10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)

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

For the fiscal year ended December 31, 2016

OR

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

Commission file number 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 Number)

600 RIVERPARK DRIVE NORTH READING, MASSACHUSETTS	01864
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (978) 370-2700

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Stock, par value $0.125 per share	New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ☐    No  ☒

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 such filing requirements for the past 90 days.    Yes  ☒    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  ☒    No  ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405) is not contained herein, and will not be contained to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or in any amendment to this Form 10-K.  ☐

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 ☒    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  ☒

The aggregate market value of the voting stock held by non-affiliates of the registrant as of July 1, 2016 was approximately $3.9 billion based upon the closing price of the registrant’s Common Stock on the New York Stock Exchange on that date.

The number of shares outstanding of the registrant’s only class of Common Stock as of February 24, 2017 was 200,302,178 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement in connection with its 2017 annual meeting of shareholders are incorporated by reference into Part III of this Form 10-K.

TERADYNE, INC.

INDEX

		Page No.
PART I.
Item 1.	Business		1
Item 1A.	Risk Factors		9
Item 1B.	Unresolved Staff Comments		19
Item 2.	Properties		19
Item 3.	Legal Proceedings		19
Item 4.	Mine Safety Disclosure		19
PART II.
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		20
Item 6.	Selected Financial Data		21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation		22
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		42
Item 8.	Financial Statements and Supplementary Data		44
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		104
Item 9A.	Controls and Procedures		104
Item 9B.	Other Information		104
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance		105
Item 11.	Executive Compensation		105
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		105
Item 13.	Certain Relationships and Related Transactions, and Director Independence		105
Item 14.	Principal Accountant Fees and Services		105
PART IV.
Item 15.	Exhibits and Financial Statement Schedule		106
Item 16.	Form 10-K Summary		107
	Signatures		113

TERADYNE, INC.

FORM 10-K

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. When used herein, the words “will,” “would,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “project,” “intend,” “may,” “see,” “target” and other words and terms of similar meaning are intended to identify forward-looking statements although not all forward looking statements contain these identifying words. Forward looking statements involve risks and uncertainties, including, but not limited to, those discussed in the section entitled “Risk Factors” of this annual report on Form 10-K and elsewhere, and in other reports we file with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s analysis only as of the date hereof and are subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied. Teradyne assumes no obligation to update these forward-looking statements for any reason, except as may be required by law.

PART I

Item 1: Business

Teradyne, Inc. (“Teradyne”) was founded in 1960 and is 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”);

• industrial automation (“Industrial Automation”) products; and

• wireless test (“Wireless Test”) systems.

We have a broad customer base which includes integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), original equipment manufacturers (“OEMs”), 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.

In 2015, we acquired Universal Robots A/S (“Universal Robots”), 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 acquisition of Universal

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Robots provides a growth engine to our business and complements our existing System Test and Wireless Test segments. The total purchase price for Universal Robots was approximately $315 million, which included cash paid of approximately $284 million and $32 million in fair value of contingent consideration payable upon achievement of revenue and earnings targets through 2018. Contingent consideration paid for 2015 was $15 million. The remaining maximum contingent consideration that could be paid is $50 million.

In 2014, we acquired Avionics Interface Technologies LLC (“AIT”), a supplier of equipment for testing state-of-the-art data communication buses. The acquisition of AIT complements our Defense/Aerospace line of bus test instrumentation for commercial and defense avionics systems. AIT is included in our System Test segment. The total purchase price for AIT was approximately $21 million, which included cash paid of approximately $19 million and $2 million in fair value of contingent consideration payable upon achievement of revenue and gross margin targets in 2015 and 2016. The total amount of contingent consideration paid was $1.1 million.

In 2013, we acquired ZTEC Instruments Inc. (“ZTEC”), a supplier of modular wireless test instruments. The acquisition of ZTEC expands our Wireless Test segment into the design verification test of wireless components and chipsets. The total purchase price for ZTEC was approximately $17 million, which included cash paid of approximately $15 million and $2 million in fair value of contingent consideration payable upon achievement of certain customer order and revenue targets through 2015. None of the contingent consideration was paid.

Investor Information

We are a Massachusetts corporation incorporated on September 23, 1960. We are subject to the informational requirements of the Securities Exchange Act of 1934 (“Exchange Act”). We file periodic reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). Such reports, proxy statements and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, N.E., Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file documents electronically.

You can access financial and other information, including the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, our Corporate Governance Guidelines and Code of Conduct, by clicking the Investors link on our web site at www.teradyne.com. We make available, free of charge, copies of our filings with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act through our web site as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.

Products

Semiconductor Test

We design, manufacture, sell and support Semiconductor Test products and services on a worldwide basis. The test systems we provide are used both for wafer level and device package testing. These chips are used in automotive, industrial, communications, consumer, and computer and electronic game applications, among others. Semiconductor devices span a broad range of functionality, from very simple low-cost devices such as appliance microcontrollers, operational amplifiers or voltage regulators to complex digital signal processors and microprocessors as well as memory devices. Semiconductor Test products and services are sold to IDMs that integrate the fabrication of silicon wafers into their business, “Fabless” companies that outsource the manufacturing of silicon wafers, “Foundries” that cater to the processing and manufacturing of silicon wafers, and OSATs that provide test and assembly services for the final packaged devices to both Fabless companies and IDMs. Fabless companies perform the design of integrated circuits without manufacturing capabilities, and use

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Foundries for wafer manufacturing and OSATs for test and assembly. These customers obtain the overall benefit of comprehensively testing devices and reducing the total costs associated with testing by using our Semiconductor Test systems to:

• improve and control product quality;

• measure and improve product performance;

• reduce time to market; and

• increase production yields.

Our FLEX Test Platform architecture advances our core technologies to produce test equipment that is designed for high efficiency multi-site testing. Multi-site testing involves the simultaneous testing of many devices in parallel. Leading semiconductor manufacturers are using multi-site testing to significantly improve their “Cost of Test” economics. The FLEX Test Platform architecture addresses customer requirements through the following key capabilities:

• A high efficiency multi-site architecture that reduces tester overhead such as instrument setup, synchronization and data movement, and signal processing;

• The IG-XL™ software operating system which provides fast program development, including instant conversion from single to multi-site test; and

• Broad technology coverage by instruments designed to cover the range of test parameters, coupled with a universal slot test head design that allows easy test system reconfiguration to address changing test needs.

FLEX Test Platform purchases are being made by IDMs, OSATs, Foundries and Fabless customers. The FLEX Test Platform has become a widely used test solution at OSATs by providing versatile testers that can handle the widest range of devices, allowing OSATs to leverage their capital investments. The broad consumer, automotive and broadband markets have historically driven most of the device volume growth in the semiconductor industry. These markets include smart phones, cell phones, tablets, set top boxes, HDTVs, game controllers, computer graphics, and automotive controllers to name a few. These end use markets continue to be drivers for the FLEX Test Platform family of products because they require a wide range of technologies and instrument coverage. The UltraFLEX-M tester extends the FLEX Test Platform into the High Speed DRAM testing market. The FLEX Test Platform has an installed base of more than 5,500 systems.

Our J750™ test system shares the IG-XL software environment with the family of FLEX Test Platform systems. The J750 is designed to address the highest volume semiconductor devices, such as microcontrollers, that are central to the functionality of almost every consumer electronics product, from small appliances to automobiles. J750 test systems combine compact packaging, high throughput and ease of production test. We extended the J750 platform technology to create the IP750 Image Sensor™ test system. The IP750 is focused on testing image sensor devices used in smart phones and other imaging products. We have continued to invest in the J750 platform with new instrument releases that bring new capabilities to existing market segments and expand the J750 platform to new devices that include high end microcontrollers and the latest generation of cameras. In 2013, we introduced the J750 Ex-HD which includes system enhancements and new high density instruments that enable the J750 test platform to provide higher test cell productivity. The J750 platform has an installed base of over 5,200 systems.

Our Magnum platform addresses the requirements of mass production test of memory devices such as flash memory and DRAM. Flash and DRAM memory are widely used core building blocks in modern electronic products finding wide application in consumer, industrial, and computing equipment. Magnum V, the newest member of the family, is a next generation memory test solution designed for parallel memory test in the flash, DRAM and multi-chip package markets. The Magnum platform has an installed base of over 2,100 systems.

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Our ETS platform is used by semiconductor manufacturers and assembly and test subcontractors, primarily in the analog/mixed signal markets that cover more cost sensitive applications. Our proprietary SmartPin™ technology enables high efficiency multi-site testing, on an individual test system, permitting greater test throughput. Semiconductors tested by ETS platform systems are incorporated into a wide range of products in historically high-growth markets, including mobile devices, video/multimedia products, automotive electronics, computer peripherals, and notebook and desktop computers. In 2013, we introduced the ETS-88, a high performance multi-site production test system designed to test a wide variety of high volume commodity and precision devices. In 2015, we introduced the ETS-800, a high performance multi-site production test system to test high complexity power devices in automotive, industrial and consumer applications. The ETS platform has an installed base of over 4,100 systems.

System Test

Our System Test segment is comprised of three business units: Defense/Aerospace, Storage Test and Production Board Test.

Defense/Aerospace

We are a leading provider of high performance test systems, subsystems, instruments and service for the defense and aerospace markets. Our test products are used to ensure the readiness of military and commercial aerospace electronics systems. New programs, such as tactical aircraft and missile systems, as well as upgrade programs, continue to fuel the demand for high performance test systems in this market. Our test products are well-suited to the demands of defense/aerospace electronics manufacturers and repair depots worldwide. Our leadership in this market is underscored by our success with major Department of Defense programs across all U.S. military service branches and many allied defense services worldwide. Our acquisition of AIT in 2014 complements our line of bus test instrumentation for commercial and defense avionics systems. AIT is a supplier of equipment for testing state-of-the-art data communication buses.

Storage Test

The Storage Test business unit addresses the high throughput, automated manufacturing test requirements of hard disk drive (“HDD”) and solid state disk (“SSD”) manufacturers. Our products address the client and enterprise storage markets. The client market is driven by the needs of desktop, laptop, and external HDD and SSD storage products. The enterprise market is driven by the needs of data centers and cloud storage. Our products lead in addressing customer requirements related to factory density, throughput, thermal performance and vibration isolation.

Production Board Test

Our test systems are used by electronics manufacturers worldwide to perform In-Circuit-Test (“ICT”) and device programming of printed circuit board assemblies. Fast, accurate and cost-effective test capabilities are hallmark features of our Test Station and Spectrum ICT product families. We offer the Test Station in off-line and automated in-line configurations. The automated in-line configurations address the growing requirements for automating production lines for high volume applications, such as automotive electronics.

Industrial Automation

Universal Robots, which we acquired in June 2015, 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. Collaborative robots are designed to mimic the motion of a human arm and can be fitted with task specific grippers or fixtures to support a wide range of applications. Universal Robots offers three collaborative robot models, the UR3, UR5, and

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UR10, each with different weight carrying capacity and arm reach. All models are easily integrated into existing production environments. Universal Robots’ products are differentiated by their:

• easy programming using a graphical interface which allows users to program the collaborative robot in a few hours;

• flexibility and ease of use in allowing customers to change the task the collaborative robot is performing as their production demands dictate;

• safe operations as collaborative robots can assist workers in side by side production environments requiring no special safety enclosures or shielding to protect workers; and

• short payback period, on average less than 12 months.

Cumulatively, Universal Robots has sold over 12,000 collaborative robots in diverse production environments and applications.

Wireless Test

Our acquisition of LitePoint in 2011 and ZTEC in 2013 expanded our product offerings in the wireless test market. Under the LitePoint brand name, these products provide test solutions utilized in the development and manufacturing of wireless devices. The world’s leading makers of smart phones, tablets, notebooks, laptops, peripherals, and Internet-of-Things (IoT) devices rely on LitePoint technology to ensure their products get into consumer hands with high quality and high efficiency.

LitePoint hardware and software wireless test solutions are used in test insertions that span design verification to high volume manufacturing and are deployed across the entire production eco-system from the wireless chipset suppliers to the consumer brands. Wireless devices are often tested at multiple points along the manufacturing process that include insertions at component, system-in-package (“SiP”), module, PCB, SMT and finished product stages.

Design verification is an important step in the development process for evaluating product performance prior to starting production. As end market unit volumes have increased, the quantity of units and the amount of data that must be analyzed for a successful product launch continues to grow. LitePoint products provide easy to use, domain specific tools for rapid analysis of product performance. This helps to speed time to market.

In high volume manufacturing, before products are packaged and shipped, wireless test enables the calibration of each individual product’s wireless performance to improve range, data throughput and battery life. Testing also verifies product specifications for product quality control. As markets become increasingly competitive, product performance and quality provide brand differentiation.

Wireless standards can be thought of in two categories, connectivity and cellular. Connectivity covers many standards such as Wi-Fi, Bluetooth, and GPS. LitePoint’s IQxel products cover emerging Wi-Fi standards such as 802.11ax and 802.11ad as well as the existing standards 802.11a/b/g/n and 11ac, and includes a variety of other standards such as Bluetooth Classic, Bluetooth 5.0 and Bluetooth low energy, Zigbee, Z-Wave, NFC, LoRa, GPS, GLONASS and others.

The IQxel product family’s high-performance wireless and multi-device testing economics is aligned with the needs of networking equipment, Internet gateways, IoT products and embedded modules used in smartphones, tablets, and PCs. Another connectivity product, the IQnfc, addresses the growing use of NFC technology for payments with mobile devices.

Cellular standards include 2G, 3G, 4G and emerging 5G mobile phone technologies. LitePoint’s IQxstream is a multi-device optimized solution for high-speed testing of GSM, EDGE, CDMA2000, TD-SCDMA, WCDMA, HSPA+, LTE-FDD, TD_LTE, and LTE-A technologies. It is used for calibration and verification of smartphones, tablets, small cell wireless gateways and embedded cellular modules.

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An important component in all wireless systems is the analog RF front end. The performance of these components is continually pushed higher as device makers add more bands, channels, antennas and higher data rates. We offer the LitePoint zSeries of modular wireless test instruments for design verification test and production testing of these wireless components. The lab-in-a-box zSeries solution provides simple and fast design verification of RF power amplifier and smart device RF front end modules. It is capable of rapid analysis of the latest digital pre-distortion and envelope tracking technologies for both LTE and Wi-Fi standards. A ruggedized version of the product is designed for high volume testing of these same devices.

To complement the test systems, LitePoint offers turnkey test software for over 350 of the most popular wireless chipsets. These optimized solutions provide rapid development of high volume manufacturing solutions with a minimum of engineering effort by customers.

Summary of Revenues by Reportable Segment

Our four reportable segments accounted for the following percentages of consolidated revenues for each of the last three years:

	2016			2015			2014
Semiconductor Test		78	%		73	%		79	%
System Test		11			13			10
Industrial Automation		6			3			—
Wireless Test		5			11			11
		100	%		100	%		100	%

Sales and Distribution

In 2016, revenues from Taiwan Semiconductor Manufacturing Company Ltd. and JA Mitsui Leasing, Ltd. accounted for 12% and 12%, respectively, of our consolidated revenues. Taiwan Semiconductor Manufacturing Company Ltd. and JA Mitsui Leasing, Ltd. are customers of our Semiconductor Test segment. In 2015, revenues from JA Mitsui Leasing, Ltd. accounted for 13% of our consolidated revenues. In 2014, no single customer accounted for more than 10% of our consolidated revenues. In each of the years, 2016, 2015 and 2014, our five largest customers in aggregate accounted for 36%, 34% and 30% of our consolidated revenues, respectively.

OSAT customers, such as Taiwan Semiconductor Manufacturing Company LTD., often purchase our test systems based upon recommendations from OEMs, IDMs and Fabless companies. In all cases when an OSAT customer purchases a test system from us, we consider the OSAT as the customer since credit risk, title and risk of loss, among other things, are between Teradyne and the OSAT. We estimate product demand driven by a single OEM customer, combining direct sales to that customer with sales to the customer’s OSATs (which include Taiwan Semiconductor Manufacturing Company Ltd. and its leasing company, JA Mitsui Leasing, Ltd), accounted for approximately 25%, 23%, and 22% of our consolidated revenues in 2016, 2015, and 2014, respectively. The loss of, or significant decrease in demand from, this OEM customer, or any of our five largest direct customers, could have a material adverse effect on our business, results of operations and financial condition.

We have sales and service offices located throughout North America, Asia and Europe. We sell in these areas predominantly through a direct sales force, except for Industrial Automation segment products which are sold through distributors. Our manufacturing activities are primarily conducted through subcontractors and outsourced contract manufacturers with significant operations in China and Malaysia.

Sales to customers outside the United States were 87% of our consolidated revenues in 2016, 2015 and 2014. Sales are attributed to geographic areas based on the location of the customer site.

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Sales to customers by country outside of the United States that accounted for 10% or more of our consolidated revenues in any of the previous three years were as follows:

	2016			2015			2014
Taiwan		37	%		27	%		30	%
China		10			16			18

See also “Item 1A: Risk Factors” and Note R: “Operating Segment, Geographic and Significant Customer Information” in Notes to Consolidated Financial Statements.

Competition

We face significant competition throughout the world in each of our reportable segments. Competitors in the Semiconductor Test segment include, among others, Advantest Corporation and Xcerra Corporation.

Competitors in the System Test segment include, among others, Keysight Technologies, Inc., Astronics, Test Research, Inc. and SPEA S.p.A.

Competitors in our Wireless Test segment include, among others, Rohde & Schwarz GmbH & Co. KG, Anritsu Company, Keysight Technologies, Inc. and National Instruments Corporation.

Competitors in our Industrial Automation segment include manufacturers of traditional industrial robots such as KUKA Robotics Corporation, ABB, FANUC and Yaskawa Electric Corporation as well as emerging companies developing collaborative robots.

Some of our competitors have substantially greater financial and other resources to pursue engineering, manufacturing, marketing and distribution of their products. We also face competition from emerging Asian equipment companies and from internal suppliers at several of our customers. Some of our competitors have introduced or announced new products with certain performance characteristics which may be considered equal or superior to those we currently offer. We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics. See also “Item 1A: Risk Factors.”

Backlog

At December 31, 2016 and 2015, our backlog of unfilled orders in our four reportable segments was as follows:

	2016		2015
	(in millions)
Semiconductor Test	$	575.7	$	472.9
System Test		117.8		108.8
Wireless Test		32.4		33.4
Industrial Automation		3.8		0.6
	$	729.7	$	615.7

Of the backlog at December 31, 2016, approximately 99% of the Semiconductor Test backlog, 97% of the System Test backlog, 50% of Wireless Test backlog and 100% of the Industrial Automation backlog, is expected to be delivered in 2017.

Customers may delay delivery of products or cancel orders suddenly and without advanced notice, subject to possible cancellation penalties. Due to possible customer changes in delivery schedules and cancellation of orders, our backlog at any particular date is not necessarily indicative of the actual sales for any succeeding period. Delays in delivery schedules or cancellations of backlog during any particular period could have a material adverse effect on our business, financial condition or results of operations.

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Raw Materials

Our products contain electronic and mechanical components that are provided by a wide range of suppliers. Some of these components are standard products, while others are manufactured to our specifications. We can experience occasional delays in obtaining timely delivery of certain items. While the majority of our components are available from multiple suppliers, certain items are obtained from sole sources. We may experience a temporary adverse impact if any of our sole source suppliers delay or cease to deliver products.

Intellectual Property and Licenses

The development of our products, both hardware and software, is based in significant part on proprietary information, our brands and technology. We protect our rights in proprietary information, brands and technology through various methods, such as:

• patents;

• copyrights;

• trademarks;

• trade secrets;

• standards of business conduct and related business practices; and

• technology license agreements, software license agreements, non-disclosure agreements, employment agreements, and other agreements.

However, these protections might not be effective in all circumstances. Competitors might independently develop similar technology or exploit our proprietary information and our brands in countries where we lack enforceable intellectual property rights or where enforcement of such rights through the legal system provides an insufficient deterrent. Also, intellectual property protections can lapse or be invalidated through appropriate legal processes. We do not believe that any single piece of intellectual property or proprietary rights is essential to our business.

Employees

As of December 31, 2016, we employed approximately 4,300 people. Since the inception of our business, we have experienced no work stoppages or other labor disturbances.

Engineering and Development Activities

The highly technical nature of our products requires a large and continuing engineering and development effort. For the years ended December 31, 2016, 2015 and 2014, our engineering and development expenditures were $291.0 million, $292.3 million, and $291.6 million, respectively. These expenditures accounted for approximately 16.6%, 17.8%, and 17.7%, of our consolidated revenues in 2016, 2015, and 2014, respectively.

Environmental Affairs

We are subject to various federal, state, and local government laws and regulations relating to the protection of employee health and safety and the environment. We accrue for all known environmental liabilities when it becomes probable that we will incur cleanup costs and those costs can reasonably be estimated. Estimated environmental costs are not expected to materially affect the financial position or results of our operations in future periods. However, estimates of future costs are subject to change due to protracted cleanup periods and changing environmental remediation laws and regulations.

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OUR EXECUTIVE OFFICERS

Pursuant to General Instruction G(3) of Form 10-K, the following table is included in Part I of this Annual Report on Form 10-K in lieu of being included in the Proxy Statement for the Annual Meeting of Shareholders. The table sets forth the names of all of our executive officers and certain other information relating to their positions held with Teradyne and other business experience. Our executive officers do not have a specific term of office but rather serve at the discretion of the Board of Directors.

Executive Officer	Age		Position	Business Experience For The Past 5 Years
Mark E. Jagiela		56	Chief Executive Officer and President	Chief Executive Officer since February 2014; President of Teradyne since January 2013; President of Semiconductor Test from 2003 to February 2016; Vice President of Teradyne from 2001 to 2013.
Gregory R. Beecher		59	Vice President, Chief Financial Officer and Treasurer	Vice President and Chief Financial Officer of Teradyne since 2001; Treasurer of Teradyne from 2003 to 2005 and since 2006.
Charles J. Gray		55	Vice President, General Counsel and Secretary	Vice President, General Counsel and Secretary of Teradyne since April 2009.
Bradford B. Robbins		58	President of Wireless Test	President of Wireless Test since August 2014; Chief Operating Officer of LitePoint Corporation from 2012 to 2014; Vice President of Teradyne since 2001.
Gregory S. Smith		53	President of Semiconductor Test	President of Semiconductor Test since February 2016; Vice President, SOC Business Group and Marketing Manager for Semiconductor Test Group from January 2014 to February 2016; Business Unit Manager, Complex SOC Business Unit from 2009 to January 2014.
Walter G. Vahey		52	President of System Test	President of System Test since July 2012; Vice President of Teradyne since 2008; General Manager of Storage Test since 2008; General Manager of Production Board Test since April 2013; General Manager of Defense/Aerospace from 2004 to July 2012.

Item 1A: Risk Factors

Risks Associated with Our Business

The risks described below 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.

Our business is impacted by global and industry-specific economic cycles, which are difficult to predict, and actions we have taken or may take to offset these cycles may not be sufficient.

Capital equipment providers in the electronics and semiconductor industries, such as Teradyne, have, in the past, been negatively impacted by both sudden slowdowns in the global economies and recurring cyclicality within those industries. These cycles have resulted in periods of over-supply; a trend we believe will continue to

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occur for newer generations of electronic products. Our business and results of operations depend, in significant part, upon capital expenditures of manufacturers of semiconductors and other electronics, which in turn depend upon the current and anticipated market demand for those products. Disruption or deterioration in economic conditions may reduce customer purchases of our products, thereby reducing our revenues and earnings. In addition, such adverse changes in economic conditions, and resulting slowdowns in the market for our products, may, among other things, result in increased price competition for our products, increased risk of excess and obsolete inventories, increased risk in the collectability of our accounts receivable from our customers, potential reserves for doubtful accounts and write-offs of accounts receivable, increased risk of restructuring charges, and higher operating costs as a percentage of revenues, which, in each case and together, adversely affect our operating results. We are unable to predict the likely duration, frequency and severity of disruptions in financial markets, credit availability, and adverse economic conditions throughout the world, and we cannot ensure that the level of revenues or new orders for a fiscal quarter will be sustained in subsequent quarters. We have taken actions to address the effects of general economic variability and recurring industry cyclicality, including implementing cost control and reduction measures. We cannot predict whether these measures will be sufficient to offset global or market-specific disruptions that might affect our test businesses and we may need to take additional or different measures in the future.

We are subject to intense competition.

We face significant competition throughout the world in each of our reportable segments. Some of our competitors have substantial financial and other resources to pursue engineering, manufacturing, marketing and distribution of their products. We also face competition from emerging Asian equipment companies and internal development at several of our customers. Some of our competitors have introduced or announced new products with certain performance characteristics that may be considered equal or superior to those we currently offer. We expect our competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics. New product introductions by competitors could cause a decline in revenues or loss of market acceptance of our products.

The market for our products is concentrated, and our business depends, in part, on obtaining orders from a few significant customers.

The market for our products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. In each of the years 2016, 2015 and 2014, our five largest customers in aggregate accounted for 36%, 34% and 30% of consolidated revenues, respectively. We estimate product demand driven by a single OEM customer, combining direct sales to that customer with sales to the customer’s OSATs (which include Taiwan Semiconductor Manufacturing Company Ltd. and its leasing company, JA Mitsui Leasing, Ltd), accounted for approximately 25%, 23%, and 22% of our consolidated revenues in 2016, 2015, and 2014, respectively. In any one reporting period, a single customer or several customers may contribute even a larger percentage of our consolidated revenues. In addition, our ability to increase sales will depend, in part, on our ability to obtain orders from current or new significant customers. The opportunities to obtain orders from these customers may be limited, which may impair our ability to grow revenues. We expect that sales of our products will continue to be concentrated with a limited number of significant customers for the foreseeable future. The loss of a significant customer or any reduction in orders by these customers, including reductions due to market or competitive conditions, such as we experienced in our Wireless Test segment, would likely have a material adverse effect on our business, financial condition or results of operations.

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Our operating results are likely to fluctuate significantly.

Our operating results are affected by a wide variety of factors that could materially adversely affect revenues or profitability. The following factors could impact future operations:

• a worldwide economic slowdown or disruption in the global financial markets;

• competitive pressures on selling prices;

• our ability to introduce, and the market acceptance of, new products;

• changes in product revenues mix resulting from changes in customer demand;

• the level of orders received which can be shipped in a quarter because of the tendency of customers to wait until late in a quarter to commit to purchase due to capital expenditure approvals and constraints occurring at the end of a quarter, or the hope of obtaining more favorable pricing from a competitor seeking the business;

• engineering and development investments relating to new product introductions, and the expansion of manufacturing, outsourcing and engineering operations in Asia;

• provisions for excess and obsolete inventory relating to the lack of demand for and the discontinuance of products;

• impairment charges for certain long-lived and intangible assets, and goodwill;

• an increase in the leasing of our products to customers;

• our ability to expand our global distribution channel for our collaborative robots;

• parallel or multi-site testing could lead to a decrease in the ultimate size of the market for our products; and

• the ability of our suppliers and subcontractors to meet product quality or delivery requirements needed to satisfy customer orders for our products, especially if product demand increases.

As a result of the foregoing and other factors, we have experienced and may continue to experience material fluctuations in future operating results on a quarterly or annual basis which could materially and adversely affect our business, financial condition, operating results or stock price.

We are subject to risks of operating internationally.

A significant portion of our total revenues is derived from customers outside the United States. Our international sales and operations are subject to significant risks and difficulties, including:

• unexpected changes in legal and regulatory requirements affecting international markets;

• changes in tariffs and exchange rates;

• social, political and economic instability, acts of terrorism and international conflicts;

• difficulties in protecting intellectual property;

• difficulties in accounts receivable collection;

• cultural differences in the conduct of business;

• difficulties in staffing and managing international operations;

• compliance with customs regulations; and

• compliance with international tax laws and regulations.

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In addition, an increasing portion of our products and the products we purchase from our suppliers are sourced or manufactured in foreign locations, including China and Malaysia, and a large portion of the devices our products test are fabricated and tested by foundries and subcontractors in Taiwan, China, Singapore and other parts of Asia. As a result, we are subject to a number of economic and other risks, particularly during times of political or financial instability in these regions. Disruption of manufacturing or supply sources in these international locations could materially adversely impact our ability to fill customer orders and potentially result in lost business.

If we fail to develop new technologies to adapt to our customers’ needs and if our customers fail to accept our new products, our revenues will be adversely affected.

We believe that our technological position depends primarily on the technical competence and creative ability of our engineers. In a rapidly evolving market, such as ours, the development or acquisition of new technologies, commercialization of those technologies into products and market acceptance and customer demand for those products are critical to our success. Successful product development or acquisition, introduction and acceptance depend upon a number of factors, including:

• new product selection;

• ability to meet customer requirements;

• development of competitive products by competitors;

• timely and efficient completion of product design;

• timely and efficient implementation of manufacturing and manufacturing processes;

• timely remediation of product performance issues, if any, identified during testing;

• assembly processes and product performance at customer locations;

• differentiation of our products from our competitors’ products;

• management of customer expectations concerning product capabilities and product life cycles;

• transition of customers to new product platforms;

• ability to attract and retain technical talent; and

• innovation that does not infringe on the intellectual property rights of third parties.

We may be subject to product recalls and warranty and product liability claims.

We invest significant resources in the design, manufacture and testing of our products. However, we may discover design or manufacturing defects in our products after they have been shipped and, as a result, we may incur development and remediation costs and be required to settle warranty and product liability claims. In addition, if any of our products contain defects or have reliability, quality or safety issues, we may need to conduct a product recall which could result in significant repair or replacement costs and substantial delays in product shipments and may damage our reputation which could make it more difficult to sell our products. Any of these results could have a material adverse effect on our business, results of operations or financial condition.

If our suppliers do not meet product or delivery requirements, we could have reduced revenues and earnings.

Certain components, including semiconductor chips, may be in short supply from time to time because of high industry demand or the inability of some vendors to consistently meet our quality or delivery requirements. If any of our suppliers were to cancel contracts or commitments or fail to meet the quality or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, have significantly decreased revenues and earnings and be subject to contractual penalties, which would have a

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material adverse effect on our business, results of operations and financial condition. In addition, we rely on contract manufacturers for certain subsystems used in our products, and our ability to meet customer orders for those products depends upon the timeliness and quality of the work performed by these subcontractors, over whom we do not exercise any control.

To a certain extent, we are dependent upon the ability of our suppliers and contractors to help meet increased product or delivery requirements. It may be difficult for certain suppliers to meet delivery requirements in a period of rapid growth, therefore impacting our ability to meet our customers’ demands.

We rely on the financial strength of our suppliers. There can be no assurance that the loss of suppliers either as a result of financial viability, bankruptcy or otherwise will not have a material adverse effect on our business, results of operations or financial condition.

Our operations may be adversely impacted if our outsourced contract manufacturers or service providers fail to perform.

We depend on Flex Ltd. (“Flex”) to manufacture and test our FLEX and J750 family of products from its facility in China and on other contract manufacturers to manufacture other products. If for any reason these contract manufacturers cannot provide us with these products in a timely fashion, or at all, we may not be able to sell these products to our customers until we enter a similar arrangement with an alternative contract manufacturer. If we experience a problem with our supply of products from Flex or our other contract manufacturers, it may take us significant time to either manufacture the product or find an alternate contract manufacturer, which could result in substantial expense and disruption to our business.

We have also outsourced a number of our general and administrative functions to reputable service providers, many of which are in foreign countries, sometimes impacting communication with them because of language and time differences. Their presence in foreign countries also increases the risk they could be exposed to political risk. Additionally, there may be difficulties encountered in coordinating the outsourced operations with existing functions and operations. If we fail in successfully coordinating and managing the outsourced service providers, it may cause an adverse effect on our operations which could have a material adverse effect on our business, results of operations or financial condition.

We may not fully realize the benefits of our acquisitions or strategic alliances.

In June 2015, we acquired Universal Robots. We may not be able to realize the benefit of acquiring Universal Robots or successfully grow Universal Robots’ business. We may continue to acquire additional businesses, form strategic alliances or create joint ventures with third parties that we believe will complement or augment our existing businesses. We may not be able to realize the expected synergies and cost savings from the integration with our existing operations of other businesses or technologies that we may acquire. In addition, the integration process for our acquisitions may be complex, costly and time consuming and include unanticipated issues, expenses and liabilities. We may have difficulty in developing, manufacturing and marketing the products of a newly acquired company in a manner that enhances the performance of our combined businesses or product lines and allows us to realize value from expected synergies. Following an acquisition, we may not achieve the revenue or net income levels that justify the acquisition. Acquisitions may also result in one-time charges (such as acquisition-related expenses, write-offs or restructuring charges) or in the future, impairment of goodwill or acquired intangible assets that adversely affect our operating results. Additionally, we may fund acquisitions of new businesses, strategic alliances or joint ventures by utilizing our cash, incurring debt, issuing shares of our common stock, or by other means.

In the second quarter of 2016, we performed an interim goodwill impairment test and recorded a goodwill impairment loss of $254.9 million and $83.3 million intangible asset impairment in our Wireless Test segment as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market.

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The decrease in projected demand was due to lower forecasted buying from our largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption.

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

We may incur significant liabilities if we fail to comply with environmental regulations.

We are subject to both domestic and international environmental regulations and statutory strict liability relating to the use, storage, discharge, site cleanup and disposal of hazardous chemicals used in our manufacturing processes. If we fail to comply with present and future regulations, or are required to perform site remediation, we could be subject to future liabilities or cost, including penalties or the suspension of production. Present and future regulations may also:

• restrict our ability to expand facilities;

• restrict our ability to ship certain products;

• require us to modify our operations logistics;

• require us to acquire costly equipment; or

• require us to incur other significant costs and expenses.

Pursuant to present regulations and agreements, we are conducting groundwater and subsurface assessment and monitoring and are implementing remediation and corrective action plans for facilities located in Massachusetts and New Hampshire which are no longer conducting manufacturing operations. As of December 31, 2016, we have not incurred material costs as result of the monitoring and remediation steps taken at the Massachusetts and New Hampshire sites.

On January 27, 2003, the European Union adopted the following directives: (i) the directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (the “RoHS Directive”); and (ii) the directive on Waste Electrical and Electronic Equipment (the “WEEE Directive”). The WEEE Directive became effective August 13, 2005 and the RoHS Directive became effective on July 6, 2006. Both the RoHS Directive and the WEEE Directive alter the form and manner in which electronic equipment is imported, sold and handled in the European Union. Other jurisdictions, such as China, have followed the European Union’s lead in enacting legislation with respect to hazardous substances and waste removal. Ensuring compliance with the RoHS Directive, the WEEE Directive and similar legislation in other jurisdictions, and integrating compliance activities with our suppliers and customers could result in additional costs and disruption to operations and logistics and thus, could have a negative impact on our business, operations or financial condition.

We currently are, and in the future may be, subject to litigation or regulatory proceedings that could have an adverse effect on our business.

From time to time, we may be subject to litigation or other administrative, regulatory or governmental proceedings, including tax audits and resulting claims that could require significant management time and resources and cause us to incur expenses and, in the event of an adverse decision, pay damages or incur costs in an amount that could have a material adverse effect on our financial position or results of operations.

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Third parties may claim we are infringing their intellectual property and we could suffer significant litigation costs, licensing expenses or be prevented from selling our products.

We have been sued for patent infringement in the past and receive notifications from time to time that we may be in violation of patents held by others. An assertion of patent infringement against us, if successful, could have a material adverse effect on our ability to sell our products or it could force us to seek a license to the intellectual property rights of others or alter such products so that they no longer infringe the intellectual property rights of others. A license could be very expensive to obtain or may not be available at all. Similarly, changing our products or processes to avoid infringing the rights of others may be costly or impractical. Additionally, patent litigation could require a significant use of management resources and involve a lengthy and expensive defense, even if we eventually prevail. If we do not prevail, we might be forced to pay significant damages, obtain licenses, modify our products, or stop making our products; each of which could have a material adverse effect on our financial condition, operating results or cash flows.

If we are unable to protect our intellectual property (“IP”), we may lose a valuable asset or may incur costly litigation to protect our rights.

We protect the technology that is incorporated in our products in several ways, including through patent, copyright, trademark and trade secret protection and by contractual agreement. However, even with these protections, our IP may still be challenged, invalidated or subject to other infringement actions. While we believe that our IP has value in the aggregate, no single element of our IP is in itself essential. If a significant portion of our IP is invalidated or ineffective, our business could be materially adversely affected.

We may incur higher tax rates than we expect and may have exposure to additional international tax liabilities and costs.

We are subject to paying income taxes in the United States and various other countries where we operate. Our effective tax rate is dependent on where our earnings are generated and the tax regulations and the interpretation and judgment of administrative tax or revenue entities in the United States and other countries. We have pursued a global tax strategy which could adversely be affected by the mix of earnings and tax rates in the countries where we operate, changes to tax laws or an adverse tax ruling by administrative entities. We are also subject to tax audits in the countries where we operate. Any material assessment resulting from an audit from an administrative tax or revenue entity could also negatively affect our financial results.

As a multinational corporation, we are subject to income taxes as well as non-income based taxes, in both the United States and various foreign jurisdictions. In certain foreign jurisdictions, we qualify for tax incentives and tax holidays based on our ability to meet, on a continuing basis, various tests relating to our employment levels, research and development expenditures and other qualification requirements in a particular foreign jurisdiction. While we intend to operate in such a manner to maintain and maximize our tax incentives, no assurance can be given that we have so qualified or that we will so qualify for any particular year or jurisdiction. If we fail to qualify and to remain qualified for certain foreign tax incentives and tax holidays, we may be subject to further taxation or an increase in our effective tax rate which would adversely impact our financial results. In December 2015, Teradyne entered into an agreement with the Singapore Economic Development Board which extended our Singapore tax holiday under substantially similar terms to the agreement which expired on December 31, 2015. The new tax holiday is scheduled to expire on December 31, 2020. The tax savings attributable to the Singapore tax holiday for the years ended December 31, 2016, 2015 and 2014 were $17.0 million or $0.08 per diluted share, $11.5 million or $0.05 per diluted share and $13.2 million or $0.06 per diluted share, respectively.

In addition, we may incur additional costs, including headcount expenses, in order to maintain or obtain a foreign tax incentive in a particular foreign jurisdiction.

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We have significant guarantees, indemnification and customer confidentiality obligations.

From time to time, we make guarantees to customers regarding the delivery, price and performance of our products and guarantee certain indebtedness, performance obligations or lease commitments of our subsidiary and affiliate companies. We also have agreed to provide indemnification to our officers, directors, employees and agents, to the extent permitted by law, arising from certain events or occurrences while the officer, director, employee or agent, is or was serving at our request in such capacity. Additionally, we have confidentiality obligations to certain customers and if breached would require the payment of significant penalties. If we become liable under any of these obligations, it could materially and adversely affect our business, financial condition or operating results. For additional information see Note K: “Commitments and Contingencies—Guarantees and Indemnification Obligations” in Notes to Consolidated Financial Statements.

We may discontinue or reduce our quarterly cash dividend or share repurchase program.

In January 2014, our Board of Directors initiated a quarterly cash dividend of $0.06 per share. In January 2017, our Board of Directors increased our quarterly cash dividend to $0.07 per share. In December 2016, our Board of Directors approved a new $500 million share repurchase authorization that commenced on January 1, 2017. We intend to repurchase at least $200 million in 2017. Our January 2015 stock repurchase program was terminated on December 31, 2016. In 2016 and 2015, we repurchased $146 million and $300 million of common stock, respectively. Holders of our common stock are only entitled to receive dividends when and if they are declared by our Board of Directors. Future cash dividends and share repurchases are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition. While we have declared a quarterly cash dividend on our common stock and authorized a share repurchase program, we are not required to do either and may reduce or eliminate our cash dividend or share repurchase program in the future. The reduction or elimination of our cash dividend or our share repurchase program could adversely affect the market price of our common stock.

We have incurred indebtedness and may incur additional indebtedness.

On December 12, 2016, we completed a private offering of $460.0 million aggregate principal amount of 1.25% convertible senior unsecured notes (the “Notes”) due December 15, 2023 and received net proceeds, after issuance costs, of approximately $450.8 million, $33.0 million of which was used to pay the net cost, after being partially offset by proceeds from the sale of the warrants, of the convertible note hedge transactions and $50.1 million of which was used to repurchase 2 million shares of our common stock. Holders of the Notes may require us to repurchase the Notes upon the occurrence of certain fundamental changes involving us or the holders may elect to convert into shares of our common stock.

On April 27, 2015, we entered into a five-year, senior secured revolving credit facility of up to $350.0 million. Subject to customary conditions, we may seek to obtain from existing or new lenders incremental commitments under the credit facility in an aggregate principal amount not to exceed $150.0 million. We have not borrowed any funds under this credit facility. We could borrow funds under this credit facility at any time for general corporate purposes and working capital.

The issuance of the Notes and any additional indebtedness, among other things, could:

• make it difficult to make payments on this indebtedness and our other obligations;

• make it difficult to obtain any necessary future financing for working capital, capital expenditures, debt service requirements or other purposes;

• require the dedication of a substantial portion of any cash flow from operations to service for indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; and

• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete.

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Our convertible note hedge and warrant transactions could impact the value of our stock.

Concurrent with the offering of the Notes, we entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that underlie the Notes, with a strike price equal to the initial conversion price of the Notes of $31.84. The Note Hedge Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of our common stock.

Separately and concurrent with the pricing of the Notes, we entered into warrant transactions with the Option Counterparties (the “Warrant Transactions”) in which we sold net-share-settled (or, at our election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of our common stock. The strike price of the warrants will initially be $39.95 per share (subject to adjustment), which was approximately 60% above the closing sale price of our common stock on December 6, 2016. The Warrant Transactions could have a dilutive effect to our common stock to the extent that the market price per share of our common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.

The Note Hedge Transactions are expected to reduce the potential dilution to our common stock upon any conversion of the Notes. However, the Warrant Transactions could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the warrants. The net cost of the Note Hedge Transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $33.0 million.

In connection with establishing their initial hedge of these convertible note hedge and warrant transactions, the Option Counterparties have entered into various derivative transactions with respect to our common stock and/or purchase shares of our common stock or other securities, including the Notes, concurrent with, or shortly after, the pricing of the Notes. In addition, the Option Counterparties may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock or by selling our common stock or other securities, including the Notes, in secondary market transactions (and may do so during any observation period related to the conversion of the Notes). These activities could adversely impact the value of our common stock and the Notes.

We may not be able to pay our debt and other obligations.

If our cash flow is inadequate to meet our obligations, we could face substantial liquidity problems. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make required payments on the Notes or certain of our other obligations, we would be in default under the terms thereof, which would permit the holders of those obligations to accelerate their maturity and also could cause defaults under future indebtedness we may incur. Any such default could have a material adverse effect on our business, prospects, financial position and operating results. In addition, we cannot be certain that we would be able to repay amounts due on the Notes if those obligations were to be accelerated following the occurrence of any other event of default as defined in the instruments creating those obligations, or if the holders of the Notes require us to repurchase the Notes upon the occurrence of a fundamental change involving us. Moreover, we cannot be certain that we will have sufficient funds or will be able to arrange for financing to pay the principal amount due on the Notes at maturity.

Restrictive covenants in the agreement governing our senior secured revolving credit facility may restrict our ability to pursue business strategies.

The agreement governing our senior secured revolving credit facility limits our ability, among other things, to: incur additional secured indebtedness; sell, transfer, license or dispose of assets; consolidate or merge; enter into transactions with our affiliates; and incur liens. In addition, our senior secured revolving credit facility contains financial and other restrictive covenants that limit our ability to engage in activities that may be in our

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long term best interest, such as, subject to permitted exceptions, making capital expenditures in excess of certain thresholds, making investments, loans and other advances, and prepaying any additional indebtedness while our indebtedness under our senior secured revolving credit facility is outstanding. Our failure to comply with financial and other restrictive covenants could result in an event of default, which if not cured or waived, could result in the lenders requiring immediate payment of all outstanding borrowings or foreclosing on collateral pledged to them to secure the indebtedness.

Our business may suffer if we are unable to attract and retain key employees.

Competition for employees with skills we require is intense in the high technology industry. Our success will depend on our ability to attract and retain key technical employees. The loss of one or more key or other employees, a decrease in our ability to attract additional qualified employees, or the delay in hiring key personnel could each have a material adverse effect on our business, results of operations or financial condition.

Our operations, and the operations of our customers and suppliers, are subject to risks of natural catastrophic events, widespread health epidemics, acts of war, terrorist attacks and the threat of domestic and international terrorist attacks, any one of which could result in cancellation of orders, delays in deliveries or other business activities, or loss of customers and could negatively affect our business and results of operations.

Our business is international in nature, with our sales, service and administrative personnel and our customers and suppliers located in numerous countries throughout the world. Our operations, and those of our customers and suppliers, are subject to disruption for a variety of reasons, including work stoppages, acts of war, terrorism, health epidemics, fires, earthquakes, hurricanes, volcanic eruptions, energy shortages, telecommunication failures, tsunamis, flooding or other natural disasters. Such disruption could materially increase our costs and expenses as well as cause delays in, among other things, shipments of products to our customers, our ability to perform services requested by our customers, or the installation and acceptance of our products at customer sites. Any of these conditions could have a material adverse effect on our business, financial condition or results of operations.

In 2016, an earthquake in Japan damaged our building beyond repair and impacted our operations located in Kumamoto, Japan. We have temporarily transferred 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 incur significant uninsured costs in order to rebuild our operations which could have an adverse effect on our financial condition and results of operations.

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

We rely on various information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, including confidential data, and to carry out and support a variety of business activities, including manufacturing, research and development, supply chain management, sales and accounting. A failure in or a breach of our operational or security systems or infrastructure, or those of our suppliers and other service providers, including as a result of cyber attacks, could disrupt our business, result in the disclosure or misuse of proprietary or confidential information, damage our reputation, cause losses and increase our costs.

We may face risks associated with shareholder activism.

Publicly traded companies have increasingly become subject to campaigns by shareholders advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases or divestitures. We may become subject in the future to such shareholder activity and demands. Such activities could interfere with our ability to execute our business plans, be costly and time-consuming, disrupt our operations, divert the attention of management or result in our initiating borrowing or increasing our share repurchase plan or dividend, any of which could have an adverse effect on our business or stock price.

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Provisions of our charter and by-laws and Massachusetts law make a takeover of Teradyne more difficult.

There are provisions in our basic corporate documents and under Massachusetts law that could discourage, delay or prevent a change in control, even if a change in control may be regarded as beneficial to some or all of our stockholders.

Item 1B: Unresolved Staff Comments

None.

Item 2: Properties

The following table provides information as to our principal facilities:

Location	Operating Segment	Major Activity(1)		Approximate Square Feet  of Floor Space
Properties owned:
North Reading, Massachusetts	Semiconductor Test & System Test		1-2-3-4-5		422,000
Agoura Hills, California	Semiconductor Test		3-4		120,000
Kumamoto, Japan	Semiconductor Test		2-3-4-5		79,000
					621,000
Properties leased:
Cebu, Philippines	Semiconductor Test		1-2-5		183,000
San Jose, California	Semiconductor Test		2-3-4-5		128,000
Odense, Denmark	Industrial Automation		2-3-4-5		130,000
Buffalo Grove, Illinois	Semiconductor Test		2-3-4-5		95,000
Sunnyvale, California	Wireless Test & Semiconductor Test		2-3-4-5		91,000
Shanghai, China	Semiconductor Test, System Test, Wireless Test & Industrial Automation		3-4-5		75,000
Heredia, Costa Rica	Semiconductor Test		1-5		63,000
Hsinchu, Taiwan	Semiconductor Test & System Test		4		43,000
Singapore, Singapore	Semiconductor Test & Industrial Automation		1-3-4		32,000
Seoul, Korea	Semiconductor Test		4		30,000
					870,000

(1) Major activities have been separated into the following categories: 1. Corporate Administration, 2. Manufacturing, 3. Engineering, 4. Sales and Marketing, 5. Storage and Distribution.

Item 3: Legal Proceedings

We are subject to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. We believe that we have meritorious defenses against all pending claims and intend to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, we believe the potential losses associated with all of these actions are unlikely to have a material adverse effect on our results of operations, financial condition or cash flows.

Item 4: Mine Safety Disclosure

Not Applicable.

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PART II

Item 5: Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

The following table shows the market range for our common stock based on reported sales price on the New York Stock Exchange and the dividends declared per share during such periods:

Period	High		Low		Dividends
2015
First quarter	$	20.15	$	17.60	$	0.06
Second quarter		21.33		18.03		0.06
Third quarter		20.00		16.06		0.06
Fourth quarter		21.58		18.09		0.06
2016
First quarter	$	21.83	$	17.34	$	0.06
Second quarter		21.84		18.07		0.06
Third quarter		21.66		18.87		0.06
Fourth quarter		26.59		20.22		0.06

The number of record holders of our common stock at February 24, 2017 was 1,737.

In January 2016, May 2016, August 2016 and November 2016, our Board of Directors declared a quarterly cash dividend of $0.06 per share.

In January 2015, May 2015, August 2015 and November 2015, our Board of Directors declared a quarterly cash dividend of $0.06 per share.

In January 2015, our Board of Directors cancelled the November 2010 stock repurchase program and authorized a new stock repurchase program for up to $500 million of common stock. The cumulative repurchases as of December 31, 2016 totaled 22.5 million shares of common stock for $446 million at an average price per share of $19.87.

In December 2016, our Board of Directors approved a new $500 million share repurchase authorization which commenced on January 1, 2017. We intend to repurchase at least $200 million in 2017. Our January 2015 stock repurchase program was terminated on December 31, 2016.

In January 2017, our Board of Directors approved an increase to our quarterly cash dividend to $0.07 per share.

See “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for information on our equity compensation plans and our performance graph.

The following table includes information with respect to repurchases we made of our common stock during the quarter ended December 31, 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
October 3, 2016 – October 30, 2016		422		$	21.44			420	$	105,961
October 31, 2016 – November 27, 2016		99			22.75			95	$	103,803
November 28, 2016 – December 31, 2016		2,007			24.97			2,006	$	53,721
		2,528	(1)		24.29	(1)		2,521

(1) Includes approximately seven thousand shares at an average price of $22.68 withheld from employees for the payment of taxes.

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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.

Item 6: Selected Financial Data

	Years Ended December 31,
	2016			2015		2014		2013		2012
	(dollars in thousands, except per share amounts)
Consolidated Statements of Operations Data (1)(2)(3)(4)(5):
Revenues	$	1,753,250		$	1,639,578	$	1,647,824	$	1,427,933	$	1,656,750
Net (loss) income	$	(43,421	)	$	206,477	$	81,272	$	164,947	$	217,049
Net (loss) income per common share—basic	$	(0.21	)	$	0.98	$	0.40	$	0.86	$	1.16
Net (loss) income per common share—diluted	$	(0.21	)	$	0.97	$	0.37	$	0.70	$	0.94
Cash dividend declared per common share	$	0.24		$	0.24	$	0.18	$	—	$	—
Consolidated Balance Sheets Data:
Total assets	$	2,762,493		$	2,548,674	$	2,538,520	$	2,629,824	$	2,429,345
Short-term debt obligations	$	—		$	—	$	—	$	186,663	$	2,328
Long-term debt obligations	$	352,669		$	—	$	—	$	—	$	171,059

(1) The Consolidated Statement of Operations Data for the year ended December 31, 2016 includes a $254.9 million goodwill impairment charge and an $83.3 million acquired intangible assets impairment charge related to the Wireless Test segment, and $3.2 million of pension actuarial gains.

(2) The Consolidated Statement of Operations Data for the year ended December 31, 2015 includes $17.7 million of pension actuarial losses, a $5.4 million gain from the sale of an equity investment and the results of operations of Universal Robots from June 12, 2015.

(3) The Consolidated Statement of Operations Data for the year ended December 31, 2014 includes a $98.9 million goodwill impairment charge related to the Wireless Test segment and $46.6 million of pension actuarial losses.

(4) The Consolidated Statement of Operations Data for the year ended December 31, 2013 includes a $34.2 million gain from the sale of an equity investment and $10.3 million of pension actuarial gains.

(5) The Consolidated Statement of Operations Data for the year ended December 31, 2012 includes $23.3 million of pension actuarial losses.

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Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

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”);

• industrial automation (“Industrial Automation”) products; and

• wireless test (“Wireless Test”) systems.

We have a broad customer base which includes integrated device manufacturers (“IDMs”), outsourced semiconductor assembly and test providers (“OSATs”), original equipment manufacturers (“OEMs”), 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.

In 2015, we acquired Universal Robots A/S (“Universal Robots”), 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 acquisition of Universal Robots provides a growth engine to our business and complements our existing System Test and Wireless Test segments. The total purchase price for Universal Robots was approximately $315 million, which included cash paid of approximately $284 million and $32 million in fair value of contingent consideration payable upon achievement of revenue and earnings targets through 2018. Contingent consideration paid for 2015 was $15 million. The maximum payment for each of the two remaining Universal Robots earn-outs is $25.0 million.

In 2014, we acquired Avionics Interface Technologies, LLC (“AIT”), a supplier of equipment for testing state-of-the-art data communication buses. The acquisition of AIT complements our Defense/Aerospace line of bus test instrumentation for commercial and defense avionics systems. AIT is included in our System Test segment. The total purchase price for AIT was approximately $21 million, which included cash paid of approximately $19 million and $2 million in fair value of contingent consideration payable upon achievement of revenue and gross margin targets in 2015 and 2016. The total amount of contingent consideration paid was $1.1 million.

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

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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. We expect the 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 main building at that location. The building, which was used for engineering, production, and support operations, was damaged beyond repair. With respect to the location, we have $10 million of earthquake insurance with a deductible of approximately $2.5 million. As a result, we impaired the building and recorded a charge of $4.2 million and a charge of $1.2 million for other earthquake related expenses. The $5.4 million of total charges were offset by $5.4 million of property insurance recovery. We have temporarily transferred some operations to other facilities in Japan and elsewhere while our Kumamoto operations are restored.

In the second quarter of 2016, the Wireless Test reporting unit (which is our Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from our largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. We considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test. Following the interim goodwill impairment test, we recorded a goodwill impairment charge of $254.9 million, with approximately $8.0 million of goodwill remaining, and $83.3 million for the impairment of acquired intangible assets with approximately $5.0 million of intangible assets remaining. In the third quarter of 2016, the Wireless Test reporting unit reduced headcount by an additional 14%.

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

Critical Accounting Policies and Estimates

We have identified the policies discussed below as critical to understanding our business and our results of operations and financial condition. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results.

Revenue Recognition

We recognize revenues, including revenues from distributors, when there is persuasive evidence of an arrangement, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to our customers upon shipment or at delivery destination point. In circumstances where either title or risk of loss pass upon destination, acceptance or cash payment, we defer revenue recognition until such events occur except when title transfer is tied to cash payment outside the United States. Outside the United States, we recognize revenues upon shipment or at delivery destination point, even if we retain a form of title to products delivered to customers, provided the sole purpose is to enable us to recover the products in the event of customer payment default and the arrangement does not prohibit the customer’s use or resale of the product in the ordinary course of business.

