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 March 30, 2014

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 May 2, 2014 was 194,252,893 shares.

TERADYNE, INC.

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of March 30, 2014 and December 31, 2013		1
	Condensed Consolidated Statements of Operations for the Three Months Ended March 30, 2014 and March 31, 2013		2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 30, 2014 and March 31, 2013		3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March  30, 2014 and March 31, 2013		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		30
Item 4.	Controls and Procedures		30
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		31
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		31
Item 4.	Mine Safety Disclosures		31
Item 6.	Exhibits		32

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 30,   2014		December 31,   2013
	(in thousands, except per share information)
ASSETS
Current assets:
Cash and cash equivalents	$	232,626	$	341,638
Marketable securities		462,150		586,882
Accounts receivable, less allowance for doubtful accounts of $2,454 and $2,912 at March 30, 2014 and December 31, 2013, respectively		216,524		157,642
Inventories:
Parts		77,072		84,232
Assemblies in process		15,131		15,539
Finished goods		45,231		38,168
		137,434		137,939
Deferred tax assets		68,780		72,478
Prepayments		131,484		136,374
Other current assets		12,249		7,324
Total current assets		1,261,247		1,440,277
Net property, plant and equipment		278,727		275,236
Marketable securities		272,068		271,078
Deferred tax assets		5,551		5,217
Other assets		10,574		14,591
Retirement plans assets		9,443		9,342
Intangible assets, net		234,020		252,291
Goodwill		361,819		361,792
Total assets	$	2,433,449	$	2,629,824
LIABILITIES
Current liabilities:
Accounts payable	$	70,597	$	62,874
Accrued employees’ compensation and withholdings		58,687		95,619
Deferred revenue and customer advances		64,811		55,404
Other accrued liabilities		65,561		63,712
Dividend payable		11,648		—
Accrued income taxes		1,749		11,360
Current debt		—		186,663
Total current liabilities		273,053		475,632
Long-term deferred revenue and customer advances		13,981		13,756
Retirement plans liabilities		92,530		91,517
Deferred tax liabilities		50,532		40,686
Long-term other accrued liabilities		13,523		23,139
Total liabilities		443,619		644,730
Commitments and contingencies (Note O)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 194,019 shares and 191,731 shares issued and outstanding at March 30, 2014 and December 31, 2013, respectively		24,253		23,966
Additional paid-in capital		1,405,175		1,390,896
Accumulated other comprehensive income		4,890		4,000
Retained earnings		555,512		566,232
Total shareholders’ equity		1,989,830		1,985,094
Total liabilities and shareholders’ equity	$	2,433,449	$	2,629,824

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, 2013, are an integral part of the condensed

consolidated financial statements.

1

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands, except per share amount)
Net revenues:
Products	$	255,386		$	214,300
Services		65,624			66,067
Total net revenues		321,010			280,367
Cost of revenues:
Cost of products		124,448			96,793
Cost of services		29,515			30,157
Total cost of revenues		153,963			126,950
Gross profit		167,047			153,417
Operating expenses:
Engineering and development		67,085			62,751
Selling and administrative		78,003			67,890
Acquired intangible assets amortization		18,271			18,036
Restructuring and other		—			332
Total operating expenses		163,359			149,009
Income from operations		3,688			4,408
Interest income		1,036			1,072
Interest expense and other		6,597			6,906
Loss before income taxes		(1,873	)		(1,426	)
Income tax benefit		(2,802	)		(8,015	)
Net income	$	929		$	6,589
Net income per common share:
Basic	$	0.00		$	0.03
Diluted	$	0.00		$	0.03
Weighted average common shares—basic		193,311			189,686
Weighted average common shares—diluted		236,484			234,757
Cash dividend declared per common share	$	0.06		$	—

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, 2013, 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
	March 30, 2014			March 31, 2013
	(in thousands)
Net income	$	929		$	6,589
Other comprehensive income (loss):
Available-for-sale marketable securities:
Net unrealized gains on marketable securities arising during period, net of tax of $654, $115		1,139			200
Less: Reclassification adjustment for net gains included in net income, net of tax of $(102), $(83)		(176	)		(144	)
		963			56
Defined benefit pension and post-retirement plans:
Amortization of prior service benefit included in net periodic pension and post-retirement expense/income, net of tax of $(42), $(40)		(73	)		(69	)
Other comprehensive income (loss)		890			(13	)
Comprehensive income	$	1,819		$	6,576

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, 2013, are an integral part of the condensed

consolidated financial statements.

3

TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Cash flows from operating activities:
Net income	$	929		$	6,589
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation		15,259			14,115
Amortization		23,925			23,002
Stock-based compensation		15,233			9,023
Provision for excess and obsolete inventory		10,039			3,800
Deferred taxes		12,699			(6,183	)
Other		(141	)		(987	)
Changes in operating assets and liabilities:
Accounts receivable		(58,882	)		(13,191	)
Inventories		2,635			(4,040	)
Prepayments and other assets		(628	)		(1,070	)
Accounts payable and other accrued expenses		(45,487	)		(47,404	)
Deferred revenue and customer advances		9,632			(10,000	)
Retirement plans contributions		(1,425	)		(1,063	)
Accrued income taxes		(9,609	)		(9,085	)
Net cash used for operating activities		(25,821	)		(36,494	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(31,197	)		(22,547	)
Purchases of marketable securities		(257,260	)		(124,514	)
Proceeds from maturities of marketable securities		280,322			119,552
Proceeds from sales of marketable securities		101,363			21,694
Proceeds from life insurance		4,391			—
Net cash provided by (used for) investing activities		97,619			(5,815	)
Cash flows from financing activities:
Issuance of common stock under employee stock purchase and stock option plans		10,165			8,921
Payments of long-term debt		(190,975	)		—
Payments of contingent consideration		—			(313	)
Net cash (used for) provided by financing activities		(180,810	)		8,608
Decrease in cash and cash equivalents		(109,012	)		(33,701	)
Cash and cash equivalents at beginning of period		341,638			338,920
Cash and cash equivalents at end of period	$	232,626		$	305,219

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, 2013, 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 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, 2013 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. Securities and Exchange Commission (“SEC”) on February 28, 2014, for the year ended December 31, 2013.

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

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’s implementation during the three months ended March 30, 2014 of this ASU did not have a material impact on Teradyne’s financial position or results of operations.

D. Financial Instruments and Derivatives

Cash Equivalents

Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents.

5

Financial Instruments

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. As of March 30, 2014, Teradyne’s investments in debt and equity securities were classified as available-for-sale and recorded at their fair market value.

On a quarterly basis, Teradyne reviews its investments to identify and evaluate those that have an indication of a potential other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include:

• The length of time and the extent to which the market value has been less than cost;

• The financial condition and near-term prospects of the issuer; and

• The intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the three months ended March 30, 2014. 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 carried at fair value be classified and disclosed 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, and therefore is considered a Level 2 input.

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 months ended March 30, 2014 and March 31, 2013. Realized gains recorded in the three months ended March 30, 2014 and March 31, 2013, were $0.3 million and $0.3 million, respectively. Realized gains are included in interest income.

During the three months ended March 30, 2014 and March 31, 2013, 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 March 30, 2014 and December 31, 2013.

	March 30, 2014
	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	$	131,722	$	—	$	—	$	131,722
Cash equivalents		87,894		13,010		—		100,904
Available-for-sale securities:
U.S. Treasury securities		321,296		—		—		321,296
U.S. government agency securities		—		191,863		—		191,863
Commercial paper		—		116,767		—		116,767
Corporate debt securities		—		82,787		—		82,787
Equity and debt mutual funds		14,171		—		—		14,171
Certificates of deposit and time deposits		—		7,257		—		7,257
Non-U.S. government securities		—		77		—		77
Total		555,083		411,761		—		966,844
Derivatives		—		209		—		209
Total	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	219,616	$	13,010	$	—	$	232,626
Marketable securities		214,230		247,920		—		462,150
Long-term marketable securities		121,237		150,831		—		272,068
Other current assets		—		209		—		209
	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

7

	December 31, 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	$	117,242	$	—	$	—	$	117,242
Cash equivalents		165,865		58,531		—		224,396
Available-for-sale securities:
U.S. Treasury securities		467,895		—		—		467,895
U.S. government agency securities		—		202,588		—		202,588
Commercial paper		—		105,598		—		105,598
Corporate debt securities		—		65,387		—		65,387
Equity and debt mutual funds		13,156		—		—		13,156
Certificates of deposit and time deposits		—		3,258		—		3,258
Non-U.S. government securities		—		78		—		78
Total		764,158		435,440		—		1,199,598
Derivatives		—		153		—		153
Total	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	283,107	$	58,531	$	—	$	341,638
Marketable securities		371,101		215,781		—		586,882
Long-term marketable securities		109,950		161,128		—		271,078
Other current assets		—		153		—		153
	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

Contingent consideration relates to Teradyne’s acquisition of ZTEC on October 25, 2013. The total purchase price included $2.2 million in fair value of contingent consideration payable upon achievement of certain customer order and revenue targets through 2015. The maximum amount of contingent consideration that could be paid is $5.0 million. Based on the projected results for the acquisition, no value was assigned to the revenue component of the contingent consideration.

The valuation of the customer order component of the contingent consideration utilized the following assumptions: (1) probability of meeting each benchmark; (2) expected timing of meeting each benchmark; and (3) discount rate reflecting the risk associated with the expected payments. The probabilities and timing for each benchmark were estimated based on a review of the historical and projected results. A discount rate of 5.2 percent was selected based on the cost of debt for the business, as a significant portion of the risk in achieving the

8

customer order contingent consideration was captured in the probabilities assigned to meeting each benchmark. There were no changes to the fair value of the contingent consideration during the three months ended March 30, 2014.

Changes in the fair value of Level 3 contingent consideration for the three months ended March 30, 2014 and March 31, 2013 were as follows:

	For the Three Months Ended March 30, 2014
	(in thousands)
Balance at December 31, 2013	$	2,230
Contingent consideration payments		—
Balance at March 30, 2014	$	2,230

	For the Three Months Ended March 31, 2013
	(in thousands)
Balance at December 31, 2012	$	388
Contingent consideration payments		(313	)
Balance at March 31, 2013	$	75

The carrying amounts and fair values of Teradyne’s financial instruments at March 30, 2014 and December 31, 2013 were as follows:

	March 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	232,626	$	232,626	$	341,638	$	341,638
Marketable securities		734,218		734,218		857,960		857,960
Convertible debt(1)		—		—		185,708		611,433
Japan loan		—		—		955		955

(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.

9

The following tables summarize the composition of available-for-sale marketable securities at March 30, 2014 and December 31, 2013:

	March 30, 2014
	Available-for-Sale									Fair Market Value of Investment with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	321,184	$	236	$	(124	)	$	321,296	$	23,205
U.S. government agency securities		191,856		92		(85	)		191,863		91,951
Commercial paper		116,758		13		(4	)		116,767		38,906
Corporate debt securities		81,913		1,337		(463	)		82,787		49,413
Equity and debt mutual funds		11,483		2,725		(37	)		14,171		810
Certificates of deposit and time deposits		7,257		—		—			7,257		—
Non-U.S. government securities		77		—		—			77		—
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	462,031	$	146	$	(27	)	$	462,150	$	99,303
Long-term marketable securities		268,497		4,257		(686	)		272,068		104,982
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

	December 31, 2013
	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	$	468,084	$	94	$	(283	)	$	467,895	$	108,212
U.S. government agency securities		202,573		75		(60	)		202,588		84,498
Commercial paper		105,583		16		(1	)		105,598		7,993
Corporate debt securities		65,747		762		(1,122	)		65,387		40,355
Equity and debt mutual funds		10,463		2,742		(49	)		13,156		702
Certificates of deposit and time deposits		3,258		—		—			3,258		—
Non-U.S. government securities		78		—		—			78		—
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

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Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	586,818	$	85	$	(21	)	$	586,882	$	137,670
Long-term marketable securities		268,968		3,604		(1,494	)		271,078		104,090
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

As of March 30, 2014, the fair market value of investments with unrealized losses was $204.3 million. Of this value, $0.9 million had unrealized losses greater than one year and $203.4 million had unrealized losses less than one year. As of December 31, 2013, the fair market value of investments with unrealized losses was $241.8 million. Of this value, $0.9 million had unrealized losses greater than one year and $240.9 million had unrealized losses less than one year.

The contractual maturities of investments held at March 30, 2014 were as follows:

	March 30, 2014
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	462,031	$	462,150
Due after 1 year through 5 years		226,558		226,607
Due after 5 years through 10 years		5,854		5,954
Due after 10 years		24,602		25,336
Total	$	719,045	$	720,047

Contractual maturities of investments held at March 30, 2014 exclude equity and debt mutual funds as they do not have a contractual maturity date.

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 monetary assets and liabilities. 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 value of the monetary assets and liabilities denominated in foreign currencies.

The notional amount of foreign currency forward contracts was $66.8 million and $74.8 million at March 30, 2014 and December 31, 2013, respectively.

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The fair value of the outstanding contracts was a gain of $0.2 million and $0.2 million at March 30, 2014 and December 31, 2013, respectively. The following table summarizes the fair value of derivative instruments at March 30, 2014 and December 31, 2013:

	Balance Sheet Location		March 30, 2014		December 31, 2013
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts		Other current assets	$	209	$	153
			$	209	$	153

Teradyne had no offsetting foreign exchange contracts at March 30, 2014 and December 31, 2013.

