10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        to

Commission File No. 001-06462

TERADYNE, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2272148
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
600 Riverpark Drive, North Reading, Massachusetts	01864
(Address of Principal Executive Offices)	(Zip Code)

978-370-2700

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares outstanding of the registrant’s only class of Common Stock as of November 1, 2013 was 191,611,017 shares.

TERADYNE, INC.

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of September 29, 2013 and December 31, 2012		1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 29, 2013 and September 30, 2012		2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 29, 2013 and September 30, 2012		3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 29, 2013 and September 30, 2012		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		33
Item 4.	Controls and Procedures		33
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		34
Item 1A.	Risk Factors		34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 4.	Mine Safety Disclosures		35
Item 6.	Exhibits		36

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 29, 2013		December 31, 2012
	(in thousands, except per share information)
ASSETS
Current assets:
Cash and cash equivalents	$	572,868	$	338,920
Marketable securities		384,334		431,516
Accounts receivable, less allowance for doubtful accounts of $3,562 and $4,118 at September 29, 2013 and December 31, 2012, respectively		209,386		153,423
Inventories:
Parts		70,620		89,598
Assemblies in process		25,923		32,303
Finished goods		26,489		17,509
		123,032		139,410
Deferred tax assets		83,780		77,305
Prepayments		109,107		90,931
Other current assets		11,873		4,556
Total current assets		1,494,380		1,236,061
Net property, plant and equipment		275,421		265,782
Long-term marketable securities		202,087		235,872
Other assets		19,763		20,209
Retirement plans assets		5,020		3,282
Intangible assets, net		265,705		318,867
Goodwill		349,272		349,272
Total assets	$	2,611,648	$	2,429,345
LIABILITIES
Current liabilities:
Accounts payable	$	67,734	$	58,324
Accrued employees’ compensation and withholdings		78,616		86,264
Deferred revenue and customer advances		70,367		81,357
Other accrued liabilities		62,184		57,249
Accrued income taxes		25,249		12,306
Current debt		183,573		2,328
Total current liabilities		487,723		297,828
Long-term deferred revenue and customer advances		17,455		16,227
Retirement plans liabilities		95,982		94,373
Deferred tax liabilities		37,632		50,201
Long-term other accrued liabilities		21,355		21,302
Long-term debt		—		171,059
Total liabilities		660,147		650,990
Commitments and contingencies (Note N)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 191,399 shares and 187,908 shares issued and outstanding at September 29, 2013 and December 31, 2012, respectively		23,925		23,488
Additional paid-in capital		1,379,832		1,347,762
Accumulated other comprehensive income		3,855		5,820
Retained earnings		543,889		401,285
Total shareholders’ equity		1,951,501		1,778,355
Total liabilities and shareholders’ equity	$	2,611,648	$	2,429,345

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012, are an integral part of the condensed consolidated financial statements.

1

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three  Months Ended						For the Nine  Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands, except per share amount)
Net revenues:
Products	$	365,825		$	393,037		$	943,212		$	1,204,506
Services		67,551			70,357			199,420			203,840
Total net revenues		433,376			463,394			1,142,632			1,408,346
Cost of revenues:
Cost of products		150,365			169,782			405,569			550,282
Cost of services		28,717			33,412			88,119			97,432
Total cost of revenues		179,082			203,194			493,688			647,714
Gross profit		254,294			260,200			648,944			760,632
Operating expenses:
Engineering and development		68,918			63,946			199,442			193,059
Selling and administrative		72,917			69,030			210,037			207,727
Acquired intangible assets amortization		18,064			18,429			54,163			55,287
Restructuring and other		889			683			1,480			(7,404	)
Total operating expenses		160,788			152,088			465,122			448,669
Income from operations		93,506			108,112			183,822			311,963
Interest income		948			1,067			2,923			2,834
Interest expense and other		(6,902	)		(6,154	)		(20,262	)		(18,536	)
Income before income taxes		87,552			103,025			166,483			296,261
Income tax provision		18,093			14,384			23,879			62,669
Net income	$	69,459		$	88,641		$	142,604		$	233,592
Net income per common share:
Basic	$	0.36		$	0.47		$	0.75		$	1.25
Diluted	$	0.29		$	0.39		$	0.61		$	1.02
Weighted average common shares—basic		191,307			187,364			190,521			186,592
Weighted average common shares—diluted		235,828			229,210			235,165			230,003

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012, are an integral part of the condensed consolidated financial statements.

2

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Three  Months Ended						For the Nine  Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Net income	$	69,459		$	88,641		$	142,604		$	233,592
Other comprehensive income:
Available-for-sale marketable securities:
Net unrealized gains (losses) on marketable securities arising during period		887			1,259			(1,019	)		2,455
Less: Reclassification adjustment for net gains included in net income		(202	)		(93	)		(621	)		(583	)
Net change		685			1,166			(1,640	)		1,872
Defined benefit pension and post-retirement plans:
Amortization of prior service net benefit included in net periodic pension cost and post-retirement benefit		(109	)		(92	)		(325	)		(275	)
Other comprehensive income (loss)		576			1,074			(1,965	)		1,597
Comprehensive income	$	70,035		$	89,715		$	140,639		$	235,189

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012, are an integral part of the condensed consolidated financial statements.

3

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine  Months Ended
	September 29, 2013			September 30, 2012
	(in thousands)
Cash flows from operating activities:
Net income	$	142,604		$	233,592
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		41,873			39,812
Amortization		69,495			67,366
Stock-based compensation		27,227			30,634
Provision for excess and obsolete inventory		9,616			16,408
Deferred taxes		(19,211	)		7,076
Non cash charge for the sale of inventories revalued at the date of acquisition		—			6,089
Contingent consideration adjustment		—			(8,373	)
Tax benefit related to stock options and restricted stock units		(807	)		(7,600	)
Retirement plans actuarial (gains) losses		(1,359	)		4,991
Impairment loss on property, plant and equipment		1,074			—
Other		83			(2,359	)
Changes in operating assets and liabilities:
Accounts receivable		(55,963	)		(76,134	)
Inventories		34,194			25,070
Prepayments and other assets		(26,312	)		7,278
Accounts payable and other accrued expenses		496			(17,600	)
Deferred revenue and customer advances		(9,762	)		(10,651	)
Retirement plans contributions		(3,569	)		(3,679	)
Accrued income taxes		13,750			50,313
Net cash provided by operating activities		223,429			362,233
Cash flows from investing activities:
Purchases of property, plant and equipment		(82,925	)		(91,132	)
Purchases of marketable securities		(657,188	)		(510,157	)
Proceeds from maturities of marketable securities		401,901			156,422
Proceeds from sales of marketable securities		332,597			14,250
Net cash used for investing activities		(5,615	)		(430,617	)
Cash flows from financing activities:
Issuance of common stock under employee stock option and stock purchase plans		16,778			17,959
Tax benefit related to stock options and restricted stock units		807			7,600
Payments of long-term debt		(1,063	)		(1,246	)
Payments of contingent consideration		(388	)		(43,973	)
Net cash provided by (used) for financing activities		16,134			(19,660	)
Increase (decrease) in cash and cash equivalents		233,948			(88,044	)
Cash and cash equivalents at beginning of period		338,920			573,736
Cash and cash equivalents at end of period	$	572,868		$	485,692

The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012, are an integral part of the condensed consolidated financial statements.

4

TERADYNE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A. The Company

Teradyne, Inc. (the “Company” or “Teradyne”) is a leading global supplier of automatic test equipment. Teradyne’s automatic test equipment products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• wireless test (“Wireless Test”) systems; and

• military/aerospace (“Mil/Aero”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Commercial Board Test”) systems, collectively these products represent “System Test”.

B. Accounting Policies

Basis of Presentation

The condensed consolidated interim financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of such interim financial statements. Certain prior year’s amounts were reclassified to conform to the current year presentation. The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Security and Exchange Commission (“SEC”) on March 1, 2013, for the year ended December 31, 2012.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates.

C. Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” This ASU is intended to enhance the understanding of the effects of netting arrangements on an entity’s financial statements, including financial instruments and derivative instruments that are either offset or subject to a master netting arrangement. The scope of this ASU includes derivatives, sale and repurchase agreements, reverse sale and repurchase agreements, and securities borrowing and lending arrangements. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. Teradyne adopted this ASU effective January 1, 2013. See Note D “Financial Instruments and Derivatives.”

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” amending the disclosure requirements regarding the reporting of amounts reclassified out of accumulated other comprehensive income. The amendment

5

does not change the current requirement for reporting net income or other comprehensive income, but requires additional disclosures about significant amounts reclassified out of accumulated other comprehensive income including the effect of the reclassification on the related statement of operations line items. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. Teradyne adopted this amendment effective January 1, 2013. See Note I “Accumulated Other Comprehensive Income.”

On July 18, 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” Under this ASU, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by unrecognized tax benefits. The provisions of this ASU are effective for interim and annual periods beginning on or after December 15, 2013. Teradyne does not expect this ASU to have a material impact on its financial position or results of operations.

D. Financial Instruments and Derivatives

Financial Instruments

Teradyne uses the market and income approach to value its financial instruments and there was no change in valuation techniques used by Teradyne during the three and nine months ended September 29, 2013 and September 30, 2012. As defined in ASC 820-10, “Fair Value Measurements and Disclosures,” fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820-10 requires that assets and liabilities are carried at fair value and are classified in one of the following three categories:

Level 1: Quoted prices in active markets for identical assets as of the reporting date.

Level 2: Inputs other than Level 1, that are observable either directly or indirectly as of the reporting date. For example, a common approach for valuing fixed income securities is the use of matrix pricing. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

Level 3: Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include Teradyne’s own data.

Most of Teradyne’s fixed income securities are classified as Level 2, with the exception of U.S. Treasury securities and investments in equity and debt mutual funds, which are classified as Level 1, and contingent consideration, which is classified as Level 3. The majority of Level 2 securities are priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.

There were no realized losses recorded in the three and nine months ended September 29, 2013 and September 30, 2012. Realized gains recorded in the three and nine months ended September 29, 2013, were $0.2 million and $0.5 million, respectively. Realized gains recorded in the three and nine months ended September 30, 2012, were $0.3 million and $0.9 million, respectively. Realized gains are included in interest income.

During the nine months ended September 29, 2013 and September 30, 2012, there were no transfers in or out of Level 1, Level 2 or Level 3 financial instruments.

6

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 29, 2013 and December 31, 2012.

	September 29, 2013
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	147,819	$	—	$	—	$	147,819
Cash equivalents		417,823		7,226		—		425,049
Available-for-sale securities:
U.S. government agency securities		—		229,129		—		229,129
U.S. Treasury securities		211,956		—		—		211,956
Commercial paper		—		88,891		—		88,891
Corporate debt securities		—		43,982		—		43,982
Equity and debt mutual funds		12,122		—		—		12,122
Certificates of deposit and time deposits		—		261		—		261
Non-U.S. government securities		—		80		—		80
Total		789,720		369,569		—		1,159,289
Derivatives		—		276		—		276
Total	$	789,720	$	369,845	$	—	$	1,159,565

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	565,642	$	7,226	$	—	$	572,868
Marketable securities		185,085		199,249		—		384,334
Long-term marketable securities		38,993		163,094		—		202,087
Other current assets		—		276		—		276
	$	789,720	$	369,845	$	—	$	1,159,565

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	December 31, 2012
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	139,354	$	—	$	—	$	139,354
Cash equivalents		183,039		16,527		—		199,566
Available-for-sale securities:
U.S. Treasury securities		312,116		—		—		312,116
U.S. government agency securities		—		217,655		—		217,655
Commercial paper		—		70,434		—		70,434
Corporate debt securities		—		55,755		—		55,755
Equity and debt mutual funds		9,717		—		—		9,717
Certificates of deposit and time deposits		—		1,627		—		1,627
Non-U.S. government securities		—		84		—		84
Total		644,226		362,082		—		1,006,308
Derivatives		—		121		—		121
Total	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Contingent consideration	$	—	$	—	$	388	$	388
Total	$	—	$	—	$	388	$	388

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	322,393	$	16,527	$	—	$	338,920
Marketable securities		239,192		192,324		—		431,516
Long-term marketable securities		82,641		153,231		—		235,872
Other current assets		—		121		—		121
	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Other accrued liabilities	$	—	$	—	$	388	$	388
	$	—	$	—	$	388	$	388

During the nine months ended September 29, 2013, Teradyne made the final payment for Level 3 contingent consideration of $0.4 million.

8

The carrying amounts and fair values of financial instruments at September 29, 2013 and December 31, 2012 were as follows:

	September 29, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	572,868	$	572,868	$	338,920	$	338,920
Marketable securities		586,421		586,421		667,388		667,388
Convertible debt(1)		181,550		580,206		169,896		589,000
Japan loan		2,023		2,023		3,491		3,491

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion feature.

The fair values of cash and cash equivalents, accounts receivable, net and accounts payable approximate the carrying amount due to the short-term nature of these instruments.

The following tables summarize the composition of available-for-sale marketable securities at September 29, 2013 and December 31, 2012:

	September 29, 2013
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. government agency securities	$	229,133	$	142	$	(146	)	$	229,129	$	103,165
U.S. Treasury securities		211,966		140		(150	)		211,956		5,605
Commercial paper		88,884		12		(5	)		88,891		25,169
Corporate debt securities		44,132		905		(1,055	)		43,982		16,439
Equity and debt mutual funds		9,843		2,315		(36	)		12,122		595
Certificates of deposit and time deposits		261		—		—			261		—
Non-U.S. government securities		80		—		—			80		—
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	384,180	$	168	$	(14	)	$	384,334	$	37,823
Long-term marketable securities		200,119		3,346		(1,378	)		202,087		113,150
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

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	December 31, 2012
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	311,915	$	216	$	(15	)	$	312,116	$	1,018
U.S. government agency securities		217,396		262		(3	)		217,655		9,018
Commercial paper		70,431		9		(6	)		70,434		25,209
Corporate debt securities		53,405		2,414		(64	)		55,755		23,255
Equity and debt mutual funds		8,767		961		(11	)		9,717		600
Certificates of deposit and time deposits		1,627		—		—			1,627		—
Non-U.S. government securities		84		—		—			84		—
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	431,324	$	203	$	(11	)	$	431,516	$	41,110
Long-term marketable securities		232,301		3,659		(88	)		235,872		17,990
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

As of September 29, 2013, the fair market value of marketable securities with unrealized losses totaled $151.0 million. Of this value, $0.5 million had unrealized losses greater than one year and $150.5 million had unrealized losses less than one year. As of December 31, 2012, the fair market value of marketable securities with unrealized losses totaled $59.1 million and none of the unrealized losses were greater than one year.

The contractual maturities of available-for-sale marketable securities at September 29, 2013 were as follows:

	September 29, 2013
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	384,180	$	384,334
Due after 1 year through 5 years		173,407		175,657
Due after 5 years through 10 years		3,131		3,188
Due after 10 years		23,581		23,242
Total	$	584,299	$	586,421

Derivatives

Teradyne conducts business in a number of foreign countries, with certain transactions denominated in local currencies. The purpose of Teradyne’s foreign currency management is to minimize the effect of exchange rate fluctuations on certain foreign currency denominated net monetary assets. Teradyne does not use derivative financial instruments for trading or speculative purposes.

To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings, and is used to offset the change in fair value of the monetary assets and liabilities denominated in foreign currencies.

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The notional amount of foreign exchange contracts hedging monetary assets and liabilities denominated in foreign currencies was $64.1 million and $64.1 million at September 29, 2013 and December 31, 2012, respectively.

The following table summarizes the fair value of derivative instruments at September 29, 2013 and December 31, 2012:

	Balance Sheet Location		September 29, 2013		December 31, 2012
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Other current assets	$	276	$	121
			$	276	$	121

Teradyne had no offsetting foreign exchange contracts at September 29, 2013 and December 31, 2012.

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three and nine months ended September 29, 2013 and September 30, 2012. The table does not reflect the corresponding (losses) gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and nine months ended September 29, 2013, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $(0.4) million and $(5.0) million, respectively. For the three and nine months ended September 30, 2012, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $1.2 million and $0.8 million, respectively.

	Location of Gains (Losses) Recognized in Statement of Operations	For the Three Months Ended					For the Nine Months  Ended
		September 29, 2013		September 30, 2012			September 29, 2013		September 30, 2012
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Interest expense and other	$	1	$	(1,197	)	$	4,068	$	(677	)
		$	1	$	(1,197	)	$	4,068	$	(677	)

See Note E “Debt” regarding derivatives related to convertible senior notes.

E. Debt

Loan Agreement

On March 31, 2009, Teradyne K.K., Teradyne’s wholly-owned subsidiary in Japan, entered into a loan agreement with a local bank in Japan to borrow approximately $10.0 million (the loan is denominated in Japanese Yen). The loan has a term of 5 years and a fixed interest rate of 0.8%. Approximately $6.0 million of the loan is collateralized by a real estate mortgage on Teradyne K.K.’s building and land in Kumamoto, Japan and approximately $4.0 million is unsecured. Teradyne, Inc. has guaranteed payment of the loan obligation. The loan is amortized over the term of the loan with semiannual principal payments of approximately $1.0 million payable on September 30 and March 30 each year. At September 29, 2013, the outstanding loan principal of approximately $2.0 million is included in current debt.

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Convertible Senior Notes

In April 2009, Teradyne issued 4.50% convertible senior notes (the “Notes”) at an aggregate principal amount of $190 million. The Notes will mature on March 15, 2014, unless earlier repurchased by Teradyne or converted. The Notes are senior unsecured obligations and rank equally with all of Teradyne’s existing and future senior debt and senior to any of Teradyne’s subordinated debt.

The Notes may be converted, at the option of the holder, under certain circumstances and during certain periods, at an initial conversion rate of approximately 182.65 shares of Teradyne’s common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $5.48, a 25% conversion premium based on the last reported sale price of $4.38 per share of Teradyne’s common stock on March 31, 2009. The conversion rate is subject to adjustment in certain circumstances including but not limited to Teradyne issuing a cash or stock dividend or effecting a stock split.