Our equipment has non-software and embedded software components that function together to deliver the equipment’s essential functionality. Revenue is recognized upon shipment or at delivery destination point, provided that customer acceptance criteria can be demonstrated prior to shipment. Certain contracts require us to

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perform tests of the product to ensure that performance meets the published product specifications or customer requested specifications, which are generally conducted prior to shipment. Where the criteria cannot be demonstrated prior to shipment, revenue is deferred until customer acceptance has been received. We also defer the portion of the sales price that is not due until acceptance, which represents deferred profit.

For multiple element arrangements, we allocate revenues to all deliverables based on their relative selling prices. In such circumstances, a hierarchy is used to determine the selling price for allocating revenues to deliverables as follows: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“BESP”). For a delivered item to be considered a separate unit, the delivered item must have value to the customer on a standalone basis and the delivery or performance of the undelivered item must be considered probable and substantially in our control.

Our post-shipment obligations include installation, training services, one-year standard warranties, and extended warranties. Installation does not alter the product capabilities, does not require specialized skills or tools and can be performed by the customers or other vendors. Installation is typically provided within five days of product shipment and is completed within one to two days thereafter. Training services are optional and do not affect the customers’ ability to use the product. We defer revenues for the selling price of installation and training. Extended warranties constitute warranty obligations beyond one year and we defer revenues in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-20, “Separately Priced Extended Warranty and Product Maintenance Contracts” and ASC 605-25, “Revenue Recognition Multiple-Element Arrangements.” Service revenue is recognized over the contractual period or as services are performed.

Our products are generally subject to warranty and the related costs of the warranty are provided for in cost of revenues when product revenue is recognized. We classify shipping and handling costs in cost of revenues.

We do not provide our customers with contractual rights of return for any of our products.

Translation of Non-U.S. Currencies

The functional currency for all non-U.S. subsidiaries is the U.S. dollar, except for the Industrial Automation segment for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Industrial Automation, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenues and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss).

Retirement and Postretirement Plans

We recognize net actuarial gains and losses and the change in the fair value of the plan assets in our operating results in the year in which they occur or upon any interim remeasurement of the plans. We calculate the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, we use consistent methodologies to evaluate all inventories for net realizable value. We record a provision

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for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix, and possible alternative uses.

Equity Incentive and Stock Purchase Plans

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718, “Compensation—Stock Compensation.” As required by ASC 718, we have made an estimate of expected forfeitures and are recognizing compensation costs only for those stock-based compensation awards expected to vest.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. We performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on our assessment, we concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. U.S. income taxes are not provided for on the earnings of non-U.S. subsidiaries which are expected to be reinvested indefinitely in operations outside the U.S. For intra-period tax allocations, we first utilize non-equity related tax attributes, such as net operating losses and credit carryforwards, and then equity-related tax attributes. We use the with-and-without method for calculating excess stock compensation deductions and do not take into account any indirect impacts of excess stock compensation deductions on our research and development tax credits, domestic production activities deduction, and other differences between financial reporting and tax reporting.

Investments

We account for our investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” On a quarterly basis, we review our 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.

Goodwill, Intangible and Long-Lived Assets

We assess goodwill for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently, when events and circumstances occur indicating that the recorded goodwill may be impaired. If the book value of a reporting unit exceeds its fair value, the implied fair value of goodwill is compared with the carrying amount of goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment charge is recorded in an amount equal to that excess.

In the second quarter of 2016, the Wireless Test reporting unit (which is our Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to

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an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from our largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. We considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test. Following the interim goodwill impairment test, we recorded a goodwill impairment charge of $254.9 million, with approximately $8.0 million of goodwill remaining. In the third quarter of 2016, the Wireless Test reporting unit reduced headcount by an additional 14%. No goodwill impairment was identified in the fourth quarter of 2016, as part of the annual goodwill impairment test.

No goodwill impairment was identified in 2015. In the fourth quarter of 2014, we performed our annual goodwill impairment test and recorded a goodwill impairment charge of $98.9 million in our Wireless Test segment as a result of decreased projected demand attributable to an estimated smaller future wireless test market due to reuse of wireless test equipment, price competition and different testing techniques.

We assess the impairment of intangible and long-lived assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important in the determination of an impairment include significant underperformance relative to historical or projected future operating results, significant changes in the manner that we use the acquired asset and significant negative industry or economic trends.

As a result of the interim goodwill impairment test in the second quarter of 2016 described above, we performed an impairment test of the Wireless Test segment’s intangible and long-lived assets based on the comparison of the estimated undiscounted cash flows to the recorded value of the assets and recorded an $83.3 million acquired intangible assets impairment charge, with approximately $5.0 million of intangible assets remaining. There were no events or circumstances indicating that the carrying value of acquired intangible and long-lived assets may not be recoverable in 2015, as such no impairment test was performed as of December 31, 2015. As a result of the Wireless Test segment goodwill impairment charge in the fourth quarter of 2014 described above, we also performed an impairment test of the Wireless Test segment’s intangible and long-lived assets as of December 31, 2014, with no indication of impairment. When we determine that the carrying value of intangible and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on a projected discounted cash flow method using a discount rate commensurate with the associated risks.

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Results of Operations

The following table sets forth the percentage of total net revenues included in our consolidated statements of operations:

	Years Ended December 31,
	2016			2015			2014
Percentage of revenues:
Revenues:
Products		82.9	%		81.8	%		82.8	%
Services		17.1			18.2			17.2
Total revenues		100.0			100.0			100.0
Cost of revenues:
Cost of products		37.6			36.1			38.9
Cost of services		7.7			8.1			7.8
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		45.3			44.2			46.7
Gross profit		54.7			55.8			53.3
Operating expenses:
Engineering and development		16.6			17.8			17.7
Selling and administrative		18.0			18.7			19.4
Acquired intangible assets amortization		3.0			4.2			4.3
Acquired intangible assets impairment		4.8			—			—
Goodwill impairment		14.5			—			6.0
Restructuring and other		1.3			0.3			0.1
Total operating expenses		58.2			41.0			47.5
(Loss) income from operations		(3.4	)		14.8			5.9
Non-operating (income) expenses:
Interest income		(0.5	)		(0.4	)		(0.4	)
Interest expense		0.2			0.1			0.4
Other (income) expense, net		—			(0.3	)		—
(Loss) income before income taxes		(3.1	)		15.4			5.8
Income tax (benefit) provision		(0.7	)		2.8			0.9
Net (loss) income		(2.5	)%		12.6	%		4.9	%

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:

	Three months ended December 31,
	2016		2015		2014
Semiconductor Test		1.9		2.0		1.0
System Test		0.9		1.1		1.5
Industrial Automation		1.0		0.8		—
Wireless Test		0.9		0.9		1.0
Total Company		1.7		1.6		1.0

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Revenues

Revenues for our four reportable segments were as follows:

	2016		2015		2014		2015-2016 Dollar Change			2014-2015 Dollar Change
	(in millions)
Semiconductor Test	$	1,368.2	$	1,201.5	$	1,300.8	$	166.7		$	(99.3	)
System Test		189.8		211.6		162.5		(21.8	)		49.1
Industrial Automation		99.0		41.9		—		57.1			41.9
Wireless Test		96.2		184.6		184.5		(88.4	)		0.1
	$	1,753.3	$	1,639.6	$	1,647.8	$	113.7		$	(8.2	)

The increase in Semiconductor Test revenues of $166.7 million, or 14%, from 2015 to 2016 was driven primarily by system-on-a-chip (“SOC”) product volume in the mobile application processor market. The decrease in Semiconductor Test revenues of $99.3 million, or 8%, from 2014 to 2015 was primarily due to a decrease in SOC product volume, driven by smaller microcontroller, power management and radio frequency test markets.

The decrease in System Test revenues of $21.8 million, or 10%, from 2015 to 2016 was primarily due to lower sales in Storage Test of 3.5” hard disk drive testers used for testing drives for cloud storage applications. The increase in System Test revenues of $49.1 million, or 30%, from 2014 to 2015 was primarily due to higher sales in Storage Test of 3.5” hard disk drive testers used for testing drives for cloud storage applications.

The acquisition of Universal Robots, which is our Industrial Automation segment, completed in June 2015, added $99.0 million of revenues in 2016 and $41.9 million of revenues in 2015.

The decrease in Wireless Test revenues of $88.4 million, or 48%, from 2015 to 2016 was driven by lower demand for connectivity and cellular test systems primarily from our largest Wireless Test segment customer. As a result of significant customer concentration in our Wireless Test segment, revenues in that segment are subject to significant fluctuations based on the segment’s largest customer’s order levels. Wireless Test revenues were approximately flat from 2014 to 2015 as an increase in cellular product volume was offset by lower connectivity product volume.

Our four reportable segments accounted for the following percentages of consolidated revenues:

	2016			2015			2014
Semiconductor Test		78	%		73	%		79	%
System Test		11			13			10
Industrial Automation		6			3			—
Wireless Test		5			11			11
		100	%		100	%		100	%

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

	2016			2015			2014
Taiwan		37	%		27	%		30	%
United States		13			13			13
China		10			16			18
Korea		8			7			9
Japan		8			8			4
Europe		7			7			7
Malaysia		6			5			5
Singapore		4			6			7
Philippines		3			6			4
Thailand		3			4			2
Rest of the World		1			1			1
		100	%		100	%		100	%

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

The breakout of product and service revenues was as follows:

	2016		2015		2014		2015-2016 Dollar Change		2014-2015 Dollar Change
	(in millions)
Product revenues	$	1,453.2	$	1,340.6	$	1,364.0	$	112.6	$	(23.4	)
Service revenues		300.0		299.0		283.8		1.0		15.2
	$	1,753.3	$	1,639.6	$	1,647.8	$	113.7	$	(8.2	)

Our product revenues increased $112.6 million, or 8%, in 2016 from 2015 primarily due to higher volume in the mobile application processor market in Semiconductor Test and the addition of Universal Robots in June 2015. This increase was partially offset by decreases in Wireless Test revenues due to lower demand for connectivity and cellular test systems and lower sales in Storage Test of 3.5” hard disk drive testers for cloud storage. Service revenues, which are derived from the servicing of our installed base of products and include equipment maintenance contracts, repairs, extended warranties, parts sales, and applications support increased $1.0 million.

Our product revenues decreased $23.4 million, or 2%, in 2015 from 2014 primarily due to lower SOC product volume, driven by smaller microcontroller, power management and radio frequency test markets. This decrease was partially offset by higher sales in Storage Test of 3.5” hard disk drive testers for cloud storage and the addition of Universal Robots in 2015. Service revenues increased $15.2 million or 5%.

In 2016, two customers each accounted for 12% of our consolidated revenues. In 2015, revenues from one customer accounted for 13% of our consolidated revenues. In 2014, no single customer accounted for more than 10% of our consolidated revenues. In each of the years, 2016, 2015 and 2014, our five largest customers in aggregate accounted for 36%, 34% and 30%, respectively, of our consolidated revenues. We estimate product demand driven by a single OEM customer, combining direct sales to that customer with sales to the customer’s OSATs, accounted for approximately 25%, 23%, and 22% of our consolidated revenues in 2016, 2015, and 2014, respectively.

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Gross Profit

	2016			2015			2014			2015-2016 Dollar / Point Change			2014-2015 Dollar / Point Change
	(dollars in millions)
Gross profit	$	959.6		$	915.6		$	878.8		$	44.0		$	36.8
Percent of total revenues		54.7	%		55.8	%		53.3	%		(1.1	)		2.5

Gross profit as a percent of total revenues decreased from 2015 to 2016 by 1.1 points, of which a 2.5 point decrease was related to product mix and sales of previously leased testers in Semiconductor Test in 2015, and lower Wireless Test sales, partially offset by a 0.6 points increase due to lower pension expense related to actuarial gains in 2016 compared to actuarial losses in 2015, a 0.5 point increase due to higher product volume and a 0.3 point increase due to lower excess and obsolete inventory provisions.

Gross profit as a percent of total revenues increased from 2014 to 2015 by 2.5 points due to favorable Semiconductor Test product mix and sales of previously leased testers in Semiconductor Test.

The breakout of product and service gross profit was as follows:

	2016			2015			2014			2015-2016 Dollar / Point Change			2014-2015 Dollar / Point Change
	(dollars in millions)
Product gross profit	$	794.2		$	748.8		$	723.2		$	45.4		$	25.6
Percent of product revenues		54.6	%		55.9	%		53.0	%		(1.3	)		2.9
Service gross profit	$	165.4		$	166.8		$	155.6		$	(1.4	)	$	11.2
Percent of service revenues		55.1	%		55.8	%		54.8	%		(0.7	)		1.0

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 product 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 next four quarters for our Wireless Test segment, is written-down to estimated net realizable value.

During the year ended December 31, 2016, we recorded an inventory provision of $17.5 million included in cost of revenues, primarily due to downward revisions to previously forecasted demand levels. Of the $17.5 million of total excess and obsolete provisions, $9.7 million was in Semiconductor Test, $7.2 million was in Wireless Test and $0.6 million was related to System Test.

During the year ended December 31, 2015, we recorded an inventory provision of $21.3 million included in cost of revenues, due to the following factors:

— A charge of $15.3 million due to downward revisions to previously forecasted demand levels, of which $8.2 million was for our 2.5” hard disk drive testers in Storage Test, $4.5 million was in Semiconductor Test and $2.5 million was in Wireless Test; and

— A $6.0 million inventory write-down as a result of product transition in Semiconductor Test.

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During the year ended December 31, 2014, we recorded an inventory provision of $22.2 million included in cost of revenues, due to the following factors:

— A charge of $15.4 million due to downward revisions to previously forecasted demand levels, of which $8.1 million was in Semiconductor Test, $5.2 million was in Wireless Test and $2.1 million was in System Test; and

— A $6.8 million inventory write-down as a result of product transition, of which $6.3 million was in Semiconductor Test and $0.5 million in Wireless Test.

During the years ended December 31, 2016, 2015 and 2014, we scrapped $15.2 million, $7.0 million and $20.8 million of inventory, respectively, and sold $10.0 million, $7.9 million and $13.1 million of previously written-down or written-off inventory, respectively. As of December 31, 2016, we had inventory related reserves for amounts which had been written-down or written-off totaling $116.0 million. We have no pre-determined timeline to scrap the remaining inventory.

Engineering and Development

Engineering and development expenses were as follows:

	2016			2015			2014			2015-2016 Change			2014-2015 Change
	(dollars in millions)
Engineering and development	$	291.0		$	292.3		$	291.6		$	(1.3	)	$	0.7
Percent of total revenues		16.6	%		17.8	%		17.7	%

The decrease of $1.3 million in engineering and development expenses from 2015 to 2016 was due primarily to lower pension expense related to $1.2 million actuarial gains in 2016 compared to $4.7 million of actuarial losses in 2015, partially offset by additional costs as a result of the acquisition of Universal Robots in June 2015.

The increase of $0.7 million in engineering and development expenses from 2014 to 2015 was due to $3.9 million of higher variable compensation, $2.6 million of additional costs related to Universal Robots and a $1.8 million increase in spending primarily in Storage Test, partially offset by lower pension expense related to actuarial losses of $4.7 million in 2015 compared to $12.2 million in 2014.

Selling and Administrative

Selling and administrative expenses were as follows:

	2016			2015			2014			2015-2016 Change		2014-2015 Change
	(dollars in millions)
Selling and administrative	$	315.7		$	306.3		$	319.7		$	9.4	$	(13.4	)
Percent of total revenues		18.0	%		18.7	%		19.4	%

The increase of $9.4 million in selling and administrative expenses from 2015 to 2016 was due to $22.6 million of additional costs as a result of the acquisition of Universal Robots in June 2015, partially offset by lower pension expense related to $0.9 million of actuarial gains in 2016 as compared to actuarial losses of $4.8 million in 2015, and lower variable compensation.

The decrease of $13.4 million in selling and administrative expenses from 2014 to 2015 was due primarily to lower pension expense related to actuarial losses of $4.8 million in 2015 compared to $21.6 million in 2014, and a one-time $6.6 million stock-based compensation charge in 2014 related to a retirement agreement entered into with our retired chief executive officer, partially offset by higher variable compensation.

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Acquired Intangible Assets Amortization

Acquired intangible assets amortization expense was as follows:

	2016			2015			2014			2015-2016 Change			2014-2015 Change
	(dollars in millions)
Acquired intangible assets amortization	$	52.6		$	69.0		$	70.8		$	(16.4	)	$	(1.8	)
Percent of total revenues		3.0	%		4.2	%		4.3	%

Acquired intangible assets amortization expense decreased from 2015 to 2016 due to lower amortization expense in the Wireless Test segment due to the impairment of intangible assets in the second quarter of 2016, partially offset by increased amortization expense due to the Universal Robots acquisition in June 2015. Acquired intangible assets amortization expense decreased from 2014 to 2015 due to intangible assets that became fully amortized during the year, partially offset by increased amortization expense due to the Universal Robots acquisition.

Goodwill Impairment

We assess goodwill for impairment at least annually, in the fourth quarter, as of December 31, or on an interim basis between annual tests when events or circumstances indicate that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. In the second quarter of 2016, the Wireless Test reporting unit (which is our Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from our largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. We considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test. Following the interim goodwill impairment test, we recorded a goodwill impairment charge of $254.9 million in the second quarter of 2016. The fourth quarter 2016 and 2015 goodwill impairment tests did not identify any goodwill impairments. In the fourth quarter of 2014, we performed our annual goodwill impairment test and recorded a goodwill impairment charge of $98.9 million in our Wireless Test segment as a result of decreased projected demand attributable to an estimated smaller future wireless test market due to reuse of wireless test equipment, price competition and different testing techniques.

Acquired Intangible Assets Impairment

We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. If undiscounted cash flows for the asset are less than the carrying amount, the asset is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment contain management’s best estimates using appropriate assumptions and projections at that time. As a result of the Wireless Test segment goodwill impairment charge in the second quarter of 2016, we performed an impairment test of the Wireless Test segment’s intangible and long-lived assets based on a comparison of the estimated undiscounted cash flows to the recorded value of the assets. As a result of the analysis, we recorded an $83.3 million impairment charge in the second quarter of 2016 in acquired intangible assets impairment on the statements of operations.

Restructuring and Other

Other

During the year ended December 31, 2016, we recorded $15.9 million of other charges of which $15.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability,

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$0.6 million for the increase in the fair value of the AIT contingent consideration liability, $4.2 million for an impairment of fixed assets and $1.2 million for expenses related to an earthquake in Kumamoto, Japan, partially offset by $5.4 million of property insurance recovery related to the Japan earthquake.

During the year ended December 31, 2015, we recorded $3.6 million of other charges, of which $5.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability and $1.0 million for acquisition costs related to Universal Robots, partially offset by a $2.9 million gain from fair value adjustments to decrease the acquisition contingent consideration liability related to ZTEC Instruments Inc. (“ZTEC”) ($1.6 million) and AIT ($1.3 million).

During the year ended December 31, 2014, we recorded a $0.6 million gain from the fair value adjustment to decrease the ZTEC acquisition contingent consideration, partially offset by $0.4 million of acquisition costs related to AIT.

Restructuring

During the year ended December 31, 2016, we recorded $6.0 million of severance charges related to headcount reductions of 146 people, of which 102 people were in Wireless Test and 44 people were in Semiconductor Test.

During the year ended December 31, 2015, we recorded $1.5 million of severance charges related to headcount reductions of 23 people primarily in System Test and Semiconductor Test.

During the year ended December 31, 2014, we recorded $1.6 million of severance charges related to headcount reductions of approximately 43 people, primarily in Semiconductor Test and Wireless Test.

The remaining accrual for severance of $2.1 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2017.

Interest and Other

	2016			2015			2014			2015-2016 Change			2014-2015 Change
	(in millions)
Interest income	$	(9.3	)	$	(7.2	)	$	(6.3	)	$	(2.1	)	$	(0.9	)
Interest expense		3.6			1.9			6.9			1.7			(5.0	)
Other (income) expense, net		0.7			(4.8	)		0.4			5.5			(5.2	)

Interest income increased by $2.1 million, from 2015 to 2016, due primarily to higher marketable securities balances and higher interest rates in 2016. Interest income increased by $0.9 million from 2014 to 2015 due primarily to higher interest rates on marketable securities

Interest expense increased by $1.7 million, from 2015 to 2016, due primarily to $1.0 million of interest expense related to our convertible senior notes in 2016 and $0.7 million due primarily to costs related to the revolving credit facility and realized losses on sales of marketable securities in 2016. Interest expense decreased by $5.0 million, from 2014 to 2015, due primarily to the first quarter 2014 repayment of our previously issued convertible debt.

In 2015, other (income) expense, net included a $5.4 million gain from the sale of an equity investment.

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(Loss) Income Before Income Taxes

	2016			2015			2014			2015-2016 Change			2014-2015 Change
	(in millions)
Semiconductor Test	$	311.9		$	260.2		$	255.8		$	51.7		$	4.4
System Test		28.9			25.1			12.1			3.8			13.0
Wireless Test		(371.4	)		(13.8	)		(116.2	)		(357.6	)		102.4
Industrial Automation		(16.8	)		(7.6	)		—			(9.2	)		(7.6	)
Corporate (1)		(7.7	)		(10.7	)		(56.3	)		3.0			45.5
	$	(55.1	)	$	253.1		$	95.4		$	(308.2	)	$	157.7

(1) Included in Corporate are pension and postretirement plans actuarial gains and losses, contingent consideration adjustments, interest income and interest expense.

The decrease in income before income taxes from 2015 to 2016 was primarily due to a $254.9 million goodwill impairment charge and an $83.3 million acquired intangible assets impairment charge related to Wireless Test in 2016, and amortization of intangible assets related to our June 2015 acquisition of Universal Robots, which is our Industrial Automation segment, partially offset by higher revenues in Semiconductor Test application processor market and $3.2 million of pension actuarial gains in 2016 as compared to actuarial losses of $17.7 million in 2015.

The increase in income before income taxes from 2014 to 2015 was primarily due to a $98.9 million goodwill impairment charge related to Wireless Test in 2014 and lower pension expense related to actuarial losses of $17.7 million in 2015 as compared to $46.6 million in 2014. Actuarial losses of $46.6 million in 2014 were primarily related to increases in life expectancy in the U.S.

Income Taxes

Income tax benefit for 2016 totaled $11.6 million. Income tax expense for 2015 and 2014 totaled $46.6 million and $14.1 million, respectively. The effective tax rate for 2016, 2015 and 2014 was 21.1%, 18.4% and 14.8%, respectively.

The increase in the effective tax rate from 2015 to 2016 resulted from a shift in the geographic distribution of income which decreased income subject to taxation in the U.S. relative to lower tax rate jurisdictions, reductions in uncertain tax positions resulting from the expiration of statutes and the settlement of an audit, and an increase in non-taxable foreign exchange gains. These increases in the effective tax rate were partially offset by the effect of the non-deductible goodwill impairment charge, which reduced the benefit of the loss before income taxes in the U.S.

The increase in the effective tax rate from 2014 to 2015 resulted from a shift in the geographic distribution of income, which increased income subject to taxation in the U.S. relative to lower tax rate jurisdictions and a reduction in the benefit from U.S. research and development tax credits. These increases in the effective tax rate were partially offset by decreases associated with uncertain tax positions and a non-deductible goodwill impairment charge.

We qualify 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 attributable to the tax holiday for the years ended December 31, 2016, 2015 and 2014 were $17.0 million or $0.08 per diluted share, $11.5 million or $0.05 per diluted share and $13.2 million or $0.06 per diluted share, respectively. The tax holiday is scheduled to expire on December 31, 2020.

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Contractual Obligations

The following table reflects our contractual obligations as of December 31, 2016:

	Payments Due by Period
	Total		Less than 1  year		1-3 years		3-5 years		More than 5  years		Other
	(in thousands)
Convertible debt	$	460,000	$	—	$	—	$	—	$	460,000	$	—
Purchase obligations		260,715		247,855		12,860		—		—		—
Retirement plans contributions		110,872		5,912		8,104		8,392		88,464		—
Operating lease obligations		72,111		16,467		28,991		16,523		10,130		—
Interest on long-term debt		40,314		5,814		11,500		11,500		11,500		—
Fair value of contingent consideration		38,332		1,050		37,282		—		—		—
Other long-term liabilities reflected on the balance sheet under GAAP (1)		64,249		—		23,463		—		—		40,786
Total	$	1,046,593	$	277,098	$	122,200	$	36,415	$	570,094	$	40,786

(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.”

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities balance increased $604 million to $1,613 million from 2015 to 2016.

In 2016, changes in operating assets and liabilities provided cash of $40.8 million. This was due to a $33.7 million decrease in operating assets and a $7.1 million increase in operating liabilities.

The decrease in operating assets was due to an $18.3 million decrease in accounts receivable due to increased collections and a $34.3 million decrease in inventories, partially offset by an $18.9 million increase in prepayments and other assets.

The increase in operating liabilities was due to a $18.4 million increase in income taxes, a $3.9 million increase in accounts payable and a $7.6 million increase in other accrued liabilities, partially offset by a $13.2 million decrease in accrued employee compensation due primarily to variable compensation and employee stock compensation awards’ payroll tax payments, $6.0 million of retirement plans contributions and a $3.6 million decrease in customer advance payments and deferred revenue.

Investing activities during 2016 used cash of $640.5 million, due to $1,656.3 million used for purchases of marketable securities, and $85.3 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities of $243.2 million and $852.8 million, respectively, and proceeds from property insurance of $5.1 million related to the Japan earthquake.

Financing activities during 2016 provided cash of $237.8 million, due to $450.8 million of proceeds from the issuance of senior convertible notes, net of issuance costs, $67.9 million of proceeds from the issuance of warrants, $20.5 million from the issuance of common stock under employee stock purchase and stock option plans and $6.2 million from the tax benefit related to employee stock compensation awards, partially offset by $146.3 million used for the repurchase of 6.8 million shares of common stock at an average price of $21.39 per share, $100.8 million used for the purchase of convertible note hedges, $48.6 million used for dividend payments and $11.7 million used for a payment related to the Universal Robots acquisition contingent consideration.

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In 2015, changes in operating assets and liabilities, net of businesses acquired, provided cash of $9.3 million. This was due to a $38.7 million increase in operating assets and a $48.0 million increase in operating liabilities.

The increase in operating assets was due to a $57.3 million increase in accounts receivable due to an increase in sales during the last month of the fourth quarter of 2015 compared to 2014, partially offset by a $15.6 million decrease in inventories and a $3.0 million decrease in prepayments and other assets.

The increase in operating liabilities was due to a $37.0 million increase in accounts payable as a result of our planned inventory increase in the fourth quarter of 2015 as we added material to maintain attractive lead times, a $17.0 million increase in customer advance payments and deferred revenue and a $11.3 million increase in other accrued liabilities, partially offset by $12.1 million of retirement plans contributions and a $5.2 million increase in income taxes.

Investing activities during 2015 used cash of $113.7 million, due to $1,424.0 million used for purchases of marketable securities, $282.7 million used for the acquisition of Universal Robots, and $89.9 million used for purchases of property, plant and equipment, partially offset by proceeds from maturities and sales of marketable securities of $360.3 million and $1,316.1 million, respectively, proceeds from the sale of an equity investment of $5.4 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 $79.1 million was primarily due to an increase in purchases of testers for customer leasing in 2014.

Financing activities during 2015 used cash of $328.7 million, due to $300.0 million used for the repurchase of 15.6 million shares of common stock at an average price of $19.20 per share, $50.7 million used for dividend payments, and $2.3 million used for debt issuance costs related to our April 2015 revolving credit facility, partially offset by $19.5 million from the issuance of common stock under employee stock purchase and stock option plans and $4.7 million from the tax benefit related to employee stock compensation awards.

In 2014, changes in operating assets and liabilities, net of businesses acquired, provided cash of $68.5 million. This was due to a $101.4 million decrease in operating assets and a $32.9 million decrease in operating liabilities.

The decrease in operating assets was due to a $41.5 million decrease in prepayments and other assets primarily related to a reduction in prepayments to our contract manufacturers, a $51.8 million decrease in inventories due to higher sales, and an $8.1 million decrease in accounts receivable.

The decrease in operating liabilities was due to $33.9 million of retirement plan contributions, a $17.0 million decrease in other accrued liabilities, a $16.9 million decrease in accounts payable, a $7.3 million decrease in accrued employee compensation due primarily to employee stock awards payroll taxes and variable compensation payments, and a $4.3 million convertible note interest payment, partially offset by a $24.4 million increase in income taxes, and a $22.0 million increase in customer advance payments and deferred revenue.

Investing activities during 2014 used cash of $332.9 million, due to $1,578.7 million used for purchases of marketable securities and $169.0 million used for purchases of property, plant and equipment, and $19.4 million used for the acquisition of AIT, completed in October 2014, partially offset by proceeds from sales and maturities of marketable securities that provided cash of $859.7 million and $570.4 million, respectively, and net proceeds from life insurance of $4.2 million primarily related to the cash surrender value from the cancellation of Teradyne owned life insurance policies on its retired chief executive officer. The increase in purchase of property, plant and equipment of $62.3 million in 2014 compared to the year ended December 31, 2013 is primarily due to testers used for customer leases.

Financing activities during 2014 used cash of $206.6 million, due to $191.0 million used for payments on long-term debt related to the convertible note and a loan in Japan and $37.4 million used for dividend payments,

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partially offset by $21.3 million provided by the issuance of common stock under employee stock purchase and stock option plans and $0.5 million from the tax benefit related to stock options and restricted stock units.

In January 2016, May 2016, August 2016 and November 2016, our Board of Directors declared a quarterly cash dividend of $0.06 per share. Total dividend payments in 2016 were $48.6 million.

In January 2015, May 2015, August 2015 and November 2015, our Board of Directors declared a quarterly cash dividend of $0.06 per share. Total dividend payments in 2015 were $50.7 million.

In January 2014, our Board of Directors declared an initial quarterly cash dividend of $0.06 per share. In each of the second, third and fourth quarters of 2014, we paid a cash dividend of $0.06 per share. Total dividend payments in 2014 were $37.4 million.

In January 2017, our Board of Directors declared a quarterly cash dividend of $0.07 per share to be paid on March 20, 2017 to shareholders of record as of February 24, 2017. Payment of future cash dividends are subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and financial condition.

In January 2015, our Board of Directors authorized the repurchase of up to $500 million of common stock. In 2015, we repurchased 15.6 million shares of common stock at an average price of $19.20, for a total cost of $300.0 million. In 2016, we repurchased 6.8 million shares of common stock at an average price of $21.39, for a total cost of $146.3 million. The cumulative repurchases as of December 31, 2016 totaled 22.5 million shares of common stock for $446.3 million at an average price per share of $19.87.

In December 2016, our Board of Directors approved a new $500 million share repurchase authorization which commenced on January 1, 2017. We intend to repurchase at least $200 million in 2017. Our January 2015 stock repurchase program was terminated on December 31, 2016.

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 approximately $768 million of cash 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.

Retirement Plans

ASC 715-20, “Compensation—Retirement Benefits—Defined Benefit Plans,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715-20. The pension asset or liability represents the difference between the fair value of the pension plan’s assets and the projected benefit obligation as of December 31. For other postretirement benefit plans, the liability is the difference between the fair value of the plan’s assets and the accumulated postretirement benefit obligation as of December 31.

For the year ended December 31, 2016, our pension income, which includes the U.S. Qualified Pension Plan (“U.S. Plan”), certain qualified plans for non-U.S. subsidiaries, and a U.S. Supplemental Executive Defined Benefit Plan, was approximately $(0.3) million. The largest portion of our 2016 pension income was $(5.2) million for our U.S. Plan. Pension expense or income is calculated based upon a number of actuarial assumptions. Discount rate and expected return on assets are two assumptions which are important elements of pension plan expense (income) and asset/liability measurement. We evaluate our discount rate and expected rate

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of return on assets assumptions annually on a plan and country specific basis. We evaluate other assumptions related to demographic factors, such as retirement age, mortality and turnover periodically, and update them to reflect our experience and expectations for the future. In the fourth quarter of 2014, we updated the mortality assumptions related to our U.S. retirement plans using the mortality tables published in October 2014 by the U.S. Society of Actuaries. The change in the mortality assumptions resulted in approximately $39.0 million of actuarial losses in 2014 for the U.S. retirement plans.

In developing the expected return on U.S. Plan assets assumption, we evaluated input from our investment manager and pension consultants, including their forecast of asset class return expectations. We believe that 4.8% was an appropriate rate to use for 2016. The December 31, 2016 asset allocation for our U.S. Plan was 88% invested in fixed income securities, 10% invested in equity securities, and 2% invested in other securities. Our investment manager regularly reviews the actual asset allocation and periodically rebalances the portfolio to ensure alignment with our target allocations.

We recognize net actuarial gains and losses and the change in the fair value of plans assets in our operating results in the year in which they occur or upon any interim remeasurement of the plans. We calculate the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

The discount rate that we utilized for determining future pension obligations for the U.S. Plan is based on the Citigroup Pension Index adjusted for the U.S. Plan’s expected cash flows and was 3.9% at December 31, 2016, down from 4.0% at December 31, 2015. We estimate that in 2017 we will recognize approximately $0.8 million of pension expense for the U.S. Plan. The U.S. Plan pension expense estimate for 2017 is based on a 3.9% discount rate and a 4.0% return on assets. Future pension expense or income will depend on future investment performance, changes in future discount rates and various other factors related to the employee population participating in our pension plans.

As of December 31, 2016, our pension plans had unrecognized pension prior service cost of $0.1 million.

We performed a sensitivity analysis, which expresses the potential U.S. Plan (income) expense for the year ending December 31, 2017, which would result from changes to either the discount rate or the expected return on plan assets. The below estimates exclude the impact of any potential actuarial gains or losses. It is difficult to reliably forecast or predict whether there will be any actuarial gains or losses in 2017 as they are primarily driven by events and circumstances beyond our control, such as changes in interest rates and the performance of the financial markets.

	Discount Rate
Return on Plan Assets	3.4%			3.9%			4.4%
	(in millions)
3.5%	$	1.6		$	2.3		$	2.9
4.0%		0.1			0.8			1.4
4.5%		(1.4	)		(0.7	)		(0.1	)

The assets of the U.S. Plan consist substantially of fixed income securities. U.S. Plan assets have increased from $298.4 million at December 31, 2015 to $307.3 million at December 31, 2016 while the U.S. Plan’s liability increased from $297.8 million at December 31, 2015 to $299.6 million at December 31, 2016.

Our funding policy is to make contributions to our pension plans in accordance with local laws and to the extent that such contributions are tax deductible. During 2016, we made contributions of $1.9 million to the U.S. Plan, $2.6 million to the U.S. supplemental executive defined benefit pension plan and $0.9 million to certain qualified plans for non-U.S. subsidiaries. In 2017, we expect to contribute approximately $1.9 million to the U.S.

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Plan and $2.6 million to the U.S. supplemental executive defined benefit pension plan. Contributions to be made in 2017 to certain qualified plans for non-U.S. subsidiaries are based on local statutory requirements and are estimated at approximately $0.8 million.

Equity Compensation Plans

In addition to our 1996 Employee Stock Purchase Plan discussed in Note O: “Stock Based Compensation” in Notes to Consolidated Financial Statements, we have a 2006 Equity and Cash Compensation Incentive Plan (the “2006 Equity Plan”) under which equity securities are authorized for issuance. The 2006 Equity Plan was initially approved by stockholders on May 25, 2006.

At our annual meeting of stockholders held May 21, 2013, our stockholders approved an amendment to the 2006 Equity Plan to increase the number of shares issuable thereunder by 10.0 million, for an aggregate of 32.0 million shares issuable thereunder, and our stockholders also approved an amendment to our 1996 Employee Stock Purchase Plan to increase the number of shares issuable thereunder by 5.0 million, for an aggregate of 30.4 million shares issuable thereunder. At our annual meeting of stockholders held May 12, 2015, our stockholders approved an amendment to the 2006 Equity Plan to extend its term until May 12, 2025.

The following table presents information about these plans as of December 31, 2016 (share numbers in thousands):

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column one)
Equity plans approved by shareholders		4,336	(1)	$	18.03		13,399	(2)
Equity plans not approved by shareholders (3,4)		368			2.71		—
Total		4,704			11.93		13,399

(1) Includes 3,777,628 shares of restricted stock units that are not included in the calculation of the weighted average exercise price.

(2) Consists of 9,545,419 securities available for issuance under the 2006 Equity Plan and 3,853,638 of securities available for issuance under the Employee Stock Purchase Plan.

(3) In connection with the 2008 acquisition of Eagle Test (the “Eagle Acquisition”), we assumed the options granted under the Eagle Test Systems, Inc. 2003 Stock Option and Grant Plan and the Eagle Test Systems, Inc. 2006 Stock Option and Incentive Plan (collectively, the “Eagle Plans”). Upon the consummation of the Eagle Acquisition, these options were converted automatically into options to purchase an aggregate of 3,594,916 shares of our common stock. No additional awards will be granted under the Eagle Plans. As of December 31, 2016, there were outstanding options exercisable for an aggregate of 57,928 shares of our common stock pursuant to the Eagle Plans, with a weighted average exercise price of $3.54 per share.

(4) In connection with the 2011 acquisition of LitePoint Corporation (the “LitePoint Acquisition”), we assumed the options granted under the LitePoint Corporation 2002 Stock Plan (the “LitePoint Plan”). Upon the consummation of the LitePoint Acquisition, these options were converted automatically into options to purchase an aggregate of 2,828,344 shares of our common stock. No additional awards will be granted under the LitePoint Plan. As of December 31, 2016, there were outstanding options exercisable for an aggregate of 310,437 shares of our common stock pursuant to the LitePoint Plan, with a weighted average exercise price of $2.55 per share.

The purpose of the 2006 Equity Plan is to motivate employees, officers and directors by providing equity ownership and compensation opportunities in Teradyne. The aggregate number of shares available under the

39

2006 Equity Plan as of December 31, 2016 was 9,545,419 shares of our common stock. The 2006 Equity Plan authorizes the grant of stock-based awards in the form of (1) non-qualified and incentive stock options, (2) stock appreciation rights, (3) restricted stock awards and restricted stock unit awards, (4) phantom stock, and (5) other stock-based awards. Awards may be tied to time-based vesting schedules and/or performance-based vesting measured by reference to performance criteria chosen by the Compensation Committee of the Board of Directors, which administers the 2006 Equity Plan. Awards may be made to any employee, officer, consultant and advisor of Teradyne and our subsidiaries, as well as, to our directors. The maximum number of shares of stock-based awards that may be granted to one participant during any one fiscal year is 2,000,000 shares of common stock. The 2006 Equity Plan will expire on May 12, 2025.

As of December 31, 2016, total unrecognized compensation expense related to non-vested restricted stock units and options was $40.6 million, and is expected to be recognized over a weighted average period of 2.3 years.

Performance Graph

The following graph compares the change in our cumulative total shareholder return in our common stock with (i) the NYSE Composite Index and (ii) the Morningstar Semiconductor Equipment & Materials Industry Group (compiled by Morningstar, Inc.). The comparison assumes $100.00 was invested on December 31, 2011 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any. Historic stock price performance is not necessarily indicative of future price performance.

Recently Issued Accounting Pronouncements

On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.” The new guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities

40

will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The revised guidance will be applied prospectively, and is effective in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. We are currently evaluating the impact of this ASU on our financial position, results of operations and statements of cash flows.

On October 24, 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” Under current Generally Accepted Accounting Principles (“GAAP”), the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance requires recognition of the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new guidance does not apply to intra-entity transfers of inventory. The income tax consequences from the sale of inventory from one member of a consolidated entity to another will continue to be deferred until the inventory is sold to a third party. The new guidance will be effective in fiscal years beginning after December 15, 2017. Early adoption is permitted. The modified retrospective approach will be required for transition to the new guidance, with a cumulative-effect adjustment recorded in retained earnings as of the beginning of the period of adoption. We do not expect this ASU to have a material impact on our financial position, results of operations and statements of cash flows.

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 statements of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. Adoption of the new guidance will require recognition of excess tax benefits and tax deficiencies in the consolidated statements of operations on a prospective basis, with a cumulative effect adjustment to retained earnings for any prior year excess tax benefits or tax deficiencies not previously recorded. We expect the cumulative effect adjustment to increase retained earnings and deferred tax assets by approximately $39 million. In the years ended December 31, 2016, 2015 and 2014, we recorded excess tax benefits of $6.1 million, $4.6 million, and $0.2 million, respectively, as a component of additional paid-in capital. In accordance with this ASU, amounts for future periods related to the difference between the fair value of a restricted stock unit (“RSU”) on the grant date and the fair value on the vest date will be recorded as a discrete benefit or expense to the current income tax provision in the period in which the RSU vests. A majority of the future amounts will be recorded during the first quarter consistent with the vesting of a majority of our RSU grants.

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 an 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 statements of operation. The new standard is effective for annual periods beginning after December 15, 2018 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 January 2016, the FASB issued 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

41

in the fair value of these equity securities will be recognized directly in net income. This pronouncement is effective for fiscal years beginning after December 15, 2017. 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 new guidance requires 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 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.

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. 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 August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40).” ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. We do not expect this ASU to have a material impact on our consolidated financial statements.

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. 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 selected the modified retrospective transition method. We are currently evaluating the impact of this ASU on our financial position and results of operations.

Item 7A: Quantitative and Qualitative Disclosures about Market Risks

Concentration of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Our cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Our fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. We place forward currency contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of geographically dispersed customers. We perform ongoing credit evaluations of our customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to

42

secure accounts receivable. There were no customers who accounted for more than 10% of our accounts receivable balance as of December 31, 2016. One customer accounted for more than 10% of our accounts receivable balance as of December 31, 2015.

Exchange Rate Risk Management

We regularly enter into foreign currency forward contracts to hedge the value of our monetary assets and liabilities in Japanese Yen, British Pound, Korean Won, Taiwan Dollar, Singapore Dollar and Euro. These foreign currency forward contracts have maturities of approximately one month. These contracts are used to minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities. We do not engage in currency speculation.

We performed a sensitivity analysis assuming a hypothetical 10% fluctuation in foreign exchange rates to the hedging contracts and the underlying exposures described above. As of December 31, 2016, 2015 and 2014, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows.

Interest Rate Risk Management

We are exposed to potential losses due to changes in interest rates. Our interest rate exposure is primarily in the Netherlands, United States and Singapore related to short-term and long-term marketable securities.

In order to estimate the potential loss due to interest rate risk, a fluctuation in interest rates of 25 basis points was assumed. Market risk for the short and long-term marketable securities was estimated as the potential change in the fair value resulting from a hypothetical change in interest rates for securities contained in the investment portfolio. The potential change in the fair value from changes in interest rates is immaterial as of December 31, 2016 and 2015.

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Item 8: Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Teradyne, Inc.:

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a) (1) present fairly, in all material respects, the financial position of Teradyne, Inc. and its subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note C to the consolidated financial statements, the Company changed the manner in which it classifies deferred taxes in 2016.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March 1, 2017

44

TERADYNE, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2016			2015
	(in thousands, except per share information)
ASSETS
Current assets:
Cash and cash equivalents	$	307,884		$	264,705
Marketable securities		871,024			477,696
Accounts receivable, less allowance for doubtful accounts of $2,356 and $2,407 in 2016 and 2015, respectively		192,444			211,293
Inventories, net		135,958			153,588
Deferred tax assets		—			54,973
Prepayments		108,454			91,519
Other current assets		8,039			6,194
Total current assets		1,623,803			1,259,968
Property, plant and equipment, net		253,821			273,414
Marketable securities		433,843			265,928
Deferred tax assets		107,405			7,404
Other assets		12,165			13,080
Retirement plans assets		7,712			636
Intangible assets, net		100,401			239,831
Goodwill		223,343			488,413
Total assets	$	2,762,493		$	2,548,674
LIABILITIES
Current liabilities:
Accounts payable	$	95,362		$	92,358
Accrued employees’ compensation and withholdings		109,944			113,994
Deferred revenue and customer advances		84,478			85,527
Other accrued liabilities		51,382			43,727
Contingent consideration		1,050			15,500
Accrued income taxes		30,480			21,751
Total current liabilities		372,696			372,857
Retirement plans liabilities		106,938			103,531
Long-term deferred revenue and customer advances		23,463			25,745
Deferred tax liabilities		12,144			26,663
Long-term other accrued liabilities		28,642			32,156
Long-term contingent consideration		37,282			21,936
Long-term debt		352,669			—
Total liabilities		933,834			582,888
Commitments and contingencies (Note K)
SHAREHOLDERS’ EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 199,177 and 203,641 shares issued and outstanding at December 31, 2016 and 2015, respectively		24,897			25,455
Additional paid-in capital		1,593,684			1,480,647
Accumulated other comprehensive loss		(20,214	)		(8,144	)
Retained earnings		230,292			467,828
Total shareholders’ equity		1,828,659			1,965,786
Total liabilities and shareholders’ equity	$	2,762,493		$	2,548,674

The accompanying notes are an integral part of the consolidated financial statements.

45

TERADYNE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2016			2015			2014
	(in thousands, except per share amounts)
Revenues:
Products	$	1,453,248		$	1,340,566		$	1,364,024
Services		300,002			299,012			283,800
Total revenues		1,753,250			1,639,578			1,647,824
Cost of revenues:
Cost of products		659,097			591,772			640,787
Cost of services		134,586			132,163			128,229
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		793,683			723,935			769,016
Gross profit		959,567			915,643			878,808
Operating expenses:
Engineering and development		291,025			292,250			291,639
Selling and administrative		315,682			306,313			319,713
Acquired intangible assets amortization		52,648			69,031			70,771
Acquired intangible assets impairment		83,339			—			—
Goodwill impairment		254,946			—			98,897
Restructuring and other		21,942			5,080			1,365
Total operating expenses		1,019,582			672,674			782,385
(Loss) income from operations		(60,015	)		242,969			96,423
Non-operating (income) expenses:
Interest income		(9,296	)		(7,214	)		(6,259	)
Interest expense		3,637			1,876			6,934
Other (income) expense, net		704			(4,817	)		372
(Loss) income before income taxes		(55,060	)		253,124			95,376
Income tax (benefit) provision		(11,639	)		46,647			14,104
Net (loss) income	$	(43,421	)	$	206,477		$	81,272
Net (loss) income per common share:
Basic	$	(0.21	)	$	0.98		$	0.40
Diluted	$	(0.21	)	$	0.97		$	0.37
Weighted average common shares—basic		202,578			211,544			202,908
Weighted average common shares—diluted		202,578			213,321			222,550
Cash dividend declared per common share	$	0.24		$	0.24		$	0.18

The accompanying notes are an integral part of the consolidated financial statements.

46

TERADYNE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

	Years Ended December 31,
	2016			2015			2014
	(in thousands)
Net (loss) income	$	(43,421	)	$	206,477		$	81,272
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax of $0, $0, $0		(13,162	)		(8,759	)		—
Available-for-sale marketable securities:
Unrealized gains (losses) on marketable securities:
Unrealized gains (losses) on marketable securities arising during period, net of tax of $923, $(1,667), $1,449, respectively		2,037			(3,075	)		2,417
Less: Reclassification adjustment for gains included in net (loss) income, net of tax of $(255), $(390), $(645), respectively		(683	)		(704	)		(1,433	)
		1,354			(3,779	)		984
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 $(190), $(169), $(169), respectively		(321	)		(295	)		(295	)
Prior service income arising during period, net of tax of $34, $0, $0, respectively		59			—			—
		(262	)		(295	)		(295	)
Other comprehensive (loss) income		(12,070	)		(12,833	)		689
Comprehensive (loss) income	$	(55,491	)	$	193,644		$	81,961

The accompanying notes are an integral part of the consolidated financial statements.

47

TERADYNE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years Ended December 31, 2016, 2015 and 2014

	Common Stock Shares Issued			Common Stock Par Value			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total Shareholders’ Equity
	(in thousands)
Balance, December 31, 2013		191,731		$	23,966		$	1,390,896		$	4,000		$	566,232		$	1,985,094
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax of $12,018		3,661			458			8,815									9,273
Warrant settlement		21,221			2,653			(2,653	)								—
Stock-based compensation expense								39,868									39,868
Tax benefit related to stock options and restricted stock units								209									209
Cash dividends														(37,425	)		(37,425	)
Net income														81,272			81,272
Unrealized gains on marketable securities:
Unrealized gains on marketable securities, net of tax of $1,449											2,417						2,417
Less: reclassification adjustment for gains included in net income, net of tax of $(645)											(1,433	)					(1,433	)
Amortization of prior service (credit) cost, net of tax of $(169)											(295	)					(295	)
Balance, December 31, 2014		216,613			27,077			1,437,135			4,689			610,079			2,078,980
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax of $10,597		2,649			331			8,602									8,933
Stock-based compensation expense								30,285									30,285
Repurchase of common stock		(15,621	)		(1,953	)								(297,996	)		(299,949	)
Tax benefit related to stock options and restricted stock units								4,625									4,625
Cash dividends														(50,732	)		(50,732	)
Net income														206,477			206,477
Foreign currency translation adjustment											(8,759	)					(8,759	)
Unrealized losses on marketable securities:
Unrealized losses on marketable securities, net of tax of $(1,667)											(3,075	)					(3,075	)
Less: reclassification adjustment for gains included in net income, net of tax of $(390)											(704	)					(704	)
Amortization of prior service (credit) cost, net of tax of $(169)											(295	)					(295	)
Balance, December 31, 2015		203,641			25,455			1,480,647			(8,144	)		467,828			1,965,786
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax of $9,808		2,377			297			10,368									10,665
Equity component of convertible notes								100,836									100,836
Equity component of convertible notes issuance cost								(2,017	)								(2,017	)
Purchase of convertible notes hedges								(100,834	)								(100,834	)
Proceeds from issuance of warrants								67,852									67,852
Stock-based compensation expense								30,745									30,745
Repurchase of common stock		(6,841	)		(855	)								(145,476	)		(146,331	)
Tax benefit related to stock options and restricted stock units								6,087									6,087
Cash dividends														(48,639	)		(48,639	)
Net loss														(43,421	)		(43,421	)
Foreign currency translation adjustment											(13,162	)					(13,162	)
Unrealized gains on marketable securities:
Unrealized gains on marketable securities, net of tax of $923											2,037						2,037
Less: reclassification adjustment for gains included in net income, net of tax of $(255)											(683	)					(683	)
Amortization of prior service (credit) cost, net of tax of $(190)											(321	)					(321	)
Prior service income arising during period, net of tax of $34											59						59
Balance, December 31, 2016		199,177		$	24,897		$	1,593,684		$	(20,214	)	$	230,292		$	1,828,659

The accompanying notes are an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

TERADYNE, INC.

	Years Ended December 31,
	2016			2015			2014
	(in thousands)
Cash flows from operating activities:
Net (loss) income	$	(43,421	)	$	206,477		$	81,272
Adjustments to reconcile net (loss) income from operations to net cash provided by operating activities:
Depreciation		64,782			68,181			73,390
Amortization		55,227			72,592			79,154
Stock-based compensation		30,750			30,451			40,307
Provision for excess and obsolete inventory		17,493			21,332			22,193
Goodwill impairment		254,946			—			98,897
Acquired intangible assets impairment		83,339			—			—
Deferred taxes		(62,936	)		(7,124	)		(19,928	)
Tax benefit related to employee stock compensation awards		(6,198	)		(4,715	)		(535	)
Impairment of fixed assets		4,179			—			—
Property insurance recovery		(5,363	)		—			—
Gain from the sale of an equity investment		—			(5,406	)		—
Non-cash charge for the sale of inventories revalued at the date of acquisition		—			1,567			—
Retirement plans actuarial (gains) losses		(3,203	)		17,732			46,564
Contingent consideration adjustment		15,896			2,489			(630	)
Other		(448	)		(34	)		2,874
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable		18,325			(57,267	)		8,060
Inventories		34,263			15,559			51,803
Prepayments and other assets		(18,882	)		3,034			41,537
Accounts payable and other accrued expenses		(1,706	)		48,213			(45,430	)
Deferred revenue and customer advances		(3,634	)		17,011			22,033
Retirement plan contributions		(6,044	)		(12,095	)		(33,916	)
Income taxes		18,434			(5,156	)		24,417
Net cash provided by operating activities		445,799			412,841			492,062
Cash flows from investing activities:
Purchases of property, plant and equipment		(85,272	)		(89,878	)		(168,982	)
Purchases of available-for-sale marketable securities		(1,656,267	)		(1,424,002	)		(1,578,743	)
Proceeds from maturities of available-for-sale marketable securities		243,232			360,264			570,358
Proceeds from sales of available-for-sale marketable securities		852,794			1,316,131			859,729
Proceeds from property insurance		5,051			—			—
Acquisition of businesses, net of cash acquired		—			(282,741	)		(19,419	)
Proceeds from life insurance		—			1,098			4,184
Proceeds from the sale of an equity investment		—			5,406			—
Net cash used for investing activities		(640,462	)		(113,722	)		(332,873	)
Cash flows from financing activities:
Proceeds from issuance of convertible notes, net of issuance costs		450,800			—			—
Purchase of convertible note hedges		(100,834	)		—			—
Proceeds from issuance of warrants		67,852			—			—
Issuance of common stock under stock option and stock purchase plans		20,473			19,530			21,291
Repurchase of common stock		(146,331	)		(299,949	)		—
Tax benefit related to employee stock compensation awards		6,198			4,715			535
Dividend payments		(48,619	)		(50,713	)		(37,425	)
Payment of revolving credit facility costs		—			(2,253	)		—
Payments of long-term debt		—			—			(190,972	)
Payments of contingent consideration		(11,697	)		—			—
Net cash provided by (used for) financing activities		237,842			(328,670	)		(206,571	)
Increase (decrease) in cash and cash equivalents		43,179			(29,551	)		(47,382	)
Cash and cash equivalents at beginning of year		264,705			294,256			341,638
Cash and cash equivalents at end of year	$	307,884		$	264,705		$	294,256
Supplementary disclosure of cash flow information:
Cash paid for:
Interest	$	446		$	301		$	4,294
Income taxes	$	40,424		$	35,218		$	25,893

The accompanying notes are an integral part of the consolidated financial statements.

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TERADYNE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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”);

• industrial automation (“Industrial Automation”) products; and

• wireless test (“Wireless Test”) systems.

On June 11, 2015, Teradyne acquired Universal Robots A/S (“Universal Robots”) for approximately $284 million of cash plus up to an additional $65 million of cash if certain performance targets are met extending through 2018. 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. Universal Robots is a separate operating and reportable segment, Industrial Automation.

B.    ACCOUNTING POLICIES

The consolidated financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions are eliminated. Certain prior years’ amounts were reclassified to conform to the current year presentation.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates.