In the three months ended March 30, 2014 and March 31, 2013, Teradyne recorded net realized losses of $0.7 million and net realized gains of $2.2 million, respectively, related to foreign currency forward contracts hedging net monetary positions. Gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in interest expense and other.

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three months ended March 30, 2014 and March 31, 2013. The table does not reflect the corresponding gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three months ended March 30, 2014 and March 31, 2013, gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.6 million and $(2.8) million, respectively.

	Location of (Losses) Gains Recognized in Statement of Operations	For the Three Months Ended
		March 30, 2014			March 31, 2013
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Interest expense and other	$	(747	)	$	2,248
		$	(747	)	$	2,248

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 was denominated in Japanese Yen). The loan had a term of 5 years and a fixed interest rate of 0.8%. Approximately $6.0 million of the loan was collateralized by a real estate mortgage on Teradyne K.K.’s building and land in Kumamoto, Japan and approximately $4.0 million was unsecured. Teradyne, Inc. guaranteed payment of the loan obligation. The loan was amortized over the term of the loan with semiannual principal payments of approximately $1.0 million on September 30 and March 30 each year. The final principal and interest payments were made during the three months ended March 30, 2014.

Convertible Senior Notes

In April 2009, Teradyne issued 4.50% convertible senior notes (the “Notes”) at an aggregate principal amount of $190 million and a conversion price of $5.4750 or 182.65 shares of Teradyne’s common stock per

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$1,000 principal amount of Notes. The Notes had a maturity date of March 15, 2014. Substantially all of the Notes were converted prior to March 15, 2014 and were “net share settled,” meaning that the holders received, for each $1,000 in principal amount of Notes, $1,000 in cash and approximately 131.95 shares of Teradyne common stock (calculated by taking 182.65 shares less 50.7 shares). The 50.7 shares were determined by dividing the $1,000 principal amount by the $19.74 average trading price of Teradyne’s common stock over the 25 day trading period from February 5, 2014 to March 12, 2014.

Teradyne satisfied the Notes “net share settlement” by paying the aggregate principal amount of $190 million in cash and issuing 25.1 million shares of common stock. On March 13, 2014, Teradyne exercised its call option agreement entered into with Goldman, Sachs & Co. (the “hedge counterparty”) at the time of issuance of the Notes and received 25.1 million shares of Teradyne’s common stock, which were retired.

The hedge counterparty will subsequently be able to exercise warrants with a strike price of $7.6650. These warrants will be net share settled, with approximately 534,000 warrants settled on a daily basis over a 65-day trading period from June 17, 2014 to September 17, 2014. However, Teradyne is not obligated to issue more than 34,526,500 shares of its common stock upon exercise of the warrants (which amount represented less than 19.99% of Teradyne’s outstanding shares of common stock as of March 31, 2009, without giving effect to any shares of common stock issuable pursuant to the warrant transaction).

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

	March 30, 2014		December 31, 2013
	(in thousands)
Debt principal	$	—	$	189,998
Unamortized debt discount		—		4,290
Net carrying amount of the convertible debt	$	—	$	185,708

The interest expense on Teradyne’s convertible senior notes for the three months ended March 30, 2014 and March 31, 2013 was as follows:

	For the Three Months Ended
	March 30,  2014		March 31,  2013
	(in thousands)
Contractual interest expense	$	1,757	$	2,137
Amortization of the discount component and debt issue fees		4,493		3,957
Total interest expense on the convertible debt	$	6,250	$	6,094

F. Prepayments

Prepayments consist of the following and are included in prepayments on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Contract manufacturer prepayments	$	108,048	$	115,388
Prepaid taxes		9,979		3,281
Prepaid professional services		6,134		6,538
Other prepayments		7,323		11,167
Total prepayments	$	131,484	$	136,374

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G. 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 on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Extended warranty	$	33,949	$	34,909
Equipment maintenance and training		24,650		22,455
Customer advances		9,940		4,825
Undelivered elements		5,477		6,971
Acceptance		4,776		—
Total deferred revenue and customer advances	$	78,792	$	69,160

H. 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 on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	6,660		$	9,786
Accruals for warranties issued during the period		2,858			1,423
Adjustments related to pre-existing warranties		(140	)		(929	)
Settlements made during the period		(2,763	)		(3,205	)
Balance at end of period	$	6,615		$	7,075

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 on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	34,909		$	28,042
Deferral of new extended warranty revenue		2,361			3,505
Recognition of extended warranty deferred revenue		(3,321	)		(2,000	)
Balance at end of period	$	33,949		$	29,547

I. Stock-Based Compensation

In January 2014, Teradyne granted performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). Teradyne’s three-year TSR performance will be measured against the Philadelphia Semiconductor Index, which consists of thirty companies in the semiconductor device and capital equipment industries. The final number of TSR PRSUs that

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vest will vary based upon the level of performance achieved from 200% of the target shares to 0% of the target shares. All TSR PRSUs will vest upon the three-year anniversary of the January 24, 2014 grant date. No TSR PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period. The TSR PRSUs are valued using a Monte Carlo simulation model. The number of units expected to be earned, based upon the achievement of the TSR market condition, is factored into the grant date Monte Carlo valuation. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized regardless of the eventual number of units that are earned based upon the market condition, provided the executive officer remains an employee at the end of the three-year period. Compensation expense is reversed if the executive officer is not an employee at the end of the three-year service period. During the three months ended March 30, 2014, Teradyne granted 0.1 million TSR performance-based restricted stock unit awards with a grant date fair value of $22.06. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	For the Three Months Ended
	March 30, 2014
Risk-free interest rate		0.75	%
Teradyne volatility-historical		36.1	%
Philadelphia Semiconductor Index volatility-historical		24.6	%
Dividend yield		1.25	%

Expected volatility was based on the historical volatility of Teradyne’s stock and the Philadelphia Semiconductor Index over the most recent three year period. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.24 per share divided by Teradyne’s January 24, 2014 stock price of $19.16.

During the three months ended March 30, 2014, Teradyne granted 1.4 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $19.15 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $5.49.

During the three months ended March 31, 2013, Teradyne granted 1.6 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $16.57 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.09.

Restricted stock unit awards granted to employees vest in equal annual installments over four years. Stock options vest in equal annual installments over four years, and have a term of seven years from the date of grant.

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

	For the Three Months Ended
	March 30, 2014			March 31, 2013
Expected life (years)		4.0			4.0
Risk-free interest rate		1.2	%		0.6	%
Volatility-historical		38.8	%		46.8	%
Dividend yield		1.25	%		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 interest rate was determined using the

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U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.24 per share divided by Teradyne’s January 24, 2014 stock price of $19.16.

Effective January 31, 2014, Michael Bradley retired as Chief Executive Officer of Teradyne. Mr. Bradley will continue to serve on Teradyne’s Board of Directors. On January 22, 2014, Teradyne entered into an agreement (the “Retirement Agreement”) with Mr. Bradley. Under the Retirement Agreement, Mr. Bradley’s unvested restricted stock units and stock options granted prior to his retirement date will continue to vest in accordance with their terms through January 31, 2017; and any vested options or options that vest during that period may be exercised for the remainder of the applicable option term. In the Retirement Agreement, Mr. Bradley agreed to be bound by non-competition and non-solicitation restrictions through January 31, 2017. In the three months ended March 30, 2014, Teradyne recorded a one-time charge to stock-based compensation expense of $6.6 million related to the Retirement Agreement.

J. 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, 2013, net of tax of $794, $(284)	$	1,381		$	2,619		$	4,000
Other comprehensive income before reclassifications, net of tax of $654		1,139			—			1,139
Amounts reclassified from accumulated other comprehensive income, net of tax of $(102), $(42)		(176	)		(73	)		(249	)
Net current period other comprehensive income		963			(73	)		890
Balance at March 30, 2014, net of tax of $1,346, $(326)	$	2,344		$	2,546		$	4,890

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three months ended March 30, 2014 and March 31, 2013, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	March 30, 2014		March 31, 2013
	(in thousands)
Available-for-sale marketable securities
Unrealized gains, net of tax of $102, $83	$	176	$	144	Interest income
Amortization of defined benefit pension and postretirement plans Prior service benefit, net of tax of $42, $40		73		69	(a)
Total reclassifications, net of tax of $144, $123	$	249	$	213	Net income

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

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K. Intangible Assets

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

	March 30, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	206,551	$	155,575		6.3 years
Customer relationships		146,276		86,333		59,943		8.0 years
Trade names and trademarks		33,834		15,332		18,502		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	309,216	$	234,020		7.0 years

	December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	193,756	$	168,370		6.3 years
Customer relationships		146,276		81,742		64,534		8.0 years
Trade names and trademarks		33,834		14,447		19,387		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	290,945	$	252,291		7.0 years

Aggregate intangible asset amortization expense was $18.3 million and $18.0 million, respectively, for the three months ended March 30, 2014 and March 31, 2013. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2014 (remainder)	$	51,870
2015		53,391
2016		53,391
2017		47,232
2018		22,691

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L. 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
	March 30, 2014		March 31, 2013
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	929	$	6,589
Weighted average common shares-basic		193,311		189,686
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		20,052		23,386
Convertible note hedge warrant shares(2)		20,942		18,859
Restricted stock units		1,051		1,123
Stock options		1,106		1,676
Employee stock purchase plan		22		27
Dilutive potential common shares		43,173		45,071
Weighted average common shares-diluted		236,484		234,757
Net income per common share-basic	$	0.00	$	0.03
Net income per common share-diluted	$	0.00	$	0.03

(1) Incremental shares from conversion of the convertible notes for the three months ended March 30, 2014 were calculated using the difference between the average Teradyne stock price from January 1, 2014 through March 12, 2014 and the conversion price of $5.4750, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period from January 1, 2014 to March 12, 2014 and adjusted for the number of days the convertible notes were outstanding during the three months ended March 30, 2014. Incremental shares from assumed conversion of the convertible notes for the three months ended March 31, 2013 were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.4750, multiplied by the 34.7 million shares to be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three months ended March 30, 2014 and March 31, 2013 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.6650, multiplied by 34.7 million shares. 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 months ended March 30, 2014 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 months ended March 31, 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.

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M. Restructuring and Other

Restructuring

During the three months ended March 30, 2014, Teradyne recorded no restructuring charges. During the three months ended March 31, 2013, Teradyne recorded $0.4 million of severance charges related to headcount reductions in Semiconductor Test and System Test.

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2013 Activities
Balance at December 31, 2012	$	243		$	1,084		$	1,327
Change in estimate		—			(553	)		(553	)
Cash payments		(243	)		(531	)		(774	)
Balance at December 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(966	)		—			(966	)
Balance at December 31, 2013		371			—			371
Cash payments		(161	)		—			(161	)
Balance at March 30, 2014	$	210		$	—		$	210
Q4 2013 Activity:
Provision	$	600		$	—		$	600
Cash payments		(486	)		—			(486	)
Balance at December 31, 2013		114			—			114
Cash payments		(114	)		—			(114	)
Balance at March 30, 2014	$	—		$	—		$	—
Balance at March 30, 2014	$	210		$	—		$	210

The accrual balance for severance and benefits of $0.2 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2014.

N. Retirement Plans

ASC 715, “Compensation—Retirement Benefits” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation.

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. In

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the three months ended March 31, 2014, Teradyne contributed $0.4 million to the U.S. supplemental executive defined benefit pension plan and $0.7 million to certain qualified plans for non-U.S. subsidiaries.

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic pension cost was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	796		$	834
Interest cost		3,720			3,370
Expected return on plan assets		(3,342	)		(3,630	)
Amortization of unrecognized prior service cost		34			41
Total net periodic pension cost	$	1,208		$	615

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.

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	13		$	16
Interest cost		86			87
Amortization of unrecognized prior service benefit		(150	)		(150	)
Total net periodic postretirement benefit	$	(51	)	$	(47	)

O. Commitments and Contingencies

Purchase Commitments

As of March 30, 2014, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $246.4 million, of which $236.5 million is for less than one year.

Legal Claims

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

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P. Income Taxes

The income tax benefit of $2.8 million for the three months ended March 30, 2014, included a $1.0 million discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares and a $1.0 million discrete tax benefit related to the decrease in uncertain tax positions resulting from the change in positions and statute expiration. The income tax benefit of $8.0 million for the three months ended March 31, 2013, included an approximately $6.7 million discrete tax benefit related to the 2012 U.S. federal research and development tax credit retrospectively reinstated under the American Taxpayer Relief Act of 2012.

The decrease in Teradyne’s income tax benefit for the three months ended March 30, 2014 compared to the three months ended March 31, 2013, was primarily attributable to the reinstatement of the U.S. research and development tax credit in 2013 for fiscal years 2012 and 2013. The U.S. research and development tax credit expired at the end of 2013.

Q. 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, 2013. Segment information is as follows:

	Semiconductor Test		Wireless Test			System Test		Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended March 30, 2014:
Net revenues	$	261,737	$	21,210		$	38,063	$	—		$	321,010
Income (loss) before income taxes(1)(2)		34,600		(25,085	)		448		(11,836	)		(1,873	)
Three months ended March 31, 2013:
Net revenues	$	211,506	$	33,598		$	35,263	$	—		$	280,367
Income (loss) before income taxes(1)(2)		13,766		(9,997	)		1,530		(6,725	)		(1,426	)

(1) 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 months ended March 30, 2014 and March 31, 2013 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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	6,205	$	213

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	3,093	$	2,668

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	741	$	919
Restructuring and other		—		244
Total	$	741	$	1,163

R. Shareholders’ Equity

Stock Repurchase Program

In November 2010, Teradyne’s Board of Directors authorized a stock repurchase program for up to $200 million. In the three months ended March 30, 2014 and March 31, 2013, Teradyne did not repurchase any shares. Cumulatively, as of March 30, 2014, Teradyne has repurchased 2.6 million shares of common stock for $31.2 million at an average price of $11.84.