During the three months ended September 29, 2013, the following circumstance occurred that allows holders to convert their Notes at their option prior to December 15, 2013: the last reported sale price of Teradyne’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeded 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter. As of November 8, 2013, one holder exercised the option to convert two thousand dollars worth of Notes which Teradyne settled in cash.

Concurrently with the offering of the Notes, Teradyne entered into a convertible note hedge transaction with a strike price equal to the initial conversion price of the Notes, or approximately $5.48. The convertible note hedge allows Teradyne to receive shares of its common stock and/or cash related to the excess conversion value that it would pay to the holders of the Notes upon conversion. The convertible note hedges will cover, subject to customary antidilution adjustments, approximately 34,703,196 shares of Teradyne’s common stock. Teradyne paid approximately $64.6 million for the convertible note hedges.

On March 31, 2009, Teradyne entered into a warrant transaction with a strike price of approximately $7.67 per share, which was 75% higher than the closing price of Teradyne’s common stock. Teradyne received approximately $43.0 million for the warrants.

The convertible note hedge and warrant transaction will generally have the effect of increasing the conversion price of the Notes to approximately $7.67 per share of Teradyne’s common stock, representing a 75% conversion premium based upon the closing price of Teradyne’s common stock on March 31, 2009.

The Notes are classified as current debt in the balance sheet at September 29, 2013. The tables below represent the components of Teradyne’s convertible senior notes:

	September 29, 2013		December 31, 2012
	(in thousands)
Debt principal	$	189,998	$	190,000
Unamortized debt discount		8,448		20,104
Net carrying amount of the convertible debt	$	181,550	$	169,896

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The interest expense on Teradyne’s convertible senior notes for the three and nine months ended September 29, 2013 and September 30, 2012 was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Contractual interest expense	$	2,114	$	2,114	$	6,388	$	6,413
Amortization of the discount component and debt issue fees		4,221		3,710		12,266		10,781
Total interest expense on the convertible debt	$	6,335	$	5,824	$	18,654	$	17,194

As of September 29, 2013, the unamortized discount was $8.4 million, which will be amortized over the next six months, and the carrying amount of the equity component was $63.4 million. As of September 29, 2013, the conversion rate was equal to the initial conversion price of approximately $5.48 per share and the if-converted value of the Notes was $579.9 million.

F. Deferred Revenue and Customer Advances

Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances.

	September 29, 2013		December 31, 2012
	(in thousands)
Maintenance, training and extended warranty	$	56,481	$	51,198
Customer advances		22,287		39,613
Undelivered elements		9,054		6,773
Total deferred revenue and customer advances	$	87,822	$	97,584

G. Product Warranty

Teradyne generally provides a one-year warranty on its products commencing upon installation or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The warranty balance below is included in other accrued liabilities.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	7,351		$	11,047		$	9,786		$	8,154
Accruals for warranties issued during the period		3,674			4,118			8,781			13,543
Adjustments related to pre-existing warranties		(524	)		1,226			(2,323	)		1,369
Settlements made during the period		(2,470	)		(3,813	)		(8,213	)		(10,488	)
Balance at end of period	$	8,031		$	12,578		$	8,031		$	12,578

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When Teradyne receives revenue for extended warranty beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The extended warranty balance below is included in short and long-term deferred revenue and customer advances.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	34,854		$	20,754		$	26,987		$	12,742
Deferral of new extended warranty revenue		5,586			8,733			17,791			21,015
Recognition of extended warranty deferred revenue		(4,120	)		(2,007	)		(8,458	)		(6,277	)
Balance at end of period	$	36,320		$	27,480		$	36,320		$	27,480

H. Stock-Based Compensation

Restricted stock unit awards granted to employees vest in equal installments over four years. A portion of restricted stock unit awards granted to executive officers is subject to time-based vesting and a portion is subject to performance-based vesting. The percentage level of performance satisfied for performance-based grants is assessed on or near the anniversary of the grant date and, in turn, that percentage level determines the number of performance-based restricted stock units available for vesting over the vesting period; portions of the performance-based grants not available for vesting will be forfeited. Stock options vest in equal installments over four years, and have a term of seven years from the date of grant.

During the nine months ended September 29, 2013, Teradyne granted 1.9 million of restricted stock unit awards to employees at a weighted average grant date fair value of $16.60 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.09.

During the nine months ended September 30, 2012, Teradyne granted 1.7 million of restricted stock unit awards to employees at a weighted average grant date fair value of $16.73 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.85.

The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended
	September 29, 2013			September 30, 2012
Expected life (years)		4.0			3.5
Interest rate		0.6	%		0.4	%
Volatility-historical		46.8	%		56.0	%
Dividend yield		0.0	%		0.0	%

Teradyne determined the stock options’ expected life based upon historical exercise data for executive officers, the age of the executive officers and the terms of the stock option grant. Volatility was determined using historical volatility for a period equal to the expected life. The risk-free rate was determined using the U.S. Treasury yield curve in effect at the time of grant.

Effective January 1, 2013, the price paid by employees for Teradyne’s common stock purchased through the employee stock purchase plan is equal to 85% of the stock price on the last business day of the purchase period.

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During 2012, the price paid by employees for Teradyne’s common stock purchased through the employee stock purchase plan was equal to 85% of the lower of the stock price on the first or last business day of the purchase period.

The weighted-average fair value of employee stock purchase rights granted in the nine months ended September 30, 2012 was $3.75. The fair value of the employees’ purchase rights granted in the nine months ended September 30, 2012 was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended September 30, 2012
Expected life (years)		0.5
Interest rate		0.11	%
Volatility-historical		42.7	%
Dividend yield		0.0	%

I. Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income, which is presented net of tax, consist of the following:

	Unrealized Gains on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2012 (a)	$	2,925		$	2,895		$	5,820
Other comprehensive income before reclassifications		(1,019	)		—			(1,019	)
Amounts reclassified from accumulated other comprehensive income		(621	)		(325	)		(946	)
Net current period other comprehensive income		(1,640	)		(325	)		(1,965	)
Balance at September 29, 2013 (a)	$	1,285		$	2,570		$	3,855

(a) Net of tax of $835 for unrealized gains on marketable securities and $(125) for retirement plans prior service credit.

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three and nine months ended September 29, 2013 and September 30, 2012, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				For the Nine Months Ended				Affected Line Item in the  Statements of Operations
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
			(in thousands)
Available-for-sale marketable securities
Unrealized gains	$	202	$	93	$	621	$	583	Interest income
	$	202	$	93	$	621	$	583
Amortization of defined benefit pension and postretirement plans Prior service benefit
	$	109	$	92	$	325	$	275	(a)
	$	109	$	92	$	325	$	275
Total reclassifications	$	311	$	185	$	946	$	858	Net income

(a) The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit; see Note M “Retirement Plans.”

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J. Intangible Assets

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

	September 29, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	358,555	$	180,960	$	177,595		6.3 years
Customer relationships and service and software maintenance contracts		144,971		77,139		67,832		8.0 years
Trade names and trademarks		33,840		13,562		20,278		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	538,366	$	272,661	$	265,705		7.0 years

	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	357,555	$	143,126	$	214,429		6.3 years
Customer relationships and service and software maintenance contracts		144,971		63,464		81,507		8.0 years
Trade names and trademarks		33,840		10,909		22,931		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	537,366	$	218,499	$	318,867		7.0 years

Aggregate intangible asset amortization expense was $18.1 million and $54.2 million, respectively, for the three and nine months ended September 29, 2013 and $18.4 million and $55.3 million, respectively, for the three and nine months ended September 30, 2012. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2013 (remainder)	$	18,052
2014		69,213
2015		52,462
2016		52,462
2017		46,304

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K. Net Income per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

	For the Three Months Ended				For the Nine Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	69,459	$	88,641	$	142,604	$	233,592
Weighted average common shares-basic		191,307		187,364		190,521		186,592
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		23,257		21,890		23,303		22,397
Convertible note hedge warrant shares(2)		18,678		16,765		18,742		17,474
Restricted stock units		1,102		1,423		1,000		1,413
Stock options		1,465		1,735		1,564		2,075
Employee stock purchase rights		19		33		35		52
Dilutive potential common shares		44,521		41,846		44,644		43,411
Weighted average common shares-diluted		235,828		229,210		235,165		230,003
Net income per common share-basic	$	0.36	$	0.47	$	0.75	$	1.25
Net income per common share-diluted	$	0.29	$	0.39	$	0.61	$	1.02

(1) Incremental shares from assumed conversion of the convertible notes for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the warrant, is divided by the average Teradyne stock price for the period.

The computation of diluted net income per common share for the three and nine months ended September 29, 2013 excludes the effect of the potential exercise of stock options to purchase approximately 0.4 million shares because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three and nine months ended September 30, 2012 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares, and the computation of the three and nine months ended September 30, 2012 excludes the effect of the potential exercise of restricted stock units of 0.1 million and 0.4 million, because the effect would have been anti-dilutive.

With respect to Teradyne’s convertible debt, Teradyne intends to settle its conversion spread (i.e., the intrinsic value of the embedded option feature contained in the convertible debt) in shares. Teradyne accounts for its conversion spread using the treasury stock method.

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L. Restructuring and Other

Restructuring

During the nine months ended September 29, 2013, Teradyne recorded $1.3 million of severance charges related to headcount reductions of 40 people, of which $1.0 million was in System Test and $0.3 million was in Semiconductor Test, and a $(0.4) million credit in Corporate for a change in the estimated exit costs related to a leased facility.

During the nine months ended September 30, 2012, Teradyne recorded $0.7 million of severance charges related to headcount reductions of 9 people, of which $0.5 million and 7 people were in System Test, $0.2 million and 2 people were in Wireless Test.

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2012 Activities
Balance at December 31, 2011	$	325		$	1,862		$	2,187
Cash payments		(325	)		(778	)		(1,103	)
Balance at December 31, 2012		—			1,084			1,084
Change in estimate		—			(105	)		(105	)
Cash payments		—			(183	)		(183	)
Balance at March 31, 2013		—			796			796
Cash payments		—			(199	)		(199	)
Balance at June 30, 2013		—			597			597
Change in estimate		—			(448	)		(448	)
Cash payments		—			(149	)		(149	)
Balance at September 29, 2013	$	—		$	—		$	—
2012 Activities
Q3 2012 Activity:
Provision	$	687		$	—		$	687
Cash payments		(444	)		—			(444	)
Balance at December 31, 2012		243			—			243
Cash payments		(243	)		—			(243	)
Balance at March 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(884	)		—			(884	)
Balance at September 29, 2013	$	453		$	—		$	453
Balance at September 29, 2013	$	453		$	—		$	453

The remaining accrual for severance and benefits of $0.5 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2014.

Other

During the nine months ended September 30, 2012, due to a decrease in specified new product revenue through December 31, 2012 earn-out period end date, Teradyne recorded an $8.4 million fair value adjustment to decrease the LitePoint acquisition contingent consideration.

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M. Retirement Plans

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of these plans consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”), as well as unfunded foreign plans.

Net periodic pension cost was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29,  2013			September 30,  2012			September 29,  2013			September 30,  2012
	(in thousands)
Service cost	$	871		$	685		$	2,557		$	2,054
Interest cost		3,350			4,111			10,001			12,333
Expected return on plan assets		(3,664	)		(4,090	)		(10,925	)		(12,269	)
Amortization of unrecognized prior service cost		41			58			123			174
Actuarial loss (gain)		—			1,937			(1,122	)		5,083
Total net periodic pension cost	$	598		$	2,701		$	634		$	7,375

In the nine months ended September 29, 2013, Teradyne contributed $1.3 million to the U.S. supplemental executive defined benefit pension plan and $1.3 million to certain qualified plans for non-U.S. subsidiaries.

During the three months ended September 30, 2012, Teradyne offered to certain former U.S. employees the option to receive their vested pension benefit as a one-time lump sum payment. Approximately 2,000 former employees selected to receive a one-time lump sum payment. Total one-time lump sum payments were approximately $52.0 million.

Postretirement Benefit Plan

In addition to receiving pension benefits, U.S. Teradyne employees who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes death, and medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees.

Net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Service cost	$	19		$	17		$	56		$	50
Interest cost		86			109			257			328
Amortization of unrecognized prior service benefit		(150	)		(150	)		(449	)		(449	)
Actuarial gain		—			—			(236	)		(92	)
Total net periodic post-retirement benefit	$	(45	)	$	(24	)	$	(372	)	$	(163	)

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N. Commitments and Contingencies

Purchase Commitments

As of September 29, 2013, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments aggregate to approximately $243.3 million, of which $231.5 million is for less than one year.

Legal Claims

Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, other than set forth herein, the ultimate disposition of these matters will not have a material adverse effect on Teradyne’s results of operations, financial condition or cash flows.

On May 17, 2013, Boston Semi Equipment (“BSE”) filed a complaint against Teradyne for antitrust violations and unfair business practices alleging that Teradyne excluded BSE from competing in the market for the sale of reconfigured Teradyne equipment and the market for the repair of Teradyne equipment. BSE sought unspecified damages and an injunction. Teradyne filed a motion to dismiss the complaint. On October 18, 2013, the parties settled the litigation. The settlement included no monetary consideration. The settlement did not and will not have a material impact on Teradyne’s consolidated financial results.

O. Income Taxes

The effective tax rate for the three months ended September 29, 2013 and September 30, 2012 was 21% and 14%, respectively. The increase in Teradyne’s tax rate for the three months ended September 29, 2013 compared to the three months ended September 30, 2012, was primarily attributable to the reduction to deferred income tax benefit recognized discretely in 2012 in connection with Teradyne’s plan to repatriate the unremitted earnings of its Japanese subsidiary.

The effective tax rate for the nine months ended September 29, 2013 and September 30, 2012 was 14% and 21%, respectively. The decrease in Teradyne’s tax rate for the nine months ended September 29, 2013 compared to the nine months ended September 30, 2012, was primarily the result of recognizing the tax benefit attributable to the retroactive reinstatement of the U.S. research and development credit and the mix of income by jurisdiction.

The effective tax rate for the three months and nine months ended September 29, 2013 is lower than the 35% U.S. statutory federal tax rate primarily due to the research and development credit and the effect of foreign income taxed at a rate lower than the U.S. statutory rate.

P. Segment Information

Teradyne has three operating segments (Semiconductor Test, Wireless Test and System Test), 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 design, manufacturing and marketing of wireless test products and services. The System Test segment includes operations related to design, manufacturing and marketing of products and services for military/aerospace instrumentation test, storage test and circuit-board test. 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.

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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 are the same as those described in Note B “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012. Segment information is as follows:

	Semiconductor Test		Wireless Test		System Test			Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended September 29, 2013:
Net revenues	$	304,131	$	93,132	$	36,113		$	—		$	433,376
Income (loss) before income taxes(1)(2)		68,932		27,575		(2,462	)		(6,493	)		87,552
Three months ended September 30, 2012:
Net revenues	$	310,979	$	118,571	$	33,844		$	—		$	463,394
Income (loss) before income taxes(1)(2)		55,348		58,902		(2,642	)		(8,583	)		103,025
Nine months ended September 29, 2013:
Net revenues	$	808,068	$	226,116	$	108,448		$	—		$	1,142,632
Income (loss) before income taxes(1)(2)		141,304		41,491		(153	)		(16,159	)		166,483
Nine months ended September 30, 2012:
Net revenues	$	943,625	$	261,827	$	202,894		$	—		$	1,408,346
Income (loss) before income taxes(1)(2)		181,594		97,729		30,964			(14,026	)		296,261

(1) Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

Included in the Semiconductor Test segment are charges for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013		September 30,  2012			September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	1,378	$	3,085		$	1,878	$	9,254
Restructuring and other		282		(4	)		416		315
Total	$	1,660	$	3,081		$	2,294	$	9,569

Included in the Wireless Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	2,059	$	2,018	$	6,125	$	4,134
Cost of revenues—inventory step-up		—		—		—		6,089
Restructuring and other		—		236		82		236
Total	$	2,059	$	2,254	$	6,207	$	10,459

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Included in the System Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	404	$	378	$	1,613	$	3,020
Restructuring and other		1,055		451		1,430		451
Total	$	1,459	$	829	$	3,043	$	3,471

Included in Corporate and Eliminations are credits for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013			September 30,  2012		September 29,  2013			September 30,  2012
	(in thousands)
Restructuring and other	$	(448	)	$	—	$	(448	)	$	(8,406	)
Total	$	(448	)	$	—	$	(448	)	$	(8,406	)

Q. Stock Repurchase Program

In November 2010, Teradyne’s board of directors authorized a stock repurchase program for up to $200 million. In the three and nine months ended September 29, 2013 and September 30, 2012, Teradyne did not repurchase any shares. Cumulatively, as of September 29, 2013, Teradyne has repurchased 2.6 million shares of common stock for $31.2 million at an average price of $11.84.

R. Subsequent Events

On October 25, 2013, Teradyne completed its acquisition of ZTEC Instruments, Inc. (“ZTEC”) located in Albuquerque, New Mexico. The acquisition was completed by acquiring all of the common and preferred stock of ZTEC for approximately $15 million and up to $5 million payable upon achievement of certain performance targets through December 31, 2015. The fair value of assets and liabilities acquired has not been disclosed because Teradyne has not completed the valuation. ZTEC is a supplier of modular wireless test instruments. The acquisition of ZTEC expands Teradyne’s wireless segment into the design verification test of wireless components and chipsets.

On November 1, 2013, Teradyne sold its equity interest in Empirix Inc. and received proceeds of $34.2 million. An additional $5.2 million of proceeds will be held in escrow for 15 months, for potential indemnifications to the buyer. Teradyne will record a gain of $34.2 million in the fourth quarter of 2013.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Statements in this Quarterly Report on Form 10-Q which are not historical facts, so called “forward looking statements,” are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those detailed in our filings with the Securities and Exchange Commission. See also Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements, except as may be required by law.