Revenue Recognition

Teradyne recognizes revenues, including revenues from distributors, when there is persuasive evidence of an arrangement, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to Teradyne’s customers upon shipment or at delivery destination point. In circumstances where either title or risk of loss pass upon destination, acceptance or cash payment, Teradyne defers revenue

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recognition until such events occur except when title transfer is tied to cash payment outside the United States. Outside the United States, Teradyne recognizes revenue upon shipment or at delivery destination point, even if Teradyne retains a form of title to products delivered to customers, provided the sole purpose is to enable Teradyne to recover the products in the event of customer payment default and the arrangement does not prohibit the customer’s use or resale of the product in the ordinary course of business.

Teradyne’s equipment has non-software and software components that function together to deliver the equipment’s essential functionality. Revenue is recognized upon shipment or at delivery destination point, provided that customer acceptance criteria can be demonstrated prior to shipment. Certain contracts require Teradyne to perform tests of the product to ensure that performance meets the published product specifications or customer requested specifications, which are generally conducted prior to shipment. Where the criteria cannot be demonstrated prior to shipment, revenue is deferred until customer acceptance has been received. Teradyne also defers the portion of the sales price that is not due until acceptance, which represents deferred profit.

For multiple element arrangements, Teradyne allocates revenue to all deliverables based on their relative selling prices. In such circumstances, a hierarchy is used to determine the selling price for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“BESP”). For a delivered item to be considered a separate unit the delivered item must have value to the customer on a standalone basis and the delivery or performance of the undelivered item must be considered probable and substantially in Teradyne’s control.

Teradyne’s post-shipment obligations include installation, training services, one-year standard warranties, and extended warranties. Installation does not alter the product capabilities, does not require specialized skills or tools and can be performed by the customers or other vendors. Installation is typically provided within five days of product shipment and is completed within one to two days thereafter. Training services are optional and do not affect the customers’ ability to use the product. Teradyne defers revenue for the selling price of installation and training. Extended warranties constitute warranty obligations beyond one year and Teradyne defers revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-20, “Separately Priced Extended Warranty and Product Maintenance Contracts” and ASC 605-25, “Revenue Recognition Multiple-Element Arrangements.” Service revenue is recognized over the contractual period or as services are performed.

Teradyne’s products are generally subject to warranty and related costs of the warranty are provided for in cost of revenues when product revenue is recognized. Teradyne classifies shipping and handling costs in cost of revenue. Teradyne does not provide its customers with contractual rights of return for any of its products.

As of December 31, 2016 and 2015, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2016		2015
	(in thousands)
Extended warranty	$	46,753	$	46,499
Equipment maintenance and training		39,037		30,616
Customer advances, undelivered elements and other		22,151		34,157
Total deferred revenue and customer advances	$	107,941	$	111,272

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Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance 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 balance below is included in other accrued liabilities:

	Amount
	(in thousands)
Balance at December 31, 2013	$	6,660
Accruals for warranties issued during the period		15,406
Accruals related to pre-existing warranties		(2,008	)
Settlements made during the period		(11,116	)
Balance at December 31, 2014		8,942
Acquisition		409
Accruals for warranties issued during the period		11,539
Accruals related to pre-existing warranties		(3,159	)
Settlements made during the period		(10,806	)
Balance at December 31, 2015		6,925
Accruals for warranties issued during the period		14,291
Accruals related to pre-existing warranties		(1,354	)
Settlements made during the period		(12,659	)
Balance at December 31, 2016	$	7,203

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

	Amount
	(in thousands)
Balance at December 31, 2013	$	34,909
Deferral of new extended warranty revenue		29,519
Recognition of extended warranty deferred revenue		(21,128	)
Balance at December 31, 2014		43,300
Acquisition		870
Deferral of new extended warranty revenue		28,549
Recognition of extended warranty deferred revenue		(26,220	)
Balance at December 31, 2015		46,499
Deferral of new extended warranty revenue		27,182
Recognition of extended warranty deferred revenue		(26,928	)
Balance at December 31, 2016	$	46,753

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The volatility of the industries that Teradyne serves can cause certain of its customers to experience shortages of cash flows, which can impact their ability to make required payments. Teradyne maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for doubtful accounts are reviewed periodically taking into account the customer’s recent payment history, the customer’s current financial statements and other information regarding the customer’s credit worthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

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Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate all inventories for net realizable value. Teradyne records a provision for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

Investments

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. 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.

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. Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the years ended December 31, 2016, 2015 and 2014. ASC 820-10 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

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

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

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

In accordance with ASC 820-10, Teradyne measures its debt and equity investments at fair value. Teradyne’s debt and equity investments are primarily classified within Level 1 and 2. Acquisition-related contingent consideration is classified within Level 3. Teradyne determines the fair value of acquisition-related contingent consideration using a Monte Carlo simulation model. Assumptions utilized in the model include forecasted revenues, revenues volatility and discount rate.

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Prepayments

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

	2016		2015
	(in thousands)
Contract manufacturer prepayments	$	77,017	$	66,283
Prepaid maintenance and other services		7,676		8,481
Prepaid taxes		4,664		3,781
Other prepayments		19,097		12,974
Total prepayments	$	108,454	$	91,519

Retirement and Postretirement Plans

Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

Goodwill, Intangible and Long-Lived Assets

Teradyne accounts for goodwill and intangible assets in accordance with ASC 350-10, “Intangibles-Goodwill and Other.” Intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with ASC 350-10, Teradyne has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

In accordance with ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment, if any, contain management’s best estimates using appropriate assumptions and projections at that time.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.

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Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:

Buildings	40 years
Building improvements	5 to 10 years
Leasehold improvements	Lesser of lease term or 10 years
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery and equipment	3 to 5 years
Software	3 to 5 years

Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2016, 2015 and 2014 was $11.4 million, $50.7 million and $9.7 million, respectively.

Engineering and Development Costs

Teradyne’s products are highly technical in nature and require a large and continuing engineering and development effort. Software development costs incurred prior to the establishment of technological feasibility are charged to expense. Software development costs incurred subsequent to the establishment of technological feasibility are capitalized until the product is available for release to customers. To date, the period between achieving technological feasibility and general availability of the product has been short and software development costs eligible for capitalization have not been material. Engineering and development costs are expensed as incurred and consist primarily of salaries, contractor fees, including non-recurring engineering charges related to product design, allocated facility costs, depreciation, and tooling costs.

Stock Compensation Plans and Employee Stock Purchase Plan

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10, “Compensation-Stock Compensation.” As required by ASC 718-10, Teradyne has made an estimate of expected forfeitures and is recognizing compensation costs only for those stock-based compensation awards expected to vest.

Under its stock compensation plans, Teradyne has granted 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”).

Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Teradyne performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on its assessment, Teradyne concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. U.S. income taxes are not

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provided for on the earnings of non-U.S. subsidiaries which are expected to be reinvested indefinitely in operations outside the U.S. For intra-period tax allocations, Teradyne first utilizes non-equity related tax attributes, such as net operating losses and credit carryforwards and then equity-related tax attributes. Teradyne uses the with-and-without method for calculating excess stock compensation deductions and does not take into account any indirect impacts of excess stock compensation deductions on its research and development tax credits, domestic production activities deduction, and other differences between financial reporting and tax reporting.

Advertising Costs

Teradyne expenses all advertising costs as incurred. Advertising costs were $6.4 million, $3.3 million and $1.9 million in 2016, 2015 and 2014, respectively.

Translation of Non-U.S. Currencies

The functional currency for all subsidiaries is the U.S. dollar, except for the Industrial Automation segment for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Industrial Automation, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenue and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss).

Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

These amounts do not reflect the corresponding gains (losses) from foreign exchange contracts. See Note G: “Financial Instruments” regarding foreign exchange contracts.

Net Income (Loss) per Common Share

Basic net (loss) income per common share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Except where the result would be antidilutive, diluted net (loss) income per common share is calculated by dividing net (loss) income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable.

For the year ended December 31, 2014, dilutive potential common shares included incremental shares from the assumed conversion of the convertible notes and the convertible notes hedge warrant shares. Incremental shares from the assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option for 34.7 million shares at an exercise price of $5.48 was not used in the GAAP earnings per share calculation as its effect was anti-dilutive.

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In 2014, Teradyne settled its conversion spread (i.e., the intrinsic value of the embedded option feature contained in the convertible debt) in shares. Teradyne accounted for its conversion spread using the treasury stock method. Teradyne determined that it had the ability and intent to settle the principal amount of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share.

With respect to its convertible debt issued in 2016, Teradyne has determined that it has the ability and intent to settle the principal of the convertible debt in cash; accordingly, the principal amount is excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt and equity marketable securities and foreign currency translation adjustment.

C.    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.” The new guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The revised guidance will be applied prospectively, and is effective in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. Teradyne is currently evaluating the impact of this ASU on its financial position, results of operations and statements of cash flows.

On October 24, 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” Under current Generally Accepted Accounting Principles (“GAAP”), the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance requires recognition of the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new guidance does not apply to intra-entity transfers of inventory. The income tax consequences from the sale of inventory from one member of a consolidated entity to another will continue to be deferred until the inventory is sold to a third party. The new guidance will be effective in fiscal years beginning after December 15, 2017. Early adoption is permitted. The modified retrospective approach will be required for transition to the new guidance, with a cumulative-effect adjustment recorded in retained earnings as of the beginning of the period of adoption. Teradyne does not expect this ASU to have a material impact on its financial position, results of operations and statements of cash flows.

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 statements of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. Adoption of the new guidance will require recognition of excess tax benefits and tax deficiencies in

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the consolidated statements of operations on a prospective basis, with a cumulative effect adjustment to retained earnings for any prior year excess tax benefits or tax deficiencies not previously recorded. Teradyne expects the cumulative effect adjustment to increase retained earnings and deferred tax assets by approximately $39 million. In the years ended December 31, 2016, 2015 and 2014, Teradyne recorded excess tax benefits of $6.1 million, $4.6 million, and $0.2 million, respectively, as a component of additional paid-in capital. In accordance with this ASU, amounts for future periods related to the difference between the fair value of a restricted stock unit (“RSU”) on the grant date and the fair value on the vest date will be recorded as a discrete benefit or expense to the current income tax provision in the period in which the RSU vests. A majority of the future amounts will be recorded during the first quarter consistent with the vesting of a majority of Teradyne’s RSU grants.

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 an 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 consolidated statements of operations. 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 January 2016, the FASB issued 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.

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 new guidance requires 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 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 August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40).” ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there

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is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. Teradyne does not expect this ASU to have a material impact on its consolidated financial statements.

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. 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 selected a modified retrospective transition method. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

D.    ACQUISITIONS

Business

Universal Robots

On June 11, 2015, Teradyne acquired all of the outstanding equity of Universal Robots A/S (“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 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount in the first quarter of 2016. The maximum payment for each of the two remaining Universal Robots earn-outs is $25.0 million.

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.

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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

For the period from June 12, 2015 to December 31, 2015, Universal Robots contributed $41.9 million of revenues and had a $7.6 million loss before income taxes.

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 Years Ended
	December 31, 2015		December 31, 2014
	(in thousands, except per share amounts)
Revenue	$	1,657,626	$	1,686,689
Net income	$	199,784	$	61,078
Net income per common share:
Basic	$	0.94	$	0.30
Diluted	$	0.94	$	0.27

Pro forma results for the year ended December 31, 2015 were adjusted to exclude $1.6 million of non-recurring expense related to the fair value adjustment to acquisition-date inventory and $1.0 million of acquisition related costs incurred in 2015.

Pro forma results for the year ended December 31, 2014 were adjusted to include $1.6 million of non-recurring expense related to the fair value adjustment to acquisition-date inventory and $1.0 million of acquisition related costs.

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Avionics Interface Technologies, LLC.

On October 31, 2014, Teradyne acquired all of the assets and liabilities of Avionics Interface Technologies, LLC (“AIT”) located in Omaha, Nebraska and Dayton, Ohio. AIT is a supplier of equipment for testing state-of-the-art data communication buses. The acquisition of AIT complements Teradyne’s Defense/Aerospace line of bus test instrumentation for commercial and defense avionics systems. AIT is included in Teradyne’s System Test segment.

The total purchase price of $21.2 million consisted of $19.4 million of cash paid to acquire AIT’s assets and liabilities and $1.8 million in fair value of contingent consideration payable upon the achievement of certain revenue and gross margin targets in 2015 and 2016. The total amount of contingent consideration paid was $1.1 million, which was paid in January 2017.

The valuation of the contingent consideration utilized the following assumptions: (1) probability of meeting each target; (2) expected timing of meeting each target; and (3) discount rate reflecting the risk associated with the expected payments. The probabilities and timing for each target were estimated based on a review of the historical and projected results. A discount rate of 4.7 percent was selected based on the cost of debt for the business. A significant portion of the risk in achieving the contingent consideration was captured in the probabilities assigned to meeting each target.

The AIT 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 of AIT’s net tangible 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 and net tangible assets in the amount of $10.5 million was allocated to goodwill, which is deductible for tax purposes.

The following represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	10,516
Intangible assets		9,080
Tangible assets acquired and liabilities assumed:
Current assets		2,452
Non-current assets		359
Accounts payable and current liabilities		(1,164	)
Total purchase price	$	21,243

Teradyne estimated the fair value of intangible assets using the income approach. 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)
Customer relationships	$	5,630		5.0
Developed technology		2,580		4.8
Trademarks and tradenames		380		5.0
Non-compete agreement		320		4.0
Customer order backlog		170		0.3
Total intangible assets	$	9,080		4.8

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For the period from October 31, 2014 to December 31, 2014, AIT contributed $0.6 million of revenues and had a $0.8 million loss before income taxes.

The following unaudited pro forma information gives effect to the acquisition of AIT as if the acquisition occurred on January 1, 2013. 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 Year Ended
	December 31, 2014
	(in thousands, except per share amounts)
Revenues	$	1,655,038
Net income	$	82,169
Income per common share:
Basic	$	0.40
Diluted	$	0.37

E.    INVENTORIES

Inventories, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Raw material	$	58,530	$	73,117
Work-in-process		22,946		32,825
Finished goods		54,482		47,646
	$	135,958	$	153,588

Inventory reserves for the years ended December 31, 2016 and 2015 were $116.0 million and $119.4 million, respectively.

F.    PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Land	$	16,561	$	16,561
Buildings		98,031		108,797
Machinery and equipment		601,835		595,445
Furniture and fixtures, and software		82,897		82,612
Leasehold improvements		46,612		43,328
Construction in progress		3,032		2,630
		848,968		849,373
Less: accumulated depreciation		595,147		575,959
	$	253,821	$	273,414

Depreciation of property, plant and equipment for the years ended December 31, 2016, 2015 and 2014 was $64.8 million, $68.2 million and $73.4 million, respectively. As of December 31, 2016 and 2015, the gross book value included in machinery and equipment for internally manufactured test systems being leased by customers was $19.4 million and $20.4 million, respectively. As of December 31, 2016 and 2015, the accumulated depreciation on these test systems was $10.5 million and $8.5 million, respectively.

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G.    FINANCIAL INSTRUMENTS

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’s available-for-sale securities are classified as Level 1 and Level 2. Contingent consideration is classified as Level 3. The vast 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 2016, 2015 and 2014 were $1.6 million, $1.7 million and $2.4 million, respectively. Realized losses recorded in 2016 and 2015 were $0.5 million and $0.4 million, respectively. There were no realized losses recorded in 2014. 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 years ended December 31, 2016 and 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 December 31, 2016 and 2015:

	December 31, 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	$	214,722	$	—	$	—	$	214,722
Cash equivalents		37,458		55,704		—		93,162
Available-for-sale securities:
U.S. Treasury securities		—		900,038		—		900,038
Commercial paper		—		161,630		—		161,630
Corporate debt securities		—		100,153		—		100,153
Certificates of deposit and time deposits		—		82,133		—		82,133
U.S. government agency securities		—		42,014		—		42,014
Equity and debt mutual funds		18,171		—		—		18,171
Non-U.S. government securities		—		728		—		728
Total	$	270,351	$	1,342,400	$	—	$	1,612,751
Derivative assets		—		1		—		1
Total	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Contingent consideration	$	—	$	—	$	38,332	$	38,332
Derivative liabilities		—		131		—		131
Total	$	—	$	131	$	38,332	$	38,463

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Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	252,180	$	55,704	$	—	$	307,884
Marketable securities		—		871,024		—		871,024
Long-term marketable securities		18,171		415,672		—		433,843
Prepayments		—		1		—		1
	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Other current liabilities	$	—	$	131	$	—	$	131
Contingent consideration		—		—		1,050		1,050
Long-term contingent consideration		—		—		37,282		37,282
	$	—	$	131	$	38,332	$	38,463

	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

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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 years ended December 31, 2016 and 2015 were as follows:

	Contingent Consideration
	(in thousands)
Balance at December 31, 2014	$	3,350
Acquisition of Universal Robots		31,597
Fair value adjustment of Universal Robots (1)		5,339
Fair value adjustment of AIT (2)		(1,250	)
Fair value adjustment of ZTEC (3)		(1,600	)
Balance at December 31, 2015		37,436
Payments (4)		(15,000	)
Fair value adjustment of AIT (5)		550
Fair value adjustment of Universal Robots (5)		15,346
Balance at December 31, 2016	$	38,332

(1) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $5.3 million primarily due to an increase in forecasted revenues.

(2) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was reduced by $1.3 million due to a decrease in the forecasted revenues.

(3) During the year ended December 31, 2015, the fair value measurement of the contingent consideration for the earn-out in connection with the acquisition of ZTEC Instruments, Inc. (“ZTEC”) was reduced by $1.6 million, to $0, because Teradyne and the Securityholder Representative, on behalf of the ZTEC securityholders, agreed to terminate the earn-out prior to the end of the December 31, 2015 earn-out period, with no payout in connection with the resolution of indemnity claims asserted by both Teradyne and the Securityholder Representative.

(4) During the year ended December 31, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(5) During the year ended December 31, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $15.3 million primarily due to an increase in forecasted revenues and a decrease in the discount rate. During the year ended 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenues. The AIT contingent consideration in the amount of $1.1 million was paid in January 2017.

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

Liability	December 31, 2016 Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$	21,301	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2017 volatility		10.8%
				Discount Rate		3.3%
		$15,981	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2018 volatility		10.8%
				Discount Rate		3.3%
Contingent consideration (AIT)	$	1,050(1)

(1) Teradyne paid this amount in January 2017.

As of December 31, 2016, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenues, 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 remaining Universal Robots earn-outs is $25.0 million.

The carrying amounts and fair values of financial instruments at December 31, 2016 and 2015 were as follows:

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	307,884	$	307,884	$	264,705	$	264,705
Marketable securities		1,304,867		1,304,867		743,624		743,624
Derivative assets		1		1		109		109
Liabilities
Contingent consideration		38,332		38,332		37,436		37,436
Derivative liabilities		131		131		146		146
Convertible debt (1)		352,669		486,754		—		—

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

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

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

	December 31, 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	$	901,975	$	97	$	(2,034	)	$	900,038	$	572,284
Commercial paper		161,672		24		(66	)		161,630		84,034
Corporate debt securities		99,708		1,065		(620	)		100,153		53,642
Certificates of deposit and time deposits		82,080		54		(1	)		82,133		7,760
U.S. government agency securities		42,026		7		(19	)		42,014		13,461
Equity and debt mutual funds		16,505		1,724		(58	)		18,171		1,661
Non-U.S. government securities		745		6		(23	)		728		137
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of  Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	871,321	$	134	$	(431	)	$	871,024	$	423,128
Long-term marketable securities		433,390		2,843		(2,390	)		433,843		309,851
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

	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

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As of December 31, 2016, the fair market value of investments with unrealized losses totaled $733.0 million. Of this value, $2.9 million had unrealized losses of $0.3 million greater than one year and $730.1 million had unrealized losses of $2.5 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 December 31, 2016 and 2015, were temporary.

The contractual maturities of investments held at December 31, 2016 were as follows:

	Cost		Fair Value
	(in thousands)
Due within one year	$	871,321	$	871,024
Due after 1 year through 5 years		365,873		365,451
Due after 5 years through 10 years		12,839		12,309
Due after 10 years		38,173		37,912
Total	$	1,288,206	$	1,286,696

Contractual maturities of investments held at December 31, 2016, exclude $18 million of equity and debt mutual funds as they do not have a contractual maturity date.

The following table sets forth by fair value hierarchy Teradyne’s non-financial assets that were measured at fair value on a non-recurring basis as of July 3, 2016:

			July 3, 2016
	Quoted Prices in Active Markets  for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3))		Total		Total Losses
	(in thousands)
Goodwill (1)	$	—	$	—	$	7,976	$	7,976	$	254,946
Definite lived intangible assets (2)		—		—		5,750		5,750		83,339
	$	—	$	—	$	13,726	$	13,726	$	338,285

(1) In accordance with the provisions of ASC 350-20, “Goodwill” goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: “Goodwill and Intangible Assets” regarding goodwill impairment.

(2) In accordance with the provisions of ASC 360-10, “Property, Plant and Equipment,” definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: “Goodwill and Intangible Assets” regarding definite lived intangible assets impairment.

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

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fluctuations on certain foreign currency denominated monetary assets and liabilities. Teradyne does not use derivative financial instruments for trading or speculative purposes.

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

At December 31, 2016 and 2015, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	December 31, 2016								December 31, 2015
	Buy Position			Sell Position		Net Total			Buy Position			Sell Position		Net Total
	(in millions)
Japanese Yen	$	(17.7	)	$	—	$	(17.7	)	$	(51.9	)	$	—	$	(51.9	)
Korean Won		(8.8	)		—		(8.8	)		(5.5	)		—		(5.5	)
Taiwan Dollar		(6.9	)		—		(6.9	)		(5.0	)		—		(5.0	)
British Pound Sterling		(1.3	)		—		(1.3	)		(9.5	)		—		(9.5	)
Euro		—			25.2		25.2			—			27.2		27.2
Singapore Dollar		—			24.0		24.0			—			15.0		15.0
Total	$	(34.7	)	$	49.2	$	14.5		$	(71.9	)	$	42.2	$	(29.7	)

The fair value of the outstanding contracts was a loss of $0.1 million and $0.0 million, at December 31, 2016 and 2015, respectively.

In 2016, 2015 and 2014, Teradyne recorded net realized losses related to foreign currency forward contracts hedging net monetary assets and liabilities of $8.7 million, $3.0 million and $0.2 million, respectively.

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 as of December 31, 2016 and 2015:

	Balance Sheet Location	December  31, 2016			December  31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepayments	$	1		$	109
Foreign exchange contracts	Other current liabilities		(131	)		(146	)
Total derivatives		$	(130	)	$	(37	)

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The following table summarizes the effect of derivative instruments in statements of operations recognized for the years ended December 31, 2016, 2015 and 2014. The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

	Location of Losses Recognized in Statements of Operations	December 31, 2016		December 31, 2015		December 31, 2014
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	8,671	$	3,047	$	237

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

Concentration of Credit Risk

Financial instruments which potentially subject Teradyne to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Teradyne’s cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Teradyne’s fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. Teradyne places foreign currency forward contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of geographically dispersed customers. Teradyne performs ongoing credit evaluations of its customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. There were no customers who accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2016. One customer accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2015.

Equity Interest

On November 1, 2013, in connection with the acquisition of Empirix, Inc. by Thoma Bravo LLC, Teradyne sold its equity interest in Empirix, Inc., a private company, and received cash proceeds of $34.2 million which was recorded as a gain in other (income) expense, net in the fourth quarter of 2013. An additional $5.4 million of cash proceeds that was held in escrow for 15 months, for potential indemnifications to the buyer, was paid to Teradyne in February 2015 and it was recorded as a gain in other (income) expense, net in the first quarter of 2015.

H.    DEBT

Convertible Senior Notes

On December 12, 2016, Teradyne completed a private offering of $460.0 million aggregate principal amount of 1.25% convertible senior unsecured notes (the “Notes”) due December 15, 2023 and received net proceeds, after issuance costs, of approximately $450.8 million, $33.0 million of which was used to pay the net cost of the convertible note hedge transactions and $50.1 million of which was used to repurchase 2.0 million shares of Teradyne’s common stock under its existing stock repurchase program from purchasers of the Notes in privately negotiated transactions effected through one of the initial purchasers or its affiliates conducted concurrently with the pricing of the Note offering. The Notes will mature on December 15, 2023, unless earlier repurchased or converted. The Notes bear interest from December 12, 2016 at a rate of 1.25% per year payable

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semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017. The Notes will be convertible at the option of the noteholders at any time prior to the close of business on the business day immediately preceding September 15, 2023, only under the following circumstances: (1) during any calendar quarter beginning after March 31, 2017 (and only during such calendar quarter), if the closing sale price of the Teradyne’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of the Teradyne’s common stock and the conversion rate on each such trading day; and (3) upon the occurrence of specified corporate events. On or after September 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Teradyne may satisfy its conversion obligation by paying or delivering cash, shares of its common stock or a combination of cash and shares of its common stock, at Teradyne’s election. The conversion rate for the Notes will initially be 31.4102 shares per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $31.84 per share of Teradyne’s common stock. The conversion rate is subject to adjustment under certain circumstances.

Concurrent with the offering of the Notes, Teradyne entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the common stock that underlie the Notes, with a strike price equal to the initial conversion price of the Notes of $31.84. The Note Hedge Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of Teradyne’s common stock.

Separately and concurrent with the pricing of the Notes, Teradyne entered into warrant transactions with the Option Counterparties (the “Warrant Transactions”) in which it sold net-share-settled (or, at its election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of common stock. The strike price of the warrants will initially be $39.95 per share (subject to adjustment). The Warrant Transactions could have a dilutive effect to Teradyne’s common stock to the extent that the market price per share of Teradyne’s common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.

The Note Hedge Transactions are expected to reduce the potential dilution to Teradyne’s common stock upon any conversion of the Notes. However, the Warrant Transactions could separately have a dilutive effect to the extent that the market value per share of Teradyne’s common stock exceeds the applicable strike price of the warrant. The net cost of the Note Hedge Transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $33.0 million.

In connection with establishing their initial hedge of these convertible note hedge and warrant transactions, the Option Counterparties have entered into various derivative transactions with respect to Teradyne’s common stock and/or purchased shares of Teradyne’s common stock or other securities, including the Notes, concurrent with, or shortly after, the pricing of the Notes. In addition, the Option Counterparties may modify their hedge positions by entering into or unwinding various derivative transactions with respect to Teradyne’s common stock or by selling Teradyne’s common stock or other securities, including the Notes, in secondary market transactions (and may do so during any observation period related to the conversion of the Notes). These activities could adversely affect the value of Teradyne’s common stock and the Notes.

Teradyne considered the guidance of ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity,” and concluded that the convertible note hedge is both indexed to Teradyne’s stock and should be classified in stockholders’ equity in its statements of financial position. The convertible note hedge is considered indexed to Teradyne’s stock as the terms of the Note Hedge Transactions do not contain an exercise contingency

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and the settlement amount equals the difference between the fair value of a fixed number of Teradyne’s shares and a fixed strike price. Because the only variable that can affect the settlement amount is Teradyne’s stock price, which is an input to the fair value of a fixed-for-fixed option contract, the convertible note hedge is considered indexed to Teradyne’s stock.

Teradyne assessed whether the convertible note hedge should be classified as equity under ASC 815-40. In the Note Hedge Transactions contract the settlement terms permit net cash settlement or net share settlement, at the option of Teradyne. Therefore, the criteria as set forth in ASC 815-40 were evaluated by Teradyne. In reviewing the criteria, Teradyne noted the following: (1) the convertible note hedge does not require Teradyne to issue shares; (2) there is no requirement to net cash settle the convertible note hedge for failure to make timely filings with the SEC; (3) in the case of termination, the convertible note hedge is settled in the same consideration as the holders of the underlying stock; (4) the counterparty does not have rights that rank higher than those of a shareholder of the stock underlying the convertible note hedge; and (5) there is no requirement to post collateral. Based on its analysis of those criteria, Teradyne concluded that the convertible note hedge should be recorded in equity and no further adjustment should be made in future periods to adjust the value of the convertible note hedge.

Teradyne analyzed the Warrant Transactions under ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity,” and other relevant literature, and determined that it met the criteria for classification as an equity transaction and is considered indexed to Teradyne’s stock. As a result, Teradyne recorded the proceeds from the warrants as an increase to additional paid-in capital. Teradyne does not recognize subsequent changes in fair value of the warrants in its financial statements.

The provisions of ASC 470-20, “Debt with Conversion and Other Options,” are applicable to the Notes. ASC 470-20 requires Teradyne to separately account for the liability (debt) and equity (conversion feature) components of the Notes in a manner that reflects Teradyne’s nonconvertible debt borrowing rate at the date of issuance when interest cost is recognized in subsequent periods. Teradyne allocated $100.8 million of the $460.0 million principal amount of the Notes to the equity component, which represents a discount to the debt and will be amortized to interest expense using the effective interest method through December 2023. Accordingly, Teradyne’s effective annual interest rate on the Notes will be approximately 5.0%. The Notes are classified as long-term debt in the balance sheet based on their December 15, 2023 maturity date. Debt issuance costs of approximately $7.2 million are being amortized to interest expense using the effective interest method over the seven year term of the Notes. As of December 31, 2016, debt issuance costs were approximately $7.1 million.

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

	December 31, 2016
	(in thousands)
Debt principal	$	460,000
Unamortized discount including debt issuance cost		107,331
Net carrying amount of convertible debt	$	352,669

	For the year ended December 31, 2016
	(in thousands)
Contractual interest expense on the coupon	$	303
Amortization of the discount component and debt issue fees recognized as interest expense		688
Total interest expense on the convertible debt	$	991

As of December 31, 2016, the unamortized discount was $107.3 million, which will be amortized over seven years using the effective interest rate method. The carrying amount of the equity component was $100.8 million. As of December 31, 2016, the conversion rate was equal to the initial conversion price of approximately $31.84 per share.

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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 statements of operations. As of March 1, 2017, 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 December 31, 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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I.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss), which is presented net of tax, consists of the following:

	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 loss before reclassifications, net of tax of $0, $(1,667)		(8,759	)		(3,075	)		—			(11,834	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(390), $(169)		—			(704	)		(295	)		(999	)
Net current period other comprehensive loss, net of tax of $0, $(2,057), $(169)		(8,759	)		(3,779	)		(295	)		(12,833	)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive (loss) income before reclassifications, net of tax of $0, $923, $34		(13,162	)		2,037			59			(11,125	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)		—			(683	)		(321	)		(945	)
Net current period other comprehensive (loss) income, net of tax of $0, $668, $(156)		(13,162	)		1,354			(262	)		(12,070	)
Balance at December 31, 2016, net of tax of $0, $209, $(778)	$	(21,921	)	$	(60	)	$	1,767		$	(20,214	)

Reclassifications out of accumulated other comprehensive income to the statements of operations for the years ended December 31, 2016, 2015 and 2014, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the year ended							Affected Line Item in the Statements of Operations
	December 31, 2016			December 31, 2015		December 31, 2014
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $255, $390, $645	$	683		$	704	$	1,433		Interest income
Defined benefit pension and postretirement plans:
Amortization of prior service credit, net of tax of $190, $169, $169		321			295		295		(1)
Prior service income arising during period, net of tax of $(34), $0, $0		(59	)		—		—
		262			295		295
Total reclassifications, net of tax of $411, $559, $814	$	945		$	999	$	1,728		Net income

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

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J.    GOODWILL AND INTANGIBLE ASSETS

Goodwill

Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other,” on December 31 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value.

Teradyne has the option to perform a qualitative assessment (“Step zero”) to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required. When performing the two-step process, the first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, Teradyne determines the fair value of a reporting unit using the results derived from an income approach and a market approach. The income approach is estimated through the discounted cash flow (“DCF”) analysis. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, and the amount and timing of expected future cash flows. Discount rates are based on a weighted average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity, plus a risk premium. The WACC used to test goodwill is derived from a group of comparable companies. The cash flows employed in the DCF analysis are derived from internal forecasts and external market forecasts. The market approach estimates the fair value of the reporting unit by utilizing the market comparable method which is based on revenue and earnings multiples from comparable companies. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with its carrying amount of goodwill to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, whereby the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

In the second quarter of 2016, the Wireless Test reporting unit (which is Teradyne’s Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from Teradyne’s largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. Teradyne considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test.

Teradyne allocated the fair value of the Wireless Test reporting unit to all of its assets and liabilities (including unrecognized intangible assets). The net book value of raw materials inventory was estimated as an approximation of current replacement costs. The fair value of finished goods inventory was estimated at the present value of selling price less direct selling costs and profit on the selling effort. The selling price used in the inventory fair values was based upon the product gross margins included in Teradyne’s forecast. The fair value of the deferred revenue liability was estimated by assessing the costs required to service the obligation plus a reasonable profit margin. The fair value for personal property assets, which consisted of furniture and fixtures,

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machinery and equipment, computer equipment, software and leasehold improvements, was estimated using the replacement cost approach, which approximated carrying value. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships and customer backlog were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. Based upon this allocation, Teradyne determined that the Wireless Test reporting unit goodwill is valued at $8.0 million and recorded an impairment loss of $254.9 million in the second quarter of 2016.

In the fourth quarter of 2016, Teradyne performed the annual goodwill impairment test. Teradyne completed step one of the two- step impairment test for the Industrial Automation, Wireless Test and Defense/Aerospace reporting units. There was no impairment as a result of the annual test performed in the fourth quarter of 2016.

In 2015, Teradyne performed step one of the two-step impairment test for the Wireless Test and Defense/Aerospace reporting units and the step zero assessment for the Industrial Automation reporting unit. In 2015, there was no impairment.

In 2014, as a result of decreased projected demand attributable to an estimated smaller future wireless test market due to reuse of wireless test equipment, price competition and different testing techniques, Teradyne determined that for its Wireless Test reporting unit, the carrying amount of its net assets exceeded its respective fair value, indicating that a potential impairment existed. After completing the second step of the goodwill impairment test, Teradyne recorded a $98.9 million goodwill impairment charge in the fourth quarter of 2014.

The fourth quarter 2014 goodwill impairment test of Teradyne’s Defense/Aerospace reporting unit, which is included in Teradyne’s System Test reportable segment, did not identify any goodwill impairment.

The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2016 and 2015 are as follows:

	Industrial Automation			System Test			Wireless Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2014:
Goodwill	$	—		$	158,699		$	361,819		$	260,540		$	781,058
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		—			10,516			262,922			—			273,438
Universal Robots acquisition		221,128			—			—			—			221,128
Foreign currency translation adjustment		(6,153	)		—			—			—			(6,153	)
Balance at December 31, 2015:
Goodwill		214,975			158,699			361,819			260,540			996,033
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		214,975			10,516			262,922			—			488,413
Foreign currency translation adjustment		(10,124	)		—			—			—			(10,124	)
Goodwill impairment losses		—			—			(254,946	)		—			(254,946	)
Balance at December 31, 2016:
Goodwill		204,851			158,699			361,819			260,540			985,909
Accumulated impairment losses		—			(148,183	)		(353,843	)		(260,540	)		(762,566	)
	$	204,851		$	10,516		$	7,976		$	—		$	223,343

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Intangible Assets

Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. As a result of the Wireless Test segment goodwill impairment review in the second quarter of 2016, Teradyne performed an impairment test of the Wireless Test segment’s intangible and long-lived assets. The impairment test is based on a comparison of the estimated undiscounted cash flows to the carrying value of the asset group. If undiscounted cash flows for the asset group are less than the carrying amount, the asset group is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment contain management’s best estimates using appropriate assumptions and projections at that time. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. As a result of the analysis, Teradyne recorded an $83.3 million impairment charge in the second quarter of 2016 in acquired intangible assets impairment on the statements of operations, resulting in a remaining intangible assets balance of $5.0 million for the Wireless Test segment.

There were no events or circumstances indicating that the carrying value of intangible and long-lived assets may not be recoverable in 2015. In 2014, as a result of the Wireless Test segment goodwill impairment charge in the fourth quarter of 2014, Teradyne performed an impairment test of the Wireless Test segment’s intangible and long-lived assets based on a comparison of the estimated undiscounted cash flows to the recorded value of the assets and there was no indication of impairment.

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

	December 31, 2016
	Gross Carrying Amount (1)		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	270,877	$	206,376	$	(5,093	)	$	59,408		6.0 years
Customer relationships		92,741		76,707		(538	)		15,496		7.9 years
Tradenames and trademarks		50,100		23,435		(1,308	)		25,357		9.5 years
Non-compete agreement		320		180		—			140		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	414,208	$	306,868	$	(6,939	)	$	100,401		6.8 years

(1) During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

(2) In 2016, $48.1 million of amortizable intangible assets became fully amortized and has been eliminated from the gross carrying amount and accumulated amortization.

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	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	382,262	$	220,346	$	(2,444	)	$	159,472		6.0 years
Customer relationships		110,602		63,722		(258	)		46,622		7.9 years
Tradenames and trademarks		53,034		18,889		(628	)		33,517		9.5 years
Non-compete agreement		320		100		—			220		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	546,388	$	303,227	$	(3,330	)	$	239,831		6.7 years

(1) During the year ended December 31, 2015, Teradyne recorded intangible assets in the amount of $121.6 million related to its Universal Robots acquisition.

(2) During the year ended December 31, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

Aggregate intangible assets amortization expense for the years ended December 31, 2016, 2015 and 2014 was $52.6 million, $69.0 million, and $70.8 million, respectively. Estimated intangible assets amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2017	$	28,986
2018		26,848
2019		23,037
2020		10,042
2021		3,435
Thereafter		8,053

K.    COMMITMENTS AND CONTINGENCIES

Purchase Commitments

As of December 31, 2016, Teradyne had entered into non-cancelable purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $260.7 million, of which $247.9 million is for less than one year.

Commitments

Teradyne leases certain of its office buildings and other facilities under various operating lease arrangements that include renewal options and escalation clauses for adjusting rent payments to reflect changes in price indices. Rental expense for leases with fixed escalation clauses is recognized on a straight line basis over the lease term.

Rental expense for the years ended December 31, 2016, 2015 and 2014 was $18.8 million, $15.9 million and $16.0 million, respectively.

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The following table reflects Teradyne’s non-cancelable operating lease commitments:

	Non-cancelable Lease Commitments
	(in thousands)
2017	$	16,467
2018		15,258
2019		13,733
2020		9,374
2021		7,149
Beyond 2022		10,130
Total	$	72,111

Legal Claims

Teradyne is subject to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.

Guarantees and Indemnification Obligations

Teradyne provides indemnification, to the extent permitted by law, to its officers, directors, employees and agents for liabilities arising from certain events or occurrences while the officer, director, employee, or agent, is or was serving, at Teradyne’s request in such capacity. Teradyne has entered into indemnification agreements with certain of its officers and directors. With respect to acquisitions, Teradyne provides indemnifications to or assumes indemnification obligations for the current and former directors, officers and employees of the acquired companies in accordance with the acquired companies’ by-laws and charter. As a matter of practice, Teradyne has maintained directors’ and officers’ liability insurance coverage including coverage for directors and officers of acquired companies.

Teradyne enters into agreements in the ordinary course of business with customers, resellers, distributors, integrators and suppliers. Most of these agreements require Teradyne to defend and/or indemnify the other party against intellectual property infringement claims brought by a third party with respect to Teradyne’s products. From time to time, Teradyne also indemnifies customers and business partners for damages, losses and liabilities they may suffer or incur relating to personal injury, personal property damage, product liability, breach of confidentiality obligations and environmental claims relating to the use of Teradyne’s products and services or resulting from the acts or omissions of Teradyne, its employees, authorized agents or subcontractors. On occasion, Teradyne has also provided guarantees to customers regarding the delivery and performance of its products in addition to the warranty described below.

As a matter of ordinary business course, Teradyne warrants that its products will substantially perform in accordance with its standard published specifications in effect at the time of delivery. Most warranties have a one-year duration commencing from installation. A provision is recorded upon revenue recognition to cost of revenue for estimated warranty expense based upon historical experience. When Teradyne receives revenue for extended warranties beyond the standard duration, it is deferred and recognized on a straight line basis over the contract period. Related costs are expensed as incurred. As of December 31, 2016 and 2015, Teradyne had a product warranty accrual of $7.2 million and $6.9 million, respectively, included in other accrued liabilities, and revenue deferrals related to extended warranties of $46.8 million and $46.5 million, respectively, included in short and long-term deferred revenue and customer advances.

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In addition, and in the ordinary course of business, Teradyne provides minimum purchase guarantees to certain vendors to ensure continuity of supply against the market demand. Although some of these guarantees provide penalties for cancellations and/or modifications to the purchase commitments as the market demand decreases, most of the guarantees do not. Therefore, as the market demand decreases, Teradyne re-evaluates these guarantees and determines what charges, if any, should be recorded.

With respect to its agreements covering product, business or entity divestitures and acquisitions, Teradyne provides certain representations, warranties and covenants to purchasers and agrees to indemnify and hold such purchasers harmless against breaches of such representations, warranties and covenants. Many of the indemnification claims have a definite expiration date while some remain in force indefinitely. With respect to its acquisitions, Teradyne may, from time to time, assume the liability for certain events or occurrences that took place prior to the date of acquisition.

As a matter of ordinary course of business, Teradyne occasionally guarantees certain indebtedness obligations of its subsidiary companies, limited to the borrowings from financial institutions, purchase commitments to certain vendors, and lease commitments to landlords.

Based on historical experience and information known as of December 31, 2016 and 2015, except for product warranty, Teradyne has not recorded any liabilities for these guarantees and obligations because the amount would be immaterial.

L.    NET (LOSS) INCOME PER COMMON SHARE

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

	2016			2015		2014
	(in thousands, except per share amounts)
Net (loss) income for basic and diluted net income per share	$	(43,421	)	$	206,477	$	81,272
Weighted average common shares-basic		202,578			211,544		202,908
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		—			—		5,013
Convertible note hedge warrant shares (2)		—			—		12,562
Restricted stock units		—			1,130		1,092
Stock options		—			606		944
Employee stock purchase rights		—			41		31
Dilutive potential common shares		—			1,777		19,642
Weighted average common shares-diluted		202,578			213,321		222,550
Net (loss) income per common share-basic	$	(0.21	)	$	0.98	$	0.40
Net (loss) income per common share-diluted	$	(0.21	)	$	0.97	$	0.37

(1) Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option on its common stock (convertible note hedge transaction) was excluded from the calculation of diluted shares because the effect was anti-dilutive.

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The computation of diluted net loss per common share for 2016 excludes the effect of the potential exercise of all outstanding stock options and restricted stock units because Teradyne had a net loss and inclusion would be anti-dilutive.

The computation of diluted net income per common share for 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.

The computation of diluted net income per common share for 2014 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.

M.    RESTRUCTURING AND OTHER

Other

During the year ended December 31, 2016, Teradyne recorded $15.9 million of other charges of which $15.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability, $0.6 million for the increase in the fair value of the AIT contingent consideration liability, $4.2 million for an impairment of fixed assets and $1.2 million for expenses related to an earthquake in Kumamoto, Japan, partially offset by $5.4 million of property insurance recovery related to the Japan earthquake.

During the year ended December 31, 2015, Teradyne recorded $3.6 million of other charges, of which $5.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability and $1.0 million for acquisition costs related to Universal Robots, partially offset by a $2.9 million gain from fair value adjustments to decrease the acquisition contingent consideration liability related to ZTEC, $1.6 million, and AIT, $1.3 million.

During the year ended December 31, 2014, Teradyne recorded a $0.6 million gain from the fair value adjustment to decrease the ZTEC acquisition contingent consideration, partially offset by $0.4 million of acquisition costs related to AIT.

Restructuring

During the year ended December 31, 2016, Teradyne recorded $6.0 million of severance charges related to headcount reductions of 146 people, of which 102 people were in Wireless Test and 44 people were in Semiconductor Test.

During the year ended December 31, 2015, Teradyne recorded $1.5 million of severance charges related to headcount reductions of 23 people primarily in System Test and Semiconductor Test.

During the year ended December 31, 2014, Teradyne recorded $1.6 million of severance charges related to headcount reductions of approximately 43 people, primarily in Semiconductor Test and Wireless Test.

The remaining accrual for severance of $2.1 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2017.

N.    RETIREMENT PLANS

ASC 715, “Compensation—Retirement Benefits,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation at December 31. Teradyne uses a December 31 measurement date for all of its plans.

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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 the 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 (the “IRC”), as well as unfunded qualified foreign plans.

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	351,117		$	62,290		$	367,619		$	58,210
Service cost		2,302			761			2,462			1,006
Interest cost		13,630			1,185			13,142			1,444
Actuarial gain (loss)		6,053			5,621			(13,221	)		7,498
Benefits paid		(19,486	)		(1,385	)		(18,885	)		(859	)
Curtailment		—			—			—			(634	)
Plan participants’ contributions		—			—			—			64
Expenses paid		—			(609	)		—			—
Non-U.S. currency movement		—			(7,125	)		—			(4,439	)
End of year		353,616			60,738			351,117			62,290
Change in plan assets:
Fair value of plan assets:
Beginning of year		298,404			28,141			316,072			29,511
Company contributions		4,489			867			10,517			808
Plan participants’ contributions		—			—			—			64
Actual return on plan assets		23,897			5,142			(9,300	)		(136	)
Benefits paid		(19,486	)		(1,148	)		(18,885	)		(859	)
Settlements		—			—			—			—
Expenses paid		—			(609	)		—			(43	)
Non-U.S. currency movement		—			(4,822	)		—			(1,204	)
End of year		307,304			27,571			298,404			28,141
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

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The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Retirement plans assets	$	7,712		$	—		$	636		$	—
Accrued employees’ compensation and withholdings		(2,591	)		(772	)		(2,564	)		(695	)
Retirement plans liabilities		(51,433	)		(32,395	)		(50,785	)		(33,454	)
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in thousands)
Prior service cost, before tax	$	127	$	—	$	224	$	—
Deferred taxes		514		—		479		—
Total recognized in other comprehensive income, net of tax	$	641	$	—	$	703	$	—

The estimated portion of prior service cost remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic pension cost in 2017 is $0.1 million.

The accumulated benefit obligation for the United States defined benefit pension plans was $342.9 million and $340.1 million at December 31, 2016 and 2015, respectively. The accumulated benefit obligation for foreign defined benefit pension plans was $56.6 million at December 31, 2016 and 2015.

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in millions)
Projected benefit obligation	$	54.0	$	34.3	$	53.3	$	35.2
Accumulated benefit obligation		48.0		30.1		47.3		29.5
Fair value of plan assets		—		1.1		—		1.0

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Expense

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic pension (income) cost was comprised of the following:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
	(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost	$	2,302		$	761		$	2,462		$	1,006		$	2,218		$	897
Interest cost		13,630			1,185			13,142			1,444			12,875			1,837
Expected return on plan assets		(13,830	)		(443	)		(14,517	)		(781	)		(12,500	)		(868	)
Amortization of prior service cost		96			—			134			—			135			—
Net actuarial (gain) loss		(4,013	)		815			10,596			8,415			43,168			4,651
Curtailment		—			—			—			(634	)		—			—
Total net periodic pension (income) cost	$	(1,815	)	$	2,318		$	11,817		$	9,450		$	45,896		$	6,517
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		(96	)		—			(134	)		—			(135	)		—
Total recognized in other comprehensive income		(96	)		—			(134	)		—			(135	)		—
Total recognized in net periodic pension (income) cost and other comprehensive income	$	(1,911	)	$	2,318		$	11,683		$	9,450		$	45,761		$	6,517

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
Discount rate		4.0	%		2.3	%		3.7	%		2.6	%		4.5	%		3.8	%
Expected return on plan assets		4.8			2.0			4.8			2.6			5.0			3.4
Salary progression rate		2.7			3.2			2.9			3.2			3.0			3.5

Weighted Average Assumptions to Determine Pension Obligations at December 31 :

	2016						2015
	United States			Foreign			United States			Foreign
Discount rate		3.9	%		1.8	%		4.0	%		2.3	%
Salary progression rate		2.6			2.7			2.7			3.2

In developing the expected return on plan assets assumption, Teradyne evaluates input from its investment manager and pension consultants, including their forecast of asset class return expectations. Teradyne believes that 4.8% was an appropriate rate to use for fiscal 2016 for the U.S. Qualified Pension Plan (“U.S. Plan”).

Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

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The discount rate utilized to determine future pension obligations for the U.S. Plan is based on Citigroup Pension Index adjusted for the plan’s expected cash flows and was 3.9% at December 31, 2016, down from 4.0% at December 31, 2015.

Plan Assets

As of December 31, 2016, the fair value of Teradyne’s pension plans’ assets totaled $334.9 million of which $307.3 million was related to the U.S. Plan, $26.5 million was related to the U.K. defined benefit pension plan, and $1.1 million was related to the Taiwan defined benefit pension plan. Substantially all Teradyne’s pension plans’ assets are held in individual trusts, which were established for the investment of assets of Teradyne’s sponsored retirement plans.

The following table provides weighted average pension asset allocation by asset category at December 31, 2016 and 2015:

	2016						2015
	United States			Foreign			United States			Foreign
Fixed income securities		88.1	%		—	%		88.6	%		—	%
Equity securities		9.9			—			9.8			—
Other		2.0			100.0			1.6			100.0
		100.0	%		100.0	%		100.0	%		100.0	%

The assets of the U.S. Plan are overseen by the Teradyne Fiduciary Committee which is comprised of members of senior management drawn from appropriate diversified levels of the management team. The Fiduciary Committee is responsible for setting the policy that provides the framework for management of the U.S. Plan assets. In accordance with its responsibilities, the Fiduciary Committee meets on a regular basis to review the performance of the U.S. Plan assets and compliance with the investment policy. The policy sets forth an investment structure for managing U.S. Plan assets, including setting the asset allocation ranges, which are expected to provide an appropriate level of overall diversification required to maximize the long-term return on plan assets for a prudent and reasonable level of risk given prevailing market conditions, total investment return over the long term, and preservation of capital, while maintaining sufficient liquidity to pay the benefits of the U.S. Plan. The investment portfolio will not, at any time, have a direct investment in Teradyne stock. It may have indirect investment in Teradyne stock, if one of the funds selected by the investment manager invests in Teradyne stock. In developing the asset allocation ranges, third party asset allocation studies are periodically performed that consider the current and expected positions of the plan assets and funded status. Based on this study and other appropriate information, the Fiduciary Committee establishes asset allocation ranges taking into account acceptable risk targets and associated returns. The investment return objectives are to avoid excessive volatility and produce a rate of return that at least matches the Policy Index identified below. The manager’s investment performance is reviewed at least annually. Results for the total portfolio and for each major category of assets are evaluated in comparison with appropriate market indices and the Policy Index.

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:	Policy Index:	Target Allocation
U.S. corporate fixed income	Barclays U.S. Corporate A or Better Index		76	%
Global equity	MSCI World Minimum Volatility Index		10
U.S. government fixed income	Barclays U.S. Long Government Bond Index		8
High yield fixed income	Barclays U.S. Corporate High Yield 2% Issuer Cap Index		5
Cash	Citigroup Three Month U.S. Treasury Bill Index		1

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Teradyne’s U.S. Plan invests primarily in common trust funds. Units held in the common trust funds are valued at the unit price as reported by the investment manager based on the asset value of the underlying investments; underlying investments in equity securities are valued at the last reported sales price, and underlying investments in fixed-income securities are generally valued using methods based upon market transactions for comparable securities.

In the fourth quarter of 2015, the Trustees of the U.K. defined benefit pension plan purchased group annuity insurance contracts. The cash flows from the contracts are intended to match the plan’s obligations.

During the years ended December 31, 2016 and 2015, there were no transfers of pension assets in or out of Level 1, Level 2 or Level 3.

The fair value of pension plan assets by asset category and by level at December 31, 2016 and December 31, 2015 were as follows:

	December 31, 2016
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	246,528	$	—	$	246,528	$	—	$	—	$	—	$	—
U.S. government securities		—		24,322		—		24,322		—		—		—		—
Global equity		—		30,360		—		30,360		—		—		—		—
Group annuity insurance contracts		—		—		3,071		3,071		—		—		26,385		26,385
Other		—		—		—		—		—		1,124		—		1,124
Cash and cash equivalents		3,023		—		—		3,023		62		—		—		62
Total	$	3,023	$	301,210	$	3,071	$	307,304	$	62	$	1,124	$	26,385	$	27,571
	December 31, 2015
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	240,695	$	—	$	240,695	$	—	$	—	$	—	$	—
U.S. government securities		—		23,761		—		23,761		—		—		—		—
Global equity		—		29,193		—		29,193		—		—		—		—
Group annuity insurance contracts		—		—		2,982		2,982		—		—		26,410		26,410
Other		—		—		—		—		—		1,029		—		1,029
Cash and cash equivalents		1,773		—		—		1,773		702		—		—		702
Total	$	1,773	$	293,649	$	2,982	$	298,404	$	702	$	1,029	$	26,410	$	28,141

The pension plan assets identified as Level 3 above are related to group annuity insurance contracts held by the U.K. defined benefit pension plan and the U.S. Plan. The fair value of these assets was calculated using the present value of future pension payments due under the group annuity insurance contracts.

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Changes in the fair value of Level 3 group annuity insurance contracts for the years ended December 31, 2016 and 2015 were as follows:

	Group Annuity Insurance Contracts
	(in thousands)
Balance at December 31, 2014	$	2,990
Purchases of group annuity insurance contracts		27,313
Interest and market value adjustments		(825	)
Benefits paid		(67	)
Other		(19	)
Balance at December 31, 2015		29,392
Purchases of group annuity insurance contracts		709
Interest and market value adjustments		5,308
Benefits paid		(611	)
Other		(634	)
Non-U.S. currency movement		(4,708	)
Balance at December 31, 2016	$	29,456

Contributions

Teradyne’s funding policy is to make contributions to the plans in accordance with local laws and to the extent that such contributions are tax deductible. During 2016, Teradyne contributed $1.9 million to the U.S. Plan, $2.6 million to the U.S. supplemental executive defined benefit pension plan and $0.9 million to certain qualified plans for non-U.S. subsidiaries. During 2015, Teradyne contributed $8.0 million to the U.S. Plan, $2.5 million to the U.S. supplemental executive defined benefit pension plan and $0.8 million to certain qualified plans for non-U.S. subsidiaries. In 2017, contributions to the U.S. supplemental executive defined benefit pension plan, U.S. Plan and certain qualified plans from non-U.S. subsidiaries will be approximately $2.6 million, $1.9 million and $0.8 million, respectively.

Expected Future Pension Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2017	$	19,205	$	788
2018		18,568		754
2019		19,046		780
2020		19,768		1,054
2021		20,390		882
2022-2026		111,334		5,209

Postretirement Benefit Plans

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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The December 31 balances of the postretirement assets and obligations are shown below:

	2016			2015
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	6,030		$	7,162
Service cost		37			48
Interest cost		218			237
Plan amendments		(93	)		—
Actuarial loss (gain)		5			(648	)
Benefits paid		(687	)		(769	)
End of year		5,510			6,030
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		687			769
Benefits paid		(687	)		(769	)
End of year		—			—
Funded status	$	(5,510	)	$	(6,030	)

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2016			2015
	(in thousands)
Accrued employees’ compensation and withholdings	$	(571	)	$	(692	)
Retirement plans liability		(4,939	)		(5,338	)
Funded status	$	(5,510	)	$	(6,030	)

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016			2015
	(in thousands)
Prior service credit, before tax	$	(1,118	)	$	(1,632	)
Deferred taxes		(1,292	)		(1,100	)
Total recognized in other comprehensive income, net of tax	$	(2,410	)	$	(2,732	)

The estimated portion of prior service credit remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic postretirement benefit income in 2017 is $(0.5) million.