Dividend

In January 2014, Teradyne’s Board of Directors declared an initial quarterly cash dividend of $0.06 per share to be paid on June 2, 2014 to the stockholders of record as of May 9, 2014. Payment of future cash dividends will rest within the discretion of Teradyne’s Board of Directors and will depend, among other things, upon Teradyne’s earnings, capital requirements and financial condition.

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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, 2013. 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.

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

We will continue to invest in our business to further expand our addressable markets while tightly managing our costs.

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 because our customers often delay or accelerate purchases in reaction to changes in their businesses and to demand fluctuations in the semiconductor and electronics industries. Historically, these demand fluctuations have resulted in significant variations in our results of operations. The sharp swings in the semiconductor and electronics industries in recent years have generally affected the semiconductor and electronics test equipment and services industries more significantly than the overall capital equipment sector.

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 three months ended March 30, 2014 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, 2013.

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SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

	For the Three Months Ended
	March 30, 2014			March 31, 2013
Percentage of total net revenues:
Net revenues:
Products		80	%		76	%
Services		20			24
Total net revenues		100			100
Cost of revenues:
Cost of products		39			35
Cost of services		9			11
Total cost of revenues		48			45
Gross profit		52			55
Operating expenses:
Engineering and development		21			22
Selling and administrative		24			24
Acquired intangible assets amortization		6			6
Restructuring and other		—			—
Total operating expenses		51			53
Income from operations		1			2
Interest income		—			—
Interest expense and other		2			2
Loss before income taxes		(1	)		(1	)
Income tax benefit		(1	)		(3	)
Net income		—	%		2	%

Results of Operations

First Quarter 2014 Compared to First Quarter 2013

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
	March 30, 2014		March 31, 2013
Semiconductor Test		1.4		1.2
Wireless Test		2.7		3.3
System Test		0.7		0.9
Total Company		1.4		1.4

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Revenues

Net revenues by reportable segment were as follows:

	For the Three Months Ended				Dollar Change
	March 30, 2014		March 31, 2013
	(in millions)
Semiconductor Test	$	261.7	$	211.5	$	50.2
Wireless Test		21.2		33.6		(12.4	)
System Test		38.1		35.3		2.8
	$	321.0	$	280.4	$	40.6

The increase in Semiconductor Test revenues of $50.2 million or 24% from the three months ended March 31, 2013 to the three months ended March 30, 2014, was primarily due to higher system-on-a-chip (“SOC”) product volume. The decrease in Wireless Test revenue of $12.4 million or 37% was primarily due to lower volume. The increase in System Test revenue of $2.8 million or 8% was primarily 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
	March 30, 2014			March 31, 2013
Taiwan		27	%		15	%
United States		14			21
China		14			17
Singapore		11			8
Korea		7			8
Europe		7			8
Japan		7			6
Malaysia		5			7
Philippines		3			5
Thailand		3			4
Rest of World		2			1
		100	%		100	%

Gross Profit

Our gross profit was as follows:

	For the Three Months Ended						Dollar/Point Change
	March 30, 2014			March 31, 2013
	(in millions)
Gross Profit	$	167.0		$	153.4		$	13.6
Percent of Total Revenue		52.0	%		54.7	%		(2.7	)

Gross profit as a percent of revenue decreased by 2.7 percentage points from the three months ended March 31, 2013 to the three months ended March 30, 2014. This decrease was a result of a decrease of 2.7 points related to product mix in SOC Semiconductor Test, lower Wireless Test sales and higher Storage Test sales, a decrease of 1.7 points due to higher excess and obsolete inventory provisions, partially offset by a higher sales volume.

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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 March 30, 2014, we recorded an inventory provision of $10.0 million included in cost of revenues with $6.1 million related to product transitions in Semiconductor Test and $3.9 million due to downward revisions to previously forecasted demand levels. Of the $10.0 million of total excess and obsolete provisions, $6.2 million was related to Semiconductor Test, $3.1 million was related to Wireless Test, and $0.7 million was related to System Test.

During the three months ended March 31, 2013, we recorded an inventory provision of $3.8 million included in cost of revenues, due to downward revisions to previously forecasted demand levels. Of the $3.8 million of total excess and obsolete provisions, $2.7 million was related to Wireless Test, $0.9 million was related to System Test, and $0.2 million was related to Semiconductor Test.

During the three months ended March 30, 2014 and March 31, 2013, we scrapped $0.9 million and $0.6 million of inventory, respectively. During the three months ended March 30, 2014 and March 31, 2013, we sold $1.4 million and $1.8 million of previously written-down or written-off inventory. As of March 30, 2014, we had inventory related reserves for inventory which had been written-down or written-off totaling $124.4 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
	March 30, 2014			March 31, 2013
	(in millions)
Engineering and Development	$	67.1		$	62.8		$	4.3
Percent of Total Revenue		20.9	%		22.4	%

The increase of $4.3 million in engineering and development expenses from the three months ended March 31, 2013 to the three months ended March 30, 2014, was due primarily to increased spending in Semiconductor Test and Wireless Test.

Selling and Administrative

Selling and administrative expenses were as follows:

	For the Three Months Ended						Dollar Change
	March 30, 2014			March 31, 2013
	(in millions)
Selling and Administrative	$	78.0		$	67.9		$	10.1
Percent of Total Revenue		24.3	%		24.2	%

The increase of $10.1 million in selling and administrative expenses from the three months ended March 31, 2013 to the three months ended March 30, 2014, was primarily due to a one-time $6.6 million stock-based compensation charge related to Michael Bradley’s (retired Chief Executive Officer) Retirement Agreement and increased sales and marketing spending in Semiconductor Test and Wireless Test.

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Restructuring and Other

Restructuring

During the three months ended March 31, 2013, we recorded $0.4 million of severance charges related to headcount reductions in Semiconductor Test and System Test.

Income Taxes

The income tax benefit of $2.8 million for the three months ended March 30, 2014, included a $1.0 million discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares and a $1.0 million discrete tax benefit related to the decrease in uncertain tax positions resulting from the change in positions and statute expiration. The income tax benefit of $8.0 million for the three months ended March 31, 2013, included an approximately $6.7 million discrete tax benefit related to the 2012 U.S. federal research and development tax credit retrospectively reinstated under the American Taxpayer Relief Act.

The decrease in income tax benefit for the three months ended March 30, 2014 compared to the three months ended March 31, 2013, was primarily attributable to the reinstatement of the U.S. research and development tax credit in 2013 for fiscal years 2012 and 2013. The U.S. research and development tax credit expired at the end of 2013.

On a quarterly basis, we evaluate the realizability of our deferred tax assets by jurisdiction and assess the need for a valuation allowance. At March 30, 2014, 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 March 30, 2014:

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Other
	(in thousands)
Purchase Obligations	$	246,409	$	236,463	$	9,946	$	—	$	—	$	—
Retirement Plan Contributions		96,502		4,949		9,073		7,884		74,596		—
Operating Lease Obligations		55,935		13,186		20,254		7,731		14,764		—
Long-Term Other Liabilities Reflected on the Balance Sheet under GAAP(1)		78,036		—		13,981		—		—		64,055
Total	$	476,882	$	254,598	$	53,254	$	15,615	$	89,360	$	64,055

(1) Included in Long-Term Other Liabilities are liabilities for customer advances, extended warranty, uncertain tax positions, deferred tax liabilities 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”.

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Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities balances decreased by $232.8 million in the three months ended March 30, 2014, to $966.8 million. Cash activity for the three months ended March 30, 2014 and March 30, 2013 was as follows:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in millions)
Cash provided by operating activities:
Net income, adjusted for non-cash items	$	77.9		$	49.4
Change in operating assets and liabilities		(103.8	)		(85.9	)
Net cash used for operating activities		(25.8	)		(36.5	)
Net cash provided by (used for) investing activities		97.6			(5.8	)
Net cash (used for) provided by financing activities		(180.8	)		8.6
Decrease in cash and cash equivalents	$	(109.0	)	$	(33.7	)

In the three months ended March 30, 2014, changes in operating assets and liabilities used cash of $103.8 million. This was due to a $56.9 million increase in operating assets and a $46.9 million decrease in operating liabilities.

The increase in operating assets was due to a $58.9 million increase in accounts receivable due to higher sales and an increase in shipments later in the quarter and a $0.6 million increase in prepayments and other assets, partially offset by a $2.6 million decrease in inventories. The decrease in operating liabilities was due to a $48.0 million decrease in accrued employee compensation due primarily to variable compensation and employee stock award payroll tax payments, a $9.6 million decrease in accrued income taxes, a $4.3 million convertible interest payment, $1.4 million of retirement plan contributions, and a $0.9 million decrease in other accrued liabilities, partially offset by, a $7.7 million increase in accounts payable due to higher sales and a $9.6 million increase in customer advance payments and deferred revenue.

Investing activities during the three months ended March 30, 2014 provided cash of $97.6 million, due to proceeds from maturities and sales of marketable securities that provided cash of $280.3 million and $101.4 million, respectively, and proceeds from life insurance of $4.4 million related to the cash surrender value from the cancellation of Teradyne owed life insurance policies on its retired chief executive officer, partially offset by $257.3 million used for purchases of marketable securities and $31.2 million used for purchases of property, plant and equipment. The increase in purchases of property, plant and equipment of $8.7 million compared to the three months ended March 31, 2013 is primarily testers for customer leases.

Financing activities during the three months ended March 30, 2014 used cash of $180.8 million. $191.0 million of cash was used for payments on long-term debt related to the Convertible Notes and the Japan loan, partially offset by $10.2 million provided from the issuance of common stock under employee stock purchase and stock option plans.

In the three months ended March 31, 2013, changes in operating assets and liabilities used cash of $85.9 million. This was due to an $18.3 million increase in operating assets and a $67.6 million decrease in operating liabilities.

The increase in operating assets was due to a $13.2 million increase in accounts receivable resulting from higher sales volume, a $4.0 million increase in inventories, and a $1.1 million increase in other assets primarily due to an increase in prepayments. The decrease in operating liabilities was due to a $43.3 million decrease in

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accrued employee compensation due primarily to variable compensation and employee stock award payroll tax payments, a $10.0 million decrease in customer advance payments and deferred revenue, a $9.1 million decrease in accrued income taxes, a $4.9 million decrease in other accrued liabilities and a $1.1 million decrease of retirement plan contributions, partially offset by a $0.8 million increase in accounts payable due to increased sales volume.

Investing activities during the three months ended March 31, 2013 used cash of $5.8 million, due to $124.5 million used for purchases of marketable securities and $22.5 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities that provided cash of $119.6 million and $21.7 million, respectively.

Financing activities during the three months ended March 31, 2013 provided cash of $8.6 million, of which $8.9 million was from the issuance of common stock under employee stock purchase and stock option plans, partially offset by $0.3 million of cash used for payments related to LitePoint acquisition contingent consideration.

In January 2014, our Board of Directors declared an initial quarterly cash dividend of $0.06 per share to be paid on June 2, 2014 to the stockholders of record as of May 9, 2014. Approximately $12 million will be paid in the second quarter of 2014 for the initial quarterly cash dividend. Holders of our common stock are entitled to receive dividends if and when they are declared by our Board of Directors. Payment of future cash dividends will rest within the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition.

In 2014, we expect to deploy approximately $75 million of capital into testers for customer leases bringing our total forecasted 2014 capital additions to $145 million.

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 $340 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 O: “Stock Based Compensation” in our 2013 Form 10-K, we have a 1996 Employee Stock Purchase Plan and a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”).

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

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. Our implementation during the three months ended March 30, 2014 of this ASU did not have a material impact on our financial position or results of operations.

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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 February 28, 2014. 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, 2013.

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.

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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, the ultimate disposition of these matters will not have a material adverse effect on our results of operations, financial condition or cash flows.

Item 1A: Risk Factors

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, 2013, 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.

