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 April 3, 2016

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 6, 2016 was 203,178,976 shares.

TERADYNE, INC.

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of April 3, 2016 and December 31, 2015		1
	Condensed Consolidated Statements of Operations for the Three Months Ended April 3, 2016 and April 5, 2015		2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended April 3, 2016 and April 5, 2015		3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 3, 2016 and April 5, 2015		4
	Notes to Condensed Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		36
Item 4.	Controls and Procedures		37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		38
Item 1A.	Risk Factors		38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 4.	Mine Safety Disclosures		39
Item 6.	Exhibits		39

PART I

Item 1: Financial Statements

TERADYNE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	April 3, 2016		December 31, 2015
	(in thousands, except per share amount)
ASSETS
Current assets:
Cash and cash equivalents	$	319,358	$	264,705
Marketable securities		410,003		477,696
Accounts receivable, less allowance for doubtful accounts of $2,385 and $2,407 at April 3, 2016 and December 31, 2015, respectively		253,976		211,293
Inventories, net:
Parts		59,425		73,117
Assemblies in process		38,490		32,825
Finished goods		62,772		47,646
		160,687		153,588
Deferred tax assets		—		54,973
Prepayments		95,185		91,519
Other current assets		3,513		6,194
Total current assets		1,242,722		1,259,968
Property, plant and equipment, net		266,907		273,414
Marketable securities		246,072		265,928
Deferred tax assets		59,119		7,404
Other assets		13,041		13,080
Retirement plans assets		1,968		636
Intangible assets, net		223,274		239,831
Goodwill		495,871		488,413
Total assets	$	2,548,974	$	2,548,674
LIABILITIES
Current liabilities:
Accounts payable	$	84,104	$	92,358
Accrued employees’ compensation and withholdings		71,838		113,994
Deferred revenue and customer advances		72,095		85,527
Other accrued liabilities		92,617		43,727
Contingent consideration		500		15,500
Accrued income taxes		23,368		21,751
Total current liabilities		344,522		372,857
Long-term deferred revenue and customer advances		25,468		25,745
Retirement plans liabilities		106,921		103,531
Deferred tax liabilities		18,300		26,663
Long-term other accrued liabilities		34,753		32,156
Long-term contingent consideration		23,109		21,936
Total liabilities		553,073		582,888
Commitments and contingencies (See Note P)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 203,707 and 203,641 shares issued and outstanding at April 3, 2016 and December 31, 2015, respectively		25,462		25,455
Additional paid-in capital		1,489,011		1,480,647
Accumulated other comprehensive income (loss)		5,035		(8,144	)
Retained earnings		476,393		467,828
Total shareholders’ equity		1,995,901		1,965,786
Total liabilities and shareholders’ equity	$	2,548,974	$	2,548,674

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, 2015, are an integral part of the condensed consolidated financial statements.

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TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands, except per share amount)
Revenues:
Products	$	358,139		$	272,325
Services		72,855			70,076
Total revenues		430,994			342,401
Cost of revenues:
Cost of products		167,555			118,996
Cost of services		33,107			30,982
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		200,662			149,978
Gross profit		230,332			192,423
Operating expenses:
Engineering and development		73,464			71,450
Selling and administrative		79,174			72,041
Acquired intangible assets amortization		19,994			13,808
Restructuring and other		1,587			—
Total operating expenses		174,219			157,299
Income from operations		56,113			35,124
Non-operating (income) expenses:
Interest income		(1,642	)		(1,816	)
Interest expense		710			162
Other (income) expense, net		(147	)		(5,660	)
Income before income taxes		57,192			42,438
Income tax provision		7,206			9,651
Net income	$	49,986		$	32,787
Net income per common share:
Basic	$	0.24		$	0.15
Diluted	$	0.24		$	0.15
Weighted average common shares—basic		204,271			217,187
Weighted average common shares—diluted		205,732			218,812
Cash dividend declared per common share	$	0.06		$	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, 2015, are an integral part of the condensed

consolidated financial statements.

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TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Net income	$	49,986		$	32,787
Other comprehensive income, net of tax:
Foreign currency translation adjustments		10,271			—
Available-for-sale marketable securities:
Unrealized gains on marketable securities arising during period, net of tax of $1,253, $704, respectively		3,071			1,799
Less: Reclassification adjustment for gains included in net income, net of tax of $11, $(169), respectively		(83	)		(330	)
		2,988			1,469
Defined benefit pension and post-retirement plans:
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax of $(46), $(42), respectively		(80	)		(74	)
Other comprehensive income		13,179			1,395
Comprehensive income	$	63,165		$	34,182

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, 2015, are an integral part of the condensed

consolidated financial statements.

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TERADYNE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Cash flows from operating activities:
Net income	$	49,986		$	32,787
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		16,192			19,345
Amortization		20,470			15,139
Stock-based compensation		7,925			7,963
Provision for excess and obsolete inventory		4,373			1,440
Contingent consideration adjustment		1,173			—
Deferred taxes		(5,496	)		(1,831	)
Retirement plans actuarial gains		(1,193	)		—
Gain from the sale of an equity investment		—			(4,782	)
Other		484			(1,417	)
Changes in operating assets and liabilities:
Accounts receivable		(42,552	)		(24,749	)
Inventories		(702	)		5,960
Prepayments and other assets		(1,148	)		3,146
Accounts payable and other accrued expenses		(7,626	)		(20,150	)
Deferred revenue and customer advances		(13,836	)		1,038
Retirement plans contributions		(1,250	)		(1,019	)
Income taxes		(52	)		4,662
Net cash provided by operating activities		26,748			37,532
Cash flows from investing activities:
Purchases of property, plant and equipment		(20,334	)		(21,149	)
Purchases of available-for-sale marketable securities		(221,778	)		(335,635	)
Proceeds from sales of available-for-sale marketable securities		239,370			148,639
Proceeds from maturities of available-for-sale marketable securities		73,458			140,222
Proceeds from the sale of an equity investment		—			4,782
Proceeds from life insurance		—			1,098
Net cash provided by (used for) investing activities		70,716			(62,043	)
Cash flows from financing activities:
Issuance of common stock under employee stock purchase and stock option plans		9,140			8,899
Repurchase of common stock		(28,001	)		(46,650	)
Dividend payments		(12,253	)		(13,049	)
Payments of contingent consideration		(11,697	)		—
Net cash used for financing activities		(42,811	)		(50,800	)
Increase (decrease) in cash and cash equivalents		54,653			(75,311	)
Cash and cash equivalents at beginning of period		264,705			294,256
Cash and cash equivalents at end of period	$	319,358		$	218,945

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, 2015, are an integral part of the condensed

consolidated financial statements.

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TERADYNE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A. The Company

Teradyne, Inc. (“Teradyne”) is a leading global supplier of automation equipment for test and industrial applications. Teradyne designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s industrial automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Teradyne’s automatic test equipment and industrial automation products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);

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

• industrial automation (“Industrial Automation”) products.

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 amounts were reclassified to conform to the current year presentation. The December 31, 2015 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 29, 2016, for the year ended December 31, 2015.

Preparation of Financial Statements and Use of Estimates

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

C. Recently Issued Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU provides guidance for the recognition, measurement, presentation, and disclosure of financial instruments. The new pronouncement revises accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it amends the presentation and disclosure requirements of equity securities that do not

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result in consolidation and are not accounted for under the equity method. Changes in the fair value of these equity securities will be recognized directly in net income. This pronouncement is effective for fiscal years and interim periods within those years beginning after December 15, 2017. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

On March 31, 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the balance sheet. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the balance sheet. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. Teradyne early adopted this ASU prospectively in the first quarter of 2016.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation for debt discount. ASU 2015-03 does not specifically address requirements for the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. On August 8, 2015, the FASB issued ASU 2015-15, “Interest—Imputation of Interest (Subtopic 835-30)” clarifying that debt issuance costs related to line-of-credit arrangements could be presented as an asset and amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Teradyne adopted this ASU in the first quarter of 2016. Adoption of this ASU did not have a material impact on Teradyne’s financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to show the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date of the new revenue standard by one year. For Teradyne, the standard will be effective in the

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first quarter of 2018. Early adoption is permitted but not before the original effective date (that is, annual periods beginning after December 15, 2016). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Teradyne has not yet selected a transition method. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

D. Acquisitions

Universal Robots

On June 11, 2015, Teradyne acquired all of the outstanding equity of Universal Robots located in Odense, Denmark. Universal Robots is the leading supplier of collaborative robots which are low-cost, easy-to-deploy and simple-to-program robots that work side by side with production workers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Universal Robots is a separate operating and reportable segment, Industrial Automation. The total purchase price of $315.4 million consisted of $283.8 million of cash paid and $31.6 million of contingent consideration, measured at fair value. The contingent consideration was valued using a Monte Carlo simulation based on the following key inputs: (1) forecasted revenue; (2) forecasted EBITDA; (3) revenue volatility; (4) EBITDA volatility; and (5) discount rate. The contingent consideration is payable upon the achievement of certain thresholds and targets for earnings before income taxes, depreciation and amortization (“EBITDA”) for calendar year 2015, revenue for the period from July 1, 2015 to December 31, 2017 and revenue for the period from July 1, 2015 to December 31, 2018. The maximum amount of contingent consideration that could be paid is $65 million. Based on Universal Robots’ calendar year 2015 EBITDA results, in the first quarter of 2016, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

In the fourth quarter of 2015, Teradyne finalized the valuation and purchase price allocation for the acquisition which resulted in a $5.4 million decrease in goodwill as a result of a $2.2 million decrease in the fair value of contingent consideration, a $1.6 million increase in intangible assets and a $1.6 million decrease in acquired liabilities.

The Universal Robots acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s consolidated results of operations from the date of acquisition. The allocation of the total purchase price to Universal Robots’ net tangible liabilities and identifiable intangible assets was based on their estimated fair values as of the acquisition date. The excess of the purchase price over the identifiable intangible assets and net tangible liabilities in the amount of $221.1 million was allocated to goodwill, which is not deductible for tax purposes.

The following table represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	221,128
Intangible assets		121,590
Tangible assets acquired and liabilities assumed:
Current assets		10,853
Non-current assets		3,415
Accounts payable and current liabilities		(11,976	)
Long-term deferred tax liabilities		(26,653	)
Long-term other liabilities		(2,920	)
Total purchase price	$	315,437

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Teradyne estimated the fair value of intangible assets using the income and cost approaches. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:

	Fair Value		Estimated Useful Life
	(in thousands)		(in years)
Developed technology	$	89,240		4.9
Trademarks and tradenames		22,920		10.0
Customer relationships		9,430		2.0
Total intangible assets	$	121,590		5.6

The following unaudited pro forma information gives effect to the acquisition of Universal Robots as if the acquisition occurred on January 1, 2014. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:

	For the Three Months Ended
	April 5, 2015
Revenue	$	352,971
Net income		28,374
Net income per common share:
Basic	$	0.13
Diluted	$	0.13

E. 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.

Marketable Securities

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of Accounting Standards Codification (“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 April 3, 2016, 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 April 3, 2016. As defined in ASC 820-10,

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“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 is considered a Level 2 input; or

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.

Teradyne’s available-for-sale debt and equity securities are classified as Level 1 and Level 2. Acquisition-related contingent consideration is classified as Level 3. Teradyne’s contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The majority of Level 2 securities are fixed income securities 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.

Realized gains recorded in the three months ended April 3, 2016 and April 5, 2015 were $0.2 million and $0.5 million, respectively. Realized losses recorded in the three months ended April 3, 2016 were $0.2 million. There were no realized losses recorded in the three months ended April 5, 2015. Realized gains are included in interest income and realized losses are included in interest expense. Unrealized gains and losses are included in accumulated other comprehensive income (loss). The cost of securities sold is based on the specific identification method.

During the three months ended April 3, 2016 and April 5, 2015, 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 April 3, 2016 and December 31, 2015.

	April 3, 2016
	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	$	227,046	$	—	$	—	$	227,046
Cash equivalents		92,010		302		—		92,312
Available-for-sale securities:
U.S. Treasury securities		—		399,277		—		399,277
Corporate debt securities		—		161,590		—		161,590
Commercial paper		—		36,592		—		36,592
U.S. government agency securities		—		26,160		—		26,160
Certificates of deposit and time deposits		—		15,653		—		15,653
Equity and debt mutual funds		16,369		—		—		16,369
Non-U.S. government securities		—		434		—		434
Total	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Contingent consideration	$	—	$	—	$	23,609	$	23,609
Derivative liabilities		—		193		—		193
Total	$	—	$	193	$	23,609	$	23,802

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Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	319,056	$	302	$	—	$	319,358
Marketable securities		—		410,003		—		410,003
Long-term marketable securities		16,369		229,703		—		246,072
	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Other current liabilities	$	—	$	193	$	—	$	193
Contingent consideration		—		—		500		500
Long-term contingent consideration		—		—		23,109		23,109
	$	—	$	193	$	23,609	$	23,802

	December 31, 2015
	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	$	213,336	$	—	$	—	$	213,336
Cash equivalents		49,241		2,128		—		51,369
Available for sale securities:
U.S. Treasury securities		—		419,958		—		419,958
Corporate debt securities		—		161,634		—		161,634
U.S. government agency securities		—		83,952		—		83,952
Certificates of deposit and time deposits		—		43,394		—		43,394
Commercial paper		—		20,308		—		20,308
Equity and debt mutual funds		13,954		—		—		13,954
Non-U.S. government securities		—		424		—		424
Total	$	276,531	$	731,798	$	—	$	1,008,329
Derivative assets		—		109		—		109
Total	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Contingent consideration	$	—	$	—	$	37,436	$	37,436
Derivative liabilities		—		146		—		146
Total	$	—	$	146	$	37,436	$	37,582

10

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	262,577	$	2,128	$	—	$	264,705
Marketable securities		—		477,696		—		477,696
Long-term marketable securities		13,954		251,974		—		265,928
Prepayments		—		109		—		109
	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Other current liabilities	$	—	$	146	$	—	$	146
Contingent consideration		—		—		15,500		15,500
Long-term contingent consideration		—		—		21,936		21,936
	$	—	$	146	$	37,436	$	37,582

Changes in the fair value of Level 3 contingent consideration for the three months ended April 3, 2016 and April 5, 2015 were as follows:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	37,436		$	3,350
Payments (a)		(15,000	)		—
Fair value adjustment (b)		1,173			—
Balance at end of period	$	23,609		$	3,350

(a) In the three months ended April 3, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(b) In the three months ended April 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.2 million primarily due to a lower discount rate.

The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments:

Liability	April 3, 2016 Fair Value	Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$16,349	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2017 volatility		15.4	%
			Discount Rate		4.7	%
	$6,760	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2018 volatility		15.4	%
			Discount Rate		4.7	%
Contingent consideration (AIT)	$500	Income approach- discounted cash flow	Revenue for calendar year 2016 probability Discount rate		48 4.7	%  %

11

As of April 3, 2016, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenue, revenue volatility and discount rate. Increases or decreases in the inputs would result in a higher or lower fair value measurement. The maximum payment for each of the two Universal Robots revenue earn-outs is $25.0 million.

The significant unobservable inputs used in the Avionics Interface Technology, LLC (“AIT”) fair value measurement of contingent consideration are the probabilities of successful achievement of calendar year 2016 revenue threshold and target, and a discount rate. Increases or decreases in the revenue probabilities would result in a higher or lower fair value measurement. The maximum payment for the AIT earn-out is $1.1 million.

The carrying amounts and fair values of Teradyne’s financial instruments at April 3, 2016 and December 31, 2015 were as follows:

	April 3, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	319,358	$	319,358	$	264,705	$	264,705
Marketable securities		656,075		656,075		743,624		743,624
Derivative assets		—		—		109		109
Liabilities
Contingent consideration		23,609		23,609		37,436		37,436
Derivative liabilities		193		193		146		146

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

The following tables summarize the composition of available-for-sale marketable securities at April 3, 2016 and December 31, 2015:

	April 3, 2016
	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	$	398,832	$	620	$	(175	)	$	399,277	$	204,136
Corporate debt securities		161,005		1,861		(1,276	)		161,590		73,165
Commercial paper		36,563		29		—			36,592		6,475
U.S. government agency securities		26,107		57		(4	)		26,160		9,747
Equity and debt mutual funds		15,110		1,328		(69	)		16,369		746
Certificates of deposit and time deposits		15,651		2		—			15,653		—
Non-U.S. government securities		434		—		—			434		—
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

12

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	409,971	$	146	$	(114	)	$	410,003	$	204,024
Long-term marketable securities		243,731		3,751		(1,410	)		246,072		90,245
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

	December 31, 2015
	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	$	421,060	$	65	$	(1,167	)	$	419,958	$	379,434
Corporate debt securities		163,297		902		(2,565	)		161,634		145,373
U.S. government agency securities		84,032		42		(122	)		83,952		55,120
Certificates of deposit and time deposits		43,391		6		(3	)		43,394		10,527
Commercial paper		20,298		11		(1	)		20,308		8,646
Equity and debt mutual funds		12,996		1,119		(161	)		13,954		2,560
Non-U.S. government securities		424		—		—			424		—
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	478,306	$	38	$	(648	)	$	477,696	$	374,785
Long-term marketable securities		267,192		2,107		(3,371	)		265,928		226,875
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

As of April 3, 2016, the fair market value of investments with unrealized losses totaled $294.3 million. Of this value, $2.8 million had unrealized losses of $0.5 million greater than one year and $291.5 million had unrealized losses of $1.1 million for less than one year.

As of December 31, 2015, the fair market value of investments with unrealized losses totaled $601.7 million. Of this value, $0.9 million had unrealized losses of $0.5 million greater than one year and $600.8 million had unrealized losses of $3.6 million for less than one year.

Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments, at April 3, 2016 and December 31, 2015, were temporary.

13

The contractual maturities of investments held at April 3, 2016 were as follows:

	April 3, 2016
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	409,971	$	410,003
Due after 1 year through 5 years		184,645		184,852
Due after 5 years through 10 years		4,432		4,546
Due after 10 years		39,544		40,305
Total	$	638,592	$	639,706

Contractual maturities of investments held at April 3, 2016 exclude equity and debt mutual funds as they do not have contractual maturity dates.

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 monetary assets and liabilities denominated in foreign currencies.

The notional amount of foreign currency forward contracts was $138.5 million and $114.1 million at April 3, 2016 and December 31, 2015, respectively. The fair value of the outstanding contracts was a loss of $0.2 million and $0.0 million at April 3, 2016 and December 31, 2015, respectively.

For the three months ended April 3, 2016 and April 5, 2015, Teradyne recorded net realized losses of $3.3 million and $3.4 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 other (income) expense, net.

The following table summarizes the fair value of derivative instruments at April 3, 2016 and December 31, 2015:

	Balance Sheet Location	April 3, 2016			December 31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts assets	Prepayments	$	—		$	109
Foreign exchange contracts liabilities	Other current liabilities		(193	)		(146	)
Total derivatives		$	(193	)	$	(37	)

Teradyne’s foreign exchange contracts are subject to master netting agreements.

14

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three months ended April 3, 2016 and April 5, 2015. The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. For the three months ended April 3, 2016 and April 5, 2015, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million and $4.3 million, respectively.

	Location of (Gains) Losses Recognized in Statement of Operations	For the Three Months     Ended
		April 3, 2016		April 5, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	3,298	$	3,425
Total Derivatives		$	3,298	$	3,425

F. Debt

Revolving Credit Facility

On April 27, 2015, Teradyne entered into a Credit Agreement (the “Credit Agreement”) with Barclays Bank PLC, as administrative agent and collateral agent, and the lenders party thereto. The Credit Agreement provides for a five-year, senior secured revolving credit facility of up to $350 million (the “Credit Facility”). The Credit Agreement further provides that, subject to customary conditions, Teradyne may seek to obtain from existing or new lenders incremental commitments under the Credit Facility in an aggregate principal amount not to exceed $150 million.

Proceeds from the Credit Facility may be used for general corporate purposes and working capital. Teradyne incurred $2.3 million in costs related to the revolving credit facility. These costs are being amortized over the five year term of the revolving credit facility and are included in interest expense in the statement of operations. As of May 13, 2016, Teradyne has not borrowed any funds under the Credit Facility.

The interest rates applicable to loans under the Credit Facility are, at Teradyne’s option, equal to either a base rate plus a margin ranging from 0.00% to 1.00% per annum or LIBOR plus a margin ranging from 1.00% to 2.00% per annum, based on the Consolidated Leverage Ratio of Teradyne and its Restricted Subsidiaries. In addition, Teradyne will pay a commitment fee on the unused portion of the commitments under the Credit Facility ranging from 0.125% to 0.350% per annum, based on the then applicable Consolidated Leverage Ratio.

Teradyne is not required to repay any loans under the Credit Facility prior to maturity, subject to certain customary exceptions. Teradyne is permitted to prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, other than customary LIBOR breakage costs.

The Credit Agreement contains customary events of default, representations, warranties and affirmative and negative covenants that, among other things, limit Teradyne’s and its Restricted Subsidiaries’ ability to sell assets, grant liens on assets, incur other secured indebtedness and make certain investments and restricted payments, all subject to exceptions set forth in the Credit Agreement. The Credit Agreement also requires Teradyne to satisfy two financial ratios measured as of the end of each fiscal quarter: a consolidated leverage ratio and an interest coverage ratio. As of April 3, 2016, Teradyne was in compliance with all covenants.

The Credit Facility is guaranteed by certain of Teradyne’s domestic subsidiaries and collateralized by assets of Teradyne and such subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries.