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Expense

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	2016			2015			2014
	(in thousands)
Components of Net Periodic Postretirement Benefit Income:
Service cost	$	37		$	48		$	59
Interest cost		218			237			335
Amortization of prior service credit		(607	)		(598	)		(598	)
Net actuarial loss (gain)		5			(648	)		(1,255	)
Total net periodic postretirement benefit income		(347	)		(961	)		(1,459	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service benefit		(93	)		—			—
Reversal of amortization items:
Prior service credit		607			598			598
Total recognized in other comprehensive income		514			598			598
Total recognized in net periodic postretirement cost (income) and other comprehensive income	$	167		$	(363	)	$	(861	)

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

	2016			2015			2014
Discount rate		3.9	%		3.5	%		4.1	%
Initial health care cost trend rate		7.5			7.5			8.0
Ultimate health care cost trend rate		5.0			5.0			5.0
Year in which ultimate health care cost trend rate is reached		2023			2022			2020

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

	2016			2015			2014
Discount rate		3.9	%		3.9	%		3.5	%
Initial medical trend		7.3			7.5			7.5
Ultimate health care trend		5.0			5.0			5.0
Medical cost trend rate decrease to ultimate rate in year		2023			2023			2022

Assumed health care trend rates could have a significant effect on the amounts reported for health care plans. A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2016 would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	2	$	(2	)
Effect on postretirement benefit obligations		44		(42	)

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Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefit Payments
	(in thousands)
2017	$	571
2018		529
2019		456
2020		409
2021		367
2022-2026		1,536

O.    STOCK-BASED COMPENSATION

Stock Compensation Plans

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”).

Stock options to purchase Teradyne’s common stock at 100% of the fair market value on the grant date vest in equal annual installments over four years from the grant date and have a maximum term of seven years.

Time-based restricted stock unit awards granted to employees vest in equal annual installments over four years. Restricted stock unit awards granted to non-employee directors vest after a one year period, with 100% of the award vesting on the first anniversary of the grant date. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.

Commencing in January 2014, Teradyne granted performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). 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; non-cash convertible debt interest expense; 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

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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.

The TSR PRSUs are valued using a Monte Carlo simulation model. During 2016, 2015 and 2014 Teradyne granted 0.1 million, 0.2 million and 0.1 million TSR PRSUs, respectively, with a grant date fair value of $20.29, $18.21 and $22.06, respectively. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	2016			2015			2014
Risk-free interest rate		0.97	%		0.77	%		0.75	%
Teradyne volatility-historical		27.0	%		28.2	%		36.1	%
NYSE Composite Index volatility-historical		13.1	%		—	%		—	%
Philadelphia Semiconductor Index volatility-historical		—	%		19.7	%		24.6	%
Dividend yield		1.24	%		1.33	%		1.25	%

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 and 2014 grants, 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 for 2016, 2015 and 2014 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 grants, $18.10 for the 2015 grants, and $19.16 for the 2014 grants.

Stock Options Valuation Assumptions:

The total number of stock options granted in 2016, 2015 and 2014 were 0.1 million, 0.1 million and 0.1 million, respectively, at the weighted average grant date fair value of $5.30, $4.43 and $5.49 per share, respectively. The fair value of the stock options at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:

	2016			2015			2014
Expected life (years)		5.0			4.0			4.0
Risk-free interest rate		1.4	%		1.1	%		1.2	%
Volatility-historical		32.9	%		33.4	%		38.8	%
Dividend yield		1.24	%		1.33	%		1.25	%

Teradyne determined the stock option’s expected life based upon historical exercise data for executive officers, the age of executives and the terms of the stock option award. Volatility was determined using historical volatility for a period equal to the expected life. The 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 grants, $18.10 for the 2015 grants, and $19.16 for the 2014 grants.

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Stock compensation plan activity for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
	(in thousands)
Restricted Stock Units:
Non-vested at January 1		4,070			4,352			4,636
Awarded		1,471			1,681			1,870
Vested		(1,530	)		(1,679	)		(1,965	)
Forfeited		(233	)		(284	)		(189	)
Non-vested at December 31		3,778			4,070			4,352
Stock Options:
Outstanding at January 1		1,121			1,507			2,706
Granted		130			132			89
Exercised		(324	)		(518	)		(1,248	)
Forfeited		—			—			(38	)
Expired		(2	)		—			(2	)
Outstanding at December 31		926			1,121			1,507
Vested and expected to vest at December 31		926			1,121			1,507
Exercisable at December 31		598			779			1,089

Total shares available for the years 2016, 2015 and 2014:

	2016			2015			2014
	(in thousands)
Shares available:
Available for grant at January 1		10,914			12,443			14,213
Options granted		(130	)		(132	)		(89	)
Restricted stock units awarded		(1,471	)		(1,681	)		(1,870	)
Restricted stock units forfeited		233			284			189
Available for grant at December 31		9,546			10,914			12,443

Weighted average restricted stock unit award date fair value information for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Non-vested at January 1	$	17.46	$	17.24	$	15.60
Awarded		18.68		17.36		18.41
Vested		17.21		16.85		14.38
Forfeited		17.57		17.08		16.97
Non-vested at December 31	$	18.03	$	17.46	$	17.24

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Vested	$	30,008	$	32,200	$	37,160
Outstanding		95,952		84,129		86,113
Expected to vest		91,871		79,611		81,582

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Restricted stock units weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		1.04		1.09		1.11
Expected to vest		1.03		1.08		1.10

Weighted average stock options exercise price information for the year ended December 31, 2016 follows:

	2016
Outstanding at January 1	$	10.21
Options granted		19.43
Options exercised		9.06
Options expired		3.07
Outstanding at December 31		11.93
Exercisable at December 31		8.32

The total cash received from employees as a result of employee stock options exercises during the years ended December 31, 2016, 2015 and 2014, was $2.9 million, $2.8 million and $6.7 million, respectively. In connection with these exercises, the tax benefit realized by Teradyne for the years ended December 31, 2016, 2015 and 2014, was $0.8 million, $2.1 million and $5.7 million, respectively.

Stock option aggregate intrinsic value information for the years ended December 31, 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Exercised	$	3,729	$	7,255	$	17,847
Outstanding		12,468		11,729		17,936
Vested and expected to vest		12,468		11,729		17,936
Exercisable		10,217		10,716		16,101

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		3.9		4.2		4.5
Vested and expected to vest		3.9		4.2		4.5
Exercisable		3.2		3.9		4.2

Significant option groups outstanding at December 31, 2016 and related weighted average price and remaining contractual life information follow:

	Options Outstanding						Options Exercisable
Range Of Exercise Prices	Weighted- Average  Remaining Contractual Life (Years)		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
	(shares in thousands)
$1.48 – $2.67		3.74		294	$	2.31		294	$	2.31
$3.23 – $7.71		1.77		75		4.26		75		4.26
$16.23 – $18.10		3.51		338		17.18		185		16.87
$19.16 – $19.43		5.26		219		19.32		44		19.16
				926		11.93		598		8.32

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As of December 31, 2016, total unrecognized expense related to non-vested restricted stock unit awards and stock options was $40.6 million, and is expected to be recognized over a weighted average period of 2.3 years.

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

Employee Stock Purchase Plan

Under the Teradyne 1996 Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of common stock through regular payroll deductions of up to 10% of their compensation, to a maximum of shares with a fair market value of $25,000 per calendar year, not to exceed 6,000 shares. Under the plan, the price paid for the common stock is equal to 85% of the stock price on the last business day of the six-month purchase period.

In July 2016, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2016, at the price of $16.74 per share. In January 2017, Teradyne issued 0.4 million shares of common stock to employees who participated in the plan during the second half of 2016, at the price of $21.59 per share.

In July 2015, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2015, at the price of $16.40 per share. In January 2016, Teradyne issued 0.5 million shares of common stock to employees who participated in the plan during the second half of 2015, at the price of $17.57 per share.

In July 2014, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2014, at the price of $16.66 per share. In January 2015, Teradyne issued 0.5 million shares of common stock to employees who participated in the plan during the second half of 2014, at the price of $16.82 per share.

As of December 31, 2016, there were 3.9 million shares available for grant under the ESPP.

The effect to income from operations for recording stock-based compensation for the years ended December 31 was as follows:

	2016			2015			2014
	(in thousands)
Cost of revenues	$	3,153		$	3,065		$	3,675
Engineering and development		9,458			9,362			10,146
Selling and administrative		18,139			18,024			26,486
Stock-based compensation		30,750			30,451			40,307
Income tax benefit		(8,752	)		(8,528	)		(11,537	)
Total stock-based compensation expense after income taxes	$	21,998		$	21,923		$	28,770

P.    SAVINGS PLAN

Teradyne sponsors a defined contribution employee retirement savings plan (“Savings Plan”) covering substantially all U.S. employees. Under the Savings Plan, employees may contribute up to 20% of their

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compensation (subject to Internal Revenue Service limitations). The Savings Plan provides for a discretionary employer match that is determined each year. In 2016, 2015 and 2014, Teradyne matched 100% of eligible employee contributions up to 4% of their compensation for employees not accruing benefits in the U.S. Qualified Pension Plan. There was no match for employees still actively accruing benefits in the U.S. Qualified Pension Plan. Teradyne’s contributions vest 25% per year for the first four years of employment, and contributions for those employees with four years of service vest immediately.

In addition, Teradyne established an unfunded U.S. Supplemental Savings Plan to provide savings benefits in excess of those allowed by Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. The provisions of this plan are the same as the Savings Plan. Teradyne also established defined contribution savings plans for its foreign employees. Under Teradyne’s savings plans, amounts charged to the statements of operations for the years ended December 31, 2016, 2015 and 2014 were $14.5 million, $13.5 million and $12.8 million, respectively.

Q.    INCOME TAXES

The components of (loss) income before income taxes and the (benefit) provision for income taxes as shown in the consolidated statements of operations were as follows:

	2016			2015			2014
	(in thousands)
(Loss) income before income taxes:
U.S.	$	(341,018	)	$	56,270		$	(151,889	)
Non-U.S.		285,958			196,854			247,265
	$	(55,060	)	$	253,124		$	95,376
(Benefit) provision for income taxes:
Current:
U.S. Federal	$	7,750		$	16,635		$	5,197
Non-U.S.		41,579			35,707			28,157
State		1,968			1,429			678
		51,297			53,771			34,032
Deferred:
U.S. Federal		(51,482	)		(574	)		(20,449	)
Non-U.S.		(9,240	)		(7,761	)		(404	)
State		(2,214	)		1,211			925
		(62,936	)		(7,124	)		(19,928	)
Total (benefit) provision for income taxes:	$	(11,639	)	$	46,647		$	14,104

Income tax benefit for 2016 totaled $11.6 million. Income tax expense for 2015 and 2014 totaled $46.6 million and $14.1 million, respectively. The effective tax rate for 2016, 2015 and 2014 was 21.1%, 18.4% and 14.8%, respectively.

The increase in the effective tax rate from 2015 to 2016 resulted from a shift in the geographic distribution of income which decreased income subject to taxation in the U.S. relative to lower tax rate jurisdictions, reductions in uncertain tax positions resulting from the expiration of statutes and the settlement of an audit, and an increase in non-taxable foreign exchange gains. These increases in the effective tax rate were partially offset by the effect of the non-deductible goodwill impairment charge, which reduced the benefit of the loss before income taxes in the U.S.

The increase in the effective tax rate from 2014 to 2015 resulted from a shift in the geographic distribution of income which increased income subject to taxation in the U.S. relative to lower tax rate jurisdictions and a

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reduction in the benefit from U.S. research and development tax credits. These increases in the effective tax rate were partially offset by decreases associated with uncertain tax positions and a non-deductible goodwill impairment charge.

A reconciliation of the effective tax rate for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
U.S. statutory federal tax rate		35.0	%		35.0	%		35.0	%
Foreign taxes		127.1			(16.5	)		(58.1	)
U.S. research and development credit		15.8			(3.0	)		(7.9	)
Domestic production activities deduction		2.3			(1.0	)		(0.5	)
State income taxes, net of federal tax benefit		2.3			0.4			(0.1	)
Equity compensation		(2.7	)		0.6			(1.8	)
Uncertain tax positions		(2.6	)		2.2			7.9
Goodwill impairment		(162.1	)		—			36.3
Other, net		6.0			0.7			4.0
		21.1	%		18.4	%		14.8	%

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 attributable to the tax holiday for the years ended December 31, 2016, 2015 and 2014 were $17.0 million or $0.08 per diluted share, $11.5 million or $0.05 per diluted share and $13.2 million or $0.06 per diluted share, respectively. The tax holiday is scheduled to expire on December 31, 2020.

Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:

	2016			2015
	(in thousands)
Deferred tax assets:
Tax credits	$	57,313		$	44,684
Pension liabilities		31,581			31,742
Inventory valuations		31,227			29,445
Accruals		27,247			26,563
Deferred revenue		12,806			10,232
Equity compensation		9,922			9,674
Vacation accrual		7,874			7,354
Net operating loss carryforwards		5,244			7,989
Other		630			502
Gross deferred tax assets		183,844			168,185
Less: valuation allowance		(48,369	)		(43,039	)
Total deferred tax assets	$	135,475		$	125,146
Deferred tax liabilities:
Intangible assets	$	(22,887	)	$	(68,433	)
Depreciation		(17,117	)		(20,541	)
Marketable securities		(210	)		(458	)
Total deferred tax liabilities	$	(40,214	)	$	(89,432	)
Net deferred assets	$	95,261		$	35,714

During 2016, Teradyne’s valuation allowance increased by $5.3 million primarily due to the increase in the deferred tax assets related to state tax credits generated in 2016.

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As of December 31, 2016 and 2015, Teradyne evaluated the likelihood that it would realize the deferred income taxes to offset future taxable income and concluded that it is more likely than not that a substantial majority of its deferred tax assets will be realized through consideration of both the positive and negative evidence. At December 31, 2016 and 2015, Teradyne maintained a valuation allowance for certain deferred tax assets of $48.4 million and $43.0 million, respectively, primarily related to state net operating losses and state tax credit carryforwards, due to the uncertainty regarding their realization. Adjustments could be required in the future if Teradyne estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded.

At December 31, 2016, Teradyne had operating loss carryforwards that expire in the following years:

	State Operating Loss Carryforwards		Foreign Operating  Loss Carryforwards
	(in thousands)
2017	$	10,245	$	—
2018		8,562		—
2019		983		—
2020		1,248		—
2021		3,549		—
2022-2026		18,044		—
2027-2031		38,498		—
Beyond 2031		5,464		129
Non-expiring		—		6,400
Total	$	86,593	$	6,529

The operating loss carryforwards do not include any excess tax deduction related to stock-based compensation, which has not been recognized for financial statements purposes.

Teradyne has approximately $134.6 million of tax credit carryforwards including federal business tax credits of approximately $45.3 million which expire in the years 2017 through 2036, alternative minimum tax credits of approximately $8.7 million which do not expire, and state tax credits of $80.6 million, of which $47.4 million do not expire and the remainder expires in the years 2017 through 2031.

Teradyne has federal tax credits of $39.1 million, that are attributable to stock-based compensation deductions, which will be recorded as an increase to retained earnings and deferred tax assets upon adoption, in the first quarter of 2017, of ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.”

Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014 were as follows:

	2016			2015			2014
	(in thousands)
Beginning balance as of January 1	$	36,792		$	30,418		$	21,203
Additions:
Tax positions for current year		9,766			6,626			8,414
Tax positions for prior years		187			792			3,781
Reductions:
Expiration of statutes		(3,532	)		—			—
Settlements with tax authorities		(2,295	)		(336	)		(500	)
Tax positions for prior years		(1,960	)		(708	)		(2,480	)
Ending balance as of December 31	$	38,958		$	36,792		$	30,418

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Current year and prior year additions include assessment of potential transfer pricing issues worldwide, federal and state tax credits and incentives, capitalization rules, and domestic production activities deductions. Reductions for tax positions for prior years primarily relate to statute expiration and the settlement tax audits. Of the $39.0 million of unrecognized tax benefits as of December 31, 2016, $27.6 million would impact the consolidated income tax rate if ultimately recognized. The remaining $11.4 million would impact deferred taxes if recognized. Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits as of December 31, 2016 may decrease approximately $0.8 million in the next twelve months, as a result of a lapse of statutes of limitation. The estimated decrease is composed primarily of reserves relating to the U.S. research and development credits.

Teradyne records all interest and penalties related to income taxes as a component of income tax expense. Accrued interest and penalties related to income tax items at December 31, 2016 and 2015 amounted to $0.4 million and $0.5 million respectively. For the years ended December 31, 2016, 2015 and 2014, benefit of $0.1 million, benefit of $0.2 million and expense of $0.2 million respectively, was recorded for interest and penalties related to income tax items.

Teradyne is subject to U.S. federal income tax, as well as income tax in multiple state, local and foreign jurisdictions. As of December 31, 2016, all material state and local income tax matters have been concluded through 2008, all material federal income tax matters have been concluded through 2012 and all material foreign income tax matters have been concluded through 2009. However, in some jurisdictions, including the United States, operating losses and tax credits may be subject to adjustment until such time as they are utilized and the year of utilization is closed to adjustment.

As of December 31, 2016, a deferred tax liability has not been established for approximately $1,020 million of cumulative undistributed earnings of non-U.S. subsidiaries, which are expected to be reinvested indefinitely in operations outside the U.S. except for instances where Teradyne can remit such earnings to the U.S. without an associated net tax cost. Determination of the unrecognized deferred tax liability on unremitted earnings 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.

R.    OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

Teradyne has four operating segments (Semiconductor Test, System Test, Industrial Automation, and Wireless Test), which are its reportable segments. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The 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 Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robots. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. Each operating segment has a segment manager who is directly accountable to and maintains regular contact with Teradyne’s chief operating decision maker (Teradyne’s chief executive officer) to discuss operating activities, financial results, forecasts, and plans for the segment.

Teradyne evaluates performance using several factors, of which the primary financial measure is business segment income (loss) from operations before taxes. The accounting policies of the business segments are the same as those described in Note B: “Accounting Policies.”

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Segment information for the years ended December 31, 2016, 2015 and 2014 is as follows:

	Semiconductor Test		System Test		Industrial Automation			Wireless Test			Corporate And Eliminations			Consolidated
	(in thousands)
2016
Revenues	$	1,368,169	$	189,846	$	99,031		$	96,204		$	—		$	1,753,250
Income (loss) before taxes (1)(2)		311,939		28,916		(16,783	)		(371,409	)		(7,723	)		(55,060	)
Total assets (3)		557,546		110,361		317,635			62,366			1,714,585			2,762,493
Property additions		70,543		3,788		6,755			4,186			—			85,272
Depreciation and amortization expense		58,087		6,551		26,869			25,921			2,581			120,009
2015
Revenues	$	1,201,530	$	211,584	$	41,892		$	184,572		$	—		$	1,639,578
Income (loss) before taxes (1)(2)		260,154		25,101		(7,574	)		(13,830	)		(10,727	)		253,124
Total assets (3)		610,869		102,547		344,260			427,880			1,063,118			2,548,674
Property additions		79,052		6,228		1,465			3,133			—			89,878
Depreciation and amortization expense		64,415		4,391		14,500			53,440			4,027			140,773
2014
Revenues	$	1,300,790	$	162,499	$	—		$	184,535		$	—		$	1,647,824
Income (loss) before taxes (1)(2)		255,803		12,116		—			(116,196	)		(56,347	)		95,376
Total assets (3)		580,501		95,105		—			478,974			1,383,940			2,538,520
Property additions		159,783		5,469		—			3,730			—			168,982
Depreciation and amortization expense		84,990		5,399		—			53,308			8,847			152,544

(1) Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

(2) Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

(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 accounts:

	For the Years Ended December 31,
	2016		2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	9,656	$	10,508	$	14,389
Restructuring and other		2,860		499		490

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

	For the Years Ended December 31,
	2016			2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	630		$	8,324	$	2,125
Restructuring and other		(49	)		1,037		742

99

Included in the Industrial Automation segment are charges in the following accounts:

	For the Years Ended December 31,
	2016		2015		2014
	(in thousands)
Restructuring and other	$	585	$	—	$	—
Cost of revenues-inventory step-up (1)		—		1,567		—

(1) Included in the cost of revenues for the year ended December 31, 2015 is the cost for purchase accounting inventory step-up.

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

	For the Years Ended December 31,
	2016		2015		2014
	(in thousands)
Goodwill impairment charge	$	254,946	$	—	$	98,897
Acquired intangible assets impairment charge		83,339		—		—
Cost of revenues—inventory charge		7,207		2,500		5,679
Restructuring and other		2,650		—		565

Included in the Corporate and Eliminations segment are charges and credits in the following accounts:

	For the Years Ended December 31,
	2016			2015			2014
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	15,346		$	5,339		$	—
Restructuring and other—Impairment of fixed assets and expenses related to Japan Earthquake		5,363			—			—
Restructuring and other—Property insurance recovery		(5,363	)		—			—
Restructuring and other—ZTEC contingent consideration adjustment		—			(1,600	)		(630	)
Restructuring and other—AIT contingent consideration adjustment		550			(1,250	)		—
Restructuring and other—Acquisition costs		—			1,104			372
Restructuring and other		—			—			198
Other (income) expense, net—Gain from the sale of an equity investment		—			(5,406	)		—
Selling and administrative—Stock based compensation expense (1)		—			—			6,598
Total	$	15,896		$	(1,813	)	$	6,538

(1) Expense related to the January 2014 retirement of Teradyne’s former chief executive officer; see Note O: “Stock-Based Compensation.”

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Information as to Teradyne’s revenues by country is as follows:

	2016		2015		2014
	(in thousands)
Revenues from customers (1):
Taiwan	$	653,076	$	436,389	$	495,942
United States		221,948		217,386		213,104
China		174,876		264,898		292,145
Korea		147,882		120,224		145,608
Japan		135,978		128,228		63,761
Europe		117,671		111,903		111,043
Malaysia		103,472		76,707		83,910
Singapore		73,172		105,216		119,421
Philippines		54,705		96,103		68,662
Thailand		43,097		59,104		44,117
Rest of the World		27,373		23,420		10,111
	$	1,753,250	$	1,639,578	$	1,647,824

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

In 2016, two customers of Teradyne’s Semiconductor Test segment each accounted for 12% of total consolidated revenues. In 2015, one customer of Teradyne’s Semiconductor Test segment accounted for 13% of total consolidated revenues. In 2014, no single customer accounted for more than 10% of total consolidated revenues. Teradyne estimates product demand driven by a single OEM customer, combining direct sales to that customer with sales to the customer’s outsourced semiconductor assembly and test providers (“OSATs”), accounted for approximately 25%, 23%, and 22% of Teradyne’s consolidated revenues in 2016, 2015 and 2014, respectively.

Long-lived assets by geographic area:

	United States		Foreign(1)		Total
	(in thousands)
December 31, 2016	$	189,195	$	64,626	$	253,821
December 31, 2015	$	198,424	$	74,990	$	273,414

(1) As of December 31, 2016 and 2015, long-lived assets attributable to Singapore were $31.5 million and $39.9 million, respectively.

S.    STOCK REPURCHASE PROGRAM

In January 2015, the Board of Directors cancelled the November 2010 stock repurchase program and authorized a new stock repurchase program for up to $500 million of common stock. The cumulative repurchases as of December 31, 2016 totaled 22.5 million shares of common stock for $446 million at an average price per share of $19.87. The total price includes commissions and is recorded as a reduction to retained earnings.

In December 2016, the Board of Directors approved a new $500 million share repurchase authorization which commenced on January 1, 2017. Teradyne intends to repurchase at least $200 million in 2017. Teradyne’s January 2015 stock repurchase program was terminated on December 31, 2016.

T.    SUBSEQUENT EVENTS

In January 2017, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.07 per share to be paid on March 20, 2017 to shareholders of record as of February 24, 2017.

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.

101

SUPPLEMENTARY INFORMATION

(Unaudited)

The following sets forth certain unaudited consolidated quarterly statements of operations data for each of Teradyne’s last eight quarters. In management’s opinion, this quarterly information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement for the periods presented. Such quarterly results are not necessarily indicative of future results of operations and should be read in conjunction with the audited consolidated financial statements of Teradyne and the notes thereto included elsewhere herein.

	2016
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	(1)(5)			(2)(5)			(3)(5)			(4)(5)
	(in thousands, except per share amounts)
Revenues:
Products	$	358,139		$	456,832		$	334,610		$	303,667
Services		72,855			74,960			75,865			76,322
Total revenues		430,994			531,792			410,475			379,989
Cost of revenues:
Cost of products		167,555			215,795			148,266			127,481
Cost of services		33,107			33,127			34,850			33,502
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		200,662			248,922			183,116			160,983
Gross profit		230,332			282,870			227,359			219,006
Operating expenses:
Engineering and development		73,464			76,109			71,400			70,052
Selling and administrative		79,174			81,425			78,794			76,289
Acquired intangible assets amortization		19,994			16,244			8,487			7,923
Acquired intangible assets impairment		—			83,339			—			—
Goodwill impairment		—			254,946			—			—
Restructuring and other		1,587			2,608			12,177			5,570
Total operating expenses		174,219			514,671			170,858			159,834
Income (loss) from operations		56,113			(231,801	)		56,501			59,172
Non-operating (income) expense:
Interest income		(1,642	)		(1,666	)		(2,892	)		(3,095	)
Interest expense		710			691			633			1,604
Other (income) expense, net		(147	)		(9	)		(921	)		1,779
Income (loss) before income taxes		57,192			(230,817	)		59,681			58,884
Income tax provision (benefit)		7,206			(7,271	)		(4,113	)		(7,461	)
Net income (loss)	$	49,986		$	(223,546	)	$	63,794		$	66,345
Net income (loss) per common share—basic	$	0.24		$	(1.10	)	$	0.32		$	0.33
Net income (loss) per common share—diluted	$	0.24		$	(1.10	)	$	0.31		$	0.33
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(2) Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of

102

contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

(3) Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(4) Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(5) Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

	2015
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
				(3)			(4)			(1)(2)
	(in thousands, except per share amounts)
Revenues:
Products	$	272,325		$	437,243		$	386,488		$	244,510
Services		70,076			75,496			79,506			73,934
Total revenues		342,401			512,739			465,994			318,444
Cost of revenues:
Cost of products		118,996			181,491			170,963			120,322
Cost of services		30,982			32,680			36,405			32,096
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		149,978			214,171			207,368			152,418
Gross profit		192,423			298,568			258,626			166,026
Operating expenses:
Engineering and development		71,450			75,832			74,027			70,941
Selling and administrative		72,041			77,073			77,481			79,718
Acquired intangible assets amortization		13,808			15,258			20,053			19,911
Restructuring and other		—			(385	)		261			5,204
Total operating expenses		157,299			167,778			171,822			175,774
Income (loss) from operations		35,124			130,790			86,804			(9,748	)
Non-operating (income) expense:
Interest income		(1,816	)		(1,674	)		(1,708	)		(2,017	)
Interest expense		162			444			508			762
Other (income) expense, net		(5,660	)		(116	)		596			364
Income (loss) before income taxes		42,438			132,136			87,408			(8,857	)
Income tax provision (benefit)		9,651			29,257			15,955			(8,216	)
Net income (loss)	$	32,787		$	102,879		$	71,453		$	(641	)
Net income (loss) per common share—basic	$	0.15		$	0.48		$	0.34		$	(0.00	)
Net income (loss) per common share—diluted	$	0.15		$	0.48		$	0.34		$	(0.00	)
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

(2) In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

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(3) Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

(4) Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

Item 9: Changes in and disagreements with accountants on accounting and financial disclosure

None.

Item 9A: Controls and procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, our management, with the participation of our CEO and CFO, 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 CEO and CFO 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 by us 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 CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting during the fourth fiscal quarter ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of December 31, 2016.

The effectiveness of our internal control over financial reporting as of December 31, 2016 has been audited by PricewaterhouseCoopers LLP, our independent registered public accounting firm, as stated in their report which is included under Item 8 of this Annual Report.

Inherent Limitations on Effectiveness of Controls

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B: Other Information

None.

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PART III

Item 10: Directors, Executive Officers and Corporate Governance

Certain information relating to our directors and executive officers, committee information, reports and charters, executive compensation, security ownership of certain beneficial owners and management and related stockholder matters, and certain relationships and related transactions is incorporated by reference herein from our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held on May 9, 2017. The proxy statement will be filed with the SEC not later than 120 days after the close of the fiscal year. For this purpose, the Compensation Committee Report included in such proxy statement is specifically not incorporated herein. Also see “Item 1: Business—Our Executive Officers.”

Item 11: Executive Compensation

Certain information relating to our directors and executive officers, executive compensation, security ownership of certain beneficial owners and management and related stockholder matters, and certain relationships and related transactions is incorporated by reference herein from our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held on May 9, 2017. The proxy statement will be filed with the SEC not later than 120 days after the close of the fiscal year. For this purpose, the Compensation Committee Report included in such proxy statement is specifically not incorporated herein.

Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain information relating to our directors and executive officers, executive compensation, security ownership of certain beneficial owners and management and related stockholder matters, and certain relationships and related transactions is incorporated by reference herein from our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held May 9, 2017. The proxy statement will be filed with the SEC not later than 120 days after the close of the fiscal year. For this purpose, the Compensation Committee Report included in such proxy statement is specifically not incorporated herein. Also see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Equity Compensation Plans.”

Item 13: Certain Relationships and Related Transactions, and Director Independence

Certain information relating to our directors and executive officers, executive compensation, security ownership of certain beneficial owners and management and related stockholder matters, and certain relationships and related transactions is incorporated by reference herein from our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held on May 9, 2017. The proxy statement will be filed with the SEC not later than 120 days after the close of the fiscal year. For this purpose, the Compensation Committee Report included in such proxy statement is specifically not incorporated herein.

Item 14: Principal Accountant Fees and Services

Certain information relating to audit fees and other of Teradyne’s independent registered public accounting firm is incorporated by reference herein from our definitive proxy statement in connection with our Annual Meeting of Shareholders to be held on May 9, 2017. The proxy statement will be filed with the SEC not later than 120 days after the close of the fiscal year. For this purpose, the Audit Committee Report included in such proxy statement is specifically not incorporated herein.

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PART IV

Item 15: Exhibits and Financial Statement Schedules.

15(a)(1) Financial Statements

The following consolidated financial statements are included in Item 8:

	Page
Report of Independent Registered Public Accounting Firm		44
Consolidated Balance Sheets as of December 31, 2016 and 2015		45
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014		46
Consolidated Statements of Comprehensive (Loss) Income for the years ended December  31, 2016, 2015 and 2014		47
Consolidated Statements of Shareholders’ Equity for the years ended December  31, 2016, 2015 and 2014		48
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014		49

15(a)(2) Financial Statement Schedule

The following consolidated financial statement schedule is included in Item 15(c):

Schedule II—Valuation and Qualifying Accounts

Schedules other than those listed above have been omitted since they are either not required or information is otherwise included.

15(a)(3) Listing of Exhibits

The Exhibits which are filed with this report or which are incorporated by reference herein are set forth in the Exhibit Index.

15(c) Financial Statement Schedules

106

TERADYNE, INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Accounts receivable:
2016 Allowance for doubtful accounts	$	2,407	$	—	$	—	$	51	$	2,356
2015 Allowance for doubtful accounts	$	2,491	$	—	$	—	$	84	$	2,407
2014 Allowance for doubtful accounts	$	2,912	$	55	$	—	$	476	$	2,491

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Inventory:
2016 Inventory reserve	$	119,376	$	17,493	$	4,417	$	25,270	$	116,016
2015 Inventory reserve	$	111,252	$	21,332	$	1,680	$	14,888	$	119,376
2014 Inventory reserve	$	115,857	$	22,193	$	7,064	$	33,862	$	111,252

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Deferred taxes:
2016 Valuation allowance	$	43,039	$	5,413	$	—	$	83	$	48,369
2015 Valuation allowance	$	41,737	$	1,322	$	—	$	20	$	43,039
2014 Valuation allowance	$	40,386	$	1,380	$	—	$	29	$	41,737

Item 16: Form 10-K Summary

Not applicable.

107

EXHIBIT INDEX

The following designated exhibits are, as indicated below, either filed herewith or have heretofore been filed with the Securities and Exchange Commission and are referred to and incorporated by reference to such filings.

Exhibit No.	Description	SEC Document Reference
2.1	Share Sale and Purchase Agreement by and among Teradyne Holdings Denmark ApS, Teradyne Inc. and the shareholders of Universal Robots A/S dated May 13, 2015.	Exhibit 2.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended July 5, 2015.
3.1	Restated Articles of Organization, as amended.	Exhibit 3.01 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2000.
3.2	Amended and Restated By-laws, as amended.	Exhibit 3.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
4.1	Indenture dated as of December 12, 2016, between Teradyne Inc and Wilmington Trust, National Association, as trustee	Exhibit 4.1 to Teradyne’s Current Report on Form 8-K filed on December 12, 2016
10.1†	Standard Manufacturing Agreement entered into as of November 24, 2003 by and between Teradyne and Solectron.	Exhibit 10.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
10.2†	Amendment 1 to Standard Manufacturing Agreement, dated as of January 18, 2007, by and between Teradyne and Solectron.	Exhibit 10.2 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
10.3†	Second Amendment to Standard Manufacturing Agreement, dated as of August 27, 2007, by and between Teradyne and Solectron.	Exhibit 10.3 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.
10.4	Fifth Amendment to Standard Manufacturing Agreement, dated as of July 17, 2009, by and between Teradyne and Flextronics Corporation.	Exhibit 10.4 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
10.5†	Sixth Amendment to Standard Manufacturing Agreement, dated as of July 27, 2009, by and between Teradyne and Flextronics Corporation.	Exhibit 10.5 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.
10.6	Addendum to Standard Manufacturing Agreement (Authorized Purchase Agreement)—Revised July 1, 2010.	Exhibit 10.6 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
10.7	Eighth Amendment to Standard Manufacturing Agreement, dated as of April 13, 2012, by and between Teradyne and Flextronics Sales & Marketing North Asia (L) LTD.	Exhibit 10.7 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

108

Exhibit No.	Description	SEC Document Reference
10.8†	Ninth Amendment to Standard Manufacturing Agreement, dated as of September 17, 2012, by and between Teradyne and Flextronics Sales & Marketing North Asia (L) LTD.	Exhibit 10.8 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
10.9	2006 Equity and Cash Compensation Incentive Plan, as amended.*	Filed herewith.
10.10	Form of Performance-Based Restricted Stock Unit Agreement for Executive Officers under 2006 Equity and Cash Compensation Incentive Plan.*	Filed herewith.
10.11	Form of Time-Based Restricted Stock Unit Agreement for Executive Officers under 2006 Equity and Cash Compensation Incentive Plan.*	Filed herewith.
10.12	Form of Restricted Stock Unit Agreement for Directors under 2006 Equity and Cash Compensation Incentive Plan.*	Filed herewith.
10.13	1996 Employee Stock Purchase Plan, as amended.*	Appendix B to Teradyne’s Notice and Proxy Statement on Schedule 14A filed April 11, 2013.
10.14	Form of Executive Officer Stock Option Agreement under 2006 Equity and Cash Compensation Incentive Plan, as amended.*	Filed herewith.
10.15	Deferral Plan for Non-Employee Directors, as amended.*	Exhibit 10.2 to Teradyne’s Quarterly Report on form 10-Q for the quarter ended September 28, 2008.
10.16	Supplemental Savings Plan, as amended and restated.*	Exhibit 10.18 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
10.17	Supplemental Executive Retirement Plan, as restated.*	Exhibit 10.19 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
10.18	Agreement Regarding Termination Benefits dated January 22, 2014 between Teradyne and Mark Jagiela.*	Exhibit 10.24 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
10.19	Employment Agreement dated August 9, 2004 between Teradyne and Gregory R. Beecher.*	Exhibit 10.40 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2004.
10.20	Employment Agreement dated May 7, 2004 between Teradyne and Mark Jagiela.*	Exhibit 10.37 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2004.

109

Exhibit No.	Description	SEC Document Reference
10.21	Amended and Restated Executive Officer Change in Control Agreement dated December 30, 2008 between Teradyne and Gregory R. Beecher, as amended.*	Exhibit 10.28 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
10.22	Executive Officer Change in Control Agreement dated January 22, 2014 between Teradyne and Mark Jagiela, as amended.*	Exhibit 10.29 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
10.23	Amended and Restated Executive Officer Change in Control Agreement dated May 26, 2009 between Teradyne and Charles J. Gray, as amended.*	Exhibit 10.30 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
10.24	Employment Agreement dated July 24, 2009 between Teradyne and Charles J. Gray.*	Exhibit 10.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended April 4, 2010.
10.25	Amended and Restated Executive Officer Change in Control Agreement dated June 30, 2012 between Teradyne and Walter G. Vahey, as amended.*	Exhibit 10.32 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
10.26	Employment Agreement dated February 6, 2013 between Teradyne and Walter G. Vahey.*	Exhibit 10.33 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
10.27	Executive Officer Change in Control Agreement dated September 1, 2014 between Teradyne, Inc. and Bradford Robbins.*	Exhibit 10.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2014.
10.28	Employment Agreement dated September 1, 2014 between Teradyne, Inc. and Bradford Robbins.*	Exhibit 10.2 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended September 28, 2014.
10.29	Executive Change in Control Agreement dated February 8, 2016 between Teradyne, Inc. and Greg Smith.	Exhibit 10.1 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended April 13, 2016.
10.30	Employment Agreement dated February 8, 2016 between Teradyne, Inc. and Greg Smith.	Exhibit 10.2 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended April 13, 2016.
10.31	Form of Indemnification Agreement.*	Exhibit 10.24 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006.
10.32	Nextest Systems Corporation 1998 Equity Incentive Plan, as amended.	Exhibit 10.33 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
10.33	Nextest Systems Corporation 2006 Equity Incentive Plan.	Exhibit 10.34 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

110

Exhibit No.	Description	SEC Document Reference
10.34	Eagle Test Systems, Inc. 2003 Stock Option and Grant Plan.	Exhibit 10.35 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
10.35	Eagle Test Systems, Inc. 2006 Stock Option and Incentive Plan.	Exhibit 10.36 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
10.36	LitePoint Corporation 2002 Stock Plan.	Exhibit 10.42 to Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
10.37	Credit Agreement among Teradyne, Inc., Barclays Bank PLC, as the administrative agent and collateral agent, and the lenders party thereto dated April 27, 2015.	Exhibit 10.1 to Teradyne’s Current Report on Form 8-K filed May 1, 2015.
10.38	Amendment No. 1 to Credit Agreement dated as of May 19, 2015 among Teradyne Inc., Barclays Bank PLC, as the administrative agent, and the lenders party thereto.	Exhibit 10.2 to Teradyne’s Quarterly Report on Form 10-Q for the quarter ended July 5, 2015.
10.39	Letter Agreement, dated December 6, 2016, between Barclays Bank PLC and Teradyne, Inc., regarding the Base Warrants.	Exhibit 10.1 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.40	Letter Agreement, dated December 6, 2016, between Bank of America, N.A., and Teradyne, Inc. regarding the Base Warrants.	Exhibit 10.2 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.41	Letter Agreement, dated December 6, 2016, between Wells Fargo Bank, National Association and Teradyne, Inc. regarding the Base Warrants.	Exhibit 10.3 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.42	Letter Agreement, dated December 6, 2016, between Barclays Bank PLC and Teradyne, Inc. regarding the Base Call Option Transaction.	Exhibit 10.4 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.43	Letter Agreement, dated December 6, 2016, between Bank of America, N.A. and Teradyne, Inc. regarding the Base Call Option Transaction.	Exhibit 10.5 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.44	Letter Agreement, dated December 6, 2016, between Wells Fargo Bank, National Association and Teradyne, Inc. regarding the Base Call Option Transaction.	Exhibit 10.6 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.45	Letter Agreement, dated December 9, 2016, between Barclays Bank PLC and Teradyne, Inc., regarding the Additional Warrants	Exhibit 10.7 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.

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Exhibit No.	Description	SEC Document Reference
10.46	Letter Agreement, dated December 9, 2016, between Bank of America, N.A., and Teradyne, Inc. regarding the Additional Warrants.	Exhibit 10.8 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.47	Letter Agreement, dated December 9, 2016, between Wells Fargo Bank, National Association and Teradyne, Inc. regarding the Additional Warrants.	Exhibit 10.9 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.48	Letter Agreement, dated December 9, 2016, between Barclays Bank PLC and Teradyne, Inc. regarding the Additional Call Option Transaction.	Exhibit 10.10 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.49	Letter Agreement, dated December 9, 2016, between Bank of America, N.A. and Teradyne, Inc. regarding the Additional Call Option Transaction	Exhibit 10.11 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
10.50	Letter Agreement, dated December 9, 2016, between Wells Fargo Bank, National Association and Teradyne, Inc. regarding the Additional Call Option Transaction.	Exhibit 10.12 to Teradyne’s Current Report on Form 8-K filed December 12, 2016.
21.1	Subsidiaries of Teradyne.	Filed herewith.
23.1	Consent of PricewaterhouseCoopers LLP.	Filed herewith.
31.1	Rule 13a-14(a) Certification of Principal Executive Officer.	Filed herewith.
31.2	Rule 13a-14(a) Certification of Principal Financial Officer.	Filed herewith.
32.1	Section 1350 Certification of Principal Executive Officer.	Furnished herewith.
32.2	Section 1350 Certification of Principal Financial Officer.	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

† -Confidential treatment granted.

* -Management contract or compensatory plan.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 this 1st day of March, 2017.

TERADYNE, INC.
By:	/S/    GREGORY R. BEECHER
	Gregory R. Beecher,
	Vice President, Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/S/    ROY A. VALLEE         Roy A. Vallee	Chair of the Board	March 1, 2017
/S/    MARK E. JAGIELA         Mark E. Jagiela	Chief Executive Officer (Principal Executive Officer)	March 1, 2017
/S/    GREGORY R. BEECHER         Gregory R. Beecher	Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	March 1, 2017
/S/    MICHAEL A. BRADLEY         Michael A. Bradley	Director	March 1, 2017
/S/    DANIEL W. CHRISTMAN         Daniel W. Christman	Director	March 1, 2017
/S/    EDWIN J. GILLIS         Edwin J. Gillis	Director	March 1, 2017
/S/    TIMOTHY E. GUERTIN         Timothy E. Guertin	Director	March 1, 2017
/S/    MERCEDES JOHNSON         Mercedes Johnson	Director	March 1, 2017
/S/    PAUL J. TUFANO         Paul J. Tufano	Director	March 1, 2017

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EX-10.9

Exhibit 10.9

TERADYNE, INC.

2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

(as amended through November 15, 2016)

1. Purpose and Eligibility.

The purpose of this 2006 Equity and Cash Compensation Incentive Plan (the “Plan”) of Teradyne, Inc. is to provide equity ownership and compensation opportunities in the Company (each an “Award”) to employees, officers, directors, consultants and advisors of the Company and its Subsidiaries, all of whom are eligible to receive Awards under the Plan. Any person to whom an Award has been granted under the Plan is called a “Participant.” Additional definitions are contained in Section 14(a).

2. Administration.

a. Administration by Committee of Independent Members of the Board of Directors. The Plan will be administered by a committee (the “Committee”) composed solely of members of the Board of Directors of the Company that are “independent,” as defined pursuant to Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended, and as proscribed under Rule 303A.02 of the New York Stock Exchange (“NYSE”) Listed Company Manual, or any amendment, supplement or modification thereto; provided, however, that, except with respect to Awards granted to non-employee directors which shall be granted and administered by the Committee, at any time and on any one or more occasions the Board may itself exercise any of the powers and responsibilities assigned the Committee under the Plan and when so acting shall have the benefit of all of the provisions of the Plan pertaining to the Committee’s exercise of its authorities hereunder. The Committee, in its sole discretion, shall have the authority to grant Awards, to adopt, amend and repeal rules relating to the Plan, to interpret and correct the provisions of the Plan and any Award, and, subject to the limitations of the Plan, to modify and amend any Award. All decisions by the Committee shall be final and binding on all interested persons. Neither the Company nor any member of the Committee shall be liable for any action or determination relating to the Plan.

b. Delegation to Executive Officers. To the extent permitted by applicable law, the Committee may delegate to one or more executive officers of the Company the power to grant Awards and exercise such other powers under the Plan as the Committee may determine; provided, however, that the Committee shall fix the maximum number of Awards to be granted and the maximum number of shares issuable to any one Participant pursuant to Awards granted by such executive officer or officers. The Committee may, by a resolution adopted by the Committee, authorize one or more executive officers of the Company to do one or both of the following: (i) designate employees of the Company or of any of its subsidiaries to be recipients of Awards and (ii) determine the number, type and terms of such Awards to be received by such employees, subject to the limitations of the Plan; provided, however, that, in each case, the resolution so authorizing such officer or officers shall specify the maximum number and type of Awards such officer or officers may so award. The Committee may not authorize an officer to designate himself or herself as a recipient of any such Awards or to grant Awards to other executive officers of the Company.

3. Stock Available for Awards.

a. Number of Shares. Subject to adjustment under Section 3(c), the aggregate number of shares (the “Authorized Shares”) of the Company’s common stock, $0.125 par value per share (the “Common Stock”), that may be issued pursuant to the Plan shall be 32,000,000 shares of Common Stock. If any Award expires, is terminated, surrendered, forfeited, expires unexercised, is settled in cash in lieu of Common Stock or is exchanged for other Awards, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Shares of Common Stock delivered to the Company by a Participant to (i) purchase shares upon the exercise of an Award, or (ii) satisfy statutory tax withholding obligations with respect to any Award shall not be added back to the number of shares available for the future grant of Awards under the Plan. All shares of Common Stock covered by an SAR shall be counted against the number of shares available for the grant of Awards under the Plan; provided, however, that SARs that may be settled only in cash shall not be so counted. Shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grants of Awards. Shares issued under the Plan may consist in whole or in part of authorized but unissued shares. Notwithstanding anything to the contrary in this Plan, the foregoing limitations shall be subject to adjustment under Section 3(c), but only to the extent that such adjustment will not affect the status of any Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

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b. Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant may be granted stock-based Awards during any one fiscal year to purchase more than 2,000,000 shares of Common Stock.

c. Adjustment to Common Stock. In the event of any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, (i) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise price per share subject to each outstanding stock-based Award, (iii) the repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding stock-based Award shall be adjusted by the Company (or substituted Awards may be made) to the extent the Committee shall determine, in good faith, that such an adjustment (or substitution) is appropriate. If Section 11(f)(i) applies for any event, this Section 3(c) shall not be applicable.

d. Fractional Shares. No fractional shares shall be issued under the Plan and the Participant shall, at the Committee’s discretion, receive either cash in lieu of such fractional shares or a full share for each fractional share.

4. Stock Options.

a. General. The Committee may grant options to purchase Common Stock (each, an “Option”) and determine the terms and conditions of each Option, including, but not limited to (i) the number of shares subject to such Option or a formula for determining such, (ii) subject to Section 4(e) hereof, the exercise price of the Options and the means of payment for the shares, (iii) the Performance Criteria (as defined in Section 11(d)), if any, and level of achievement of such Performance Criteria that shall determine the number of shares or Options granted, issued, retainable and/or vested, (iv) the terms and conditions of the grant, issuance and/or forfeiture of the shares or Options, and (v) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan.

b. Incentive Stock Options. An Option that the Committee intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall be granted only to employees of the Company and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Committee and the Company shall have no liability if an Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as such.

c. Nonstatutory Stock Options. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory Stock Option.”

d. Dollar Limitation. For so long as the Code shall so provide, Options granted to any employee under the Plan (and any other plans of the Company) which are intended to constitute Incentive Stock Options shall not constitute Incentive Stock Options to the extent that such Options, in the aggregate, become exercisable for the first time in any one calendar year for shares of Common Stock with an aggregate Fair Market Value (as defined in Section 14 and determined as of the respective date or dates of grant) of more than $100,000 (or such other limit as may be provided by the Code). To the extent that any such Incentive Stock Options exceed the $100,000 limitation (or such other limit as may be provided by the Code), such Options shall be Nonstatutory Stock Options.

e. Exercise Price. The Committee shall establish the exercise price (or determine the method by which the exercise price shall be established) at the time each Option is granted and specify the exercise price in the applicable Option agreement, provided, that the exercise price per share specified in the agreement relating to each Option granted under the Plan shall not be less than the Fair Market Value per share of Common Stock on the date of such grant. In the case of an Incentive Stock Option to be granted to an employee owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, the price per share specified in the agreement relating to such Incentive Stock Option shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the date of grant (or such other limit as may be provided by the Code). For purposes of determining stock ownership under this subsection, the rules of Section 424(d) of the Code shall apply. Subject to Section 3(c), an Option may not be amended subsequent to its issuance to reduce the price at which it is exercisable unless such amendment is approved by the Company’s shareholders.

f. Duration of Options. Each Option shall be exercisable at such times and subject to such terms, conditions and expiration as the Committee may specify in the applicable Option agreement; provided, that no Option shall be exercisable for a period of time greater than ten (10) years from the date of grant of such Option; provided, further, that Incentive Stock Options granted to an employee owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company shall be exercisable for a maximum of five (5) years from the date of grant of such Option (or such other limit as may be provided by the Code). For purposes of determining stock ownership under this subsection, the rules of Section 424(d) of the Code shall apply.

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g. Vesting of Options. At the time of the grant of an Option, the Committee shall establish a vesting date or vesting dates with respect to the shares of Common Stock covered by such Options; provided that all Options, subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year. The Committee may establish vesting dates based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee.

h. Exercise of Option. Options may be exercised only by delivery to the Company at its principal office address or to such transfer agent as the Company shall designate of a written notice of exercise specifying the number of shares as to which such Option is being exercised, signed by the proper person, or by notification of the Company-designated third party commercial provider (the “Third Party Commercial Provider”), in accordance with the procedures approved by the Company and to which the holder of the Option shall have ongoing access by means of accessing such person’s account maintained with the Third Party Commercial Provider, together with payment in full as specified in Section 4(i) for the number of shares for which the Option is exercised.

i. Payment Upon Exercise. Common Stock purchased upon the exercise of an Option shall be paid for by one or any combination of the following forms of payment:

(i) in United States dollars in cash or by check payable to order of the Company or by fund transfer from the Option holder’s account maintained with the Third Party Commercial Provider;

(ii) at the discretion of the Committee, through delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option, provided, that such shares were not acquired by the Participant in the prior six months;

(iii) at the discretion of the Committee and consistent with applicable law, through the delivery of an assignment to the Company of a sufficient amount of the proceeds from the sale of the Common Stock acquired upon exercise of the Option and an authorization to the Third Party Commercial Provider to pay that amount to the Company, which sale shall be at the Participant’s direction at the time of exercise; or

(iv) at the discretion of the Committee, by any combination of (i), (ii), or (iii) above.

If the Committee exercises its discretion to permit payment of the exercise price of an Incentive Stock Option by means of the methods set forth in clauses (ii), (iii) or (iv) of the preceding sentence, such discretion shall be exercised in writing in the instrument evidencing the Award of the Incentive Stock Option.

j. Notice to Company of Disqualifying Disposition. By accepting an Incentive Stock Option granted under the Plan, each optionee agrees to notify the Company in writing immediately after such optionee makes a disqualifying disposition of any stock acquired pursuant to the exercise of the Incentive Stock Options. A “disqualifying disposition” is generally any disposition occurring on or before the later of (a) the date two years following the date the Incentive Stock Option was granted or (b) the date one year following the date the Incentive Stock Option was exercised.

k. Issuances of Securities. Except as provided in Section 3(c) or as otherwise expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options. No adjustments shall be made for dividends paid in cash or in property other than securities of the Company. A Participant that is the holder of an Option shall not be entitled to receive dividends or dividend equivalents declared and payable prior to exercise of the Option.

5. Stock Appreciation Rights

a. General. A Stock Appreciation Right (a “SAR”) is an Award entitling the holder, upon exercise, to receive an amount in cash or Common Stock, or a combination thereof (such form to be determined by the Committee), determined solely by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock. The date as of which such appreciation or other measure is determined shall be the exercise date of the SAR Award.

b. Grants. SARs may be granted in tandem with, or independently of, Options granted under the Plan.

(1) Tandem Awards. When SARs are expressly granted in tandem with Options: (i) the SARs will be exercisable only at such time or times, and to the extent, that the related Option is exercisable, and will be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the SARs will terminate and no longer be

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exercisable upon the termination or exercise of the related Option, except that a SAR granted with respect to less than the full number of shares covered by an Option will not be terminated until and only to the extent that the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the SAR; (iii) the Option will terminate and no longer be exercisable upon the exercise of the related SAR; and (iv) the SAR will be transferable only with the related Option.

(2) Independent Stock Appreciation Rights. A SAR not expressly granted in tandem with an Option will become exercisable at such time or times, and on such conditions, as the Committee may specify in the SAR Award.

c. Terms and Conditions. The Committee shall determine all terms and conditions of a SAR Award, including, but not limited to (i) the number of shares subject to such SAR Award or a formula for determining such, (ii) the Performance Criteria, if any, and level of achievement of such Performance Criteria that shall determine the number of shares granted, issued, retainable and/or vested or the amount of cash payable, (iii) the terms and conditions on the grant, issuance and/or forfeiture of the shares, and (iv) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. Subject to Section 3(c), a SAR may not be amended subsequent to its issuance to reduce the price used to determine the measurement price upon exercise unless such amendment is approved by the Company’s shareholders. A Participant that is the holder of a SAR Award shall not be entitled to receive dividends or dividend equivalents. The Amendment of all SAR Awards shall be subject to Section 11(n).

d. Vesting of SAR Awards. At the time of the grant of a SAR Award, the Committee shall establish a vesting date or vesting dates with respect to such SAR Award, provided that all SAR Awards, subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year; and, provided, further, that SARs awarded in tandem with Options shall be subject to the same vesting date or vesting dates established by the Committee pursuant to Section 4(g) for such related Options and shall be exercisable only to the extent that such related Option shall then be exercisable. The Committee may establish vesting dates based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee.