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 March 30, 2014, 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 March 30, 2014 (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
January 1, 2014 – January 26, 2014		—	$	—		—	$	168,825
January 27, 2014 – February 23, 2014		—	$	—		—	$	168,825
February 24, 2014 – March 30, 2014		—	$	—		—	$	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 of Principal Executive Officer 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 of Principal Financial Officer 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

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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)

May 7, 2014

33

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Mark E. Jagiela, 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: May 7, 2014

By:	/S/    MARK E. JAGIELA
	Mark E. Jagiela 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: May 7, 2014

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

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 March 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Jagiela, 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/    MARK E. JAGIELA

Mark E. Jagiela

Chief Executive Officer

May 7, 2014

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 March 30, 2014 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

May 7, 2014

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Financial Instruments and Derivatives - Additional Information (Detail) (USD $)	3 Months Ended					3 Months Ended	12 Months Ended
	Mar. 30, 2014	Mar. 31, 2013	Dec. 31, 2013	Oct. 25, 2013 ZTEC Instruments, Inc.	Oct. 25, 2013 ZTEC Instruments, Inc. Maximum	Mar. 30, 2014 Foreign Currency Forward Contracts	Dec. 31, 2013 Foreign Currency Forward Contracts
Financial Instruments and Fair Value [Line Items]
Available-for-sale securities, realized gain	$ 300,000	$ 300,000
Available-for-sale securities, realized losses	0	0
Contingent consideration				2,200,000	5,000,000
Contingent consideration discount rate	5.20%
Changes to fair value of contingent consideration	0
Fair market value of investments with unrealized losses	204,285,000		241,760,000
Fair market value of investments with unrealized losses greater than one year	900,000		900,000
Fair market value of investments with unrealized losses less than one year	203,400,000		240,900,000
Notional amount of foreign currency forward contracts						66,800,000	74,800,000
Gains (losses) on foreign currency transactions	600,000	(2,800,000)				200,000	200,000
Realized (losses) gains on foreign currency contracts	$ (700,000)	$ 2,200,000

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Extended Product Warranty Included in Short and Long-Term Deferred Revenue and Customer Advances (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Schedule of Accrued Liabilities [Line Items]
Balance at beginning of period	$ 34,909	$ 28,042
Deferral of new extended warranty revenue	2,361	3,505
Recognition of extended warranty deferred revenue	(3,321)	(2,000)
Balance at end of period	$ 33,949	$ 29,547

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Debt - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended			1 Months Ended		1 Months Ended	3 Months Ended
	Mar. 31, 2009	Mar. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Mar. 31, 2009 Maximum	Mar. 30, 2014 Maximum	Apr. 30, 2009 4.50% Convertible Senior Notes Due March 15, 2014	Mar. 30, 2014 4.50% Convertible Senior Notes Due March 15, 2014
Debt Instrument
Borrowings from local bank	$ 10,000,000
Term of loan, years	5 years
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
Aggregate principal amount				189,998,000			190,000,000
Initial debt conversion price							$ 5.4750
Conversion rate in number of shares							182.65	131.95
Additional aggregate principal amount							1,000
Senior notes maturity date							Mar. 15, 2014
Number of shares excluded for conversion rate calculation								50.7
Trading days used to determine average price per share								25 days
Average trading price of common shares								$ 19.74
Payments of long-term debt		$ 190,975,000						$ 190,000,000
Stock issued in conversion of notes								25,100,000
Stock received and retired								25,100,000
Strike price per share of warrant		$ 7.6650
Warrants settled on a daily basis		534,000
Warrant settlement period		65 days
Common stock shares issuable upon exercise of the warrants						34,526,500
Percentage of warrant price in excess of closing price of common stock					19.99%

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Retirement Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 30, 2014
U.S. Supplemental Executive Defined Benefit Pension Plan
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	$ 0.4
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	$ 0.7

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Stock Based Compensation - Additional Information (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	3 Months Ended							1 Months Ended	3 Months Ended		1 Months Ended
	Mar. 30, 2014	Mar. 31, 2013	Mar. 30, 2014 Service-Based Restricted Stock Units	Mar. 31, 2013 Service-Based Restricted Stock Units	Mar. 30, 2014 Restricted Stock Units Employees	Mar. 30, 2014 Stock Options	Jan. 24, 2014 Stock Options	Jan. 31, 2014 TSR Performance-Based Restricted Stock Units	Mar. 30, 2014 TSR Performance-Based Restricted Stock Units	Jan. 24, 2014 TSR Performance-Based Restricted Stock Units	Jan. 31, 2014 TSR Performance-Based Restricted Stock Units Maximum	Jan. 31, 2014 TSR Performance-Based Restricted Stock Units Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Total shareholder return performance measurement period								3 years
Percentage of vesting of target shares upon performance achieved											200.00%	0.00%
Restricted stock unit awards to employees			1.4	1.6					0.1
Weighted average grant date fair value of restricted stock units granted			$ 19.15	$ 16.57					$ 22.06
Estimated annual dividend amount per share						$ 0.24			$ 0.24
Stock price							$ 19.16			$ 19.16
Number of service-based stock options granted to executive officers	0.1	0.2
Weighted average grant date fair value of stock options granted to executive officers	$ 5.49	$ 6.09
Period of stock granted to employees and executive officers vest in equal installments					4 years	4 years
Stock options term	7 years
Stock based compensation expense related to retirement agreement	$ 6,600,000

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Contractual Maturities of Investments Held (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014
Schedule of Available-for-sale Securities
Due within one year, cost	$ 462,031
Due after 1 year through 5 years, cost	226,558
Due after 5 years through 10 years, cost	5,854
Due after 10 years, cost	24,602
Total, cost	719,045
Due within one year, fair value	462,150
Due after 1 year through 5 years, fair value	226,607
Due after 5 years through 10 years, fair value	5,954
Due after 10 years, fair value	25,336
Total, fair value	$ 720,047

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 30, 2014

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, 2013, net of tax of $794, $(284)	$	1,381		$	2,619		$	4,000
Other comprehensive income before reclassifications, net of tax of $654		1,139			—			1,139
Amounts reclassified from accumulated other comprehensive income, net of tax of $(102), $(42)		(176	)		(73	)		(249	)
Net current period other comprehensive income		963			(73	)		890
Balance at March 30, 2014, net of tax of $1,346, $(326)	$	2,344		$	2,546		$	4,890

Reclassification Out of Accumulated Other Comprehensive Income to Statement of Operations

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three months ended March 30, 2014 and March 31, 2013, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	March 30, 2014		March 31, 2013
	(in thousands)
Available-for-sale marketable securities
Unrealized gains, net of tax of $102, $83	$	176	$	144	Interest income
Amortization of defined benefit pension and postretirement plans Prior service benefit, net of tax of $42, $40		73		69	(a)
Total reclassifications, net of tax of $144, $123	$	249	$	213	Net income

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

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Income Taxes [Line Items]
Income tax benefit	$ (2,802,000)	$ (8,015,000)
Discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares	1,000,000
Discrete tax benefit related to decrease in uncertain tax positions	1,000,000
Discrete tax benefit related to the 2012 U.S. federal research and development tax credit		$ 6,700,000

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Schedule of Estimated Fair Value of Stock Options Assumptions (Detail) (Stock Options)	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Expected life (years)	4 years	4 years
Risk-free interest rate	1.20%	0.60%
Volatility-historical	38.80%	46.80%
Dividend yield	1.25%	0.00%

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Shareholders' Equity - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended	3 Months Ended		40 Months Ended	1 Months Ended
	Jan. 31, 2014	Mar. 30, 2014	Mar. 31, 2013	Mar. 30, 2014	Nov. 30, 2010 Maximum
Stockholders Equity Note Disclosure [Line Items]
Stock repurchase program, authorized amount					$ 200
Repurchase of stock, shares		0	0	2.6
Repurchase of stock, value				$ 31.2
Common stock average price				$ 11.84
Dividends payable, amount per share	$ 0.06
Dividends payable, date to be paid	Jun. 02, 2014
Dividends payable, record date	May 09, 2014

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Schedule of Net Periodic Pension and Postretirement Cost (Benefit) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure
Service cost	$ 796	$ 834
Interest cost	3,720	3,370
Expected return on plan assets	(3,342)	(3,630)
Amortization of unrecognized prior service benefit	34	41
Total net periodic pension/ postretirement cost (benefit)	1,208	615
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Service cost	13	16
Interest cost	86	87
Amortization of unrecognized prior service benefit	(150)	(150)
Total net periodic pension/ postretirement cost (benefit)	$ (51)	$ (47)

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Shareholders' Equity

3 Months Ended

Mar. 30, 2014

Shareholders' Equity

R. Shareholders’ Equity

Stock Repurchase Program

In November 2010, Teradyne’s Board of Directors authorized a stock repurchase program for up to $200 million. In the three months ended March 30, 2014 and March 31, 2013, Teradyne did not repurchase any shares. Cumulatively, as of March 30, 2014, Teradyne has repurchased 2.6 million shares of common stock for $31.2 million at an average price of $11.84.

Dividend

In January 2014, Teradyne’s Board of Directors declared an initial quarterly cash dividend of $0.06 per share to be paid on June 2, 2014 to the stockholders of record as of May 9, 2014. Payment of future cash dividends will rest within the discretion of Teradyne’s Board of Directors and will depend, among other things, upon Teradyne’s earnings, capital requirements and financial condition.

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Interest Expense on Convertible Senior Notes (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Debt Instrument
Contractual interest expense	$ 1,757	$ 2,137
Amortization of the discount component and debt issue fees	4,493	3,957
Total interest expense on the convertible debt	$ 6,250	$ 6,094

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Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Fair Value Measurements
Beginning Balance	$ 2,230	$ 388
Contingent consideration payments		(313)
Ending Balance	$ 2,230	$ 75

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Schedule of Segment Reporting Information by Segment Charges (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Restructuring and other		$ 332
Semiconductor Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	6,205	213
System Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	741	919
Restructuring and other		244
Total	741	1,163
Wireless Test
Segment Reporting Information [Line Items]
Cost of revenues-provision for excess and obsolete inventory	$ 3,093	$ 2,668

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Retirement Plans (Tables)

3 Months Ended

Mar. 30, 2014

Postretirement Benefit Plans

Net Periodic Pension and Postretirement Cost (Benefit)

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	13		$	16
Interest cost		86			87
Amortization of unrecognized prior service benefit		(150	)		(150	)
Total net periodic postretirement benefit	$	(51	)	$	(47	)

Defined Benefit Pension Plans

Net Periodic Pension and Postretirement Cost (Benefit)

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic pension cost was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	796		$	834
Interest cost		3,720			3,370
Expected return on plan assets		(3,342	)		(3,630	)
Amortization of unrecognized prior service cost		34			41
Total net periodic pension cost	$	1,208		$	615

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Deferred Revenue and Customer Advances (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Deferred Revenue Arrangement
Extended warranty	$ 33,949	$ 34,909	$ 29,547	$ 28,042
Equipment maintenance and training	24,650	22,455
Customer advances	9,940	4,825
Undelivered elements	5,477	6,971
Acceptance	4,776
Total deferred revenue and customer advances	$ 78,792	$ 69,160

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Net Income Per Common Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Net Income Loss Per Common Share
Exercise of stock options	0.4	0.4

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Reclassification Out of Accumulated Other Comprehensive Income to Statement of Operations (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains, tax	$ 102	$ 83
Prior service benefit, tax	42	40
Total reclassifications, tax	$ 144	$ 123

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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
	Mar. 30, 2014	Mar. 31, 2013	Dec. 31, 2013
Fair Value, Option, Quantitative Disclosures
Derivatives asset not designated as hedging instruments	$ 209		$ 153
Foreign currency forward contracts derivatives not designated as hedging instruments, (Losses) Gains Recognized in Statement of Operations	(747)	2,248
Interest Expense and Other
Fair Value, Option, Quantitative Disclosures
Foreign currency forward contracts derivatives not designated as hedging instruments, (Losses) Gains Recognized in Statement of Operations	(747)	2,248
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts | Other current assets
Fair Value, Option, Quantitative Disclosures
Derivatives asset not designated as hedging instruments	$ 209		$ 153

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Accounting Policies

3 Months Ended

Mar. 30, 2014

Accounting Policies

B. Accounting Policies

Basis of Presentation

The 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, 2013 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. Securities and Exchange Commission (“SEC”) on February 28, 2014, for the year ended December 31, 2013.

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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Schedule of Amortizable Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 543,236	$ 543,236
Accumulated Amortization	309,216	290,945
Net Carrying Amount	234,020	252,291
Weighted Average Useful Life, years	7 years	7 years
Developed technology
Finite-Lived Intangible Assets
Gross Carrying Amount	362,126	362,126
Accumulated Amortization	206,551	193,756
Net Carrying Amount	155,575	168,370
Weighted Average Useful Life, years	6 years 3 months 18 days	6 years 3 months 18 days
Customer Relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	146,276	146,276
Accumulated Amortization	86,333	81,742
Net Carrying Amount	59,943	64,534
Weighted Average Useful Life, years	8 years	8 years
Trade names and trademarks
Finite-Lived Intangible Assets
Gross Carrying Amount	33,834	33,834
Accumulated Amortization	15,332	14,447
Net Carrying Amount	18,502	19,387
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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Schedule of Carrying Amounts and Fair Values of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013		Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2009
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Carrying Value	$ 232,626	$ 341,638		$ 305,219	$ 338,920
Convertible debt, Carrying Value		185,708
Japan loan, Carrying Value						10,000
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Carrying Value	232,626	341,638
Marketable securities, Carrying Value	734,218	857,960
Convertible debt, Carrying Value		185,708	[1]
Japan loan, Carrying Value		955
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents, Fair Value	232,626	341,638
Marketable securities, Fair Value	734,218	857,960
Convertible debt, Fair Value		611,433	[1]
Japan loan, Fair Value		$ 955

[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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Prepayments (Tables)

3 Months Ended

Mar. 30, 2014

Schedule of Prepayments

Prepayments consist of the following and are included in prepayments on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Contract manufacturer prepayments	$	108,048	$	115,388
Prepaid taxes		9,979		3,281
Prepaid professional services		6,134		6,538
Other prepayments		7,323		11,167
Total prepayments	$	131,484	$	136,374

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Debt (Tables)

3 Months Ended

Mar. 30, 2014

Components of Convertible Senior Notes

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

	March 30, 2014		December 31, 2013
	(in thousands)
Debt principal	$	—	$	189,998
Unamortized debt discount		—		4,290
Net carrying amount of the convertible debt	$	—	$	185,708