15

G. Prepayments

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

	April 3, 2016		December 31, 2015
	(in thousands)
Contract manufacturer prepayments	$	68,746	$	66,283
Prepaid maintenance and other services		7,061		8,481
Prepaid taxes		5,281		3,781
Other prepayments		14,097		12,974
Total prepayments	$	95,185	$	91,519

H. 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:

	April 3, 2016		December 31, 2015
	(in thousands)
Extended warranty	$	46,115	$	46,499
Product maintenance and training		31,368		30,616
Customer advances		5,347		17,456
Undelivered elements and other		14,733		16,701
Total deferred revenue and customer advances	$	97,563	$	111,272

I. Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance, delivery 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
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	6,925		$	8,942
Accruals for warranties issued during the period		3,490			2,361
Adjustments related to pre-existing warranties		243			(1,031	)
Settlements made during the period		(3,162	)		(2,849	)
Balance at end of period	$	7,496		$	7,423

16

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
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	46,499		$	43,300
Deferral of new extended warranty revenue		6,827			4,204
Recognition of extended warranty deferred revenue		(7,211	)		(6,800	)
Balance at end of period	$	46,115		$	40,704

J. Stock-Based Compensation

Under Teradyne’s stock compensation plans, Teradyne grants stock options, restricted stock units and performance-based restricted stock units, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”).

Teradyne grants performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). For TSR grants issued in 2014 and 2015, Teradyne’s three-year TSR performance is measured against the Philadelphia Semiconductor Index. For TSR grants issued in January 2016, Teradyne’s three-year TSR performance will be measured against the New York Stock Exchange (“NYSE”) Composite Index. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. 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 at any time during the three-year service period the executive officer is no longer an employee, subject to the retirement and termination eligibility provisions noted below.

In January 2016, Teradyne granted PRSUs to its executive officers with a performance metric based on three-year cumulative non-GAAP profit before interest and tax (“PBIT”). Non-GAAP PBIT is a financial measure equal to GAAP income from operations less restructuring and other, net; amortization of acquired intangible assets; acquisition and divestiture related charges or credits; pension actuarial gains and losses; and other non-recurring gains and charges. The final number of PBIT PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The PBIT PRSUs will vest upon the three-year anniversary of the grant date. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized based on the number of units that are earned based upon the three year Teradyne PBIT as a percent of Teradyne’s revenue, provided the executive officer remains an employee at the end of the three-year period subject to the retirement and termination eligibility provisions noted below.

Beginning with PRSUs granted in January 2014, if the recipient’s employment ends prior to the determination of the performance percentage due to (1) permanent disability or death or (2) retirement or termination other than for cause, after attaining both at least age sixty and at least ten years of service, then all or a portion of the recipient’s PRSUs (based on the actual performance percentage achieved on the determination date) will vest on the date the performance percentage is determined. Except as set forth in the preceding sentence, no PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period.

17

During the three months ended April 3, 2016 and April 5, 2015, Teradyne granted 0.1 million and 0.2 million TSR PRSUs, respectively, with a grant date fair value of $20.29 and $18.21, respectively. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
Risk-free interest rate		0.97	%		0.77	%
Teradyne volatility-historical		27.0	%		28.2	%
NYSE Composite Index volatility-historical		13.1	%		—
Philadelphia Semiconductor Index volatility-historical		—			19.7	%
Dividend yield		1.24	%		1.33	%

Expected volatility was based on the historical volatility of Teradyne’s stock and the NYSE Composite Index for the 2016 grant and Philadelphia Semiconductor Index for the 2015 grant, 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 stock price on the grant date of $19.43 for the 2016 grant and $18.10 for the 2015 grant.

During the three months ended April 3, 2016, Teradyne granted 0.1 million PBIT PRSUs with a grant date fair value of $18.71.

During the three months ended April 3, 2016, Teradyne granted 1.2 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $18.47 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $5.30.

During the three months ended April 5, 2015, Teradyne granted 1.4 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $17.14 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $4.43.

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
	April 3, 2016			April 5, 2015
Expected life (years)		5.0			4.0
Risk-free interest rate		1.4	%		1.1	%
Volatility-historical		32.9	%		33.4	%
Dividend yield		1.24	%		1.33	%

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 stock price on the grant date, of $19.43 for the 2016 grant and $18.10 for the 2015 grant.

18

K. Accumulated Other Comprehensive Income

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

	For the Three Months Ended April 3, 2016
	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive income before reclassifications, net of tax of $0, $1,253		10,271			3,071			—			13,342
Amounts reclassified from accumulated other comprehensive income, net of tax of $11, $(46)		—			(83	)		(80	)		(163	)
Net current period other comprehensive income, net of tax of $0, $1,264, $(46)		10,271			2,988			(80	)		13,179
Balance at April 3, 2016, net of tax of $0, $805, $(668)	$	1,512		$	1,574		$	1,949		$	5,035

	For the Three Months Ended April 5, 2015
	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2014, net of tax of $1,598, $(453)	$	—	$	2,365		$	2,324		$	4,689
Other comprehensive income before reclassifications, net of tax of $704		—		1,799			—			1,799
Amounts reclassified from accumulated other comprehensive income, net of tax of $(169), $(42)		—		(330	)		(74	)		(404	)
Net current period other comprehensive income, net of tax of $535, $(42)		—		1,469			(74	)		1,395
Balance at April 5, 2015, net of tax of $2,133, $(495)	$	—	$	3,834		$	2,250		$	6,084

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three months ended April 3, 2016 and April 5, 2015 were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	April 3, 2016		April 5, 2015
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $(11), $169	$	83	$	330	Interest income
Amortization of defined benefit pension and postretirement plans:
Prior service benefit, net of tax of $46, $42		80		74	(a)
Total reclassifications, net of tax of $35, $211	$	163	$	404	Net income

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

19

L. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segments for the three months ended April 3, 2016, were as follows:

	Wireless Test			Industrial Automation		System Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2015:
Goodwill	$	361,819		$	214,975	$	158,699		$	260,540		$	996,033
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
		262,922			214,975		10,516			—			488,413
Foreign currency translation adjustment		—			7,458		—			—			7,458
Balance at April 3, 2016:
Goodwill		361,819			222,433		158,699			260,540			1,003,491
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
	$	262,922		$	222,433	$	10,516		$	—		$	495,871

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

	April 3, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	333,947	$	186,118	$	147,829		6.0 years
Customer relationships		110,658		68,114		42,544		7.9 years
Tradenames and trademarks		53,169		20,468		32,701		9.5 years
Non-compete agreement		320		120		200		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	498,264	$	274,990	$	223,274		6.8 years

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	379,778	$	220,306	$	159,472		6.0 years
Customer relationships		110,340		63,718		46,622		7.9 years
Tradenames and trademarks		52,396		18,879		33,517		9.5 years
Non-compete agreement		320		100		220		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	543,004	$	303,173	$	239,831		6.7 years

20

Aggregate intangible asset amortization expense was $20.0 million and $13.8 million, respectively, for the three months ended April 3, 2016 and April 5, 2015. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2016 (remainder)	$	60,547
2017		71,899
2018		45,160
2019		24,260
2020		10,304
Thereafter		11,104

M. 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
	April 3, 2016		April 5, 2015
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	49,986	$	32,787
Weighted average common shares-basic		204,271		217,187
Effect of dilutive potential common shares:
Restricted stock units		965		901
Stock options		487		696
Employee stock purchase plan		9		28
Dilutive potential common shares		1,461		1,625
Weighted average common shares-diluted		205,732		218,812
Net income per common share-basic	$	0.24	$	0.15
Net income per common share-diluted	$	0.24	$	0.15

The computation of diluted net income per common share for the three months ended April 3, 2016 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three months ended April 5, 2015 excludes the effect of the potential exercise of stock options to purchase approximately 0.2 million shares because the effect would have been anti-dilutive.

N. Restructuring and Other

Other

During the three months ended April 3, 2016, Teradyne recorded an expense of $1.2 million for the increase in the fair value of the Universal Robots contingent consideration liability.

Restructuring

During the three months ended April 3, 2016, Teradyne recorded $0.4 million of severance charges related to headcount reductions of 12 people, primarily in Semiconductor Test.

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O. 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. 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 April 3, 2016, Teradyne contributed $0.7 million to the U.S. supplemental executive defined benefit pension plan and $0.6 million to certain qualified plans for non-U.S. subsidiaries.

For the three months ended April 3, 2016 and April 5, 2015, Teradyne’s net periodic pension (income) cost was comprised of the following:

	For the Three Months Ended
	April 3, 2016						April 5, 2015
	United States			Foreign			United States			Foreign
	(in thousands)
Service cost	$	576		$	207		$	616		$	247
Interest cost		3,414			206			3,282			358
Expected return on plan assets		(3,443	)		(5	)		(3,624	)		(195	)
Amortization of prior service cost		24			—			33			—
Net actuarial gain		(1,193	)		—			—			—
Settlement		—			(239	)		—			—
Total net periodic pension (income) cost	$	(622	)	$	169		$	307		$	410

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 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.

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For the three months ended April 3, 2016 and April 5, 2015, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Service cost	$	10		$	12
Interest cost		56			59
Amortization of prior service benefit		(150	)		(149	)
Total net periodic post-retirement benefit	$	(84	)	$	(78	)

P. Commitments and Contingencies

Purchase Commitments

As of April 3, 2016, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $235.3 million, of which $233.7 million is for less than one year.

Legal Claims

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

Q. Income Taxes

The effective tax rate for the three months ended April 3, 2016 and April 5, 2015 was 12.6% and 22.7%, respectively. The effective tax rates for these periods were lower than the expected federal statutory rate of 35% primarily because of the favorable effect of statutory rates applicable to income earned outside the United States. The tax rate for the three months ended April 3, 2016 was also reduced by the benefit from U.S. research and development tax credits, partially offset by additions to the uncertain tax positions for transfer pricing, both of which are included in the projected annual effective tax rate. Discrete tax benefits recorded in the quarter amounted to $2.5 million of which $1.2 million resulted from non-taxable foreign exchange gains, $0.9 million related to marketable securities and $0.4 million from other discrete tax benefits.

The tax rate for the three months ended April 5, 2015 was reduced by a $1.2 million discrete tax benefit related to non-taxable foreign exchange gains and a $0.5 million discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares.

On a quarterly basis, Teradyne evaluates the realizability of the deferred tax assets by jurisdiction and assesses the need for a valuation allowance. As of April 3, 2016, Teradyne believes that it will ultimately realize the deferred tax assets recorded on the condensed consolidated balance sheet. However, should Teradyne believe that it is more likely than not that the deferred tax assets would not be realized, the tax provision would increase in the period in which Teradyne determined that the realizability was not likely. Teradyne considers the probability of future taxable income and historical profitability, among other factors, in assessing the realizability of the deferred tax assets.

As of April 3, 2016 and December 31, 2015, Teradyne had $35.2 million and $33.7 million, respectively, of reserves for uncertain tax positions. The $1.5 million net increase in reserves for uncertain tax positions relates primarily to transfer pricing exposure.

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As of April 3, 2016, Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits may decrease approximately $9.1 million in the next twelve months, as a result of a lapse of statutes of limitation and the settlement of a tax audit. The estimated decrease is composed primarily of reserves relating to federal tax credits and transfer pricing.

Teradyne recognizes interest and penalties related to income tax matters in income tax expense. As of April 3, 2016 and December 31, 2015, $0.8 million and $0.5 million, respectively, of interest and penalties were included in the reserve for uncertain tax positions. For the three months ended April 3, 2016, expense of $0.3 million was recorded for interest and penalties related to income tax items. For the three months ended April 5, 2015, interest and penalties related to income tax items were not material.

Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings due to the tax holiday for the three months ended April 3, 2016 was $2.6 million, or $0.01 per diluted share. The tax savings due to the tax holiday for the three months ended April 5, 2015 was $1.1 million and the impact of the tax holiday on earnings per share was not material. The tax holiday is scheduled to expire on December 31, 2020.

R. Segment Information

Teradyne has four operating segments (Semiconductor Test, System Test, Wireless Test, and Industrial Automation), 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 System Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robots. 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 in effect are described in Note B: “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2015.

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Segment information for the three months ended April 3, 2016 and April 5, 2015 is as follows:

	Semiconductor Test		System Test		Wireless Test			Industrial Automation			Corporate and Eliminations		Consolidated
	(in thousands)
Three months ended April 3, 2016:
Revenues	$	340,264	$	53,670	$	20,314		$	16,746		$	—	$	430,994
Income (loss) before income taxes (1)(2)		73,254		9,492		(20,140	)		(7,168	)		1,754		57,192
Total assets (3)		664,555		90,695		408,466			350,589			1,034,669		2,548,974
Three months ended April 5, 2015:
Revenues	$	270,917	$	37,436	$	34,048		$	—		$	—	$	342,401
Income (loss) before income taxes (1)(2)		43,125		1,005		(10,441	)		—			8,749		42,438
Total assets (3)		596,477		94,133		465,465			—			1,356,107		2,512,182

(1) Interest income, interest expense, and other (income) expense, net are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges related to inventory and other.

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

Included in the Semiconductor Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	3,685	$	531
Restructuring and other		414		—
Total	$	4,099	$	531

Included in the Wireless Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	605	$	846
Total	$	605	$	846

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Included in Corporate and Eliminations are charges and credits in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	1,173	$	—
Other (income) expense, net—gain from the sale of an equity investment		—		(4,782	)
Total	$	1,173	$	(4,782	)

S. Shareholders’ Equity

Stock Repurchase Program

In January 2015, the Board of Directors authorized Teradyne to repurchase up to $500 million of common stock, of which $300 million was repurchased in 2015. In 2016, Teradyne intends to repurchase between $100 million and $200 million of common stock. During the three months ended April 3, 2016, Teradyne repurchased 1.5 million shares of common stock at an average price of $18.81, for a total cost of $28.0 million. The cumulative repurchases as of April 3, 2016 totaled 17.1 million shares of common stock for a total purchase price of $328 million at an average price per share of $19.17. The total price includes commissions and is recorded as a reduction to retained earnings.

Dividend

Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors.

In January 2016, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.06 per share that was paid on March 21, 2016 to shareholders of record as of February 26, 2016. Dividend payments for the three months ended April 3, 2016 were $12.3 million.

In January 2015, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.06 per share that was paid on March 24, 2015 to shareholders of record as of February 27, 2015. Dividend payments for the three months ended April 5, 2015 were $13.0 million.

While Teradyne declared a quarterly cash dividend and authorized a share repurchase program, it may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of Teradyne’s Board of Directors which will consider, among other things, Teradyne’s earnings, capital requirements and financial condition.

T. Subsequent Events

On April 16, 2016, an earthquake in Kumamoto, Japan damaged Teradyne’s facility. The facility, which is used for engineering, production, and support operations, sustained heavy damage. Teradyne is still in the process of assessing the total impact of the damage. The net book value of the inventory and fixed assets at the Kumamoto location is approximately $17 million. With respect to the location, Teradyne has $10 million of earthquake insurance with a deductible of approximately $2.5 million. Teradyne is temporarily transferring some operations to other facilities in Japan and elsewhere while Teradyne’s Kumamoto operations are restored.

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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, 2015. 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 automation equipment for test and industrial applications. We design, develop, manufacture and sell automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our industrial automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Our automatic test equipment and industrial automation products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);

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

• industrial automation (“Industrial Automation”) products.

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, and distributors that sell collaborative robots.

We believe our recent acquisitions have enhanced our opportunities for growth. We intend to continue to invest in our business, grow market share in our markets and expand further 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 have generally affected the semiconductor and electronics test equipment and services industries more significantly than the overall capital equipment sector.

In recent years, this cyclical demand has become an even/odd year trend where demand has increased in even years and decreased in odd years due principally to demand swings in the mobility market of our Semiconductor Test business. In 2015, the even/odd year trend continued, but had less of an impact on our annual revenue due to the sale in 2015 of testers that were previously leased to customers in 2014. We expect the

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even/odd year demand trend in the mobility market to most likely lessen in the future due to slower smart phone unit growth, along with rising device complexity and the reduced impact of parallel test in our Semiconductor Test business.

On April 16, 2016, an earthquake in Kumamoto, Japan damaged our facility. The facility, which is used for engineering, production, and support operations, sustained heavy damage. We are still in the process of assessing the total impact of the damage. The net book value of the inventory and fixed assets at the Kumamoto location is approximately $17 million. With respect to the location, we have $10 million of earthquake insurance with a deductible of approximately $2.5 million. We are temporarily transferring some operations to other facilities in Japan and elsewhere while our Kumamoto operations are restored.

Critical Accounting Policies and Estimates

We have identified the policies which are critical to understanding our business and our results of operations. Except for below, there have been no significant changes during the three months ended April 3, 2016 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, 2015.

Goodwill, Intangible and Long-Lived Assets

We performed our last goodwill impairment test during the fourth quarter of 2015. We performed step one of the two step impairment test for our Wireless Test and Defense/Aerospace reporting units and the step zero assessment for our Industrial Automation reporting unit. The step one tests resulted in each of the reporting unit’s fair value exceeding its carrying value by at least 20%.

We estimate the fair value of a reporting unit using the results derived from an income approach, a discounted cash flow analysis, and a market approach using the market comparable method which is based on revenue and earnings multiples from comparable companies. Estimating a reporting unit’s fair value requires significant judgment and assumptions including projected future cash flows, revenue, market size, market growth, Teradyne’s market share, market multiples, discount rates and consideration of market valuations of comparable companies. These judgments and assumptions reflect our best estimates, but these items involve inherent uncertainties based on market and customer conditions.

The fair value estimate for our Wireless Test reporting unit involves forecasting the size of the wireless test market in future years and our market share which are significant judgments and assumptions due to our significant customer concentration in our Wireless Test segment. Forecasting the size of the wireless test market in future years and our market share includes estimating end product shipment volumes, new wireless technology introductions and customer buying patterns. As of April 3, 2016 and December 31, 2015, our Wireless Test segment had $262.9 million of goodwill.

In the fourth quarter of 2014, we recorded a goodwill impairment charge of $98.9 million in our Wireless Test segment as a result of decreased demand attributable to an estimated smaller wireless test market due to reuse of wireless test equipment, price competition and different testing techniques.

Further reductions in the size of the wireless test market or our share of the wireless test market may occur which may result in additional goodwill impairment charges.

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SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS

	For the Three Months Ended
	April 3, 2016			April 5, 2015
Percentage of revenues:
Revenues:
Products		83	%		80	%
Services		17			20
Total revenues		100			100
Cost of revenues:
Cost of products		39			35
Cost of services		8			9
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		47			44
Gross profit		53			56
Operating expenses:
Engineering and development		17			21
Selling and administrative		18			21
Acquired intangible assets amortization		5			4
Restructuring and other		—			—
Total operating expenses		40			46
Income from operations		13			10
Non-operating (income) expenses
Interest income		—			(1	)
Interest expense		—			—
Other (income) expense, net		—			(2	)
Income before income taxes		13			12
Income tax provision		2			3
Net income		12	%		10	%

Results of Operations

First Quarter 2016 Compared to First Quarter 2015

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
	April 3, 2016		April 5, 2015
Semiconductor Test		0.9		1.5
System Test		0.9		1.8
Wireless Test		1.0		0.8
Industrial Automation		1.1		—
Total Company		0.9		1.4

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Revenues

Revenues by our four reportable segments were as follows:

	For the Three Months Ended				Dollar Change
	April 3, 2016		April 5, 2015
	(in millions)
Semiconductor Test	$	340.3	$	270.9	$	69.4
System Test		53.7		37.4		16.3
Wireless Test		20.3		34.1		(13.8	)
Industrial Automation		16.7		—		16.7
	$	431.0	$	342.4	$	88.6

The increase in Semiconductor Test revenues of $69.4 million, or 25.6%, was primarily due to higher product volume in the application processor and image sensor markets. The increase in System Test revenue of $16.3 million, or 43.6%, was primarily due to higher sales in Storage Test of 3.5” hard disk drive testers for cloud storage. The decrease in Wireless Test revenue of $13.8 million, or 40.5%, was primarily driven by lower cellular test system sales due to lower sales to our largest Wireless Test segment customer. As a result of significant customer concentration in our Wireless Test segment, quarterly revenue is subject to fluctuations based on our largest customer’s test capacity plans. The acquisition of Universal Robots, which is our Industrial Automation segment, completed in June 2015, added $16.7 million of revenue in the three months ended April 3, 2016.

Revenues by country as a percentage of total revenues were as follows (1):

	For the Three Months Ended
	April 3, 2016			April 5, 2015
Taiwan		42	%		30	%
United States		12			14
Japan		11			7
China		9			13
Europe		7			6
Korea		6			13
Singapore		4			5
Thailand		3			2
Malaysia		3			5
Philippines		2			3
Rest of World		1			2
		100	%		100	%

(1) Revenues attributable to a country are based on location of customer site.

Gross Profit

Our gross profit was as follows:

	For the Three Months Ended						Dollar/Point Change
	April 3, 2016			April 5, 2015
	(in millions)
Gross Profit	$	230.3		$	192.4		$	37.9
Percent of Total Revenues		53.4	%		56.2	%		(2.8	)

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Gross profit as a percent of revenue decreased by 2.8 points, of which 3.7 points decrease was related to unfavorable product mix in SOC Semiconductor Test, higher Storage Test sales and lower Wireless Test sales, partially offset by an increase of 1.6 points due to higher product volume.

