688,232	$	102,605	$	91,014		$	68,713	$	(63	)	$	950,501
Income (loss) before income taxes (1)(2)		265,017		31,773		(4,226	)		31,726		(26,535	)		297,755
Total assets (3)		1,251,549		147,970		696,792			119,568		1,546,303			3,762,182
Three Months Ended September 27, 2020
Revenues	$	592,141	$	118,169	$	68,711		$	40,504	$	(41	)	$	819,484
Income (loss) before income taxes (1)(2)		189,116		47,368		(5,302	)		10,938		21,611			263,731
Total assets (3)		1,069,830		155,642		667,132			108,671		1,435,237			3,436,512
Nine Months Ended October 3, 2021 (4)
Revenues	$	2,050,271	$	340,261	$	263,151		$	164,504	$	(352	)	$	2,817,835
Income (loss) before income taxes (1)(2)		778,687		116,788		(14,586	)		63,810		(38,925	)		905,774
Total assets (3)		1,251,549		147,970		696,792			119,568		1,546,303			3,762,182
Nine Months Ended September 27, 2020
Revenues	$	1,735,777	$	306,051	$	187,792		$	133,174	$	(294	)	$	2,362,500
Income (loss) before income taxes (1)(2)		571,719		114,968		(32,041	)		35,640		(12,197	)		678,089
Total assets (3)		1,069,830		155,642		667,132			108,671		1,435,237			3,436,512

(1) Included in Corporate and Other are: contingent consideration adjustments, loss on convertible debt conversions, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations and acquisition related: (a) charges; (b) legal fees; (c) compensation.

(2) Included in income (loss) before taxes are charges and credits related to restructuring and other, loss on convertible debt conversions and inventory charges.

(3) Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

(4) The (loss) before income taxes for the nine months ended October 3, 2021 for Industrial Automation has been decreased and Corporate and Other has been increased to correctly eliminate a $10.1 million immaterial error in the three and six months ended July 4, 2021 related to intercompany charges. The error is not material to any historical periods.

Included in each segment are charges and credits in the following line items in the statements of operations:

	For the Three Months Ended					For the Nine Months Ended
	October 3, 2021		September 27, 2020			October 3, 2021			September 27, 2020
	(in thousands)
Semiconductor Test:
Cost of revenues—inventory charge	$	3,725	$	1,131		$	4,959		$	7,956
Restructuring and other—Contract termination settlement charge		—		—			—			4,000
Industrial Automation:
Cost of revenues—inventory charge	$	3,656	$	—		$	4,941		$	505
Restructuring and other—employee severance		476		—			965			664
Restructuring and other—acquisition related expenses and compensation		—		—			825			790
Wireless:
Cost of revenues—inventory charge	$	679	$	1,802		$	1,351		$	3,957
System Test:
Cost of revenues—inventory charge	$	—	$	—		$	524		$	698
Corporate and Other:
Other (income) expense, net—loss on convertible debt conversion	$	20,153	$	—		$	25,397		$	—
Restructuring and other—other		—		—			1,846			—
Restructuring and other—AutoGuide contingent consideration adjustment		—		(27,206	)		(7,227	)		(4,421	)
Restructuring and other—acquisition related expenses and compensation		—		(1,086	)		(513	)		2,629
Restructuring and other—MiR contingent consideration adjustment		—		—			—			(3,546	)