Overview

We are a leading global supplier of automatic test equipment. We design, develop, manufacture and sell automatic test systems and solutions used to test semiconductors, wireless products, hard disk drives and circuit boards in the consumer electronics, wireless, automotive, industrial, computing, communications and aerospace and defense industries. Our automatic test equipment products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• wireless test (“Wireless Test”) systems; and

• military/aerospace (“Mil/Aero”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Commercial Board Test”) systems, collectively these products represent “System Test”.

We have a broad customer base which includes integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), wafer foundries, fabless companies that design, but contract with others for the manufacture of integrated circuits (“ICs”), developers of wireless devices and consumer electronics, manufacturers of circuit boards, automotive suppliers, wireless product manufacturers, storage device manufacturers, aerospace and military contractors.

The sales of our products and services are dependent, to a large degree, on customers who are subject to cyclical trends in the demand for their products. These cyclical periods have had, and will continue to have, a significant effect on our business since our customers often delay or accelerate purchases in reaction to changes in their businesses and to demand fluctuations in the semiconductor industry. Historically, these demand fluctuations have resulted in significant variations in our results of operations.

In October 2013, we acquired ZTEC Instruments Inc. (“ZTEC”), a supplier of modular wireless test instruments. The acquisition of ZTEC expands our wireless segment into the design verification test of wireless components and chipsets.

In 2011, we acquired LitePoint Corporation (“LitePoint”) to expand our product portfolio of test equipment in the wireless test sector. LitePoint designs, develops, and supports advanced wireless test solutions for the development and manufacturing of wireless devices, including smart phones, tablets, notebooks/laptops, personal computer peripherals, and other Wi-Fi and cellular enabled devices. LitePoint and the design verification test business from ZTEC constitute our Wireless Test segment.

We believe our acquisitions of LitePoint and ZTEC, have enhanced our opportunities for growth. We will continue to invest in our business to further expand our addressable markets while tightly managing our costs.

Critical Accounting Policies and Estimates

We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the nine months ended September 29, 2013 to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
Percentage of total net revenues:
Net revenues:
Products		84	%		85	%		83	%		86	%
Services		16			15			17			14
Total net revenues		100			100			100			100
Cost of revenues:
Cost of products		35			37			35			39
Cost of services		7			7			8			7
Total cost of revenues		41			44			43			46
Gross profit		59			56			57			54
Operating expenses:
Engineering and development		16			14			17			14
Selling and administrative		17			15			18			15
Acquired intangible assets amortization		4			4			5			4
Restructuring and other		—			—			—			(1	)
Total operating expenses		37			33			41			32
Income from operations		22			23			16			22
Interest income		—			—			—			—
Interest expense and other		(2	)		(1	)		(2	)		(1	)
Income before income taxes		20			22			15			21
Income tax provision		4			3			2			4
Net income		16	%		19	%		12	%		17	%

Results of Operations

Third Quarter 2013 Compared to Third Quarter 2012

Book to Bill Ratio

Book to bill ratio is calculated as net bookings divided by net sales. Book to bill ratio by reportable segment was as follows:

	For the Three Months Ended
	September 29, 2013		September 30, 2012
Semiconductor Test		0.7		0.5
Wireless Test		0.4		0.4
System Test		0.7		0.7
Total Company		0.6		0.5

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Revenues

Net revenues by reportable segment were as follows:

	For the Three Months Ended				Dollar Change
	September 29, 2013		September 30, 2012
	(in millions)
Semiconductor Test	$	304.2	$	311.0	$	(6.8	)
Wireless Test		93.1		118.6		(25.5	)
System Test		36.1		33.8		2.3
	$	433.4	$	463.4	$	(30.0	)

The decrease in Semiconductor Test revenues of $6.8 million or 2% from the three months ended September 30, 2012 to the three months ended September 29, 2013, was primarily due to a decrease in system-on-a-chip (“SOC”) service revenue. The decrease in Wireless Test revenue of $25.5 million or 22% was primarily due to lower volume. The increase in System Test revenue of $2.3 million or 7% was primarily due to an increase in sales due to higher product volume in Storage Test systems, partially offset by lower Mil/Aero product sales.

Our revenues by region as a percentage of total net revenue were as follows:

	For the Three Months Ended
	September 29, 2013			September 30, 2012
China		27	%		29	%
Taiwan		25			17
United States		11			12
Korea		9			19
Singapore		7			3
Malaysia		6			3
Europe		4			5
Japan		4			7
Philippines		4			3
Thailand		2			1
Rest of World		1			1
		100	%		100	%

Gross Profit

Our gross profit was as follows:

	For the Three Months Ended						Dollar/Point Change
	September 29, 2013			September 30, 2012
	(in millions)
Gross Profit	$	254.3		$	260.2		$	(5.9	)
Percent of Total Revenue		58.7	%		56.2	%		2.5

Gross profit as a percent of revenue increased by 2.5 percentage points from the three months ended September 30, 2012 to the three months ended September 29, 2013. This increase was a result of an increase of

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1.7 points due to lower warranty and material cost, an increase of 1.1 points due to lower excess and obsolete inventory provisions and increased sales of previously reserved inventory, partially offset by a decrease of 0.6 points due to lower sales volume across the Wireless Test and Semiconductor Test segments.

We assess the carrying value of our inventory on a quarterly basis by estimating future demand and comparing that demand against on-hand and on-order inventory positions. Forecasted revenue information is obtained from the sales and marketing groups and incorporates factors such as backlog and future revenue demand. This quarterly process identifies obsolete and excess inventory. Obsolete inventory, which represents items for which there is no demand, is fully reserved. Excess inventory, which represents inventory items that are not expected to be consumed during the next twelve quarters, is written-down to estimated net realizable value.

During the three months ended September 29, 2013, we recorded an inventory provision of $3.8 million included in cost of revenues, due to the following factors:

• A $2.0 million inventory write-down as a result of product transition in Wireless Test.

• The remainder of the charge of $1.8 million primarily reflects downward revisions to previously forecasted demand levels, of which $1.4 million was related to Semiconductor Test and $0.4 million was related to System Test.

During the three months ended September 30, 2012, we recorded an inventory provision of $5.5 million included in cost of revenues, due to the following factors:

• A $3.1 million inventory write-down as a result of product transition related to the Flex Test Platform in Semiconductor Test.

• A $2.0 million inventory write-down as a result of product transition in Wireless Test.

• The remainder of the charge of $0.4 million reflects downward revisions to previously forecasted demand levels in System Test.

During the three months ended September 29, 2013 and September 30, 2012, we scrapped $13.9 million and $1.1 million of inventory, respectively. During the three months ended September 29, 2013 and September 30, 2012, we sold $4.1 million and $0.7 million of previously written-down or written-off inventory. As of September 29, 2013, we had inventory related reserves for inventory which had been written-down or written-off totaling $127.4 million. We have no pre-determined timeline to scrap the remaining inventory.

Engineering and Development

Engineering and development expenses were as follows:

	For the Three Months Ended						Dollar Change
	September 29, 2013			September 30, 2012
	(in millions)
Engineering and Development	$	68.9		$	63.9		$	5.0
Percent of Total Revenue		15.9	%		13.8	%

The increase of $5.0 million in engineering and development expenses from the three months ended September 30, 2012 to the three months ended September 29, 2013, was due primarily to increased spending in Semiconductor Test and Wireless Test.

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Selling and Administrative

Selling and administrative expenses were as follows:

	For the Three Months Ended						Dollar Change
	September 29, 2013			September 30, 2012
	(in millions)
Selling and Administrative	$	72.9		$	69.0		$	3.9
Percent of Total Revenue		16.8	%		14.9	%

The increase of $3.9 million in selling and administrative expenses from the three months ended September 30, 2012 to the three months ended September 29, 2013, was due primarily to increased sales and marketing spending in Semiconductor Test and Wireless Test.

Restructuring and Other

Restructuring

During the three months ended September 29, 2013, we recorded $1.3 million of severance charges related to headcount reductions of 40 people, of which $1.0 million was in System Test and $0.3 million in Semiconductor Test, and a $(0.4) million credit related to a change in the estimated exit costs related to a leased facility, in Corporate.

During the three months ended September 30, 2012, Teradyne recorded $0.7 million of severance charges related to headcount reductions of 9 people, of which $0.5 million and 7 people were in System Test, and $0.2 million and 2 people were in Wireless Test.

Interest and Other

Interest expense and other increased by $0.7 million from the three months ended September 30, 2012 to the three months ended September 29, 2013, due primarily to higher interest expense from increased convertible debt discount amortization.

Income Taxes

The effective tax rate for the three months ended September 29, 2013 and September 30, 2012 was 21% and 14%, respectively. The increase in our tax rate for the three months ended September 29, 2013 compared to the three months ended September 30, 2012, was primarily attributable to the reduction to deferred income tax benefit recognized discretely in 2012 in connection with our plan to repatriate the unremitted earnings of our Japanese subsidiary.

The effective tax rate for the three months ended September 29, 2013 is lower than the 35% U.S. statutory federal tax rate primarily due to the research and development credit and the effect of foreign income taxed at a rate lower than the U.S. statutory rate.

On a quarterly basis, we evaluate the realizability of our deferred tax assets by jurisdiction and assess the need for a valuation allowance. At September 29, 2013, we believe that we will ultimately realize the deferred tax assets recorded on our condensed consolidated balance sheet. However, should we believe that it is more likely than not that our deferred tax assets would not be realized, our tax provision would increase in the period in which we determined that the realizability was not likely. We consider the probability of future taxable income and our historical profitability, among other factors, in assessing the realizability of our deferred tax assets.

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Nine Months of 2013 Compared to Nine Months of 2012

Revenues

Net revenues by reportable segment were as follows:

	For the Nine Months Ended				Dollar Change
	September 29, 2013		September 30, 2012
	(in millions)
Semiconductor Test	$	808.1	$	943.6	$	(135.5	)
Wireless Test		226.1		261.8		(35.7	)
System Test		108.4		202.9		(94.5	)
	$	1,142.6	$	1,408.3	$	(265.7	)

The decrease of $135.5 million or 14% in Semiconductor Test revenues from the nine months ended September 30, 2012 to the nine months ended September 29, 2013, was primarily due to a decrease in system-on-a-chip (“SOC”) test product sales because of a lower application processor market in 2013 compared to 2012. The decrease in System Test revenue of $94.5 million or 47% was primarily due to a decrease in sales due to lower product volume in Storage Test systems. The decrease in Storage Test systems sales was due to lower hard disk drive demand primarily from lower shipments of personal computers, a trend which is expected to continue. The decrease in Wireless Test revenue of $35.7 million or 14% was primarily due to lower volume.

Our revenues by region as a percentage of total net revenues were as follows:

	For the Nine Months Ended
	September 29, 2013			September 30, 2012
China		25	%		23	%
Taiwan		21			18
United States		13			12
Singapore		9			4
Korea		9			15
Europe		6			5
Malaysia		6			4
Japan		5			6
Philippines		3			6
Thailand		2			5
Rest of World		1			2
		100	%		100	%

Gross Profit

Our gross profit was as follows:

	For the Nine Months Ended						Dollar/Point Change
	September 29, 2013			September 30, 2012
	(in millions)
Gross Profit	$	648.9		$	760.6		$	(111.7	)
Percent of Total Revenue		56.8	%		54.0	%		2.8

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Gross profit as a percent of revenue increased by 2.8 percentage points from the nine months ended September 30, 2012 to the nine months ended September 29, 2013. This increase was a result of an increase of 1.9 points related to a favorable product mix in SOC Semiconductor Test and lower Storage Test system sales, an increase of 1.3 points due to lower variable compensation and warranty cost, and an increase of 1.1 points due to lower excess and obsolete inventory provisions and increased sales of previously reserved inventory, partially offset by a decrease of 1.9 points due to lower sales volume across all segments.

We assess the carrying value of our inventory on a quarterly basis by estimating future demand and comparing that demand against on-hand and on-order inventory positions. Forecasted revenue information is obtained from the sales and marketing groups and incorporates factors such as backlog and future revenue demand. This quarterly process identifies obsolete and excess inventory. Obsolete inventory, which represents items for which there is no demand, is fully reserved. Excess inventory, which represents inventory items that are not expected to be consumed during the next twelve quarters, is written-down to estimated net realizable value.

During the nine months ended September 29, 2013, we recorded an inventory provision of $9.6 million included in cost of revenues, due to the following factors:

• A $4.1 million inventory write-down as a result of product transition in Wireless Test.

• The remainder of the charge of $5.5 million primarily reflects downward revisions to previously forecasted demand levels, of which $2.0 million was related to Wireless Test, $1.9 million was related to Semiconductor Test and $1.6 million was related to System Test.

During the nine months ended September 30, 2012, we recorded an inventory provision of $16.4 million included in cost of revenues, due to the following factors:

• A $5.7 million inventory write-down as a result of product transition related to the Flex Test Platform in Semiconductor Test.

• A $3.2 million inventory provision due to a decline in demand versus previously forecasted demand levels for a prior generation Nextest Magnum.

• A $2.0 million inventory write-down as a result of product transition in Wireless Test.

• The remainder of the charge of $5.5 million primarily reflects downward revisions to previously forecasted demand levels, of which $3.0 million was related to System Test, $2.1 million was related to Wireless Test and $0.4 million was related to Semiconductor Test.

During the nine months ended September 29, 2013 and September 30, 2012, we scrapped $16.8 million and $8.0 million of inventory, respectively. During the nine months ended September 29, 2013 and September 30, 2012, we sold $8.9 million and $3.2 million, respectively, of previously written-down or written-off inventory. As of September 29, 2013, we had inventory related reserves for inventory which had been written-down or written-off totaling $127.4 million. We have no pre-determined timeline to scrap the remaining inventory.

Engineering and Development

Engineering and development expenses were as follows:

	For the Nine Months Ended						Dollar Change
	September 29, 2013			September 30, 2012
	(in millions)
Engineering and Development	$	199.4		$	193.1		$	6.3
Percent of Total Revenue		17.5	%		13.7	%

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The increase of $6.3 million in engineering and development expenses from the nine months ended September 30, 2012 to the nine months ended September 29, 2013, was due primarily to increased spending in Semiconductor Test, partially offset by lower variable compensation.

Selling and Administrative

Selling and administrative expenses were as follows:

	For the Nine Months Ended						Dollar Change
	September 29, 2013			September 30, 2012
	(in millions)
Selling and Administrative	$	210.0		$	207.7		$	2.3
Percent of Total Revenue		18.4	%		14.7	%

The increase of $2.3 million in selling and administrative expenses from the nine months ended September 30, 2012 to the nine months ended September 29, 2013, was due primarily to increased sales and marketing spending in Semiconductor Test and Wireless Test, partially offset by lower variable compensation.

Restructuring and Other

Restructuring

During the nine months ended September 29, 2013, we recorded $1.3 million of severance charges related to headcount reductions of 40 people primarily in System Test and a $(0.4) million credit in Corporate related to the change in the estimated exit costs related to a leased facility.

During the nine months ended September 30, 2012, we recorded $0.7 million of severance charges related to headcount reductions of 9 people primarily in System Test.

Other

During the nine months ended September 30, 2012, due to a decrease in specified new product revenue through the December 31, 2012 earn-out period end date, we recorded an $8.4 million fair value adjustment to decrease the LitePoint acquisition contingent consideration.

Interest and Other

Interest expense and other increased by $1.7 million from the nine months ended September 30, 2012 to the nine months ended September 29, 2013, due primarily to higher interest expense from increased convertible debt discount amortization.

Income Taxes

The effective tax rate for the nine months ended September 29, 2013 and September 30, 2012 was 14% and 21%, respectively. The decrease in our tax rate for the nine months ended September 29, 2013 compared to the nine months ended September 30, 2012, was primarily the result of recognizing the tax benefit attributable to the retroactive reinstatement of the U.S. research and development credit and the mix of income by jurisdiction.

The effective tax rate for the nine months ended September 29, 2013 is lower than the 35% U.S. statutory federal tax rate primarily due to the research and development credit and the effect of foreign income taxed at a rate lower than the U.S. statutory rate.

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On a quarterly basis, we evaluate the realizability of our deferred tax assets by jurisdiction and assess the need for a valuation allowance. At September 29, 2013, we believe that we will ultimately realize the deferred tax assets recorded on our condensed consolidated balance sheet. However, should we believe that it is more likely than not that our deferred tax assets would not be realized, our tax provision would increase in the period in which we determined that the realizability was not likely. We consider the probability of future taxable income and our historical profitability, among other factors, in assessing the realizability of our deferred tax assets.

Contractual Obligations

The following table reflects our contractual obligations at September 29, 2013:

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Other
	(in thousands)
Purchase Obligations	$	243,264	$	231,507	$	11,757	$	—	$	—	$	—
Debt Obligations		192,021		192,021		—		—		—		—
Retirement Plan Contributions		50,749		5,054		10,722		10,934		24,039		—
Operating Lease Obligations		46,184		13,273		19,209		7,576		6,126		—
Interest on Debt		8,571		8,571		—		—		—		—
Other Long-Term Liabilities Reflected on the Balance Sheet under GAAP(1)		76,442		—		17,455		—		—		58,987
Total	$	617,231	$	450,426	$	59,143	$	18,510	$	30,165	$	58,987

(1) Included in Other Long-Term Liabilities are liabilities for customer advances, extended warranty, uncertain tax positions and other obligations. For certain long-term obligations, we are unable to provide a reasonably reliable estimate of the timing of future payments relating to these obligations and therefore we included these amounts in the column marked “Other”.

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities balances increased by $153.0 million in the nine months ended September 29, 2013, to $1,159 million. Cash activity for the nine months ended September 29, 2013 and September 30, 2012 was as follows:

	For the Nine Months Ended
	September 29, 2013			September 30, 2012
	(in millions)
Cash provided by operating activities:
Net income, adjusted for non-cash items	$	270.6		$	387.6
Change in operating assets and liabilities		(47.2	)		(25.4	)
Net cash provided by operating activities		223.4			362.2
Net cash used for investing activities		(5.6	)		(430.6	)
Net cash provided (used) by financing activities		16.1			(19.7	)
Increase (decrease) in cash and cash equivalents	$	233.9		$	(88.0	)

In the nine months ended September 29, 2013, changes in operating assets and liabilities used cash of $47.2 million. This was due to a $48.1 million increase in operating assets and a $0.9 million increase in operating liabilities.