Interest Expense on Convertible Senior Notes

The interest expense on Teradyne’s convertible senior notes for the three months ended March 30, 2014 and March 31, 2013 was as follows:

	For the Three Months Ended
	March 30,  2014		March 31,  2013
	(in thousands)
Contractual interest expense	$	1,757	$	2,137
Amortization of the discount component and debt issue fees		4,493		3,957
Total interest expense on the convertible debt	$	6,250	$	6,094

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Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions (Detail) (TSR Performance-Based Restricted Stock Units)	3 Months Ended
	Mar. 30, 2014
TSR Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Risk-free interest rate	0.75%
Teradyne volatility-historical	36.10%
Philadelphia Semiconductor Index volatility-historical	24.60%
Dividend yield	1.25%

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Schedule of Available for Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 730,528	$ 855,786
Available-for-sale marketable securities, Unrealized Gain	4,403	3,689
Available-for-sale marketable securities, Unrealized (Loss)	(713)	(1,515)
Available-for-sale marketable securities, Fair Market Value	734,218	857,960
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	204,285	241,760
U.S. Government Agency Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	191,856	202,573
Available-for-sale marketable securities, Unrealized Gain	92	75
Available-for-sale marketable securities, Unrealized (Loss)	(85)	(60)
Available-for-sale marketable securities, Fair Market Value	191,863	202,588
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	91,951	84,498
U.S. Treasury Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	321,184	468,084
Available-for-sale marketable securities, Unrealized Gain	236	94
Available-for-sale marketable securities, Unrealized (Loss)	(124)	(283)
Available-for-sale marketable securities, Fair Market Value	321,296	467,895
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	23,205	108,212
Commercial Paper
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	116,758	105,583
Available-for-sale marketable securities, Unrealized Gain	13	16
Available-for-sale marketable securities, Unrealized (Loss)	(4)	(1)
Available-for-sale marketable securities, Fair Market Value	116,767	105,598
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	38,906	7,993
Corporate Debt Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	81,913	65,747
Available-for-sale marketable securities, Unrealized Gain	1,337	762
Available-for-sale marketable securities, Unrealized (Loss)	(463)	(1,122)
Available-for-sale marketable securities, Fair Market Value	82,787	65,387
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	49,413	40,355
Equity And Debt Mutual Funds
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	11,483	10,463
Available-for-sale marketable securities, Unrealized Gain	2,725	2,742
Available-for-sale marketable securities, Unrealized (Loss)	(37)	(49)
Available-for-sale marketable securities, Fair Market Value	14,171	13,156
Available-for-sale marketable securities, Fair Market Value of Investment with Unrealized Losses	810	702
Certificates of Deposit and Time Deposits
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	7,257	3,258
Available-for-sale marketable securities, Fair Market Value	7,257	3,258
Non-U.S. Government Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	77	78
Available-for-sale marketable securities, Fair Market Value	$ 77	$ 78

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Deferred Revenue and Customer Advances (Tables)

3 Months Ended

Mar. 30, 2014

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 on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Extended warranty	$	33,949	$	34,909
Equipment maintenance and training		24,650		22,455
Customer advances		9,940		4,825
Undelivered elements		5,477		6,971
Acceptance		4,776		—
Total deferred revenue and customer advances	$	78,792	$	69,160

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Product Warranty (Tables)

3 Months Ended

Mar. 30, 2014

Other Accrued Liabilities

The warranty balance below is included in other accrued liabilities on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	6,660		$	9,786
Accruals for warranties issued during the period		2,858			1,423
Adjustments related to pre-existing warranties		(140	)		(929	)
Settlements made during the period		(2,763	)		(3,205	)
Balance at end of period	$	6,615		$	7,075

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 on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	34,909		$	28,042
Deferral of new extended warranty revenue		2,361			3,505
Recognition of extended warranty deferred revenue		(3,321	)		(2,000	)
Balance at end of period	$	33,949		$	29,547

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The Company

3 Months Ended

Mar. 30, 2014

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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Stock-Based Compensation (Tables)

3 Months Ended

May 05, 2014

Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions

The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	For the Three Months Ended
	March 30, 2014
Risk-free interest rate		0.75	%
Teradyne volatility-historical		36.1	%
Philadelphia Semiconductor Index volatility-historical		24.6	%
Dividend yield		1.25	%

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 Three Months Ended
	March 30, 2014			March 31, 2013
Expected life (years)		4.0			4.0
Risk-free interest rate		1.2	%		0.6	%
Volatility-historical		38.8	%		46.8	%
Dividend yield		1.25	%		0.0	%

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Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	$ 734,218	$ 857,960
Derivatives	209	153
U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	321,296	467,895
U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	191,863	202,588
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	116,767	105,598
Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	82,787	65,387
Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	14,171	13,156
Certificates of Deposit and Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	7,257	3,258
Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	77	78
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivatives	209	153
Total including derivatives	967,053	1,199,751
Contingent consideration	2,230	2,230
Liabilities	2,230	2,230
Fair Value, Measurements, Recurring | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	131,722	117,242
Fair Value, Measurements, Recurring | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	100,904	224,396
Fair Value, Measurements, Recurring | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	321,296	467,895
Fair Value, Measurements, Recurring | U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	191,863	202,588
Fair Value, Measurements, Recurring | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	116,767	105,598
Fair Value, Measurements, Recurring | Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	82,787	65,387
Fair Value, Measurements, Recurring | Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	14,171	13,156
Fair Value, Measurements, Recurring | Certificates of Deposit and Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	7,257	3,258
Fair Value, Measurements, Recurring | Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	77	78
Fair Value, Measurements, Recurring | Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	966,844	1,199,598
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total including derivatives	555,083	764,158
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	131,722	117,242
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	87,894	165,865
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	321,296	467,895
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	14,171	13,156
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Fair Value, Measurements, Recurring | Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	555,083	764,158
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivatives	209	153
Total including derivatives	411,970	435,593
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and Cash equivalents	13,010	58,531
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	191,863	202,588
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	116,767	105,598
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	82,787	65,387
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Certificates of Deposit and Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	7,257	3,258
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	77	78
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Subtotal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	411,761	435,440
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration	2,230	2,230
Liabilities	$ 2,230	$ 2,230

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Warranty Accrual Included in Other Accrued Liabilities (Detail) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Schedule of Accrued Liabilities [Line Items]
Balance at beginning of period	$ 6,660	$ 9,786
Accruals for warranties issued during the period	2,858	1,423
Adjustments related to pre-existing warranties	(140)	(929)
Settlements made during the period	(2,763)	(3,205)
Balance at end of period	$ 6,615	$ 7,075

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 30, 2014
Purchase Commitment, Excluding Long-term Commitment
Aggregate purchase commitments	$ 246.4
Purchase commitments less than one year	$ 236.5
Maximum
Purchase Commitment, Excluding Long-term Commitment
Purchase commitments period	1 year

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 232,626	$ 341,638
Marketable securities	462,150	586,882
Accounts receivable, less allowance for doubtful accounts of $2,454 and $2,912 at March 30, 2014 and December 31, 2013, respectively	216,524	157,642
Inventories:
Parts	77,072	84,232
Assemblies in process	15,131	15,539
Finished goods	45,231	38,168
Inventory, Net, Total	137,434	137,939
Deferred tax assets	68,780	72,478
Prepayments	131,484	136,374
Other current assets	12,249	7,324
Total current assets	1,261,247	1,440,277
Net property, plant and equipment	278,727	275,236
Marketable securities	272,068	271,078
Deferred tax assets	5,551	5,217
Other assets	10,574	14,591
Retirement plans assets	9,443	9,342
Intangible assets, net	234,020	252,291
Goodwill	361,819	361,792
Total assets	2,433,449	2,629,824
Current liabilities:
Accounts payable	70,597	62,874
Accrued employees' compensation and withholdings	58,687	95,619
Deferred revenue and customer advances	64,811	55,404
Other accrued liabilities	65,561	63,712
Dividend payable	11,648
Accrued income taxes	1,749	11,360
Current debt		186,663
Total current liabilities	273,053	475,632
Long-term deferred revenue and customer advances	13,981	13,756
Retirement plans liabilities	92,530	91,517
Deferred tax liabilities	50,532	40,686
Long-term other accrued liabilities	13,523	23,139
Total liabilities	443,619	644,730
Commitments and contingencies (Note O)
SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 194,019 shares and 191,731 shares issued and outstanding at March 30, 2014 and December 31, 2013, respectively	24,253	23,966
Additional paid-in capital	1,405,175	1,390,896
Accumulated other comprehensive income	4,890	4,000
Retained earnings	555,512	566,232
Total shareholders' equity	1,989,830	1,985,094
Total liabilities and shareholders' equity	$ 2,433,449	$ 2,629,824

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Schedule of Reported Available for Sale Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 730,528	$ 855,786
Available-for-sale marketable securities, Unrealized Gain	4,403	3,689
Available-for-sale marketable securities, Unrealized (Loss)	(713)	(1,515)
Available-for-sale marketable securities, Fair Market Value	734,218	857,960
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	204,285	241,760
Marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	462,031	586,818
Available-for-sale marketable securities, Unrealized Gain	146	85
Available-for-sale marketable securities, Unrealized (Loss)	(27)	(21)
Available-for-sale marketable securities, Fair Market Value	462,150	586,882
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	99,303	137,670
Long-term marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	268,497	268,968
Available-for-sale marketable securities, Unrealized Gain	4,257	3,604
Available-for-sale marketable securities, Unrealized (Loss)	(686)	(1,494)
Available-for-sale marketable securities, Fair Market Value	272,068	271,078
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	$ 104,982	$ 104,090

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Net unrealized gains on marketable securities arising during period, tax	$ 654	$ 115
Reclassification adjustment for net gains included in net income, tax	(102)	(83)
Amortization of prior service benefit, tax	$ (42)	$ (40)

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Changes in Accumulated Other Comprehensive Income Balances (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	$ 654	$ 115
Amounts reclassified from accumulated other comprehensive income, tax	(102)	(83)
Amounts reclassified from accumulated other comprehensive income, tax	(42)	(40)
Unrealized gains on marketable securities, tax	1,346		794
Retirement plans prior service benefit, tax	(326)		(284)
Unrealized Gains on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	654
Amounts reclassified from accumulated other comprehensive income, tax	(102)
Retirement Plans Prior Service Benefit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive income, tax	$ (42)

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Net Income per Common Share (Tables)

3 Months Ended

Mar. 30, 2014

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
	March 30, 2014		March 31, 2013
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	929	$	6,589
Weighted average common shares-basic		193,311		189,686
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		20,052		23,386
Convertible note hedge warrant shares(2)		20,942		18,859
Restricted stock units		1,051		1,123
Stock options		1,106		1,676
Employee stock purchase plan		22		27
Dilutive potential common shares		43,173		45,071
Weighted average common shares-diluted		236,484		234,757
Net income per common share-basic	$	0.00	$	0.03
Net income per common share-diluted	$	0.00	$	0.03

(1) Incremental shares from conversion of the convertible notes for the three months ended March 30, 2014 were calculated using the difference between the average Teradyne stock price from January 1, 2014 through March 12, 2014 and the conversion price of $5.4750, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period from January 1, 2014 to March 12, 2014 and adjusted for the number of days the convertible notes were outstanding during the three months ended March 30, 2014. Incremental shares from assumed conversion of the convertible notes for the three months ended March 31, 2013 were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.4750, multiplied by the 34.7 million shares to be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three months ended March 30, 2014 and March 31, 2013 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.6650, multiplied by 34.7 million shares. 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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Computation of Basic and Diluted Net Income Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 30, 2014		Mar. 31, 2013
Net Income Loss Per Common Share
Net income for basic and diluted net income per share	$ 929		$ 6,589
Weighted average common shares-basic	193,311		189,686
Incremental shares from assumed conversion of convertible notes	20,052	[1]	23,386	[1]
Convertible note hedge warrant shares	20,942	[2]	18,859	[2]
Employee stock purchase plan	22		27
Dilutive potential common shares	43,173		45,071
Weighted average common shares-diluted	236,484		234,757
Net income per common share-basic	$ 0.00		$ 0.03
Net income per common share-diluted	$ 0.00		$ 0.03
Restricted Stock Units
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements	1,051		1,123
Stock Option
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements	1,106		1,676

[1] Incremental shares from conversion of the convertible notes for the three months ended March 30, 2014 were calculated using the difference between the average Teradyne stock price from January 1, 2014 through March 12, 2014 and the conversion price of $5.4750, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period from January 1, 2014 to March 12, 2014 and adjusted for the number of days the convertible notes were outstanding during the three months ended March 30, 2014. Incremental shares from assumed conversion of the convertible notes for the three months ended March 31, 2013 were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.4750, multiplied by the 34.7 million shares to be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

[2] Convertible note hedge warrant shares for the three months ended March 30, 2014 and March 31, 2013 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.6650, multiplied by 34.7 million shares. 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

3 Months Ended

Mar. 30, 2014

Commitments and Contingencies

O. Commitments and Contingencies

Purchase Commitments

As of March 30, 2014, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $246.4 million, of which $236.5 million is for less than one year.