6. Restricted Stock.

a. Grants. The Committee may grant Awards entitling recipients to acquire shares of Common Stock, subject to (i) delivery to the Company by the Participant of cash, a check or other sufficient legal consideration in an amount at least equal to the par value of the shares purchased, (ii) the right of the Company to repurchase or reacquire all or part of such shares at their issue price or other stated or formula price from the Participant in the event that conditions specified by the Committee in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Committee for such Award (each, a “Restricted Stock Award”), and (iii) Section 6(b).

b. Terms and Conditions. A Participant that is the holder of a Restricted Stock Award, whether vested or unvested, shall be entitled to enjoy all shareholder rights with respect to the shares of Common Stock underlying such Restricted Stock Award, including the right to vote such shares. Subject to Section 6(c), the Committee shall determine all terms and conditions of any such Restricted Stock Award, including, but not limited to (i) the number of shares subject to such Restricted Stock Award or a formula for determining such, (ii) the purchase price of the shares, if any, and the means of payment for the shares, (iii) the Performance Criteria, if any, and level of achievement of such Performance Criteria that shall determine the number of shares granted, issued, retainable and/or vested, (iv) the terms and conditions on the grant, issuance and/or forfeiture of the shares, and (v) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. At the Committee’s election, shares of Common Stock issued in respect of a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapses, or (ii) evidenced by a stock certificate that may bear a legend indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant. All certificates registered in the name of the Participant shall, unless otherwise determined by the Committee, be deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). After the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or, if the Participant has died, to the beneficiary designated by the Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

c. Vesting of Restricted Stock. At the time of the grant of a Restricted Stock Award, the Committee shall establish a vesting date or vesting dates with respect to the shares of Common Stock covered by such Restricted Stock Award, which vesting

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dates may be based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee; provided, that all Restricted Stock Awards, subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year.

7. Restricted Stock Unit.

a. Grants. The Committee may grant Awards entitling recipients to acquire shares of Common Stock in the future, with the future delivery of the Common Stock subject to a risk of forfeiture or other restrictions that will lapse upon the satisfaction of one or more specified conditions (each, a “Restricted Stock Unit”).

b. Terms and Conditions. Subject to Section 7(c), the Committee shall determine all terms and conditions of any such Restricted Stock Unit, including, but not limited to (i) the number of shares subject to such Restricted Stock Unit or a formula for determining such, (ii) the purchase price of the shares, if any, and the means of payment for the shares, (iii) the Performance Criteria, if any, and level of achievement of such Performance Criteria that shall determine the number of shares granted, issued, retainable and/or vested, (iv) the terms and conditions on the grant, issuance and/or forfeiture of the shares, and (v) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. A Participant that is the holder of a Restricted Stock Unit Award shall not be entitled to shareholder rights with respect to the Restricted Stock Units, including the right to vote such shares represented by the a Restricted Stock Unit or to receive dividends. Any dividend equivalents awarded with respect to a Restricted Stock Unit shall be subject to the same restrictions on transferability and forfeiture as the Restricted Stock Units with respect to which the dividend equivalent is paid. A Restricted Stock Unit may be settled in cash or Common Stock, as determined by the Committee, with the amount of the cash payment based on the Fair Market Value of the shares of Common Stock at the time of vesting. Any such settlements may be subject to such conditions, restrictions and contingencies as the Committee shall establish.

c. Vesting of Restricted Stock Unit. At the time of the grant of a Restricted Stock Unit, the Committee shall establish a vesting date or vesting dates with respect to the shares of Common Stock covered by such Restricted Stock Unit, which vesting dates may be based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee; provided, that all Awards of Restricted Stock Units, subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year.

8. Phantom Stock.

a. General. The Committee may grant Awards entitling recipients to receive, in cash or shares, the Fair Market Value of shares of Common Stock (“Phantom Stock”) upon the satisfaction of one or more specified conditions.

b. Terms and Conditions. Subject to Section 8(c), the Committee shall determine the terms and conditions of a Phantom Stock Award, including, but not limited to (i) the number of shares subject to or represented by such Phantom Stock Award or a formula for determining such, (ii) the purchase price of the shares, if any, and the means of payment for the shares, (iii) the Performance Criteria, if any, and level of achievement of such Performance Criteria that shall determine the number of shares granted, issued, retainable and/or vested or the amount of cash payable, (iv) the terms and conditions on the grant, issuance and/or forfeiture of the shares or Phantom Stock Award, and (v) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. A Participant may not vote the shares represented by a Phantom Stock Award. Any settlements of Phantom Stock Awards may be subject to such conditions, restrictions and contingencies as the Committee shall establish.

c. Vesting of Phantom Stock. At the time of the grant of a Phantom Stock Award, the Committee shall establish a vesting date or vesting dates with respect to such Phantom Stock Award; provided that all Phantom Stock Awards, subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year. The Committee may establish vesting dates based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee.

9. Other Stock-Based Awards.

The Committee shall have the right to grant other Awards based upon the Common Stock and having such terms and conditions as the Committee may determine, including, without limitation, the grant of shares based upon certain conditions and/or Performance Criteria, the grant of securities convertible into Common Stock and the grant of stock units. The Committee shall determine the terms and conditions of any such Awards, including, but not limited to (i) the number of shares subject to such Award or a formula for determining such, (ii) the purchase price of the shares, if any, and the means of payment for the shares, (iii) the

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Performance Criteria, if any, and level of achievement of such Performance Criteria that shall determine the number of shares granted, issued, retainable and/or vested, (iv) the terms and conditions on the grant, issuance and/or forfeiture of the shares or Award, and (v) such further terms and conditions as may be determined from time to time by the Committee, in each case not inconsistent with this Plan. At the time of the grant of an Award under this Section 9, the Committee shall establish a vesting date or vesting dates with respect to such Award, which vesting date may be based upon the passage of time and/or the satisfaction of Performance Criteria or other conditions as deemed appropriate by the Committee; provided, that all Full Value Awards, subject to and except provided in Sections 11(f), 11(j), 11(l) and 13,granted under this Section 9 shall have a minimum vesting period of no less than one (1) year.

10. Cash Awards.

a. Grants. The Committee may grant cash awards (each, a “Cash Award”), either alone, in addition to, or in tandem with other Awards granted under the Plan.

b. Terms and Conditions. The Committee shall determine the terms and conditions of any such Cash Award. From time to time, the Committee shall establish administrative rules and procedures governing the administration of Cash Awards.

c. Variable Compensation Awards. A Cash Award that the Committee intends to be a “Variable Compensation Award” subject to Section 162(m) of the Code, provides a variable compensation payment each year to the Company’s executive officers and certain eligible senior employees each year based on certain Performance Criteria that may include, among other criteria, overall corporate and/or individual business group’s or division’s performance during the prior fiscal year, as determined by the Committee. Variable Compensation Awards are calculated based on a percentage of the Participant’s base annual salary (“Variable Compensation Factor”) and start at 5% for new Participants. Variable Compensation Factors are reviewed annually and typically do not exceed 100%. A newly hired executive officer or employee, who is approved for eligibility for Variable Compensation Awards, will be eligible to receive a Variable Compensation Award for their first year of employment, pro-rated from the date of hire. The Committee may rely upon the recommendation of the Company’s senior management in granting Variable Compensation Awards to eligible Participants who do not constitute executive officers of the Company, including as to the amount and terms of any such Awards and the satisfaction of Performance Criteria. No Participant may be granted Variable Compensation Awards that would result in a payment of more than $3 million during any one fiscal year.

11. General Provisions Applicable to Awards.

a. Transferability of Awards. Except as the Committee may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant, provided, however, that Nonstatutory Stock Options may be transferred to a grantor-retained annuity trust or a similar estate-planning vehicle in which the trust is bound by all provisions of the Option which are applicable to the Participant. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees of such an Option.

b. Documentation. Each Award granted under the Plan, with the exception of Cash Awards, shall be evidenced by a written Award agreement in such form as the Committee shall from time to time approve. Award agreements shall comply with the terms and conditions of the Plan and may contain such other provisions not inconsistent with the terms and conditions of the Plan as the Committee shall deem advisable. In the case of an Incentive Stock Option, the Award agreement shall contain, or refer to, such provisions relating to exercise and other matters as are required of “incentive stock options” under the Code. Award agreements may be evidenced by an electronic transmission (including an e-mail or reference to a website or other URL) sent to the Participant through the Company’s normal process for communicating electronically with its employees. As a condition to receiving an Award, the Committee may require the Participant to affirmatively accept the Award and agree to the terms and conditions set forth in the Award agreement by physically and/or electronically executing the Award agreement or by otherwise physically and/or electronically acknowledging such acceptance and agreement. With or without such affirmative acceptance, however, the Committee may prescribe conditions (including the exercise or attempted exercise of any benefit conferred by the Award) under which the proposed Participant may be deemed to have accepted the Award and agreed to the terms and conditions set forth in the Award agreement.

c. Committee Discretion. The terms of each type of Award need not be identical, and the Committee need not treat Participants uniformly.

d. Performance Criteria. For purposes of this Plan, the term “Performance Criteria” shall mean any one or more of the following performance criteria, applied to either the Company as a whole or to a division, business unit or Subsidiary, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Committee in the Award: cash flow; earnings per

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share; earnings before interest, taxes and amortization; return on equity; total shareholder return; share price performance; return on capital; return on assets or net assets; revenue; orders; product gross margins, including by customer; income or net income; operating income or net operating income; operating profit or net operating profit; 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; operating margin or profit margin; return on operating revenue; return on invested capital; market segment share; customer wins or design ins; product release schedules; new product innovation; product cost reduction; brand recognition/acceptance; product ship targets; process improvement results; verification of business strategy and/or business plan; improvement of strategic position; adaptation to changes in the marketplace or environment; or customer satisfaction. If the Award so provides, the Committee may appropriately evaluate achievement against Performance Criteria to take into account any of the following events that occurs during a performance period: asset write-downs; litigation or claim judgments or settlements; the effect of changes in tax law; accounting principles or other such laws or provisions affecting reported results; accruals for reorganization and restructuring programs and any extraordinary non-recurring charges or other events. The Committee may prescribe the foregoing criteria either individually or in combination. The Committee’s determination of the achievement of any Performance Criteria shall be conclusive. At the time of the grant of any Full Value Award subject to this Section 11(d), the Committee shall establish a vesting date or vesting dates with respect to the shares of Common Stock covered by such Awards; provided that all Full Value Awards subject to this Section 11(d), subject to and except as provided in Sections 11(f), 11(j), 11(l) and 13, shall have a minimum vesting period of no less than one (1) year.

e. Termination of Status. Except as otherwise specified herein, the Committee shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award under such circumstances, subject to applicable law and the provisions of the Code.

f. Acquisition or Liquidation of the Company.

(i) Consequences of an Acquisition. If the Company is to be consolidated with or acquired by another entity in a merger or other reorganization in which the holders of the outstanding voting stock of the Company immediately preceding the consummation of such event shall, immediately following such event, hold, as a group, less than a majority of the voting securities of the surviving or successor entity, or in the event of a sale of all or substantially all of the Company’s assets or otherwise (each, an “Acquisition”), the Committee or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Committee”), shall, as to outstanding Awards, either (A) make appropriate provision for the continuation of such Awards by substituting on an equitable basis for the shares then subject to such Awards either (1) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition, (2) shares of stock of the surviving or successor corporation or (3) such other securities as the Committee or the Successor Committee deems appropriate, the Fair Market Value of which shall not materially exceed the Fair Market Value of the shares of Common Stock subject to such Awards immediately preceding the Acquisition; or (B) upon written notice to the Participants, provide that all Awards must be exercised, to the extent then exercisable or to be exercisable as a result of the Acquisition, within a specified number of days of the date of such notice, at the end of which period the Awards shall terminate; or (C) terminate all Awards in exchange for a cash payment equal to the excess, if any, of the Fair Market Value of the shares subject to such Awards (to the extent then exercisable or to be exercisable as a result of the Acquisition) over the exercise price thereof, if any; or (D) in the case of Awards that may be settled in whole or in part in cash, provide for equitable treatment of such Awards.

(ii) Substitution of Awards Upon Certain Events. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Committee may grant Awards under the Plan in substitution for stock and stock-based awards issued by such entity or an affiliate thereof. The substitute Awards shall be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

(iii) Liquidation or Dissolution. In the event of the proposed liquidation or dissolution of the Company, each Award, except for Cash Awards already earned, to the extent not then exercised or vested, will terminate immediately prior to the consummation of such proposed action or at such other time and subject to such other conditions as shall be determined by the Committee.

g. Withholding. Each Participant shall pay to the Company, or make provisions satisfactory to the Company for payment, of any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax withholding obligation. Participants may elect to satisfy such tax withholding obligations by authorizing the Company to withhold shares of Common Stock from the Award creating the tax obligation, valued at their Fair Market Value. If the

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withholding of shares for legal or accounting reasons is problematic and a Participant does not otherwise satisfy such tax withholding obligations, the Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.

h. Amendment of Awards. The Committee may amend, modify or terminate any outstanding Award including, but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, the vesting provisions (subject to the minimum vesting requirements set forth herein), Performance Criteria, or level of achievement of Performance Criteria, and converting an Incentive Stock Option to a Nonstatutory Stock Option; provided that, except as otherwise provided in Section 11(f)(i), the Participant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant; provided, further, that subject to Section 3(c), an Option may not be amended subsequent to its issuance either to reduce the price at which such previously issued Option is exercisable or to extend the period of time for which such previously-issued Option shall be exercisable beyond ten (10) years unless such amendment is approved by the Company’s shareholders. Furthermore, no Option shall be canceled and replaced with Options having a lower exercise price unless such cancellation and exchange is approved by the Company’s shareholders. The Amendment of all Awards shall be subject to Section 11(n).

i. Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations, and (iv) the Participant has paid to the Company, or made provisions satisfactory to the Company for payment of, any taxes required by law to be withheld in connection with the Award.

j. Acceleration. The Committee may at any time provide (i) that Awards that may be settled in whole or in part in cash may become immediately exercisable in full or in part, and (ii) in connection with the disability or death of a Participant or in connection with an event contemplated by Section 11(f)(i), that any Award shall become exercisable in full or in part or shall be free of some or all restrictions or the risk of forfeiture. The Committee may take the actions contemplated by the preceding sentence despite the fact that such actions may (x) cause the application of Sections 280G and 4999 of the Code if an event contemplated by Section 11(f)(i) occurs, or (y) disqualify all or part of an Option as an Incentive Stock Option. In the event of the acceleration of the exercisability of one or more outstanding Options, including pursuant to Section 11(f)(i), the Committee may provide, as a condition of accelerated exercisability of any or all such Options, that the Common Stock or other substituted consideration, including cash, as to which exercisability has been accelerated shall be restricted and subject to forfeiture back to the Company at the election of the Company at the cost thereof upon termination of employment or other relationship, with the timing and other terms of the vesting of such restricted Common Stock or other consideration being not less favorable to the Participant than the timing and other terms of the superseded vesting schedule of the related Option.

k. Reserved.

l. Exception to Minimum Vesting Periods and Acceleration Limitations. The Committee may grant or accelerate the vesting of Awards with respect to up to 5% of the maximum, aggregate shares of Common Stock authorized for issuance hereunder in a manner that does not comply with the minimum vesting periods set forth in Sections 4(g), 5(d), 6(c), 7(c), 8(c), 9, 11(d) and 13 or that is not otherwise permitted under the vesting acceleration limitations in Section 11(j).

m. Compliance with Section 409A. Any other provision of the Plan or any Award to the contrary notwithstanding, the Plan and every Award hereunder shall be construed, administered and enforced as necessary to comply with applicable requirements of Section 409A of the Code and the Treasury and IRS rulings and regulations issued thereunder, so that no Participant shall (without such Participant’s express written consent) incur any of the additional tax or interest liabilities of Section 409A(a)(B) of the Code with respect to any Award. The Plan and each Award are hereby modified and limited as necessary to comply with applicable requirements of Section 409A.

n. Compliance with Limitations on Repricing. Unless such action is approved by the Company’s shareholders, the Company may not, except as provided for under Section 3(c)(i) amend any outstanding Option or SAR granted under the Plan to provide an exercise or measurement price per share that is lower than the then-current exercise or measurement price per share of such outstanding Option or SAR; (ii)cancel any outstanding option or stock appreciation right (whether or not granted under the Plan) and grant in substitution new Awards under the Plan (other than Awards granted pursuant to Section 11(f)(ii)); (iii) cancel in exchange for a cash payment any outstanding Option or SAR with an exercise or measurement price per share above the then-current Fair Market Value; or (iv) take any action under the Plan that constitutes a “repricing” of an Award with the meaning of the rules of the New York Stock Exchange, or other exchange on which the Company’s Common Stock is traded.

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12. Foreign Jurisdictions.

To the extent that the Committee determines that the material terms set by the Committee or imposed by the Plan preclude the achievement of the material purposes of the Plan in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those terms and provide for such other terms and conditions as the Committee determines to be necessary, appropriate or desirable to accommodate differences in local law, policy or custom or to facilitate administration of the Plan. The Committee may adopt or approve sub-plans, appendices or supplements to, or amendments, restatements or alternative versions of, the Plan as it may consider necessary, appropriate or desirable for such purpose, without thereby affecting the terms of the Plan as in effect for any other purpose. The special terms and any appendices, supplements, amendments, restatements or alternative versions, however, shall not include any provisions that are inconsistent with the terms of the Plan as then in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the shareholders. The Committee shall also have the authority and discretion to delegate the foregoing powers to appropriate officers of the Company.

13. Grant of Awards to Non-Employee Directors.

Each person who is a member of the Board of Directors and who is not an employee of the Company (each, a “Non-Employee Director”) shall be automatically granted Awards having a Fair Market Value or exercisable for shares having a Fair Market Value, as the case may be, on the day of such grant as follows:

a. on the date such Non-Employee Director is first elected or appointed to the Board of Directors (other than pursuant to an election at an annual meeting of shareholders, in which case, paragraph b and only paragraph b below shall apply) equal to the value of the Automatic Annual Grant, as prorated daily to reflect the period between the directors date of election or appointment and the date of the next Automatic Annual Grant; and

b. on the date in each year which is the earlier of (i) the date that the annual meeting of shareholders is held and (ii) the last Thursday in May, equal to a dollar amount approved by the Board of Directors not to exceed $200,000 (“Automatic Annual Grant”).

Awards granted under this Section 13 may be any of the following: Restricted Stock Units, Restricted Stock, Nonstatutory Stock Options, SARs, or cash, or a combination of the foregoing. Awards granted under the Plan shall be in addition to the annual Board and Committee cash retainers paid by the Company to the Non-Employee Directors. The type of Awards granted under this Section 13 shall be determined, in each instance, at the Committee’s discretion (subject to the foregoing limitations). The number of shares, if any, covered by Awards granted under this Section 13 shall be subject to adjustment in accordance with the provisions of Section 3(c) of this Plan. Subject to and except as provided in Sections 11(f), 11(j) and 11(l), an Award of Restricted Stock, Restricted Stock Units, Options or SARS granted pursuant to this Section 13 shall have a minimum vesting period that extends until the earlier of one year from the grant of the Award or the date the next annual meeting of shareholders is held following the grant of the Award, and shall expire on the date which is ten (10) years after the date of grant of such Award. Cash Awards granted pursuant to this Section 13 may, at the Committee’s discretion, be immediately exercisable or paid in their entirety on the date of grant.

14. Miscellaneous.

a. Definitions.

(i) “Company” for purposes of eligibility under the Plan, shall include Teradyne, Inc. and any present or future subsidiary corporations of Teradyne, Inc., as defined in Section 424(f) of the Code (a “Subsidiary”), and any present or future parent corporation of Teradyne, Inc., as defined in Section 424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term “Company” shall include any other entity in which the Company has a direct or indirect significant interest, as determined by the Committee in its sole discretion.

(ii) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

(iii) “Employee” for purposes of eligibility under the Plan shall include a person to whom an offer of employment has been extended by the Company and who has actually commenced employment with the Company, whether full or part-time status.

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(iv) “Fair Market Value” of the Company’s Common Stock on any date means (i) the closing price (on that date) of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; or (ii) the average of the closing bid and asked prices last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Stock is not then traded on a national securities exchange; or (iii) if the Common Stock is not publicly traded, the fair market value of the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length; provided, that, in all events the Fair Market Value shall represent the Committee’s good faith determination of the fair market value of the Common Stock. The Committee’s determination shall be conclusive as to the Fair Market Value of the Common Stock.

(v) “Full Value Awards” means Restricted Stock, Restricted Stock Units and Awards other than (a) Options or (b) SARs or (c) Cash Awards or (d) other stock-based Awards for which the Participant pays the intrinsic value (whether directly or by forgoing a right to receive a cash payment from the Company).

b. Legal Consideration for Issuance of Shares. Unless otherwise determined by the Committee, in the case of Awards of Restricted Stock, Restricted Stock Units, or Awards that are settled in whole or in part with shares of Common Stock, to the extent such Awards do not otherwise require the payment by the Participant of cash consideration that exceeds the par value of the shares of Common Stock received in connection therewith, the services rendered or to be rendered by the Participant shall satisfy the legal requirement of payment of par value for such shares of Common Stock.

c. No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan.

d. No Rights As Shareholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a shareholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder thereof.

e. Effective Date and Term of Plan. The Plan shall become effective on the date on which it is approved by the shareholders of the Company (the “Effective Date”). No Awards shall be granted under the Plan after May 12, 2025, but Awards previously granted may extend beyond that date.

f. Amendment of Plan. The Committee may amend this Plan at any time, provided that any material amendment to the Plan will not be effective unless approved by the Company’s shareholders. For this purpose, a material amendment is any amendment that would (i) other than pursuant to Section 3(c), materially increase either the aggregate number of shares of Common Stock available for issuance under the Plan; or the maximum number of shares of Common Stock issuable in one fiscal year to a Participant; (ii) expand or limit the class of persons eligible to receive Awards or otherwise participate in the Plan; (iii) subject to Section 3(c), reduce the price at which a previously-issued Option is exercisable or extend the period of time for which a previously-issued Option shall be exercisable beyond ten (10) years; (iv) subject to Section 11(f) and Section 11(j), amend the minimum vesting provisions of Full Value Awards; or (v) require shareholder approval pursuant to the requirements of the NYSE and/or any other exchange on which the Company is then listed or pursuant to applicable law.

g. Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of The Commonwealth of Massachusetts, exclusive of reference to rules and principles of conflicts of law.

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EX-10.10

Exhibit 10.10

TERADYNE, INC. 2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

NOTICE OF PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT AND TERMS

FOR U.S. RECIPIENTS

Name:

Employee ID:

In granting restricted stock units, Teradyne, Inc. (“Teradyne”) seeks to provide employees of Teradyne and its subsidiaries with incentive to help drive Teradyne’s future success and to share in the economic benefits of that success. We all look forward to your contributions to that effort.

In recognition of your contributions to Teradyne, you have been granted an award consisting of the right to receive a target of xx shares of Teradyne common stock (“Target Performance-Based Shares”), which final number of shares shall be determined by the Committee or Teradyne’s Board of Directors and based upon achieving certain Performance Criteria over time (“Actual Performance-Based Shares”). This grant was approved [●] (the “Effective Date”).

This award is subject to the Restricted Stock Unit Terms attached hereto and the terms of the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The shares covered by this award will be delivered upon attainment of certain Performance Criteria as described in and subject to the vesting conditions of the Restricted Stock Unit Terms.

The Plan prospectus, consisting of a “Participant Information” document that summarizes the Plan and the complete Plan, is available on “In-Site,” Teradyne’s internal Web site:

http://cms.corp.teradyne.com/insite/FunctionsGroups/GeneralAdministrative/HumanResources/ GLOBALPOLICY/ EquityCompensationOptionsRSU%E2%80%99s/index.htm .

Please note that printed versions of the Plan prospectus documents are available to you, at no charge, upon request to the HR Service Center, Teradyne, Inc., 600 Riverpark Drive, North Reading, MA 01864, (978) 370-3041.

TERADYNE, INC.

Charles J. Gray

V.P., General Counsel and Secretary

(2016 Performance-based RSU)

Grant #

1

PERFORMANCE-BASED RESTRICTED STOCK UNIT TERMS FOR U.S. RECIPIENTS

1. Award Grant, Vesting and Transfer

(a) Award Grant. Teradyne, Inc. hereby grants to the recipient an award (this “Award”) of performance-based restricted stock units (the “RSUs”) under the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The RSUs represent the right of the recipient to receive that number of shares of Teradyne common stock set forth in the Notice of Performance-Based Restricted Stock Unit Grant and Terms (the “Notice of Grant”) attached hereto upon satisfaction of the terms set forth in this Agreement. This Award is governed by and subject to the terms of the Plan, the Notice of Grant and this Agreement.

Capitalized terms used but not otherwise defined herein will have the meaning set forth in the Notice of Grant or the Plan. In the event of any inconsistencies or differences between the Plan and these terms, the Plan shall prevail. The terms governing this Award are intended to comply with all applicable laws and regulations.

(b) Vesting of Award. None of this grant will be vested on the Effective Date. The number of Actual Performance-Based Shares that will be allowed to vest is uncertain at the time of the grant but is expected to be determined near the three-year anniversary of the grant, based on the determination by the Committee or Teradyne’s Board of Directors of the Performance Percentage. The “Performance Percentage” is a percentage ranging from 0-200% determined using Performance Criteria approved by the Committee or Teradyne’s Board of Directors for the grant. The Performance Percentage shall be multiplied against the Target Performance-Based Shares granted to derive the number of Actual Performance-Based Shares. Except as provided in (c) below, this Award shall vest with respect to 100% of the Actual Performance-Based Shares on the later of the third anniversary of the Effective Date or the date the Board determines the number of Actual Performance-Based Shares. The portion of the grant that is not allowed to vest will be forfeited. Subject to the terms of the Plan, the Committee shall have the right to accelerate the date that any installment of this Award becomes vested, including, but not limited to, events such as disability, death or upon the acquisition of control of Teradyne by another entity.

(c) This Award will not vest further after termination of employment or other business relationship except in limited certain circumstances. This Award will not vest after the recipient’s employment or other business relationship with Teradyne or its Subsidiaries ends, regardless of the reason, provided, however, that if the recipient’s employment or other business relationship with Teradyne or one of its Subsidiaries ends prior to the determination of the Performance Percentage on account of (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 (a) one-hundred percent of the Actual Performance-Based Shares under any Award granted at least 365 calendar days prior to the permanent disability, death, retirement or termination without cause shall vest on the date the Performance Percentage is determined by the Committee or the Board of Directors and (b) a pro-rated portion of the Actual Performance-Based Shares under any Award granted within 365 calendar days of the permanent disability, death, retirement or termination without cause based on the number of days of employment or other business relationship during the 365 calendar day period from the grant date shall vest on the date the Performance Percentage is determined by the Committee or the Board of Directors.

Employment or another business relationship shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness or military obligations) provided that the period of such leave does not exceed 90 days or, in the case of an employee, if longer, any period during which the employee’s right to reemployment is guaranteed by statute. A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of employment or other business relationship, provided that such written approval contractually obligates Teradyne or a Subsidiary to continue the employment or other business relationship of the recipient after the approved period of absence.

(d) No rights as stockholder; Issuance. The recipient shall not have any rights as a stockholder in, to or with respect to any shares which may be covered by this Award (including but not limited to the right to vote or to receive dividends) until this Award is settled by issuance of shares to the recipient. All shares issued in respect of this Award will be transferred or issued to the recipient (or his or her estate, in the event of his or her death) as soon as is practicable after the date the Actual Performance-Based Shares vest but, in any event, within 2 ¹/₂ months following the calendar year in which the Actual Performance-Based Shares become vested (or any earlier date, after vesting, as required to avoid characterization as non-qualified deferred compensation under Section 409A of the Code). Teradyne will not be required to transfer or issue any shares upon vesting of the Actual Performance-Based Shares until arrangements

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satisfactory to it have been made by the recipient to address any Tax-Related Items (as defined in Section 4 below) which might arise by reason of the vesting of the Actual Performance-Based Shares and/or transfer or issuance of shares.

(e) This Award may not be assigned or transferred. Other than as provided in Section 11(a) of the Plan, this Award is not assignable or transferable (except by will or the laws of descent and distribution).

2. Capital Changes and Business Succession. Section 3(c) of the Plan contains provisions for adjusting (or substituting) the number and class of securities, vesting schedule, and other terms of outstanding stock-based awards granted under the Plan if a recapitalization, stock split, merger, or other specified event occurs, and the Committee determines that an adjustment (or substitution) is appropriate. In that event, the recipient of this Award will be notified of the adjustment (or substitution), if any, to this Award.

3. Employment or Business Relationship. Granting this Award does not imply any right of continued employment or business relationship with Teradyne or its Subsidiaries, and does not affect the right of the recipient, Teradyne or its Subsidiaries to terminate the recipient’s employment or a business relationship at any time.

4. Tax Obligations.

(a) Responsibility for Taxes. The recipient acknowledges that, regardless of any action taken by Teradyne or, if different, the recipient’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the recipient’s participation in the Plan and legally applicable to the recipient (“Tax-Related Items”), is and remains the recipient’s responsibility and may exceed the amount actually withheld by Teradyne or the Employer. The recipient further acknowledges that Teradyne and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including, but not limited to, the grant, vesting or settlement of the RSUs, the subsequent sale of shares acquired pursuant to such settlement and the receipt of any dividends or other distributions, and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Award to reduce or eliminate the recipient’s liability for Tax-Related Items or achieve any particular tax result. Further, if the recipient is subject to Tax-Related Items in more than one jurisdiction between the Effective Date and the date of any relevant taxable or tax withholding event, as applicable, the recipient acknowledges that Teradyne and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b) Tax Withholding. Prior to any relevant taxable or tax withholding event, as applicable, the recipient agrees to make adequate arrangements satisfactory to Teradyne and/or the Employer to satisfy all Tax-Related Items. The recipient authorizes Teradyne or its respective agents to satisfy the obligations with regard to all Tax-Related Items by withholding in shares to be issued upon settlement of the RSUs; provided, however, that the total Tax-Related Items withholding where shares are being used to satisfy such tax obligations cannot exceed Teradyne’s minimum statutory withholding obligations. If the obligation for Tax-Related Items is satisfied by withholding in shares, for tax purposes, the recipient is deemed to have been issued the full number of shares subject to the vested RSUs, notwithstanding that a number of the shares are held back solely for the purpose of paying the Tax-Related Items. In the event that such withholding in shares is problematic under applicable tax or securities law or has materially adverse accounting consequences, by the recipient’s acceptance of this Award, the recipient authorizes and directs Teradyne and any brokerage firm determined acceptable to Teradyne to sell on the recipient’s behalf a whole number of shares from those shares issuable to the recipient as Teradyne determines to be appropriate to generate cash proceeds sufficient to satisfy the obligation for Tax-Related Items. If withholding is performed from proceeds from the sale of shares acquired upon vesting of the RSUs, Teradyne shall withhold for Tax-Related Items at minimum applicable rates. Alternatively, Teradyne, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require the recipient to satisfy his or her obligations for Tax-Related Items, in whole or in part (without limitation) by delivery of cash or check to Teradyne or the Employer, or Teradyne or the Employer may withhold from the recipient’s wages or other compensation.

5. Compliance with Laws. Shares to be issued under this Award are currently registered under the United States Securities Act of 1933, as amended. If such registration is not in effect at the time of vesting, the recipient will be required to represent to Teradyne that he or she is acquiring such shares as an investment and not with a view to the sale of those shares. Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares of common stock, Teradyne shall not be required to deliver any shares of common stock issuable upon settlement of the RSUs prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the United States Securities and Exchange Commission (“SEC”)

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or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Teradyne shall, in its absolute discretion, deem necessary or advisable. The recipient understands that Teradyne is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, the recipient agrees that Teradyne shall have unilateral authority to amend the Plan and the Agreement without the recipient’s consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.

6. Code Section 409A. This Award is intended to be exempt from the application of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. Teradyne reserves the right, to the extent Teradyne deems necessary or advisable in its sole discretion, to amend or modify the terms of this Award (or the Plan) or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take other actions, including any amendments or actions that would result in a reduction to the benefit payable under this Award, in each case, without the consent of the recipient of the Award, as may be necessary to ensure that all vesting or settlement provided under this Award are made in a manner that complies with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code if compliance is not practical; provided, however, that nothing in this Section 6 creates an obligation on the part of Teradyne to modify the terms of this Award or the Plan. In that light, Teradyne makes no representation that the terms of this Award will comply with Section 409A of the Code or that the settlement under Award will not be subject to taxes, interest and penalties or other adverse tax consequences under Section 409A of the Code. In no event whatsoever shall Teradyne or any of its affiliates be liable to the recipient of this Award or any other party for any additional tax, interest, penalties or other liability that may be imposed on the recipient of this Award by Section 409A of the Code or for any action taken by Teradyne with respect thereto.

7. Governing Law and Venue. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the Commonwealth of Massachusetts, without regard to the conflict of law provisions, as provided in the Plan. For purposes of litigating any dispute that arises under this Award or this Agreement, the parties hereby submit to and consent to the jurisdiction of the Commonwealth of Massachusetts, agree that such litigation shall be conducted in the courts of Middlesex County, or the federal courts for the United States for the District of Massachusetts, where this grant is made and/or to be performed.

8. Electronic Delivery and Acceptance. Teradyne may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The recipient hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by Teradyne or a third party designated by Teradyne.

9. Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

10. Imposition of Other Requirements. Teradyne reserves the right to impose other requirements on the recipient’s participation in the Plan, on the RSUs and on any shares of common stock acquired under the Plan, to the extent Teradyne determines it is necessary or advisable for legal or administrative reasons, and to require the recipient to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

11. Waiver. The recipient acknowledges that a waiver by Teradyne of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the recipient or any other recipient.

12. No Advice Regarding Grant. Teradyne is not providing any tax, legal or financial advice, nor is Teradyne making any recommendations regarding the recipient’s participation in the Plan, or the recipient’s acquisition or sale of the underlying shares of common stock. The recipient is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

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EX-10.11

Exhibit 10.11

TERADYNE, INC. 2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT GRANT AND TERMS FOR U.S. RECIPIENTS

Name:

Employee ID:

Supervisor:

In granting restricted stock units, Teradyne, Inc. (“Teradyne”) seeks to provide employees of Teradyne and its subsidiaries with incentive to help drive Teradyne’s future success and to share in the economic benefits of that success. We all look forward to your contributions to that effort.

You have been granted a restricted stock unit award consisting of the right to receive up to xx shares of Teradyne common stock. This grant was approved effective [●] (the “Effective Date”).

This award is subject to the Restricted Stock Unit Terms attached hereto and the terms of the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The shares covered by this award will be delivered over time as described in and subject to the vesting conditions of the Restricted Stock Unit Terms.

The Plan prospectus, consisting of a “Participant Information” document that summarizes the Plan and the complete Plan, is available on “In-Site,” Teradyne’s internal Web site:

http://cms.corp.teradyne.com/insite/FunctionsGroups/GeneralAdministrative/HumanResources/GLOBALPOLICY/

EquityCompensationOptionsRSU%E2%80%99s/index.htm.

Please note that printed versions of the Plan prospectus documents are available to you, at no charge, upon request to the HR Service Center, Teradyne, Inc., 600 Riverpark Drive, North Reading, MA 01864, (978) 370-3041.

TERADYNE, INC

Charles J. Gray

V.P., General Counsel and Secretary

(2016 RSU)

Grant #

1

RESTRICTED STOCK UNIT TERMS FOR U.S. RECIPIENTS

1. Award Grant, Vesting and Transfer

(a) Award Grant. Teradyne, Inc. hereby grants to the recipient an award (this “Award”) of restricted stock units (the “RSUs”) under the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The RSUs represent the right of the recipient to receive that number of shares of Teradyne common stock set forth in the Notice of Restricted Stock Unit Grant and Terms (the “Notice of Grant”) attached hereto upon satisfaction of the terms set forth in this Agreement. This Award is governed by and subject to the terms of the Plan, the Notice of Grant and this Agreement.

Capitalized terms used but not otherwise defined herein will have the meaning set forth in the Notice of Grant or the Plan. In the event of any inconsistencies or differences between the Plan and these terms, the Plan shall prevail. The terms governing this Award are intended to comply with all applicable laws and regulations.

(b) This Award vests yearly on the anniversary of the Effective Date. None of the RSUs subject to this Award will be vested on the Effective Date. Except as provided in (c) below, 25% of the RSUs granted will vest on the first and each of the three subsequent anniversaries of the Effective Date until the total grant is fully vested on the fourth anniversary of the Effective Date. The Committee shall have the right to accelerate the date that any installment of this Award becomes vested, including, but not limited to events such as disability, death or upon the acquisition of control of Teradyne by another entity.

(c) This Award will not vest further after termination of employment or other business relationship except in limited certain circumstances. This Award will not vest after the recipient’s employment or other business relationship ends, regardless of the reason, provided, however, that if the recipient’s employment or other business relationship with Teradyne or one of its Subsidiaries ends on account of permanent disability or death, the unvested portion of this Award which would have vested under the applicable rule stated in (b) above shall automatically become vested in full on the date of his or her termination of employment or business relationship on account of permanent disability or death.

Employment or another business relationship shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness or military obligations) provided that the period of such leave does not exceed 90 days or, in the case of an employee, if longer, any period during which the employee’s right to reemployment is guaranteed by statute. A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of employment or other business relationship, provided that such written approval contractually obligates Teradyne or a Subsidiary to continue the employment or other business relationship of the recipient after the approved period of absence.

(d) No rights as stockholder; Issuance. The recipient shall not have any rights as a stockholder in, to or with respect to any shares which may be covered by this Award (including but not limited to the right to vote or to receive dividends) until this Award is settled by issuance of shares to the recipient. All shares issued in respect of this Award will be transferred or issued to the recipient (or his or her estate, in the event of his or her death) as soon as is practicable after the date the RSUs vest but, in any event, within 2 ¹/₂ months following the calendar year in which the RSUs become vested (or any earlier date, after vesting, as required to avoid characterization as non-qualified deferred compensation under Section 409A of the Code). Teradyne will not be required to transfer or issue any shares upon vesting of the RSUs until arrangements satisfactory to it have been made by the recipient to address any Tax-Related Items (as defined in Section 4 below) which might arise by reason of the vesting of the RSUs and/or transfer or issuance of shares.

(e) This Award may not be assigned or transferred. Other than as provided in Section 11(a) of the Plan, this Award is not assignable or transferable (except by will or the laws of descent and distribution).

2. Capital Changes and Business Succession. Section 3(c) of the Plan contains provisions for adjusting (or substituting) the number and class of securities, vesting schedule and other terms of outstanding stock-based awards granted under the Plan if a recapitalization, stock split, merger, or other specified event occurs and the Committee determines that an adjustment (or substitution) is appropriate. In that event, the recipient of this Award will be notified of the adjustment (or substitution), if any, to this Award.

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3. Employment or Business Relationship. Granting this Award does not imply any right of continued employment or business relationship with Teradyne or its Subsidiaries, and does not affect the right of the recipient, Teradyne or its Subsidiaries to terminate the recipient’s employment or a business relationship at any time.

4. Tax Obligations.

(a) Responsibility for Taxes. The recipient acknowledges that, regardless of any action taken by Teradyne or, if different, the recipient’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the recipient’s participation in the Plan and legally applicable to the recipient (“Tax-Related Items”), is and remains the recipient’s responsibility and may exceed the amount actually withheld by Teradyne or the Employer. The recipient further acknowledges that Teradyne and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award, including, but not limited to, the grant, vesting or settlement of the RSUs, the subsequent sale of shares acquired pursuant to such settlement and the receipt of any dividends or other distributions, and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Award to reduce or eliminate the recipient’s liability for Tax-Related Items or achieve any particular tax result. Further, if the recipient is subject to Tax-Related Items in more than one jurisdiction between the Effective Date and the date of any relevant taxable or tax withholding event, as applicable, the recipient acknowledges that Teradyne and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b) Tax Withholding. Prior to any relevant taxable or tax withholding event, as applicable, the recipient agrees to make adequate arrangements satisfactory to Teradyne and/or the Employer to satisfy all Tax-Related Items. The recipient authorizes Teradyne or its respective agents to satisfy the obligations with regard to all Tax-Related Items by withholding in shares to be issued upon settlement of the RSUs; provided, however, that the total Tax-Related Items withholding where shares are being used to satisfy such tax obligations cannot exceed Teradyne’s minimum statutory withholding obligations. If the obligation for Tax-Related Items is satisfied by withholding in shares, for tax purposes, the recipient is deemed to have been issued the full number of shares subject to the vested RSUs, notwithstanding that a number of the shares are held back solely for the purpose of paying the Tax-Related Items. In the event that such withholding in shares is problematic under applicable tax or securities law or has materially adverse accounting consequences, by the recipient’s acceptance of this Award, the recipient authorizes and directs Teradyne and any brokerage firm determined acceptable to Teradyne to sell on the recipient’s behalf a whole number of shares from those shares issuable to the recipient as Teradyne determines to be appropriate to generate cash proceeds sufficient to satisfy the obligation for Tax-Related Items. If withholding is performed from proceeds from the sale of shares acquired upon vesting of the RSUs, Teradyne shall withhold for Tax-Related Items at minimum applicable rates. Alternatively, Teradyne, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require the recipient to satisfy his or her obligations for Tax-Related Items, in whole or in part (without limitation) by delivery of cash or check to Teradyne or the Employer, or Teradyne or the Employer may withhold from the recipient’s wages or other compensation.

5. Compliance with Laws. Shares to be issued under this Award are currently registered under the United States Securities Act of 1933, as amended. If such registration is not in effect at the time of vesting, the recipient will be required to represent to Teradyne that he or she is acquiring such shares as an investment and not with a view to the sale of those shares. Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares of common stock, Teradyne shall not be required to deliver any shares of common stock issuable upon settlement of the RSUs prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the United States Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Teradyne shall, in its absolute discretion, deem necessary or advisable. The recipient understands that Teradyne is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, the recipient agrees that Teradyne shall have unilateral authority to amend the Plan and the Agreement without the recipient’s consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.

6. Code Section 409A. This Award is intended to be exempt from the application of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. Teradyne reserves the right, to the extent Teradyne deems necessary or advisable in its sole discretion, to amend or modify the terms of this Award (or the Plan) or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take other

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actions, including any amendments or actions that would result in a reduction to the benefit payable under this Award, in each case, without the consent of the recipient of the Award, as may be necessary to ensure that all vesting or settlement provided under this Award are made in a manner that complies with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code if compliance is not practical; provided, however, that nothing in this Section 6 creates an obligation on the part of Teradyne to modify the terms of this Award or the Plan. In that light, Teradyne makes no representation that the terms of this Award will comply with Section 409A of the Code or that the settlement under Award will not be subject to taxes, interest and penalties or other adverse tax consequences under Section 409A of the Code. In no event whatsoever shall Teradyne or any of its affiliates be liable to the recipient of this Award or any other party for any additional tax, interest, penalties or other liability that may be imposed on the recipient of this Award by Section 409A of the Code or for any action taken by Teradyne with respect thereto.

7. Governing Law and Venue. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the Commonwealth of Massachusetts, without regard to the conflict of law provisions, as provided in the Plan. For purposes of litigating any dispute that arises under this Award or this Agreement, the parties hereby submit to and consent to the jurisdiction of the Commonwealth of Massachusetts, agree that such litigation shall be conducted in the courts of Middlesex County, or the federal courts for the United States for the District of Massachusetts, where this grant is made and/or to be performed.

8. Electronic Delivery and Acceptance. Teradyne may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The recipient hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by Teradyne or a third party designated by Teradyne.

9. Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

10. Imposition of Other Requirements. Teradyne reserves the right to impose other requirements on the recipient’s participation in the Plan, on the RSUs and on any shares of common stock acquired under the Plan, to the extent Teradyne determines it is necessary or advisable for legal or administrative reasons, and to require the recipient to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

11. Waiver. The recipient acknowledges that a waiver by Teradyne of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the recipient or any other recipient.

12. No Advice Regarding Grant. Teradyne is not providing any tax, legal or financial advice, nor is Teradyne making any recommendations regarding the recipient’s participation in the Plan, or the recipient’s acquisition or sale of the underlying shares of common stock. The recipient is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

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EX-10.12

Exhibit 10.12

TERADYNE, INC. 2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT GRANT AND TERMS

FOR NON-EMPLOYEE DIRECTOR AWARDS

Name

In granting restricted stock units, Teradyne seeks to provide directors with incentive to help drive the company’s future success and to share in the economic benefits of that success.

In recognition of your contributions to Teradyne, you have been granted an award consisting of the right to receive up to xxx shares of Teradyne common stock. This grant was approved effective (the “Effective Date”).

This award is subject to the Restricted Stock Unit Terms attached hereto and the terms of the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The shares covered by this award will be delivered subject to the vesting conditions of the Restricted Stock Unit Terms.

The Plan prospectus, consisting of a “Participant Information” document that summarizes the Plan and contains a copy of the complete Plan, is available to you, at no charge, upon request to the HR Service Center, Teradyne, Inc., 600 Riverpark Drive, North Reading, MA 01864, (978) 370-3041.

TERADYNE, INC.

Charles J. Gray

V.P., General Counsel and Secretary

(2006 RSU)

Grant #xxx

Director RSU Grant Agreement (2006 Plan as amended in 2015)

1

RESTRICTED STOCK UNIT TERMS FOR NON-EMPLOYEE DIRECTOR AWARDS

1. Award Grant, Vesting and Transfer

(a) Award Grant. Teradyne, Inc. hereby grants to the recipient an award (this “Award”) of restricted stock units (the “RSUs”) under the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The RSUs represent the right of the recipient to receive that number of shares of Teradyne common stock set forth in the Notice of Restricted Stock Unit Grant and Terms (the “Notice of Grant”) attached hereto upon satisfaction of the terms set forth in this Agreement. This Award is governed by and subject to the terms of the Plan, the Notice of Grant and these Terms.

Capitalized terms used but not otherwise defined herein will have the meaning set forth in the Notice of Grant or the Plan. In the event of any inconsistencies or differences between the Plan and these terms, the Plan shall prevail. The terms governing this Award are intended to comply with all applicable laws and regulations.

(b) Award Vesting. None of this grant will be vested on the Effective Date. One-hundred percent of the grant will vest on the earlier of one year from the Effective Date or the date of the next annual meeting of shareholders following the Effective Date (“Vesting Date”). Subject to the terms of the Plan, the Teradyne Board of Directors shall have the right to accelerate the date that any installment of this award becomes vested in the event of termination, retirement, or upon the acquisition of control of Teradyne by another entity.

(c) Termination of Board Membership. This Award will not vest after the recipient’s board membership ends unless the Board accelerates the vesting pursuant to Paragraph 1(b) above; provided that if the recipient’s board membership with Teradyne ends on account of permanent disability or death, this Award will vest automatically in full on the date the board membership ends in the event of permanent disability or death.

Board membership with Teradyne shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness or military obligations) provided that the period of such leave does not exceed 90 days. A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of the board membership.

(d) No Rights as Stockholder; Issuance. The recipient shall not have any right in, to or with respect to any shares which may be covered by this Award (including but not limited to the right to vote or to receive dividends) until the Award is settled by issuance of shares to the recipient. All vested shares issued in respect of this Award will be transferred or issued to the recipient (or his or her estate, in the event of his or her death) promptly after the date they vest but in any event within 2 ¹/₂ months following the calendar year in which they become vested (or any earlier date, after vesting, required to avoid characterization as non-qualified deferred compensation under Section 409A of the Code). Teradyne will not be required to transfer or issue any vested shares until arrangements satisfactory to it have been made to address any income, withholding and employment tax requirements which might arise by reason of the vesting and transfer or issuance of shares.

(e) Transfer or Assignment. Other than as provided in Section 11(a) of the Plan, this Award is not assignable or transferable (except by will or the laws of descent and distribution).

2. Capital Changes and Business Succession. Section 3(c) of the Plan, contains provisions for adjusting the number, vesting schedule, exercise price and other terms of outstanding stock based Awards under the Plan if a recapitalization, stock split, merger, or other specified event occurs and a Committee of the Board of Directors determines that an adjustment (or substitution) is appropriate. . In that event, the recipient of the Award will be notified of the adjustment (or substitution), if any.

3. Board Membership. Granting this Award does not imply any right of continued board membership.

4. Stock Registration. Shares to be issued under this Award are currently registered under the Securities Act of 1933, as amended. If such registration is not in effect at the time of vesting, the recipient will be required to represent to the Company that he or she is acquiring such shares as an investment and not with a view to the sale of those shares.

5. Term. This Agreement will terminate on the Vesting Date, unless earlier terminated under the terms of the Plan.

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6. Code Section 409A. This Award is intended to be exempt from the application of Section 409A of the Code, and any ambiguities herein will be interpreted to so comply. Teradyne reserves the right, to the extent Teradyne deems necessary or advisable in its sole discretion, to amend or modify the terms of this Award (or the Plan) or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take other actions, including any amendments or actions that would result in a reduction to the benefit payable under this Award, in each case, without the consent of the recipient of the Award, as may be necessary to ensure that all vesting or settlement provided under this Award are made in a manner that complies with Section 409A of the Code or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code if compliance is not practical; provided, however, that nothing in this Section 6 creates an obligation on the part of Teradyne to modify the terms of this Award or the Plan. In that light, Teradyne makes no representation that the terms of this Award will comply with Section 409A of the Code or that the settlement under Award will not be subject to taxes, interest and penalties or other adverse tax consequences under Section 409A of the Code. In no event whatsoever shall Teradyne or any of its affiliates be liable to the recipient of this Award or any other party for any additional tax, interest, penalties or other liability that may be imposed on the recipient of this Award by Section 409A of the Code or for any action taken by Teradyne with respect thereto.

7. Governing Law. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the Commonwealth of Massachusetts, without regard to the conflict of law provisions, as provided in the Plan.

Director RSU Grant Agreement (2006 Plan as amended in 2015)

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EX-10.14

Exhibit 10.14

TERADYNE, INC. 2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT AND TERMS FOR U.S. RECIPIENTS

Name:

Employee ID:

In granting stock options, Teradyne, Inc. (“Teradyne”) seeks to provide employees with incentive to help drive Teradyne’s future success and to share in the economic benefits of that success. We all look forward to your contributions to that effort.

In recognition of your contributions to Teradyne, you have been granted a stock option award consisting of the right to receive up to xx shares of Teradyne common stock upon exercise of this option in accordance with its terms. This stock option grant was approved effective [●] (the “Effective Date”). The Stock Option Grant Details applicable to this stock option grant are listed below.

This stock option grant is subject to the Stock Option Terms attached hereto and the terms of the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). Stock options covered by this award will be exercisable over time as described in and subject to the vesting conditions of the attached Stock Option Terms.

The Plan prospectus, consisting of a “Participant Information” document that summarizes the Plan and the complete Plan, is available on “In-Site,” Teradyne’s internal Web site. To access the information, go to:

http://cms.corp.teradyne.com/insite/FunctionsGroups/GeneralAdministrative/HumanResources/GLOBALPOLICY/

EquityCompensationOptionsRSU%E2%80%99s/index.htm.

Please note that printed versions of the Plan prospectus documents are available to you, at no charge, upon request to HR Service Center, Teradyne, Inc., 600 Riverpark Drive, North Reading, MA 01864, (978) 370-3041.

	TERADYNE, INC.
Stock Option Grant Details: Grant Date/Effective Date: [●] Number of Shares under Option: [xx] Per Share Option Price/FMV on Grant Date: [$●]
	Charles J. Gray
	V.P., General Counsel and Secretary

(2016 Stock Option)

Grant #

1

STOCK OPTION TERMS FOR U.S. RECIPIENTS

1. Option Grant, Exercise and Vesting.

(a) Option Grant. Teradyne, Inc. hereby grants to the recipient an award (this “Award”) of nonstatutory stock options (the “Stock Options”) under the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). The Stock Options represent the right of the recipient to purchase that number of shares of Teradyne common stock set forth in the Notice of Stock Option Grant and Terms (the “Notice of Grant”) attached hereto upon satisfaction of the terms set forth in this Agreement. This Award is governed by and subject to the terms of the Plan, the Notice of Grant and this Agreement.

Capitalized terms used but not otherwise defined herein will have the meaning set forth in the Notice of Grant or the Plan. In the event of any inconsistencies or differences between the Plan and these terms, the Plan shall prevail. The terms governing this Award are intended to comply with all applicable laws and regulations.

(b) These Stock Options vest and become exercisable yearly on the anniversary of the Effective Date. None of the Stock Options subject to this Award will be vested or exercisable on the Effective Date. Except as provided in (d) below, 25% of the Stock Options granted will vest and become exercisable on the first and each of the three subsequent anniversaries of the Effective Date until the total grant is fully vested and exercisable on the fourth anniversary of the Effective Date. The Committee shall have the right to accelerate the date that any installment of this Award becomes vested and exercisable, including, but not limited to events such as disability, death or upon the acquisition of control of Teradyne by another entity.

(c) After Stock Options become exercisable, they can be exercised at any time prior to and on the Option Expiration Date. This Award expires at the close of business at Teradyne’s headquarters on the date that is seven years from the Effective Date (the “Option Expiration Date”). This Award may expire earlier if the recipient’s employment or other business relationship terminates, as described below.

(d) This Award will not vest further after termination of employment or other business relationship except in limited certain circumstances. If the recipient’s employment or business relationship with Teradyne or any Subsidiary terminates for any reason except disability or death, then this Award will not vest after the recipient’s employment or other business relationship ends and this Award will automatically expire at the close of business at Teradyne’s headquarters on the date ninety (90) days after the recipient’s termination date, or if earlier, the Option Expiration Date. If the recipient’s employment or other business relationship with Teradyne or a Subsidiary ends on account of permanent disability or death, the unvested portion of this Award which would have vested under the applicable rule stated in (b) above shall automatically become vested in full on the date of the recipient’s termination of employment or business relationship on account of permanent disability or death and the vested portion of this Award may be exercised in accordance with Section 11(a) of the Plan until the earlier of the close of business at Teradyne’s headquarters on the date that is one year subsequent to the recipient’s termination due to permanent disability or death or the Option Expiration Date.

Employment or another business relationship shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness or military obligations) provided that the period of such leave does not exceed 90 days or, in the case of an employee, if longer, any period during which the employee’s right to reemployment is guaranteed by statute. A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of employment or other business relationship, provided that such written approval contractually obligates Teradyne or a Subsidiary to continue the recipient’s employment or other business relationship after the approved period of absence.

2. Procedure for Exercising Stock Options.

(a) Stock Options are exercised by giving written notice to Teradyne in the form (or by such other procedures as) specified by the Committee stating the election to exercise, specifying the number of shares as to which Stock Options are being exercised and paying Teradyne the full option price for such shares, plus any applicable Tax-Related Items (as defined in Section 6 below). Payment can be made to Teradyne by a combination of cash, certified or

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bank check, or personal check (in each case in United States dollars), or by delivery of shares of Teradyne common stock having a Fair Market Value equal as of the date of the exercise to the cash exercise price of the Option, provided that such shares were not acquired by the Participant in the prior six months, or through a broker-dealer sale and remittance procedure pursuant to which the recipient shall provide written irrevocable instructions to a brokerage firm to effect the immediate sale of some or all of the purchased shares and remit to Teradyne sufficient funds to cover the aggregate exercise price payable for the purchased shares, plus any applicable Tax-Related Items designated by Teradyne, and shall provide written directives to Teradyne to deliver the purchased shares directly to such brokerage firm to complete the sale transaction, provided that such process is consistent with and permissible under applicable law.