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The increase in operating assets was due to a $56.0 million increase in accounts receivable and a $26.3 million increase in other assets primarily due to an increase in prepayments, partially offset by a $34.2 million decrease in inventories. The increase in operating liabilities was due to a $9.4 million increase in accounts payable, a $13.8 million increase in accrued income taxes and a $10.5 million increase in other accrued liabilities, partially offset by a $19.2 million decrease in accrued employee compensation due primarily to variable compensation and employee stock award payroll tax payments, a $9.8 million decrease in customer advance payments and deferred revenue, and $3.6 million of retirement plan contributions.

Investing activities during the nine months ended September 29, 2013 used cash of $5.6 million, due to $657.2 million used for purchases of marketable securities and $82.9 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities that provided cash of $401.9 million and $332.6 million, respectively.

Financing activities during the nine months ended September 29, 2013 provided cash of $16.1 million. $16.8 million was due to the issuance of common stock under stock option and stock purchase plans and $0.8 million from a tax benefit related to stock options and restricted stock units, partially offset by $1.1 million of cash used for payments on long-term debt related to the Japan loan and $0.4 million of cash used for payments related to LitePoint acquisition contingent consideration.

In the nine months ended September 30, 2012, changes in operating assets and liabilities used cash of $25.4 million. This was due to a $43.8 million increase in operating assets, and a $18.4 million increase in operating liabilities.

The increase in operating assets was due to a $76.1 million increase in accounts receivable resulting from higher sales volume, partially offset by a $25.1 million decrease in inventories and a $7.3 million decrease in other assets primarily due to a decrease in prepayments. The increase in operating liabilities was due to a $50.3 million increase in accrued income taxes, a $4.3 million increase in accounts payable due to increased sales volume and a $0.8 million increase in other accrued liabilities, partially offset by a $22.7 million decrease in accrued employee compensation due primarily to variable compensation and employee stock awards payroll taxes payments, a $10.7 million decrease in customer advance payments and deferred revenue and $3.7 million of retirement plan contributions.

Investing activities during the nine months ended September 30, 2012 used cash of $430.6 million, due to $510.2 million used for purchases of marketable securities and $91.1 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities that provided cash of $156.4 million and $14.3 million, respectively.

Financing activities during the nine months ended September 30, 2012 used cash of $19.7 million due to $44.0 million of cash used for payments related to LitePoint acquisition contingent consideration and $1.2 million of cash used for payments on long-term debt related to the Japan loan, partially offset by $17.9 million in proceeds from the issuance of common stock under stock option and stock purchase plans, and $7.6 million from the tax benefit related to stock options and restricted stock units.

We believe our cash, cash equivalents and marketable securities balance will be sufficient to meet working capital and expenditure needs for at least the next twelve months. The amount of cash, cash equivalents and marketable securities in the U.S. and our operations in the U.S. provide sufficient liquidity to fund our business activities in the U.S. We have approximately $360 million of cash outside the U.S. that if repatriated would incur additional taxes. Inflation has not had a significant long-term impact on earnings.

Equity Compensation Plans

As discussed in Note P “Stock Based Compensation” in our 2012 Form 10-K, we have a 1996 Employee Stock Purchase Plan and a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”).

32

The purpose of the 1996 Employee Stock Purchase Plan is to encourage stock ownership by all eligible employees of Teradyne. The purpose of the 2006 Equity Plan is to provide equity ownership and compensation opportunities in Teradyne to our employees, officers, directors, consultants and/or advisors. Both plans were approved by our shareholders.

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” This ASU is intended to enhance the understanding of the effects of netting arrangements on an entity’s financial statements, including financial instruments and derivative instruments that are either offset or subject to a master netting arrangement. The scope of this ASU includes derivatives, sale and repurchase agreements, reverse sale and repurchase agreements, and securities borrowing and lending arrangements. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. We adopted this ASU effective January 1, 2013. See Note D “Financial Instruments and Derivatives.”

In February 2013, the Financial Accounting Standards Board (FASB) issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” amending the disclosure requirements regarding the reporting of amounts reclassified out of accumulated other comprehensive income. The amendment does not change the current requirement for reporting net income or other comprehensive income, but requires additional disclosures about significant amounts reclassified out of accumulated other comprehensive income including the effect of the reclassification on the related statement of operations line items. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. We adopted this amendment effective January 1, 2013. See Note I “Accumulated Other Comprehensive Income.”

On July 18, 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This ASU, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by unrecognized tax benefits. The provisions of this ASU are effective for interim and annual periods beginning on or after December 15, 2013. We do not expect this ASU to have a material impact on our financial position or results of operations.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

For “Quantitative and Qualitative Disclosures about Market Risk” affecting Teradyne, see Item 7a, “Quantitative and Qualitative Disclosures about Market Risks,” in our Annual Report on Form 10-K filed with the SEC on March 1, 2013. There were no material changes in our exposure to market risk from those set forth in our Annual Report for the fiscal year ended December 31, 2012.

Item 4: Controls and Procedures

As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) promulgated under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such material information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

33

PART II. OTHER INFORMATION

Item 1: Legal Proceedings

We are subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, other than as set forth herein, the ultimate disposition of these matters will not have a material adverse effect on our results of operations, financial condition or cash flows.

On May 17, 2013, Boston Semi Equipment (“BSE”) filed a complaint against us for antitrust violations and unfair business practices alleging that we excluded BSE from competing in the market for the sale of reconfigured Teradyne equipment and the market for the repair of Teradyne equipment. BSE sought unspecified damages and an injunction. We filed a motion to dismiss the complaint. On October 18, 2013, the parties settled the litigation. The settlement included no monetary consideration.The settlement did not and will not have a material impact on our consolidated financial results.

Item 1A: Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, which could materially affect our business, financial condition or future results. The risk factors described in our Annual Report on Form 10-K remain applicable to our business.

The risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

A breach of our operational or security systems could negatively affect our business and results of operations.

A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyber attacks, could disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and increase our costs.

We have significant guarantee, indemnification and customer confidentiality obligations.

From time to time, we make guarantees to customers regarding the delivery, price and performance of our products and guarantee certain indebtedness, performance obligations or lease commitments of our subsidiary and affiliate companies. We also have agreed to provide indemnification to our officers, directors, employees and agents, to the extent permitted by law, arising from certain events or occurrences while the officer, director, employee or agent, is or was serving at our request in such capacity. Additionally, we have confidentiality obligations to certain customers. If we become liable under any of these obligations, it could materially and adversely affect our business, financial condition or operating results.

We may take actions in response to slowdowns in the markets for our products which may adversely affect our operating results.

During the third quarter of 2013, in response to the slowdown in the hard disk drive test market, we implemented a headcount reduction in our storage test business unit. It is possible that we may need to take further cost control and reduction measures including shifting more of our operations to lower cost regions, divesting of certain businesses, reducing the number of our employees, and reducing planned capital expenditures and expense budgets. We cannot predict whether these measures will be sufficient to offset certain of the negative trends that might affect our storage test business.

34

In addition, slowdowns in the markets for our products and deterioration in economic conditions may, among other things, result in increased price competition for our products, increased risk of excess and obsolete inventories, increased risk in the collectability of our accounts receivable from our customers, asset write-offs and restructuring charges that adversely affect our operating results.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

In November 2010, Teradyne’s board of directors authorized a stock repurchase program for up to $200 million. Cumulatively, as of September 29, 2013, we have repurchased 2.6 million shares of common stock for $31.2 million at an average price of $11.84.

The following table includes information with respect to repurchases we made of our common stock during the three months ended September 29, 2013 (in thousands except per share price):

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs
July 1, 2013 – July 28, 2013		—	$	—		—	$	168,825
July 29, 2013 – August 25, 2013		—	$	—		—	$	168,825
August 26, 2013 – September 29, 2013		—	$	—		—	$	168,825
		—	$	—		—	$	168,825

We satisfy the U.S. minimum statutory withholding tax obligation due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due.

Item 4: Mine Safety Disclosures

Not Applicable

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Item 6: Exhibits

Exhibit Number	Description
31.1	Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) of Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2	Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) of Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1	Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
32.2	Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TERADYNE, INC.

Registrant

/S/    GREGORY R. BEECHER

Gregory R. Beecher

Vice President,

Chief Financial Officer and Treasurer

(Duly Authorized Officer

and Principal Financial Officer)

November 8, 2013

37

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael A. Bradley, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2013

By:	/S/    MICHAEL A. BRADLEY
	Michael A. Bradley Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Gregory R. Beecher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2013

By:	/S/    GREGORY R. BEECHER
	Gregory R. Beecher Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Teradyne, Inc. (the “Company”) on Form 10-Q for the period ending September 29, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. Bradley, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/S/    MICHAEL A. BRADLEY

Michael A. Bradley

Chief Executive Officer

November 8, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Teradyne, Inc. (the “Company”) on Form 10-Q for the period ending September 29, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory R. Beecher, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/S/    GREGORY R. BEECHER

Gregory R. Beecher

Chief Financial Officer and Treasurer

November 8, 2013

XML

Net Income per Common Share

9 Months Ended

Sep. 29, 2013

Net Income per Common Share

K. Net Income per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

	For the Three Months Ended				For the Nine Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	69,459	$	88,641	$	142,604	$	233,592
Weighted average common shares-basic		191,307		187,364		190,521		186,592
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		23,257		21,890		23,303		22,397
Convertible note hedge warrant shares(2)		18,678		16,765		18,742		17,474
Restricted stock units		1,102		1,423		1,000		1,413
Stock options		1,465		1,735		1,564		2,075
Employee stock purchase rights		19		33		35		52
Dilutive potential common shares		44,521		41,846		44,644		43,411
Weighted average common shares-diluted		235,828		229,210		235,165		230,003
Net income per common share-basic	$	0.36	$	0.47	$	0.75	$	1.25
Net income per common share-diluted	$	0.29	$	0.39	$	0.61	$	1.02

(1) Incremental shares from assumed conversion of the convertible notes for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the warrant, is divided by the average Teradyne stock price for the period.

The computation of diluted net income per common share for the three and nine months ended September 29, 2013 excludes the effect of the potential exercise of stock options to purchase approximately 0.4 million shares because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three and nine months ended September 30, 2012 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares, and the computation of the three and nine months ended September 30, 2012 excludes the effect of the potential exercise of restricted stock units of 0.1 million and 0.4 million, because the effect would have been anti-dilutive.

With respect to Teradyne’s convertible debt, Teradyne intends to settle its conversion spread (i.e., the intrinsic value of the embedded option feature contained in the convertible debt) in shares. Teradyne accounts for its conversion spread using the treasury stock method.

XML

Changes in Accumulated Other Comprehensive Income Balances (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 29, 2013		Sep. 30, 2012	Sep. 29, 2013		Sep. 30, 2012
Other Comprehensive Income (Loss) [Line Items]
Beginning balance				$ 5,820	[1]
Other comprehensive income before reclassifications				(1,019)
Amounts reclassified from accumulated other comprehensive income	(311)		(185)	(946)		(858)
Other comprehensive income (loss)	576		1,074	(1,965)		1,597
Ending balance	3,855	[1]		3,855	[1]
Unrealized Gains on Marketable Securities
Other Comprehensive Income (Loss) [Line Items]
Beginning balance				2,925	[1]
Other comprehensive income before reclassifications				(1,019)
Amounts reclassified from accumulated other comprehensive income				(621)
Other comprehensive income (loss)				(1,640)
Ending balance	1,285	[1]		1,285	[1]
Retirement Plans Prior Service Credit
Other Comprehensive Income (Loss) [Line Items]
Beginning balance				2,895	[1]
Amounts reclassified from accumulated other comprehensive income				(325)
Other comprehensive income (loss)				(325)
Ending balance	$ 2,570	[1]		$ 2,570	[1]

[1] Net of tax of $835 for unrealized gains on marketable securities and $(125) for retirement plans prior service credit.

XML

Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 29, 2013		Sep. 30, 2012		Sep. 29, 2013		Sep. 30, 2012
Net revenues:
Products	$ 365,825		$ 393,037		$ 943,212		$ 1,204,506
Services	67,551		70,357		199,420		203,840
Total net revenues	433,376		463,394		1,142,632		1,408,346
Cost of revenues:
Cost of products	150,365		169,782		405,569		550,282
Cost of services	28,717		33,412		88,119		97,432
Total cost of revenues	179,082		203,194		493,688		647,714
Gross profit	254,294		260,200		648,944		760,632
Operating expenses:
Engineering and development	68,918		63,946		199,442		193,059
Selling and administrative	72,917		69,030		210,037		207,727
Acquired intangible assets amortization	18,064		18,429		54,163		55,287
Restructuring and other	889		683		1,480		(7,404)
Total operating expenses	160,788		152,088		465,122		448,669
Income from operations	93,506		108,112		183,822		311,963
Interest income	948		1,067		2,923		2,834
Interest expense and other	(6,902)		(6,154)		(20,262)		(18,536)
Income before income taxes	87,552	[1],[2]	103,025	[1],[2]	166,483	[1],[2]	296,261	[1],[2]
Income tax provision	18,093		14,384		23,879		62,669
Net income	$ 69,459		$ 88,641		$ 142,604		$ 233,592
Net income per common share:
Basic	$ 0.36		$ 0.47		$ 0.75		$ 1.25
Diluted	$ 0.29		$ 0.39		$ 0.61		$ 1.02
Weighted average common shares-basic	191,307		187,364		190,521		186,592
Weighted average common shares-diluted	235,828		229,210		235,165		230,003

[1] Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

[2] Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

XML

Financial Instruments and Derivatives

9 Months Ended

Sep. 29, 2013

Financial Instruments and Derivatives

D. Financial Instruments and Derivatives

Financial Instruments

Teradyne uses the market and income approach to value its financial instruments and there was no change in valuation techniques used by Teradyne during the three and nine months ended September 29, 2013 and September 30, 2012. As defined in ASC 820-10, “Fair Value Measurements and Disclosures,” fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820-10 requires that assets and liabilities are carried at fair value and are classified in one of the following three categories:

Level 1: Quoted prices in active markets for identical assets as of the reporting date.

Level 2: Inputs other than Level 1, that are observable either directly or indirectly as of the reporting date. For example, a common approach for valuing fixed income securities is the use of matrix pricing. Matrix pricing is a mathematical technique used to value securities by relying on the securities’ relationship to other benchmark quoted prices.

Level 3: Unobservable inputs that are not supported by market data. Unobservable inputs are developed based on the best information available, which might include Teradyne’s own data.

Most of Teradyne’s fixed income securities are classified as Level 2, with the exception of U.S. Treasury securities and investments in equity and debt mutual funds, which are classified as Level 1, and contingent consideration, which is classified as Level 3. The majority of Level 2 securities are priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.

There were no realized losses recorded in the three and nine months ended September 29, 2013 and September 30, 2012. Realized gains recorded in the three and nine months ended September 29, 2013, were $0.2 million and $0.5 million, respectively. Realized gains recorded in the three and nine months ended September 30, 2012, were $0.3 million and $0.9 million, respectively. Realized gains are included in interest income.

During the nine months ended September 29, 2013 and September 30, 2012, there were no transfers in or out of Level 1, Level 2 or Level 3 financial instruments.

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 29, 2013 and December 31, 2012.

	September 29, 2013
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	147,819	$	—	$	—	$	147,819
Cash equivalents		417,823		7,226		—		425,049
Available-for-sale securities:
U.S. government agency securities		—		229,129		—		229,129
U.S. Treasury securities		211,956		—		—		211,956
Commercial paper		—		88,891		—		88,891
Corporate debt securities		—		43,982		—		43,982
Equity and debt mutual funds		12,122		—		—		12,122
Certificates of deposit and time deposits		—		261		—		261
Non-U.S. government securities		—		80		—		80
Total		789,720		369,569		—		1,159,289
Derivatives		—		276		—		276
Total	$	789,720	$	369,845	$	—	$	1,159,565

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	565,642	$	7,226	$	—	$	572,868
Marketable securities		185,085		199,249		—		384,334
Long-term marketable securities		38,993		163,094		—		202,087
Other current assets		—		276		—		276
	$	789,720	$	369,845	$	—	$	1,159,565

	December 31, 2012
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	139,354	$	—	$	—	$	139,354
Cash equivalents		183,039		16,527		—		199,566
Available-for-sale securities:
U.S. Treasury securities		312,116		—		—		312,116
U.S. government agency securities		—		217,655		—		217,655
Commercial paper		—		70,434		—		70,434
Corporate debt securities		—		55,755		—		55,755
Equity and debt mutual funds		9,717		—		—		9,717
Certificates of deposit and time deposits		—		1,627		—		1,627
Non-U.S. government securities		—		84		—		84
Total		644,226		362,082		—		1,006,308
Derivatives		—		121		—		121
Total	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Contingent consideration	$	—	$	—	$	388	$	388
Total	$	—	$	—	$	388	$	388

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	322,393	$	16,527	$	—	$	338,920
Marketable securities		239,192		192,324		—		431,516
Long-term marketable securities		82,641		153,231		—		235,872
Other current assets		—		121		—		121
	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Other accrued liabilities	$	—	$	—	$	388	$	388
	$	—	$	—	$	388	$	388

During the nine months ended September 29, 2013, Teradyne made the final payment for Level 3 contingent consideration of $0.4 million.

The carrying amounts and fair values of financial instruments at September 29, 2013 and December 31, 2012 were as follows:

	September 29, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	572,868	$	572,868	$	338,920	$	338,920
Marketable securities		586,421		586,421		667,388		667,388
Convertible debt(1)		181,550		580,206		169,896		589,000
Japan loan		2,023		2,023		3,491		3,491

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion feature.

The fair values of cash and cash equivalents, accounts receivable, net and accounts payable approximate the carrying amount due to the short-term nature of these instruments.