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 for our Semiconductor Test, System Test and Industrial Automation segments and the next four quarters for our Wireless Test segment, is written-down to estimated net realizable value.

During the three months ended April 3, 2016, we recorded an inventory provision of $4.3 million included in cost of revenues primarily due to downward revisions to previously forecasted demand levels. Of the $4.3 million of total excess and obsolete provisions, $3.7 million was related to Semiconductor Test, $0.6 million was related to Wireless Test, and $0.1 million was related to System Test.

During the three months ended April 5, 2015, we recorded an inventory provision of $1.4 million included in cost of revenues primarily due to downward revisions to previously forecasted demand levels. Of the $1.4 million of total excess and obsolete provisions, $0.8 million was related to Wireless Test, $0.5 million was related to Semiconductor Test, and $0.1 million was related to System Test.

During the three months ended April 3, 2016 and April 5, 2015, we scrapped $0.7 million and $0.6 million of inventory, respectively. During the three months ended April 3, 2016 and April 5, 2015, we sold $1.1 million and $1.9 million of previously written-down or written-off inventory, respectively. As of April 3, 2016, we had inventory related reserves for inventory which had been written-down or written-off totaling $122.9 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
	April 3, 2016			April 5, 2015
	(in millions)
Engineering and Development	$	73.5		$	71.5		$	2.0
Percent of Total Revenues		17.0	%		20.9	%

The increase of $2.0 million in engineering and development expenses was primarily from the acquisition of Universal Robots completed in June 2015.

Selling and Administrative

Selling and administrative expenses were as follows:

	For the Three Months Ended						Dollar Change
	April 3, 2016			April 5, 2015
	(in millions)
Selling and Administrative	$	79.2		$	72.0		$	7.2
Percent of Total Revenues		18.4	%		21.0	%

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The increase of $7.2 million in selling and administrative expenses was due primarily to additional costs as a result of the acquisition of Universal Robots in June 2015.

Acquired Intangible Assets Amortization

Acquired intangible assets amortization expense was as follows:

	For the Three Months Ended						Dollar Change
	April 3, 2016			April 5, 2015
	(in millions)
Acquired Intangible Assets Amortization	$	20.0		$	13.8		$	6.2
Percent of Total Revenues		4.6	%		4.0	%

Acquired intangible assets amortization expense increased due to the Universal Robots acquisition in June 2015.

Restructuring and Other

Other

During the three months ended April 3, 2016, we recorded an expense of $1.2 million for the increase in the fair value of the Universal Robots contingent consideration liability.

Restructuring

During the three months ended April 3, 2016, we recorded $0.4 million of severance charges related to headcount reductions of 12 people, primarily in Semiconductor Test.

Interest and Other

	For the Three Months Ended						Dollar Change
	April 3, 2016			April 5, 2015
	(in millions)
Interest Income	$	(1.6	)	$	(1.8	)	$	0.2
Interest Expense		0.7			0.2			0.5
Other (income) expense, net		(0.1	)		(5.7	)		5.6

Interest income decreased by $0.2 million due primarily to lower cash and marketable securities balances in 2016. Interest expense increased by $0.5 million due primarily to costs related to the revolving credit facility and realized losses on sales of marketable securities in 2016. In 2015, other (income) expense, net included a $4.8 million gain from the sale of an equity investment.

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Income (Loss) Before Income Taxes

	For the Three Months Ended						Dollar Change
	April 3, 2016			April 5, 2015
	(in millions)
Semiconductor Test	$	73.3		$	43.1		$	30.1
System Test		9.5			1.0			8.5
Wireless Test		(20.1	)		(10.4	)		(9.7	)
Industrial Automation		(7.2	)		—			(7.2	)
Corporate(1)		1.8			8.7			(6.9	)
	$	57.2		$	42.4		$	14.8

(1) Included in Corporate are pension actuarial gains, contingent consideration adjustment, gain from the sale of an equity investment, proceeds from life insurance, interest income and interest expense.

The increase in income before income taxes in Semiconductor Test was primarily due to higher revenues in the application processor and image sensor markets. The increase in income before income taxes in System Test was primarily due to higher sales in Storage Test of 3.5” hard disk drive testers for cloud storage. The decrease in income before income taxes in Wireless Test was primarily due to lower revenue driven by lower cellular test system sales. In June 2015, we completed the acquisition of Universal Robots, which is our Industrial Automation segment. The loss before income taxes in Industrial Automation in the three months ended April 3, 2016, was primarily due to intangible assets amortization.

Income Taxes

The effective tax rate for the three months ended April 3, 2016 and April 5, 2015 was 12.6% and 22.7%, respectively. The decrease in the effective tax rate is primarily attributable to a projected decrease in income subject to tax in the United States as compared to lower rate foreign jurisdictions as well as the benefit from U.S. research and development tax credits.

Contractual Obligations

The following table reflects our contractual obligations as of April 3, 2016:

	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Other
	(in thousands)
Purchase obligations	$	235,305	$	233,718	$	1,587	$	—	$	—	$	—
Retirement plans contributions		110,896		4,036		7,967		13,109		85,784		—
Operating lease obligations		70,963		15,374		24,768		16,826		13,995		—
Fair value of contingent consideration		23,609		500		23,109		—		—		—
Other long-term liabilities reflected on the balance sheet under GAAP(1)		78,521		—		25,468		—		—		53,053
Total	$	519,294	$	253,628	$	82,899	$	29,935	$	99,779	$	53,053

(1) Included in Other Long-Term 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 $32.9 million in the three months ended April 3, 2016, to $975.4 million.

In the three months ended April 3, 2016, changes in operating assets and liabilities used cash of $67.2 million. This was due to a $44.4 million increase in operating assets and a $22.8 million decrease in operating liabilities.

The increase in operating assets was primarily due to a $42.6 million increase in accounts receivable due to higher sales.

The decrease in operating liabilities was due to a $51.1 million decrease in accrued employee compensation due primarily to variable compensation and employee stock compensation awards payroll tax payments, a $13.8 million decrease in customer advance payments and deferred revenue, an $8.3 million decrease in accounts payable and $1.3 million of retirement plan contributions, partially offset by a $51.8 million increase in other accrued liabilities.

Investing activities during the three months ended April 3, 2016 provided cash of $70.7 million, due to $239.4 million and $73.5 million proceeds from sales and maturities of marketable securities, respectively, partially offset by $221.8 million used for purchases of marketable securities and $20.3 million used for purchases of property, plant and equipment.

Financing activities during the three months ended April 3, 2016 used cash of $42.8 million, due to $28.0 million used for the repurchase of 1.5 million shares of common stock at an average price of $18.81 per share, $12.3 million used for dividend payments and $11.7 million used for payment related to Universal Robots acquisition contingent consideration, partially offset by $9.1 million from the issuance of common stock under employee stock purchase and stock option plans.

In the three months ended April 5, 2015, changes in operating assets and liabilities used cash of $31.1 million. This was due to a $15.6 million increase in operating assets and a $15.5 million decrease in operating liabilities.

The increase in operating assets was due to a $24.7 million increase in accounts receivable due to higher sales, partially offset by a $6.0 million decrease in inventories and a $3.1 million increase in prepayments and other assets. The decrease in operating liabilities was due to a $45.2 million decrease in accrued employee compensation due primarily to variable compensation and employee stock award payroll tax payments, and $1.0 million of retirement plan contributions, partially offset by a $13.9 million increase in other accrued liabilities, a $11.1 million increase in accounts payable due to higher sales, a $4.7 million increase in accrued income taxes and a $1.0 million increase in customer advance payments and deferred revenue.

Investing activities during the three months ended April 5, 2015 used cash of $62.0 million, due to $335.6 million used for purchases of marketable securities and $21.1 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities of $140.2 million and $148.6 million, respectively, proceeds from the sale of an equity investment of $4.8 million, and proceeds from life insurance of $1.1 million related to the cash surrender value from the cancellation of Teradyne owned life insurance policies. The decrease in purchases of property, plant and equipment of $10.1 million was primarily due to higher purchases of testers for customer leasing in the three months ended March 30, 2014.

Financing activities during the three months ended April 5, 2015 used cash of $50.8 million, due to the repurchase of 2.4 million shares of common stock for $46.7 million at an average price of $19.40 per share, and $13.0 million used for dividend payments, partially offset by $8.9 million provided by the issuance of common stock under employee stock purchase and stock option plans.

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In January 2016, our Board of Directors declared a quarterly cash dividend of $0.06 per share. In the three months ended April 3, 2016, dividend payments were $12.3 million.

In January 2015, our Board of Directors authorized the repurchase of up to $500 million of common stock of which $300 million was repurchased in 2015. In 2016, we intend to repurchase between $100 million and $200 million. During the three months ended April 3, 2016, we repurchased 1.5 million shares of common stock at an average price of $18.81, for a total cost of $28.0 million. The cumulative repurchases under this program as of April 3, 2016 totaled 17.1 million shares of common stock for $328.0 million at an average price of $19.17 per share.

While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors which will consider, among other things, our earnings, capital requirements and financial condition.

We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend, execute our authorized share repurchase program and meet our 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 $514 million of cash, cash equivalents and marketable securities outside the U.S. that if repatriated would incur additional taxes. Determination of the additional taxes that would be incurred is not practicable due to uncertainty regarding the remittance structure, the mix of earnings and earnings and profit pools in the year of remittance, and overall complexity of the calculation. Inflation has not had a significant long-term impact on earnings.

Equity Compensation Plans

As discussed in Note N: “Stock Based Compensation” in our 2015 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

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU provides guidance for the recognition, measurement, presentation, and disclosure of financial instruments. The new pronouncement revises accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it amends the presentation and disclosure requirements of equity securities that do not result in consolidation and are not accounted for under the equity method. Changes in the fair value of these equity securities will be recognized directly in net income. This pronouncement is effective for fiscal years and interim periods within those years beginning after December 15, 2017. We are currently evaluating the impact of this ASU on our financial position and results of operations.

On March 31, 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact of this ASU on our financial position and results of operations.

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In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the impact of this ASU on our financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the balance sheet. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the balance sheet. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. We early adopted this ASU prospectively in the first quarter of 2016.

On April 7, 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation for debt discount. ASU 2015-03 does not specifically address requirements for the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. On August 8, 2015, the FASB issued ASU 2015-15, “Interest—Imputation of Interest (Subtopic 835-30)” clarifying that debt issuance costs related to line-of-credit arrangements could be presented as an asset and amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We adopted this ASU in the first quarter of 2016. Adoption of this ASU did not have a material impact on our financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to show the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date of the new revenue standard by one year. For Teradyne, the standard will be effective in the first quarter of 2018. Early adoption is permitted but not before the original effective date (that is, annual periods beginning after December 15, 2016). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. We have not yet selected a transition method. We are currently evaluating the impact of this ASU on our financial position and results of operations.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

For “Quantitative and Qualitative Disclosures about Market Risk” affecting Teradyne, see Part 2 Item 7a, “Quantitative and Qualitative Disclosures about Market Risks,” in our Annual Report on Form 10-K filed with the SEC on February 29, 2016. 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, 2015.

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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

In addition to other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015, 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.

The recent natural disaster in Japan could disrupt our operations and adversely affect our results of operations.

The recent earthquake in Japan has damaged our building and impacted our operations located in Kumamoto. We are temporarily transferring the manufacturing operations to other facilities so we do not expect the damage to have a significant impact on our ability to manufacture our products or sell products to our customers. However, the situation in Kumamoto remains uncertain so the events could have a short-term impact to our business in Japan. In addition, we may have to incur significant costs in order to repair our building which could have an adverse effect on our financial condition and results of operations.

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

In January 2015, our Board of Directors authorized a stock repurchase program for up to $500 million of common stock, of which $300 million was repurchased in 2015. In 2016, we intend to repurchase between $100 million and $200 million. The cumulative repurchases as of April 3, 2016 totaled 17.1 million shares of common stock for $328 million at an average price per share of $19.17.

The following table includes information with respect to repurchases we made of our common stock during the three months ended April 3, 2016 (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, 2016 – January 31, 2016		452		$	19.57			—	$	200,051
February 1, 2016 – February 28, 2016		955		$	18.08			951	$	182,851
February 29, 2016 – April 3, 2016		540		$	20.01			537	$	172,050
		1,947	(1)	$	18.96	(1)		1,488

(1) Includes approximately 0.5 million shares at an average price of $19.57 withheld from employees for the payment of taxes.

We satisfy U.S. federal and state minimum withholding tax obligations 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.

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Item 4: Mine Safety Disclosures

Not Applicable

Item 6: Exhibits

Exhibit Number	Description
10.1	Executive Officer Change in Control Agreement dated February 8, 2016 between Teradyne, Inc. and Greg Smith (filed herewith)
10.2	Employment Agreement dated February 8, 2016 between Teradyne, Inc. and Greg Smith (filed herewith)
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 13, 2016

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EX-10.1

Exhibit 10.1

EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT

EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 8th day of February 2016 by and between Teradyne, Inc. (including its subsidiaries, “Teradyne”), and the undersigned executive officer Teradyne (“Employee”).

WITNESSETH:

WHEREAS, Teradyne and Employee desire to set forth certain terms and conditions relating to the termination of Employee’s employment upon the occurrence of a Change in Control (as hereinafter defined) of Teradyne.

NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:

1. Entitlements Upon a Termination Event. If, within twenty-four (24) months following a Change in Control or in contemplation of a Change in Control, there is a Termination Event, and subject to the conditions set forth herein and the performance by Employee of the undertakings and duties set forth herein, Employee shall be entitled to the rights, payments and other benefits set forth below:

(a) Treatment of Awards. Equity Awards that are not subject to Performance Criteria shall be governed by Section 1(b) below, and Cash Awards and Equity Awards that are subject to Performance Criteria shall be governed by Section 1(c) below. The parties hereto acknowledge that, except as otherwise provided herein, the terms of this Agreement are intended to modify the terms of Employee’s existing Cash Award and Equity Award agreements and to be a supplement to Cash Award and Equity Award agreements granted on or subsequent to the date hereof.

(b) Acceleration of Equity Awards. All of Employee’s unvested or unexercisable Equity Awards or Equity Awards subject to restrictions on transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, granted prior to, on, or after the date hereof (but only (I) such Equity Awards as have been granted to Employee by Teradyne as of the date of the Change in Control or (II) such Equity Awards as have been assumed by an acquiring company at the time of a Change in Control or such new cash and equity awards that have been substituted by an acquiring company for Equity Awards existing at the time of a Change in Control, each pursuant to the terms of any Teradyne incentive plan) shall automatically become fully vested, exercisable or free of restrictions on transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, as of the date of such Termination Event, and all Equity Awards granted on or after the date hereof shall, to the extent applicable, remain exercisable for the remainder of the generally applicable term of such Equity Award.

(c) Satisfaction of Performance Criteria. All of Employee’s Cash Awards and Equity Awards that are subject to Performance Criteria shall be settled and paid in the following

manner: Employee shall be deemed to have satisfied the necessary percentage of the Performance Criteria to which such Cash Awards and Equity Awards are subject as of the date of the Termination Event, that will provide Employee with the target level of such Cash Awards and Equity Awards; and Employee shall be entitled to receive that portion of each Cash Award and Equity Award payable, at the target level. For purposes of the Cash Awards, the payment shall be multiplied by a fraction, the numerator of which shall be the number of calendar months that have passed during the period in which the Performance Criteria are to be measured (treating the month in which the Termination Event occurs as a full calendar month) and the denominator of which shall be the total number of calendar months in such period. For purposes of this Agreement, “target level” is that percentage of the Performance Criteria established at the beginning of each calendar year in order for the Employee to achieve Model Compensation. Unless otherwise required under Section 1(e) below, such Cash Awards and Equity Awards shall be paid to Employee or the restrictions on transfer removed not later than 10 days following the Termination Event.

(d) Salary Continuation. Unless otherwise required under Section 1 (e) below, Teradyne shall pay Employee monthly an amount equal to 1/12^th of Employee’s current annual Model Compensation as of the Termination Event for a period of 24 months following the date of the Termination Event (the “Salary Continuation Period”). In the event a Termination Event constitutes termination for Good Reason on account of a material reduction in Model Compensation, the payment obligation pursuant to this Section 1(d) shall be calculated without giving effect to any such reductions in Model Compensation. All such continued payments shall be made in accordance with Teradyne’s customary pay practices. Subject to Section 1(e)(i) of this Agreement but notwithstanding any other provision of this Agreement to the contrary, the continued payments to Employee contemplated by this Section 1(d) and any benefits provided to Employee that are subject to Section 409A of the Code shall commence on the 60^th day following the Termination Event provided Employee has complied with the requirements of Section 1(g) of this Agreement and the release of claims has become irrevocable under applicable law no later than on the 60^th day following his Termination Event.

(e) Deferred Compensation/Section 409A.

(i) Notwithstanding any other provision of this Agreement, if the Employee is a “ specified employee” at the time of the Employee’s “separation from service” as defined in Section 409A of the Code , all payments, benefits, or removal of restrictions on the transfer of equity under this Agreement with respect to the Employee’s “separation from service” that constitute compensation deferred under a nonqualified deferred compensation plan as defined in Section 409A of the Code to which such specified employee would otherwise be entitled during the first six months following the date of separation from service shall be made on the first day of the seventh month after the date of separation from service (or, if earlier, the date of death of the Employee).

(ii) For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A or payments that are made under separation pay plans as described in Treasury Regulation

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Section 1.409A-1(b)(9)(ii), (iii) or (iv), shall not be treated as deferred compensation unless applicable law requires otherwise. Neither Teradyne nor the Employee shall have the right to accelerate or defer the delivery of any payments or benefits under this Agreement except to the extent specifically permitted or required by Section 409A.

(iii) This Agreement is intended to comply with the provisions of Section 409A and the Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in the Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, Teradyne makes no representations or warranty and shall have no liability to Employee or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

(iv) If any amount is payable under the provisions of paragraph (f), below, as a reimbursement of Employee’s expenses, under the provisions of Section 2 and 13, or any other provision of this Agreement that constitutes a reimbursement of expenses under Section 409A then, notwithstanding the other provisions of this Agreement with respect to the payment of such reimbursement, the following limitations shall apply; (A) the expenses eligible for reimbursement may not affect the expenses eligible for reimbursement in any other taxable year; (B) such reimbursement must be made on or before the last day of the year following the year in which the expenses are incurred; (C) the right to reimbursement is not subject to liquidation or exchange for another benefit; and (D) in connection with reimbursements under Section 13 the period during which such expenses can be incurred extends to the end of the period permitted for such claims under the applicable statute of limitations.

(f) Benefit Continuation. During the Salary Continuation Period, Teradyne shall arrange or provide for continued health, dental and vision insurance plan coverage for the Employee at the same levels of coverage in existence prior to the Termination Event subject to Teradyne and Employee each contributing to the applicable insurance premium payments on the same basis and in the same proportions as in existence at the date of the Termination Event. If the Employee is not eligible for continued health, dental and vision insurance plan coverage for any portion of the twenty-four (24) month period defined herein, Teradyne shall provide or reimburse Employee for comparable individual insurance and, if such provision or reimbursement constitutes taxable income to the Employee, such additional amount as is necessary to place the Employee in substantially the same after tax position as he was while an employee of Teradyne with respect to such insurance plan coverages. All other benefits, including but not limited to flex/vacation time accrual, short and long term disability insurance, life insurance, contributions (including company matches) into savings plan and “savings plan plus”, profit sharing payments and participation in the Employee stock purchase plan shall cease as of the date of the Termination Event.

To the extent that amounts paid by Teradyne to provide the benefits under this paragraph (f) are deemed to be deferred compensation subject to Section 409A, then such payments shall be made monthly and any payment to preserve the Employee’s after tax position shall be made within 60 days after the end of each calendar year in which the taxable provision or reimbursement occurs.

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(g) Release. Notwithstanding any other provision of this Agreement to the contrary, no payment, benefit or removal of restriction on the transfer of equity provided for under or by virtue of the provisions of this Agreement shall be paid or otherwise made available unless Teradyne shall have first received from Employee a valid, binding and irrevocable general release, in the form of Attachment A to this Agreement within twenty-one (21) days of the date of the Termination Event. Employee shall sign such release within twenty-one (21) days of a Termination Event subsequent to a Change in Control. Teradyne agrees to provide Employee an estimate relating to payments to be made under this Agreement upon Employee’s written request. All rights, benefits, payments and other entitlements contemplated to be provided or paid to Employee under this Agreement shall be forfeited as of the 60^th day following Employee’s Termination Event if Employee has not provided Teradyne with a valid, irrevocable release of claims as of such 60^th day.

(h) Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

“Cash Awards” shall mean any cash-based bonus, cash incentive or other cash awards provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash Compensation Incentive Plan.

“Cause” shall mean conduct involving one or more of the following: (i) the substantial and continuing failure of Employee, after notice thereof, to render services to Teradyne in accordance with the terms or requirements of his or her employment as established by the Teradyne Board of Directors from time to time and communicated to the Employee; (ii) Employee’s disloyalty, gross negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to Teradyne, each in connection with Employee’s employment by Teradyne; (iii) Employee’s deliberate disregard of the rules or policies of, or breach of an agreement with, Teradyne which results in direct or indirect material loss, damage or injury to Teradyne; (iv) the intentional unauthorized disclosure by Employee of any trade secret or confidential information of Teradyne; (v) the commission by Employee of an act which constitutes unfair competition with Teradyne; or (vi) the conviction of, or the entry of a plea of guilty or nolo contendere by the Employee, to any crime involving moral turpitude or any felony. In the event that Teradyne determines that Cause may exist pursuant to clauses (i), (iii) and (v) above, Teradyne shall give Employee written notice of the facts constituting such Cause and Employee shall have 30 days following receipt of such notice to remedy such Cause.

