Goodwill and Acquired Intangible Assets

6 Months Ended

Jul. 03, 2022

Goodwill and Acquired Intangible Assets

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. In the six months ended July 3, 2022, there were no interim indicators of impairment. 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 six months ended July 3, 2022, were as follows:

	Industrial Automation			Wireless Test			Semiconductor Test			System Test			Total
	(in thousands)
Balance at December 31, 2021
Goodwill	$	405,971		$	361,819		$	262,101		$	158,699		$	1,188,590
Accumulated impairment losses		—			(353,843	)		(260,540	)		(148,183	)		(762,566	)
Total Goodwill		405,971			7,976			1,561			10,516			426,024
Foreign currency translation adjustment		(28,225	)		—			(66	)		—			(28,291	)
Balance at July 3, 2022
Goodwill		377,746			361,819			262,035			158,699			1,160,299
Accumulated impairment losses		—			(353,843	)		(260,540	)		(148,183	)		(762,566	)
Total Goodwill	$	377,746		$	7,976		$	1,495		$	10,516		$	397,733

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 July 3, 2022	(in thousands)
Developed technology	$	272,547	$	(229,766	)	$	(6,182	)	$	36,599
Customer relationships		57,739		(50,058	)		149			7,830
Tradenames and trademarks		59,387		(39,706	)		(1,601	)		18,080
Total intangible assets	$	389,673	$	(319,530	)	$	(7,634	)	$	62,509
Balance, December 31, 2021
Developed technology	$	272,547	$	(223,413	)	$	(4,093	)	$	45,041
Customer relationships		57,739		(48,921	)		209			9,027
Tradenames and trademarks		59,387		(37,237	)		(583	)		21,567
Total intangible assets	$	389,673	$	(309,571	)	$	(4,467	)	$	75,635

Aggregate intangible asset amortization expense was $4.9 million and $9.9 million, respectively, for the three and six months ended July 3, 2022 and $5.4 million and $10.9 million, respectively, for the three and six months ended July 4, 2021.

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

Year	Amortization Expense
	(in thousands)
2022	$	9,547
2023		18,642
2024		18,336
2025		11,154
2026		2,333
Thereafter		2,497