The following tables summarize the composition of available-for-sale marketable securities at September 29, 2013 and December 31, 2012:

	September 29, 2013
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. government agency securities	$	229,133	$	142	$	(146	)	$	229,129	$	103,165
U.S. Treasury securities		211,966		140		(150	)		211,956		5,605
Commercial paper		88,884		12		(5	)		88,891		25,169
Corporate debt securities		44,132		905		(1,055	)		43,982		16,439
Equity and debt mutual funds		9,843		2,315		(36	)		12,122		595
Certificates of deposit and time deposits		261		—		—			261		—
Non-U.S. government securities		80		—		—			80		—
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	384,180	$	168	$	(14	)	$	384,334	$	37,823
Long-term marketable securities		200,119		3,346		(1,378	)		202,087		113,150
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

	December 31, 2012
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	311,915	$	216	$	(15	)	$	312,116	$	1,018
U.S. government agency securities		217,396		262		(3	)		217,655		9,018
Commercial paper		70,431		9		(6	)		70,434		25,209
Corporate debt securities		53,405		2,414		(64	)		55,755		23,255
Equity and debt mutual funds		8,767		961		(11	)		9,717		600
Certificates of deposit and time deposits		1,627		—		—			1,627		—
Non-U.S. government securities		84		—		—			84		—
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	431,324	$	203	$	(11	)	$	431,516	$	41,110
Long-term marketable securities		232,301		3,659		(88	)		235,872		17,990
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

As of September 29, 2013, the fair market value of marketable securities with unrealized losses totaled $151.0 million. Of this value, $0.5 million had unrealized losses greater than one year and $150.5 million had unrealized losses less than one year. As of December 31, 2012, the fair market value of marketable securities with unrealized losses totaled $59.1 million and none of the unrealized losses were greater than one year.

The contractual maturities of available-for-sale marketable securities at September 29, 2013 were as follows:

	September 29, 2013
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	384,180	$	384,334
Due after 1 year through 5 years		173,407		175,657
Due after 5 years through 10 years		3,131		3,188
Due after 10 years		23,581		23,242
Total	$	584,299	$	586,421

Derivatives

Teradyne conducts business in a number of foreign countries, with certain transactions denominated in local currencies. The purpose of Teradyne’s foreign currency management is to minimize the effect of exchange rate fluctuations on certain foreign currency denominated net monetary assets. Teradyne does not use derivative financial instruments for trading or speculative purposes.

To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings, and is used to offset the change in fair value of the monetary assets and liabilities denominated in foreign currencies.

The notional amount of foreign exchange contracts hedging monetary assets and liabilities denominated in foreign currencies was $64.1 million and $64.1 million at September 29, 2013 and December 31, 2012, respectively.

The following table summarizes the fair value of derivative instruments at September 29, 2013 and December 31, 2012:

	Balance Sheet Location		September 29, 2013		December 31, 2012
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Other current assets	$	276	$	121
			$	276	$	121

Teradyne had no offsetting foreign exchange contracts at September 29, 2013 and December 31, 2012.

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three and nine months ended September 29, 2013 and September 30, 2012. The table does not reflect the corresponding (losses) gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and nine months ended September 29, 2013, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $(0.4) million and $(5.0) million, respectively. For the three and nine months ended September 30, 2012, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $1.2 million and $0.8 million, respectively.

	Location of Gains (Losses) Recognized in Statement of Operations	For the Three Months Ended					For the Nine Months  Ended
		September 29, 2013		September 30, 2012			September 29, 2013		September 30, 2012
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Interest expense and other	$	1	$	(1,197	)	$	4,068	$	(677	)
		$	1	$	(1,197	)	$	4,068	$	(677	)

See Note E “Debt” regarding derivatives related to convertible senior notes.

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Subsequent Events

9 Months Ended

Sep. 29, 2013

Subsequent Events

R. Subsequent Events

On October 25, 2013, Teradyne completed its acquisition of ZTEC Instruments, Inc. (“ZTEC”) located in Albuquerque, New Mexico. The acquisition was completed by acquiring all of the common and preferred stock of ZTEC for approximately $15 million and up to $5 million payable upon achievement of certain performance targets through December 31, 2015. The fair value of assets and liabilities acquired has not been disclosed because Teradyne has not completed the valuation. ZTEC is a supplier of modular wireless test instruments. The acquisition of ZTEC expands Teradyne’s wireless segment into the design verification test of wireless components and chipsets.

On November 1, 2013, Teradyne sold its equity interest in Empirix Inc. and received proceeds of $34.2 million. An additional $5.2 million of proceeds will be held in escrow for 15 months, for potential indemnifications to the buyer. Teradyne will record a gain of $34.2 million in the fourth quarter of 2013.

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Income Taxes - Additional Information (Detail)	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Income Taxes [Line Items]
Effective tax rate	21.00%	14.00%	14.00%	21.00%
U.S. statutory federal tax rate	35.00%		35.00%

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Schedule of Amortizable Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 29, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 538,366	$ 537,366
Accumulated Amortization	272,661	218,499
Net Carrying Amount	265,705	318,867
Weighted Average Useful Life, years	7 years	7 years
Developed technology
Finite-Lived Intangible Assets
Gross Carrying Amount	358,555	357,555
Accumulated Amortization	180,960	143,126
Net Carrying Amount	177,595	214,429
Weighted Average Useful Life, years	6 years 3 months 18 days	6 years 3 months 18 days
Customer Relationships And Service And Software Maintenance Contracts
Finite-Lived Intangible Assets
Gross Carrying Amount	144,971	144,971
Accumulated Amortization	77,139	63,464
Net Carrying Amount	67,832	81,507
Weighted Average Useful Life, years	8 years	8 years
Trade Names And Trademarks
Finite-Lived Intangible Assets
Gross Carrying Amount	33,840	33,840
Accumulated Amortization	13,562	10,909
Net Carrying Amount	20,278	22,931
Weighted Average Useful Life, years	9 years	9 years
Customer Backlog
Finite-Lived Intangible Assets
Gross Carrying Amount	1,000	1,000
Accumulated Amortization	$ 1,000	$ 1,000
Weighted Average Useful Life, years	4 months 24 days	4 months 24 days

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Restructuring and Other

9 Months Ended

Sep. 29, 2013

Restructuring and Other

L. Restructuring and Other

Restructuring

During the nine months ended September 29, 2013, Teradyne recorded $1.3 million of severance charges related to headcount reductions of 40 people, of which $1.0 million was in System Test and $0.3 million was in Semiconductor Test, and a $(0.4) million credit in Corporate for a change in the estimated exit costs related to a leased facility.

During the nine months ended September 30, 2012, Teradyne recorded $0.7 million of severance charges related to headcount reductions of 9 people, of which $0.5 million and 7 people were in System Test, $0.2 million and 2 people were in Wireless Test.

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2012 Activities
Balance at December 31, 2011	$	325		$	1,862		$	2,187
Cash payments		(325	)		(778	)		(1,103	)
Balance at December 31, 2012		—			1,084			1,084
Change in estimate		—			(105	)		(105	)
Cash payments		—			(183	)		(183	)
Balance at March 31, 2013		—			796			796
Cash payments		—			(199	)		(199	)
Balance at June 30, 2013		—			597			597
Change in estimate		—			(448	)		(448	)
Cash payments		—			(149	)		(149	)
Balance at September 29, 2013	$	—		$	—		$	—
2012 Activities
Q3 2012 Activity:
Provision	$	687		$	—		$	687
Cash payments		(444	)		—			(444	)
Balance at December 31, 2012		243			—			243
Cash payments		(243	)		—			(243	)
Balance at March 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(884	)		—			(884	)
Balance at September 29, 2013	$	453		$	—		$	453
Balance at September 29, 2013	$	453		$	—		$	453

The remaining accrual for severance and benefits of $0.5 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2014.

Other

During the nine months ended September 30, 2012, due to a decrease in specified new product revenue through December 31, 2012 earn-out period end date, Teradyne recorded an $8.4 million fair value adjustment to decrease the LitePoint acquisition contingent consideration.

XML

Deferred Revenue and Customer Advances (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Deferred Revenue Arrangement
Maintenance, training and extended warranty	$ 56,481	$ 51,198
Customer advances	22,287	39,613
Undelivered elements	9,054	6,773
Total deferred revenue and customer advances	$ 87,822	$ 97,584

XML

Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Goodwill and Intangible Assets Disclosure [Line Items]
Aggregate intangible asset amortization expense	$ 18,064	$ 18,429	$ 54,163	$ 55,287

XML

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	$ 586,421	$ 667,388
Derivatives	276	121
Total including derivatives	1,159,565	1,006,429
Contingent consideration		388
Liabilities		388
Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	147,819	139,354
Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	425,049	199,566
U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	211,956	312,116
U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	229,129	217,655
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	88,891	70,434
Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	43,982	55,755
Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	12,122	9,717
Certificates Of Deposit And Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	261	1,627
Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	80	84
Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	1,159,289	1,006,308
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total including derivatives	789,720	644,226
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	147,819	139,354
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	417,823	183,039
Quoted Prices in Active Markets for Identical Instruments (Level 1) | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	211,956	312,116
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	12,122	9,717
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	789,720	644,226
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivatives	276	121
Total including derivatives	369,845	362,203
Significant Other Observable Inputs (Level 2) | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	7,226	16,527
Significant Other Observable Inputs (Level 2) | U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	229,129	217,655
Significant Other Observable Inputs (Level 2) | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	88,891	70,434
Significant Other Observable Inputs (Level 2) | Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	43,982	55,755
Significant Other Observable Inputs (Level 2) | Certificates Of Deposit And Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	261	1,627
Significant Other Observable Inputs (Level 2) | Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	80	84
Significant Other Observable Inputs (Level 2) | Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	369,569	362,082
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration		388
Liabilities		$ 388

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Debt (Tables)

9 Months Ended

Sep. 29, 2013

Components of Convertible Senior Notes

The tables below represent the components of Teradyne’s convertible senior notes:

	September 29, 2013		December 31, 2012
	(in thousands)
Debt principal	$	189,998	$	190,000
Unamortized debt discount		8,448		20,104
Net carrying amount of the convertible debt	$	181,550	$	169,896

Interest Expense on Convertible Senior Notes

The interest expense on Teradyne’s convertible senior notes for the three and nine months ended September 29, 2013 and September 30, 2012 was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Contractual interest expense	$	2,114	$	2,114	$	6,388	$	6,413
Amortization of the discount component and debt issue fees		4,221		3,710		12,266		10,781
Total interest expense on the convertible debt	$	6,335	$	5,824	$	18,654	$	17,194

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Financial Instruments and Derivatives (Tables)

9 Months Ended

Sep. 29, 2013

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 29, 2013 and December 31, 2012.

	September 29, 2013
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	147,819	$	—	$	—	$	147,819
Cash equivalents		417,823		7,226		—		425,049
Available-for-sale securities:
U.S. government agency securities		—		229,129		—		229,129
U.S. Treasury securities		211,956		—		—		211,956
Commercial paper		—		88,891		—		88,891
Corporate debt securities		—		43,982		—		43,982
Equity and debt mutual funds		12,122		—		—		12,122
Certificates of deposit and time deposits		—		261		—		261
Non-U.S. government securities		—		80		—		80
Total		789,720		369,569		—		1,159,289
Derivatives		—		276		—		276
Total	$	789,720	$	369,845	$	—	$	1,159,565

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	565,642	$	7,226	$	—	$	572,868
Marketable securities		185,085		199,249		—		384,334
Long-term marketable securities		38,993		163,094		—		202,087
Other current assets		—		276		—		276
	$	789,720	$	369,845	$	—	$	1,159,565

	December 31, 2012
	Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(in thousands)
Assets
Cash	$	139,354	$	—	$	—	$	139,354
Cash equivalents		183,039		16,527		—		199,566
Available-for-sale securities:
U.S. Treasury securities		312,116		—		—		312,116
U.S. government agency securities		—		217,655		—		217,655
Commercial paper		—		70,434		—		70,434
Corporate debt securities		—		55,755		—		55,755
Equity and debt mutual funds		9,717		—		—		9,717
Certificates of deposit and time deposits		—		1,627		—		1,627
Non-U.S. government securities		—		84		—		84
Total		644,226		362,082		—		1,006,308
Derivatives		—		121		—		121
Total	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Contingent consideration	$	—	$	—	$	388	$	388
Total	$	—	$	—	$	388	$	388

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	322,393	$	16,527	$	—	$	338,920
Marketable securities		239,192		192,324		—		431,516
Long-term marketable securities		82,641		153,231		—		235,872
Other current assets		—		121		—		121
	$	644,226	$	362,203	$	—	$	1,006,429
Liabilities
Other accrued liabilities	$	—	$	—	$	388	$	388
	$	—	$	—	$	388	$	388

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at September 29, 2013 and December 31, 2012 were as follows:

	September 29, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	572,868	$	572,868	$	338,920	$	338,920
Marketable securities		586,421		586,421		667,388		667,388
Convertible debt(1)		181,550		580,206		169,896		589,000
Japan loan		2,023		2,023		3,491		3,491

(1) The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion feature.

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available-for-sale marketable securities at September 29, 2013 and December 31, 2012:

	September 29, 2013
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. government agency securities	$	229,133	$	142	$	(146	)	$	229,129	$	103,165
U.S. Treasury securities		211,966		140		(150	)		211,956		5,605
Commercial paper		88,884		12		(5	)		88,891		25,169
Corporate debt securities		44,132		905		(1,055	)		43,982		16,439
Equity and debt mutual funds		9,843		2,315		(36	)		12,122		595
Certificates of deposit and time deposits		261		—		—			261		—
Non-U.S. government securities		80		—		—			80		—
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	384,180	$	168	$	(14	)	$	384,334	$	37,823
Long-term marketable securities		200,119		3,346		(1,378	)		202,087		113,150
	$	584,299	$	3,514	$	(1,392	)	$	586,421	$	150,973

	December 31, 2012
	Available-for-Sale									Fair Market Value of Investments with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	311,915	$	216	$	(15	)	$	312,116	$	1,018
U.S. government agency securities		217,396		262		(3	)		217,655		9,018
Commercial paper		70,431		9		(6	)		70,434		25,209
Corporate debt securities		53,405		2,414		(64	)		55,755		23,255
Equity and debt mutual funds		8,767		961		(11	)		9,717		600
Certificates of deposit and time deposits		1,627		—		—			1,627		—
Non-U.S. government securities		84		—		—			84		—
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	431,324	$	203	$	(11	)	$	431,516	$	41,110
Long-term marketable securities		232,301		3,659		(88	)		235,872		17,990
	$	663,625	$	3,862	$	(99	)	$	667,388	$	59,100

Contractual Maturities of Available-for-Sale Marketable Securities

The contractual maturities of available-for-sale marketable securities at September 29, 2013 were as follows:

	September 29, 2013
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	384,180	$	384,334
Due after 1 year through 5 years		173,407		175,657
Due after 5 years through 10 years		3,131		3,188
Due after 10 years		23,581		23,242
Total	$	584,299	$	586,421

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments at September 29, 2013 and December 31, 2012:

	Balance Sheet Location		September 29, 2013		December 31, 2012
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Other current assets	$	276	$	121
			$	276	$	121

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three and nine months ended September 29, 2013 and September 30, 2012. The table does not reflect the corresponding (losses) gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three and nine months ended September 29, 2013, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $(0.4) million and $(5.0) million, respectively. For the three and nine months ended September 30, 2012, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $1.2 million and $0.8 million, respectively.

	Location of Gains (Losses) Recognized in Statement of Operations	For the Three Months Ended					For the Nine Months  Ended
		September 29, 2013		September 30, 2012			September 29, 2013		September 30, 2012
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Interest expense and other	$	1	$	(1,197	)	$	4,068	$	(677	)
		$	1	$	(1,197	)	$	4,068	$	(677	)

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Components of Convertible Senior Notes (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Debt Instrument
Debt principal	$ 189,998	$ 190,000
Unamortized debt discount	8,448	20,104
Net carrying amount of the convertible debt	$ 181,550	$ 169,896

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Restructuring and Other (Tables)

9 Months Ended

Sep. 29, 2013

Restructuring and Other

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2012 Activities
Balance at December 31, 2011	$	325		$	1,862		$	2,187
Cash payments		(325	)		(778	)		(1,103	)
Balance at December 31, 2012		—			1,084			1,084
Change in estimate		—			(105	)		(105	)
Cash payments		—			(183	)		(183	)
Balance at March 31, 2013		—			796			796
Cash payments		—			(199	)		(199	)
Balance at June 30, 2013		—			597			597
Change in estimate		—			(448	)		(448	)
Cash payments		—			(149	)		(149	)
Balance at September 29, 2013	$	—		$	—		$	—
2012 Activities
Q3 2012 Activity:
Provision	$	687		$	—		$	687
Cash payments		(444	)		—			(444	)
Balance at December 31, 2012		243			—			243
Cash payments		(243	)		—			(243	)
Balance at March 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(884	)		—			(884	)
Balance at September 29, 2013	$	453		$	—		$	453
Balance at September 29, 2013	$	453		$	—		$	453

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Schedule of Carrying Amounts and Fair Values of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013		Dec. 31, 2012		Sep. 30, 2012	Dec. 31, 2011	Mar. 31, 2009
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Carrying Value	$ 572,868		$ 338,920		$ 485,692	$ 573,736
Convertible debt, Carrying Value	181,550		169,896
Japan loan, Carrying Value							10,000
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Carrying Value	572,868		338,920
Marketable securities, Carrying Value	586,421		667,388
Convertible debt, Carrying Value	181,550	[1]	169,896	[1]
Japan loan, Carrying Value	2,023		3,491
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Fair Value	572,868		338,920
Marketable securities, Fair Value	586,421		667,388
Convertible debt, Fair Value	580,206	[1]	589,000	[1]
Japan loan, Fair Value	$ 2,023		$ 3,491

[1] The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion feature.