(b) The recipient shall not have any rights as a stockholder in, to or with respect to any shares which may be covered by this Award (including but not limited to the right to vote or to receive dividends) until the issuance of shares to the recipient upon exercise of the Stock Options. All shares issuable upon exercise of the Stock Options will be transferred or issued to the recipient (or his or her estate, in the event of death) promptly upon exercise.

(c) With regard to any Stock Option exercises, Teradyne will not be required to transfer or issue any shares until arrangements satisfactory to it have been made to address any Tax-Related Items and withholding requirements which might arise by reason of the Stock Option exercise. Teradyne will pay any transfer or issue tax and deliver the shares purchased.

3. Assignment and Transferability. This Stock Option may not be assigned or transferred (except by will or the laws of descent and distribution) other than as provided in Section 11(a) of the Plan.

4. Capital Changes and Business Succession. Section 3(c) of the Plan contains provisions for adjusting (or substituting) the number and class of securities, vesting schedule, exercise price and other terms of outstanding stock-based awards granted under the Plan if a recapitalization, stock split, merger, or other specified event occurs and the Committee determines that an adjustment (or substitution) is appropriate. In that event, the recipient will be notified of the adjustment (or substitution), if any, to this Award.

5. Employment or Business Relationship. Granting this Award does not imply any right of continued employment or business relationship with Teradyne or its Subsidiaries, and does not affect the right of the recipient, Teradyne or its Subsidiaries to terminate the recipient’s employment or a business relationship at any time.

6. Tax Obligations.

(a) Responsibility for Taxes. The recipient acknowledges that, regardless of any action taken by Teradyne or, if different, the recipient’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the recipient’s participation in the Plan and legally applicable to the recipient (“Tax-Related Items”), is and remains the recipient’s responsibility and may exceed the amount actually withheld by Teradyne or the Employer. The recipient further acknowledges that Teradyne and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Stock Options, including, but not limited to, the grant, vesting or exercise of the Stock Options, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends or other distributions, and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Stock Option to reduce or eliminate the recipient’s liability for Tax-Related Items or achieve any particular tax result. Further, if the recipient is subject to Tax-Related Items in more than one jurisdiction between the Effective Date and the date of any relevant taxable or tax withholding event, as applicable, the recipient acknowledges that Teradyne and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b) Tax Withholding. Prior to the relevant taxable or tax withholding event, as applicable, the recipient agrees to make adequate arrangements satisfactory to Teradyne and/or the Employer to satisfy all Tax-Related Items. In this regard, the recipient authorizes Teradyne and/or the Employer, or their respective agents to satisfy the obligations with regard to all Tax-Related Items by withholding from proceeds of the sale of shares acquired at exercise of the Stock Options. Teradyne shall withhold or account for Tax-Related Items at minimum applicable rates. Alternatively, Teradyne, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit or require the recipient to satisfy the recipient’s obligations for Tax-Related Items, in whole or in part (without limitation) by delivery of cash or check to Teradyne or the Employer.

3

7. Compliance with Laws. Shares to be issued under this Award are currently registered under the United States Securities Act of 1933, as amended. If such registration is not in effect at the time of vesting, the recipient will be required to represent to Teradyne that the recipient is acquiring such shares as an investment and not with a view to the sale of those shares. Notwithstanding any other provision of the Plan or the Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares of common stock, Teradyne shall not be required to deliver any shares of common stock issuable upon exercise of the Stock Options prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the United States Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Teradyne shall, in its absolute discretion, deem necessary or advisable. The recipient understands that Teradyne is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, the recipient agrees that Teradyne shall have unilateral authority to amend the Plan and the Agreement without the recipient’s consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.

8. Governing Law and Venue. The Award and the provisions of this Agreement are governed by, and subject to, the laws of the Commonwealth of Massachusetts, without regard to the conflict of law provisions, as provided in the Plan. For purposes of litigating any dispute that arises under this Award or this Agreement, the parties hereby submit to and consent to the jurisdiction of the Commonwealth of Massachusetts, agree that such litigation shall be conducted in the courts of Middlesex County, or the federal courts for the United States for the District of Massachusetts, where this grant is made and/or to be performed.

9. Electronic Delivery and Acceptance. Teradyne may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The recipient hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by Teradyne or a third party designated by Teradyne.

10. Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

11. Imposition of Other Requirements. Teradyne reserves the right to impose other requirements on the recipient’s participation in the Plan, on the Stock Options and on any shares of common stock acquired under the Plan, to the extent Teradyne determines it is necessary or advisable for legal or administrative reasons, and to require the recipient to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

12. Waiver. The recipient acknowledges that a waiver by Teradyne of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the recipient or any other recipient.

13. No Advice Regarding Grant. Teradyne is not providing any tax, legal or financial advice, nor is Teradyne making any recommendations regarding the recipient’s participation in the Plan, or the recipient’s acquisition or sale of the underlying shares of common stock. The recipient is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

4

EX-21.1

Exhibit 21.1

Present Subsidiaries

Entity Name:	State or Jurisdiction Of Incorporation	Percentage of Voting Securities Owned
Teradyne (Asia) Pte., Ltd.	Singapore		100	%*
Teradyne Canada Limited	Canada		100	%
Teradyne de Costa Rica S.A.	Costa Rica		100	%
Teradyne GmbH	Germany		100	%*
Teradyne Holdings Denmark ApS	Denmark		100	%*
Teradyne (India) Engineering Private Ltd.	India		100	%*
Teradyne International Holdings B.V.	The Netherlands		100	%
Teradyne Italia SrL	Italy		100	%*
Teradyne K.K.	Japan		100	%
Teradyne Korea Ltd.	Republic of Korea		100	%*
Teradyne Limited	United Kingdom		100	%*
Teradyne Malaysia Sdn. Bhd.	Malaysia		100	%*
Teradyne Philippines Limited	Delaware		100	%*
Teradyne SAS	France		100	%
Teradyne (Shanghai) Co., Ltd	Peoples Republic of China		100	%*
Teradyne Taiwan LLC	Delaware		100	%*
Teradyne Thailand Ltd.	Delaware		100	%*
GenRad, LLC	Delaware		100	%
Herco Technology Corp.	California		100	%
P.L.S.T., Inc. (f/k/a Perception Laminates, Inc.)	California		100	%
Eagle Test Systems, Inc.	Delaware		100	%
Eagle Test Systems (Philippines) LLC	Delaware		100	%*
Nextest Systems Corporation	Delaware		100	%
Nextest Systems (Philippines) Corp.	Philippines		99.9	%*
LitePoint Corporation	Delaware		100	%
LitePoint Europe A/S	Denmark		100	%*
LitePoint Technology Limited	Hong Kong		100	%*
LitePoint Technology (Shanghai) Company Ltd.	Peoples Republic of China		100	%*
LitePoint Japan K.K.	Japan		100	%*
LitePoint Design Test, LLC	New Mexico		100	%*
LitePoint Vietnam Limited	Socialist Republic of Vietnam		100	%*
Universal Robots A/S	Denmark		100	%*
Universal Robots (Spain) S.L.	Spain		100	%*
Universal Robots (Singapore) Pte. Ltd.	Singapore		100	%*
Universal Robots (India) Pte. Ltd.	India		100	%*
Universal Robots (Shanghai) Co. Ltd.	Peoples Republic of China		100	%*
Universal Robots (USA), Inc.	Delaware		100	%
Universal Robots GmbH	Germany		100	%*

* Indirect subsidiaries whose voting securities are 100% controlled by Teradyne, Inc.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-188824; 333-177246; 333-159723; 333-155564; 333-149017; 333-143231; 333-134519; 333-116632; 333-101983; 333-68074; 333-56373; 333-32547; and 333-07177) of Teradyne, Inc. of our report dated March 1, 2017 relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

March 1, 2017

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Mark E. Jagiela, certify that:

1. I have reviewed this annual report on Form 10-K 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 officers 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 officers 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 functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls 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: March 1, 2017

By:	/S/    MARK E. JAGIELA
	Mark E. Jagiela
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

I, Gregory R. Beecher, certify that:

1. I have reviewed this annual report on Form 10-K 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 officers 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 officers 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 functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls 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: March 1, 2017

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 Annual Report of Teradyne, Inc. (the “Company”) on Form 10-K for the period ending December 31, 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 Section 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.

/S/    MARK E. JAGIELA

Mark E. Jagiela

Chief Executive Officer

March 1, 2017

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 Annual Report of Teradyne, Inc. (the “Company”) on Form 10-K for the period ending December 31, 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 Section 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.

/S/    GREGORY R. BEECHER

Gregory R. Beecher

Chief Financial Officer

March 1, 2017

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 24, 2017	Jul. 01, 2016
Document Information
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Trading Symbol	TER
Entity Registrant Name	TERADYNE, INC
Entity Central Index Key	0000097210
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		200,302,178
Entity Public Float			$ 3,900,000,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents		$ 307,884	$ 264,705
Marketable securities		871,024	477,696
Accounts receivable, less allowance for doubtful accounts of $2,356 and $2,407 in 2016 and 2015, respectively		192,444	211,293
Inventories, net		135,958	153,588
Deferred tax assets			54,973
Prepayments		108,454	91,519
Other current assets		8,039	6,194
Total current assets		1,623,803	1,259,968
Property, plant and equipment, net		253,821	273,414
Marketable securities		433,843	265,928
Deferred tax assets		107,405	7,404
Other assets		12,165	13,080
Retirement plans assets		7,712	636
Intangible assets, net		100,401	239,831
Goodwill		223,343	488,413
Total assets	[1]	2,762,493	2,548,674
Current liabilities:
Accounts payable		95,362	92,358
Accrued employees' compensation and withholdings		109,944	113,994
Deferred revenue and customer advances		84,478	85,527
Other accrued liabilities		51,382	43,727
Contingent consideration		1,050	15,500
Accrued income taxes		30,480	21,751
Total current liabilities		372,696	372,857
Retirement plans liabilities		106,938	103,531
Long-term deferred revenue and customer advances		23,463	25,745
Deferred tax liabilities		12,144	26,663
Long-term other accrued liabilities		28,642	32,156
Long-term contingent consideration		37,282	21,936
Long-term debt		352,669
Total liabilities		933,834	582,888
Commitments and contingencies (Note K)
SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized; 199,177 and 203,641 shares issued and outstanding at December 31, 2016 and 2015, respectively		24,897	25,455
Additional paid-in capital		1,593,684	1,480,647
Accumulated other comprehensive loss		(20,214)	(8,144)
Retained earnings		230,292	467,828
Total shareholders' equity		1,828,659	1,965,786
Total liabilities and shareholders' equity		$ 2,762,493	$ 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.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts receivable, less allowance for doubtful accounts	$ 2,356	$ 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	199,177,000	203,641,000
Common stock, shares outstanding	199,177,000	203,641,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2016		Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2014	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Revenues:
Products	$ 303,667	[1],[2]	$ 334,610		$ 456,832		$ 358,139		$ 244,510		$ 386,488		$ 437,243		$ 272,325		$ 1,453,248		$ 1,340,566		$ 1,364,024
Services	76,322	[1],[2]	75,865		74,960		72,855		73,934		79,506		75,496		70,076		300,002		299,012		283,800
Total revenues	379,989	[1],[2]	410,475		531,792		430,994		318,444		465,994		512,739		342,401		1,753,250	[10]	1,639,578	[10]	1,647,824	[10]
Cost of revenues:
Cost of products	127,481	[1],[2]	148,266		215,795		167,555		120,322		170,963		181,491		118,996		659,097		591,772		640,787
Cost of services	33,502	[1],[2]	34,850		33,127		33,107		32,096		36,405		32,680		30,982		134,586		132,163		128,229
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)	160,983	[1],[2]	183,116		248,922		200,662		152,418		207,368		214,171		149,978		793,683		723,935		769,016
Gross profit	219,006	[1],[2]	227,359		282,870		230,332		166,026		258,626		298,568		192,423		959,567		915,643		878,808
Operating expenses:
Engineering and development	70,052	[1],[2]	71,400		76,109		73,464		70,941		74,027		75,832		71,450		291,025		292,250		291,639
Selling and administrative	76,289	[1],[2]	78,794		81,425		79,174		79,718		77,481		77,073		72,041		315,682		306,313		319,713
Acquired intangible assets amortization	7,923	[1],[2]	8,487		16,244		19,994		19,911		20,053		15,258		13,808		52,648		69,031		70,771
Acquired intangible assets impairment					83,339												83,339		98,200
Goodwill impairment	0				254,946											$ 98,897	254,946		(254,946)		98,897
Restructuring and other	5,570	[1],[2]	12,177		2,608		1,587		5,204		261		(385)				21,942		5,080		1,365
Total operating expenses	159,834	[1],[2]	170,858		514,671		174,219		175,774		171,822		167,778		157,299		1,019,582		672,674		782,385
(Loss) income from operations	59,172	[1],[2]	56,501		(231,801)		56,113		(9,748)		86,804		130,790		35,124		(60,015)		242,969		96,423
Non-operating (income) expenses:
Interest income	(3,095)	[1],[2]	(2,892)		(1,666)		(1,642)		(2,017)		(1,708)		(1,674)		(1,816)		(9,296)		(7,214)		(6,259)
Interest expense	1,604	[1],[2]	633		691		710		762		508		444		162		3,637		1,876		6,934
Other (income) expense, net	1,779	[1],[2]	(921)		(9)		(147)		364		596		(116)		(5,660)		704		(4,817)		372
(Loss) income before income taxes	58,884	[1],[2]	59,681		(230,817)		57,192		(8,857)		87,408		132,136		42,438		(55,060)	[11],[12]	253,124	[11],[12]	95,376	[11],[12]
Income tax (benefit) provision	(7,461)	[1],[2]	(4,113)		(7,271)		7,206		(8,216)		15,955		29,257		9,651		(11,639)		46,647		14,104
Net (loss) income	$ 66,345	[1],[2]	$ 63,794		$ (223,546)		$ 49,986		$ (641)		$ 71,453		$ 102,879		$ 32,787		$ (43,421)		$ 206,477		$ 81,272
Net (loss) income per common share:
Basic	$ 0.33	[1],[2]	$ 0.32		$ (1.10)		$ 0.24		$ 0.00		$ 0.34		$ 0.48		$ 0.15		$ (0.21)		$ 0.98		$ 0.40
Diluted	0.33	[1],[2]	0.31		(1.10)		0.24		0.00		0.34		0.48		0.15		$ (0.21)		$ 0.97		$ 0.37
Weighted average common shares-basic																	202,578		211,544		202,908
Weighted average common shares-diluted																	202,578		213,321		222,550
Cash dividend declared per common share	$ 0.06	[1],[2]	$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.24		$ 0.24		$ 0.18

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Revenues attributable to a country are based on location of customer site.

[11] Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

[12] Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net (loss) income	$ (43,421)	$ 206,477	$ 81,272
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax of $0, $0, $0	(13,162)	(8,759)
Unrealized gains (losses) on marketable securities:
Unrealized gains (losses) on marketable securities arising during period, net of tax of $923, $(1,667), $1,449, respectively	2,037	(3,075)	2,417
Less: Reclassification adjustment for gains included in net (loss) income, net of tax of $(255), $(390), $(645), respectively	(683)	(704)	(1,433)
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Total	1,354	(3,779)	984
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 $(190), $(169), $(169), respectively	(321)	(295)	(295)
Prior service income arising during period, net of tax of $34, $0, $0, respectively	59
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	(262)	(295)	(295)
Other comprehensive (loss) income	(12,070)	(12,833)	689
Comprehensive (loss) income	$ (55,491)	$ 193,644	$ 81,961

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Foreign currency translation adjustment, tax	$ 0	$ 0	$ 0
Unrealized gains (losses) on marketable securities arising during period, tax	923	(1,667)	1,449
Reclassification adjustment for gains included in net income,tax	(255)	(390)	(645)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, tax	(190)	(169)	(169)
Prior service credit, tax	$ 34	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Balance, at Dec. 31, 2013	$ 1,985,094	$ 23,966	$ 1,390,896	$ 4,000	$ 566,232
Balance, Shares at Dec. 31, 2013		191,731
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax (in shares)		3,661
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax	9,273	$ 458	8,815
Proceeds from issuance of warrants		$ 2,653	(2,653)
Warrant settlement Shares		21,221
Stock-based compensation expense	39,868		39,868
Tax benefit related to stock options and restricted stock units	209		209
Cash dividends	(37,425)				(37,425)
Net income (loss)	81,272				81,272
Unrealized gains (losses) on marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $1,449, (1,667), 923, respectively	2,417			2,417
Less: Reclassification adjustment for gains included in net income, net of tax of $(645), $(390), (255), respectively	(1,433)			(1,433)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax $(169), $(169), $(190), respectively	(295)			(295)
Balance, at Dec. 31, 2014	2,078,980	$ 27,077	1,437,135	4,689	610,079
Balance, Shares at Dec. 31, 2014		216,613
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax (in shares)		2,649
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax	8,933	$ 331	8,602
Stock-based compensation expense	30,285		30,285
Repurchase of common stock	(299,949)	$ (1,953)			(297,996)
Repurchase of common stock (in shares)		(15,621)
Tax benefit related to stock options and restricted stock units	4,625		4,625
Cash dividends	(50,732)				(50,732)
Net income (loss)	206,477				206,477
Foreign currency translation adjustment	(8,759)			(8,759)
Unrealized gains (losses) on marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $1,449, (1,667), 923, respectively	(3,075)			(3,075)
Less: Reclassification adjustment for gains included in net income, net of tax of $(645), $(390), (255), respectively	(704)			(704)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax $(169), $(169), $(190), respectively	(295)			(295)
Balance, at Dec. 31, 2015	1,965,786	$ 25,455	1,480,647	(8,144)	467,828
Balance, Shares at Dec. 31, 2015		203,641
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax (in shares)		2,377
Issuance of stock to employees under benefit plans, net of shares withheld for payroll tax	10,665	$ 297	10,368
Equity component of convertible notes	100,836		100,836
Equity component of convertible notes issuance cost	(2,017)		(2,017)
Purchase of convertible notes hedges	(100,834)		(100,834)
Proceeds from issuance of warrants	67,852		67,852
Stock-based compensation expense	30,745		30,745
Repurchase of common stock	(146,331)	$ (855)			(145,476)
Repurchase of common stock (in shares)		(6,841)
Tax benefit related to stock options and restricted stock units	6,087		6,087
Cash dividends	(48,639)				(48,639)
Net income (loss)	(43,421)				(43,421)
Foreign currency translation adjustment	(13,162)			(13,162)
Unrealized gains (losses) on marketable securities:
Unrealized (losses) gains on marketable securities arising during period, net of tax of $1,449, (1,667), 923, respectively	2,037			2,037
Less: Reclassification adjustment for gains included in net income, net of tax of $(645), $(390), (255), respectively	(683)			(683)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, net of tax $(169), $(169), $(190), respectively	(321)			(321)
Prior service income arising during period, net of tax of $34	59			59
Balance, at Dec. 31, 2016	$ 1,828,659	$ 24,897	$ 1,593,684	$ (20,214)	$ 230,292
Balance, Shares at Dec. 31, 2016		199,177

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Issuance of stock to employees under benefit plans, shares withheld for payroll tax	$ 9,808	$ 10,597	$ 12,018
Unrealized (losses) gains on marketable securities arising during period, tax	923	(1,667)	1,449
Reclassification adjustment for gains included in net income, tax	(255)	(390)	(645)
Amortization of prior service (credit) cost included in net periodic pension and post-retirement expense/income, tax	(190)	(169)	(169)
Prior service income arising during period, tax	$ 34	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net (loss) income	$ (43,421)	$ 206,477	$ 81,272
Adjustments to reconcile net (loss) income from operations to net cash provided by operating activities:
Depreciation	64,782	68,181	73,390
Amortization	55,227	72,592	79,154
Stock-based compensation	30,750	30,451	40,307
Provision for excess and obsolete inventory	17,493	21,332	22,193
Goodwill impairment	254,946	(254,946)	98,897
Acquired intangible assets impairment	83,339	98,200
Deferred taxes	(62,936)	(7,124)	(19,928)
Tax benefit related to employee stock compensation awards	(6,198)	(4,715)	(535)
Impairment of fixed assets	4,179
Property insurance recovery	(5,363)
Gain from the sale of an equity investment		(5,406)
Non-cash charge for the sale of inventories revalued at the date of acquisition		1,567
Retirement plans actuarial (gains) losses	(3,203)	17,732	46,564
Contingent consideration adjustment	15,896	2,489	(630)
Other	(448)	(34)	2,874
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable	18,325	(57,267)	8,060
Inventories	34,263	15,559	51,803
Prepayments and other assets	(18,882)	3,034	41,537
Accounts payable and other accrued expenses	(1,706)	48,213	(45,430)
Deferred revenue and customer advances	(3,634)	17,011	22,033
Retirement plan contributions	(6,044)	(12,095)	(33,916)
Income taxes	18,434	(5,156)	24,417
Net cash provided by operating activities	445,799	412,841	492,062
Cash flows from investing activities:
Purchases of property, plant and equipment	(85,272)	(89,878)	(168,982)
Purchases of available-for-sale marketable securities	(1,656,267)	(1,424,002)	(1,578,743)
Proceeds from maturities of available-for-sale marketable securities	243,232	360,264	570,358
Proceeds from sales of available-for-sale marketable securities	852,794	1,316,131	859,729
Proceeds from property insurance	5,051
Acquisition of businesses, net of cash acquired		(282,741)	(19,419)
Proceeds from life insurance		1,098	4,184
Proceeds from the sale of an equity investment		5,406
Net cash used for investing activities	(640,462)	(113,722)	(332,873)
Cash flows from financing activities:
Proceeds from issuance of convertible notes, net of issuance costs	450,800
Purchase of convertible note hedges	(100,834)
Proceeds from issuance of warrants	67,852
Issuance of common stock under stock option and stock purchase plans	20,473	19,530	21,291
Repurchase of common stock	(146,331)	(299,949)
Tax benefit related to employee stock compensation awards	6,198	4,715	535
Dividend payments	(48,619)	(50,713)	(37,425)
Payment of revolving credit facility costs		(2,253)
Payments of long-term debt			(190,972)
Payments of contingent consideration	(11,697)
Net cash provided by (used for) financing activities	237,842	(328,670)	(206,571)
Increase (decrease) in cash and cash equivalents	43,179	(29,551)	(47,382)
Cash and cash equivalents at beginning of year	264,705	294,256	341,638
Cash and cash equivalents at end of year	307,884	264,705	294,256
Cash paid for:
Interest	446	301	4,294
Income taxes	$ 40,424	$ 35,218	$ 25,893

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The Company

12 Months Ended

Dec. 31, 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”);

• industrial automation (“Industrial Automation”) products; and

• wireless test (“Wireless Test”) systems.

On June 11, 2015, Teradyne acquired Universal Robots A/S (“Universal Robots”) for approximately $284 million of cash plus up to an additional $65 million of cash if certain performance targets are met extending through 2018. 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. Universal Robots is a separate operating and reportable segment, Industrial Automation.

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Accounting Policies

12 Months Ended

Dec. 31, 2016

Accounting Policies

B.    ACCOUNTING POLICIES

The consolidated financial statements include the accounts of Teradyne and its wholly-owned subsidiaries. All significant intercompany balances and transactions are eliminated. Certain prior years’ amounts were reclassified to conform to the current year presentation.

Preparation of Financial Statements and Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates.

Revenue Recognition

Teradyne recognizes revenues, including revenues from distributors, when there is persuasive evidence of an arrangement, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to Teradyne’s customers upon shipment or at delivery destination point. In circumstances where either title or risk of loss pass upon destination, acceptance or cash payment, Teradyne defers revenue recognition until such events occur except when title transfer is tied to cash payment outside the United States. Outside the United States, Teradyne recognizes revenue upon shipment or at delivery destination point, even if Teradyne retains a form of title to products delivered to customers, provided the sole purpose is to enable Teradyne to recover the products in the event of customer payment default and the arrangement does not prohibit the customer’s use or resale of the product in the ordinary course of business.

Teradyne’s equipment has non-software and software components that function together to deliver the equipment’s essential functionality. Revenue is recognized upon shipment or at delivery destination point, provided that customer acceptance criteria can be demonstrated prior to shipment. Certain contracts require Teradyne to perform tests of the product to ensure that performance meets the published product specifications or customer requested specifications, which are generally conducted prior to shipment. Where the criteria cannot be demonstrated prior to shipment, revenue is deferred until customer acceptance has been received. Teradyne also defers the portion of the sales price that is not due until acceptance, which represents deferred profit.

For multiple element arrangements, Teradyne allocates revenue to all deliverables based on their relative selling prices. In such circumstances, a hierarchy is used to determine the selling price for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“BESP”). For a delivered item to be considered a separate unit the delivered item must have value to the customer on a standalone basis and the delivery or performance of the undelivered item must be considered probable and substantially in Teradyne’s control.

Teradyne’s post-shipment obligations include installation, training services, one-year standard warranties, and extended warranties. Installation does not alter the product capabilities, does not require specialized skills or tools and can be performed by the customers or other vendors. Installation is typically provided within five days of product shipment and is completed within one to two days thereafter. Training services are optional and do not affect the customers’ ability to use the product. Teradyne defers revenue for the selling price of installation and training. Extended warranties constitute warranty obligations beyond one year and Teradyne defers revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-20, “Separately Priced Extended Warranty and Product Maintenance Contracts” and ASC 605-25, “Revenue Recognition Multiple-Element Arrangements.” Service revenue is recognized over the contractual period or as services are performed.

Teradyne’s products are generally subject to warranty and related costs of the warranty are provided for in cost of revenues when product revenue is recognized. Teradyne classifies shipping and handling costs in cost of revenue. Teradyne does not provide its customers with contractual rights of return for any of its products.

As of December 31, 2016 and 2015, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2016		2015
	(in thousands)
Extended warranty	$	46,753	$	46,499
Equipment maintenance and training		39,037		30,616
Customer advances, undelivered elements and other		22,151		34,157
Total deferred revenue and customer advances	$	107,941	$	111,272

Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance 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 balance below is included in other accrued liabilities:

	Amount
	(in thousands)
Balance at December 31, 2013	$	6,660
Accruals for warranties issued during the period		15,406
Accruals related to pre-existing warranties		(2,008	)
Settlements made during the period		(11,116	)
Balance at December 31, 2014		8,942
Acquisition		409
Accruals for warranties issued during the period		11,539
Accruals related to pre-existing warranties		(3,159	)
Settlements made during the period		(10,806	)
Balance at December 31, 2015		6,925
Accruals for warranties issued during the period		14,291
Accruals related to pre-existing warranties		(1,354	)
Settlements made during the period		(12,659	)
Balance at December 31, 2016	$	7,203

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

	Amount
	(in thousands)
Balance at December 31, 2013	$	34,909
Deferral of new extended warranty revenue		29,519
Recognition of extended warranty deferred revenue		(21,128	)
Balance at December 31, 2014		43,300
Acquisition		870
Deferral of new extended warranty revenue		28,549
Recognition of extended warranty deferred revenue		(26,220	)
Balance at December 31, 2015		46,499
Deferral of new extended warranty revenue		27,182
Recognition of extended warranty deferred revenue		(26,928	)
Balance at December 31, 2016	$	46,753

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The volatility of the industries that Teradyne serves can cause certain of its customers to experience shortages of cash flows, which can impact their ability to make required payments. Teradyne maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for doubtful accounts are reviewed periodically taking into account the customer’s recent payment history, the customer’s current financial statements and other information regarding the customer’s credit worthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate all inventories for net realizable value. Teradyne records a provision for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

Investments

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. 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.

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. Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the years ended December 31, 2016, 2015 and 2014. ASC 820-10 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

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

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

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

In accordance with ASC 820-10, Teradyne measures its debt and equity investments at fair value. Teradyne’s debt and equity investments are primarily classified within Level 1 and 2. Acquisition-related contingent consideration is classified within Level 3. Teradyne determines the fair value of acquisition-related contingent consideration using a Monte Carlo simulation model. Assumptions utilized in the model include forecasted revenues, revenues volatility and discount rate.

Prepayments

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

	2016		2015
	(in thousands)
Contract manufacturer prepayments	$	77,017	$	66,283
Prepaid maintenance and other services		7,676		8,481
Prepaid taxes		4,664		3,781
Other prepayments		19,097		12,974
Total prepayments	$	108,454	$	91,519

Retirement and Postretirement Plans

Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

Goodwill, Intangible and Long-Lived Assets

Teradyne accounts for goodwill and intangible assets in accordance with ASC 350-10, “Intangibles-Goodwill and Other.” Intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with ASC 350-10, Teradyne has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

In accordance with ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment, if any, contain management’s best estimates using appropriate assumptions and projections at that time.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.

Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:

Buildings	40 years
Building improvements	5 to 10 years
Leasehold improvements	Lesser of lease term or 10 years
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery and equipment	3 to 5 years
Software	3 to 5 years

Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2016, 2015 and 2014 was $11.4 million, $50.7 million and $9.7 million, respectively.

Engineering and Development Costs

Teradyne’s products are highly technical in nature and require a large and continuing engineering and development effort. Software development costs incurred prior to the establishment of technological feasibility are charged to expense. Software development costs incurred subsequent to the establishment of technological feasibility are capitalized until the product is available for release to customers. To date, the period between achieving technological feasibility and general availability of the product has been short and software development costs eligible for capitalization have not been material. Engineering and development costs are expensed as incurred and consist primarily of salaries, contractor fees, including non-recurring engineering charges related to product design, allocated facility costs, depreciation, and tooling costs.

Stock Compensation Plans and Employee Stock Purchase Plan

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10, “Compensation-Stock Compensation.” As required by ASC 718-10, Teradyne has made an estimate of expected forfeitures and is recognizing compensation costs only for those stock-based compensation awards expected to vest.

Under its stock compensation plans, Teradyne has granted 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”).

Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Teradyne performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on its assessment, Teradyne concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. U.S. income taxes are not provided for on the earnings of non-U.S. subsidiaries which are expected to be reinvested indefinitely in operations outside the U.S. For intra-period tax allocations, Teradyne first utilizes non-equity related tax attributes, such as net operating losses and credit carryforwards and then equity-related tax attributes. Teradyne uses the with-and-without method for calculating excess stock compensation deductions and does not take into account any indirect impacts of excess stock compensation deductions on its research and development tax credits, domestic production activities deduction, and other differences between financial reporting and tax reporting.

Advertising Costs

Teradyne expenses all advertising costs as incurred. Advertising costs were $6.4 million, $3.3 million and $1.9 million in 2016, 2015 and 2014, respectively.

Translation of Non-U.S. Currencies

The functional currency for all subsidiaries is the U.S. dollar, except for the Industrial Automation segment for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Industrial Automation, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenue and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss).

Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

These amounts do not reflect the corresponding gains (losses) from foreign exchange contracts. See Note G: “Financial Instruments” regarding foreign exchange contracts.

Net Income (Loss) per Common Share

Basic net (loss) income per common share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Except where the result would be antidilutive, diluted net (loss) income per common share is calculated by dividing net (loss) income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable.

For the year ended December 31, 2014, dilutive potential common shares included incremental shares from the assumed conversion of the convertible notes and the convertible notes hedge warrant shares. Incremental shares from the assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option for 34.7 million shares at an exercise price of $5.48 was not used in the GAAP earnings per share calculation as its effect was anti-dilutive.

In 2014, Teradyne settled its conversion spread (i.e., the intrinsic value of the embedded option feature contained in the convertible debt) in shares. Teradyne accounted for its conversion spread using the treasury stock method. Teradyne determined that it had the ability and intent to settle the principal amount of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share.

With respect to its convertible debt issued in 2016, Teradyne has determined that it has the ability and intent to settle the principal of the convertible debt in cash; accordingly, the principal amount is excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt and equity marketable securities and foreign currency translation adjustment.

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Recently Issued Accounting Pronouncements

12 Months Ended

Dec. 31, 2016

Recently Issued Accounting Pronouncements

C.    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.” The new guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The revised guidance will be applied prospectively, and is effective in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. Teradyne is currently evaluating the impact of this ASU on its financial position, results of operations and statements of cash flows.

On October 24, 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory.” Under current Generally Accepted Accounting Principles (“GAAP”), the tax effects of intra-entity asset transfers are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance requires recognition of the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The new guidance does not apply to intra-entity transfers of inventory. The income tax consequences from the sale of inventory from one member of a consolidated entity to another will continue to be deferred until the inventory is sold to a third party. The new guidance will be effective in fiscal years beginning after December 15, 2017. Early adoption is permitted. The modified retrospective approach will be required for transition to the new guidance, with a cumulative-effect adjustment recorded in retained earnings as of the beginning of the period of adoption. Teradyne does not expect this ASU to have a material impact on its financial position, results of operations and statements of cash flows.

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 statements of cash flows. This pronouncement is effective for annual periods beginning after December 15, 2016. Early adoption is permitted. Adoption of the new guidance will require recognition of excess tax benefits and tax deficiencies in the consolidated statements of operations on a prospective basis, with a cumulative effect adjustment to retained earnings for any prior year excess tax benefits or tax deficiencies not previously recorded. Teradyne expects the cumulative effect adjustment to increase retained earnings and deferred tax assets by approximately $39 million. In the years ended December 31, 2016, 2015 and 2014, Teradyne recorded excess tax benefits of $6.1 million, $4.6 million, and $0.2 million, respectively, as a component of additional paid-in capital. In accordance with this ASU, amounts for future periods related to the difference between the fair value of a restricted stock unit (“RSU”) on the grant date and the fair value on the vest date will be recorded as a discrete benefit or expense to the current income tax provision in the period in which the RSU vests. A majority of the future amounts will be recorded during the first quarter consistent with the vesting of a majority of Teradyne’s RSU grants.

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 an 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 consolidated statements of operations. 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 January 2016, the FASB issued 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.

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 new guidance requires 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 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 August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40).” ASU 2014-15 provides guidance on management’s responsibility in evaluating whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. Teradyne does not expect this ASU to have a material impact on its consolidated financial statements.

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. 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 selected a modified retrospective transition method. Teradyne is currently evaluating the impact of this ASU on its financial position and results of operations.

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Acquisitions

12 Months Ended

Dec. 31, 2016

Acquisitions

D.    ACQUISITIONS

Business

Universal Robots

On June 11, 2015, Teradyne acquired all of the outstanding equity of Universal Robots A/S (“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 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount in the first quarter of 2016. The maximum payment for each of the two remaining Universal Robots earn-outs is $25.0 million.

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

For the period from June 12, 2015 to December 31, 2015, Universal Robots contributed $41.9 million of revenues and had a $7.6 million loss before income taxes.

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 Years Ended
	December 31, 2015		December 31, 2014
	(in thousands, except per share amounts)
Revenue	$	1,657,626	$	1,686,689
Net income	$	199,784	$	61,078
Net income per common share:
Basic	$	0.94	$	0.30
Diluted	$	0.94	$	0.27

Pro forma results for the year ended December 31, 2015 were adjusted to exclude $1.6 million of non-recurring expense related to the fair value adjustment to acquisition-date inventory and $1.0 million of acquisition related costs incurred in 2015.

Pro forma results for the year ended December 31, 2014 were adjusted to include $1.6 million of non-recurring expense related to the fair value adjustment to acquisition-date inventory and $1.0 million of acquisition related costs.

Avionics Interface Technologies, LLC.

On October 31, 2014, Teradyne acquired all of the assets and liabilities of Avionics Interface Technologies, LLC (“AIT”) located in Omaha, Nebraska and Dayton, Ohio. AIT is a supplier of equipment for testing state-of-the-art data communication buses. The acquisition of AIT complements Teradyne’s Defense/Aerospace line of bus test instrumentation for commercial and defense avionics systems. AIT is included in Teradyne’s System Test segment.

The total purchase price of $21.2 million consisted of $19.4 million of cash paid to acquire AIT’s assets and liabilities and $1.8 million in fair value of contingent consideration payable upon the achievement of certain revenue and gross margin targets in 2015 and 2016. The total amount of contingent consideration paid was $1.1 million, which was paid in January 2017.

The valuation of the contingent consideration utilized the following assumptions: (1) probability of meeting each target; (2) expected timing of meeting each target; and (3) discount rate reflecting the risk associated with the expected payments. The probabilities and timing for each target were estimated based on a review of the historical and projected results. A discount rate of 4.7 percent was selected based on the cost of debt for the business. A significant portion of the risk in achieving the contingent consideration was captured in the probabilities assigned to meeting each target.

The AIT 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 of AIT’s net tangible 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 and net tangible assets in the amount of $10.5 million was allocated to goodwill, which is deductible for tax purposes.

The following represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	10,516
Intangible assets		9,080
Tangible assets acquired and liabilities assumed:
Current assets		2,452
Non-current assets		359
Accounts payable and current liabilities		(1,164	)
Total purchase price	$	21,243

Teradyne estimated the fair value of intangible assets using the income approach. 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)
Customer relationships	$	5,630		5.0
Developed technology		2,580		4.8
Trademarks and tradenames		380		5.0
Non-compete agreement		320		4.0
Customer order backlog		170		0.3
Total intangible assets	$	9,080		4.8

For the period from October 31, 2014 to December 31, 2014, AIT contributed $0.6 million of revenues and had a $0.8 million loss before income taxes.

The following unaudited pro forma information gives effect to the acquisition of AIT as if the acquisition occurred on January 1, 2013. 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 Year Ended
	December 31, 2014
	(in thousands, except per share amounts)
Revenues	$	1,655,038
Net income	$	82,169
Income per common share:
Basic	$	0.40
Diluted	$	0.37

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Inventories

12 Months Ended

Dec. 31, 2016

Inventories

E.    INVENTORIES

Inventories, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Raw material	$	58,530	$	73,117
Work-in-process		22,946		32,825
Finished goods		54,482		47,646
	$	135,958	$	153,588

Inventory reserves for the years ended December 31, 2016 and 2015 were $116.0 million and $119.4 million, respectively.

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment

F.    PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Land	$	16,561	$	16,561
Buildings		98,031		108,797
Machinery and equipment		601,835		595,445
Furniture and fixtures, and software		82,897		82,612
Leasehold improvements		46,612		43,328
Construction in progress		3,032		2,630
		848,968		849,373
Less: accumulated depreciation		595,147		575,959
	$	253,821	$	273,414

Depreciation of property, plant and equipment for the years ended December 31, 2016, 2015 and 2014 was $64.8 million, $68.2 million and $73.4 million, respectively. As of December 31, 2016 and 2015, the gross book value included in machinery and equipment for internally manufactured test systems being leased by customers was $19.4 million and $20.4 million, respectively. As of December 31, 2016 and 2015, the accumulated depreciation on these test systems was $10.5 million and $8.5 million, respectively.

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Financial Instruments

12 Months Ended

Dec. 31, 2016

Financial Instruments

G.    FINANCIAL INSTRUMENTS

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’s available-for-sale securities are classified as Level 1 and Level 2. Contingent consideration is classified as Level 3. The vast 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 2016, 2015 and 2014 were $1.6 million, $1.7 million and $2.4 million, respectively. Realized losses recorded in 2016 and 2015 were $0.5 million and $0.4 million, respectively. There were no realized losses recorded in 2014. 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 years ended December 31, 2016 and 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 December 31, 2016 and 2015:

	December 31, 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	$	214,722	$	—	$	—	$	214,722
Cash equivalents		37,458		55,704		—		93,162
Available-for-sale securities:
U.S. Treasury securities		—		900,038		—		900,038
Commercial paper		—		161,630		—		161,630
Corporate debt securities		—		100,153		—		100,153
Certificates of deposit and time deposits		—		82,133		—		82,133
U.S. government agency securities		—		42,014		—		42,014
Equity and debt mutual funds		18,171		—		—		18,171
Non-U.S. government securities		—		728		—		728
Total	$	270,351	$	1,342,400	$	—	$	1,612,751
Derivative assets		—		1		—		1
Total	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Contingent consideration	$	—	$	—	$	38,332	$	38,332
Derivative liabilities		—		131		—		131
Total	$	—	$	131	$	38,332	$	38,463

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	252,180	$	55,704	$	—	$	307,884
Marketable securities		—		871,024		—		871,024
Long-term marketable securities		18,171		415,672		—		433,843
Prepayments		—		1		—		1
	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Other current liabilities	$	—	$	131	$	—	$	131
Contingent consideration		—		—		1,050		1,050
Long-term contingent consideration		—		—		37,282		37,282
	$	—	$	131	$	38,332	$	38,463

	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 years ended December 31, 2016 and 2015 were as follows:

	Contingent Consideration
	(in thousands)
Balance at December 31, 2014	$	3,350
Acquisition of Universal Robots		31,597
Fair value adjustment of Universal Robots (1)		5,339
Fair value adjustment of AIT (2)		(1,250	)
Fair value adjustment of ZTEC (3)		(1,600	)
Balance at December 31, 2015		37,436
Payments (4)		(15,000	)
Fair value adjustment of AIT (5)		550
Fair value adjustment of Universal Robots (5)		15,346
Balance at December 31, 2016	$	38,332

(1) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $5.3 million primarily due to an increase in forecasted revenues.

(2) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was reduced by $1.3 million due to a decrease in the forecasted revenues.

(3) During the year ended December 31, 2015, the fair value measurement of the contingent consideration for the earn-out in connection with the acquisition of ZTEC Instruments, Inc. (“ZTEC”) was reduced by $1.6 million, to $0, because Teradyne and the Securityholder Representative, on behalf of the ZTEC securityholders, agreed to terminate the earn-out prior to the end of the December 31, 2015 earn-out period, with no payout in connection with the resolution of indemnity claims asserted by both Teradyne and the Securityholder Representative.

(4) During the year ended December 31, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(5) During the year ended December 31, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $15.3 million primarily due to an increase in forecasted revenues and a decrease in the discount rate. During the year ended 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenues. The AIT contingent consideration in the amount of $1.1 million was paid in January 2017.

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

Liability	December 31, 2016 Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$	21,301	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2017 volatility		10.8%
				Discount Rate		3.3%
		$15,981	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2018 volatility		10.8%
				Discount Rate		3.3%
Contingent consideration (AIT)	$	1,050(1)

(1) Teradyne paid this amount in January 2017.

As of December 31, 2016, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenues, 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 remaining Universal Robots earn-outs is $25.0 million.

The carrying amounts and fair values of financial instruments at December 31, 2016 and 2015 were as follows:

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	307,884	$	307,884	$	264,705	$	264,705
Marketable securities		1,304,867		1,304,867		743,624		743,624
Derivative assets		1		1		109		109
Liabilities
Contingent consideration		38,332		38,332		37,436		37,436
Derivative liabilities		131		131		146		146
Convertible debt (1)		352,669		486,754		—		—

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

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

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

	December 31, 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	$	901,975	$	97	$	(2,034	)	$	900,038	$	572,284
Commercial paper		161,672		24		(66	)		161,630		84,034
Corporate debt securities		99,708		1,065		(620	)		100,153		53,642
Certificates of deposit and time deposits		82,080		54		(1	)		82,133		7,760
U.S. government agency securities		42,026		7		(19	)		42,014		13,461
Equity and debt mutual funds		16,505		1,724		(58	)		18,171		1,661
Non-U.S. government securities		745		6		(23	)		728		137
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of  Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	871,321	$	134	$	(431	)	$	871,024	$	423,128
Long-term marketable securities		433,390		2,843		(2,390	)		433,843		309,851
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

	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 December 31, 2016, the fair market value of investments with unrealized losses totaled $733.0 million. Of this value, $2.9 million had unrealized losses of $0.3 million greater than one year and $730.1 million had unrealized losses of $2.5 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 December 31, 2016 and 2015, were temporary.

The contractual maturities of investments held at December 31, 2016 were as follows:

	Cost		Fair Value
	(in thousands)
Due within one year	$	871,321	$	871,024
Due after 1 year through 5 years		365,873		365,451
Due after 5 years through 10 years		12,839		12,309
Due after 10 years		38,173		37,912
Total	$	1,288,206	$	1,286,696

Contractual maturities of investments held at December 31, 2016, exclude $18 million of equity and debt mutual funds as they do not have a contractual maturity date.

The following table sets forth by fair value hierarchy Teradyne’s non-financial assets that were measured at fair value on a non-recurring basis as of July 3, 2016:

			July 3, 2016
	Quoted Prices in Active Markets  for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3))		Total		Total Losses
	(in thousands)
Goodwill (1)	$	—	$	—	$	7,976	$	7,976	$	254,946
Definite lived intangible assets (2)		—		—		5,750		5,750		83,339
	$	—	$	—	$	13,726	$	13,726	$	338,285

(1) In accordance with the provisions of ASC 350-20, “Goodwill” goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: “Goodwill and Intangible Assets” regarding goodwill impairment.

(2) In accordance with the provisions of ASC 360-10, “Property, Plant and Equipment,” definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: “Goodwill and Intangible Assets” regarding definite lived intangible assets impairment.

Derivatives

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

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

At December 31, 2016 and 2015, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	December 31, 2016								December 31, 2015
	Buy Position			Sell Position		Net Total			Buy Position			Sell Position		Net Total
	(in millions)
Japanese Yen	$	(17.7	)	$	—	$	(17.7	)	$	(51.9	)	$	—	$	(51.9	)
Korean Won		(8.8	)		—		(8.8	)		(5.5	)		—		(5.5	)
Taiwan Dollar		(6.9	)		—		(6.9	)		(5.0	)		—		(5.0	)
British Pound Sterling		(1.3	)		—		(1.3	)		(9.5	)		—		(9.5	)
Euro		—			25.2		25.2			—			27.2		27.2
Singapore Dollar		—			24.0		24.0			—			15.0		15.0
Total	$	(34.7	)	$	49.2	$	14.5		$	(71.9	)	$	42.2	$	(29.7	)

The fair value of the outstanding contracts was a loss of $0.1 million and $0.0 million, at December 31, 2016 and 2015, respectively.

In 2016, 2015 and 2014, Teradyne recorded net realized losses related to foreign currency forward contracts hedging net monetary assets and liabilities of $8.7 million, $3.0 million and $0.2 million, respectively.

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 as of December 31, 2016 and 2015:

	Balance Sheet Location	December  31, 2016			December  31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepayments	$	1		$	109
Foreign exchange contracts	Other current liabilities		(131	)		(146	)
Total derivatives		$	(130	)	$	(37	)

The following table summarizes the effect of derivative instruments in statements of operations recognized for the years ended December 31, 2016, 2015 and 2014. The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

	Location of Losses Recognized in Statements of Operations	December 31, 2016		December 31, 2015		December 31, 2014
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	8,671	$	3,047	$	237

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

Concentration of Credit Risk

Financial instruments which potentially subject Teradyne to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Teradyne’s cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Teradyne’s fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. Teradyne places foreign currency forward contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of geographically dispersed customers. Teradyne performs ongoing credit evaluations of its customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. There were no customers who accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2016. One customer accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2015.

Equity Interest

On November 1, 2013, in connection with the acquisition of Empirix, Inc. by Thoma Bravo LLC, Teradyne sold its equity interest in Empirix, Inc., a private company, and received cash proceeds of $34.2 million which was recorded as a gain in other (income) expense, net in the fourth quarter of 2013. An additional $5.4 million of cash proceeds that was held in escrow for 15 months, for potential indemnifications to the buyer, was paid to Teradyne in February 2015 and it was recorded as a gain in other (income) expense, net in the first quarter of 2015.

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Debt

12 Months Ended

Dec. 31, 2016

Debt

H.    DEBT

Convertible Senior Notes

On December 12, 2016, Teradyne completed a private offering of $460.0 million aggregate principal amount of 1.25% convertible senior unsecured notes (the “Notes”) due December 15, 2023 and received net proceeds, after issuance costs, of approximately $450.8 million, $33.0 million of which was used to pay the net cost of the convertible note hedge transactions and $50.1 million of which was used to repurchase 2.0 million shares of Teradyne’s common stock under its existing stock repurchase program from purchasers of the Notes in privately negotiated transactions effected through one of the initial purchasers or its affiliates conducted concurrently with the pricing of the Note offering. The Notes will mature on December 15, 2023, unless earlier repurchased or converted. The Notes bear interest from December 12, 2016 at a rate of 1.25% per year payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017. The Notes will be convertible at the option of the noteholders at any time prior to the close of business on the business day immediately preceding September 15, 2023, only under the following circumstances: (1) during any calendar quarter beginning after March 31, 2017 (and only during such calendar quarter), if the closing sale price of the Teradyne’s common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of the Teradyne’s common stock and the conversion rate on each such trading day; and (3) upon the occurrence of specified corporate events. On or after September 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Teradyne may satisfy its conversion obligation by paying or delivering cash, shares of its common stock or a combination of cash and shares of its common stock, at Teradyne’s election. The conversion rate for the Notes will initially be 31.4102 shares per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $31.84 per share of Teradyne’s common stock. The conversion rate is subject to adjustment under certain circumstances.

Concurrent with the offering of the Notes, Teradyne entered into convertible note hedge transactions (the “Note Hedge Transactions”) with the initial purchasers or their affiliates (the “Option Counterparties”). The Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the common stock that underlie the Notes, with a strike price equal to the initial conversion price of the Notes of $31.84. The Note Hedge Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of Teradyne’s common stock.

Separately and concurrent with the pricing of the Notes, Teradyne entered into warrant transactions with the Option Counterparties (the “Warrant Transactions”) in which it sold net-share-settled (or, at its election subject to certain conditions, cash-settled) warrants to the Option Counterparties. The Warrant Transactions cover, subject to customary antidilution adjustments, approximately 14.4 million shares of common stock. The strike price of the warrants will initially be $39.95 per share (subject to adjustment). The Warrant Transactions could have a dilutive effect to Teradyne’s common stock to the extent that the market price per share of Teradyne’s common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.

The Note Hedge Transactions are expected to reduce the potential dilution to Teradyne’s common stock upon any conversion of the Notes. However, the Warrant Transactions could separately have a dilutive effect to the extent that the market value per share of Teradyne’s common stock exceeds the applicable strike price of the warrant. The net cost of the Note Hedge Transactions, after being partially offset by the proceeds from the sale of the warrants, was approximately $33.0 million.

In connection with establishing their initial hedge of these convertible note hedge and warrant transactions, the Option Counterparties have entered into various derivative transactions with respect to Teradyne’s common stock and/or purchased shares of Teradyne’s common stock or other securities, including the Notes, concurrent with, or shortly after, the pricing of the Notes. In addition, the Option Counterparties may modify their hedge positions by entering into or unwinding various derivative transactions with respect to Teradyne’s common stock or by selling Teradyne’s common stock or other securities, including the Notes, in secondary market transactions (and may do so during any observation period related to the conversion of the Notes). These activities could adversely affect the value of Teradyne’s common stock and the Notes.

Teradyne considered the guidance of ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity,” and concluded that the convertible note hedge is both indexed to Teradyne’s stock and should be classified in stockholders’ equity in its statements of financial position. The convertible note hedge is considered indexed to Teradyne’s stock as the terms of the Note Hedge Transactions do not contain an exercise contingency and the settlement amount equals the difference between the fair value of a fixed number of Teradyne’s shares and a fixed strike price. Because the only variable that can affect the settlement amount is Teradyne’s stock price, which is an input to the fair value of a fixed-for-fixed option contract, the convertible note hedge is considered indexed to Teradyne’s stock.

Teradyne assessed whether the convertible note hedge should be classified as equity under ASC 815-40. In the Note Hedge Transactions contract the settlement terms permit net cash settlement or net share settlement, at the option of Teradyne. Therefore, the criteria as set forth in ASC 815-40 were evaluated by Teradyne. In reviewing the criteria, Teradyne noted the following: (1) the convertible note hedge does not require Teradyne to issue shares; (2) there is no requirement to net cash settle the convertible note hedge for failure to make timely filings with the SEC; (3) in the case of termination, the convertible note hedge is settled in the same consideration as the holders of the underlying stock; (4) the counterparty does not have rights that rank higher than those of a shareholder of the stock underlying the convertible note hedge; and (5) there is no requirement to post collateral. Based on its analysis of those criteria, Teradyne concluded that the convertible note hedge should be recorded in equity and no further adjustment should be made in future periods to adjust the value of the convertible note hedge.

Teradyne analyzed the Warrant Transactions under ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity,” and other relevant literature, and determined that it met the criteria for classification as an equity transaction and is considered indexed to Teradyne’s stock. As a result, Teradyne recorded the proceeds from the warrants as an increase to additional paid-in capital. Teradyne does not recognize subsequent changes in fair value of the warrants in its financial statements.

The provisions of ASC 470-20, “Debt with Conversion and Other Options,” are applicable to the Notes. ASC 470-20 requires Teradyne to separately account for the liability (debt) and equity (conversion feature) components of the Notes in a manner that reflects Teradyne’s nonconvertible debt borrowing rate at the date of issuance when interest cost is recognized in subsequent periods. Teradyne allocated $100.8 million of the $460.0 million principal amount of the Notes to the equity component, which represents a discount to the debt and will be amortized to interest expense using the effective interest method through December 2023. Accordingly, Teradyne’s effective annual interest rate on the Notes will be approximately 5.0%. The Notes are classified as long-term debt in the balance sheet based on their December 15, 2023 maturity date. Debt issuance costs of approximately $7.2 million are being amortized to interest expense using the effective interest method over the seven year term of the Notes. As of December 31, 2016, debt issuance costs were approximately $7.1 million.

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

	December 31, 2016
	(in thousands)
Debt principal	$	460,000
Unamortized discount including debt issuance cost		107,331
Net carrying amount of convertible debt	$	352,669

	For the year ended December 31, 2016
	(in thousands)
Contractual interest expense on the coupon	$	303
Amortization of the discount component and debt issue fees recognized as interest expense		688
Total interest expense on the convertible debt	$	991

As of December 31, 2016, the unamortized discount was $107.3 million, which will be amortized over seven years using the effective interest rate method. The carrying amount of the equity component was $100.8 million. As of December 31, 2016, the conversion rate was equal to the initial conversion price of approximately $31.84 per share.