Legal Claims

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

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Restructuring and Other (Tables)

3 Months Ended

Mar. 30, 2014

Restructuring and Other

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2013 Activities
Balance at December 31, 2012	$	243		$	1,084		$	1,327
Change in estimate		—			(553	)		(553	)
Cash payments		(243	)		(531	)		(774	)
Balance at December 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(966	)		—			(966	)
Balance at December 31, 2013		371			—			371
Cash payments		(161	)		—			(161	)
Balance at March 30, 2014	$	210		$	—		$	210
Q4 2013 Activity:
Provision	$	600		$	—		$	600
Cash payments		(486	)		—			(486	)
Balance at December 31, 2013		114			—			114
Cash payments		(114	)		—			(114	)
Balance at March 30, 2014	$	—		$	—		$	—
Balance at March 30, 2014	$	210		$	—		$	210

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Segment Information

3 Months Ended

Mar. 30, 2014

Segment Information

Q. 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, 2013. Segment information is as follows:

	Semiconductor Test		Wireless Test			System Test		Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended March 30, 2014:
Net revenues	$	261,737	$	21,210		$	38,063	$	—		$	321,010
Income (loss) before income taxes(1)(2)		34,600		(25,085	)		448		(11,836	)		(1,873	)
Three months ended March 31, 2013:
Net revenues	$	211,506	$	33,598		$	35,263	$	—		$	280,367
Income (loss) before income taxes(1)(2)		13,766		(9,997	)		1,530		(6,725	)		(1,426	)

(1) 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 months ended March 30, 2014 and March 31, 2013 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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	6,205	$	213

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	3,093	$	2,668

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

	For the Three Months Ended
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	741	$	919
Restructuring and other		—		244
Total	$	741	$	1,163

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Restructuring and Other - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013 System Test and Semiconductor Test
Restructuring Cost and Reserve
Restructuring charges	$ 0
Severance benefit and charges		400,000
Accrual balance for severance and benefits	$ 210,000

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 929	$ 6,589
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation	15,259	14,115
Amortization	23,925	23,002
Stock-based compensation	15,233	9,023
Provision for excess and obsolete inventory	10,039	3,800
Deferred taxes	12,699	(6,183)
Other	(141)	(987)
Changes in operating assets and liabilities:
Accounts receivable	(58,882)	(13,191)
Inventories	2,635	(4,040)
Prepayments and other assets	(628)	(1,070)
Accounts payable and other accrued expenses	(45,487)	(47,404)
Deferred revenue and customer advances	9,632	(10,000)
Retirement plans contributions	(1,425)	(1,063)
Accrued income taxes	(9,609)	(9,085)
Net cash used for operating activities	(25,821)	(36,494)
Cash flows from investing activities:
Purchases of property, plant and equipment	(31,197)	(22,547)
Purchases of marketable securities	(257,260)	(124,514)
Proceeds from maturities of marketable securities	280,322	119,552
Proceeds from sales of marketable securities	101,363	21,694
Proceeds from life insurance	4,391
Net cash provided by (used for) investing activities	97,619	(5,815)
Cash flows from financing activities:
Issuance of common stock under employee stock purchase and stock option plans	10,165	8,921
Payments of long-term debt	(190,975)
Payments of contingent consideration		(313)
Net cash (used for) provided by financing activities	(180,810)	8,608
Decrease in cash and cash equivalents	(109,012)	(33,701)
Cash and cash equivalents at beginning of period	341,638	338,920
Cash and cash equivalents at end of period	$ 232,626	$ 305,219

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Accounts receivable, less allowance for doubtful accounts	$ 2,454	$ 2,912
Common stock, par value	$ 0.125	$ 0.125
Common stock, shares authorized	1,000,000	1,000,000
Common stock, shares issued	194,019	191,731
Common stock, shares outstanding	194,019	191,731

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 30, 2014

Accumulated Other Comprehensive Income

J. 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, 2013, net of tax of $794, $(284)	$	1,381		$	2,619		$	4,000
Other comprehensive income before reclassifications, net of tax of $654		1,139			—			1,139
Amounts reclassified from accumulated other comprehensive income, net of tax of $(102), $(42)		(176	)		(73	)		(249	)
Net current period other comprehensive income		963			(73	)		890
Balance at March 30, 2014, net of tax of $1,346, $(326)	$	2,344		$	2,546		$	4,890

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three months ended March 30, 2014 and March 31, 2013, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	March 30, 2014		March 31, 2013
	(in thousands)
Available-for-sale marketable securities
Unrealized gains, net of tax of $102, $83	$	176	$	144	Interest income
Amortization of defined benefit pension and postretirement plans Prior service benefit, net of tax of $42, $40		73		69	(a)
Total reclassifications, net of tax of $144, $123	$	249	$	213	Net income

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

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Document and Entity Information	3 Months Ended
	Mar. 30, 2014	May 02, 2014
Document Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
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		194,252,893

XML

Intangible Assets

3 Months Ended

Mar. 30, 2014

Intangible Assets

K. Intangible Assets

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

	March 30, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	206,551	$	155,575		6.3 years
Customer relationships		146,276		86,333		59,943		8.0 years
Trade names and trademarks		33,834		15,332		18,502		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	309,216	$	234,020		7.0 years

	December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	193,756	$	168,370		6.3 years
Customer relationships		146,276		81,742		64,534		8.0 years
Trade names and trademarks		33,834		14,447		19,387		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	290,945	$	252,291		7.0 years

Aggregate intangible asset amortization expense was $18.3 million and $18.0 million, respectively, for the three months ended March 30, 2014 and March 31, 2013. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2014 (remainder)	$	51,870
2015		53,391
2016		53,391
2017		47,232
2018		22,691

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 30, 2014		Mar. 31, 2013
Net revenues:
Products	$ 255,386		$ 214,300
Services	65,624		66,067
Total net revenues	321,010		280,367
Cost of revenues:
Cost of products	124,448		96,793
Cost of services	29,515		30,157
Total cost of revenues	153,963		126,950
Gross profit	167,047		153,417
Operating expenses:
Engineering and development	67,085		62,751
Selling and administrative	78,003		67,890
Acquired intangible assets amortization	18,271		18,036
Restructuring and other			332
Total operating expenses	163,359		149,009
Income from operations	3,688		4,408
Interest income	1,036		1,072
Interest expense and other	6,597		6,906
Loss before income taxes	(1,873)	[1],[2]	(1,426)	[1],[2]
Income tax benefit	(2,802)		(8,015)
Net income	$ 929		$ 6,589
Net income per common share:
Basic	$ 0.00		$ 0.03
Diluted	$ 0.00		$ 0.03
Weighted average common shares-basic	193,311		189,686
Weighted average common shares-diluted	236,484		234,757
Cash dividend declared per common share	$ 0.06

[1] 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 months ended March 30, 2014 and March 31, 2013 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

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Debt

3 Months Ended

Mar. 30, 2014

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 was denominated in Japanese Yen). The loan had a term of 5 years and a fixed interest rate of 0.8%. Approximately $6.0 million of the loan was collateralized by a real estate mortgage on Teradyne K.K.’s building and land in Kumamoto, Japan and approximately $4.0 million was unsecured. Teradyne, Inc. guaranteed payment of the loan obligation. The loan was amortized over the term of the loan with semiannual principal payments of approximately $1.0 million on September 30 and March 30 each year. The final principal and interest payments were made during the three months ended March 30, 2014.

Convertible Senior Notes

In April 2009, Teradyne issued 4.50% convertible senior notes (the “Notes”) at an aggregate principal amount of $190 million and a conversion price of $5.4750 or 182.65 shares of Teradyne’s common stock per $1,000 principal amount of Notes. The Notes had a maturity date of March 15, 2014. Substantially all of the Notes were converted prior to March 15, 2014 and were “net share settled,” meaning that the holders received, for each $1,000 in principal amount of Notes, $1,000 in cash and approximately 131.95 shares of Teradyne common stock (calculated by taking 182.65 shares less 50.7 shares). The 50.7 shares were determined by dividing the $1,000 principal amount by the $19.74 average trading price of Teradyne’s common stock over the 25 day trading period from February 5, 2014 to March 12, 2014.

Teradyne satisfied the Notes “net share settlement” by paying the aggregate principal amount of $190 million in cash and issuing 25.1 million shares of common stock. On March 13, 2014, Teradyne exercised its call option agreement entered into with Goldman, Sachs & Co. (the “hedge counterparty”) at the time of issuance of the Notes and received 25.1 million shares of Teradyne’s common stock, which were retired.

The hedge counterparty will subsequently be able to exercise warrants with a strike price of $7.6650. These warrants will be net share settled, with approximately 534,000 warrants settled on a daily basis over a 65-day trading period from June 17, 2014 to September 17, 2014. However, Teradyne is not obligated to issue more than 34,526,500 shares of its common stock upon exercise of the warrants (which amount represented less than 19.99% of Teradyne’s outstanding shares of common stock as of March 31, 2009, without giving effect to any shares of common stock issuable pursuant to the warrant transaction).

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

	March 30, 2014		December 31, 2013
	(in thousands)
Debt principal	$	—	$	189,998
Unamortized debt discount		—		4,290
Net carrying amount of the convertible debt	$	—	$	185,708

The interest expense on Teradyne’s convertible senior notes for the three months ended March 30, 2014 and March 31, 2013 was as follows:

	For the Three Months Ended
	March 30,  2014		March 31,  2013
	(in thousands)
Contractual interest expense	$	1,757	$	2,137
Amortization of the discount component and debt issue fees		4,493		3,957
Total interest expense on the convertible debt	$	6,250	$	6,094

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Financial Instruments and Derivatives

3 Months Ended

Mar. 30, 2014

Financial Instruments and Derivatives

D. Financial Instruments and Derivatives

Cash Equivalents

Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents.

Financial Instruments

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. As of March 30, 2014, Teradyne’s investments in debt and equity securities were classified as available-for-sale and recorded at their fair market value.

On a quarterly basis, Teradyne reviews its investments to identify and evaluate those that have an indication of a potential other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include:

• The length of time and the extent to which the market value has been less than cost;

• The financial condition and near-term prospects of the issuer; and

• The intent and ability to retain the investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the three months ended March 30, 2014. 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 carried at fair value be classified and disclosed 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, and therefore is considered a Level 2 input.

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 months ended March 30, 2014 and March 31, 2013. Realized gains recorded in the three months ended March 30, 2014 and March 31, 2013, were $0.3 million and $0.3 million, respectively. Realized gains are included in interest income.

During the three months ended March 30, 2014 and March 31, 2013, 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 March 30, 2014 and December 31, 2013.

	March 30, 2014
	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	$	131,722	$	—	$	—	$	131,722
Cash equivalents		87,894		13,010		—		100,904
Available-for-sale securities:
U.S. Treasury securities		321,296		—		—		321,296
U.S. government agency securities		—		191,863		—		191,863
Commercial paper		—		116,767		—		116,767
Corporate debt securities		—		82,787		—		82,787
Equity and debt mutual funds		14,171		—		—		14,171
Certificates of deposit and time deposits		—		7,257		—		7,257
Non-U.S. government securities		—		77		—		77
Total		555,083		411,761		—		966,844
Derivatives		—		209		—		209
Total	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	219,616	$	13,010	$	—	$	232,626
Marketable securities		214,230		247,920		—		462,150
Long-term marketable securities		121,237		150,831		—		272,068
Other current assets		—		209		—		209
	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

	December 31, 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	$	117,242	$	—	$	—	$	117,242
Cash equivalents		165,865		58,531		—		224,396
Available-for-sale securities:
U.S. Treasury securities		467,895		—		—		467,895
U.S. government agency securities		—		202,588		—		202,588
Commercial paper		—		105,598		—		105,598
Corporate debt securities		—		65,387		—		65,387
Equity and debt mutual funds		13,156		—		—		13,156
Certificates of deposit and time deposits		—		3,258		—		3,258
Non-U.S. government securities		—		78		—		78
Total		764,158		435,440		—		1,199,598
Derivatives		—		153		—		153
Total	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	283,107	$	58,531	$	—	$	341,638
Marketable securities		371,101		215,781		—		586,882
Long-term marketable securities		109,950		161,128		—		271,078
Other current assets		—		153		—		153
	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

Contingent consideration relates to Teradyne’s acquisition of ZTEC on October 25, 2013. The total purchase price included $2.2 million in fair value of contingent consideration payable upon achievement of certain customer order and revenue targets through 2015. The maximum amount of contingent consideration that could be paid is $5.0 million. Based on the projected results for the acquisition, no value was assigned to the revenue component of the contingent consideration.

The valuation of the customer order component of the contingent consideration utilized the following assumptions: (1) probability of meeting each benchmark; (2) expected timing of meeting each benchmark; and (3) discount rate reflecting the risk associated with the expected payments. The probabilities and timing for each benchmark were estimated based on a review of the historical and projected results. A discount rate of 5.2 percent was selected based on the cost of debt for the business, as a significant portion of the risk in achieving the customer order contingent consideration was captured in the probabilities assigned to meeting each benchmark. There were no changes to the fair value of the contingent consideration during the three months ended March 30, 2014.