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Other Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Schedule of Accrued Liabilities [Line Items]
Balance at beginning of period	$ 7,351	$ 11,047	$ 9,786	$ 8,154
Accruals for warranties issued during the period	3,674	4,118	8,781	13,543
Adjustments related to pre-existing warranties	(524)	1,226	(2,323)	1,369
Settlements made during the period	(2,470)	(3,813)	(8,213)	(10,488)
Balance at end of period	8,031	12,578	8,031	12,578
Balance at beginning of period	34,854	20,754	26,987	12,742
Deferral of new extended warranty revenue	5,586	8,733	17,791	21,015
Recognition of extended warranty deferred revenue	(4,120)	(2,007)	(8,458)	(6,277)
Balance at end of period	$ 36,320	$ 27,480	$ 36,320	$ 27,480

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 29, 2013

Changes in Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income, which is presented net of tax, consist of the following:

	Unrealized Gains on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2012 (a)	$	2,925		$	2,895		$	5,820
Other comprehensive income before reclassifications		(1,019	)		—			(1,019	)
Amounts reclassified from accumulated other comprehensive income		(621	)		(325	)		(946	)
Net current period other comprehensive income		(1,640	)		(325	)		(1,965	)
Balance at September 29, 2013 (a)	$	1,285		$	2,570		$	3,855

(a) Net of tax of $835 for unrealized gains on marketable securities and $(125) for retirement plans prior service credit.

Reclassifications out of Accumulated Other Comprehensive Income

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three and nine months ended September 29, 2013 and September 30, 2012, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				For the Nine Months Ended				Affected Line Item in the  Statements of Operations
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
			(in thousands)
Available-for-sale marketable securities
Unrealized gains	$	202	$	93	$	621	$	583	Interest income
	$	202	$	93	$	621	$	583
Amortization of defined benefit pension and postretirement plans Prior service benefit
	$	109	$	92	$	325	$	275	(a)
	$	109	$	92	$	325	$	275
Total reclassifications	$	311	$	185	$	946	$	858	Net income

(a) The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit; see Note M “Retirement Plans.”

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Schedule of Net Periodic Pension (Benefit) Costs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Defined Benefit Plan Disclosure
Actuarial (gain) loss			$ (1,359)	$ 4,991
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure
Service cost	871	685	2,557	2,054
Interest cost	3,350	4,111	10,001	12,333
Expected return on plan assets	(3,664)	(4,090)	(10,925)	(12,269)
Amortization of unrecognized prior service cost (benefit)	41	58	123	174
Actuarial (gain) loss		1,937	(1,122)	5,083
Total net periodic (benefit) cost	598	2,701	634	7,375
Post-Retirement Benefit Plans
Defined Benefit Plan Disclosure
Service cost	19	17	56	50
Interest cost	86	109	257	328
Amortization of unrecognized prior service cost (benefit)	(150)	(150)	(449)	(449)
Actuarial (gain) loss			(236)	(92)
Total net periodic (benefit) cost	$ (45)	$ (24)	$ (372)	$ (163)

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Schedule of Restructuring and Other Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			12 Months Ended
	Sep. 29, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
Restructuring Cost and Reserve
Ending balance	$ 453
Pre-2012 Activities
Restructuring Cost and Reserve
Beginning Balance	597	796	1,084	2,187
Change in estimate	(448)		(105)
Cash payments	(149)	(199)	(183)	(1,103)
Ending balance		597	796	1,084
Q3 2012 Activity
Restructuring Cost and Reserve
Beginning Balance			243
Provision				687
Cash payments			(243)	(444)
Ending balance				243
Q3 2013 Activity
Restructuring Cost and Reserve
Provision	1,337
Cash payments	(884)
Ending balance	453
Employee Serverance And Benefits
Restructuring Cost and Reserve
Ending balance	453
Employee Serverance And Benefits | Pre-2012 Activities
Restructuring Cost and Reserve
Beginning Balance				325
Cash payments				(325)
Employee Serverance And Benefits | Q3 2012 Activity
Restructuring Cost and Reserve
Beginning Balance			243
Provision				687
Cash payments			(243)	(444)
Ending balance				243
Employee Serverance And Benefits | Q3 2013 Activity
Restructuring Cost and Reserve
Provision	1,337
Cash payments	(884)
Ending balance	453
Facility Exit Costs | Pre-2012 Activities
Restructuring Cost and Reserve
Beginning Balance	597	796	1,084	1,862
Change in estimate	(448)		(105)
Cash payments	(149)	(199)	(183)	(778)
Ending balance		$ 597	$ 796	$ 1,084

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Contractual Maturities of Available-for-Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities
Available for sale securities, Cost	$ 584,299	$ 663,625
Available for sale securities, Fair Market Value	586,421	667,388
Due In One Year Or Less
Schedule of Available-for-sale Securities
Available for sale securities, Cost	384,180
Available for sale securities, Fair Market Value	384,334
Due After One Year Through Five Years
Schedule of Available-for-sale Securities
Available for sale securities, Cost	173,407
Available for sale securities, Fair Market Value	175,657
Due After Five Years Through Ten Years
Schedule of Available-for-sale Securities
Available for sale securities, Cost	3,131
Available for sale securities, Fair Market Value	3,188
Due After Ten Years
Schedule of Available-for-sale Securities
Available for sale securities, Cost	23,581
Available for sale securities, Fair Market Value	23,242
Available-for-sale Securities
Schedule of Available-for-sale Securities
Available for sale securities, Cost	584,299
Available for sale securities, Fair Market Value	$ 586,421

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Schedule of Segment Reporting Information by Segment Charges (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Semiconductor Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	$ 1,378	$ 3,085	$ 1,878	$ 9,254
Restructuring and other	282	(4)	416	315
Total	1,660	3,081	2,294	9,569
Wireless Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	2,059	2,018	6,125	4,134
Cost of revenues-inventory step-up				6,089
Restructuring and other		236	82	236
Total	2,059	2,254	6,207	10,459
System Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	404	378	1,613	3,020
Restructuring and other	1,055	451	1,430	451
Total	1,459	829	3,043	3,471
Corporate And Eliminations
Segment Reporting Information [Line Items]
Restructuring and other	(448)		(448)	(8,406)
Total	$ (448)		$ (448)	$ (8,406)

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Accounting Policies (Policies)

9 Months Ended

Sep. 29, 2013

Basis of Presentation

Basis of Presentation

The condensed consolidated interim financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of such interim financial statements. Certain prior year’s amounts were reclassified to conform to the current year presentation. The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Security and Exchange Commission (“SEC”) on March 1, 2013, for the year ended December 31, 2012.

Preparation of Financial Statements and Use of Estimates

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates.

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 142,604	$ 233,592
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	41,873	39,812
Amortization	69,495	67,366
Stock-based compensation	27,227	30,634
Provision for excess and obsolete inventory	9,616	16,408
Deferred taxes	(19,211)	7,076
Non cash charge for the sale of inventories revalued at the date of acquisition		6,089
Contingent consideration adjustment		(8,373)
Tax benefit related to stock options and restricted stock units	(807)	(7,600)
Retirement plans actuarial (gains) losses	(1,359)	4,991
Impairment loss on property, plant and equipment	1,074
Other	83	(2,359)
Changes in operating assets and liabilities:
Accounts receivable	(55,963)	(76,134)
Inventories	34,194	25,070
Prepayments and other assets	(26,312)	7,278
Accounts payable and other accrued expenses	496	(17,600)
Deferred revenue and customer advances	(9,762)	(10,651)
Retirement plans contributions	(3,569)	(3,679)
Accrued income taxes	13,750	50,313
Net cash provided by operating activities	223,429	362,233
Cash flows from investing activities:
Purchases of property, plant and equipment	(82,925)	(91,132)
Purchases of marketable securities	(657,188)	(510,157)
Proceeds from maturities of marketable securities	401,901	156,422
Proceeds from sales of marketable securities	332,597	14,250
Net cash used for investing activities	(5,615)	(430,617)
Cash flows from financing activities:
Issuance of common stock under employee stock option and stock purchase plans	16,778	17,959
Tax benefit related to stock options and restricted stock units	807	7,600
Payments of long-term debt	(1,063)	(1,246)
Payments of contingent consideration	(388)	(43,973)
Net cash provided by (used) for financing activities	16,134	(19,660)
Increase (decrease) in cash and cash equivalents	233,948	(88,044)
Cash and cash equivalents at beginning of period	338,920	573,736
Cash and cash equivalents at end of period	$ 572,868	$ 485,692

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Accounting Policies

9 Months Ended

Sep. 29, 2013

Accounting Policies

B. Accounting Policies

Basis of Presentation

The condensed consolidated interim financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair presentation of such interim financial statements. Certain prior year’s amounts were reclassified to conform to the current year presentation. The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Security and Exchange Commission (“SEC”) on March 1, 2013, for the year ended December 31, 2012.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates.

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Debt

9 Months Ended

Sep. 29, 2013

Debt

E. Debt

Loan Agreement

On March 31, 2009, Teradyne K.K., Teradyne’s wholly-owned subsidiary in Japan, entered into a loan agreement with a local bank in Japan to borrow approximately $10.0 million (the loan is denominated in Japanese Yen). The loan has a term of 5 years and a fixed interest rate of 0.8%. Approximately $6.0 million of the loan is collateralized by a real estate mortgage on Teradyne K.K.’s building and land in Kumamoto, Japan and approximately $4.0 million is unsecured. Teradyne, Inc. has guaranteed payment of the loan obligation. The loan is amortized over the term of the loan with semiannual principal payments of approximately $1.0 million payable on September 30 and March 30 each year. At September 29, 2013, the outstanding loan principal of approximately $2.0 million is included in current debt.

Convertible Senior Notes

In April 2009, Teradyne issued 4.50% convertible senior notes (the “Notes”) at an aggregate principal amount of $190 million. The Notes will mature on March 15, 2014, unless earlier repurchased by Teradyne or converted. The Notes are senior unsecured obligations and rank equally with all of Teradyne’s existing and future senior debt and senior to any of Teradyne’s subordinated debt.

The Notes may be converted, at the option of the holder, under certain circumstances and during certain periods, at an initial conversion rate of approximately 182.65 shares of Teradyne’s common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $5.48, a 25% conversion premium based on the last reported sale price of $4.38 per share of Teradyne’s common stock on March 31, 2009. The conversion rate is subject to adjustment in certain circumstances including but not limited to Teradyne issuing a cash or stock dividend or effecting a stock split.

During the three months ended September 29, 2013, the following circumstance occurred that allows holders to convert their Notes at their option prior to December 15, 2013: the last reported sale price of Teradyne’s common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeded 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter. As of November 8, 2013, one holder exercised the option to convert two thousand dollars worth of Notes which Teradyne settled in cash.

Concurrently with the offering of the Notes, Teradyne entered into a convertible note hedge transaction with a strike price equal to the initial conversion price of the Notes, or approximately $5.48. The convertible note hedge allows Teradyne to receive shares of its common stock and/or cash related to the excess conversion value that it would pay to the holders of the Notes upon conversion. The convertible note hedges will cover, subject to customary antidilution adjustments, approximately 34,703,196 shares of Teradyne’s common stock. Teradyne paid approximately $64.6 million for the convertible note hedges.

On March 31, 2009, Teradyne entered into a warrant transaction with a strike price of approximately $7.67 per share, which was 75% higher than the closing price of Teradyne’s common stock. Teradyne received approximately $43.0 million for the warrants.

The convertible note hedge and warrant transaction will generally have the effect of increasing the conversion price of the Notes to approximately $7.67 per share of Teradyne’s common stock, representing a 75% conversion premium based upon the closing price of Teradyne’s common stock on March 31, 2009.

The Notes are classified as current debt in the balance sheet at September 29, 2013. The tables below represent the components of Teradyne’s convertible senior notes:

	September 29, 2013		December 31, 2012
	(in thousands)
Debt principal	$	189,998	$	190,000
Unamortized debt discount		8,448		20,104
Net carrying amount of the convertible debt	$	181,550	$	169,896

The interest expense on Teradyne’s convertible senior notes for the three and nine months ended September 29, 2013 and September 30, 2012 was as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Contractual interest expense	$	2,114	$	2,114	$	6,388	$	6,413
Amortization of the discount component and debt issue fees		4,221		3,710		12,266		10,781
Total interest expense on the convertible debt	$	6,335	$	5,824	$	18,654	$	17,194

As of September 29, 2013, the unamortized discount was $8.4 million, which will be amortized over the next six months, and the carrying amount of the equity component was $63.4 million. As of September 29, 2013, the conversion rate was equal to the initial conversion price of approximately $5.48 per share and the if-converted value of the Notes was $579.9 million.

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Recently Issued Accounting Pronouncements

9 Months Ended

Sep. 29, 2013

Recently Issued Accounting Pronouncements

C. Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” This ASU is intended to enhance the understanding of the effects of netting arrangements on an entity’s financial statements, including financial instruments and derivative instruments that are either offset or subject to a master netting arrangement. The scope of this ASU includes derivatives, sale and repurchase agreements, reverse sale and repurchase agreements, and securities borrowing and lending arrangements. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. Teradyne adopted this ASU effective January 1, 2013. See Note D “Financial Instruments and Derivatives.”

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income” amending the disclosure requirements regarding the reporting of amounts reclassified out of accumulated other comprehensive income. The amendment does not change the current requirement for reporting net income or other comprehensive income, but requires additional disclosures about significant amounts reclassified out of accumulated other comprehensive income including the effect of the reclassification on the related statement of operations line items. The provisions of this ASU are effective for interim and annual periods beginning on or after January 1, 2013. Teradyne adopted this amendment effective January 1, 2013. See Note I “Accumulated Other Comprehensive Income.”

On July 18, 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” Under this ASU, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carryforwards that would be utilized, rather than only against carryforwards that are created by unrecognized tax benefits. The provisions of this ASU are effective for interim and annual periods beginning on or after December 15, 2013. Teradyne does not expect this ASU to have a material impact on its financial position or results of operations.

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Schedule of Available for Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 584,299	$ 663,625
Available-for-sale marketable securities, Unrealized Gain	3,514	3,862
Available-for-sale marketable securities, Unrealized (Loss)	(1,392)	(99)
Available-for-sale marketable securities, Fair Market Value	586,421	667,388
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	150,973	59,100
U.S. Government Agency Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	229,133	217,396
Available-for-sale marketable securities, Unrealized Gain	142	262
Available-for-sale marketable securities, Unrealized (Loss)	(146)	(3)
Available-for-sale marketable securities, Fair Market Value	229,129	217,655
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	103,165	9,018
U.S. Treasury Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	211,966	311,915
Available-for-sale marketable securities, Unrealized Gain	140	216
Available-for-sale marketable securities, Unrealized (Loss)	(150)	(15)
Available-for-sale marketable securities, Fair Market Value	211,956	312,116
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	5,605	1,018
Commercial Paper
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	88,884	70,431
Available-for-sale marketable securities, Unrealized Gain	12	9
Available-for-sale marketable securities, Unrealized (Loss)	(5)	(6)
Available-for-sale marketable securities, Fair Market Value	88,891	70,434
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	25,169	25,209
Corporate Debt Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	44,132	53,405
Available-for-sale marketable securities, Unrealized Gain	905	2,414
Available-for-sale marketable securities, Unrealized (Loss)	(1,055)	(64)
Available-for-sale marketable securities, Fair Market Value	43,982	55,755
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	16,439	23,255
Equity And Debt Mutual Funds
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	9,843	8,767
Available-for-sale marketable securities, Unrealized Gain	2,315	961
Available-for-sale marketable securities, Unrealized (Loss)	(36)	(11)
Available-for-sale marketable securities, Fair Market Value	12,122	9,717
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	595	600
Certificates Of Deposit And Time Deposits
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	261	1,627
Available-for-sale marketable securities, Fair Market Value	261	1,627
Non-U.S. Government Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	80	84
Available-for-sale marketable securities, Fair Market Value	$ 80	$ 84

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Deferred Revenue and Customer Advances (Tables)

9 Months Ended

Sep. 29, 2013

Deferred Revenue and Customer Advances

Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances.

	September 29, 2013		December 31, 2012
	(in thousands)
Maintenance, training and extended warranty	$	56,481	$	51,198
Customer advances		22,287		39,613
Undelivered elements		9,054		6,773
Total deferred revenue and customer advances	$	87,822	$	97,584

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Intangible Assets (Tables)

9 Months Ended

Sep. 29, 2013

Schedule of Amortizable Intangible Assets

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

	September 29, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	358,555	$	180,960	$	177,595		6.3 years
Customer relationships and service and software maintenance contracts		144,971		77,139		67,832		8.0 years
Trade names and trademarks		33,840		13,562		20,278		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	538,366	$	272,661	$	265,705		7.0 years

	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	357,555	$	143,126	$	214,429		6.3 years
Customer relationships and service and software maintenance contracts		144,971		63,464		81,507		8.0 years
Trade names and trademarks		33,840		10,909		22,931		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	537,366	$	218,499	$	318,867		7.0 years

Schedule of Estimated Intangible Asset Amortization Expense

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

Year	Amortization Expense
	(in thousands)
2013 (remainder)	$	18,052
2014		69,213
2015		52,462
2016		52,462
2017		46,304

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Subsequent Events - Additional Information (Detail) (USD $)		3 Months Ended	1 Months Ended
	Dec. 31, 2012	Dec. 31, 2013 Scenario, Forecast	Nov. 01, 2013 Subsequent Event	Oct. 25, 2013 Subsequent Event ZTEC	Oct. 25, 2013 Subsequent Event ZTEC Maximum
Subsequent Event [Line Items]
Acquisition price				$ 15,000,000
Amount payable upon completion of performance target	388,000				5,000,000
Proceeds from sale of equity interest			34,200,000
Additional proceeds held in escrow			5,200,000
Amount of gain will record		$ 34,200,000

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Financial Instruments and Derivatives - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012	Dec. 31, 2012
Financial Instruments and Fair Value [Line Items]
Available-for-sale securities, realized gain	$ 200,000	$ 300,000	$ 500,000	$ 900,000
Final payment for Level 3 contingent consideration			400,000
Fair market value of investments with unrealized losses	150,973,000		150,973,000		59,100,000
Available-for-sale marketable securities, fair market value of investments with unrealized losses greater than one year	500,000		500,000
Available-for-sale marketable securities, fair market value of investments with unrealized losses less than one year	150,500,000		150,500,000
Gain (loss) on foreign currency transactions	(400,000)	1,200,000	(5,000,000)	800,000
Foreign Exchange Contract
Financial Instruments and Fair Value [Line Items]
Notional amount of foreign exchange contracts hedging monetary assets and liabilities	$ 64,100,000		$ 64,100,000		$ 64,100,000

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Stock Repurchase Program - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended	34 Months Ended
	Nov. 30, 2010	Sep. 29, 2013
Stock Repurchase Program
Stock repurchase program, authorized amount	$ 200
Repurchase of stock, shares		2.6
Repurchase of stock, value		$ 31.2
Common stock average price		$ 11.84

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Reclassification Out of Accumulated Other Comprehensive Income to Statement of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 29, 2013		Sep. 30, 2012		Sep. 29, 2013		Sep. 30, 2012
Other Comprehensive Income (Loss) [Line Items]
Unrealized gains	$ 202		$ 93		$ 621		$ 583
Net income	202		93		621		583
Prior service benefit	109	[1]	92	[1]	325	[1]	275	[1]
Net income	109		92		325		275
Total reclassifications	$ 311		$ 185		$ 946		$ 858

[1] The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit; see Note M "Retirement Plans."