A “Change in Control” shall be deemed to have occurred upon the occurrence of any of the following events: (i) any consolidation, cash tender offer, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes less than a majority of the combined voting power of the then-outstanding securities of the combined corporation or person immediately after such transaction; (ii) any sale, lease, exchange or other transfer of all or substantially all of Teradyne’s assets; (iii) the adoption by the Board of Directors of Teradyne of any plan or proposal for the liquidation or dissolution of Teradyne; (iv) a change in the majority of the Board of Directors of Teradyne through one or more contested elections occurring within a three-year period; or (v) any person (as that term is used in Section 13(d)(3) or

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Section 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined voting power of Teradyne’s outstanding voting securities, other than (A) as a result of a consolidation, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes at least a majority of combined voting power of the then-outstanding securities of the combined corporation or person immediately after such transaction, (B) by any trustee or other fiduciary holding securities under an employee benefit plan of Teradyne, or (C) by a person temporarily acquiring beneficial ownership in its capacity as an underwriter (as defined pursuant to Section 2(a)(11) of the Securities Act of 1933, as amended) in connection with a public offering of Teradyne securities.

“Equity Awards” shall mean the equity ownership, participation or appreciation opportunities provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash Compensation Incentive Plan, the Teradyne, Inc. 1991 Employee Stock Option Plan and the Teradyne, Inc. 1997 Employee Stock Option Plan, and any stock options, restricted stock units, restricted stock, stock appreciation rights, phantom stock and other stock-based awards granted thereunder.

“Good Reason” shall mean any one or more of the following: (i) any material reduction of Employee’s responsibilities (other than for Cause or as a result of death or disability) as they shall exist on the date of the consummation of the Change in Control; (ii) any material reduction in Employee’s Model Compensation as in effect on the date of the consummation of the Change in Control, or as the same may be increased from time to time, or any failure by Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written notice by Employee to Teradyne, within 45 days; (iii) a material reduction in the value of Employee’s benefit package from the value of Employee’s benefit package on the date of the consummation of the Change in Control; or (iv) a requirement that Employee be based at an office that is greater than 50 miles from the location of Employee’s office immediately prior to the Change in Control except for required travel on Teradyne’s business to an extent substantially consistent with the business travel obligations which Employee undertook on behalf of Teradyne prior to the date of the consummation of the Change in Control. In the event of a Termination Event in contemplation of a Change in Control, the applicable baseline measurement date shall be six months prior to such Termination Event and not the date of the consummation of the Change in Control.

“Model Compensation” shall mean Employee’s annual “Model Compensation” as determined by Teradyne’s Compensation Committee or Board of Directors, which consists of (i) a fixed annual salary and (ii) a target annual variable amount.

“Performance Criteria” shall have the meaning ascribed to that term in the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan.

“Termination Event” shall mean (i) any termination of Employee by Teradyne without Cause or (ii) any voluntary termination by Employee for Good Reason; provided, that it shall not be a Termination Event merely because Employee ceases to be employed by Teradyne and becomes employed by a successor to Teradyne involved in the Change in Control that

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assumes or is otherwise bound by this Agreement as provided in Section 7(a). It is expressly understood that no Termination Event shall be deemed to have occurred merely because, upon the occurrence of a Change in Control, Employee ceases to be employed by Teradyne and does not become employed by a successor to Teradyne after the Change in Control if the successor makes an offer to employ Employee on terms and conditions which, if imposed by Teradyne, would not give Employee a basis on which to terminate employment for Good Reason.

(i) Termination in Contemplation of a Change in Control. For purposes of this Agreement, including without limitation, this Section 1, a Termination Event occurring “in contemplation of a Change in Control” means a Termination Event occurring within 3 months prior to an actual Change in Control at the request or direction of a person who enters or has entered into an agreement the consummation of which would cause a Change in Control or who conditions the entry into such an agreement on the Employee’s termination whether or not such person actually enters into such an agreement. A termination by the Employee for Good Reason shall constitute a Termination Event in contemplation of a Change in Control if the actions constituting Good Reason were taken at the request or direction of a person who has entered into an agreement the consummation of which would cause a Change in Control.

2. Reduction of Payments

(a) Notwithstanding any other provision of this Agreement, in the event that the Company undergoes a Change in Ownership or Control (as defined below), the Company shall not be obligated to provide to the Executive a portion of any “Contingent Compensation Payments” (as defined below) that the Executive would otherwise be entitled to receive to the extent necessary to eliminate any “excess parachute payments” (as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “Code”)) for the Executive. For purposes of this Section 2, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”

(b) For purposes of this Section 2, the following terms shall have the following respective meanings:

(i) “Change in Ownership or Control” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code.

(ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G (b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.

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(c) If and to the extent that any Contingent Compensation Payments are required to be treated as Eliminated Payments pursuant to this Section 2, then the Payments shall be reduced or eliminated, as determined by the Company, in the following order (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits and (iv) any vesting of equity awards, in each case in reverse order beginning with the payments or benefits that are to be paid the farthest in time from the date that triggers the applicability of the excise tax, to the extent necessary to maximize the Eliminated Payments.

3. (a) Non-Competition and Non-Solicitation. From the Termination Event through the end of the Salary Continuation Period, Employee shall not directly or indirectly:

(i) Engage in any business or enterprise (whether as an owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise, except as the holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company) that is competitive with Teradyne (including but not limited to, any business or enterprise that develops, designs, produces, markets, sells or renders any product or service competitive with any product or service developed, produced, marketed, sold or rendered by Teradyne while Employee was employed by Teradyne);

(ii) Either alone or in association with others, recruit, solicit, hire or engage as an independent contractor, any person who was employed by Teradyne at any time during the period of Employee’s employment with Teradyne, except for an individual whose employment with Teradyne has been terminated for a period of six months or longer; and

(iii) Either alone or in association with others, solicit, divert or take away, or attempt to divert or to take away, the business or patronage of any client or customer or entity that was a prospective client or customer of Teradyne during the Employee’s employment.

(b) If any restriction set forth in this Section 3 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.

(c) Employee acknowledges that the restrictions contained in this Section 3 are necessary for the protection of the business and goodwill of Teradyne and are considered by Employee to be reasonable for such purpose. Employee agrees that any breach of this Section 3 will cause Teradyne irreparable harm and therefore, in the event of any such breach, in addition to such other remedies that may be available, Teradyne shall have the right to seek equitable and/or injunctive relief.

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(d) The geographic scope of this Section 3 shall extend to anywhere Teradyne or any of its subsidiaries is doing business, has done business or has plans to do business.

(e) Employee agrees that during the Salary Continuation Period, he/she will make reasonable good faith efforts to give verbal notice to Teradyne of each new business activity he/she plans to undertake, at least (5) business days prior to beginning any such activity.

(f) If Employee violates the provisions of this Section 3, Teradyne shall be entitled to suspend and recoup any salary continuation payment made per Section 1 (d) above and Employee shall continue to be bound by the restrictions set forth in this Section 3 for an additional period of time equal to the duration of the violation, such additional period not to exceed 24 months.

3A. No Obligation of Employment. Employee understands that the employment relationship between Employee and Teradyne will be “at will” and Employee understands that, prior to any Change in Control, Teradyne may terminate Employee with or without “Cause” at any time, including in contemplation of a Change in Control. Following any Change in Control, Teradyne may also terminate Employee with or without “Cause” at any time subject to Employee’s rights and Teradyne’s obligations specified in this Agreement.

4. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts and this Agreement shall be deemed to be performable in Massachusetts.

5. Severability. In case any one or more of the provisions contained in this Agreement for any reason shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and this Agreement shall be construed to the maximum extent permitted by law.

6. Waivers and Modifications. This Agreement may be modified, and the rights, remedies and obligations contained in any provision hereof may be waived, only in accordance with this Section 6. No waiver by either party of any breach by the other or any provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any other provision of this Agreement. This Agreement may not be waived, changed, discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.

7. Assignment. (a) Teradyne shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Teradyne expressly to assume and agree to perform under the terms of this Agreement in the same manner and to the same extent that Teradyne and its affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement), and in such event Teradyne (as constituted prior to such

8

succession) shall have no further obligation under or with respect to this Agreement. Failure of Teradyne to obtain such assumption and agreement with respect to Employee prior to the effectiveness of any such succession shall be a breach of the terms of this Agreement with respect to Employee and shall entitle Employee to compensation from Teradyne (as constituted prior to such succession) in the same amount and on the same terms as Employee would be entitled to hereunder were Employee’s employment terminated for Good Reason following a Change in Control, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of the Termination Event. As used in this Agreement, “Teradyne” shall mean Teradyne as hereinbefore defined and any successor to its business or assets as aforesaid which assumes and agrees (or is otherwise required) to perform this Agreement. Nothing in this Section 7(a) shall be deemed to cause any event or condition which would otherwise constitute a Change in Control not to constitute a Change in Control.

(b) Notwithstanding Section 7(a), Teradyne shall remain liable to Employee upon a Termination Event after a Change in Control if Employee is not offered continuing employment by a successor to Teradyne or is offered continuing employment by a successor to Teradyne only on a basis which would constitute Good Reason for termination of employment hereunder.

(c) This Agreement, and Employee’s and Teradyne’s rights and obligations hereunder, may not be assigned by Employee or, except as provided in Section 7(a), Teradyne, respectively; any purported assignment by Employee or Teradyne in violation hereof shall be null and void.

(d) The terms of this Agreement shall inure to the benefit of and be enforceable by the personal or legal representatives, executors, administrators, permitted successors, heirs, distributees, devisees and legatees of Employee. If Employee shall die while an amount would still be payable to Employee hereunder if they had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee or other designee or, if there is no such designee, Employee’s estate.

8. Entire Agreement. This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes and cancels all agreements, written or oral, made prior to the date hereof between Employee and Teradyne relating to the subject matter hereof; provided, however, that Employee’s existing Cash Award and Equity Award agreements, as modified hereby, shall remain in effect. This Agreement shall not limit any right of Employee to receive any payments or benefits under an employee benefit or Employee compensation plan of Teradyne, initially adopted as of or after the date hereof, which are expressly contingent thereunder upon the occurrence of a Change in Control (including, but not limited to, the acceleration of any rights or benefits thereunder); provided that in no event shall Employee be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Employee under any severance or similar plan or policy of Teradyne, and in any such case Employee shall only be entitled to receive the greater of the two payments.

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9. Notices. All notices hereunder shall be in writing and shall be delivered in person or mailed by certified or registered mail, return receipt requested, addressed as follows:

If to Teradyne, to:	Teradyne, Inc.
	600 Riverpark Drive
	MS NR600-2-2 (Legal Department)
	North Reading, MA 01864
	Attention: General Counsel

If to Employee, at Employee’s address in his employment file on record with the Human Resources Department.

10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

11. Section Headings. The descriptive section headings herein have been inserted for convenience only and shall not be deemed to define, limit, or otherwise affect the construction of any provision hereof.

12. Term. The term of this Agreement (the “Term”) shall commence upon the Effective Date hereof and terminate upon the earlier of (i) twenty-four (24) months following any Change in Control of Teradyne, (ii) the date prior to any Change in Control of Teradyne that Employee for any reason ceases to be an employee of Teradyne (other than a Termination Event in contemplation of a Change in Control) and (iii) the date following any Change in Control of Teradyne that Employee is terminated for Cause or voluntary terminates his employment (other than for Good Reason).

13. Expenses. All reasonable legal fees and expenses incurred in a legal proceeding by Employee in seeking to obtain or enforce any right or benefit provided by this Agreement against a successor to Teradyne shall be the responsibility of and paid for by the successor to Teradyne (but not Teradyne as constituted prior to such succession). Such payments are to be made within twenty (20) days after Employee’s request for payment accompanied with such evidence of fees and expenses incurred as Teradyne’s successor reasonably may require; provided that if Employee institutes a proceeding and the judge or other decision-maker presiding over the proceeding affirmatively finds that Employee has failed to prevail substantially, Employee shall pay Employee’s own costs and expenses (and, if applicable, return any amounts theretofore paid on Employee’s behalf under this Section 13).

14. Payments. Any payments hereunder shall be made out of the general assets of Teradyne. The Employee shall have the status of general unsecured creditor of Teradyne, and this Agreement constitutes a mere promise by Teradyne to make payments under this Agreement in the future as and to the extent provided herein. Unless otherwise determined by Teradyne in an applicable plan or arrangement, no amounts payable hereunder upon a Termination Event shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of Teradyne for the benefit of its employees. Teradyne shall be entitled to withhold from any payments or deemed payments any amount of tax withholding required by law.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

TERADYNE, INC.

By:             /s/ Charles J. Gray

Name:	Charles J. Gray
Title:	Vice President and General Counsel
EMPLOYEE
/s/ Greg Smith
Name:   Greg Smith

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ATTACHMENT A

Release

In consideration of the payments and benefits described in the Executive Officer Change in Control Agreement dated February 1, 2016 between me and Teradyne, Inc. (the “Company”), all of which I acknowledge I would not otherwise be entitled to receive, I hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company, its successors and assigns and their respective officers, directors, stockholders, corporate affiliates, subsidiaries, parent companies, agents and employees (each in their individual and corporate capacities) (hereinafter, the “Released Parties”)

from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature which I ever had or now have against the Released Parties arising out of my employment with and/or termination or separation from the Company or relating to my relationship as an officer or in any other capacity for the Company, including, but not limited to, all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., all as amended, the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., the Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et seq., the Massachusetts Sexual Harassment Statute, G.L. c. 214 § 1C, the Massachusetts Consumer Protection Act, G.L. c. 93A, the Massachusetts Equal Rights Act, G.L. c. 93, the Massachusetts Fair Employment Practices Act, M.G.L. c. 151B, § 1 et seq., the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts Maternity Leave Act , M.G.L. c. 149, § 105D, all as amended; all common law claims including, but not limited to, actions in tort, defamation and breach of contract; all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to stock or stock options; and any claim or damage arising out of my employment with, termination or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that notwithstanding the foregoing, the Company agrees and hereby acknowledges that this Release Agreement is not intended to and does not (i) apply to any claims Executive may bring to enforce the terms of the Executive Officer Change in Control Agreement, (ii) release the Company of any obligation it may have pursuant to a written agreement, the Company’s articles of organization or bylaws, or as mandated by statute to indemnify me as an officer of the Company; and (iii) release the Company of any obligation to provide and/or pay benefits to me or my estate, conservator or designated beneficiary(ies) under and in accordance with the terms of any applicable Company benefit plan and/or program; provided further, that nothing in this Release Agreement prevents me from filing, cooperating with, or participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (except that I acknowledge that I may not be able to recover any monetary benefits in connection with any such claim, charge or proceeding).

Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967: Since I am 40 years of age or older, I have been informed that I have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967 (ADEA) and I agree that:

in consideration for the payments and benefits described in the Executive Officer Change in Control Agreement, which I am not otherwise entitled to receive, I specifically and voluntarily waive such rights and/or claims under the ADEA I might have against the Released Parties to the extent such rights and/or claims arose prior to the date this Release Agreement was executed;

I understand that rights or claims under the ADEA which may arise after the date this Release Agreement is executed are not waived by me;

I was advised that I have at least 21 days within which to consider the terms of this Release Agreement and to consult with or seek advice from an attorney of my choice or any other person of your choosing prior to executing this Release Agreement;

I have carefully read and fully understand all of the provisions of this Release Agreement, and I knowingly and voluntarily agree to all of the terms set forth in this Release Agreement; and in entering into this Release Agreement I am not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those promises described in this document.

Period for Review and Consideration of Agreement:

I acknowledge that I was informed and understand that I have twenty-one (21) days to review this Release Agreement and consider its terms before signing it.

The 21-day review period will not be affected or extended by any revisions, whether material or immaterial, that might be made to this Agreement.

Accord and Satisfaction: The amounts set forth in the Executive Officer Change in Control Agreement shall be complete and unconditional payment, settlement, accord and/or satisfaction with respect to all obligations and liabilities of the Released Parties to me, including, without limitation, all claims for back wages, salary, vacation pay, draws, incentive pay, bonuses, cash awards, equity awards, commissions, severance pay, reimbursement of expenses, any and all other forms of compensation or benefits, attorney’s fees, or other costs or sums.

Revocation Period: I may revoke this Release Agreement at any time during the seven-day period immediately following my execution hereof. As a result, this Release Agreement shall not become effective or enforceable and the Company shall have no obligation to make any payments or provide any benefits described herein until the seven-day revocation period has expired.

Name: Greg Smith	Date
Witness	Date

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IF YOU DO NOT WISH TO USE THE 21-DAY PERIOD,

PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT

I, Greg Smith, acknowledge that I was informed and understand that I have 21 days within which to consider the attached Release Agreement, have been advised of my right to consult with an attorney regarding such Agreement and have considered carefully every provision of the Agreement, and that after having engaged in those actions, I prefer to and have requested that I enter into the Agreement prior to the expiration of the 21 day period.

Dated:
	Name: Greg Smith
Dated:
	Witness

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

In consideration of my promotion to President, Semiconductor Test by Teradyne, Inc., a corporation of the Commonwealth of Massachusetts (herein referred to as “the Company”), effective February 8, 2016 and the payments made to me as consequence thereof, I agree that, effective February 8, 2016, I will promptly report to an officer of the Company or to such other individual as may from time to time be designated, all inventions and new ideas which I, alone or with others, have conceived or reduced to practice since the time of entering the employment of the Company in respect to any subject matter relating to the business in which the Company is engaging as of the date of conception or reduction to practice of each such invention or new idea. This obligation ceases with termination of my employment with the Company.

I further agree to assign to the Company the entire interest throughout the world in all inventions and new ideas referred to in the proceeding paragraph, whether or not reported by me, and to execute all papers and do anything necessary and reasonable to secure to the Company title therein and Letters Patent pertaining thereto including the giving of testimony in any suit if called so to do during or after my employment but all at the expense of the Company. I also waive all claims to moral rights in any Inventions.

All inventions and new ideas that would fall within the scope of this Agreement, but for the fact that they were conceived prior to my employment by the Company, may be excluded from this Agreement only if I can establish, under applicable inventorship law, a date of conception prior to my entering the employment of the Company.

I further agree that I will make a written record of all inventions and new ideas falling within the scope of this Agreement in the form of notes, sketches, drawing, or reports relating thereto, which records shall be and remain the property of and available to the Company at all times.

I further agree that I will not, during or after the period of my employment with the Company, divulge to any unauthorized persons confidential information concerning the Company’s business, technology, and activities that I learn during the period of my employment, or use any such information except on the Company’s behalf.

I further agree that I will observe all rules and regulations laid down by the Government agencies relating to the safeguarding of classified information that may be disclosed or entrusted to me in connection with any contract between the Company and the Government or any contractor with the Government.

I further agree that during the period of my employment by the Company, I will not directly or indirectly enter the employment of, or render any professional services, including but not limited to as an independent contractor, consultant, director, partner, owner or otherwise, except such as are rendered at the request of the Company, to any individual, partnership, association or

corporation who or which is a competitor of the Company without the prior permission in writing of the Company. Competitor includes, but is not limited to, any business or enterprise that develops, designs, produces, markets, sells or renders any product or service or intends to do so that is competitive with any product or service developed, produced, marketed, sold or rendered by the Company, including actual or demonstrably anticipated research or development. I further agree that I will notify the Company of any outside employment in which I am engaged during the period of my employment with the Company.

I further agree that during the period of my employment with the Company, and for a period of one year after my employment ceases as a result of my voluntary resignation, I will not (except on the Company’s behalf) solicit (for the purpose of providing a product or service that is competitive with the Company) any customer or prospective customer of the Company that was contacted, solicited or served by me within the five-year period immediately preceding the termination of my employment with the Company.

I further agree that during the period of my employment with the Company, and for a period of one year after my employment ceases as a result of my voluntary resignation, I will not recruit, solicit, hire, or engage as an employee or an independent contractor, any employee or former employee of the Company, excluding former employees whose employment with the Company has been terminated for a period of six months or longer.

Due to the global market in which the Company operates, the geographic scope of this Agreement shall extend to anywhere the Company or its subsidiaries do business, have done business or have plans to do business.

This Agreement supersedes all previous agreements between me and the Company relating to the subject matter hereof, and may not be modified on behalf of the Company in whole or in part except by a statement in writing signed by an authorized officer of the Company.

I further agree that if any one or more provisions in this Agreement are deemed unenforceable, they will be reformed to the extent necessary to make them enforceable, and the remaining provisions of this Agreement will continue in full force and effect.

I further agree that this Agreement shall be governed by and construed as a sealed instrument under and in accordance with the laws of the Commonwealth of Massachusetts without regard to conflict of laws provisions. Any action, suit or other legal proceeding that is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, federal court located within Massachusetts), and I consent to the jurisdiction of such a court.

I acknowledge that I have carefully read this Agreement and understand and agree to all the provisions in this Agreement.

The parties hereto agree that the effective date of this Agreement shall be February 8, 2016.

Signed at North Reading, MA, this 8^th day of February 2016.