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 statements of operations. As of March 1, 2017, 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 December 31, 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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Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2016

Accumulated Other Comprehensive Income (Loss)

I.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in accumulated other comprehensive income (loss), which is presented net of tax, consists of the following:

	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 loss before reclassifications, net of tax of $0, $(1,667)		(8,759	)		(3,075	)		—			(11,834	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(390), $(169)		—			(704	)		(295	)		(999	)
Net current period other comprehensive loss, net of tax of $0, $(2,057), $(169)		(8,759	)		(3,779	)		(295	)		(12,833	)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive (loss) income before reclassifications, net of tax of $0, $923, $34		(13,162	)		2,037			59			(11,125	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)		—			(683	)		(321	)		(945	)
Net current period other comprehensive (loss) income, net of tax of $0, $668, $(156)		(13,162	)		1,354			(262	)		(12,070	)
Balance at December 31, 2016, net of tax of $0, $209, $(778)	$	(21,921	)	$	(60	)	$	1,767		$	(20,214	)

Reclassifications out of accumulated other comprehensive income to the statements of operations for the years ended December 31, 2016, 2015 and 2014, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the year ended							Affected Line Item in the Statements of Operations
	December 31, 2016			December 31, 2015		December 31, 2014
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $255, $390, $645	$	683		$	704	$	1,433		Interest income
Defined benefit pension and postretirement plans:
Amortization of prior service credit, net of tax of $190, $169, $169		321			295		295		(1)
Prior service income arising during period, net of tax of $(34), $0, $0		(59	)		—		—
		262			295		295
Total reclassifications, net of tax of $411, $559, $814	$	945		$	999	$	1,728		Net income

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

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets

J.    GOODWILL AND INTANGIBLE ASSETS

Goodwill

Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other,” on December 31 of each fiscal year unless interim indicators of impairment exist. Goodwill is considered to be impaired when the net book value of a reporting unit exceeds its estimated fair value.

Teradyne has the option to perform a qualitative assessment (“Step zero”) to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required. When performing the two-step process, the first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, Teradyne determines the fair value of a reporting unit using the results derived from an income approach and a market approach. The income approach is estimated through the discounted cash flow (“DCF”) analysis. Determining fair value requires the exercise of significant judgment, including judgments about appropriate discount rates, perpetual growth rates, and the amount and timing of expected future cash flows. Discount rates are based on a weighted average cost of capital (“WACC”), which represents the average rate a business must pay its providers of debt and equity, plus a risk premium. The WACC used to test goodwill is derived from a group of comparable companies. The cash flows employed in the DCF analysis are derived from internal forecasts and external market forecasts. The market approach estimates the fair value of the reporting unit by utilizing the market comparable method which is based on revenue and earnings multiples from comparable companies. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with its carrying amount of goodwill to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, whereby the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

In the second quarter of 2016, the Wireless Test reporting unit (which is Teradyne’s Wireless Test operating and reportable segment) reduced headcount by 11% as a result of a sharp decline in projected demand attributable to an estimated smaller future wireless test market. The decrease in projected demand was due to lower forecasted buying from Teradyne’s largest Wireless Test segment customer (who has contributed between 51% and 73% of annual Wireless Test sales since the LitePoint acquisition in 2011 through 2015) as a result of the customer’s numerous operational efficiencies; slower smartphone growth rates; and a slowdown of new wireless technology adoption. Teradyne considered the headcount reduction and sharp decline in projected demand to be a triggering event for an interim goodwill impairment test.

Teradyne allocated the fair value of the Wireless Test reporting unit to all of its assets and liabilities (including unrecognized intangible assets). The net book value of raw materials inventory was estimated as an approximation of current replacement costs. The fair value of finished goods inventory was estimated at the present value of selling price less direct selling costs and profit on the selling effort. The selling price used in the inventory fair values was based upon the product gross margins included in Teradyne’s forecast. The fair value of the deferred revenue liability was estimated by assessing the costs required to service the obligation plus a reasonable profit margin. The fair value for personal property assets, which consisted of furniture and fixtures, machinery and equipment, computer equipment, software and leasehold improvements, was estimated using the replacement cost approach, which approximated carrying value. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships and customer backlog were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. Based upon this allocation, Teradyne determined that the Wireless Test reporting unit goodwill is valued at $8.0 million and recorded an impairment loss of $254.9 million in the second quarter of 2016.

In the fourth quarter of 2016, Teradyne performed the annual goodwill impairment test. Teradyne completed step one of the two- step impairment test for the Industrial Automation, Wireless Test and Defense/Aerospace reporting units. There was no impairment as a result of the annual test performed in the fourth quarter of 2016.

In 2015, Teradyne performed step one of the two-step impairment test for the Wireless Test and Defense/Aerospace reporting units and the step zero assessment for the Industrial Automation reporting unit. In 2015, there was no impairment.

In 2014, as a result of decreased projected demand attributable to an estimated smaller future wireless test market due to reuse of wireless test equipment, price competition and different testing techniques, Teradyne determined that for its Wireless Test reporting unit, the carrying amount of its net assets exceeded its respective fair value, indicating that a potential impairment existed. After completing the second step of the goodwill impairment test, Teradyne recorded a $98.9 million goodwill impairment charge in the fourth quarter of 2014.

The fourth quarter 2014 goodwill impairment test of Teradyne’s Defense/Aerospace reporting unit, which is included in Teradyne’s System Test reportable segment, did not identify any goodwill impairment.

The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2016 and 2015 are as follows:

	Industrial Automation			System Test			Wireless Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2014:
Goodwill	$	—		$	158,699		$	361,819		$	260,540		$	781,058
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		—			10,516			262,922			—			273,438
Universal Robots acquisition		221,128			—			—			—			221,128
Foreign currency translation adjustment		(6,153	)		—			—			—			(6,153	)
Balance at December 31, 2015:
Goodwill		214,975			158,699			361,819			260,540			996,033
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		214,975			10,516			262,922			—			488,413
Foreign currency translation adjustment		(10,124	)		—			—			—			(10,124	)
Goodwill impairment losses		—			—			(254,946	)		—			(254,946	)
Balance at December 31, 2016:
Goodwill		204,851			158,699			361,819			260,540			985,909
Accumulated impairment losses		—			(148,183	)		(353,843	)		(260,540	)		(762,566	)
	$	204,851		$	10,516		$	7,976		$	—		$	223,343

Intangible Assets

Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. As a result of the Wireless Test segment goodwill impairment review in the second quarter of 2016, Teradyne performed an impairment test of the Wireless Test segment’s intangible and long-lived assets. The impairment test is based on a comparison of the estimated undiscounted cash flows to the carrying value of the asset group. If undiscounted cash flows for the asset group are less than the carrying amount, the asset group is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment contain management’s best estimates using appropriate assumptions and projections at that time. The fair value of intangible assets was estimated using the income approach and, in particular, developed technology and trademarks/trade names were valued using the relief-from-royalty method and customer relationships were valued using the discounted cash flow method. Royalty rates were estimated using rates applicable to wireless testing equipment and other similar technologies. As a result of the analysis, Teradyne recorded an $83.3 million impairment charge in the second quarter of 2016 in acquired intangible assets impairment on the statements of operations, resulting in a remaining intangible assets balance of $5.0 million for the Wireless Test segment.

There were no events or circumstances indicating that the carrying value of intangible and long-lived assets may not be recoverable in 2015. In 2014, as a result of the Wireless Test segment goodwill impairment charge in the fourth quarter of 2014, Teradyne performed an impairment test of the Wireless Test segment’s intangible and long-lived assets based on a comparison of the estimated undiscounted cash flows to the recorded value of the assets and there was no indication of impairment.

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

	December 31, 2016
	Gross Carrying Amount (1)		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	270,877	$	206,376	$	(5,093	)	$	59,408		6.0 years
Customer relationships		92,741		76,707		(538	)		15,496		7.9 years
Tradenames and trademarks		50,100		23,435		(1,308	)		25,357		9.5 years
Non-compete agreement		320		180		—			140		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	414,208	$	306,868	$	(6,939	)	$	100,401		6.8 years

(1) During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

(2) In 2016, $48.1 million of amortizable intangible assets became fully amortized and has been eliminated from the gross carrying amount and accumulated amortization.

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	382,262	$	220,346	$	(2,444	)	$	159,472		6.0 years
Customer relationships		110,602		63,722		(258	)		46,622		7.9 years
Tradenames and trademarks		53,034		18,889		(628	)		33,517		9.5 years
Non-compete agreement		320		100		—			220		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	546,388	$	303,227	$	(3,330	)	$	239,831		6.7 years

(1) During the year ended December 31, 2015, Teradyne recorded intangible assets in the amount of $121.6 million related to its Universal Robots acquisition.

(2) During the year ended December 31, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

Aggregate intangible assets amortization expense for the years ended December 31, 2016, 2015 and 2014 was $52.6 million, $69.0 million, and $70.8 million, respectively. Estimated intangible assets amortization expense for each of the five succeeding fiscal years is as follows:

Year	Amortization Expense
	(in thousands)
2017	$	28,986
2018		26,848
2019		23,037
2020		10,042
2021		3,435
Thereafter		8,053

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies

K.    COMMITMENTS AND CONTINGENCIES

Purchase Commitments

As of December 31, 2016, Teradyne had entered into non-cancelable purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $260.7 million, of which $247.9 million is for less than one year.

Commitments

Teradyne leases certain of its office buildings and other facilities under various operating lease arrangements that include renewal options and escalation clauses for adjusting rent payments to reflect changes in price indices. Rental expense for leases with fixed escalation clauses is recognized on a straight line basis over the lease term.

Rental expense for the years ended December 31, 2016, 2015 and 2014 was $18.8 million, $15.9 million and $16.0 million, respectively.

The following table reflects Teradyne’s non-cancelable operating lease commitments:

	Non-cancelable Lease Commitments
	(in thousands)
2017	$	16,467
2018		15,258
2019		13,733
2020		9,374
2021		7,149
Beyond 2022		10,130
Total	$	72,111

Legal Claims

Teradyne is subject to legal proceedings, claims and investigations that arise in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.

Guarantees and Indemnification Obligations

Teradyne provides indemnification, to the extent permitted by law, to its officers, directors, employees and agents for liabilities arising from certain events or occurrences while the officer, director, employee, or agent, is or was serving, at Teradyne’s request in such capacity. Teradyne has entered into indemnification agreements with certain of its officers and directors. With respect to acquisitions, Teradyne provides indemnifications to or assumes indemnification obligations for the current and former directors, officers and employees of the acquired companies in accordance with the acquired companies’ by-laws and charter. As a matter of practice, Teradyne has maintained directors’ and officers’ liability insurance coverage including coverage for directors and officers of acquired companies.

Teradyne enters into agreements in the ordinary course of business with customers, resellers, distributors, integrators and suppliers. Most of these agreements require Teradyne to defend and/or indemnify the other party against intellectual property infringement claims brought by a third party with respect to Teradyne’s products. From time to time, Teradyne also indemnifies customers and business partners for damages, losses and liabilities they may suffer or incur relating to personal injury, personal property damage, product liability, breach of confidentiality obligations and environmental claims relating to the use of Teradyne’s products and services or resulting from the acts or omissions of Teradyne, its employees, authorized agents or subcontractors. On occasion, Teradyne has also provided guarantees to customers regarding the delivery and performance of its products in addition to the warranty described below.

As a matter of ordinary business course, Teradyne warrants that its products will substantially perform in accordance with its standard published specifications in effect at the time of delivery. Most warranties have a one-year duration commencing from installation. A provision is recorded upon revenue recognition to cost of revenue for estimated warranty expense based upon historical experience. When Teradyne receives revenue for extended warranties beyond the standard duration, it is deferred and recognized on a straight line basis over the contract period. Related costs are expensed as incurred. As of December 31, 2016 and 2015, Teradyne had a product warranty accrual of $7.2 million and $6.9 million, respectively, included in other accrued liabilities, and revenue deferrals related to extended warranties of $46.8 million and $46.5 million, respectively, included in short and long-term deferred revenue and customer advances.

In addition, and in the ordinary course of business, Teradyne provides minimum purchase guarantees to certain vendors to ensure continuity of supply against the market demand. Although some of these guarantees provide penalties for cancellations and/or modifications to the purchase commitments as the market demand decreases, most of the guarantees do not. Therefore, as the market demand decreases, Teradyne re-evaluates these guarantees and determines what charges, if any, should be recorded.

With respect to its agreements covering product, business or entity divestitures and acquisitions, Teradyne provides certain representations, warranties and covenants to purchasers and agrees to indemnify and hold such purchasers harmless against breaches of such representations, warranties and covenants. Many of the indemnification claims have a definite expiration date while some remain in force indefinitely. With respect to its acquisitions, Teradyne may, from time to time, assume the liability for certain events or occurrences that took place prior to the date of acquisition.

As a matter of ordinary course of business, Teradyne occasionally guarantees certain indebtedness obligations of its subsidiary companies, limited to the borrowings from financial institutions, purchase commitments to certain vendors, and lease commitments to landlords.

Based on historical experience and information known as of December 31, 2016 and 2015, except for product warranty, Teradyne has not recorded any liabilities for these guarantees and obligations because the amount would be immaterial.

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Net (loss) Income per Common Share

12 Months Ended

Dec. 31, 2016

Net (loss) Income per Common Share

L.    NET (LOSS) INCOME PER COMMON SHARE

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

	2016			2015		2014
	(in thousands, except per share amounts)
Net (loss) income for basic and diluted net income per share	$	(43,421	)	$	206,477	$	81,272
Weighted average common shares-basic		202,578			211,544		202,908
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		—			—		5,013
Convertible note hedge warrant shares (2)		—			—		12,562
Restricted stock units		—			1,130		1,092
Stock options		—			606		944
Employee stock purchase rights		—			41		31
Dilutive potential common shares		—			1,777		19,642
Weighted average common shares-diluted		202,578			213,321		222,550
Net (loss) income per common share-basic	$	(0.21	)	$	0.98	$	0.40
Net (loss) income per common share-diluted	$	(0.21	)	$	0.97	$	0.37

(1) Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option on its common stock (convertible note hedge transaction) was excluded from the calculation of diluted shares because the effect was anti-dilutive.

The computation of diluted net loss per common share for 2016 excludes the effect of the potential exercise of all outstanding stock options and restricted stock units because Teradyne had a net loss and inclusion would be anti-dilutive.

The computation of diluted net income per common share for 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.

The computation of diluted net income per common share for 2014 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.

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Restructuring and Other

12 Months Ended

Dec. 31, 2016

Restructuring and Other

M.    RESTRUCTURING AND OTHER

Other

During the year ended December 31, 2016, Teradyne recorded $15.9 million of other charges of which $15.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability, $0.6 million for the increase in the fair value of the AIT contingent consideration liability, $4.2 million for an impairment of fixed assets and $1.2 million for expenses related to an earthquake in Kumamoto, Japan, partially offset by $5.4 million of property insurance recovery related to the Japan earthquake.

During the year ended December 31, 2015, Teradyne recorded $3.6 million of other charges, of which $5.3 million was for the increase in the fair value of the Universal Robots contingent consideration liability and $1.0 million for acquisition costs related to Universal Robots, partially offset by a $2.9 million gain from fair value adjustments to decrease the acquisition contingent consideration liability related to ZTEC, $1.6 million, and AIT, $1.3 million.

During the year ended December 31, 2014, Teradyne recorded a $0.6 million gain from the fair value adjustment to decrease the ZTEC acquisition contingent consideration, partially offset by $0.4 million of acquisition costs related to AIT.

Restructuring

During the year ended December 31, 2016, Teradyne recorded $6.0 million of severance charges related to headcount reductions of 146 people, of which 102 people were in Wireless Test and 44 people were in Semiconductor Test.

During the year ended December 31, 2015, Teradyne recorded $1.5 million of severance charges related to headcount reductions of 23 people primarily in System Test and Semiconductor Test.

During the year ended December 31, 2014, Teradyne recorded $1.6 million of severance charges related to headcount reductions of approximately 43 people, primarily in Semiconductor Test and Wireless Test.

The remaining accrual for severance of $2.1 million is reflected in the accrued employees’ compensation and withholdings on the balance sheet and is expected to be paid by June 2017.

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Retirement Plans

12 Months Ended

Dec. 31, 2016

Retirement Plans

N.    RETIREMENT PLANS

ASC 715, “Compensation—Retirement Benefits,” requires an employer with defined benefit plans or other postretirement benefit plans to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plans as defined by ASC 715. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation at December 31. Teradyne uses a December 31 measurement date for all of its plans.

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to the 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 (the “IRC”), as well as unfunded qualified foreign plans.

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	351,117		$	62,290		$	367,619		$	58,210
Service cost		2,302			761			2,462			1,006
Interest cost		13,630			1,185			13,142			1,444
Actuarial gain (loss)		6,053			5,621			(13,221	)		7,498
Benefits paid		(19,486	)		(1,385	)		(18,885	)		(859	)
Curtailment		—			—			—			(634	)
Plan participants’ contributions		—			—			—			64
Expenses paid		—			(609	)		—			—
Non-U.S. currency movement		—			(7,125	)		—			(4,439	)
End of year		353,616			60,738			351,117			62,290
Change in plan assets:
Fair value of plan assets:
Beginning of year		298,404			28,141			316,072			29,511
Company contributions		4,489			867			10,517			808
Plan participants’ contributions		—			—			—			64
Actual return on plan assets		23,897			5,142			(9,300	)		(136	)
Benefits paid		(19,486	)		(1,148	)		(18,885	)		(859	)
Settlements		—			—			—			—
Expenses paid		—			(609	)		—			(43	)
Non-U.S. currency movement		—			(4,822	)		—			(1,204	)
End of year		307,304			27,571			298,404			28,141
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Retirement plans assets	$	7,712		$	—		$	636		$	—
Accrued employees’ compensation and withholdings		(2,591	)		(772	)		(2,564	)		(695	)
Retirement plans liabilities		(51,433	)		(32,395	)		(50,785	)		(33,454	)
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in thousands)
Prior service cost, before tax	$	127	$	—	$	224	$	—
Deferred taxes		514		—		479		—
Total recognized in other comprehensive income, net of tax	$	641	$	—	$	703	$	—

The estimated portion of prior service cost remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic pension cost in 2017 is $0.1 million.

The accumulated benefit obligation for the United States defined benefit pension plans was $342.9 million and $340.1 million at December 31, 2016 and 2015, respectively. The accumulated benefit obligation for foreign defined benefit pension plans was $56.6 million at December 31, 2016 and 2015.

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in millions)
Projected benefit obligation	$	54.0	$	34.3	$	53.3	$	35.2
Accumulated benefit obligation		48.0		30.1		47.3		29.5
Fair value of plan assets		—		1.1		—		1.0

Expense

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic pension (income) cost was comprised of the following:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
	(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost	$	2,302		$	761		$	2,462		$	1,006		$	2,218		$	897
Interest cost		13,630			1,185			13,142			1,444			12,875			1,837
Expected return on plan assets		(13,830	)		(443	)		(14,517	)		(781	)		(12,500	)		(868	)
Amortization of prior service cost		96			—			134			—			135			—
Net actuarial (gain) loss		(4,013	)		815			10,596			8,415			43,168			4,651
Curtailment		—			—			—			(634	)		—			—
Total net periodic pension (income) cost	$	(1,815	)	$	2,318		$	11,817		$	9,450		$	45,896		$	6,517
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		(96	)		—			(134	)		—			(135	)		—
Total recognized in other comprehensive income		(96	)		—			(134	)		—			(135	)		—
Total recognized in net periodic pension (income) cost and other comprehensive income	$	(1,911	)	$	2,318		$	11,683		$	9,450		$	45,761		$	6,517

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
Discount rate		4.0	%		2.3	%		3.7	%		2.6	%		4.5	%		3.8	%
Expected return on plan assets		4.8			2.0			4.8			2.6			5.0			3.4
Salary progression rate		2.7			3.2			2.9			3.2			3.0			3.5

Weighted Average Assumptions to Determine Pension Obligations at December 31 :

	2016						2015
	United States			Foreign			United States			Foreign
Discount rate		3.9	%		1.8	%		4.0	%		2.3	%
Salary progression rate		2.6			2.7			2.7			3.2

In developing the expected return on plan assets assumption, Teradyne evaluates input from its investment manager and pension consultants, including their forecast of asset class return expectations. Teradyne believes that 4.8% was an appropriate rate to use for fiscal 2016 for the U.S. Qualified Pension Plan (“U.S. Plan”).

Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

The discount rate utilized to determine future pension obligations for the U.S. Plan is based on Citigroup Pension Index adjusted for the plan’s expected cash flows and was 3.9% at December 31, 2016, down from 4.0% at December 31, 2015.

Plan Assets

As of December 31, 2016, the fair value of Teradyne’s pension plans’ assets totaled $334.9 million of which $307.3 million was related to the U.S. Plan, $26.5 million was related to the U.K. defined benefit pension plan, and $1.1 million was related to the Taiwan defined benefit pension plan. Substantially all Teradyne’s pension plans’ assets are held in individual trusts, which were established for the investment of assets of Teradyne’s sponsored retirement plans.

The following table provides weighted average pension asset allocation by asset category at December 31, 2016 and 2015:

	2016						2015
	United States			Foreign			United States			Foreign
Fixed income securities		88.1	%		—	%		88.6	%		—	%
Equity securities		9.9			—			9.8			—
Other		2.0			100.0			1.6			100.0
		100.0	%		100.0	%		100.0	%		100.0	%

The assets of the U.S. Plan are overseen by the Teradyne Fiduciary Committee which is comprised of members of senior management drawn from appropriate diversified levels of the management team. The Fiduciary Committee is responsible for setting the policy that provides the framework for management of the U.S. Plan assets. In accordance with its responsibilities, the Fiduciary Committee meets on a regular basis to review the performance of the U.S. Plan assets and compliance with the investment policy. The policy sets forth an investment structure for managing U.S. Plan assets, including setting the asset allocation ranges, which are expected to provide an appropriate level of overall diversification required to maximize the long-term return on plan assets for a prudent and reasonable level of risk given prevailing market conditions, total investment return over the long term, and preservation of capital, while maintaining sufficient liquidity to pay the benefits of the U.S. Plan. The investment portfolio will not, at any time, have a direct investment in Teradyne stock. It may have indirect investment in Teradyne stock, if one of the funds selected by the investment manager invests in Teradyne stock. In developing the asset allocation ranges, third party asset allocation studies are periodically performed that consider the current and expected positions of the plan assets and funded status. Based on this study and other appropriate information, the Fiduciary Committee establishes asset allocation ranges taking into account acceptable risk targets and associated returns. The investment return objectives are to avoid excessive volatility and produce a rate of return that at least matches the Policy Index identified below. The manager’s investment performance is reviewed at least annually. Results for the total portfolio and for each major category of assets are evaluated in comparison with appropriate market indices and the Policy Index.

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:	Policy Index:	Target Allocation
U.S. corporate fixed income	Barclays U.S. Corporate A or Better Index		76	%
Global equity	MSCI World Minimum Volatility Index		10
U.S. government fixed income	Barclays U.S. Long Government Bond Index		8
High yield fixed income	Barclays U.S. Corporate High Yield 2% Issuer Cap Index		5
Cash	Citigroup Three Month U.S. Treasury Bill Index		1

Teradyne’s U.S. Plan invests primarily in common trust funds. Units held in the common trust funds are valued at the unit price as reported by the investment manager based on the asset value of the underlying investments; underlying investments in equity securities are valued at the last reported sales price, and underlying investments in fixed-income securities are generally valued using methods based upon market transactions for comparable securities.

In the fourth quarter of 2015, the Trustees of the U.K. defined benefit pension plan purchased group annuity insurance contracts. The cash flows from the contracts are intended to match the plan’s obligations.

During the years ended December 31, 2016 and 2015, there were no transfers of pension assets in or out of Level 1, Level 2 or Level 3.

The fair value of pension plan assets by asset category and by level at December 31, 2016 and December 31, 2015 were as follows:

	December 31, 2016
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	246,528	$	—	$	246,528	$	—	$	—	$	—	$	—
U.S. government securities		—		24,322		—		24,322		—		—		—		—
Global equity		—		30,360		—		30,360		—		—		—		—
Group annuity insurance contracts		—		—		3,071		3,071		—		—		26,385		26,385
Other		—		—		—		—		—		1,124		—		1,124
Cash and cash equivalents		3,023		—		—		3,023		62		—		—		62
Total	$	3,023	$	301,210	$	3,071	$	307,304	$	62	$	1,124	$	26,385	$	27,571
	December 31, 2015
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	240,695	$	—	$	240,695	$	—	$	—	$	—	$	—
U.S. government securities		—		23,761		—		23,761		—		—		—		—
Global equity		—		29,193		—		29,193		—		—		—		—
Group annuity insurance contracts		—		—		2,982		2,982		—		—		26,410		26,410
Other		—		—		—		—		—		1,029		—		1,029
Cash and cash equivalents		1,773		—		—		1,773		702		—		—		702
Total	$	1,773	$	293,649	$	2,982	$	298,404	$	702	$	1,029	$	26,410	$	28,141

The pension plan assets identified as Level 3 above are related to group annuity insurance contracts held by the U.K. defined benefit pension plan and the U.S. Plan. The fair value of these assets was calculated using the present value of future pension payments due under the group annuity insurance contracts.

Changes in the fair value of Level 3 group annuity insurance contracts for the years ended December 31, 2016 and 2015 were as follows:

	Group Annuity Insurance Contracts
	(in thousands)
Balance at December 31, 2014	$	2,990
Purchases of group annuity insurance contracts		27,313
Interest and market value adjustments		(825	)
Benefits paid		(67	)
Other		(19	)
Balance at December 31, 2015		29,392
Purchases of group annuity insurance contracts		709
Interest and market value adjustments		5,308
Benefits paid		(611	)
Other		(634	)
Non-U.S. currency movement		(4,708	)
Balance at December 31, 2016	$	29,456

Contributions

Teradyne’s funding policy is to make contributions to the plans in accordance with local laws and to the extent that such contributions are tax deductible. During 2016, Teradyne contributed $1.9 million to the U.S. Plan, $2.6 million to the U.S. supplemental executive defined benefit pension plan and $0.9 million to certain qualified plans for non-U.S. subsidiaries. During 2015, Teradyne contributed $8.0 million to the U.S. Plan, $2.5 million to the U.S. supplemental executive defined benefit pension plan and $0.8 million to certain qualified plans for non-U.S. subsidiaries. In 2017, contributions to the U.S. supplemental executive defined benefit pension plan, U.S. Plan and certain qualified plans from non-U.S. subsidiaries will be approximately $2.6 million, $1.9 million and $0.8 million, respectively.

Expected Future Pension Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2017	$	19,205	$	788
2018		18,568		754
2019		19,046		780
2020		19,768		1,054
2021		20,390		882
2022-2026		111,334		5,209

Postretirement Benefit Plans

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.

The December 31 balances of the postretirement assets and obligations are shown below:

	2016			2015
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	6,030		$	7,162
Service cost		37			48
Interest cost		218			237
Plan amendments		(93	)		—
Actuarial loss (gain)		5			(648	)
Benefits paid		(687	)		(769	)
End of year		5,510			6,030
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		687			769
Benefits paid		(687	)		(769	)
End of year		—			—
Funded status	$	(5,510	)	$	(6,030	)

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2016			2015
	(in thousands)
Accrued employees’ compensation and withholdings	$	(571	)	$	(692	)
Retirement plans liability		(4,939	)		(5,338	)
Funded status	$	(5,510	)	$	(6,030	)

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016			2015
	(in thousands)
Prior service credit, before tax	$	(1,118	)	$	(1,632	)
Deferred taxes		(1,292	)		(1,100	)
Total recognized in other comprehensive income, net of tax	$	(2,410	)	$	(2,732	)

The estimated portion of prior service credit remaining in accumulated other comprehensive income that is expected to be recognized as a component of net periodic postretirement benefit income in 2017 is $(0.5) million.

Expense

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	2016			2015			2014
	(in thousands)
Components of Net Periodic Postretirement Benefit Income:
Service cost	$	37		$	48		$	59
Interest cost		218			237			335
Amortization of prior service credit		(607	)		(598	)		(598	)
Net actuarial loss (gain)		5			(648	)		(1,255	)
Total net periodic postretirement benefit income		(347	)		(961	)		(1,459	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service benefit		(93	)		—			—
Reversal of amortization items:
Prior service credit		607			598			598
Total recognized in other comprehensive income		514			598			598
Total recognized in net periodic postretirement cost (income) and other comprehensive income	$	167		$	(363	)	$	(861	)

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

	2016			2015			2014
Discount rate		3.9	%		3.5	%		4.1	%
Initial health care cost trend rate		7.5			7.5			8.0
Ultimate health care cost trend rate		5.0			5.0			5.0
Year in which ultimate health care cost trend rate is reached		2023			2022			2020

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

	2016			2015			2014
Discount rate		3.9	%		3.9	%		3.5	%
Initial medical trend		7.3			7.5			7.5
Ultimate health care trend		5.0			5.0			5.0
Medical cost trend rate decrease to ultimate rate in year		2023			2023			2022

Assumed health care trend rates could have a significant effect on the amounts reported for health care plans. A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2016 would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	2	$	(2	)
Effect on postretirement benefit obligations		44		(42	)

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefit Payments
	(in thousands)
2017	$	571
2018		529
2019		456
2020		409
2021		367
2022-2026		1,536

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2016

Stock-Based Compensation

O.    STOCK-BASED COMPENSATION

Stock Compensation Plans

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”).

Stock options to purchase Teradyne’s common stock at 100% of the fair market value on the grant date vest in equal annual installments over four years from the grant date and have a maximum term of seven years.

Time-based restricted stock unit awards granted to employees vest in equal annual installments over four years. Restricted stock unit awards granted to non-employee directors vest after a one year period, with 100% of the award vesting on the first anniversary of the grant date. Teradyne expenses the cost of the restricted stock unit awards subject to time-based vesting, which is determined to be the fair market value of the shares at the date of grant, ratably over the period during which the restrictions lapse.

Commencing in January 2014, Teradyne granted performance-based restricted stock units (“PRSUs”) to its executive officers with a performance metric based on relative total shareholder return (“TSR”). 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; non-cash convertible debt interest expense; 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.

The TSR PRSUs are valued using a Monte Carlo simulation model. During 2016, 2015 and 2014 Teradyne granted 0.1 million, 0.2 million and 0.1 million TSR PRSUs, respectively, with a grant date fair value of $20.29, $18.21 and $22.06, respectively. The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

	2016			2015			2014
Risk-free interest rate		0.97	%		0.77	%		0.75	%
Teradyne volatility-historical		27.0	%		28.2	%		36.1	%
NYSE Composite Index volatility-historical		13.1	%		—	%		—	%
Philadelphia Semiconductor Index volatility-historical		—	%		19.7	%		24.6	%
Dividend yield		1.24	%		1.33	%		1.25	%

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 and 2014 grants, 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 for 2016, 2015 and 2014 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 grants, $18.10 for the 2015 grants, and $19.16 for the 2014 grants.

Stock Options Valuation Assumptions:

The total number of stock options granted in 2016, 2015 and 2014 were 0.1 million, 0.1 million and 0.1 million, respectively, at the weighted average grant date fair value of $5.30, $4.43 and $5.49 per share, respectively. The fair value of the stock options at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:

	2016			2015			2014
Expected life (years)		5.0			4.0			4.0
Risk-free interest rate		1.4	%		1.1	%		1.2	%
Volatility-historical		32.9	%		33.4	%		38.8	%
Dividend yield		1.24	%		1.33	%		1.25	%

Teradyne determined the stock option’s expected life based upon historical exercise data for executive officers, the age of executives and the terms of the stock option award. Volatility was determined using historical volatility for a period equal to the expected life. The 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 grants, $18.10 for the 2015 grants, and $19.16 for the 2014 grants.

Stock compensation plan activity for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
	(in thousands)
Restricted Stock Units:
Non-vested at January 1		4,070			4,352			4,636
Awarded		1,471			1,681			1,870
Vested		(1,530	)		(1,679	)		(1,965	)
Forfeited		(233	)		(284	)		(189	)
Non-vested at December 31		3,778			4,070			4,352
Stock Options:
Outstanding at January 1		1,121			1,507			2,706
Granted		130			132			89
Exercised		(324	)		(518	)		(1,248	)
Forfeited		—			—			(38	)
Expired		(2	)		—			(2	)
Outstanding at December 31		926			1,121			1,507
Vested and expected to vest at December 31		926			1,121			1,507
Exercisable at December 31		598			779			1,089

Total shares available for the years 2016, 2015 and 2014:

	2016			2015			2014
	(in thousands)
Shares available:
Available for grant at January 1		10,914			12,443			14,213
Options granted		(130	)		(132	)		(89	)
Restricted stock units awarded		(1,471	)		(1,681	)		(1,870	)
Restricted stock units forfeited		233			284			189
Available for grant at December 31		9,546			10,914			12,443

Weighted average restricted stock unit award date fair value information for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Non-vested at January 1	$	17.46	$	17.24	$	15.60
Awarded		18.68		17.36		18.41
Vested		17.21		16.85		14.38
Forfeited		17.57		17.08		16.97
Non-vested at December 31	$	18.03	$	17.46	$	17.24

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Vested	$	30,008	$	32,200	$	37,160
Outstanding		95,952		84,129		86,113
Expected to vest		91,871		79,611		81,582

Restricted stock units weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		1.04		1.09		1.11
Expected to vest		1.03		1.08		1.10

Weighted average stock options exercise price information for the year ended December 31, 2016 follows:

	2016
Outstanding at January 1	$	10.21
Options granted		19.43
Options exercised		9.06
Options expired		3.07
Outstanding at December 31		11.93
Exercisable at December 31		8.32

The total cash received from employees as a result of employee stock options exercises during the years ended December 31, 2016, 2015 and 2014, was $2.9 million, $2.8 million and $6.7 million, respectively. In connection with these exercises, the tax benefit realized by Teradyne for the years ended December 31, 2016, 2015 and 2014, was $0.8 million, $2.1 million and $5.7 million, respectively.

Stock option aggregate intrinsic value information for the years ended December 31, 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Exercised	$	3,729	$	7,255	$	17,847
Outstanding		12,468		11,729		17,936
Vested and expected to vest		12,468		11,729		17,936
Exercisable		10,217		10,716		16,101

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		3.9		4.2		4.5
Vested and expected to vest		3.9		4.2		4.5
Exercisable		3.2		3.9		4.2

Significant option groups outstanding at December 31, 2016 and related weighted average price and remaining contractual life information follow:

	Options Outstanding						Options Exercisable
Range Of Exercise Prices	Weighted- Average  Remaining Contractual Life (Years)		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
	(shares in thousands)
$1.48 – $2.67		3.74		294	$	2.31		294	$	2.31
$3.23 – $7.71		1.77		75		4.26		75		4.26
$16.23 – $18.10		3.51		338		17.18		185		16.87
$19.16 – $19.43		5.26		219		19.32		44		19.16
				926		11.93		598		8.32

As of December 31, 2016, total unrecognized expense related to non-vested restricted stock unit awards and stock options was $40.6 million, and is expected to be recognized over a weighted average period of 2.3 years.

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

Employee Stock Purchase Plan

Under the Teradyne 1996 Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of common stock through regular payroll deductions of up to 10% of their compensation, to a maximum of shares with a fair market value of $25,000 per calendar year, not to exceed 6,000 shares. Under the plan, the price paid for the common stock is equal to 85% of the stock price on the last business day of the six-month purchase period.

In July 2016, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2016, at the price of $16.74 per share. In January 2017, Teradyne issued 0.4 million shares of common stock to employees who participated in the plan during the second half of 2016, at the price of $21.59 per share.

In July 2015, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2015, at the price of $16.40 per share. In January 2016, Teradyne issued 0.5 million shares of common stock to employees who participated in the plan during the second half of 2015, at the price of $17.57 per share.

In July 2014, 0.5 million shares of common stock were issued to employees who participated in the plan during the first half of 2014, at the price of $16.66 per share. In January 2015, Teradyne issued 0.5 million shares of common stock to employees who participated in the plan during the second half of 2014, at the price of $16.82 per share.

As of December 31, 2016, there were 3.9 million shares available for grant under the ESPP.

The effect to income from operations for recording stock-based compensation for the years ended December 31 was as follows:

	2016			2015			2014
	(in thousands)
Cost of revenues	$	3,153		$	3,065		$	3,675
Engineering and development		9,458			9,362			10,146
Selling and administrative		18,139			18,024			26,486
Stock-based compensation		30,750			30,451			40,307
Income tax benefit		(8,752	)		(8,528	)		(11,537	)
Total stock-based compensation expense after income taxes	$	21,998		$	21,923		$	28,770

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Savings Plan

12 Months Ended

Dec. 31, 2016

Savings Plan

P.    SAVINGS PLAN

Teradyne sponsors a defined contribution employee retirement savings plan (“Savings Plan”) covering substantially all U.S. employees. Under the Savings Plan, employees may contribute up to 20% of their compensation (subject to Internal Revenue Service limitations). The Savings Plan provides for a discretionary employer match that is determined each year. In 2016, 2015 and 2014, Teradyne matched 100% of eligible employee contributions up to 4% of their compensation for employees not accruing benefits in the U.S. Qualified Pension Plan. There was no match for employees still actively accruing benefits in the U.S. Qualified Pension Plan. Teradyne’s contributions vest 25% per year for the first four years of employment, and contributions for those employees with four years of service vest immediately.

In addition, Teradyne established an unfunded U.S. Supplemental Savings Plan to provide savings benefits in excess of those allowed by Employee Retirement Income Security Act of 1974 and the Internal Revenue Code. The provisions of this plan are the same as the Savings Plan. Teradyne also established defined contribution savings plans for its foreign employees. Under Teradyne’s savings plans, amounts charged to the statements of operations for the years ended December 31, 2016, 2015 and 2014 were $14.5 million, $13.5 million and $12.8 million, respectively.

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Income Taxes

12 Months Ended

Dec. 31, 2016

Income Taxes

Q.    INCOME TAXES

The components of (loss) income before income taxes and the (benefit) provision for income taxes as shown in the consolidated statements of operations were as follows:

	2016			2015			2014
	(in thousands)
(Loss) income before income taxes:
U.S.	$	(341,018	)	$	56,270		$	(151,889	)
Non-U.S.		285,958			196,854			247,265
	$	(55,060	)	$	253,124		$	95,376
(Benefit) provision for income taxes:
Current:
U.S. Federal	$	7,750		$	16,635		$	5,197
Non-U.S.		41,579			35,707			28,157
State		1,968			1,429			678
		51,297			53,771			34,032
Deferred:
U.S. Federal		(51,482	)		(574	)		(20,449	)
Non-U.S.		(9,240	)		(7,761	)		(404	)
State		(2,214	)		1,211			925
		(62,936	)		(7,124	)		(19,928	)
Total (benefit) provision for income taxes:	$	(11,639	)	$	46,647		$	14,104

Income tax benefit for 2016 totaled $11.6 million. Income tax expense for 2015 and 2014 totaled $46.6 million and $14.1 million, respectively. The effective tax rate for 2016, 2015 and 2014 was 21.1%, 18.4% and 14.8%, respectively.

The increase in the effective tax rate from 2015 to 2016 resulted from a shift in the geographic distribution of income which decreased income subject to taxation in the U.S. relative to lower tax rate jurisdictions, reductions in uncertain tax positions resulting from the expiration of statutes and the settlement of an audit, and an increase in non-taxable foreign exchange gains. These increases in the effective tax rate were partially offset by the effect of the non-deductible goodwill impairment charge, which reduced the benefit of the loss before income taxes in the U.S.

The increase in the effective tax rate from 2014 to 2015 resulted from a shift in the geographic distribution of income which increased income subject to taxation in the U.S. relative to lower tax rate jurisdictions and a reduction in the benefit from U.S. research and development tax credits. These increases in the effective tax rate were partially offset by decreases associated with uncertain tax positions and a non-deductible goodwill impairment charge.

A reconciliation of the effective tax rate for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
U.S. statutory federal tax rate		35.0	%		35.0	%		35.0	%
Foreign taxes		127.1			(16.5	)		(58.1	)
U.S. research and development credit		15.8			(3.0	)		(7.9	)
Domestic production activities deduction		2.3			(1.0	)		(0.5	)
State income taxes, net of federal tax benefit		2.3			0.4			(0.1	)
Equity compensation		(2.7	)		0.6			(1.8	)
Uncertain tax positions		(2.6	)		2.2			7.9
Goodwill impairment		(162.1	)		—			36.3
Other, net		6.0			0.7			4.0
		21.1	%		18.4	%		14.8	%

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 attributable to the tax holiday for the years ended December 31, 2016, 2015 and 2014 were $17.0 million or $0.08 per diluted share, $11.5 million or $0.05 per diluted share and $13.2 million or $0.06 per diluted share, respectively. The tax holiday is scheduled to expire on December 31, 2020.

Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:

	2016			2015
	(in thousands)
Deferred tax assets:
Tax credits	$	57,313		$	44,684
Pension liabilities		31,581			31,742
Inventory valuations		31,227			29,445
Accruals		27,247			26,563
Deferred revenue		12,806			10,232
Equity compensation		9,922			9,674
Vacation accrual		7,874			7,354
Net operating loss carryforwards		5,244			7,989
Other		630			502
Gross deferred tax assets		183,844			168,185
Less: valuation allowance		(48,369	)		(43,039	)
Total deferred tax assets	$	135,475		$	125,146
Deferred tax liabilities:
Intangible assets	$	(22,887	)	$	(68,433	)
Depreciation		(17,117	)		(20,541	)
Marketable securities		(210	)		(458	)
Total deferred tax liabilities	$	(40,214	)	$	(89,432	)
Net deferred assets	$	95,261		$	35,714

During 2016, Teradyne’s valuation allowance increased by $5.3 million primarily due to the increase in the deferred tax assets related to state tax credits generated in 2016.

As of December 31, 2016 and 2015, Teradyne evaluated the likelihood that it would realize the deferred income taxes to offset future taxable income and concluded that it is more likely than not that a substantial majority of its deferred tax assets will be realized through consideration of both the positive and negative evidence. At December 31, 2016 and 2015, Teradyne maintained a valuation allowance for certain deferred tax assets of $48.4 million and $43.0 million, respectively, primarily related to state net operating losses and state tax credit carryforwards, due to the uncertainty regarding their realization. Adjustments could be required in the future if Teradyne estimates that the amount of deferred tax assets to be realized is more or less than the net amount recorded.

At December 31, 2016, Teradyne had operating loss carryforwards that expire in the following years:

	State Operating Loss Carryforwards		Foreign Operating  Loss Carryforwards
	(in thousands)
2017	$	10,245	$	—
2018		8,562		—
2019		983		—
2020		1,248		—
2021		3,549		—
2022-2026		18,044		—
2027-2031		38,498		—
Beyond 2031		5,464		129
Non-expiring		—		6,400
Total	$	86,593	$	6,529

The operating loss carryforwards do not include any excess tax deduction related to stock-based compensation, which has not been recognized for financial statements purposes.

Teradyne has approximately $134.6 million of tax credit carryforwards including federal business tax credits of approximately $45.3 million which expire in the years 2017 through 2036, alternative minimum tax credits of approximately $8.7 million which do not expire, and state tax credits of $80.6 million, of which $47.4 million do not expire and the remainder expires in the years 2017 through 2031.

Teradyne has federal tax credits of $39.1 million, that are attributable to stock-based compensation deductions, which will be recorded as an increase to retained earnings and deferred tax assets upon adoption, in the first quarter of 2017, of ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.”

Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014 were as follows:

	2016			2015			2014
	(in thousands)
Beginning balance as of January 1	$	36,792		$	30,418		$	21,203
Additions:
Tax positions for current year		9,766			6,626			8,414
Tax positions for prior years		187			792			3,781
Reductions:
Expiration of statutes		(3,532	)		—			—
Settlements with tax authorities		(2,295	)		(336	)		(500	)
Tax positions for prior years		(1,960	)		(708	)		(2,480	)
Ending balance as of December 31	$	38,958		$	36,792		$	30,418

Current year and prior year additions include assessment of potential transfer pricing issues worldwide, federal and state tax credits and incentives, capitalization rules, and domestic production activities deductions. Reductions for tax positions for prior years primarily relate to statute expiration and the settlement tax audits. Of the $39.0 million of unrecognized tax benefits as of December 31, 2016, $27.6 million would impact the consolidated income tax rate if ultimately recognized. The remaining $11.4 million would impact deferred taxes if recognized. Teradyne estimates that it is reasonably possible that the balance of unrecognized tax benefits as of December 31, 2016 may decrease approximately $0.8 million in the next twelve months, as a result of a lapse of statutes of limitation. The estimated decrease is composed primarily of reserves relating to the U.S. research and development credits.

Teradyne records all interest and penalties related to income taxes as a component of income tax expense. Accrued interest and penalties related to income tax items at December 31, 2016 and 2015 amounted to $0.4 million and $0.5 million respectively. For the years ended December 31, 2016, 2015 and 2014, benefit of $0.1 million, benefit of $0.2 million and expense of $0.2 million respectively, was recorded for interest and penalties related to income tax items.

Teradyne is subject to U.S. federal income tax, as well as income tax in multiple state, local and foreign jurisdictions. As of December 31, 2016, all material state and local income tax matters have been concluded through 2008, all material federal income tax matters have been concluded through 2012 and all material foreign income tax matters have been concluded through 2009. However, in some jurisdictions, including the United States, operating losses and tax credits may be subject to adjustment until such time as they are utilized and the year of utilization is closed to adjustment.

As of December 31, 2016, a deferred tax liability has not been established for approximately $1,020 million of cumulative undistributed earnings of non-U.S. subsidiaries, which are expected to be reinvested indefinitely in operations outside the U.S. except for instances where Teradyne can remit such earnings to the U.S. without an associated net tax cost. Determination of the unrecognized deferred tax liability on unremitted earnings 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.

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Operating Segment, Geographic and Significant Customer Information

12 Months Ended

Dec. 31, 2016

Operating Segment, Geographic and Significant Customer Information

R.    OPERATING SEGMENT, GEOGRAPHIC AND SIGNIFICANT CUSTOMER INFORMATION

Teradyne has four operating segments (Semiconductor Test, System Test, Industrial Automation, and Wireless Test), which are its reportable segments. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The 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 Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robots. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services. Each operating segment has a segment manager who is directly accountable to and maintains regular contact with Teradyne’s chief operating decision maker (Teradyne’s chief executive officer) to discuss operating activities, financial results, forecasts, and plans for the segment.

Teradyne evaluates performance using several factors, of which the primary financial measure is business segment income (loss) from operations before taxes. The accounting policies of the business segments are the same as those described in Note B: “Accounting Policies.”

Segment information for the years ended December 31, 2016, 2015 and 2014 is as follows:

	Semiconductor Test		System Test		Industrial Automation			Wireless Test			Corporate And Eliminations			Consolidated
	(in thousands)
2016
Revenues	$	1,368,169	$	189,846	$	99,031		$	96,204		$	—		$	1,753,250
Income (loss) before taxes (1)(2)		311,939		28,916		(16,783	)		(371,409	)		(7,723	)		(55,060	)
Total assets (3)		557,546		110,361		317,635			62,366			1,714,585			2,762,493
Property additions		70,543		3,788		6,755			4,186			—			85,272
Depreciation and amortization expense		58,087		6,551		26,869			25,921			2,581			120,009
2015
Revenues	$	1,201,530	$	211,584	$	41,892		$	184,572		$	—		$	1,639,578
Income (loss) before taxes (1)(2)		260,154		25,101		(7,574	)		(13,830	)		(10,727	)		253,124
Total assets (3)		610,869		102,547		344,260			427,880			1,063,118			2,548,674
Property additions		79,052		6,228		1,465			3,133			—			89,878
Depreciation and amortization expense		64,415		4,391		14,500			53,440			4,027			140,773
2014
Revenues	$	1,300,790	$	162,499	$	—		$	184,535		$	—		$	1,647,824
Income (loss) before taxes (1)(2)		255,803		12,116		—			(116,196	)		(56,347	)		95,376
Total assets (3)		580,501		95,105		—			478,974			1,383,940			2,538,520
Property additions		159,783		5,469		—			3,730			—			168,982
Depreciation and amortization expense		84,990		5,399		—			53,308			8,847			152,544

(1) Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

(2) Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

(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 accounts:

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	9,656	$	10,508	$	14,389
Restructuring and other		2,860		499		490

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

	For the Year Ended December 31,
	2016			2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	630		$	8,324	$	2,125
Restructuring and other		(49	)		1,037		742

Included in the Industrial Automation segment are charges in the following accounts:

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Restructuring and other	$	585	$	—	$	—
Cost of revenues-inventory step-up (1)		—		1,567		—

(1) Included in the cost of revenues for the year ended December 31, 2015 is the cost for purchase accounting inventory step-up.

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

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Goodwill impairment charge	$	254,946	$	—	$	98,897
Acquired intangible assets impairment charge		83,339		—		—
Cost of revenues—inventory charge		7,207		2,500		5,679
Restructuring and other		2,650		—		565

Included in the Corporate and Eliminations segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2016			2015			2014
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	15,346		$	5,339		$	—
Restructuring and other—Impairment of fixed assets and expenses related to Japan Earthquake		5,363			—			—
Restructuring and other—Property insurance recovery		(5,363	)		—			—
Restructuring and other—ZTEC contingent consideration adjustment		—			(1,600	)		(630	)
Restructuring and other—AIT contingent consideration adjustment		550			(1,250	)		—
Restructuring and other—Acquisition costs		—			1,104			372
Restructuring and other		—			—			198
Other (income) expense, net—Gain from the sale of an equity investment		—			(5,406	)		—
Selling and administrative—Stock based compensation expense (1)		—			—			6,598
Total	$	15,896		$	(1,813	)	$	6,538

(1) Expense related to the January 2014 retirement of Teradyne’s former chief executive officer; see Note O: “Stock-Based Compensation.”

Information as to Teradyne’s revenues by country is as follows:

	2016		2015		2014
	(in thousands)
Revenues from customers (1):
Taiwan	$	653,076	$	436,389	$	495,942
United States		221,948		217,386		213,104
China		174,876		264,898		292,145
Korea		147,882		120,224		145,608
Japan		135,978		128,228		63,761
Europe		117,671		111,903		111,043
Malaysia		103,472		76,707		83,910
Singapore		73,172		105,216		119,421
Philippines		54,705		96,103		68,662
Thailand		43,097		59,104		44,117
Rest of the World		27,373		23,420		10,111
	$	1,753,250	$	1,639,578	$	1,647,824

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

In 2016, two customers of Teradyne’s Semiconductor Test segment each accounted for 12% of total consolidated revenues. In 2015, one customer of Teradyne’s Semiconductor Test segment accounted for 13% of total consolidated revenues. In 2014, no single customer accounted for more than 10% of total consolidated revenues. Teradyne estimates product demand driven by a single OEM customer, combining direct sales to that customer with sales to the customer’s outsourced semiconductor assembly and test providers (“OSATs”), accounted for approximately 25%, 23%, and 22% of Teradyne’s consolidated revenues in 2016, 2015 and 2014, respectively.

Long-lived assets by geographic area:

	United States		Foreign(1)		Total
	(in thousands)
December 31, 2016	$	189,195	$	64,626	$	253,821
December 31, 2015	$	198,424	$	74,990	$	273,414

(1) As of December 31, 2016 and 2015, long-lived assets attributable to Singapore were $31.5 million and $39.9 million, respectively.

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Stock Repurchase Program

12 Months Ended

Dec. 31, 2016

Stock Repurchase Program

S.    STOCK REPURCHASE PROGRAM

In January 2015, the Board of Directors cancelled the November 2010 stock repurchase program and authorized a new stock repurchase program for up to $500 million of common stock. The cumulative repurchases as of December 31, 2016 totaled 22.5 million shares of common stock for $446 million at an average price per share of $19.87. The total price includes commissions and is recorded as a reduction to retained earnings.

In December 2016, the Board of Directors approved a new $500 million share repurchase authorization which commenced on January 1, 2017. Teradyne intends to repurchase at least $200 million in 2017. Teradyne’s January 2015 stock repurchase program was terminated on December 31, 2016.

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Subsequent Events

12 Months Ended

Dec. 31, 2016

Subsequent Events

T.    SUBSEQUENT EVENTS

In January 2017, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.07 per share to be paid on March 20, 2017 to shareholders of record as of February 24, 2017.

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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Supplementary Information

12 Months Ended

Dec. 31, 2016

Supplementary Information

SUPPLEMENTARY INFORMATION

(Unaudited)

The following sets forth certain unaudited consolidated quarterly statements of operations data for each of Teradyne’s last eight quarters. In management’s opinion, this quarterly information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement for the periods presented. Such quarterly results are not necessarily indicative of future results of operations and should be read in conjunction with the audited consolidated financial statements of Teradyne and the notes thereto included elsewhere herein.

	2016
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	(1)(5)			(2)(5)			(3)(5)			(4)(5)
	(in thousands, except per share amounts)
Revenues:
Products	$	358,139		$	456,832		$	334,610		$	303,667
Services		72,855			74,960			75,865			76,322
Total revenues		430,994			531,792			410,475			379,989
Cost of revenues:
Cost of products		167,555			215,795			148,266			127,481
Cost of services		33,107			33,127			34,850			33,502
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		200,662			248,922			183,116			160,983
Gross profit		230,332			282,870			227,359			219,006
Operating expenses:
Engineering and development		73,464			76,109			71,400			70,052
Selling and administrative		79,174			81,425			78,794			76,289
Acquired intangible assets amortization		19,994			16,244			8,487			7,923
Acquired intangible assets impairment		—			83,339			—			—
Goodwill impairment		—			254,946			—			—
Restructuring and other		1,587			2,608			12,177			5,570
Total operating expenses		174,219			514,671			170,858			159,834
Income (loss) from operations		56,113			(231,801	)		56,501			59,172
Non-operating (income) expense:
Interest income		(1,642	)		(1,666	)		(2,892	)		(3,095	)
Interest expense		710			691			633			1,604
Other (income) expense, net		(147	)		(9	)		(921	)		1,779
Income (loss) before income taxes		57,192			(230,817	)		59,681			58,884
Income tax provision (benefit)		7,206			(7,271	)		(4,113	)		(7,461	)
Net income (loss)	$	49,986		$	(223,546	)	$	63,794		$	66,345
Net income (loss) per common share—basic	$	0.24		$	(1.10	)	$	0.32		$	0.33
Net income (loss) per common share—diluted	$	0.24		$	(1.10	)	$	0.31		$	0.33
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(2) Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

(3) Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(4) Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(5) Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

	2015
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
				(3)			(4)			(1)(2)
	(in thousands, except per share amounts)
Revenues:
Products	$	272,325		$	437,243		$	386,488		$	244,510
Services		70,076			75,496			79,506			73,934
Total revenues		342,401			512,739			465,994			318,444
Cost of revenues:
Cost of products		118,996			181,491			170,963			120,322
Cost of services		30,982			32,680			36,405			32,096
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		149,978			214,171			207,368			152,418
Gross profit		192,423			298,568			258,626			166,026
Operating expenses:
Engineering and development		71,450			75,832			74,027			70,941
Selling and administrative		72,041			77,073			77,481			79,718
Acquired intangible assets amortization		13,808			15,258			20,053			19,911
Restructuring and other		—			(385	)		261			5,204
Total operating expenses		157,299			167,778			171,822			175,774
Income (loss) from operations		35,124			130,790			86,804			(9,748	)
Non-operating (income) expense:
Interest income		(1,816	)		(1,674	)		(1,708	)		(2,017	)
Interest expense		162			444			508			762
Other (income) expense, net		(5,660	)		(116	)		596			364
Income (loss) before income taxes		42,438			132,136			87,408			(8,857	)
Income tax provision (benefit)		9,651			29,257			15,955			(8,216	)
Net income (loss)	$	32,787		$	102,879		$	71,453		$	(641	)
Net income (loss) per common share—basic	$	0.15		$	0.48		$	0.34		$	(0.00	)
Net income (loss) per common share—diluted	$	0.15		$	0.48		$	0.34		$	(0.00	)
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

(2) In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

(3) Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

(4) Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

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Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2016

Valuation and Qualifying Accounts

TERADYNE, INC.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Accounts receivable:
2016 Allowance for doubtful accounts	$	2,407	$	—	$	—	$	51	$	2,356
2015 Allowance for doubtful accounts	$	2,491	$	—	$	—	$	84	$	2,407
2014 Allowance for doubtful accounts	$	2,912	$	55	$	—	$	476	$	2,491

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Inventory:
2016 Inventory reserve	$	119,376	$	17,493	$	4,417	$	25,270	$	116,016
2015 Inventory reserve	$	111,252	$	21,332	$	1,680	$	14,888	$	119,376
2014 Inventory reserve	$	115,857	$	22,193	$	7,064	$	33,862	$	111,252

Column A	Column B		Column C		Column D		Column E		Column F
Description	Balance at Beginning of Period		Additions Charged to Cost and Expenses		Other		Deductions		Balance at End of Period
	(in thousands)
Valuation reserve deducted in the balance sheet from the asset to which it applies:
Deferred taxes:
2016 Valuation allowance	$	43,039	$	5,413	$	—	$	83	$	48,369
2015 Valuation allowance	$	41,737	$	1,322	$	—	$	20	$	43,039
2014 Valuation allowance	$	40,386	$	1,380	$	—	$	29	$	41,737

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Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

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 reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to inventories, investments, goodwill, intangible and other long-lived assets, accounts receivable, income taxes, deferred tax assets and liabilities, pensions, warranties, and loss contingencies. Management bases its estimates on historical experience and on appropriate and customary assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates.