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Stock Based Compensation - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award
Stock options term	7 years
Restricted stock unit awards to employees	1.9	1.7
Weighted average grant date fair value of restricted stock units granted	$ 16.60	$ 16.73
Number of service-based stock options granted to executive officers	0.2	0.2
Weighted average grant date fair value of stock options granted to executive officers	$ 6.09	$ 6.85
Price paid by employees for common stock purchased through employee stock purchase plan as percentage of stock price	85.00%		85.00%
Restricted Stock Units | Employees
Share-based Compensation Arrangement by Share-based Payment Award
Period of stock granted to employees and executive officers vest in equal installments	4 years
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Period of stock granted to employees and executive officers vest in equal installments	4 years
Stock Purchase Rights
Share-based Compensation Arrangement by Share-based Payment Award
Weighted average grant date fair value of stock options granted to executive officers		$ 3.75

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Debt - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended				1 Months Ended		3 Months Ended	9 Months Ended	1 Months Ended
	Mar. 31, 2009 Y	Mar. 30, 2012	Sep. 29, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 29, 2013 Convertible Notes Hedge Warrant	Sep. 30, 2012 Convertible Notes Hedge Warrant	Sep. 29, 2013 Convertible Notes Hedge Warrant	Sep. 30, 2012 Convertible Notes Hedge Warrant	Mar. 31, 2009 Convertible Notes Hedge Warrant	Sep. 29, 2013 Convertible Senior Notes	Apr. 30, 2009 4.50% Convertible Senior Notes Due March 15, 2014	Mar. 31, 2009 4.50% Convertible Senior Notes Due March 15, 2014	Sep. 29, 2013 4.50% Convertible Senior Notes Due March 15, 2014 D	Sep. 29, 2013 4.50% Convertible Senior Notes Due March 15, 2014	Nov. 08, 2013 4.50% Convertible Senior Notes Due March 15, 2014 Subsequent Event
Debt Instrument
Borrowings from local bank	$ 10,000,000
Term of loan, years	5
Debt instrument, interest rate, stated percentage	0.80%											4.50%
Loan collateralized by real estate mortgage	6,000,000
Unsecured loan	4,000,000
Semiannual principal payments of loan		1,000,000		1,000,000
Outstanding loan principal amount			2,000,000
Aggregate principal amount			189,998,000		190,000,000							190,000,000
Senior notes maturity date												March 15, 2014
Initial conversion rate in number of shares															182.65
Additional aggregate principal amount															1,000
Initial debt conversion price			$ 5.48			$ 7.67	$ 7.67	$ 7.67	$ 7.67	$ 7.67			$ 5.48
Debt conversion premium percentage													25.00%
Last reported sale price per share of debt													$ 4.38
Initial conversion rate			The Notes may be converted, at the option of the holder, under certain circumstances and during certain periods, at an initial conversion rate of approximately 182.65 shares of Teradyne's common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $5.48, a 25% conversion premium based on the last reported sale price of $4.38 per share of Teradyne's common stock on March 31, 2009.
Threshold trading days														20
Threshold consecutive trading days														30 days
Threshold percentage of stock price trigger														130.00%
Stock price trigger																$ 2,000
Antidilution adjustments, shares			34,703,196			34,700,000	34,700,000	34,700,000	34,700,000
Convertible note hedges			64,600,000
Strike price per share of warrant	$ 7.67
Percentage of warrant price in excess of closing price of common stock	75.00%
Proceeds from warrants	43,000,000
Warrants conversion premium percentage	75.00%
Unamortized discount			8,448,000		20,104,000						8,400,000
Amortization period of unamortized discount, months			6 months
Carrying amount of equity component			63,400,000
Debt instrument conversion price			$ 5.48
If-converted value of notes			$ 579,900,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Accounts receivable, less allowance for doubtful accounts	$ 3,562	$ 4,118
Common stock, par value	$ 0.125	$ 0.125
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares issued	191,399	187,908
Common stock, shares outstanding	191,399	187,908

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Stock-Based Compensation

9 Months Ended

Sep. 29, 2013

Stock-Based Compensation

H. Stock-Based Compensation

Restricted stock unit awards granted to employees vest in equal installments over four years. A portion of restricted stock unit awards granted to executive officers is subject to time-based vesting and a portion is subject to performance-based vesting. The percentage level of performance satisfied for performance-based grants is assessed on or near the anniversary of the grant date and, in turn, that percentage level determines the number of performance-based restricted stock units available for vesting over the vesting period; portions of the performance-based grants not available for vesting will be forfeited. Stock options vest in equal installments over four years, and have a term of seven years from the date of grant.

During the nine months ended September 29, 2013, Teradyne granted 1.9 million of restricted stock unit awards to employees at a weighted average grant date fair value of $16.60 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.09.

During the nine months ended September 30, 2012, Teradyne granted 1.7 million of restricted stock unit awards to employees at a weighted average grant date fair value of $16.73 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.85.

The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended
	September 29, 2013			September 30, 2012
Expected life (years)		4.0			3.5
Interest rate		0.6	%		0.4	%
Volatility-historical		46.8	%		56.0	%
Dividend yield		0.0	%		0.0	%

Teradyne determined the stock options’ expected life based upon historical exercise data for executive officers, the age of the executive officers and the terms of the stock option grant. Volatility was determined using historical volatility for a period equal to the expected life. The risk-free rate was determined using the U.S. Treasury yield curve in effect at the time of grant.

Effective January 1, 2013, the price paid by employees for Teradyne’s common stock purchased through the employee stock purchase plan is equal to 85% of the stock price on the last business day of the purchase period.

During 2012, the price paid by employees for Teradyne’s common stock purchased through the employee stock purchase plan was equal to 85% of the lower of the stock price on the first or last business day of the purchase period.

The weighted-average fair value of employee stock purchase rights granted in the nine months ended September 30, 2012 was $3.75. The fair value of the employees’ purchase rights granted in the nine months ended September 30, 2012 was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended September 30, 2012
Expected life (years)		0.5
Interest rate		0.11	%
Volatility-historical		42.7	%
Dividend yield		0.0	%

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Net income	$ 69,459	$ 88,641	$ 142,604	$ 233,592
Other comprehensive income:
Net unrealized gains (losses) on marketable securities arising during period	887	1,259	(1,019)	2,455
Less: Reclassification adjustment for net gains included in net income	(202)	(93)	(621)	(583)
Net change	685	1,166	(1,640)	1,872
Defined benefit pension and post-retirement plans:
Amortization of prior service net benefit included in net periodic pension cost and post-retirement benefit	(109)	(92)	(325)	(275)
Other comprehensive income (loss)	576	1,074	(1,965)	1,597
Comprehensive income	$ 70,035	$ 89,715	$ 140,639	$ 235,189

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Schedule of Estimated Intangible Asset Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013
Finite-Lived Intangible Assets
2013 (remainder)	$ 18,052
2014	69,213
2015	52,462
2016	52,462
2017	$ 46,304

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013		Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 572,868		$ 338,920
Marketable securities	384,334		431,516
Accounts receivable, less allowance for doubtful accounts of $3,562 and $4,118 at September 29, 2013 and December 31, 2012, respectively	209,386		153,423
Inventories:
Parts	70,620		89,598
Assemblies in process	25,923		32,303
Finished goods	26,489		17,509
Inventory, Net, Total	123,032		139,410
Deferred tax assets	83,780		77,305
Prepayments	109,107		90,931
Other current assets	11,873		4,556
Total current assets	1,494,380		1,236,061
Net property, plant and equipment	275,421		265,782
Long-term marketable securities	202,087		235,872
Other assets	19,763		20,209
Retirement plans assets	5,020		3,282
Intangible assets, net	265,705		318,867
Goodwill	349,272		349,272
Total assets	2,611,648		2,429,345
Current liabilities:
Accounts payable	67,734		58,324
Accrued employees' compensation and withholdings	78,616		86,264
Deferred revenue and customer advances	70,367		81,357
Other accrued liabilities	62,184		57,249
Accrued income taxes	25,249		12,306
Current debt	183,573		2,328
Total current liabilities	487,723		297,828
Long-term deferred revenue and customer advances	17,455		16,227
Retirement plans liabilities	95,982		94,373
Deferred tax liabilities	37,632		50,201
Long-term other accrued liabilities	21,355		21,302
Long-term debt			171,059
Total liabilities	660,147		650,990
Commitments and contingencies (Note N)
SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 191,399 shares and 187,908 shares issued and outstanding at September 29, 2013 and December 31, 2012, respectively	23,925		23,488
Additional paid-in capital	1,379,832		1,347,762
Accumulated other comprehensive income	3,855	[1]	5,820	[1]
Retained earnings	543,889		401,285
Total shareholders' equity	1,951,501		1,778,355
Total liabilities and shareholders' equity	$ 2,611,648		$ 2,429,345

[1] Net of tax of $835 for unrealized gains on marketable securities and $(125) for retirement plans prior service credit.

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Black Scholes Option Pricing Model (Detail) (Stock Options)	9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Expected life (years)	4 years	3 years 6 months
Interest rate	0.60%	0.40%
Volatility-historical	46.80%	56.00%
Dividend yield	0.00%	0.00%

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Product Warranty (Tables)

9 Months Ended

Sep. 29, 2013

Other Accrued Liabilities

The warranty balance below is included in other accrued liabilities.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	7,351		$	11,047		$	9,786		$	8,154
Accruals for warranties issued during the period		3,674			4,118			8,781			13,543
Adjustments related to pre-existing warranties		(524	)		1,226			(2,323	)		1,369
Settlements made during the period		(2,470	)		(3,813	)		(8,213	)		(10,488	)
Balance at end of period	$	8,031		$	12,578		$	8,031		$	12,578

Extended Product Warranty of Short and Long-Term Deferred Revenue and Customer Advances

The extended warranty balance below is included in short and long-term deferred revenue and customer advances.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	34,854		$	20,754		$	26,987		$	12,742
Deferral of new extended warranty revenue		5,586			8,733			17,791			21,015
Recognition of extended warranty deferred revenue		(4,120	)		(2,007	)		(8,458	)		(6,277	)
Balance at end of period	$	36,320		$	27,480		$	36,320		$	27,480

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Stock Repurchase Program

9 Months Ended

Sep. 29, 2013

Stock Repurchase Program

Q. Stock Repurchase Program

In November 2010, Teradyne’s board of directors authorized a stock repurchase program for up to $200 million. In the three and nine months ended September 29, 2013 and September 30, 2012, Teradyne did not repurchase any shares. Cumulatively, as of September 29, 2013, Teradyne has repurchased 2.6 million shares of common stock for $31.2 million at an average price of $11.84.

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Schedule of Effect of Derivative Instruments in Statement of Operations Recognized (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012	Dec. 31, 2012
Fair Value, Option, Quantitative Disclosures
Derivatives asset not designated as hedging instruments	$ 276		$ 276		$ 121
Foreign exchange contracts derivatives not designated as hedging instruments, Gains (Losses) Recognized in Statement of Operations	1	(1,197)	4,068	(677)
Interest Expense and Other
Fair Value, Option, Quantitative Disclosures
Foreign exchange contracts derivatives not designated as hedging instruments, Gains (Losses) Recognized in Statement of Operations	1	(1,197)	4,068	(677)
Not Designated as Hedging Instrument | Foreign Exchange Contract | Other current assets
Fair Value, Option, Quantitative Disclosures
Derivatives asset not designated as hedging instruments	$ 276		$ 276		$ 121

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Changes in Accumulated Other Comprehensive Income Balances (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Other Comprehensive Income (Loss) [Line Items]
Unrealized gains on marketable securities, tax	$ 835	$ 835
Retirement plans prior service benefit, tax	$ (125)	$ (125)

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Retirement Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Employee	Sep. 29, 2013 United States Pension Plans of US Entity, Defined Benefit	Sep. 29, 2013 Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans		$ 1.3	$ 1.3
Number of former employees elected to receive lump-sum payment	2,000
Lump sum payment made for former employees	$ 52.0

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Schedule of Reported Financial Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	$ 1,159,565	$ 1,006,429
Liabilities		388
Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	572,868	338,920
Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	384,334	431,516
Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	202,087	235,872
Other current assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	276	121
Other Accrued Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities		388
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	789,720	644,226
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	565,642	322,393
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	185,085	239,192
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	38,993	82,641
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	369,845	362,203
Significant Other Observable Inputs (Level 2) | Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	7,226	16,527
Significant Other Observable Inputs (Level 2) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	199,249	192,324
Significant Other Observable Inputs (Level 2) | Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	163,094	153,231
Significant Other Observable Inputs (Level 2) | Other current assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	276	121
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities		388
Significant Unobservable Inputs (Level 3) | Other Accrued Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities		$ 388

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Retirement Plans (Tables)

9 Months Ended

Sep. 29, 2013

Defined Benefit Pension Plans

Net Periodic Pension (Benefit) Cost

Net periodic pension cost was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29,  2013			September 30,  2012			September 29,  2013			September 30,  2012
	(in thousands)
Service cost	$	871		$	685		$	2,557		$	2,054
Interest cost		3,350			4,111			10,001			12,333
Expected return on plan assets		(3,664	)		(4,090	)		(10,925	)		(12,269	)
Amortization of unrecognized prior service cost		41			58			123			174
Actuarial loss (gain)		—			1,937			(1,122	)		5,083
Total net periodic pension cost	$	598		$	2,701		$	634		$	7,375

Post-Retirement Benefit Plans

Net Periodic Pension (Benefit) Cost

Net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Service cost	$	19		$	17		$	56		$	50
Interest cost		86			109			257			328
Amortization of unrecognized prior service benefit		(150	)		(150	)		(449	)		(449	)
Actuarial gain		—			—			(236	)		(92	)
Total net periodic post-retirement benefit	$	(45	)	$	(24	)	$	(372	)	$	(163	)

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Segment Information (Tables)

9 Months Ended

Sep. 29, 2013

Segment Information

Segment information is as follows:

	Semiconductor Test		Wireless Test		System Test			Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended September 29, 2013:
Net revenues	$	304,131	$	93,132	$	36,113		$	—		$	433,376
Income (loss) before income taxes(1)(2)		68,932		27,575		(2,462	)		(6,493	)		87,552
Three months ended September 30, 2012:
Net revenues	$	310,979	$	118,571	$	33,844		$	—		$	463,394
Income (loss) before income taxes(1)(2)		55,348		58,902		(2,642	)		(8,583	)		103,025
Nine months ended September 29, 2013:
Net revenues	$	808,068	$	226,116	$	108,448		$	—		$	1,142,632
Income (loss) before income taxes(1)(2)		141,304		41,491		(153	)		(16,159	)		166,483
Nine months ended September 30, 2012:
Net revenues	$	943,625	$	261,827	$	202,894		$	—		$	1,408,346
Income (loss) before income taxes(1)(2)		181,594		97,729		30,964			(14,026	)		296,261

(1) Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

Semiconductor Test

Schedule of Segment Reporting Information by Segment Charges

Included in the Semiconductor Test segment are charges for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013		September 30,  2012			September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	1,378	$	3,085		$	1,878	$	9,254
Restructuring and other		282		(4	)		416		315
Total	$	1,660	$	3,081		$	2,294	$	9,569

Wireless Test

Schedule of Segment Reporting Information by Segment Charges

Included in the Wireless Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	2,059	$	2,018	$	6,125	$	4,134
Cost of revenues—inventory step-up		—		—		—		6,089
Restructuring and other		—		236		82		236
Total	$	2,059	$	2,254	$	6,207	$	10,459

System Test

Schedule of Segment Reporting Information by Segment Charges

Included in the System Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	404	$	378	$	1,613	$	3,020
Restructuring and other		1,055		451		1,430		451
Total	$	1,459	$	829	$	3,043	$	3,471

Corporate And Eliminations

Schedule of Segment Reporting Information by Segment Charges

Included in Corporate and Eliminations are credits for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013			September 30,  2012		September 29,  2013			September 30,  2012
	(in thousands)
Restructuring and other	$	(448	)	$	—	$	(448	)	$	(8,406	)
Total	$	(448	)	$	—	$	(448	)	$	(8,406	)

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Product Warranty

9 Months Ended

Sep. 29, 2013

Product Warranty

G. Product Warranty

Teradyne generally provides a one-year warranty on its products commencing upon installation or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The warranty balance below is included in other accrued liabilities.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	7,351		$	11,047		$	9,786		$	8,154
Accruals for warranties issued during the period		3,674			4,118			8,781			13,543
Adjustments related to pre-existing warranties		(524	)		1,226			(2,323	)		1,369
Settlements made during the period		(2,470	)		(3,813	)		(8,213	)		(10,488	)
Balance at end of period	$	8,031		$	12,578		$	8,031		$	12,578

When Teradyne receives revenue for extended warranty beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The extended warranty balance below is included in short and long-term deferred revenue and customer advances.