Employee Signature:             /s/ Greg Smith Teradyne Signature:             /s/ Charles J. Gray

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 13, 2016

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 13, 2016

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 ended April 3, 2016 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 13, 2016

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 ended April 3, 2016 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 13, 2016

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Document and Entity Information - shares	3 Months Ended
	Apr. 03, 2016	May. 06, 2016
Document Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Apr. 03, 2016
Document Fiscal Year Focus	2016
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		203,178,976

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 03, 2016		Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 319,358		$ 264,705
Marketable securities	410,003		477,696
Accounts receivable, less allowance for doubtful accounts of $2,385 and $2,407 at April 3, 2016 and December 31, 2015, respectively	253,976		211,293
Inventories, net:
Parts	59,425		73,117
Assemblies in process	38,490		32,825
Finished goods	62,772		47,646
Inventory, Net, Total	160,687		153,588
Deferred tax assets			54,973
Prepayments	95,185		91,519
Other current assets	3,513		6,194
Total current assets	1,242,722		1,259,968
Property, plant and equipment, net	266,907		273,414
Marketable securities	246,072		265,928
Deferred tax assets	59,119		7,404
Other assets	13,041		13,080
Retirement plans assets	1,968		636
Intangible assets, net	223,274		239,831
Goodwill	495,871		488,413
Total assets	2,548,974	[1]	2,548,674
Current liabilities:
Accounts payable	84,104		92,358
Accrued employees' compensation and withholdings	71,838		113,994
Deferred revenue and customer advances	72,095		85,527
Other accrued liabilities	92,617		43,727
Contingent consideration	500		15,500
Accrued income taxes	23,368		21,751
Total current liabilities	344,522		372,857
Long-term deferred revenue and customer advances	25,468		25,745
Retirement plans liabilities	106,921		103,531
Deferred tax liabilities	18,300		26,663
Long-term other accrued liabilities	34,753		32,156
Long-term contingent consideration	23,109		21,936
Total liabilities	$ 553,073		$ 582,888
Commitments and contingencies (See Note P)
SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 203,707 and 203,641 shares issued and outstanding at April 3, 2016 and December 31, 2015, respectively	$ 25,462		$ 25,455
Additional paid-in capital	1,489,011		1,480,647
Accumulated other comprehensive income (loss)	5,035		(8,144)
Retained earnings	476,393		467,828
Total shareholders' equity	1,995,901		1,965,786
Total liabilities and shareholders' equity	$ 2,548,974		$ 2,548,674

[1] Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Accounts receivable, less allowance for doubtful accounts	$ 2,385	$ 2,407
Common stock, par value	$ 0.125	$ 0.125
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	203,707,000	203,641,000
Common stock, shares outstanding	203,707,000	203,641,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Revenues:
Products	$ 358,139	$ 272,325
Services	72,855	70,076
Total revenues	430,994	342,401
Cost of revenues:
Cost of products	167,555	118,996
Cost of services	33,107	30,982
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)	200,662	149,978
Gross profit	230,332	192,423
Operating expenses:
Engineering and development	73,464	71,450
Selling and administrative	79,174	72,041
Acquired intangible assets amortization	19,994	13,808
Restructuring and other	1,587
Total operating expenses	174,219	157,299
Income from operations	56,113	35,124
Non-operating (income) expenses:
Interest income	(1,642)	(1,816)
Interest expense	710	162
Other (income) expense, net	(147)	(5,660)
Income before income taxes	57,192	42,438
Income tax provision	7,206	9,651
Net income	$ 49,986	$ 32,787
Net income per common share:
Basic	$ 0.24	$ 0.15
Diluted	$ 0.24	$ 0.15
Weighted average common shares-basic	204,271	217,187
Weighted average common shares-diluted	205,732	218,812
Cash dividend declared per common share	$ 0.06	$ 0.06

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands		3 Months Ended
		Apr. 03, 2016	Apr. 05, 2015
Net income		$ 49,986	$ 32,787
Other comprehensive income, net of tax:
Foreign currency translation adjustments		10,271
Available-for-sale marketable securities:
Unrealized gains on marketable securities arising during period, net of tax of $1,253, $704, respectively		3,071	1,799
Less: Reclassification adjustment for gains included in net income, net of tax of $11, $(169), respectively		(83)	(330)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Total		2,988	1,469
Defined benefit pension and post-retirement plans:
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax of $(46), $(42), respectively	[1]	(80)	(74)
Other comprehensive income		13,179	1,395
Comprehensive income		$ 63,165	$ 34,182

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

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Unrealized gains on marketable securities arising during period, tax	$ 1,253	$ 704
Amounts reclassified from accumulated other comprehensive income, tax	11	(169)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, tax	$ (46)	$ (42)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Cash flows from operating activities:
Net income	$ 49,986	$ 32,787
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	16,192	19,345
Amortization	20,470	15,139
Stock-based compensation	7,925	7,963
Provision for excess and obsolete inventory	4,373	1,440
Contingent consideration adjustment	1,173
Deferred taxes	(5,496)	(1,831)
Retirement plans actuarial gains	(1,193)
Gain from the sale of an equity investment		(4,782)
Other	484	(1,417)
Changes in operating assets and liabilities:
Accounts receivable	(42,552)	(24,749)
Inventories	(702)	5,960
Prepayments and other assets	(1,148)	3,146
Accounts payable and other accrued expenses	(7,626)	(20,150)
Deferred revenue and customer advances	(13,836)	1,038
Retirement plans contributions	(1,250)	(1,019)
Income taxes	(52)	4,662
Net cash provided by operating activities	26,748	37,532
Cash flows from investing activities:
Purchases of property, plant and equipment	(20,334)	(21,149)
Purchases of available-for-sale marketable securities	(221,778)	(335,635)
Proceeds from sales of available-for-sale marketable securities	239,370	148,639
Proceeds from maturities of available-for-sale marketable securities	73,458	140,222
Proceeds from the sale of an equity investment		4,782
Proceeds from life insurance		1,098
Net cash provided by (used for) investing activities	70,716	(62,043)
Cash flows from financing activities:
Issuance of common stock under employee stock purchase and stock option plans	9,140	8,899
Repurchase of common stock	(28,001)	(46,650)
Dividend payments	(12,253)	(13,049)
Payments of contingent consideration	(11,697)
Net cash used for financing activities	(42,811)	(50,800)
Increase (decrease) in cash and cash equivalents	54,653	(75,311)
Cash and cash equivalents at beginning of period	264,705	294,256
Cash and cash equivalents at end of period	$ 319,358	$ 218,945

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The Company

3 Months Ended

Apr. 03, 2016

The Company

A. The Company

Teradyne, Inc. (“Teradyne”) is a leading global supplier of automation equipment for test and industrial applications. Teradyne designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s industrial automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Teradyne’s automatic test equipment and industrial automation products and services include:

• semiconductor test (“Semiconductor Test”) systems;

• defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);

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

• industrial automation (“Industrial Automation”) products.

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Accounting Policies

3 Months Ended

Apr. 03, 2016

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 amounts were reclassified to conform to the current year presentation. The December 31, 2015 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 29, 2016, for the year ended December 31, 2015.

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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Recently Issued Accounting Pronouncements

3 Months Ended

Apr. 03, 2016

Recently Issued Accounting Pronouncements

C. Recently Issued Accounting Pronouncements

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU provides guidance for the recognition, measurement, presentation, and disclosure of financial instruments. The new pronouncement revises accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it amends the presentation and disclosure requirements of equity securities that do not result in consolidation and are not accounted for under the equity method. Changes in the fair value of these equity securities will be recognized directly in net income. This pronouncement is effective for fiscal years and interim periods within those years beginning after December 15, 2017. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

On March 31, 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The guidance in this ASU supersedes the lease recognition requirements in Accounting Standards Codification (“ASC”) Topic 840, “Leases.” The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for annual periods beginning after December 15, 2018, including interim periods within those years, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the balance sheet. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the balance sheet. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those years and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. Teradyne early adopted this ASU prospectively in the first quarter of 2016.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation for debt discount. ASU 2015-03 does not specifically address requirements for the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. On August 8, 2015, the FASB issued ASU 2015-15, “Interest—Imputation of Interest (Subtopic 835-30)” clarifying that debt issuance costs related to line-of-credit arrangements could be presented as an asset and amortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Teradyne adopted this ASU in the first quarter of 2016. Adoption of this ASU did not have a material impact on Teradyne’s financial position and results of operations.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to show the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, which deferred the effective date of the new revenue standard by one year. For Teradyne, the standard will be effective in the first quarter of 2018. Early adoption is permitted but not before the original effective date (that is, annual periods beginning after December 15, 2016). The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. Teradyne has not yet selected a transition method. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

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Acquisitions

3 Months Ended

Apr. 03, 2016

Acquisitions

D. Acquisitions

Universal Robots

On June 11, 2015, Teradyne acquired all of the outstanding equity of Universal Robots located in Odense, Denmark. Universal Robots is the leading supplier of collaborative robots which are low-cost, easy-to-deploy and simple-to-program robots that work side by side with production workers to improve quality, increase manufacturing efficiency and decrease manufacturing costs. Universal Robots is a separate operating and reportable segment, Industrial Automation. The total purchase price of $315.4 million consisted of $283.8 million of cash paid and $31.6 million of contingent consideration, measured at fair value. The contingent consideration was valued using a Monte Carlo simulation based on the following key inputs: (1) forecasted revenue; (2) forecasted EBITDA; (3) revenue volatility; (4) EBITDA volatility; and (5) discount rate. The contingent consideration is payable upon the achievement of certain thresholds and targets for earnings before income taxes, depreciation and amortization (“EBITDA”) for calendar year 2015, revenue for the period from July 1, 2015 to December 31, 2017 and revenue for the period from July 1, 2015 to December 31, 2018. The maximum amount of contingent consideration that could be paid is $65 million. Based on Universal Robots’ calendar year 2015 EBITDA results, in the first quarter of 2016, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

In the fourth quarter of 2015, Teradyne finalized the valuation and purchase price allocation for the acquisition which resulted in a $5.4 million decrease in goodwill as a result of a $2.2 million decrease in the fair value of contingent consideration, a $1.6 million increase in intangible assets and a $1.6 million decrease in acquired liabilities.

The Universal Robots acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s consolidated results of operations from the date of acquisition. The allocation of the total purchase price to Universal Robots’ net tangible liabilities and identifiable intangible assets was based on their estimated fair values as of the acquisition date. The excess of the purchase price over the identifiable intangible assets and net tangible liabilities in the amount of $221.1 million was allocated to goodwill, which is not deductible for tax purposes.

The following table represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	221,128
Intangible assets		121,590
Tangible assets acquired and liabilities assumed:
Current assets		10,853
Non-current assets		3,415
Accounts payable and current liabilities		(11,976	)
Long-term deferred tax liabilities		(26,653	)
Long-term other liabilities		(2,920	)
Total purchase price	$	315,437

Teradyne estimated the fair value of intangible assets using the income and cost approaches. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:

	Fair Value		Estimated Useful Life
	(in thousands)		(in years)
Developed technology	$	89,240		4.9
Trademarks and tradenames		22,920		10.0
Customer relationships		9,430		2.0
Total intangible assets	$	121,590		5.6

The following unaudited pro forma information gives effect to the acquisition of Universal Robots as if the acquisition occurred on January 1, 2014. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:

	For the Three Months Ended
	April 5, 2015
Revenue	$	352,971
Net income		28,374
Net income per common share:
Basic	$	0.13
Diluted	$	0.13

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Financial Instruments and Derivatives

3 Months Ended

Apr. 03, 2016

Financial Instruments and Derivatives

E. 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.

Marketable Securities

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of Accounting Standards Codification (“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 April 3, 2016, 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 April 3, 2016. 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 is considered a Level 2 input; or

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.

Teradyne’s available-for-sale debt and equity securities are classified as Level 1 and Level 2. Acquisition-related contingent consideration is classified as Level 3. Teradyne’s contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The majority of Level 2 securities are fixed income securities 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.

Realized gains recorded in the three months ended April 3, 2016 and April 5, 2015 were $0.2 million and $0.5 million, respectively. Realized losses recorded in the three months ended April 3, 2016 were $0.2 million. There were no realized losses recorded in the three months ended April 5, 2015. Realized gains are included in interest income and realized losses are included in interest expense. Unrealized gains and losses are included in accumulated other comprehensive income (loss). The cost of securities sold is based on the specific identification method.

During the three months ended April 3, 2016 and April 5, 2015, 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 April 3, 2016 and December 31, 2015.

	April 3, 2016
	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	$	227,046	$	—	$	—	$	227,046
Cash equivalents		92,010		302		—		92,312
Available-for-sale securities:
U.S. Treasury securities		—		399,277		—		399,277
Corporate debt securities		—		161,590		—		161,590
Commercial paper		—		36,592		—		36,592
U.S. government agency securities		—		26,160		—		26,160
Certificates of deposit and time deposits		—		15,653		—		15,653
Equity and debt mutual funds		16,369		—		—		16,369
Non-U.S. government securities		—		434		—		434
Total	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Contingent consideration	$	—	$	—	$	23,609	$	23,609
Derivative liabilities		—		193		—		193
Total	$	—	$	193	$	23,609	$	23,802

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	319,056	$	302	$	—	$	319,358
Marketable securities		—		410,003		—		410,003
Long-term marketable securities		16,369		229,703		—		246,072
	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Other current liabilities	$	—	$	193	$	—	$	193
Contingent consideration		—		—		500		500
Long-term contingent consideration		—		—		23,109		23,109
	$	—	$	193	$	23,609	$	23,802

	December 31, 2015
	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	$	213,336	$	—	$	—	$	213,336
Cash equivalents		49,241		2,128		—		51,369
Available for sale securities:
U.S. Treasury securities		—		419,958		—		419,958
Corporate debt securities		—		161,634		—		161,634
U.S. government agency securities		—		83,952		—		83,952
Certificates of deposit and time deposits		—		43,394		—		43,394
Commercial paper		—		20,308		—		20,308
Equity and debt mutual funds		13,954		—		—		13,954
Non-U.S. government securities		—		424		—		424
Total	$	276,531	$	731,798	$	—	$	1,008,329
Derivative assets		—		109		—		109
Total	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Contingent consideration	$	—	$	—	$	37,436	$	37,436
Derivative liabilities		—		146		—		146
Total	$	—	$	146	$	37,436	$	37,582

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	262,577	$	2,128	$	—	$	264,705
Marketable securities		—		477,696		—		477,696
Long-term marketable securities		13,954		251,974		—		265,928
Prepayments		—		109		—		109
	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Other current liabilities	$	—	$	146	$	—	$	146
Contingent consideration		—		—		15,500		15,500
Long-term contingent consideration		—		—		21,936		21,936
	$	—	$	146	$	37,436	$	37,582

Changes in the fair value of Level 3 contingent consideration for the three months ended April 3, 2016 and April 5, 2015 were as follows:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	37,436		$	3,350
Payments (a)		(15,000	)		—
Fair value adjustment (b)		1,173			—
Balance at end of period	$	23,609		$	3,350

(a) In the three months ended April 3, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(b) In the three months ended April 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.2 million primarily due to a lower discount rate.

The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments:

Liability	April 3, 2016 Fair Value	Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$16,349	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2017 volatility		15.4	%
			Discount Rate		4.7	%
	$6,760	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2018 volatility		15.4	%
			Discount Rate		4.7	%
Contingent consideration (AIT)	$500	Income approach- discounted cash flow	Revenue for calendar year 2016 probability Discount rate		48 4.7	%  %

As of April 3, 2016, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenue, revenue volatility and discount rate. Increases or decreases in the inputs would result in a higher or lower fair value measurement. The maximum payment for each of the two Universal Robots revenue earn-outs is $25.0 million.

The significant unobservable inputs used in the Avionics Interface Technology, LLC (“AIT”) fair value measurement of contingent consideration are the probabilities of successful achievement of calendar year 2016 revenue threshold and target, and a discount rate. Increases or decreases in the revenue probabilities would result in a higher or lower fair value measurement. The maximum payment for the AIT earn-out is $1.1 million.

The carrying amounts and fair values of Teradyne’s financial instruments at April 3, 2016 and December 31, 2015 were as follows:

	April 3, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	319,358	$	319,358	$	264,705	$	264,705
Marketable securities		656,075		656,075		743,624		743,624
Derivative assets		—		—		109		109
Liabilities
Contingent consideration		23,609		23,609		37,436		37,436
Derivative liabilities		193		193		146		146

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

The following tables summarize the composition of available-for-sale marketable securities at April 3, 2016 and December 31, 2015:

	April 3, 2016
	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	$	398,832	$	620	$	(175	)	$	399,277	$	204,136
Corporate debt securities		161,005		1,861		(1,276	)		161,590		73,165
Commercial paper		36,563		29		—			36,592		6,475
U.S. government agency securities		26,107		57		(4	)		26,160		9,747
Equity and debt mutual funds		15,110		1,328		(69	)		16,369		746
Certificates of deposit and time deposits		15,651		2		—			15,653		—
Non-U.S. government securities		434		—		—			434		—
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	409,971	$	146	$	(114	)	$	410,003	$	204,024
Long-term marketable securities		243,731		3,751		(1,410	)		246,072		90,245
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

	December 31, 2015
	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	$	421,060	$	65	$	(1,167	)	$	419,958	$	379,434
Corporate debt securities		163,297		902		(2,565	)		161,634		145,373
U.S. government agency securities		84,032		42		(122	)		83,952		55,120
Certificates of deposit and time deposits		43,391		6		(3	)		43,394		10,527
Commercial paper		20,298		11		(1	)		20,308		8,646
Equity and debt mutual funds		12,996		1,119		(161	)		13,954		2,560
Non-U.S. government securities		424		—		—			424		—
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	478,306	$	38	$	(648	)	$	477,696	$	374,785
Long-term marketable securities		267,192		2,107		(3,371	)		265,928		226,875
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

As of April 3, 2016, the fair market value of investments with unrealized losses totaled $294.3 million. Of this value, $2.8 million had unrealized losses of $0.5 million greater than one year and $291.5 million had unrealized losses of $1.1 million for less than one year.

As of December 31, 2015, the fair market value of investments with unrealized losses totaled $601.7 million. Of this value, $0.9 million had unrealized losses of $0.5 million greater than one year and $600.8 million had unrealized losses of $3.6 million for less than one year.

Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments, at April 3, 2016 and December 31, 2015, were temporary.

The contractual maturities of investments held at April 3, 2016 were as follows:

	April 3, 2016
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	409,971	$	410,003
Due after 1 year through 5 years		184,645		184,852
Due after 5 years through 10 years		4,432		4,546
Due after 10 years		39,544		40,305
Total	$	638,592	$	639,706

Contractual maturities of investments held at April 3, 2016 exclude equity and debt mutual funds as they do not have contractual maturity dates.

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 monetary assets and liabilities denominated in foreign currencies.

The notional amount of foreign currency forward contracts was $138.5 million and $114.1 million at April 3, 2016 and December 31, 2015, respectively. The fair value of the outstanding contracts was a loss of $0.2 million and $0.0 million at April 3, 2016 and December 31, 2015, respectively.

For the three months ended April 3, 2016 and April 5, 2015, Teradyne recorded net realized losses of $3.3 million and $3.4 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 other (income) expense, net.

The following table summarizes the fair value of derivative instruments at April 3, 2016 and December 31, 2015:

	Balance Sheet Location	April 3, 2016			December 31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts assets	Prepayments	$	—		$	109
Foreign exchange contracts liabilities	Other current liabilities		(193	)		(146	)
Total derivatives		$	(193	)	$	(37	)

Teradyne’s foreign exchange contracts are subject to master netting agreements.

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three months ended April 3, 2016 and April 5, 2015. The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. For the three months ended April 3, 2016 and April 5, 2015, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million and $4.3 million, respectively.

	Location of (Gains) Losses Recognized in Statement of Operations	For the Three Months     Ended
		April 3, 2016		April 5, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	3,298	$	3,425
Total Derivatives		$	3,298	$	3,425

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Debt

3 Months Ended

Apr. 03, 2016

Debt

F. Debt

Revolving Credit Facility

On April 27, 2015, Teradyne entered into a Credit Agreement (the “Credit Agreement”) with Barclays Bank PLC, as administrative agent and collateral agent, and the lenders party thereto. The Credit Agreement provides for a five-year, senior secured revolving credit facility of up to $350 million (the “Credit Facility”). The Credit Agreement further provides that, subject to customary conditions, Teradyne may seek to obtain from existing or new lenders incremental commitments under the Credit Facility in an aggregate principal amount not to exceed $150 million.

Proceeds from the Credit Facility may be used for general corporate purposes and working capital. Teradyne incurred $2.3 million in costs related to the revolving credit facility. These costs are being amortized over the five year term of the revolving credit facility and are included in interest expense in the statement of operations. As of May 13, 2016, Teradyne has not borrowed any funds under the Credit Facility.

The interest rates applicable to loans under the Credit Facility are, at Teradyne’s option, equal to either a base rate plus a margin ranging from 0.00% to 1.00% per annum or LIBOR plus a margin ranging from 1.00% to 2.00% per annum, based on the Consolidated Leverage Ratio of Teradyne and its Restricted Subsidiaries. In addition, Teradyne will pay a commitment fee on the unused portion of the commitments under the Credit Facility ranging from 0.125% to 0.350% per annum, based on the then applicable Consolidated Leverage Ratio.

Teradyne is not required to repay any loans under the Credit Facility prior to maturity, subject to certain customary exceptions. Teradyne is permitted to prepay all or any portion of the loans under the Credit Facility prior to maturity without premium or penalty, other than customary LIBOR breakage costs.