Changes in the fair value of Level 3 contingent consideration for the three months ended March 30, 2014 and March 31, 2013 were as follows:

	For the Three Months Ended March 30, 2014
	(in thousands)
Balance at December 31, 2013	$	2,230
Contingent consideration payments		—
Balance at March 30, 2014	$	2,230

	For the Three Months Ended March 31, 2013
	(in thousands)
Balance at December 31, 2012	$	388
Contingent consideration payments		(313	)
Balance at March 31, 2013	$	75

The carrying amounts and fair values of Teradyne’s financial instruments at March 30, 2014 and December 31, 2013 were as follows:

	March 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	232,626	$	232,626	$	341,638	$	341,638
Marketable securities		734,218		734,218		857,960		857,960
Convertible debt(1)		—		—		185,708		611,433
Japan loan		—		—		955		955

(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 March 30, 2014 and December 31, 2013:

	March 30, 2014
	Available-for-Sale									Fair Market Value of Investment with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	321,184	$	236	$	(124	)	$	321,296	$	23,205
U.S. government agency securities		191,856		92		(85	)		191,863		91,951
Commercial paper		116,758		13		(4	)		116,767		38,906
Corporate debt securities		81,913		1,337		(463	)		82,787		49,413
Equity and debt mutual funds		11,483		2,725		(37	)		14,171		810
Certificates of deposit and time deposits		7,257		—		—			7,257		—
Non-U.S. government securities		77		—		—			77		—
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	462,031	$	146	$	(27	)	$	462,150	$	99,303
Long-term marketable securities		268,497		4,257		(686	)		272,068		104,982
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

	December 31, 2013
	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	$	468,084	$	94	$	(283	)	$	467,895	$	108,212
U.S. government agency securities		202,573		75		(60	)		202,588		84,498
Commercial paper		105,583		16		(1	)		105,598		7,993
Corporate debt securities		65,747		762		(1,122	)		65,387		40,355
Equity and debt mutual funds		10,463		2,742		(49	)		13,156		702
Certificates of deposit and time deposits		3,258		—		—			3,258		—
Non-U.S. government securities		78		—		—			78		—
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	586,818	$	85	$	(21	)	$	586,882	$	137,670
Long-term marketable securities		268,968		3,604		(1,494	)		271,078		104,090
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

As of March 30, 2014, the fair market value of investments with unrealized losses was $204.3 million. Of this value, $0.9 million had unrealized losses greater than one year and $203.4 million had unrealized losses less than one year. As of December 31, 2013, the fair market value of investments with unrealized losses was $241.8 million. Of this value, $0.9 million had unrealized losses greater than one year and $240.9 million had unrealized losses less than one year.

The contractual maturities of investments held at March 30, 2014 were as follows:

	March 30, 2014
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	462,031	$	462,150
Due after 1 year through 5 years		226,558		226,607
Due after 5 years through 10 years		5,854		5,954
Due after 10 years		24,602		25,336
Total	$	719,045	$	720,047

Contractual maturities of investments held at March 30, 2014 exclude equity and debt mutual funds as they do not have a contractual maturity date.

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 monetary assets and liabilities. 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 value of the monetary assets and liabilities denominated in foreign currencies.

The notional amount of foreign currency forward contracts was $66.8 million and $74.8 million at March 30, 2014 and December 31, 2013, respectively.

The fair value of the outstanding contracts was a gain of $0.2 million and $0.2 million at March 30, 2014 and December 31, 2013, respectively. The following table summarizes the fair value of derivative instruments at March 30, 2014 and December 31, 2013:

	Balance Sheet Location		March 30, 2014		December 31, 2013
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts		Other current assets	$	209	$	153
			$	209	$	153

Teradyne had no offsetting foreign exchange contracts at March 30, 2014 and December 31, 2013.

In the three months ended March 30, 2014 and March 31, 2013, Teradyne recorded net realized losses of $0.7 million and net realized gains of $2.2 million, respectively, related to foreign currency forward contracts hedging net monetary positions. Gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in interest expense and other.

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three months ended March 30, 2014 and March 31, 2013. The table does not reflect the corresponding gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three months ended March 30, 2014 and March 31, 2013, gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.6 million and $(2.8) million, respectively.

	Location of (Losses) Gains Recognized in Statement of Operations	For the Three Months Ended
		March 30, 2014			March 31, 2013
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Interest expense and other	$	(747	)	$	2,248
		$	(747	)	$	2,248

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

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Income Taxes

3 Months Ended

Mar. 30, 2014

Income Taxes

P. Income Taxes

The income tax benefit of $2.8 million for the three months ended March 30, 2014, included a $1.0 million discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares and a $1.0 million discrete tax benefit related to the decrease in uncertain tax positions resulting from the change in positions and statute expiration. The income tax benefit of $8.0 million for the three months ended March 31, 2013, included an approximately $6.7 million discrete tax benefit related to the 2012 U.S. federal research and development tax credit retrospectively reinstated under the American Taxpayer Relief Act of 2012.

The decrease in Teradyne’s income tax benefit for the three months ended March 30, 2014 compared to the three months ended March 31, 2013, was primarily attributable to the reinstatement of the U.S. research and development tax credit in 2013 for fiscal years 2012 and 2013. The U.S. research and development tax credit expired at the end of 2013.

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Net Income per Common Share

3 Months Ended

Mar. 30, 2014

Net Income per Common Share

L. 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
	March 30, 2014		March 31, 2013
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	929	$	6,589
Weighted average common shares-basic		193,311		189,686
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes(1)		20,052		23,386
Convertible note hedge warrant shares(2)		20,942		18,859
Restricted stock units		1,051		1,123
Stock options		1,106		1,676
Employee stock purchase plan		22		27
Dilutive potential common shares		43,173		45,071
Weighted average common shares-diluted		236,484		234,757
Net income per common share-basic	$	0.00	$	0.03
Net income per common share-diluted	$	0.00	$	0.03

(1) Incremental shares from conversion of the convertible notes for the three months ended March 30, 2014 were calculated using the difference between the average Teradyne stock price from January 1, 2014 through March 12, 2014 and the conversion price of $5.4750, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period from January 1, 2014 to March 12, 2014 and adjusted for the number of days the convertible notes were outstanding during the three months ended March 30, 2014. Incremental shares from assumed conversion of the convertible notes for the three months ended March 31, 2013 were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.4750, multiplied by the 34.7 million shares to be issued upon conversion. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible note hedge warrant shares for the three months ended March 30, 2014 and March 31, 2013 are calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.6650, multiplied by 34.7 million shares. 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 months ended March 30, 2014 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 months ended March 31, 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.

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Product Warranty

3 Months Ended

Mar. 30, 2014

Product Warranty

H. 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 on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	6,660		$	9,786
Accruals for warranties issued during the period		2,858			1,423
Adjustments related to pre-existing warranties		(140	)		(929	)
Settlements made during the period		(2,763	)		(3,205	)
Balance at end of period	$	6,615		$	7,075

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 on the balance sheet.

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Balance at beginning of period	$	34,909		$	28,042
Deferral of new extended warranty revenue		2,361			3,505
Recognition of extended warranty deferred revenue		(3,321	)		(2,000	)
Balance at end of period	$	33,949		$	29,547

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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
	Mar. 30, 2014		Mar. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains	$ 176		$ 144
Prior service benefit	73	[1]	69	[1]
Total reclassifications	$ 249		$ 213

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

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Prepayments

3 Months Ended

Mar. 30, 2014

Prepayments

F. Prepayments

Prepayments consist of the following and are included in prepayments on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Contract manufacturer prepayments	$	108,048	$	115,388
Prepaid taxes		9,979		3,281
Prepaid professional services		6,134		6,538
Other prepayments		7,323		11,167
Total prepayments	$	131,484	$	136,374

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Deferred Revenue and Customer Advances

3 Months Ended

Mar. 30, 2014

Deferred Revenue and Customer Advances

G. 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 on the balance sheet:

	March 30, 2014		December 31, 2013
	(in thousands)
Extended warranty	$	33,949	$	34,909
Equipment maintenance and training		24,650		22,455
Customer advances		9,940		4,825
Undelivered elements		5,477		6,971
Acceptance		4,776		—
Total deferred revenue and customer advances	$	78,792	$	69,160

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Stock-Based Compensation

3 Months Ended

May 05, 2014

Stock-Based Compensation

I. Stock-Based Compensation

In January 2014, Teradyne granted performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). Teradyne’s three-year TSR performance will be measured against the Philadelphia Semiconductor Index, which consists of thirty companies in the semiconductor device and capital equipment industries. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 200% of the target shares to 0% of the target shares. All TSR PRSUs will vest upon the three-year anniversary of the January 24, 2014 grant date. No TSR PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period. The TSR PRSUs are valued using a Monte Carlo simulation model. The number of units expected to be earned, based upon the achievement of the TSR market condition, is factored into the grant date Monte Carlo valuation. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized regardless of the eventual number of units that are earned based upon the market condition, provided the executive officer remains an employee at the end of the three-year period. Compensation expense is reversed if the executive officer is not an employee at the end of the three-year service period. During the three months ended March 30, 2014, Teradyne granted 0.1 million TSR performance-based restricted stock unit awards with a grant date fair value of $22.06. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	For the Three Months Ended
	March 30, 2014
Risk-free interest rate		0.75	%
Teradyne volatility-historical		36.1	%
Philadelphia Semiconductor Index volatility-historical		24.6	%
Dividend yield		1.25	%

Expected volatility was based on the historical volatility of Teradyne’s stock and the Philadelphia Semiconductor Index over the most recent three year period. The risk-free interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.24 per share divided by Teradyne’s January 24, 2014 stock price of $19.16.

During the three months ended March 30, 2014, Teradyne granted 1.4 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $19.15 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $5.49.

During the three months ended March 31, 2013, Teradyne granted 1.6 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $16.57 and 0.2 million of service-based stock options to executive officers at a weighted average grant date fair value of $6.09.

Restricted stock unit awards granted to employees vest in equal annual installments over four years. Stock options vest in equal annual installments over four years, and have a term of seven years from the date of grant.

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

	For the Three Months Ended
	March 30, 2014			March 31, 2013
Expected life (years)		4.0			4.0
Risk-free interest rate		1.2	%		0.6	%
Volatility-historical		38.8	%		46.8	%
Dividend yield		1.25	%		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 interest rate was determined using the U.S. Treasury yield curve in effect at the time of grant. Dividend yield was based upon an estimated annual dividend amount of $0.24 per share divided by Teradyne’s January 24, 2014 stock price of $19.16.

Effective January 31, 2014, Michael Bradley retired as Chief Executive Officer of Teradyne. Mr. Bradley will continue to serve on Teradyne’s Board of Directors. On January 22, 2014, Teradyne entered into an agreement (the “Retirement Agreement”) with Mr. Bradley. Under the Retirement Agreement, Mr. Bradley’s unvested restricted stock units and stock options granted prior to his retirement date will continue to vest in accordance with their terms through January 31, 2017; and any vested options or options that vest during that period may be exercised for the remainder of the applicable option term. In the Retirement Agreement, Mr. Bradley agreed to be bound by non-competition and non-solicitation restrictions through January 31, 2017. In the three months ended March 30, 2014, Teradyne recorded a one-time charge to stock-based compensation expense of $6.6 million related to the Retirement Agreement.

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Schedule of Estimated Intangible Asset Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014
Finite-Lived Intangible Assets
2014 (remainder)	$ 51,870
2015	53,391
2016	53,391
2017	47,232
2018	$ 22,691

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Computation of Basic and Diluted Net Income Per Common Share (Parenthetical) (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Convertible Notes
Net Income Loss Per Common Share
Initial debt conversion price	$ 5.4750	$ 5.4750
Shares that would be issued upon conversion	34.7	34.7
Convertible Notes Hedge Warrant
Net Income Loss Per Common Share
Initial debt conversion price	$ 7.6650	$ 7.6650
Shares that would be issued upon conversion	34.7	34.7

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Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Goodwill and Intangible Assets Disclosure [Line Items]
Aggregate intangible asset amortization expense	$ 18,271	$ 18,036

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Intangible Assets (Tables)

3 Months Ended

Mar. 30, 2014

Schedule of Amortizable Intangible Assets

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

	March 30, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	206,551	$	155,575		6.3 years
Customer relationships		146,276		86,333		59,943		8.0 years
Trade names and trademarks		33,834		15,332		18,502		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	309,216	$	234,020		7.0 years

	December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	362,126	$	193,756	$	168,370		6.3 years
Customer relationships		146,276		81,742		64,534		8.0 years
Trade names and trademarks		33,834		14,447		19,387		9.0 years
Customer backlog		1,000		1,000		—		0.4 years
Total intangible assets	$	543,236	$	290,945	$	252,291		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)
2014 (remainder)	$	51,870
2015		53,391
2016		53,391
2017		47,232
2018		22,691

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Schedule of Prepayments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Prepaid Expenses [Line Items]
Contract manufacturer prepayments	$ 108,048	$ 115,388
Prepaid taxes	9,979	3,281
Prepaid professional services	6,134	6,538
Other prepayments	7,323	11,167
Prepayments	$ 131,484	$ 136,374

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Retirement Plans

3 Months Ended

Mar. 30, 2014

Retirement Plans

N. Retirement Plans

ASC 715, “Compensation—Retirement Benefits” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation.

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. In the three months ended March 31, 2014, Teradyne contributed $0.4 million to the U.S. supplemental executive defined benefit pension plan and $0.7 million to certain qualified plans for non-U.S. subsidiaries.

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic pension cost was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	796		$	834
Interest cost		3,720			3,370
Expected return on plan assets		(3,342	)		(3,630	)
Amortization of unrecognized prior service cost		34			41
Total net periodic pension cost	$	1,208		$	615

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.