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Balance at beginning of period	$	34,854		$	20,754		$	26,987		$	12,742
Deferral of new extended warranty revenue		5,586			8,733			17,791			21,015
Recognition of extended warranty deferred revenue		(4,120	)		(2,007	)		(8,458	)		(6,277	)
Balance at end of period	$	36,320		$	27,480		$	36,320		$	27,480

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Restructuring and Other - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 29, 2013 Employee	Sep. 30, 2012 Employee
Restructuring Cost and Reserve
Severance benefit and charges	$ 1.3	$ 0.7
Reduction in employees head count	40	9
Change in estimated exit costs related to leased facility	(0.4)
Accrual for severance and benefits	0.5
Business acquisition, contingent consideration	8.4
System Test
Restructuring Cost and Reserve
Severance benefit and charges	1.0	0.5
Reduction in employees head count		7
Wireless Test
Restructuring Cost and Reserve
Severance benefit and charges		0.2
Reduction in employees head count		2
Semiconductor Test
Restructuring Cost and Reserve
Severance benefit and charges	$ 0.3

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 29, 2013

Stock Option

Schedule of Estimated Fair Value of Stock Options Assumptions

The fair value of stock options was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended
	September 29, 2013			September 30, 2012
Expected life (years)		4.0			3.5
Interest rate		0.6	%		0.4	%
Volatility-historical		46.8	%		56.0	%
Dividend yield		0.0	%		0.0	%

Stock Purchase Rights

Schedule of Estimated Fair Value of Stock Options Assumptions

The fair value of the employees’ purchase rights granted in the nine months ended September 30, 2012 was estimated using the Black-Scholes option-pricing model with the following assumptions:

	For the Nine Months Ended September 30, 2012
Expected life (years)		0.5
Interest rate		0.11	%
Volatility-historical		42.7	%
Dividend yield		0.0	%

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Schedule of Reported Available for Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 29, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 584,299	$ 663,625
Available-for-sale marketable securities, Unrealized Gain	3,514	3,862
Available-for-sale marketable securities, Unrealized (Loss)	(1,392)	(99)
Available-for-sale marketable securities, Fair Market Value	586,421	667,388
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	150,973	59,100
Marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	384,180	431,324
Available-for-sale marketable securities, Unrealized Gain	168	203
Available-for-sale marketable securities, Unrealized (Loss)	(14)	(11)
Available-for-sale marketable securities, Fair Market Value	384,334	431,516
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	37,823	41,110
Long-term marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	200,119	232,301
Available-for-sale marketable securities, Unrealized Gain	3,346	3,659
Available-for-sale marketable securities, Unrealized (Loss)	(1,378)	(88)
Available-for-sale marketable securities, Fair Market Value	202,087	235,872
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	$ 113,150	$ 17,990

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Intangible Assets

9 Months Ended

Sep. 29, 2013

Intangible Assets

J. Intangible Assets

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

	September 29, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	358,555	$	180,960	$	177,595		6.3 years
Customer relationships and service and software maintenance contracts		144,971		77,139		67,832		8.0 years
Trade names and trademarks		33,840		13,562		20,278		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	538,366	$	272,661	$	265,705		7.0 years

	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	357,555	$	143,126	$	214,429		6.3 years
Customer relationships and service and software maintenance contracts		144,971		63,464		81,507		8.0 years
Trade names and trademarks		33,840		10,909		22,931		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	537,366	$	218,499	$	318,867		7.0 years

Aggregate intangible asset amortization expense was $18.1 million and $54.2 million, respectively, for the three and nine months ended September 29, 2013 and $18.4 million and $55.3 million, respectively, for the three and nine months ended September 30, 2012. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2013 (remainder)	$	18,052
2014		69,213
2015		52,462
2016		52,462
2017		46,304

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Deferred Revenue and Customer Advances

9 Months Ended

Sep. 29, 2013

Deferred Revenue and Customer Advances

F. Deferred Revenue and Customer Advances

Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances.

	September 29, 2013		December 31, 2012
	(in thousands)
Maintenance, training and extended warranty	$	56,481	$	51,198
Customer advances		22,287		39,613
Undelivered elements		9,054		6,773
Total deferred revenue and customer advances	$	87,822	$	97,584

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The Company

9 Months Ended

Sep. 29, 2013

The Company

A. The Company

Teradyne, Inc. (the “Company” or “Teradyne”) is a leading global supplier of automatic test equipment. Teradyne’s automatic test equipment products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• wireless test (“Wireless Test”) systems; and

• military/aerospace (“Mil/Aero”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Commercial Board Test”) systems, collectively these products represent “System Test”.

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Schedule of Estimated Fair Value of Stock Options Assumptions (Detail) (Stock Purchase Rights)	9 Months Ended
	Sep. 30, 2012
Stock Purchase Rights
Share-based Compensation Arrangement by Share-based Payment Award
Expected life (years)	6 months
Interest rate	0.11%
Volatility-historical	42.70%
Dividend yield	0.00%

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Interest Expense on Convertible Senior Notes (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Debt Instrument
Contractual interest expense	$ 2,114	$ 2,114	$ 6,388	$ 6,413
Amortization of the discount component and debt issue fees	4,221	3,710	12,266	10,781
Total interest expense on the convertible debt	$ 6,335	$ 5,824	$ 18,654	$ 17,194

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Net Income per Common Share (Tables)

9 Months Ended

Sep. 29, 2013

Schedule of Computation of Basic and Diluted Net Income Per Common Share

The following table sets forth the computation of basic and diluted net income per common share:

	For the Three Months Ended				For the Nine Months Ended
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	69,459	$	88,641	$	142,604	$	233,592
Weighted average common shares-basic		191,307		187,364		190,521		186,592
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		23,257		21,890		23,303		22,397
Convertible note hedge warrant shares(2)		18,678		16,765		18,742		17,474
Restricted stock units		1,102		1,423		1,000		1,413
Stock options		1,465		1,735		1,564		2,075
Employee stock purchase rights		19		33		35		52
Dilutive potential common shares		44,521		41,846		44,644		43,411
Weighted average common shares-diluted		235,828		229,210		235,165		230,003
Net income per common share-basic	$	0.36	$	0.47	$	0.75	$	1.25
Net income per common share-diluted	$	0.29	$	0.39	$	0.61	$	1.02

(1) Incremental shares from assumed conversion of the convertible notes for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the warrant, is divided by the average Teradyne stock price for the period.

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 29, 2013
Purchase Commitment, Excluding Long-term Commitment
Aggregate purchase commitments	$ 243.3
Purchase commitments less than one year	$ 231.5
Maximum
Purchase Commitment, Excluding Long-term Commitment
Purchase commitments period	1 year

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Net Income Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 29, 2013		Sep. 30, 2012		Sep. 29, 2013		Sep. 30, 2012
Net Income Loss Per Common Share
Net income for basic and diluted net income per share	$ 69,459		$ 88,641		$ 142,604		$ 233,592
Weighted average common shares-basic	191,307		187,364		190,521		186,592
Incremental shares from assumed conversion of convertible notes	23,257	[1]	21,890	[1]	23,303	[1]	22,397	[1]
Convertible note hedge warrant shares	18,678	[2]	16,765	[2]	18,742	[2]	17,474	[2]
Restricted stock units	1,102		1,423		1,000		1,413
Stock options	1,465		1,735		1,564		2,075
Employee stock purchase rights	19		33		35		52
Dilutive potential common shares	44,521		41,846		44,644		43,411
Weighted average common shares-diluted	235,828		229,210		235,165		230,003
Net income per common share-basic	$ 0.36		$ 0.47		$ 0.75		$ 1.25
Net income per common share-diluted	$ 0.29		$ 0.39		$ 0.61		$ 1.02

[1] Incremental shares from assumed conversion of the convertible notes for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, is divided by the average Teradyne stock price for the period.

[2] Convertible note hedge warrant shares for the three and nine months ended September 29, 2013 and September 30, 2012 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by the 34.7 million shares that would be issued upon conversion. The result of this calculation, representing the total intrinsic value of the warrant, is divided by the average Teradyne stock price for the period.

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Retirement Plans

9 Months Ended

Sep. 29, 2013

Retirement Plans

M. Retirement Plans

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of these plans consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”), as well as unfunded foreign plans.

Net periodic pension cost was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29,  2013			September 30,  2012			September 29,  2013			September 30,  2012
	(in thousands)
Service cost	$	871		$	685		$	2,557		$	2,054
Interest cost		3,350			4,111			10,001			12,333
Expected return on plan assets		(3,664	)		(4,090	)		(10,925	)		(12,269	)
Amortization of unrecognized prior service cost		41			58			123			174
Actuarial loss (gain)		—			1,937			(1,122	)		5,083
Total net periodic pension cost	$	598		$	2,701		$	634		$	7,375

In the nine months ended September 29, 2013, Teradyne contributed $1.3 million to the U.S. supplemental executive defined benefit pension plan and $1.3 million to certain qualified plans for non-U.S. subsidiaries.

During the three months ended September 30, 2012, Teradyne offered to certain former U.S. employees the option to receive their vested pension benefit as a one-time lump sum payment. Approximately 2,000 former employees selected to receive a one-time lump sum payment. Total one-time lump sum payments were approximately $52.0 million.

Postretirement Benefit Plan

In addition to receiving pension benefits, U.S. Teradyne employees who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes death, and medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees.

Net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 29, 2013			September 30, 2012			September 29, 2013			September 30, 2012
	(in thousands)
Service cost	$	19		$	17		$	56		$	50
Interest cost		86			109			257			328
Amortization of unrecognized prior service benefit		(150	)		(150	)		(449	)		(449	)
Actuarial gain		—			—			(236	)		(92	)
Total net periodic post-retirement benefit	$	(45	)	$	(24	)	$	(372	)	$	(163	)

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 29, 2013

Accumulated Other Comprehensive Income

I. Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income, which is presented net of tax, consist of the following:

	Unrealized Gains on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2012 (a)	$	2,925		$	2,895		$	5,820
Other comprehensive income before reclassifications		(1,019	)		—			(1,019	)
Amounts reclassified from accumulated other comprehensive income		(621	)		(325	)		(946	)
Net current period other comprehensive income		(1,640	)		(325	)		(1,965	)
Balance at September 29, 2013 (a)	$	1,285		$	2,570		$	3,855

(a) Net of tax of $835 for unrealized gains on marketable securities and $(125) for retirement plans prior service credit.

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three and nine months ended September 29, 2013 and September 30, 2012, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				For the Nine Months Ended				Affected Line Item in the  Statements of Operations
	September 29, 2013		September 30, 2012		September 29, 2013		September 30, 2012
			(in thousands)
Available-for-sale marketable securities
Unrealized gains	$	202	$	93	$	621	$	583	Interest income
	$	202	$	93	$	621	$	583
Amortization of defined benefit pension and postretirement plans Prior service benefit
	$	109	$	92	$	325	$	275	(a)
	$	109	$	92	$	325	$	275
Total reclassifications	$	311	$	185	$	946	$	858	Net income

(a) The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit; see Note M “Retirement Plans.”

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Schedule of Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 29, 2013		Sep. 30, 2012		Sep. 29, 2013		Sep. 30, 2012
Segment Reporting Information [Line Items]
Net revenues	$ 433,376		$ 463,394		$ 1,142,632		$ 1,408,346
Income (loss) before income taxes	87,552	[1],[2]	103,025	[1],[2]	166,483	[1],[2]	296,261	[1],[2]
Semiconductor Test
Segment Reporting Information [Line Items]
Net revenues	304,131		310,979		808,068		943,625
Income (loss) before income taxes	68,932	[1],[2]	55,348	[1],[2]	141,304	[1],[2]	181,594	[1],[2]
Wireless Test
Segment Reporting Information [Line Items]
Net revenues	93,132		118,571		226,116		261,827
Income (loss) before income taxes	27,575	[1],[2]	58,902	[1],[2]	41,491	[1],[2]	97,729	[1],[2]
System Test
Segment Reporting Information [Line Items]
Net revenues	36,113		33,844		108,448		202,894
Income (loss) before income taxes	(2,462)	[1],[2]	(2,642)	[1],[2]	(153)	[1],[2]	30,964	[1],[2]
Corporate And Eliminations
Segment Reporting Information [Line Items]
Income (loss) before income taxes	$ (6,493)	[1],[2]	$ (8,583)	[1],[2]	$ (16,159)	[1],[2]	$ (14,026)	[1],[2]

[1] Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

[2] Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

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Segment Information

9 Months Ended

Sep. 29, 2013

Segment Information

P. Segment Information

Teradyne has three operating segments (Semiconductor Test, Wireless Test and System Test), 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 design, manufacturing and marketing of wireless test products and services. The System Test segment includes operations related to design, manufacturing and marketing of products and services for military/aerospace instrumentation test, storage test and circuit-board test. 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 are the same as those described in Note B “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012. Segment information is as follows:

	Semiconductor Test		Wireless Test		System Test			Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended September 29, 2013:
Net revenues	$	304,131	$	93,132	$	36,113		$	—		$	433,376
Income (loss) before income taxes(1)(2)		68,932		27,575		(2,462	)		(6,493	)		87,552
Three months ended September 30, 2012:
Net revenues	$	310,979	$	118,571	$	33,844		$	—		$	463,394
Income (loss) before income taxes(1)(2)		55,348		58,902		(2,642	)		(8,583	)		103,025
Nine months ended September 29, 2013:
Net revenues	$	808,068	$	226,116	$	108,448		$	—		$	1,142,632
Income (loss) before income taxes(1)(2)		141,304		41,491		(153	)		(16,159	)		166,483
Nine months ended September 30, 2012:
Net revenues	$	943,625	$	261,827	$	202,894		$	—		$	1,408,346
Income (loss) before income taxes(1)(2)		181,594		97,729		30,964			(14,026	)		296,261

(1) Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and nine months ended September 29, 2013 and September 30, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

Included in the Semiconductor Test segment are charges for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013		September 30,  2012			September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	1,378	$	3,085		$	1,878	$	9,254
Restructuring and other		282		(4	)		416		315
Total	$	1,660	$	3,081		$	2,294	$	9,569

Included in the Wireless Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	2,059	$	2,018	$	6,125	$	4,134
Cost of revenues—inventory step-up		—		—		—		6,089
Restructuring and other		—		236		82		236
Total	$	2,059	$	2,254	$	6,207	$	10,459

Included in the System Test segment are charges for the following:

	For the Three Months Ended				For the Nine Months Ended
	September 29,  2013		September 30,  2012		September 29,  2013		September 30,  2012
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	404	$	378	$	1,613	$	3,020
Restructuring and other		1,055		451		1,430		451
Total	$	1,459	$	829	$	3,043	$	3,471

Included in Corporate and Eliminations are credits for the following:

	For the Three Months Ended					For the Nine Months Ended
	September 29,  2013			September 30,  2012		September 29,  2013			September 30,  2012
	(in thousands)
Restructuring and other	$	(448	)	$	—	$	(448	)	$	(8,406	)
Total	$	(448	)	$	—	$	(448	)	$	(8,406	)

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Commitments and Contingencies

9 Months Ended

Sep. 29, 2013

Commitments and Contingencies

N. Commitments and Contingencies

Purchase Commitments

As of September 29, 2013, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments aggregate to approximately $243.3 million, of which $231.5 million is for less than one year.

Legal Claims

Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, other than set forth herein, the ultimate disposition of these matters will not have a material adverse effect on Teradyne’s results of operations, financial condition or cash flows.

On May 17, 2013, Boston Semi Equipment (“BSE”) filed a complaint against Teradyne for antitrust violations and unfair business practices alleging that Teradyne excluded BSE from competing in the market for the sale of reconfigured Teradyne equipment and the market for the repair of Teradyne equipment. BSE sought unspecified damages and an injunction. Teradyne filed a motion to dismiss the complaint. On October 18, 2013, the parties settled the litigation. The settlement included no monetary consideration. The settlement did not and will not have a material impact on Teradyne’s consolidated financial results.

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Document and Entity Information	9 Months Ended
	Sep. 29, 2013	Nov. 01, 2013
Document Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 29, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	TER
Entity Registrant Name	TERADYNE, INC
Entity Central Index Key	0000097210
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		191,611,017

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Income Taxes

9 Months Ended

Sep. 29, 2013

Income Taxes

O. Income Taxes

The effective tax rate for the three months ended September 29, 2013 and September 30, 2012 was 21% and 14%, respectively. The increase in Teradyne’s tax rate for the three months ended September 29, 2013 compared to the three months ended September 30, 2012, was primarily attributable to the reduction to deferred income tax benefit recognized discretely in 2012 in connection with Teradyne’s plan to repatriate the unremitted earnings of its Japanese subsidiary.

The effective tax rate for the nine months ended September 29, 2013 and September 30, 2012 was 14% and 21%, respectively. The decrease in Teradyne’s tax rate for the nine months ended September 29, 2013 compared to the nine months ended September 30, 2012, was primarily the result of recognizing the tax benefit attributable to the retroactive reinstatement of the U.S. research and development credit and the mix of income by jurisdiction.

The effective tax rate for the three months and nine months ended September 29, 2013 is lower than the 35% U.S. statutory federal tax rate primarily due to the research and development credit and the effect of foreign income taxed at a rate lower than the U.S. statutory rate.

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Net Income Per Common Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012
Net Income Loss Per Common Share
Exercise of stock options	0.4	0.3	0.4	0.3
Restricted stock units exercise to purchase shares		0.1		0.4

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Net Income Per Common Share (Parenthetical) (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 29, 2013	Sep. 30, 2012	Sep. 29, 2013	Sep. 30, 2012	Mar. 31, 2009
Net Income Loss Per Common Share
Initial debt conversion price	$ 5.48		$ 5.48
Shares that would be issued upon conversion			34,703,196
Convertible Notes
Net Income Loss Per Common Share
Initial debt conversion price	$ 5.48	$ 5.48	$ 5.48	$ 5.48
Shares that would be issued upon conversion	34,700,000	34,700,000	34,700,000	34,700,000
Convertible Notes Hedge Warrant
Net Income Loss Per Common Share
Initial debt conversion price	$ 7.67	$ 7.67	$ 7.67	$ 7.67	$ 7.67
Shares that would be issued upon conversion	34,700,000	34,700,000	34,700,000	34,700,000