The Credit Agreement contains customary events of default, representations, warranties and affirmative and negative covenants that, among other things, limit Teradyne’s and its Restricted Subsidiaries’ ability to sell assets, grant liens on assets, incur other secured indebtedness and make certain investments and restricted payments, all subject to exceptions set forth in the Credit Agreement. The Credit Agreement also requires Teradyne to satisfy two financial ratios measured as of the end of each fiscal quarter: a consolidated leverage ratio and an interest coverage ratio. As of April 3, 2016, Teradyne was in compliance with all covenants.

The Credit Facility is guaranteed by certain of Teradyne’s domestic subsidiaries and collateralized by assets of Teradyne and such subsidiaries, including a pledge of 65% of the capital stock of certain foreign subsidiaries.

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Prepayments

3 Months Ended

Apr. 03, 2016

Prepayments

G. Prepayments

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

	April 3, 2016		December 31, 2015
	(in thousands)
Contract manufacturer prepayments	$	68,746	$	66,283
Prepaid maintenance and other services		7,061		8,481
Prepaid taxes		5,281		3,781
Other prepayments		14,097		12,974
Total prepayments	$	95,185	$	91,519

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Deferred Revenue and Customer Advances

3 Months Ended

Apr. 03, 2016

Deferred Revenue and Customer Advances

H. 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:

	April 3, 2016		December 31, 2015
	(in thousands)
Extended warranty	$	46,115	$	46,499
Product maintenance and training		31,368		30,616
Customer advances		5,347		17,456
Undelivered elements and other		14,733		16,701
Total deferred revenue and customer advances	$	97,563	$	111,272

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Product Warranty

3 Months Ended

Apr. 03, 2016

Product Warranty

I. Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance, delivery 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
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	6,925		$	8,942
Accruals for warranties issued during the period		3,490			2,361
Adjustments related to pre-existing warranties		243			(1,031	)
Settlements made during the period		(3,162	)		(2,849	)
Balance at end of period	$	7,496		$	7,423

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
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	46,499		$	43,300
Deferral of new extended warranty revenue		6,827			4,204
Recognition of extended warranty deferred revenue		(7,211	)		(6,800	)
Balance at end of period	$	46,115		$	40,704

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Stock-Based Compensation

3 Months Ended

Apr. 03, 2016

Stock-Based Compensation

J. Stock-Based Compensation

Under Teradyne’s stock compensation plans, Teradyne grants stock options, restricted stock units and performance-based restricted stock units, and employees are eligible to purchase Teradyne’s common stock through its Employee Stock Purchase Plan (“ESPP”).

Teradyne grants performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). For TSR grants issued in 2014 and 2015, Teradyne’s three-year TSR performance is measured against the Philadelphia Semiconductor Index. For TSR grants issued in January 2016, Teradyne’s three-year TSR performance will be measured against the New York Stock Exchange (“NYSE”) Composite Index. The final number of TSR PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The TSR PRSUs will vest upon the three-year anniversary of the grant date. 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 at any time during the three-year service period the executive officer is no longer an employee, subject to the retirement and termination eligibility provisions noted below.

In January 2016, Teradyne granted PRSUs to its executive officers with a performance metric based on three-year cumulative non-GAAP profit before interest and tax (“PBIT”). Non-GAAP PBIT is a financial measure equal to GAAP income from operations less restructuring and other, net; amortization of acquired intangible assets; acquisition and divestiture related charges or credits; pension actuarial gains and losses; and other non-recurring gains and charges. The final number of PBIT PRSUs that vest will vary based upon the level of performance achieved from 200% to 0% of the target shares. The PBIT PRSUs will vest upon the three-year anniversary of the grant date. Compensation expense is recognized on a straight-line basis over the three-year service period. Compensation expense is recognized based on the number of units that are earned based upon the three year Teradyne PBIT as a percent of Teradyne’s revenue, provided the executive officer remains an employee at the end of the three-year period subject to the retirement and termination eligibility provisions noted below.

Beginning with PRSUs granted in January 2014, if the recipient’s employment ends prior to the determination of the performance percentage due to (1) permanent disability or death or (2) retirement or termination other than for cause, after attaining both at least age sixty and at least ten years of service, then all or a portion of the recipient’s PRSUs (based on the actual performance percentage achieved on the determination date) will vest on the date the performance percentage is determined. Except as set forth in the preceding sentence, no PRSUs will vest if the executive officer is no longer an employee at the end of the three-year period.

During the three months ended April 3, 2016 and April 5, 2015, Teradyne granted 0.1 million and 0.2 million TSR PRSUs, respectively, with a grant date fair value of $20.29 and $18.21, respectively. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
Risk-free interest rate		0.97	%		0.77	%
Teradyne volatility-historical		27.0	%		28.2	%
NYSE Composite Index volatility-historical		13.1	%		—
Philadelphia Semiconductor Index volatility-historical		—			19.7	%
Dividend yield		1.24	%		1.33	%

Expected volatility was based on the historical volatility of Teradyne’s stock and the NYSE Composite Index for the 2016 grant and Philadelphia Semiconductor Index for the 2015 grant, 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 stock price on the grant date of $19.43 for the 2016 grant and $18.10 for the 2015 grant.

During the three months ended April 3, 2016, Teradyne granted 0.1 million PBIT PRSUs with a grant date fair value of $18.71.

During the three months ended April 3, 2016, Teradyne granted 1.2 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $18.47 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $5.30.

During the three months ended April 5, 2015, Teradyne granted 1.4 million of service-based restricted stock unit awards to employees at a weighted average grant date fair value of $17.14 and 0.1 million of service-based stock options to executive officers at a weighted average grant date fair value of $4.43.

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
	April 3, 2016			April 5, 2015
Expected life (years)		5.0			4.0
Risk-free interest rate		1.4	%		1.1	%
Volatility-historical		32.9	%		33.4	%
Dividend yield		1.24	%		1.33	%

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 stock price on the grant date, of $19.43 for the 2016 grant and $18.10 for the 2015 grant.

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Accumulated Other Comprehensive Income

3 Months Ended

Apr. 03, 2016

Accumulated Other Comprehensive Income

K. Accumulated Other Comprehensive Income

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

	For the Three Months Ended April 3, 2016
	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive income before reclassifications, net of tax of $0, $1,253		10,271			3,071			—			13,342
Amounts reclassified from accumulated other comprehensive income, net of tax of $11, $(46)		—			(83	)		(80	)		(163	)
Net current period other comprehensive income, net of tax of $0, $1,264, $(46)		10,271			2,988			(80	)		13,179
Balance at April 3, 2016, net of tax of $0, $805, $(668)	$	1,512		$	1,574		$	1,949		$	5,035

	For the Three Months Ended April 5, 2015
	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2014, net of tax of $1,598, $(453)	$	—	$	2,365		$	2,324		$	4,689
Other comprehensive income before reclassifications, net of tax of $704		—		1,799			—			1,799
Amounts reclassified from accumulated other comprehensive income, net of tax of $(169), $(42)		—		(330	)		(74	)		(404	)
Net current period other comprehensive income, net of tax of $535, $(42)		—		1,469			(74	)		1,395
Balance at April 5, 2015, net of tax of $2,133, $(495)	$	—	$	3,834		$	2,250		$	6,084

Reclassifications out of accumulated other comprehensive income to the statement of operations for the three months ended April 3, 2016 and April 5, 2015 were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	April 3, 2016		April 5, 2015
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $(11), $169	$	83	$	330	Interest income
Amortization of defined benefit pension and postretirement plans:
Prior service benefit, net of tax of $46, $42		80		74	(a)
Total reclassifications, net of tax of $35, $211	$	163	$	404	Net income

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

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Goodwill and Intangible Assets

3 Months Ended

Apr. 03, 2016

Goodwill and Intangible Assets

L. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill by reportable segments for the three months ended April 3, 2016, were as follows:

	Wireless Test			Industrial Automation		System Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2015:
Goodwill	$	361,819		$	214,975	$	158,699		$	260,540		$	996,033
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
		262,922			214,975		10,516			—			488,413
Foreign currency translation adjustment		—			7,458		—			—			7,458
Balance at April 3, 2016:
Goodwill		361,819			222,433		158,699			260,540			1,003,491
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
	$	262,922		$	222,433	$	10,516		$	—		$	495,871

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

	April 3, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	333,947	$	186,118	$	147,829		6.0 years
Customer relationships		110,658		68,114		42,544		7.9 years
Tradenames and trademarks		53,169		20,468		32,701		9.5 years
Non-compete agreement		320		120		200		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	498,264	$	274,990	$	223,274		6.8 years

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	379,778	$	220,306	$	159,472		6.0 years
Customer relationships		110,340		63,718		46,622		7.9 years
Tradenames and trademarks		52,396		18,879		33,517		9.5 years
Non-compete agreement		320		100		220		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	543,004	$	303,173	$	239,831		6.7 years

Aggregate intangible asset amortization expense was $20.0 million and $13.8 million, respectively, for the three months ended April 3, 2016 and April 5, 2015. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2016 (remainder)	$	60,547
2017		71,899
2018		45,160
2019		24,260
2020		10,304
Thereafter		11,104

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Net Income per Common Share

3 Months Ended

Apr. 03, 2016

Net Income per Common Share

M. 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
	April 3, 2016		April 5, 2015
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	49,986	$	32,787
Weighted average common shares-basic		204,271		217,187
Effect of dilutive potential common shares:
Restricted stock units		965		901
Stock options		487		696
Employee stock purchase plan		9		28
Dilutive potential common shares		1,461		1,625
Weighted average common shares-diluted		205,732		218,812
Net income per common share-basic	$	0.24	$	0.15
Net income per common share-diluted	$	0.24	$	0.15

The computation of diluted net income per common share for the three months ended April 3, 2016 excludes the effect of the potential exercise of stock options to purchase approximately 0.3 million shares because the effect would have been anti-dilutive.

The computation of diluted net income per common share for the three months ended April 5, 2015 excludes the effect of the potential exercise of stock options to purchase approximately 0.2 million shares because the effect would have been anti-dilutive.

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Restructuring and Other

3 Months Ended

Apr. 03, 2016

Restructuring and Other

N. Restructuring and Other

Other

During the three months ended April 3, 2016, Teradyne recorded an expense of $1.2 million for the increase in the fair value of the Universal Robots contingent consideration liability.

Restructuring

During the three months ended April 3, 2016, Teradyne recorded $0.4 million of severance charges related to headcount reductions of 12 people, primarily in Semiconductor Test.

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Retirement Plans

3 Months Ended

Apr. 03, 2016

Retirement Plans

O. 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. 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 April 3, 2016, Teradyne contributed $0.7 million to the U.S. supplemental executive defined benefit pension plan and $0.6 million to certain qualified plans for non-U.S. subsidiaries.

For the three months ended April 3, 2016 and April 5, 2015, Teradyne’s net periodic pension (income) cost was comprised of the following:

	For the Three Months Ended
	April 3, 2016						April 5, 2015
	United States			Foreign			United States			Foreign
	(in thousands)
Service cost	$	576		$	207		$	616		$	247
Interest cost		3,414			206			3,282			358
Expected return on plan assets		(3,443	)		(5	)		(3,624	)		(195	)
Amortization of prior service cost		24			—			33			—
Net actuarial gain		(1,193	)		—			—			—
Settlement		—			(239	)		—			—
Total net periodic pension (income) cost	$	(622	)	$	169		$	307		$	410

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 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 April 3, 2016 and April 5, 2015, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Service cost	$	10		$	12
Interest cost		56			59
Amortization of prior service benefit		(150	)		(149	)
Total net periodic post-retirement benefit	$	(84	)	$	(78	)

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Commitments and Contingencies

3 Months Ended

Apr. 03, 2016

Commitments and Contingencies

P. Commitments and Contingencies

Purchase Commitments

As of April 3, 2016, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $235.3 million, of which $233.7 million is for less than one year.

Legal Claims

Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, 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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Income Taxes

3 Months Ended

Apr. 03, 2016

Income Taxes

Q. Income Taxes

The effective tax rate for the three months ended April 3, 2016 and April 5, 2015 was 12.6% and 22.7%, respectively. The effective tax rates for these periods were lower than the expected federal statutory rate of 35% primarily because of the favorable effect of statutory rates applicable to income earned outside the United States. The tax rate for the three months ended April 3, 2016 was also reduced by the benefit from U.S. research and development tax credits, partially offset by additions to the uncertain tax positions for transfer pricing, both of which are included in the projected annual effective tax rate. Discrete tax benefits recorded in the quarter amounted to $2.5 million of which $1.2 million resulted from non-taxable foreign exchange gains, $0.9 million related to marketable securities and $0.4 million from other discrete tax benefits.

The tax rate for the three months ended April 5, 2015 was reduced by a $1.2 million discrete tax benefit related to non-taxable foreign exchange gains and a $0.5 million discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares.

On a quarterly basis, Teradyne evaluates the realizability of the deferred tax assets by jurisdiction and assesses the need for a valuation allowance. As of April 3, 2016, Teradyne believes that it will ultimately realize the deferred tax assets recorded on the condensed consolidated balance sheet. However, should Teradyne believe that it is more likely than not that the deferred tax assets would not be realized, the tax provision would increase in the period in which Teradyne determined that the realizability was not likely. Teradyne considers the probability of future taxable income and historical profitability, among other factors, in assessing the realizability of the deferred tax assets.

As of April 3, 2016 and December 31, 2015, Teradyne had $35.2 million and $33.7 million, respectively, of reserves for uncertain tax positions. The $1.5 million net increase in reserves for uncertain tax positions relates primarily to transfer pricing exposure.

As of April 3, 2016, Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits may decrease approximately $9.1 million in the next twelve months, as a result of a lapse of statutes of limitation and the settlement of a tax audit. The estimated decrease is composed primarily of reserves relating to federal tax credits and transfer pricing.

Teradyne recognizes interest and penalties related to income tax matters in income tax expense. As of April 3, 2016 and December 31, 2015, $0.8 million and $0.5 million, respectively, of interest and penalties were included in the reserve for uncertain tax positions. For the three months ended April 3, 2016, expense of $0.3 million was recorded for interest and penalties related to income tax items. For the three months ended April 5, 2015, interest and penalties related to income tax items were not material.

Teradyne qualifies for a tax holiday in Singapore by fulfilling the requirements of an agreement with the Singapore Economic Development Board under which certain headcount and spending requirements must be met. The tax savings due to the tax holiday for the three months ended April 3, 2016 was $2.6 million, or $0.01 per diluted share. The tax savings due to the tax holiday for the three months ended April 5, 2015 was $1.1 million and the impact of the tax holiday on earnings per share was not material. The tax holiday is scheduled to expire on December 31, 2020.

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Segment Information

3 Months Ended

Apr. 03, 2016

Segment Information

R. Segment Information

Teradyne has four operating segments (Semiconductor Test, System Test, Wireless Test, and Industrial Automation), 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 System Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robots. 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 in effect are described in Note B: “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2015.

Segment information for the three months ended April 3, 2016 and April 5, 2015 is as follows:

	Semiconductor Test		System Test		Wireless Test			Industrial Automation			Corporate and Eliminations		Consolidated
	(in thousands)
Three months ended April 3, 2016:
Revenues	$	340,264	$	53,670	$	20,314		$	16,746		$	—	$	430,994
Income (loss) before income taxes (1)(2)		73,254		9,492		(20,140	)		(7,168	)		1,754		57,192
Total assets (3)		664,555		90,695		408,466			350,589			1,034,669		2,548,974
Three months ended April 5, 2015:
Revenues	$	270,917	$	37,436	$	34,048		$	—		$	—	$	342,401
Income (loss) before income taxes (1)(2)		43,125		1,005		(10,441	)		—			8,749		42,438
Total assets (3)		596,477		94,133		465,465			—			1,356,107		2,512,182

(1) Interest income, interest expense, and other (income) expense, net are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges related to inventory and other.

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

Included in the Semiconductor Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	3,685	$	531
Restructuring and other		414		—
Total	$	4,099	$	531

Included in the Wireless Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	605	$	846
Total	$	605	$	846

Included in Corporate and Eliminations are charges and credits in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	1,173	$	—
Other (income) expense, net—gain from the sale of an equity investment		—		(4,782	)
Total	$	1,173	$	(4,782	)

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Shareholders' Equity

3 Months Ended

Apr. 03, 2016

Shareholders' Equity

S. Shareholders’ Equity

Stock Repurchase Program

In January 2015, the Board of Directors authorized Teradyne to repurchase up to $500 million of common stock, of which $300 million was repurchased in 2015. In 2016, Teradyne intends to repurchase between $100 million and $200 million of common stock. During the three months ended April 3, 2016, Teradyne repurchased 1.5 million shares of common stock at an average price of $18.81, for a total cost of $28.0 million. The cumulative repurchases as of April 3, 2016 totaled 17.1 million shares of common stock for a total purchase price of $328 million at an average price per share of $19.17. The total price includes commissions and is recorded as a reduction to retained earnings.

Dividend

Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors.

In January 2016, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.06 per share that was paid on March 21, 2016 to shareholders of record as of February 26, 2016. Dividend payments for the three months ended April 3, 2016 were $12.3 million.

In January 2015, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.06 per share that was paid on March 24, 2015 to shareholders of record as of February 27, 2015. Dividend payments for the three months ended April 5, 2015 were $13.0 million.

While Teradyne declared a quarterly cash dividend and authorized a share repurchase program, it may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of Teradyne’s Board of Directors which will consider, among other things, Teradyne’s earnings, capital requirements and financial condition.

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Subsequent Events

3 Months Ended

Apr. 03, 2016

Subsequent Events

T. Subsequent Events

On April 16, 2016, an earthquake in Kumamoto, Japan damaged Teradyne’s facility. The facility, which is used for engineering, production, and support operations, sustained heavy damage. Teradyne is still in the process of assessing the total impact of the damage. The net book value of the inventory and fixed assets at the Kumamoto location is approximately $17 million. With respect to the location, Teradyne has $10 million of earthquake insurance with a deductible of approximately $2.5 million. Teradyne is temporarily transferring some operations to other facilities in Japan and elsewhere while Teradyne’s Kumamoto operations are restored.

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Accounting Policies (Policies)

3 Months Ended

Apr. 03, 2016

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 amounts were reclassified to conform to the current year presentation. The December 31, 2015 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 29, 2016, for the year ended December 31, 2015.

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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Acquisitions (Tables) - Universal Robots

3 Months Ended

Apr. 03, 2016

Final Allocation of the Purchase Price

The following table represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	221,128
Intangible assets		121,590
Tangible assets acquired and liabilities assumed:
Current assets		10,853
Non-current assets		3,415
Accounts payable and current liabilities		(11,976	)
Long-term deferred tax liabilities		(26,653	)
Long-term other liabilities		(2,920	)
Total purchase price	$	315,437

Components of Intangible Assets and Their Estimated Useful Lives at Acquisition Date

Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:

	Fair Value		Estimated Useful Life
	(in thousands)		(in years)
Developed technology	$	89,240		4.9
Trademarks and tradenames		22,920		10.0
Customer relationships		9,430		2.0
Total intangible assets	$	121,590		5.6

Pro Forma Results Under Acquisitions

The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:

	For the Three Months Ended
	April 5, 2015
Revenue	$	352,971
Net income		28,374
Net income per common share:
Basic	$	0.13
Diluted	$	0.13

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Financial Instruments and Derivatives (Tables)

3 Months Ended

Apr. 03, 2016

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 April 3, 2016 and December 31, 2015.

	April 3, 2016
	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	$	227,046	$	—	$	—	$	227,046
Cash equivalents		92,010		302		—		92,312
Available-for-sale securities:
U.S. Treasury securities		—		399,277		—		399,277
Corporate debt securities		—		161,590		—		161,590
Commercial paper		—		36,592		—		36,592
U.S. government agency securities		—		26,160		—		26,160
Certificates of deposit and time deposits		—		15,653		—		15,653
Equity and debt mutual funds		16,369		—		—		16,369
Non-U.S. government securities		—		434		—		434
Total	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Contingent consideration	$	—	$	—	$	23,609	$	23,609
Derivative liabilities		—		193		—		193
Total	$	—	$	193	$	23,609	$	23,802

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	319,056	$	302	$	—	$	319,358
Marketable securities		—		410,003		—		410,003
Long-term marketable securities		16,369		229,703		—		246,072
	$	335,425	$	640,008	$	—	$	975,433
Liabilities
Other current liabilities	$	—	$	193	$	—	$	193
Contingent consideration		—		—		500		500
Long-term contingent consideration		—		—		23,109		23,109
	$	—	$	193	$	23,609	$	23,802

	December 31, 2015
	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	$	213,336	$	—	$	—	$	213,336
Cash equivalents		49,241		2,128		—		51,369
Available for sale securities:
U.S. Treasury securities		—		419,958		—		419,958
Corporate debt securities		—		161,634		—		161,634
U.S. government agency securities		—		83,952		—		83,952
Certificates of deposit and time deposits		—		43,394		—		43,394
Commercial paper		—		20,308		—		20,308
Equity and debt mutual funds		13,954		—		—		13,954
Non-U.S. government securities		—		424		—		424
Total	$	276,531	$	731,798	$	—	$	1,008,329
Derivative assets		—		109		—		109
Total	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Contingent consideration	$	—	$	—	$	37,436	$	37,436
Derivative liabilities		—		146		—		146
Total	$	—	$	146	$	37,436	$	37,582

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	262,577	$	2,128	$	—	$	264,705
Marketable securities		—		477,696		—		477,696
Long-term marketable securities		13,954		251,974		—		265,928
Prepayments		—		109		—		109
	$	276,531	$	731,907	$	—	$	1,008,438
Liabilities
Other current liabilities	$	—	$	146	$	—	$	146
Contingent consideration		—		—		15,500		15,500
Long-term contingent consideration		—		—		21,936		21,936
	$	—	$	146	$	37,436	$	37,582

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 April 3, 2016 and April 5, 2015 were as follows:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	37,436		$	3,350
Payments (a)		(15,000	)		—
Fair value adjustment (b)		1,173			—
Balance at end of period	$	23,609		$	3,350

(a) In the three months ended April 3, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(b) In the three months ended April 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.2 million primarily due to a lower discount rate.

Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument

The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments:

Liability	April 3, 2016 Fair Value	Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$16,349	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2017 volatility		15.4	%
			Discount Rate		4.7	%
	$6,760	Monte Carlo Simulation	Revenue for the period July 1, 2015—December 31, 2018 volatility		15.4	%
			Discount Rate		4.7	%
Contingent consideration (AIT)	$500	Income approach- discounted cash flow	Revenue for calendar year 2016 probability Discount rate		48 4.7	%  %

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of Teradyne’s financial instruments at April 3, 2016 and December 31, 2015 were as follows:

	April 3, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	319,358	$	319,358	$	264,705	$	264,705
Marketable securities		656,075		656,075		743,624		743,624
Derivative assets		—		—		109		109
Liabilities
Contingent consideration		23,609		23,609		37,436		37,436
Derivative liabilities		193		193		146		146

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available-for-sale marketable securities at April 3, 2016 and December 31, 2015:

	April 3, 2016
	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	$	398,832	$	620	$	(175	)	$	399,277	$	204,136
Corporate debt securities		161,005		1,861		(1,276	)		161,590		73,165
Commercial paper		36,563		29		—			36,592		6,475
U.S. government agency securities		26,107		57		(4	)		26,160		9,747
Equity and debt mutual funds		15,110		1,328		(69	)		16,369		746
Certificates of deposit and time deposits		15,651		2		—			15,653		—
Non-U.S. government securities		434		—		—			434		—
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	409,971	$	146	$	(114	)	$	410,003	$	204,024
Long-term marketable securities		243,731		3,751		(1,410	)		246,072		90,245
	$	653,702	$	3,897	$	(1,524	)	$	656,075	$	294,269

	December 31, 2015
	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	$	421,060	$	65	$	(1,167	)	$	419,958	$	379,434
Corporate debt securities		163,297		902		(2,565	)		161,634		145,373
U.S. government agency securities		84,032		42		(122	)		83,952		55,120
Certificates of deposit and time deposits		43,391		6		(3	)		43,394		10,527
Commercial paper		20,298		11		(1	)		20,308		8,646
Equity and debt mutual funds		12,996		1,119		(161	)		13,954		2,560
Non-U.S. government securities		424		—		—			424		—
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	478,306	$	38	$	(648	)	$	477,696	$	374,785
Long-term marketable securities		267,192		2,107		(3,371	)		265,928		226,875
	$	745,498	$	2,145	$	(4,019	)	$	743,624	$	601,660

Contractual Maturities of Investments Held

The contractual maturities of investments held at April 3, 2016 were as follows:

	April 3, 2016
	Cost		Fair Market Value
	(in thousands)
Due within one year	$	409,971	$	410,003
Due after 1 year through 5 years		184,645		184,852
Due after 5 years through 10 years		4,432		4,546
Due after 10 years		39,544		40,305
Total	$	638,592	$	639,706

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

The following table summarizes the fair value of derivative instruments at April 3, 2016 and December 31, 2015:

	Balance Sheet Location	April 3, 2016			December 31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts assets	Prepayments	$	—		$	109
Foreign exchange contracts liabilities	Other current liabilities		(193	)		(146	)
Total derivatives		$	(193	)	$	(37	)

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 April 3, 2016 and April 5, 2015. The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. For the three months ended April 3, 2016 and April 5, 2015, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million and $4.3 million, respectively.

	Location of (Gains) Losses Recognized in Statement of Operations	For the Three Months     Ended
		April 3, 2016		April 5, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	3,298	$	3,425
Total Derivatives		$	3,298	$	3,425

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Prepayments (Tables)

3 Months Ended

Apr. 03, 2016

Schedule of Prepayments

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

	April 3, 2016		December 31, 2015
	(in thousands)
Contract manufacturer prepayments	$	68,746	$	66,283
Prepaid maintenance and other services		7,061		8,481
Prepaid taxes		5,281		3,781
Other prepayments		14,097		12,974
Total prepayments	$	95,185	$	91,519

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Deferred Revenue and Customer Advances (Tables)

3 Months Ended

Apr. 03, 2016

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:

	April 3, 2016		December 31, 2015
	(in thousands)
Extended warranty	$	46,115	$	46,499
Product maintenance and training		31,368		30,616
Customer advances		5,347		17,456
Undelivered elements and other		14,733		16,701
Total deferred revenue and customer advances	$	97,563	$	111,272

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Product Warranty (Tables)

3 Months Ended

Apr. 03, 2016

Other Accrued Liabilities

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

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	6,925		$	8,942
Accruals for warranties issued during the period		3,490			2,361
Adjustments related to pre-existing warranties		243			(1,031	)
Settlements made during the period		(3,162	)		(2,849	)
Balance at end of period	$	7,496		$	7,423

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
	April 3, 2016			April 5, 2015
	(in thousands)
Balance at beginning of period	$	46,499		$	43,300
Deferral of new extended warranty revenue		6,827			4,204
Recognition of extended warranty deferred revenue		(7,211	)		(6,800	)
Balance at end of period	$	46,115		$	40,704

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Stock-Based Compensation (Tables)

3 Months Ended

Apr. 03, 2016

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
	April 3, 2016			April 5, 2015
Risk-free interest rate		0.97	%		0.77	%
Teradyne volatility-historical		27.0	%		28.2	%
NYSE Composite Index volatility-historical		13.1	%		—
Philadelphia Semiconductor Index volatility-historical		—			19.7	%
Dividend yield		1.24	%		1.33	%

Stock Options

Fair Value of Stock Options Using 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
	April 3, 2016			April 5, 2015
Expected life (years)		5.0			4.0
Risk-free interest rate		1.4	%		1.1	%
Volatility-historical		32.9	%		33.4	%
Dividend yield		1.24	%		1.33	%

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Apr. 03, 2016

Changes in accumulated other comprehensive income

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

	For the Three Months Ended April 3, 2016
	Foreign Currency Translation Adjustment			Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive income before reclassifications, net of tax of $0, $1,253		10,271			3,071			—			13,342
Amounts reclassified from accumulated other comprehensive income, net of tax of $11, $(46)		—			(83	)		(80	)		(163	)
Net current period other comprehensive income, net of tax of $0, $1,264, $(46)		10,271			2,988			(80	)		13,179
Balance at April 3, 2016, net of tax of $0, $805, $(668)	$	1,512		$	1,574		$	1,949		$	5,035

	For the Three Months Ended April 5, 2015
	Foreign Currency Translation Adjustment		Unrealized Gains (Losses) on Marketable Securities			Retirement Plans Prior Service Credit			Total
	(in thousands)
Balance at December 31, 2014, net of tax of $1,598, $(453)	$	—	$	2,365		$	2,324		$	4,689
Other comprehensive income before reclassifications, net of tax of $704		—		1,799			—			1,799
Amounts reclassified from accumulated other comprehensive income, net of tax of $(169), $(42)		—		(330	)		(74	)		(404	)
Net current period other comprehensive income, net of tax of $535, $(42)		—		1,469			(74	)		1,395
Balance at April 5, 2015, net of tax of $2,133, $(495)	$	—	$	3,834		$	2,250		$	6,084

Reclassifications 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 April 3, 2016 and April 5, 2015 were as follows:

Details about Accumulated Other Comprehensive Income Components	For the Three Months Ended				Affected Line Item in the Statements of Operations
	April 3, 2016		April 5, 2015
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $(11), $169	$	83	$	330	Interest income
Amortization of defined benefit pension and postretirement plans:
Prior service benefit, net of tax of $46, $42		80		74	(a)
Total reclassifications, net of tax of $35, $211	$	163	$	404	Net income

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

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Apr. 03, 2016

Changes in Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill by reportable segments for the three months ended April 3, 2016, were as follows:

	Wireless Test			Industrial Automation		System Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2015:
Goodwill	$	361,819		$	214,975	$	158,699		$	260,540		$	996,033
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
		262,922			214,975		10,516			—			488,413
Foreign currency translation adjustment		—			7,458		—			—			7,458
Balance at April 3, 2016:
Goodwill		361,819			222,433		158,699			260,540			1,003,491
Accumulated impairment losses		(98,897	)		—		(148,183	)		(260,540	)		(507,620	)
	$	262,922		$	222,433	$	10,516		$	—		$	495,871

Schedule of Amortizable Intangible Assets

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

	April 3, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	333,947	$	186,118	$	147,829		6.0 years
Customer relationships		110,658		68,114		42,544		7.9 years
Tradenames and trademarks		53,169		20,468		32,701		9.5 years
Non-compete agreement		320		120		200		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	498,264	$	274,990	$	223,274		6.8 years

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	379,778	$	220,306	$	159,472		6.0 years
Customer relationships		110,340		63,718		46,622		7.9 years
Tradenames and trademarks		52,396		18,879		33,517		9.5 years
Non-compete agreement		320		100		220		4.0 years
Customer backlog		170		170		—		0.3 years
Total intangible assets	$	543,004	$	303,173	$	239,831		6.7 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)
2016 (remainder)	$	60,547
2017		71,899
2018		45,160
2019		24,260
2020		10,304
Thereafter		11,104

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Net Income per Common Share (Tables)

3 Months Ended

Apr. 03, 2016

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
	April 3, 2016		April 5, 2015
	(in thousands, except per share amounts)
Net income for basic and diluted net income per share	$	49,986	$	32,787
Weighted average common shares-basic		204,271		217,187
Effect of dilutive potential common shares:
Restricted stock units		965		901
Stock options		487		696
Employee stock purchase plan		9		28
Dilutive potential common shares		1,461		1,625
Weighted average common shares-diluted		205,732		218,812
Net income per common share-basic	$	0.24	$	0.15
Net income per common share-diluted	$	0.24	$	0.15

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Retirement Plans (Tables)

3 Months Ended

Apr. 03, 2016

Postretirement Benefit Plans

Net Periodic Pension and Postretirement (Income) Cost

For the three months ended April 3, 2016 and April 5, 2015, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	For the Three Months Ended
	April 3, 2016			April 5, 2015
	(in thousands)
Service cost	$	10		$	12
Interest cost		56			59
Amortization of prior service benefit		(150	)		(149	)
Total net periodic post-retirement benefit	$	(84	)	$	(78	)

Defined Benefit Pension Plans

Net Periodic Pension and Postretirement (Income) Cost

For the three months ended April 3, 2016 and April 5, 2015, Teradyne’s net periodic pension (income) cost was comprised of the following:

	For the Three Months Ended
	April 3, 2016						April 5, 2015
	United States			Foreign			United States			Foreign
	(in thousands)
Service cost	$	576		$	207		$	616		$	247
Interest cost		3,414			206			3,282			358
Expected return on plan assets		(3,443	)		(5	)		(3,624	)		(195	)
Amortization of prior service cost		24			—			33			—
Net actuarial gain		(1,193	)		—			—			—
Settlement		—			(239	)		—			—
Total net periodic pension (income) cost	$	(622	)	$	169		$	307		$	410

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Segment Information (Tables)

3 Months Ended

Apr. 03, 2016

Segment Information

Segment information for the three months ended April 3, 2016 and April 5, 2015 is as follows:

	Semiconductor Test		System Test		Wireless Test			Industrial Automation			Corporate and Eliminations		Consolidated
	(in thousands)
Three months ended April 3, 2016:
Revenues	$	340,264	$	53,670	$	20,314		$	16,746		$	—	$	430,994
Income (loss) before income taxes (1)(2)		73,254		9,492		(20,140	)		(7,168	)		1,754		57,192
Total assets (3)		664,555		90,695		408,466			350,589			1,034,669		2,548,974
Three months ended April 5, 2015:
Revenues	$	270,917	$	37,436	$	34,048		$	—		$	—	$	342,401
Income (loss) before income taxes (1)(2)		43,125		1,005		(10,441	)		—			8,749		42,438
Total assets (3)		596,477		94,133		465,465			—			1,356,107		2,512,182

(1) Interest income, interest expense, and other (income) expense, net are included in Corporate and Eliminations.

(2) Included in the income (loss) before income taxes for each of the segments are charges related to inventory and other.

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

Semiconductor Test

Schedule of Segment Reporting Information by Segment Charges

Included in the Semiconductor Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	3,685	$	531
Restructuring and other		414		—
Total	$	4,099	$	531

Wireless Test

Schedule of Segment Reporting Information by Segment Charges

Included in the Wireless Test segment are charges in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Cost of revenues—inventory charge	$	605	$	846
Total	$	605	$	846

Corporate And Eliminations

Schedule of Segment Reporting Information by Segment Charges

Included in Corporate and Eliminations are charges and credits in the following line items in the statements of operations:

	For the Three Months Ended
	April 3, 2016		April 5, 2015
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	1,173	$	—
Other (income) expense, net—gain from the sale of an equity investment		—		(4,782	)
Total	$	1,173	$	(4,782	)

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Acquisitions - Additional Information (Detail) - USD ($)		3 Months Ended
	Jun. 11, 2015	Apr. 03, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Payments of contingent consideration		$ 11,697,000
Universal Robots
Business Acquisition [Line Items]
Total purchase price	$ 315,437,000
Cash paid to acquire outstanding common and preferred stock	283,800,000
Contingent consideration	31,600,000
Arrangement range of outcomes value high	65,000,000
Payments of contingent consideration		$ 15,000,000
EBITDA contingent consideration amount, percentage		100.00%
Decrease in goodwill			$ (5,400,000)
Contingent consideration adjustment			(2,200,000)
Increase in intangible assets			1,600,000
Decrease in acquired liabilities			$ (1,600,000)
Goodwill, not deductible for tax purposes	$ 221,100,000

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Allocation of Final Purchase Price (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015	Jun. 11, 2015
Business Acquisition [Line Items]
Goodwill	$ 495,871	$ 488,413
Universal Robots
Business Acquisition [Line Items]
Goodwill			$ 221,128
Intangible assets			121,590
Current assets			10,853
Non-current assets			3,415
Accounts payable and current liabilities			(11,976)
Long-term deferred tax liabilities			(26,653)
Long-term other liabilities			(2,920)
Total purchase price			$ 315,437

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Components of Intangible Assets and Their Estimated Useful Lives at Acquisition Date (Detail) - Universal Robots $ in Thousands	Jun. 11, 2015 USD ($)
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 121,590
Total intangible assets, estimated useful life, years	5 years 7 months 6 days
Developed technology
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 89,240
Total intangible assets, estimated useful life, years	4 years 10 months 24 days
Customer Relationships
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 9,430
Total intangible assets, estimated useful life, years	2 years
Trademarks and tradenames
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 22,920
Total intangible assets, estimated useful life, years	10 years

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Pro Forma Results Under Acquisition (Detail) - Universal Robots $ / shares in Units, $ in Thousands	3 Months Ended
	Apr. 05, 2015 USD ($) $ / shares
Business Acquisition [Line Items]
Revenue | $	$ 352,971
Net income | $	$ 28,374
Net income per common share, basic | $ / shares	$ 0.13
Net income per common share, diluted | $ / shares	$ 0.13

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Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Apr. 03, 2016	Apr. 05, 2015	Dec. 31, 2015
Financial Instruments and Fair Value [Line Items]
Available-for-sale securities, realized loss	$ 200,000	$ 0
Available-for-sale securities, realized gain	200,000	500,000
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	294,269,000		$ 601,660,000
Fair market value of investments with unrealized losses greater than one year	2,800,000		900,000
Aggregate loss of investments with unrealized losses greater than one year	500,000		500,000
Fair market value of investments with unrealized losses less than one year	291,500,000		600,800,000
Aggregate loss of investments with unrealized losses less than one year	1,100,000		3,600,000
Gains (losses) on foreign currency transactions	3,400,000	4,300,000
Realized gain(loss) on foreign currency contracts	(3,300,000)	$ (3,400,000)
Universal Robots
Financial Instruments and Fair Value [Line Items]
Maximum payment per earn-out	25,000,000
Avionics Interface Technologies, LLC
Financial Instruments and Fair Value [Line Items]
Maximum payment per earn-out	1,100,000
Foreign Currency Forward Contracts
Financial Instruments and Fair Value [Line Items]
Notional amount of foreign currency forward contracts	138,500,000		114,100,000
Gains (losses) on foreign currency transactions	$ (200,000)		$ 0

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Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	$ 656,075	$ 743,624
U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	399,277	419,958
Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	161,590	161,634
U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	26,160	83,952
Certificates of Deposit and Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	15,653	43,394
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	36,592	20,308
Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	16,369	13,954
Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	434	424
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	975,433	1,008,329
Derivative assets		109
Total	975,433	1,008,438
Contingent consideration	23,609	37,436
Derivative liabilities	193	146
Total	23,802	37,582
Fair Value, Measurements, Recurring | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and cash equivalents	227,046	213,336
Fair Value, Measurements, Recurring | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and cash equivalents	92,312	51,369
Fair Value, Measurements, Recurring | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	399,277	419,958
Fair Value, Measurements, Recurring | Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	161,590	161,634
Fair Value, Measurements, Recurring | U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	26,160	83,952
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	15,653	43,394
Fair Value, Measurements, Recurring | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	36,592	20,308
Fair Value, Measurements, Recurring | Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	16,369	13,954
Fair Value, Measurements, Recurring | Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	434	424
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	335,425	276,531
Total	335,425	276,531
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	227,046	213,336
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	92,010	49,241
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	16,369	13,954
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	640,008	731,798
Derivative assets		109
Total	640,008	731,907
Derivative liabilities	193	146
Total	193	146
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	302	2,128
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	399,277	419,958
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	161,590	161,634
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	26,160	83,952
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	15,653	43,394
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	36,592	20,308
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	434	424
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration	23,609	37,436
Total	$ 23,609	$ 37,436

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Schedule of Reported Financial Assets and Liabilities (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	$ 975,433	$ 1,008,438
Liabilities	23,802	37,582
Other Current Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	193	146
Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	319,358	264,705
Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	410,003	477,696
Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	246,072	265,928
Prepayments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets		109
Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	500	15,500
Long Term Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	23,109	21,936
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	335,425	276,531
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	319,056	262,577
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	16,369	13,954
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	640,008	731,907
Liabilities	193	146
Significant Other Observable Inputs (Level 2) | Other Current Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	193	146
Significant Other Observable Inputs (Level 2) | Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	302	2,128
Significant Other Observable Inputs (Level 2) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	410,003	477,696
Significant Other Observable Inputs (Level 2) | Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	229,703	251,974
Significant Other Observable Inputs (Level 2) | Prepayments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets		109
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	23,609	37,436
Significant Unobservable Inputs (Level 3) | Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	500	15,500
Significant Unobservable Inputs (Level 3) | Long Term Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	$ 23,109	$ 21,936

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Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Detail) - USD ($) $ in Thousands		3 Months Ended
		Apr. 03, 2016	Apr. 05, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period		$ 37,436	$ 3,350
Payments	[1]	(15,000)	0
Fair value adjustment	[2]	1,173	0
Ending Balance		$ 23,609	$ 3,350

[1] In the three months ended April 3, 2016, based on Universal Robots' calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

[2] In the three months ended April 3, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $1.2 million primarily due to a lower discount rate.