For the three months ended March 30, 2014 and March 31, 2013, Teradyne’s net periodic postretirement benefit was comprised of the following:

	For the Three Months Ended
	March 30, 2014			March 31, 2013
	(in thousands)
Service cost	$	13		$	16
Interest cost		86			87
Amortization of unrecognized prior service benefit		(150	)		(150	)
Total net periodic postretirement benefit	$	(51	)	$	(47	)

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Accounting Policies (Policies)

3 Months Ended

Mar. 30, 2014

Basis of Presentation

Basis of Presentation

The 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, 2013 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. Securities and Exchange Commission (“SEC”) on February 28, 2014, for the year ended December 31, 2013.

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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Components of Convertible Senior Notes (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Debt Instrument
Debt principal		$ 189,998
Unamortized debt discount		4,290
Net carrying amount of the convertible debt		$ 185,708

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Schedule of Reported Financial Assets and Liabilities (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Mar. 30, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	$ 967,053	$ 1,199,751
Liabilities	2,230	2,230
Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	232,626	341,638
Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	462,150	586,882
Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	272,068	271,078
Other current assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	209	153
Long-term other accrued liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	2,230	2,230
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	555,083	764,158
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	219,616	283,107
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	214,230	371,101
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	121,237	109,950
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	411,970	435,593
Significant Other Observable Inputs (Level 2) | Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	13,010	58,531
Significant Other Observable Inputs (Level 2) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	247,920	215,781
Significant Other Observable Inputs (Level 2) | Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	150,831	161,128
Significant Other Observable Inputs (Level 2) | Other current assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	209	153
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	2,230	2,230
Significant Unobservable Inputs (Level 3) | Long-term other accrued liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	$ 2,230	$ 2,230

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014		Mar. 31, 2013
Net income	$ 929		$ 6,589
Other comprehensive income (loss):
Net unrealized gains on marketable securities arising during period, net of tax of $654, $115	1,139		200
Less: Reclassification adjustment for net gains included in net income, net of tax of $(102), $(83)	(176)		(144)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Total	963		56
Defined benefit pension and post-retirement plans:
Amortization of prior service benefit included in net periodic pension and post-retirement expense/income, net of tax of $(42), $(40)	(73)	[1]	(69)	[1]
Other comprehensive income (loss)	890		(13)
Comprehensive income	$ 1,819		$ 6,576

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

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Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 30, 2014

Recently Issued Accounting Pronouncements

C. Recently Issued Accounting Pronouncements

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’s implementation during the three months ended March 30, 2014 of this ASU did not have a material impact on Teradyne’s financial position or results of operations.

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Changes in Accumulated Other Comprehensive Income Balances (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 4,000
Other comprehensive income before reclassifications, net of tax	1,139
Amounts reclassified from accumulated other comprehensive income, net of tax	(249)	(213)
Other comprehensive income (loss)	890	(13)
Ending balance	4,890
Unrealized Gains on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	1,381
Other comprehensive income before reclassifications, net of tax	1,139
Amounts reclassified from accumulated other comprehensive income, net of tax	(176)
Other comprehensive income (loss)	963
Ending balance	2,344
Retirement Plans Prior Service Benefit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	2,619
Amounts reclassified from accumulated other comprehensive income, net of tax	(73)
Other comprehensive income (loss)	(73)
Ending balance	$ 2,546

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Schedule of Restructuring and Other Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 30, 2014	Dec. 31, 2013
Restructuring Cost and Reserve
Provision	$ 0
Ending balance	210
Pre-2013 Activities
Restructuring Cost and Reserve
Beginning Balance		1,327
Change in estimate		(553)
Cash payments		(774)
Ending balance
Q3 2013 Activity
Restructuring Cost and Reserve
Beginning Balance	371
Provision		1,337
Cash payments	(161)	(966)
Ending balance	210	371
Q4 2013 Activity
Restructuring Cost and Reserve
Beginning Balance	114
Provision		600
Cash payments	(114)	(486)
Ending balance		114
Severance and Benefits
Restructuring Cost and Reserve
Ending balance	210
Severance and Benefits | Pre-2013 Activities
Restructuring Cost and Reserve
Beginning Balance		243
Cash payments		(243)
Ending balance
Severance and Benefits | Q3 2013 Activity
Restructuring Cost and Reserve
Beginning Balance	371
Provision		1,337
Cash payments	(161)	(966)
Ending balance	210	371
Severance and Benefits | Q4 2013 Activity
Restructuring Cost and Reserve
Beginning Balance	114
Provision		600
Cash payments	(114)	(486)
Ending balance		114
Facility Exit Costs | Pre-2013 Activities
Restructuring Cost and Reserve
Beginning Balance		1,084
Change in estimate		(553)
Cash payments		(531)
Ending balance

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Financial Instruments and Derivatives (Tables)

3 Months Ended

Mar. 30, 2014

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 March 30, 2014 and December 31, 2013.

	March 30, 2014
	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	$	131,722	$	—	$	—	$	131,722
Cash equivalents		87,894		13,010		—		100,904
Available-for-sale securities:
U.S. Treasury securities		321,296		—		—		321,296
U.S. government agency securities		—		191,863		—		191,863
Commercial paper		—		116,767		—		116,767
Corporate debt securities		—		82,787		—		82,787
Equity and debt mutual funds		14,171		—		—		14,171
Certificates of deposit and time deposits		—		7,257		—		7,257
Non-U.S. government securities		—		77		—		77
Total		555,083		411,761		—		966,844
Derivatives		—		209		—		209
Total	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	219,616	$	13,010	$	—	$	232,626
Marketable securities		214,230		247,920		—		462,150
Long-term marketable securities		121,237		150,831		—		272,068
Other current assets		—		209		—		209
	$	555,083	$	411,970	$	—	$	967,053
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

	December 31, 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	$	117,242	$	—	$	—	$	117,242
Cash equivalents		165,865		58,531		—		224,396
Available-for-sale securities:
U.S. Treasury securities		467,895		—		—		467,895
U.S. government agency securities		—		202,588		—		202,588
Commercial paper		—		105,598		—		105,598
Corporate debt securities		—		65,387		—		65,387
Equity and debt mutual funds		13,156		—		—		13,156
Certificates of deposit and time deposits		—		3,258		—		3,258
Non-U.S. government securities		—		78		—		78
Total		764,158		435,440		—		1,199,598
Derivatives		—		153		—		153
Total	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Contingent consideration	$	—	$	—	$	2,230	$	2,230
Total	$	—	$	—	$	2,230	$	2,230

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	283,107	$	58,531	$	—	$	341,638
Marketable securities		371,101		215,781		—		586,882
Long-term marketable securities		109,950		161,128		—		271,078
Other current assets		—		153		—		153
	$	764,158	$	435,593	$	—	$	1,199,751
Liabilities
Long-term other accrued liabilities	$	—	$	—	$	2,230	$	2,230
	$	—	$	—	$	2,230	$	2,230

Schedule of Changes in Fair Value of Level 3 Contingent Consideration

Changes in the fair value of Level 3 contingent consideration for the three months ended March 30, 2014 and March 31, 2013 were as follows:

	For the Three Months Ended March 30, 2014
	(in thousands)
Balance at December 31, 2013	$	2,230
Contingent consideration payments		—
Balance at March 30, 2014	$	2,230

	For the Three Months Ended March 31, 2013
	(in thousands)
Balance at December 31, 2012	$	388
Contingent consideration payments		(313	)
Balance at March 31, 2013	$	75

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at March 30, 2014 and December 31, 2013 were as follows:

	March 30, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Cash and cash equivalents	$	232,626	$	232,626	$	341,638	$	341,638
Marketable securities		734,218		734,218		857,960		857,960
Convertible debt(1)		—		—		185,708		611,433
Japan loan		—		—		955		955

(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 March 30, 2014 and December 31, 2013:

	March 30, 2014
	Available-for-Sale									Fair Market Value of Investment with  Unrealized Losses
	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value
	(in thousands)
U.S. Treasury securities	$	321,184	$	236	$	(124	)	$	321,296	$	23,205
U.S. government agency securities		191,856		92		(85	)		191,863		91,951
Commercial paper		116,758		13		(4	)		116,767		38,906
Corporate debt securities		81,913		1,337		(463	)		82,787		49,413
Equity and debt mutual funds		11,483		2,725		(37	)		14,171		810
Certificates of deposit and time deposits		7,257		—		—			7,257		—
Non-U.S. government securities		77		—		—			77		—
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	462,031	$	146	$	(27	)	$	462,150	$	99,303
Long-term marketable securities		268,497		4,257		(686	)		272,068		104,982
	$	730,528	$	4,403	$	(713	)	$	734,218	$	204,285

	December 31, 2013
	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	$	468,084	$	94	$	(283	)	$	467,895	$	108,212
U.S. government agency securities		202,573		75		(60	)		202,588		84,498
Commercial paper		105,583		16		(1	)		105,598		7,993
Corporate debt securities		65,747		762		(1,122	)		65,387		40,355
Equity and debt mutual funds		10,463		2,742		(49	)		13,156		702
Certificates of deposit and time deposits		3,258		—		—			3,258		—
Non-U.S. government securities		78		—		—			78		—
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	586,818	$	85	$	(21	)	$	586,882	$	137,670
Long-term marketable securities		268,968		3,604		(1,494	)		271,078		104,090
	$	855,786	$	3,689	$	(1,515	)	$	857,960	$	241,760

Contractual Maturities of Investments Held

The contractual maturities of investments held at March 30, 2014 were as follows:

	March 30, 2014
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	462,031	$	462,150
Due after 1 year through 5 years		226,558		226,607
Due after 5 years through 10 years		5,854		5,954
Due after 10 years		24,602		25,336
Total	$	719,045	$	720,047

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

The following table summarizes the fair value of derivative instruments at March 30, 2014 and December 31, 2013:

	Balance Sheet Location		March 30, 2014		December 31, 2013
			(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts		Other current assets	$	209	$	153
			$	209	$	153

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 months ended March 30, 2014 and March 31, 2013. The table does not reflect the corresponding gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the three months ended March 30, 2014 and March 31, 2013, gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.6 million and $(2.8) million, respectively.

	Location of (Losses) Gains Recognized in Statement of Operations	For the Three Months Ended
		March 30, 2014			March 31, 2013
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Interest expense and other	$	(747	)	$	2,248
		$	(747	)	$	2,248

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Schedule of Segment Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 30, 2014		Mar. 31, 2013
Segment Reporting Information [Line Items]
Net revenues	$ 321,010		$ 280,367
Income (loss) before income taxes	(1,873)	[1],[2]	(1,426)	[1],[2]
Semiconductor Test
Segment Reporting Information [Line Items]
Net revenues	261,737		211,506
Income (loss) before income taxes	34,600	[1],[2]	13,766	[1],[2]
Wireless Test
Segment Reporting Information [Line Items]
Net revenues	21,210		33,598
Income (loss) before income taxes	(25,085)	[1],[2]	(9,997)	[1],[2]
System Test
Segment Reporting Information [Line Items]
Net revenues	38,063		35,263
Income (loss) before income taxes	448	[1],[2]	1,530	[1],[2]
Corporate And Eliminations
Segment Reporting Information [Line Items]
Income (loss) before income taxes	$ (11,836)	[1],[2]	$ (6,725)	[1],[2]

[1] 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 months ended March 30, 2014 and March 31, 2013 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

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Segment Information (Tables)

3 Months Ended

Mar. 30, 2014

Segment Information

Segment information is as follows:

	Semiconductor Test		Wireless Test			System Test		Corporate and Eliminations			Consolidated
	(in thousands)
Three months ended March 30, 2014:
Net revenues	$	261,737	$	21,210		$	38,063	$	—		$	321,010
Income (loss) before income taxes(1)(2)		34,600		(25,085	)		448		(11,836	)		(1,873	)
Three months ended March 31, 2013:
Net revenues	$	211,506	$	33,598		$	35,263	$	—		$	280,367
Income (loss) before income taxes(1)(2)		13,766		(9,997	)		1,530		(6,725	)		(1,426	)

(1) 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 months ended March 30, 2014 and March 31, 2013 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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	6,205	$	213

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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	3,093	$	2,668

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
	March 30, 2014		March 31, 2013
	(in thousands)
Cost of revenues—provision for excess and obsolete inventory	$	741	$	919
Restructuring and other		—		244
Total	$	741	$	1,163

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Restructuring and Other

3 Months Ended

Mar. 30, 2014

Restructuring and Other

M. Restructuring and Other

Restructuring

During the three months ended March 30, 2014, Teradyne recorded no restructuring charges. During the three months ended March 31, 2013, Teradyne recorded $0.4 million of severance charges related to headcount reductions in Semiconductor Test and System Test.

	Severance and Benefits			Facility Exit Costs			Total
	(in thousands)
Pre-2013 Activities
Balance at December 31, 2012	$	243		$	1,084		$	1,327
Change in estimate		—			(553	)		(553	)
Cash payments		(243	)		(531	)		(774	)
Balance at December 31, 2013	$	—		$	—		$	—
2013 Activities
Q3 2013 Activity:
Provision	$	1,337		$	—		$	1,337
Cash payments		(966	)		—			(966	)
Balance at December 31, 2013		371			—			371
Cash payments		(161	)		—			(161	)
Balance at March 30, 2014	$	210		$	—		$	210
Q4 2013 Activity:
Provision	$	600		$	—		$	600
Cash payments		(486	)		—			(486	)
Balance at December 31, 2013		114			—			114
Cash payments		(114	)		—			(114	)
Balance at March 30, 2014	$	—		$	—		$	—
Balance at March 30, 2014	$	210		$	—		$	210

The accrual balance for severance and benefits of $0.2 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2014.