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Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Parenthetical) (Detail) $ in Thousands	3 Months Ended
	Apr. 03, 2016 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Payments of contingent consideration	$ 11,697
Increase in contingent consideration	1,173
Universal Robots
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Payments of contingent consideration	$ 15,000
EBITDA contingent consideration amount, percentage	100.00%
Increase in contingent consideration	$ 1,200

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Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Jun. 11, 2015
Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		$ 31,600
Monte Carlo simulation model | Revenue for the period July 1, 2015-December 31, 2017 | Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Target achievement, volatility	15.40%
Discount Rate	4.70%
Monte Carlo simulation model | Revenue for the period July 1, 2015-December 31, 2018 | Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Target achievement, volatility	15.40%
Discount Rate	4.70%
Monte Carlo simulation model | Significant Unobservable Inputs (Level 3)
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration	$ 6,760
Monte Carlo simulation model | Significant Unobservable Inputs (Level 3) | Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration	$ 16,349
Income Approach Valuation Technique | Revenue for calendar year 2016 | Avionics Interface Technologies, LLC
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Target achievement, probability	48.00%
Discount Rate	4.70%
Income Approach Valuation Technique | Significant Unobservable Inputs (Level 3) | Avionics Interface Technologies, LLC
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration	$ 500

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Schedule of Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Marketable securities	$ 656,075	$ 743,624
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	319,358	264,705
Marketable securities	656,075	743,624
Derivative assets		109
Contingent consideration	23,609	37,436
Derivative liabilities	193	146
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	319,358	264,705
Marketable securities	656,075	743,624
Derivative assets		109
Contingent consideration	23,609	37,436
Derivative liabilities	$ 193	$ 146

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Schedule of Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 653,702	$ 745,498
Available-for-sale marketable securities, Unrealized Gain	3,897	2,145
Available-for-sale marketable securities, Unrealized (Loss)	(1,524)	(4,019)
Available-for-sale marketable securities, Fair Market Value	656,075	743,624
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	294,269	601,660
U.S. Treasury Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	398,832	421,060
Available-for-sale marketable securities, Unrealized Gain	620	65
Available-for-sale marketable securities, Unrealized (Loss)	(175)	(1,167)
Available-for-sale marketable securities, Fair Market Value	399,277	419,958
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	204,136	379,434
Corporate Debt Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	161,005	163,297
Available-for-sale marketable securities, Unrealized Gain	1,861	902
Available-for-sale marketable securities, Unrealized (Loss)	(1,276)	(2,565)
Available-for-sale marketable securities, Fair Market Value	161,590	161,634
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	73,165	145,373
U.S. Government Agency Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	26,107	84,032
Available-for-sale marketable securities, Unrealized Gain	57	42
Available-for-sale marketable securities, Unrealized (Loss)	(4)	(122)
Available-for-sale marketable securities, Fair Market Value	26,160	83,952
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	9,747	55,120
Certificates of Deposit and Time Deposits
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	15,651	43,391
Available-for-sale marketable securities, Unrealized Gain	2	6
Available-for-sale marketable securities, Unrealized (Loss)		(3)
Available-for-sale marketable securities, Fair Market Value	15,653	43,394
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses		10,527
Commercial Paper
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	36,563	20,298
Available-for-sale marketable securities, Unrealized Gain	29	11
Available-for-sale marketable securities, Unrealized (Loss)		(1)
Available-for-sale marketable securities, Fair Market Value	36,592	20,308
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	6,475	8,646
Equity And Debt Mutual Funds
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	15,110	12,996
Available-for-sale marketable securities, Unrealized Gain	1,328	1,119
Available-for-sale marketable securities, Unrealized (Loss)	(69)	(161)
Available-for-sale marketable securities, Fair Market Value	16,369	13,954
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	746	2,560
Non-U.S. Government Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	434	424
Available-for-sale marketable securities, Fair Market Value	$ 434	$ 424

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Schedule of Reported Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 653,702	$ 745,498
Available-for-sale marketable securities, Unrealized Gain	3,897	2,145
Available-for-sale marketable securities, Unrealized (Loss)	(1,524)	(4,019)
Available-for-sale marketable securities, Fair Market Value	656,075	743,624
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	294,269	601,660
Marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	409,971	478,306
Available-for-sale marketable securities, Unrealized Gain	146	38
Available-for-sale marketable securities, Unrealized (Loss)	(114)	(648)
Available-for-sale marketable securities, Fair Market Value	410,003	477,696
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	204,024	374,785
Long-term marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	243,731	267,192
Available-for-sale marketable securities, Unrealized Gain	3,751	2,107
Available-for-sale marketable securities, Unrealized (Loss)	(1,410)	(3,371)
Available-for-sale marketable securities, Fair Market Value	246,072	265,928
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	$ 90,245	$ 226,875

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Contractual Maturities of Investments Held (Detail) $ in Thousands	Apr. 03, 2016 USD ($)
Schedule of Available-for-sale Securities
Due within one year, cost	$ 409,971
Due after 1 year through 5 years, cost	184,645
Due after 5 years through 10 years, cost	4,432
Due after 10 years, cost	39,544
Total, cost	638,592
Due within one year, fair value	410,003
Due after 1 year through 5 years, fair value	184,852
Due after 5 years through 10 years, fair value	4,546
Due after 10 years, fair value	40,305
Total, fair value	$ 639,706

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Schedule of Derivative Instruments in Statement of Financial Position at Fair Value (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative assets (liabilities), net	$ (193)	$ (37)
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts | Prepayments
Derivatives, Fair Value [Line Items]
Derivative assets		109
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ (193)	$ (146)

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Schedule of Effect of Derivative Instruments in Statement of Operations Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts derivatives not designated as hedging instruments, Gains (Losses) Recognized in Statement of Operations	$ 3,298	$ 3,425
Other (income) expense, net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts derivatives not designated as hedging instruments, Gains (Losses) Recognized in Statement of Operations	$ 3,298	$ 3,425

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Debt - Additional Information (Detail) - USD ($)		3 Months Ended
	Apr. 27, 2015	Apr. 03, 2016
Debt Instrument
Term of loan, years	5 years
Pledge percentage of capital stock	65.00%
Maximum
Debt Instrument
Aggregate principal amount	$ 150,000,000
Commitment fee percentage of unused portion of credit facility	0.35%
Minimum
Debt Instrument
Commitment fee percentage of unused portion of credit facility	0.125%
Base Rate | Maximum
Debt Instrument
Debt instrument, basis spread on variable rate	1.00%
Base Rate | Minimum
Debt Instrument
Debt instrument, basis spread on variable rate	0.00%
London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument
Debt instrument, basis spread on variable rate	2.00%
London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument
Debt instrument, basis spread on variable rate	1.00%
Revolving Credit Facility
Debt Instrument
Financing cost		$ 2,300,000
Financing cost, amortization term		5 years
Revolving Credit Facility | Maximum
Debt Instrument
Credit facility, borrowing capacity	$ 350,000,000

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Schedule of Prepayments (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015
Prepaid And Other Current Assets [Line Items]
Contract manufacturer prepayments	$ 68,746	$ 66,283
Prepaid maintenance and other services	7,061	8,481
Prepaid taxes	5,281	3,781
Other prepayments	14,097	12,974
Total prepayments	$ 95,185	$ 91,519

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Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands	Apr. 03, 2016	Dec. 31, 2015	Apr. 05, 2015	Dec. 31, 2014
Deferred Revenue Arrangement
Extended warranty	$ 46,115	$ 46,499	$ 40,704	$ 43,300
Product maintenance and training	31,368	30,616
Customer advances	5,347	17,456
Undelivered elements and other	14,733	16,701
Total deferred revenue and customer advances	$ 97,563	$ 111,272

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Warranty Accrual Included in Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Product Warranty Liability [Line Items]
Balance at beginning of period	$ 6,925	$ 8,942
Accruals for warranties issued during the period	3,490	2,361
Adjustments related to pre-existing warranties	243	(1,031)
Settlements made during the period	(3,162)	(2,849)
Balance at end of period	$ 7,496	$ 7,423

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Extended Product Warranty Included in Short and Long-Term Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Product Warranty Liability [Line Items]
Balance at beginning of period	$ 46,499	$ 43,300
Deferral of new extended warranty revenue	6,827	4,204
Recognition of extended warranty deferred revenue	(7,211)	(6,800)
Balance at end of period	$ 46,115	$ 40,704

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Stock Based Compensation - Additional Information (Detail) - $ / shares shares in Millions	1 Months Ended		3 Months Ended
	Jan. 31, 2016	Jan. 31, 2014	Apr. 03, 2016	Apr. 05, 2015
Share-based Compensation Arrangement by Share-based Payment Award
Number of service-based stock options granted to executive officers			0.1
Weighted average grant date fair value of stock options granted to executive officers			$ 5.30
Stock options term			7 years
Service-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock unit awards granted			1.2
Weighted average grant date fair value of restricted stock units granted			$ 18.47
Service-Based Restricted Stock Units | Employees
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock unit awards granted				1.4
Weighted average grant date fair value of restricted stock units granted				$ 17.14
Service-Based Restricted Stock Units | Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award
Number of service-based stock options granted to executive officers				0.1
Weighted average grant date fair value of stock options granted to executive officers				$ 4.43
Restricted Stock Units | Employees
Share-based Compensation Arrangement by Share-based Payment Award
Period of stock granted to employees and executive officers vest in equal installments			4 years
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Period of stock granted to employees and executive officers vest in equal installments			4 years
TSR Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Total shareholder return performance measurement period	3 years
Minimum age of retirement to be eligible for PRSUs		60 years
Minimum years of service for retirement to be eligible for PRSUs		10 years
Restricted stock unit awards granted			0.1	0.2
Weighted average grant date fair value of restricted stock units granted			$ 20.29	$ 18.21
Estimated annual dividend amount per share			0.24
Stock price			$ 19.43	$ 18.10
TSR Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of vesting of target shares upon performance achieved	200.00%
TSR Performance-Based Restricted Stock Units | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of vesting of target shares upon performance achieved	0.00%
PBIT PRSUs
Share-based Compensation Arrangement by Share-based Payment Award
Total shareholder return performance measurement period	3 years
Restricted stock unit awards granted			0.1
Weighted average grant date fair value of restricted stock units granted			$ 18.71
PBIT PRSUs | Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of vesting of target shares upon performance achieved	200.00%
PBIT PRSUs | Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of vesting of target shares upon performance achieved	0.00%

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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
	Apr. 03, 2016	Apr. 05, 2015
Share-based Compensation Arrangement by Share-based Payment Award
Risk-free interest rate	0.97%	0.77%
Expected historical volatility	27.00%	28.20%
Dividend yield	1.24%	1.33%
New York Stock Exchange Composite Index
Share-based Compensation Arrangement by Share-based Payment Award
Expected historical volatility	13.10%
Philadelphia Semiconductor Index
Share-based Compensation Arrangement by Share-based Payment Award
Expected historical volatility		19.70%

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Schedule of Estimated Fair Value of Stock Options Grant Using Black Scholes Option Pricing Model (Detail) - Stock Options	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Share-based Compensation Arrangement by Share-based Payment Award
Expected life (years)	5 years	4 years
Risk-free interest rate	1.40%	1.10%
Volatility-historical	32.90%	33.40%
Dividend yield	1.24%	1.33%

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Changes in Accumulated Other Comprehensive Income Balances (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (8,144)	$ 4,689
Other comprehensive income (loss) before reclassifications, net of tax	13,342	1,799
Amounts reclassified from accumulated other comprehensive income, net of tax	(163)	(404)
Other comprehensive income	13,179	1,395
Ending balance	5,035	6,084
Foreign currency translation reclassification adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(8,759)
Other comprehensive income (loss) before reclassifications, net of tax	10,271
Other comprehensive income	10,271
Ending balance	1,512
Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(1,414)	2,365
Other comprehensive income (loss) before reclassifications, net of tax	3,071	1,799
Amounts reclassified from accumulated other comprehensive income, net of tax	(83)	(330)
Other comprehensive income	2,988	1,469
Ending balance	1,574	3,834
Retirement Plans Prior Service Credit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	2,029	2,324
Amounts reclassified from accumulated other comprehensive income, net of tax	(80)	(74)
Other comprehensive income	(80)	(74)
Ending balance	$ 1,949	$ 2,250

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Changes in Accumulated Other Comprehensive Income Balances (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income before reclassifications, tax	$ 0
Other comprehensive income (loss) before reclassifications, net of tax	1,253	$ 704
Amounts reclassified from accumulated other comprehensive income, tax	11	(169)
Amounts reclassified from accumulated other comprehensive income, tax	(46)	(42)
Foreign currency translation adjustments, tax	0		$ 0
Unrealized gains on marketable securities, tax	805	2,133	(459)	$ 1,598
Retirement plans prior service benefit, tax	(668)	(495)	$ (622)	$ (453)
Foreign currency translation reclassification adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss), tax	0
Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss), tax	1,264
Retirement Plans Prior Service Credit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive income (loss), tax	$ (46)	$ (169)

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Reclassification Out of Accumulated Other Comprehensive Income to Statement of Operations (Detail) - USD ($) $ in Thousands		3 Months Ended
		Apr. 03, 2016	Apr. 05, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains, net of tax		$ 83	$ 330
Prior service benefit	[1]	80	74
Total reclassifications		163	404
Interest Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains, net of tax		$ 83	$ 330

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

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Reclassification Out of Accumulated Other Comprehensive Income to Statement of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains, tax	$ 11	$ (169)
Prior service benefit, tax	(46)	(42)
Total reclassifications, tax	$ 35	$ 211

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Changes in Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Dec. 31, 2015
Goodwill [Line Items]
Foreign currency translation adjustment	$ 7,458
Goodwill	1,003,491	$ 996,033
Accumulated impairment losses	(507,620)	(507,620)
Goodwill	495,871	488,413
Semiconductor Test
Goodwill [Line Items]
Goodwill	260,540	260,540
Accumulated impairment losses	(260,540)	(260,540)
Industrial Automation
Goodwill [Line Items]
Foreign currency translation adjustment	7,458
Goodwill	222,433	214,975
Goodwill	222,433	214,975
System Test
Goodwill [Line Items]
Goodwill	158,699	158,699
Accumulated impairment losses	(148,183)	(148,183)
Goodwill	10,516	10,516
Wireless Test
Goodwill [Line Items]
Goodwill	361,819	361,819
Accumulated impairment losses	(98,897)	(98,897)
Goodwill	$ 262,922	$ 262,922

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Schedule of Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Apr. 03, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 498,264	$ 543,004
Accumulated Amortization	274,990	303,173
Net Carrying Amount	$ 223,274	$ 239,831
Weighted Average Useful Life, years	6 years 9 months 18 days	6 years 8 months 12 days
Developed technology
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 333,947	$ 379,778
Accumulated Amortization	186,118	220,306
Net Carrying Amount	$ 147,829	$ 159,472
Weighted Average Useful Life, years	6 years	6 years
Customer Relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 110,658	$ 110,340
Accumulated Amortization	68,114	63,718
Net Carrying Amount	$ 42,544	$ 46,622
Weighted Average Useful Life, years	7 years 10 months 24 days	7 years 10 months 24 days
Trademarks and tradenames
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 53,169	$ 52,396
Accumulated Amortization	20,468	18,879
Net Carrying Amount	$ 32,701	$ 33,517
Weighted Average Useful Life, years	9 years 6 months	9 years 6 months
Non-compete agreements
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 320	$ 320
Accumulated Amortization	120	100
Net Carrying Amount	$ 200	$ 220
Weighted Average Useful Life, years	4 years	4 years
Customer backlog
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 170	$ 170
Accumulated Amortization	$ 170	$ 170
Weighted Average Useful Life, years	3 months 18 days	3 months 18 days

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Goodwill and Intangible Assets Disclosure [Line Items]
Acquired intangible asset amortization	$ 19,994	$ 13,808

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Schedule of Estimated Intangible Asset Amortization Expense (Detail) $ in Thousands	Apr. 03, 2016 USD ($)
Finite-Lived Intangible Assets
2016 (remainder)	$ 60,547
2017	71,899
2018	45,160
2019	24,260
2020	10,304
Thereafter	$ 11,104

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Computation of Basic and Diluted Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Net Income Loss Per Common Share
Net income for basic and diluted net income per share	$ 49,986	$ 32,787
Weighted average common shares-basic	204,271	217,187
Employee stock purchase plan	9	28
Dilutive potential common shares	1,461	1,625
Weighted average common shares-diluted	205,732	218,812
Net income per common share-basic	$ 0.24	$ 0.15
Net income per common share-diluted	$ 0.24	$ 0.15
Restricted Stock Units
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements	965	901
Stock Options
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements	487	696

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Net Income Per Common Share - Additional Information (Detail) - shares shares in Millions	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Net Income Loss Per Common Share
Exercise of stock options	0.3	0.2

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Restructuring and Other - Additional Information (Detail) $ in Thousands	3 Months Ended
	Apr. 03, 2016 USD ($) Employee
Restructuring Cost and Reserve
Contingent consideration adjustment	$ 1,173
System Test and Semiconductor Test
Restructuring Cost and Reserve
Severance benefit and charges	$ 400
Reduction in employees headcount | Employee	12
Universal Robots
Restructuring Cost and Reserve
Contingent consideration adjustment	$ 1,200

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Retirement Plans - Additional Information (Detail) $ in Millions	3 Months Ended
	Apr. 03, 2016 USD ($)
U.S. Supplemental Executive Defined Benefit Pension Plan
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	$ 0.7
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	$ 0.6

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Schedule of Net Periodic Pension and Postretirement Benefit (Income) Cost (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Defined Benefit Plan Disclosure
Net actuarial gain	$ (1,193)
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Service cost	576	$ 616
Interest cost	3,414	3,282
Expected return on plan assets	(3,443)	(3,624)
Amortization of prior service benefit	24	33
Net actuarial gain	(1,193)
Total net periodic	(622)	307
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Service cost	207	247
Interest cost	206	358
Expected return on plan assets	(5)	(195)
Settlement	(239)
Total net periodic	169	410
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Service cost	10	12
Interest cost	56	59
Amortization of prior service benefit	(150)	(149)
Total net periodic	$ (84)	$ (78)

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Apr. 03, 2016 USD ($)
Purchase Commitment, Excluding Long-term Commitment
Aggregate purchase commitments	$ 235.3
Purchase commitments less than one year	$ 233.7

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Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015	Dec. 31, 2015
Income Taxes [Line Items]
Effective tax rate	12.60%	22.70%
U.S. statutory federal tax rate	35.00%
Other discrete tax benefits	$ 0.4
Discrete tax benefit related to decrease in uncertain tax positions	2.5	$ (1.2)
Gains on non-taxable foreign exchange	1.2
Marketable securities	0.9
Discrete tax benefit related to disqualifying dispositions of incentive stock options and employee stock purchase plan shares		0.5
Uncertain tax positions	35.2		$ 33.7
Net Increase in uncertain tax positions	1.5
Decrease in unrecognized tax benefits	(9.1)
Accrued interest and penalties	0.8		$ 0.5
Interest and penalties related to income tax	0.3
Tax savings due to the tax holiday	$ 2.6	$ 1.1
Tax savings due to the tax holiday, per share	$ 0.01
Tax holiday expiration date	December 31, 2020

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Segment Information - Additional Information (Detail)	3 Months Ended
	Apr. 03, 2016 Segment
Segment Reporting Information [Line Items]
Operating segments	4

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Schedule of Segment Information (Detail) - USD ($) $ in Thousands		3 Months Ended
		Apr. 03, 2016		Apr. 05, 2015		Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenues		$ 430,994		$ 342,401
Income (loss) before income taxes	[1],[2]	57,192		42,438
Total assets		2,548,974	[3]	2,512,182	[3]	$ 2,548,674
Semiconductor Test
Segment Reporting Information [Line Items]
Revenues		340,264		270,917
Income (loss) before income taxes	[1],[2]	73,254		43,125
Total assets	[3]	664,555		596,477
Wireless Test
Segment Reporting Information [Line Items]
Revenues		20,314		34,048
Income (loss) before income taxes	[1],[2]	(20,140)		(10,441)
Total assets	[3]	408,466		465,465
System Test
Segment Reporting Information [Line Items]
Revenues		53,670		37,436
Income (loss) before income taxes	[1],[2]	9,492		1,005
Total assets	[3]	90,695		94,133
Corporate And Eliminations
Segment Reporting Information [Line Items]
Income (loss) before income taxes	[1],[2]	1,754		8,749
Total assets	[3]	1,034,669		$ 1,356,107
Industrial Automation
Segment Reporting Information [Line Items]
Revenues		16,746
Income (loss) before income taxes	[1],[2]	(7,168)
Total assets	[3]	$ 350,589

[1] Included in the income (loss) before income taxes for each of the segments are charges related to inventory and other.

[2] Interest income, interest expense, and other (income) expense, net are included in Corporate and Eliminations.

[3] Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

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Schedule of Segment Reporting Information by Segment Charges (Detail) - USD ($) $ in Thousands	3 Months Ended
	Apr. 03, 2016	Apr. 05, 2015
Segment Reporting Information [Line Items]
Restructuring and other	$ 1,587
Contingent consideration adjustment	1,173
Gain from the sale of an equity investment		$ (4,782)
Universal Robots
Segment Reporting Information [Line Items]
Contingent consideration adjustment	1,200
Semiconductor Test
Segment Reporting Information [Line Items]
Cost of revenues-inventory charge	3,685	531
Restructuring and other	414
Total	4,099	531
Wireless Test
Segment Reporting Information [Line Items]
Cost of revenues-inventory charge	605	846
Total	605	846
Corporate And Eliminations
Segment Reporting Information [Line Items]
Total	1,173	(4,782)
Corporate And Eliminations | Other (income) expense, net
Segment Reporting Information [Line Items]
Gain from the sale of an equity investment		$ (4,782)
Corporate And Eliminations | Universal Robots | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment	$ 1,173

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Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions	1 Months Ended		3 Months Ended		12 Months Ended		15 Months Ended
	Jan. 31, 2016	Jan. 31, 2015	Apr. 03, 2016	Apr. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Apr. 03, 2016
Stockholders Equity Note Disclosure [Line Items]
Repurchase of stock, value			$ 28,000,000			$ 300,000,000
Repurchase of stock, shares			1.5
Cumulative repurchases, shares			17.1				17.1
Cumulative repurchases, value			$ 328,000,000				$ 328,000,000
Common stock average price			$ 18.81				$ 19.17
Dividends payable, amount per share	$ 0.06	$ 0.06
Dividends payable, date to be paid	Mar. 21, 2016	Mar. 24, 2015
Dividends payable, record date	Feb. 26, 2016	Feb. 27, 2015
Dividend payment			$ 12,253,000	$ 13,049,000
Maximum
Stockholders Equity Note Disclosure [Line Items]
Stock repurchase program, authorized amount		$ 500,000,000
Maximum | Scenario, Forecast
Stockholders Equity Note Disclosure [Line Items]
Repurchase of stock, value					$ 200,000,000
Minimum | Scenario, Forecast
Stockholders Equity Note Disclosure [Line Items]
Repurchase of stock, value					$ 100,000,000

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Subsequent Events - Additional information (Detail) - Subsequent Event - Earthquake	Apr. 16, 2016 USD ($)
Subsequent Event [Line Items]
Net book value of inventory and fixed assets	$ 17,000,000
Earthquake insurance	10,000,000
Insurance deductible	$ 2,500,000