Revenue Recognition

Revenue Recognition

Teradyne recognizes revenues, including revenues from distributors, when there is persuasive evidence of an arrangement, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to Teradyne’s customers upon shipment or at delivery destination point. In circumstances where either title or risk of loss pass upon destination, acceptance or cash payment, Teradyne defers revenue recognition until such events occur except when title transfer is tied to cash payment outside the United States. Outside the United States, Teradyne recognizes revenue upon shipment or at delivery destination point, even if Teradyne retains a form of title to products delivered to customers, provided the sole purpose is to enable Teradyne to recover the products in the event of customer payment default and the arrangement does not prohibit the customer’s use or resale of the product in the ordinary course of business.

Teradyne’s equipment has non-software and software components that function together to deliver the equipment’s essential functionality. Revenue is recognized upon shipment or at delivery destination point, provided that customer acceptance criteria can be demonstrated prior to shipment. Certain contracts require Teradyne to perform tests of the product to ensure that performance meets the published product specifications or customer requested specifications, which are generally conducted prior to shipment. Where the criteria cannot be demonstrated prior to shipment, revenue is deferred until customer acceptance has been received. Teradyne also defers the portion of the sales price that is not due until acceptance, which represents deferred profit.

For multiple element arrangements, Teradyne allocates revenue to all deliverables based on their relative selling prices. In such circumstances, a hierarchy is used to determine the selling price for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence of selling price (“VSOE”), (ii) third-party evidence of selling price (“TPE”), and (iii) best estimate of the selling price (“BESP”). For a delivered item to be considered a separate unit the delivered item must have value to the customer on a standalone basis and the delivery or performance of the undelivered item must be considered probable and substantially in Teradyne’s control.

Teradyne’s post-shipment obligations include installation, training services, one-year standard warranties, and extended warranties. Installation does not alter the product capabilities, does not require specialized skills or tools and can be performed by the customers or other vendors. Installation is typically provided within five days of product shipment and is completed within one to two days thereafter. Training services are optional and do not affect the customers’ ability to use the product. Teradyne defers revenue for the selling price of installation and training. Extended warranties constitute warranty obligations beyond one year and Teradyne defers revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-20, “Separately Priced Extended Warranty and Product Maintenance Contracts” and ASC 605-25, “Revenue Recognition Multiple-Element Arrangements.” Service revenue is recognized over the contractual period or as services are performed.

Teradyne’s products are generally subject to warranty and related costs of the warranty are provided for in cost of revenues when product revenue is recognized. Teradyne classifies shipping and handling costs in cost of revenue. Teradyne does not provide its customers with contractual rights of return for any of its products.

As of December 31, 2016 and 2015, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2016		2015
	(in thousands)
Extended warranty	$	46,753	$	46,499
Equipment maintenance and training		39,037		30,616
Customer advances, undelivered elements and other		22,151		34,157
Total deferred revenue and customer advances	$	107,941	$	111,272

Product Warranty

Product Warranty

Teradyne generally provides a one-year warranty on its products, commencing upon installation, acceptance 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 balance below is included in other accrued liabilities:

	Amount
	(in thousands)
Balance at December 31, 2013	$	6,660
Accruals for warranties issued during the period		15,406
Accruals related to pre-existing warranties		(2,008	)
Settlements made during the period		(11,116	)
Balance at December 31, 2014		8,942
Acquisition		409
Accruals for warranties issued during the period		11,539
Accruals related to pre-existing warranties		(3,159	)
Settlements made during the period		(10,806	)
Balance at December 31, 2015		6,925
Accruals for warranties issued during the period		14,291
Accruals related to pre-existing warranties		(1,354	)
Settlements made during the period		(12,659	)
Balance at December 31, 2016	$	7,203

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

	Amount
	(in thousands)
Balance at December 31, 2013	$	34,909
Deferral of new extended warranty revenue		29,519
Recognition of extended warranty deferred revenue		(21,128	)
Balance at December 31, 2014		43,300
Acquisition		870
Deferral of new extended warranty revenue		28,549
Recognition of extended warranty deferred revenue		(26,220	)
Balance at December 31, 2015		46,499
Deferral of new extended warranty revenue		27,182
Recognition of extended warranty deferred revenue		(26,928	)
Balance at December 31, 2016	$	46,753

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The volatility of the industries that Teradyne serves can cause certain of its customers to experience shortages of cash flows, which can impact their ability to make required payments. Teradyne maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. Estimated allowances for doubtful accounts are reviewed periodically taking into account the customer’s recent payment history, the customer’s current financial statements and other information regarding the customer’s credit worthiness. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

Inventories

Inventories

Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. On a quarterly basis, Teradyne uses consistent methodologies to evaluate all inventories for net realizable value. Teradyne records a provision for both excess and obsolete inventory when such write-downs or write-offs are identified through the quarterly review process. The inventory valuation is based upon assumptions about future demand, product mix and possible alternative uses.

Investments

Investments

Teradyne accounts for its investments in debt and equity securities in accordance with the provisions of ASC 320-10, “Investments—Debt and Equity Securities.” ASC 320-10 requires that certain debt and equity securities be classified into one of three categories; trading, available-for-sale or held-to-maturity securities. 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.

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. Teradyne uses the market and income approach techniques to value its financial instruments and there were no changes in valuation techniques during the years ended December 31, 2016, 2015 and 2014. ASC 820-10 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

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

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

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

In accordance with ASC 820-10, Teradyne measures its debt and equity investments at fair value. Teradyne’s debt and equity investments are primarily classified within Level 1 and 2. Acquisition-related contingent consideration is classified within Level 3. Teradyne determines the fair value of acquisition-related contingent consideration using a Monte Carlo simulation model. Assumptions utilized in the model include forecasted revenues, revenues volatility and discount rate.

Prepayments

Prepayments

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

	2016		2015
	(in thousands)
Contract manufacturer prepayments	$	77,017	$	66,283
Prepaid maintenance and other services		7,676		8,481
Prepaid taxes		4,664		3,781
Other prepayments		19,097		12,974
Total prepayments	$	108,454	$	91,519

Retirement and Postretirement Plans

Retirement and Postretirement Plans

Teradyne recognizes net actuarial gains and losses and the change in the fair value of the plan assets in its operating results in the year in which they occur or upon any interim remeasurement of the plans. Teradyne calculates the expected return on plan assets using the fair value of the plan assets. Actuarial gains and losses are generally measured annually as of December 31 and, accordingly, recorded during the fourth quarter of each year or upon any interim remeasurement of the plans.

Goodwill, Intangible and Long-Lived Assets

Goodwill, Intangible and Long-Lived Assets

Teradyne accounts for goodwill and intangible assets in accordance with ASC 350-10, “Intangibles-Goodwill and Other.” Intangible assets are amortized over their estimated useful economic life and are carried at cost less accumulated amortization. Goodwill is assessed for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. In accordance with ASC 350-10, Teradyne has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If Teradyne determines this is the case, Teradyne is required to perform the two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized. If Teradyne determines that it is more-likely-than-not that the fair value of the reporting unit is greater than its carrying amounts, the two-step goodwill impairment test is not required.

In accordance with ASC 360-10, “Impairment or Disposal of Long-Lived Assets,” Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the estimated undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value based on a discounted cash flow analysis. The cash flow estimates used to determine the impairment, if any, contain management’s best estimates using appropriate assumptions and projections at that time.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated over the estimated useful lives of the assets. Leasehold improvements and major renewals are capitalized and included in property, plant and equipment accounts while expenditures for maintenance and repairs and minor renewals are charged to expense. When assets are retired, the assets and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations.

Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:

Buildings	40 years
Building improvements	5 to 10 years
Leasehold improvements	Lesser of lease term or 10 years
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery and equipment	3 to 5 years
Software	3 to 5 years

Test systems manufactured internally are used by Teradyne for customer evaluations and manufacturing and support of its customers. Teradyne depreciates the test systems manufactured internally over a six-year life to cost of revenues, engineering and development, and selling and administrative expenses. Teradyne often sells internally manufactured test equipment to customers. Upon the sale of an internally manufactured test system, the net book value of the system is transferred to inventory and expensed as cost of revenues. The net book value of internally manufactured test systems sold in the years ended December 31, 2016, 2015 and 2014 was $11.4 million, $50.7 million and $9.7 million, respectively.

Engineering and Development Costs

Engineering and Development Costs

Teradyne’s products are highly technical in nature and require a large and continuing engineering and development effort. Software development costs incurred prior to the establishment of technological feasibility are charged to expense. Software development costs incurred subsequent to the establishment of technological feasibility are capitalized until the product is available for release to customers. To date, the period between achieving technological feasibility and general availability of the product has been short and software development costs eligible for capitalization have not been material. Engineering and development costs are expensed as incurred and consist primarily of salaries, contractor fees, including non-recurring engineering charges related to product design, allocated facility costs, depreciation, and tooling costs.

Stock Compensation Plans and Employee Stock Purchase Plan

Stock Compensation Plans and Employee Stock Purchase Plan

Stock-based compensation expense is based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10, “Compensation-Stock Compensation.” As required by ASC 718-10, Teradyne has made an estimate of expected forfeitures and is recognizing compensation costs only for those stock-based compensation awards expected to vest.

Under its stock compensation plans, Teradyne has granted 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”).

Income Taxes

Income Taxes

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized. Teradyne performed the required assessment of positive and negative evidence regarding the realization of the net deferred tax assets in accordance with ASC 740, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax-planning strategies. Although realization is not assured, based on its assessment, Teradyne concluded that it is more likely than not that such assets, net of the existing valuation allowance, will be realized. U.S. income taxes are not provided for on the earnings of non-U.S. subsidiaries which are expected to be reinvested indefinitely in operations outside the U.S. For intra-period tax allocations, Teradyne first utilizes non-equity related tax attributes, such as net operating losses and credit carryforwards and then equity-related tax attributes. Teradyne uses the with-and-without method for calculating excess stock compensation deductions and does not take into account any indirect impacts of excess stock compensation deductions on its research and development tax credits, domestic production activities deduction, and other differences between financial reporting and tax reporting.

Advertising Costs

Advertising Costs

Teradyne expenses all advertising costs as incurred. Advertising costs were $6.4 million, $3.3 million and $1.9 million in 2016, 2015 and 2014, respectively.

Translation of Non-U.S. Currencies

Translation of Non-U.S. Currencies

The functional currency for all subsidiaries is the U.S. dollar, except for the Industrial Automation segment for which the local currency is its functional currency. All foreign currency denominated monetary assets and liabilities are remeasured on a monthly basis into the functional currency using exchange rates in effect at the end of the period. All foreign currency denominated non-monetary assets and liabilities are remeasured into the functional currency using historical exchange rates. Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For Industrial Automation, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of the period. Revenue and expense amounts are translated using an average of exchange rates in effect during the period. Translation adjustments are recorded within accumulated other comprehensive income (loss).

Net foreign exchange gains and losses resulting from remeasurement are included in other (income) expense, net. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

These amounts do not reflect the corresponding gains (losses) from foreign exchange contracts. See Note G: “Financial Instruments” regarding foreign exchange contracts.

Net Income (Loss) per Common Share

Net Income (Loss) per Common Share

Basic net (loss) income per common share is calculated by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Except where the result would be antidilutive, diluted net (loss) income per common share is calculated by dividing net (loss) income by the sum of the weighted average number of common shares plus common stock equivalents, if applicable.

For the year ended December 31, 2014, dilutive potential common shares included incremental shares from the assumed conversion of the convertible notes and the convertible notes hedge warrant shares. Incremental shares from the assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option for 34.7 million shares at an exercise price of $5.48 was not used in the GAAP earnings per share calculation as its effect was anti-dilutive.

In 2014, Teradyne settled its conversion spread (i.e., the intrinsic value of the embedded option feature contained in the convertible debt) in shares. Teradyne accounted for its conversion spread using the treasury stock method. Teradyne determined that it had the ability and intent to settle the principal amount of the convertible debt in cash; accordingly, the principal amount was excluded from the determination of diluted earnings per share.

With respect to its convertible debt issued in 2016, Teradyne has determined that it has the ability and intent to settle the principal of the convertible debt in cash; accordingly, the principal amount is excluded from the determination of diluted earnings per share. As a result, Teradyne is accounting for the conversion spread using the treasury stock method.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income, unrealized pension and postretirement prior service costs and benefits, unrealized gains and losses on investments in debt and equity marketable securities and foreign currency translation adjustment.

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Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Deferred Revenue and Customer Advances

As of December 31, 2016 and 2015, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2016		2015
	(in thousands)
Extended warranty	$	46,753	$	46,499
Equipment maintenance and training		39,037		30,616
Customer advances, undelivered elements and other		22,151		34,157
Total deferred revenue and customer advances	$	107,941	$	111,272

Warranty Accrual Included in Other Accrued Liabilities

The balance below is included in other accrued liabilities:

	Amount
	(in thousands)
Balance at December 31, 2013	$	6,660
Accruals for warranties issued during the period		15,406
Accruals related to pre-existing warranties		(2,008	)
Settlements made during the period		(11,116	)
Balance at December 31, 2014		8,942
Acquisition		409
Accruals for warranties issued during the period		11,539
Accruals related to pre-existing warranties		(3,159	)
Settlements made during the period		(10,806	)
Balance at December 31, 2015		6,925
Accruals for warranties issued during the period		14,291
Accruals related to pre-existing warranties		(1,354	)
Settlements made during the period		(12,659	)
Balance at December 31, 2016	$	7,203

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

The balance below is included in short and long-term deferred revenue and customer advances:

	Amount
	(in thousands)
Balance at December 31, 2013	$	34,909
Deferral of new extended warranty revenue		29,519
Recognition of extended warranty deferred revenue		(21,128	)
Balance at December 31, 2014		43,300
Acquisition		870
Deferral of new extended warranty revenue		28,549
Recognition of extended warranty deferred revenue		(26,220	)
Balance at December 31, 2015		46,499
Deferral of new extended warranty revenue		27,182
Recognition of extended warranty deferred revenue		(26,928	)
Balance at December 31, 2016	$	46,753

Schedule of Prepayments

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

	2016		2015
	(in thousands)
Contract manufacturer prepayments	$	77,017	$	66,283
Prepaid maintenance and other services		7,676		8,481
Prepaid taxes		4,664		3,781
Other prepayments		19,097		12,974
Total prepayments	$	108,454	$	91,519

Useful Lives of Assets

Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:

Buildings	40 years
Building improvements	5 to 10 years
Leasehold improvements	Lesser of lease term or 10 years
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery and equipment	3 to 5 years
Software	3 to 5 years

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

Universal Robots

Final Allocation of 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 Year Ended
	December 31, 2014
	(in thousands, except per share amounts)
Revenues	$	1,655,038
Net income	$	82,169
Income per common share:
Basic	$	0.40
Diluted	$	0.37

Avionics Interface Technologies, LLC

Final Allocation of Purchase Price

The following represents the final allocation of the purchase price:

	Purchase Price Allocation
	(in thousands)
Goodwill	$	10,516
Intangible assets		9,080
Tangible assets acquired and liabilities assumed:
Current assets		2,452
Non-current assets		359
Accounts payable and current liabilities		(1,164	)
Total purchase price	$	21,243

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)
Customer relationships	$	5,630		5.0
Developed technology		2,580		4.8
Trademarks and tradenames		380		5.0
Non-compete agreement		320		4.0
Customer order backlog		170		0.3
Total intangible assets	$	9,080		4.8

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 Years Ended
	December 31, 2015		December 31, 2014
	(in thousands, except per share amounts)
Revenue	$	1,657,626	$	1,686,689
Net income	$	199,784	$	61,078
Net income per common share:
Basic	$	0.94	$	0.30
Diluted	$	0.94	$	0.27

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Inventories (Tables)

12 Months Ended

Dec. 31, 2016

Composition of Inventories, Net

Inventories, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Raw material	$	58,530	$	73,117
Work-in-process		22,946		32,825
Finished goods		54,482		47,646
	$	135,958	$	153,588

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2016

Property Plant and Equipment, Net

Property, plant and equipment, net consisted of the following at December 31, 2016 and 2015:

	2016		2015
	(in thousands)
Land	$	16,561	$	16,561
Buildings		98,031		108,797
Machinery and equipment		601,835		595,445
Furniture and fixtures, and software		82,897		82,612
Leasehold improvements		46,612		43,328
Construction in progress		3,032		2,630
		848,968		849,373
Less: accumulated depreciation		595,147		575,959
	$	253,821	$	273,414

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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2016 and 2015:

	December 31, 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	$	214,722	$	—	$	—	$	214,722
Cash equivalents		37,458		55,704		—		93,162
Available-for-sale securities:
U.S. Treasury securities		—		900,038		—		900,038
Commercial paper		—		161,630		—		161,630
Corporate debt securities		—		100,153		—		100,153
Certificates of deposit and time deposits		—		82,133		—		82,133
U.S. government agency securities		—		42,014		—		42,014
Equity and debt mutual funds		18,171		—		—		18,171
Non-U.S. government securities		—		728		—		728
Total	$	270,351	$	1,342,400	$	—	$	1,612,751
Derivative assets		—		1		—		1
Total	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Contingent consideration	$	—	$	—	$	38,332	$	38,332
Derivative liabilities		—		131		—		131
Total	$	—	$	131	$	38,332	$	38,463

Reported as follows:

	(Level 1)		(Level 2)		(Level 3)		Total
	(in thousands)
Assets
Cash and cash equivalents	$	252,180	$	55,704	$	—	$	307,884
Marketable securities		—		871,024		—		871,024
Long-term marketable securities		18,171		415,672		—		433,843
Prepayments		—		1		—		1
	$	270,351	$	1,342,401	$	—	$	1,612,752
Liabilities
Other current liabilities	$	—	$	131	$	—	$	131
Contingent consideration		—		—		1,050		1,050
Long-term contingent consideration		—		—		37,282		37,282
	$	—	$	131	$	38,332	$	38,463

	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 years ended December 31, 2016 and 2015 were as follows:

	Contingent Consideration
	(in thousands)
Balance at December 31, 2014	$	3,350
Acquisition of Universal Robots		31,597
Fair value adjustment of Universal Robots (1)		5,339
Fair value adjustment of AIT (2)		(1,250	)
Fair value adjustment of ZTEC (3)		(1,600	)
Balance at December 31, 2015		37,436
Payments (4)		(15,000	)
Fair value adjustment of AIT (5)		550
Fair value adjustment of Universal Robots (5)		15,346
Balance at December 31, 2016	$	38,332

(1) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $5.3 million primarily due to an increase in forecasted revenues.

(2) During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was reduced by $1.3 million due to a decrease in the forecasted revenues.

(3) During the year ended December 31, 2015, the fair value measurement of the contingent consideration for the earn-out in connection with the acquisition of ZTEC Instruments, Inc. (“ZTEC”) was reduced by $1.6 million, to $0, because Teradyne and the Securityholder Representative, on behalf of the ZTEC securityholders, agreed to terminate the earn-out prior to the end of the December 31, 2015 earn-out period, with no payout in connection with the resolution of indemnity claims asserted by both Teradyne and the Securityholder Representative.

(4) During the year ended December 31, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

(5) During the year ended December 31, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $15.3 million primarily due to an increase in forecasted revenues and a decrease in the discount rate. During the year ended 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenues. The AIT contingent consideration in the amount of $1.1 million was paid in January 2017.

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 instrument:

Liability	December 31, 2016 Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
	(in thousands)
Contingent consideration (Universal Robots)	$	21,301	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2017 volatility		10.8%
				Discount Rate		3.3%
		$15,981	Monte Carlo simulation	Revenues for the period July 1, 2015—December 31, 2018 volatility		10.8%
				Discount Rate		3.3%
Contingent consideration (AIT)	$	1,050(1)

(1) Teradyne paid this amount in January 2017.

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2016 and 2015 were as follows:

	December 31, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)
Assets
Cash and cash equivalents	$	307,884	$	307,884	$	264,705	$	264,705
Marketable securities		1,304,867		1,304,867		743,624		743,624
Derivative assets		1		1		109		109
Liabilities
Contingent consideration		38,332		38,332		37,436		37,436
Derivative liabilities		131		131		146		146
Convertible debt (1)		352,669		486,754		—		—

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

Schedule of Available-for-Sale Marketable Securities

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

	December 31, 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	$	901,975	$	97	$	(2,034	)	$	900,038	$	572,284
Commercial paper		161,672		24		(66	)		161,630		84,034
Corporate debt securities		99,708		1,065		(620	)		100,153		53,642
Certificates of deposit and time deposits		82,080		54		(1	)		82,133		7,760
U.S. government agency securities		42,026		7		(19	)		42,014		13,461
Equity and debt mutual funds		16,505		1,724		(58	)		18,171		1,661
Non-U.S. government securities		745		6		(23	)		728		137
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

Reported as follows:

	Cost		Unrealized Gain		Unrealized (Loss)			Fair Market Value		Fair Market Value of  Investments with Unrealized Losses
	(in thousands)
Marketable securities	$	871,321	$	134	$	(431	)	$	871,024	$	423,128
Long-term marketable securities		433,390		2,843		(2,390	)		433,843		309,851
	$	1,304,711	$	2,977	$	(2,821	)	$	1,304,867	$	732,979

	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 December 31, 2016 were as follows:

	Cost		Fair Value
	(in thousands)
Due within one year	$	871,321	$	871,024
Due after 1 year through 5 years		365,873		365,451
Due after 5 years through 10 years		12,839		12,309
Due after 10 years		38,173		37,912
Total	$	1,288,206	$	1,286,696

Non-Financial Assets Measured at Fair Value on Non-Recurring Basis

The following table sets forth by fair value hierarchy Teradyne’s non-financial assets that were measured at fair value on a non-recurring basis as of July 3, 2016:

			July 3, 2016
	Quoted Prices in Active Markets  for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3))		Total		Total Losses
	(in thousands)
Goodwill (1)	$	—	$	—	$	7,976	$	7,976	$	254,946
Definite lived intangible assets (2)		—		—		5,750		5,750		83,339
	$	—	$	—	$	13,726	$	13,726	$	338,285

(1) In accordance with the provisions of ASC 350-20, “Goodwill” goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: “Goodwill and Intangible Assets” regarding goodwill impairment.

(2) In accordance with the provisions of ASC 360-10, “Property, Plant and Equipment,” definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: “Goodwill and Intangible Assets” regarding definite lived intangible assets impairment.

Schedule of Notional Amount of Derivatives

At December 31, 2016 and 2015, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

	December 31, 2016								December 31, 2015
	Buy Position			Sell Position		Net Total			Buy Position			Sell Position		Net Total
	(in millions)
Japanese Yen	$	(17.7	)	$	—	$	(17.7	)	$	(51.9	)	$	—	$	(51.9	)
Korean Won		(8.8	)		—		(8.8	)		(5.5	)		—		(5.5	)
Taiwan Dollar		(6.9	)		—		(6.9	)		(5.0	)		—		(5.0	)
British Pound Sterling		(1.3	)		—		(1.3	)		(9.5	)		—		(9.5	)
Euro		—			25.2		25.2			—			27.2		27.2
Singapore Dollar		—			24.0		24.0			—			15.0		15.0
Total	$	(34.7	)	$	49.2	$	14.5		$	(71.9	)	$	42.2	$	(29.7	)

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

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

	Balance Sheet Location	December  31, 2016			December  31, 2015
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepayments	$	1		$	109
Foreign exchange contracts	Other current liabilities		(131	)		(146	)
Total derivatives		$	(130	)	$	(37	)

Schedule of Effect of Derivative Instruments on Statements of Operations Recognized

The following table summarizes the effect of derivative instruments in statements of operations recognized for the years ended December 31, 2016, 2015 and 2014. The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the years ended December 31, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.

	Location of Losses Recognized in Statements of Operations	December 31, 2016		December 31, 2015		December 31, 2014
		(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other (income) expense, net	$	8,671	$	3,047	$	237

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Debt (Tables)

12 Months Ended

Dec. 31, 2016

Components of Convertible Senior Notes

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

	December 31, 2016
	(in thousands)
Debt principal	$	460,000
Unamortized discount including debt issuance cost		107,331
Net carrying amount of convertible debt	$	352,669

	For the year ended December 31, 2016
	(in thousands)
Contractual interest expense on the coupon	$	303
Amortization of the discount component and debt issue fees recognized as interest expense		688
Total interest expense on the convertible debt	$	991

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Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2016

Changes in accumulated other comprehensive income (loss)

Changes in accumulated other comprehensive income (loss), which is presented net of tax, consists of the following:

	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 loss before reclassifications, net of tax of $0, $(1,667)		(8,759	)		(3,075	)		—			(11,834	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(390), $(169)		—			(704	)		(295	)		(999	)
Net current period other comprehensive loss, net of tax of $0, $(2,057), $(169)		(8,759	)		(3,779	)		(295	)		(12,833	)
Balance at December 31, 2015, net of tax of $0, $(459), $(622)	$	(8,759	)	$	(1,414	)	$	2,029		$	(8,144	)
Other comprehensive (loss) income before reclassifications, net of tax of $0, $923, $34		(13,162	)		2,037			59			(11,125	)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)		—			(683	)		(321	)		(945	)
Net current period other comprehensive (loss) income, net of tax of $0, $668, $(156)		(13,162	)		1,354			(262	)		(12,070	)
Balance at December 31, 2016, net of tax of $0, $209, $(778)	$	(21,921	)	$	(60	)	$	1,767		$	(20,214	)

Reclassifications Out of Accumulated Other Comprehensive Income to Statements of Operations

Reclassifications out of accumulated other comprehensive income to the statements of operations for the years ended December 31, 2016, 2015 and 2014, were as follows:

Details about Accumulated Other Comprehensive Income Components	For the year ended							Affected Line Item in the Statements of Operations
	December 31, 2016			December 31, 2015		December 31, 2014
	(in thousands)
Available-for-sale marketable securities:
Unrealized gains, net of tax of $255, $390, $645	$	683		$	704	$	1,433		Interest income
Defined benefit pension and postretirement plans:
Amortization of prior service credit, net of tax of $190, $169, $169		321			295		295		(1)
Prior service income arising during period, net of tax of $(34), $0, $0		(59	)		—		—
		262			295		295
Total reclassifications, net of tax of $411, $559, $814	$	945		$	999	$	1,728		Net income

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

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2016

Changes in Carrying Amount of Goodwill by Segment

The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2016 and 2015 are as follows:

	Industrial Automation			System Test			Wireless Test			Semiconductor Test			Total
	(in thousands)
Balance at December 31, 2014:
Goodwill	$	—		$	158,699		$	361,819		$	260,540		$	781,058
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		—			10,516			262,922			—			273,438
Universal Robots acquisition		221,128			—			—			—			221,128
Foreign currency translation adjustment		(6,153	)		—			—			—			(6,153	)
Balance at December 31, 2015:
Goodwill		214,975			158,699			361,819			260,540			996,033
Accumulated impairment losses		—			(148,183	)		(98,897	)		(260,540	)		(507,620	)
		214,975			10,516			262,922			—			488,413
Foreign currency translation adjustment		(10,124	)		—			—			—			(10,124	)
Goodwill impairment losses		—			—			(254,946	)		—			(254,946	)
Balance at December 31, 2016:
Goodwill		204,851			158,699			361,819			260,540			985,909
Accumulated impairment losses		—			(148,183	)		(353,843	)		(260,540	)		(762,566	)
	$	204,851		$	10,516		$	7,976		$	—		$	223,343

Schedule of Amortizable Intangible Assets

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

	December 31, 2016
	Gross Carrying Amount (1)		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	270,877	$	206,376	$	(5,093	)	$	59,408		6.0 years
Customer relationships		92,741		76,707		(538	)		15,496		7.9 years
Tradenames and trademarks		50,100		23,435		(1,308	)		25,357		9.5 years
Non-compete agreement		320		180		—			140		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	414,208	$	306,868	$	(6,939	)	$	100,401		6.8 years

(1) During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

(2) In 2016, $48.1 million of amortizable intangible assets became fully amortized and has been eliminated from the gross carrying amount and accumulated amortization.

	December 31, 2015
	Gross Carrying Amount		Accumulated Amortization  (1)(2)		Foreign Currency Translation Adjustment			Net Carrying Amount		Weighted Average Useful Life
	(in thousands)
Developed technology	$	382,262	$	220,346	$	(2,444	)	$	159,472		6.0 years
Customer relationships		110,602		63,722		(258	)		46,622		7.9 years
Tradenames and trademarks		53,034		18,889		(628	)		33,517		9.5 years
Non-compete agreement		320		100		—			220		4.0 years
Customer backlog		170		170		—			—		0.3 years
Total intangible assets	$	546,388	$	303,227	$	(3,330	)	$	239,831		6.7 years

(1) During the year ended December 31, 2015, Teradyne recorded intangible assets in the amount of $121.6 million related to its Universal Robots acquisition.

(2) During the year ended December 31, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

Schedule of Estimated Intangible Assets Amortization Expense

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

Year	Amortization Expense
	(in thousands)
2017	$	28,986
2018		26,848
2019		23,037
2020		10,042
2021		3,435
Thereafter		8,053

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Non-Cancelable Operating Lease Commitments

The following table reflects Teradyne’s non-cancelable operating lease commitments:

	Non-cancelable Lease Commitments
	(in thousands)
2017	$	16,467
2018		15,258
2019		13,733
2020		9,374
2021		7,149
Beyond 2022		10,130
Total	$	72,111

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Net (loss) Income per Common Share (Tables)

12 Months Ended

Dec. 31, 2016

Computation of Basic and Diluted Net (Loss) Income Per Common Share

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

	2016			2015		2014
	(in thousands, except per share amounts)
Net (loss) income for basic and diluted net income per share	$	(43,421	)	$	206,477	$	81,272
Weighted average common shares-basic		202,578			211,544		202,908
Effect of dilutive potential common shares:
Incremental shares from assumed conversion of convertible notes (1)		—			—		5,013
Convertible note hedge warrant shares (2)		—			—		12,562
Restricted stock units		—			1,130		1,092
Stock options		—			606		944
Employee stock purchase rights		—			41		31
Dilutive potential common shares		—			1,777		19,642
Weighted average common shares-diluted		202,578			213,321		222,550
Net (loss) income per common share-basic	$	(0.21	)	$	0.98	$	0.40
Net (loss) income per common share-diluted	$	(0.21	)	$	0.97	$	0.37

(1) Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

(2) Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne’s call option on its common stock (convertible note hedge transaction) was excluded from the calculation of diluted shares because the effect was anti-dilutive.

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Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2016

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	351,117		$	62,290		$	367,619		$	58,210
Service cost		2,302			761			2,462			1,006
Interest cost		13,630			1,185			13,142			1,444
Actuarial gain (loss)		6,053			5,621			(13,221	)		7,498
Benefits paid		(19,486	)		(1,385	)		(18,885	)		(859	)
Curtailment		—			—			—			(634	)
Plan participants’ contributions		—			—			—			64
Expenses paid		—			(609	)		—			—
Non-U.S. currency movement		—			(7,125	)		—			(4,439	)
End of year		353,616			60,738			351,117			62,290
Change in plan assets:
Fair value of plan assets:
Beginning of year		298,404			28,141			316,072			29,511
Company contributions		4,489			867			10,517			808
Plan participants’ contributions		—			—			—			64
Actual return on plan assets		23,897			5,142			(9,300	)		(136	)
Benefits paid		(19,486	)		(1,148	)		(18,885	)		(859	)
Settlements		—			—			—			—
Expenses paid		—			(609	)		—			(43	)
Non-U.S. currency movement		—			(4,822	)		—			(1,204	)
End of year		307,304			27,571			298,404			28,141
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

	2016						2015
	United States			Foreign			United States			Foreign
	(in thousands)
Retirement plans assets	$	7,712		$	—		$	636		$	—
Accrued employees’ compensation and withholdings		(2,591	)		(772	)		(2,564	)		(695	)
Retirement plans liabilities		(51,433	)		(32,395	)		(50,785	)		(33,454	)
Funded status	$	(46,312	)	$	(33,167	)	$	(52,713	)	$	(34,149	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in thousands)
Prior service cost, before tax	$	127	$	—	$	224	$	—
Deferred taxes		514		—		479		—
Total recognized in other comprehensive income, net of tax	$	641	$	—	$	703	$	—

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	2016				2015
	United States		Foreign		United States		Foreign
	(in millions)
Projected benefit obligation	$	54.0	$	34.3	$	53.3	$	35.2
Accumulated benefit obligation		48.0		30.1		47.3		29.5
Fair value of plan assets		—		1.1		—		1.0

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic pension (income) cost was comprised of the following:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
	(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost	$	2,302		$	761		$	2,462		$	1,006		$	2,218		$	897
Interest cost		13,630			1,185			13,142			1,444			12,875			1,837
Expected return on plan assets		(13,830	)		(443	)		(14,517	)		(781	)		(12,500	)		(868	)
Amortization of prior service cost		96			—			134			—			135			—
Net actuarial (gain) loss		(4,013	)		815			10,596			8,415			43,168			4,651
Curtailment		—			—			—			(634	)		—			—
Total net periodic pension (income) cost	$	(1,815	)	$	2,318		$	11,817		$	9,450		$	45,896		$	6,517
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost		(96	)		—			(134	)		—			(135	)		—
Total recognized in other comprehensive income		(96	)		—			(134	)		—			(135	)		—
Total recognized in net periodic pension (income) cost and other comprehensive income	$	(1,911	)	$	2,318		$	11,683		$	9,450		$	45,761		$	6,517

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

	2016						2015						2014
	United States			Foreign			United States			Foreign			United States			Foreign
Discount rate		4.0	%		2.3	%		3.7	%		2.6	%		4.5	%		3.8	%
Expected return on plan assets		4.8			2.0			4.8			2.6			5.0			3.4
Salary progression rate		2.7			3.2			2.9			3.2			3.0			3.5

Weighted Average Assumptions to Determine Pension Obligations at December 31 :

	2016						2015
	United States			Foreign			United States			Foreign
Discount rate		3.9	%		1.8	%		4.0	%		2.3	%
Salary progression rate		2.6			2.7			2.7			3.2

Weighted Average Pension Asset Allocations by Category

The following table provides weighted average pension asset allocation by asset category at December 31, 2016 and 2015:

	2016						2015
	United States			Foreign			United States			Foreign
Fixed income securities		88.1	%		—	%		88.6	%		—	%
Equity securities		9.9			—			9.8			—
Other		2.0			100.0			1.6			100.0
		100.0	%		100.0	%		100.0	%		100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:	Policy Index:	Target Allocation
U.S. corporate fixed income	Barclays U.S. Corporate A or Better Index		76	%
Global equity	MSCI World Minimum Volatility Index		10
U.S. government fixed income	Barclays U.S. Long Government Bond Index		8
High yield fixed income	Barclays U.S. Corporate High Yield 2% Issuer Cap Index		5
Cash	Citigroup Three Month U.S. Treasury Bill Index		1

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2016 and December 31, 2015 were as follows:

	December 31, 2016
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	246,528	$	—	$	246,528	$	—	$	—	$	—	$	—
U.S. government securities		—		24,322		—		24,322		—		—		—		—
Global equity		—		30,360		—		30,360		—		—		—		—
Group annuity insurance contracts		—		—		3,071		3,071		—		—		26,385		26,385
Other		—		—		—		—		—		1,124		—		1,124
Cash and cash equivalents		3,023		—		—		3,023		62		—		—		62
Total	$	3,023	$	301,210	$	3,071	$	307,304	$	62	$	1,124	$	26,385	$	27,571
	December 31, 2015
	United States								Foreign
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Fixed income securities:
Corporate debt securities	$	—	$	240,695	$	—	$	240,695	$	—	$	—	$	—	$	—
U.S. government securities		—		23,761		—		23,761		—		—		—		—
Global equity		—		29,193		—		29,193		—		—		—		—
Group annuity insurance contracts		—		—		2,982		2,982		—		—		26,410		26,410
Other		—		—		—		—		—		1,029		—		1,029
Cash and cash equivalents		1,773		—		—		1,773		702		—		—		702
Total	$	1,773	$	293,649	$	2,982	$	298,404	$	702	$	1,029	$	26,410	$	28,141

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	United States		Foreign
	(in thousands)
2017	$	19,205	$	788
2018		18,568		754
2019		19,046		780
2020		19,768		1,054
2021		20,390		882
2022-2026		111,334		5,209

Postretirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of the postretirement assets and obligations are shown below:

	2016			2015
	(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year	$	6,030		$	7,162
Service cost		37			48
Interest cost		218			237
Plan amendments		(93	)		—
Actuarial loss (gain)		5			(648	)
Benefits paid		(687	)		(769	)
End of year		5,510			6,030
Change in plan assets:
Fair value of plan assets:
Beginning of year		—			—
Company contributions		687			769
Benefits paid		(687	)		(769	)
End of year		—			—
Funded status	$	(5,510	)	$	(6,030	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

	2016			2015
	(in thousands)
Accrued employees’ compensation and withholdings	$	(571	)	$	(692	)
Retirement plans liability		(4,939	)		(5,338	)
Funded status	$	(5,510	)	$	(6,030	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

	2016			2015
	(in thousands)
Prior service credit, before tax	$	(1,118	)	$	(1,632	)
Deferred taxes		(1,292	)		(1,100	)
Total recognized in other comprehensive income, net of tax	$	(2,410	)	$	(2,732	)

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2016, 2015 and 2014, Teradyne’s net periodic postretirement benefit income was comprised of the following:

	2016			2015			2014
	(in thousands)
Components of Net Periodic Postretirement Benefit Income:
Service cost	$	37		$	48		$	59
Interest cost		218			237			335
Amortization of prior service credit		(607	)		(598	)		(598	)
Net actuarial loss (gain)		5			(648	)		(1,255	)
Total net periodic postretirement benefit income		(347	)		(961	)		(1,459	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service benefit		(93	)		—			—
Reversal of amortization items:
Prior service credit		607			598			598
Total recognized in other comprehensive income		514			598			598
Total recognized in net periodic postretirement cost (income) and other comprehensive income	$	167		$	(363	)	$	(861	)

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

	2016			2015			2014
Discount rate		3.9	%		3.5	%		4.1	%
Initial health care cost trend rate		7.5			7.5			8.0
Ultimate health care cost trend rate		5.0			5.0			5.0
Year in which ultimate health care cost trend rate is reached		2023			2022			2020

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

	2016			2015			2014
Discount rate		3.9	%		3.9	%		3.5	%
Initial medical trend		7.3			7.5			7.5
Ultimate health care trend		5.0			5.0			5.0
Medical cost trend rate decrease to ultimate rate in year		2023			2023			2022

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

	Benefit Payments
	(in thousands)
2017	$	571
2018		529
2019		456
2020		409
2021		367
2022-2026		1,536

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2016 would have the following effects:

	1 Percentage Point Increase		1 Percentage Point Decrease
	(in thousands)
Effect on total service and interest cost components	$	2	$	(2	)
Effect on postretirement benefit obligations		44		(42	)

Group Annuity Insurance Contracts

Changes in Fair Value of Pension Assets

Changes in the fair value of Level 3 group annuity insurance contracts for the years ended December 31, 2016 and 2015 were as follows:

	Group Annuity Insurance Contracts
	(in thousands)
Balance at December 31, 2014	$	2,990
Purchases of group annuity insurance contracts		27,313
Interest and market value adjustments		(825	)
Benefits paid		(67	)
Other		(19	)
Balance at December 31, 2015		29,392
Purchases of group annuity insurance contracts		709
Interest and market value adjustments		5,308
Benefits paid		(611	)
Other		(634	)
Non-U.S. currency movement		(4,708	)
Balance at December 31, 2016	$	29,456

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 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:

	2016			2015			2014
Risk-free interest rate		0.97	%		0.77	%		0.75	%
Teradyne volatility-historical		27.0	%		28.2	%		36.1	%
NYSE Composite Index volatility-historical		13.1	%		—	%		—	%
Philadelphia Semiconductor Index volatility-historical		—	%		19.7	%		24.6	%
Dividend yield		1.24	%		1.33	%		1.25	%

Fair Value of Stock Options Using Assumptions

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

	2016			2015			2014
Expected life (years)		5.0			4.0			4.0
Risk-free interest rate		1.4	%		1.1	%		1.2	%
Volatility-historical		32.9	%		33.4	%		38.8	%
Dividend yield		1.24	%		1.33	%		1.25	%

Stock Compensation Plan Activity

Stock compensation plan activity for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
	(in thousands)
Restricted Stock Units:
Non-vested at January 1		4,070			4,352			4,636
Awarded		1,471			1,681			1,870
Vested		(1,530	)		(1,679	)		(1,965	)
Forfeited		(233	)		(284	)		(189	)
Non-vested at December 31		3,778			4,070			4,352
Stock Options:
Outstanding at January 1		1,121			1,507			2,706
Granted		130			132			89
Exercised		(324	)		(518	)		(1,248	)
Forfeited		—			—			(38	)
Expired		(2	)		—			(2	)
Outstanding at December 31		926			1,121			1,507
Vested and expected to vest at December 31		926			1,121			1,507
Exercisable at December 31		598			779			1,089

Share Based Compensation Total Shares Available

Total shares available for the years 2016, 2015 and 2014:

	2016			2015			2014
	(in thousands)
Shares available:
Available for grant at January 1		10,914			12,443			14,213
Options granted		(130	)		(132	)		(89	)
Restricted stock units awarded		(1,471	)		(1,681	)		(1,870	)
Restricted stock units forfeited		233			284			189
Available for grant at December 31		9,546			10,914			12,443

Weighted-Average Restricted Stock Unit Award Date Fair Value

Weighted average restricted stock unit award date fair value information for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Non-vested at January 1	$	17.46	$	17.24	$	15.60
Awarded		18.68		17.36		18.41
Vested		17.21		16.85		14.38
Forfeited		17.57		17.08		16.97
Non-vested at December 31	$	18.03	$	17.46	$	17.24

Restricted Stock Unit Awards Aggregate Intrinsic Value

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Vested	$	30,008	$	32,200	$	37,160
Outstanding		95,952		84,129		86,113
Expected to vest		91,871		79,611		81,582

Restricted Stock Units Weighted Average Remaining Contractual Terms

Restricted stock units weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		1.04		1.09		1.11
Expected to vest		1.03		1.08		1.10

Weighted Average Stock Options Exercise Price

Weighted average stock options exercise price information for the year ended December 31, 2016 follows:

	2016
Outstanding at January 1	$	10.21
Options granted		19.43
Options exercised		9.06
Options expired		3.07
Outstanding at December 31		11.93
Exercisable at December 31		8.32

Stock Option Aggregate Intrinsic Value Information

Stock option aggregate intrinsic value information for the years ended December 31, 2016, 2015 and 2014 follows:

	2016		2015		2014
	(in thousands)
Exercised	$	3,729	$	7,255	$	17,847
Outstanding		12,468		11,729		17,936
Vested and expected to vest		12,468		11,729		17,936
Exercisable		10,217		10,716		16,101

Stock Options Weighted Average Remaining Contractual Terms

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2016, 2015 and 2014 follows:

	2016		2015		2014
Outstanding		3.9		4.2		4.5
Vested and expected to vest		3.9		4.2		4.5
Exercisable		3.2		3.9		4.2

Significant Option Groups Outstanding

Significant option groups outstanding at December 31, 2016 and related weighted average price and remaining contractual life information follow:

	Options Outstanding						Options Exercisable
Range Of Exercise Prices	Weighted- Average  Remaining Contractual Life (Years)		Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
	(shares in thousands)
$1.48 – $2.67		3.74		294	$	2.31		294	$	2.31
$3.23 – $7.71		1.77		75		4.26		75		4.26
$16.23 – $18.10		3.51		338		17.18		185		16.87
$19.16 – $19.43		5.26		219		19.32		44		19.16
				926	$	11.93		598	$	8.32

Effect to Income (Loss) from Operations for Recording Stock-Based Compensation

The effect to income from operations for recording stock-based compensation for the years ended December 31 was as follows:

	2016			2015			2014
	(in thousands)
Cost of revenues	$	3,153		$	3,065		$	3,675
Engineering and development		9,458			9,362			10,146
Selling and administrative		18,139			18,024			26,486
Stock-based compensation		30,750			30,451			40,307
Income tax benefit		(8,752	)		(8,528	)		(11,537	)
Total stock-based compensation expense after income taxes	$	21,998		$	21,923		$	28,770

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of (Loss) Income Before Income Taxes and (Benefit) Provision for Income Taxes from Operations

The components of (loss) income before income taxes and the (benefit) provision for income taxes as shown in the consolidated statements of operations were as follows:

	2016			2015			2014
	(in thousands)
(Loss) income before income taxes:
U.S.	$	(341,018	)	$	56,270		$	(151,889	)
Non-U.S.		285,958			196,854			247,265
	$	(55,060	)	$	253,124		$	95,376
(Benefit) provision for income taxes:
Current:
U.S. Federal	$	7,750		$	16,635		$	5,197
Non-U.S.		41,579			35,707			28,157
State		1,968			1,429			678
		51,297			53,771			34,032
Deferred:
U.S. Federal		(51,482	)		(574	)		(20,449	)
Non-U.S.		(9,240	)		(7,761	)		(404	)
State		(2,214	)		1,211			925
		(62,936	)		(7,124	)		(19,928	)
Total (benefit) provision for income taxes:	$	(11,639	)	$	46,647		$	14,104

Reconciliation of Effective Tax Rate

A reconciliation of the effective tax rate for the years 2016, 2015 and 2014 follows:

	2016			2015			2014
U.S. statutory federal tax rate		35.0	%		35.0	%		35.0	%
Foreign taxes		127.1			(16.5	)		(58.1	)
U.S. research and development credit		15.8			(3.0	)		(7.9	)
Domestic production activities deduction		2.3			(1.0	)		(0.5	)
State income taxes, net of federal tax benefit		2.3			0.4			(0.1	)
Equity compensation		(2.7	)		0.6			(1.8	)
Uncertain tax positions		(2.6	)		2.2			7.9
Goodwill impairment		(162.1	)		—			36.3
Other, net		6.0			0.7			4.0
		21.1	%		18.4	%		14.8	%

Deferred Tax Assets (Liabilities)

Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:

	2016			2015
	(in thousands)
Deferred tax assets:
Tax credits	$	57,313		$	44,684
Pension liabilities		31,581			31,742
Inventory valuations		31,227			29,445
Accruals		27,247			26,563
Deferred revenue		12,806			10,232
Equity compensation		9,922			9,674
Vacation accrual		7,874			7,354
Net operating loss carryforwards		5,244			7,989
Other		630			502
Gross deferred tax assets		183,844			168,185
Less: valuation allowance		(48,369	)		(43,039	)
Total deferred tax assets	$	135,475		$	125,146
Deferred tax liabilities:
Intangible assets	$	(22,887	)	$	(68,433	)
Depreciation		(17,117	)		(20,541	)
Marketable securities		(210	)		(458	)
Total deferred tax liabilities	$	(40,214	)	$	(89,432	)
Net deferred assets	$	95,261		$	35,714

Operating Loss Carryforwards

At December 31, 2016, Teradyne had operating loss carryforwards that expire in the following years:

	State Operating Loss Carryforwards		Foreign Operating  Loss Carryforwards
	(in thousands)
2017	$	10,245	$	—
2018		8,562		—
2019		983		—
2020		1,248		—
2021		3,549		—
2022-2026		18,044		—
2027-2031		38,498		—
Beyond 2031		5,464		129
Non-expiring		—		6,400
Total	$	86,593	$	6,529

Unrecognized Tax Benefits

Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014 were as follows:

	2016			2015			2014
	(in thousands)
Beginning balance as of January 1	$	36,792		$	30,418		$	21,203
Additions:
Tax positions for current year		9,766			6,626			8,414
Tax positions for prior years		187			792			3,781
Reductions:
Expiration of statutes		(3,532	)		—			—
Settlements with tax authorities		(2,295	)		(336	)		(500	)
Tax positions for prior years		(1,960	)		(708	)		(2,480	)
Ending balance as of December 31	$	38,958		$	36,792		$	30,418

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Operating Segment, Geographic and Significant Customer Information (Tables)

12 Months Ended

Dec. 31, 2016

Segment Information

Segment information for the years ended December 31, 2016, 2015 and 2014 is as follows:

	Semiconductor Test		System Test		Industrial Automation			Wireless Test			Corporate And Eliminations			Consolidated
	(in thousands)
2016
Revenues	$	1,368,169	$	189,846	$	99,031		$	96,204		$	—		$	1,753,250
Income (loss) before taxes (1)(2)		311,939		28,916		(16,783	)		(371,409	)		(7,723	)		(55,060	)
Total assets (3)		557,546		110,361		317,635			62,366			1,714,585			2,762,493
Property additions		70,543		3,788		6,755			4,186			—			85,272
Depreciation and amortization expense		58,087		6,551		26,869			25,921			2,581			120,009
2015
Revenues	$	1,201,530	$	211,584	$	41,892		$	184,572		$	—		$	1,639,578
Income (loss) before taxes (1)(2)		260,154		25,101		(7,574	)		(13,830	)		(10,727	)		253,124
Total assets (3)		610,869		102,547		344,260			427,880			1,063,118			2,548,674
Property additions		79,052		6,228		1,465			3,133			—			89,878
Depreciation and amortization expense		64,415		4,391		14,500			53,440			4,027			140,773
2014
Revenues	$	1,300,790	$	162,499	$	—		$	184,535		$	—		$	1,647,824
Income (loss) before taxes (1)(2)		255,803		12,116		—			(116,196	)		(56,347	)		95,376
Total assets (3)		580,501		95,105		—			478,974			1,383,940			2,538,520
Property additions		159,783		5,469		—			3,730			—			168,982
Depreciation and amortization expense		84,990		5,399		—			53,308			8,847			152,544

(1) Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

(2) Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

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

Revenues by Country

Information as to Teradyne’s revenues by country is as follows:

	2016		2015		2014
	(in thousands)
Revenues from customers (1):
Taiwan	$	653,076	$	436,389	$	495,942
United States		221,948		217,386		213,104
China		174,876		264,898		292,145
Korea		147,882		120,224		145,608
Japan		135,978		128,228		63,761
Europe		117,671		111,903		111,043
Malaysia		103,472		76,707		83,910
Singapore		73,172		105,216		119,421
Philippines		54,705		96,103		68,662
Thailand		43,097		59,104		44,117
Rest of the World		27,373		23,420		10,111
	$	1,753,250	$	1,639,578	$	1,647,824

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

Long-Lived Assets by Geographic Area

Long-lived assets by geographic area:

	United States		Foreign(1)		Total
	(in thousands)
December 31, 2016	$	189,195	$	64,626	$	253,821
December 31, 2015	$	198,424	$	74,990	$	273,414

(1) As of December 31, 2016 and 2015, long-lived assets attributable to Singapore were $31.5 million and $39.9 million, respectively.

System Test

Schedule of Segment Reporting Information by Segment Charges

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

	For the Year Ended December 31,
	2016			2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	630		$	8,324	$	2,125
Restructuring and other		(49	)		1,037		742

Semiconductor Test

Schedule of Segment Reporting Information by Segment Charges

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

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Cost of revenues—inventory charge	$	9,656	$	10,508	$	14,389
Restructuring and other		2,860		499		490

Corporate And Eliminations

Schedule of Segment Reporting Information by Segment Charges

Included in the Corporate and Eliminations segment are charges and credits in the following accounts:

	For the Year Ended December 31,
	2016			2015			2014
	(in thousands)
Restructuring and other—Universal Robots contingent consideration adjustment	$	15,346		$	5,339		$	—
Restructuring and other—Impairment of fixed assets and expenses related to Japan Earthquake		5,363			—			—
Restructuring and other—Property insurance recovery		(5,363	)		—			—
Restructuring and other—ZTEC contingent consideration adjustment		—			(1,600	)		(630	)
Restructuring and other—AIT contingent consideration adjustment		550			(1,250	)		—
Restructuring and other—Acquisition costs		—			1,104			372
Restructuring and other		—			—			198
Other (income) expense, net—Gain from the sale of an equity investment		—			(5,406	)		—
Selling and administrative—Stock based compensation expense (1)		—			—			6,598
Total	$	15,896		$	(1,813	)	$	6,538

(1) Expense related to the January 2014 retirement of Teradyne’s former chief executive officer; see Note O: “Stock-Based Compensation.”

Industrial Automation

Schedule of Segment Reporting Information by Segment Charges

Included in the Industrial Automation segment are charges in the following accounts:

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Restructuring and other	$	585	$	—	$	—
Cost of revenues-inventory step-up (1)		—		1,567		—

(1) Included in the cost of revenues for the year ended December 31, 2015 is the cost for purchase accounting inventory step-up.

Wireless Test

Schedule of Segment Reporting Information by Segment Charges

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

	For the Year Ended December 31,
	2016		2015		2014
	(in thousands)
Goodwill impairment charge	$	254,946	$	—	$	98,897
Acquired intangible assets impairment charge		83,339		—		—
Cost of revenues—inventory charge		7,207		2,500		5,679
Restructuring and other		2,650		—		565

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Supplementary Information (Tables)

12 Months Ended

Dec. 31, 2016

Consolidated Quarterly Statements of Operations

The following sets forth certain unaudited consolidated quarterly statements of operations data for each of Teradyne’s last eight quarters. In management’s opinion, this quarterly information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement for the periods presented. Such quarterly results are not necessarily indicative of future results of operations and should be read in conjunction with the audited consolidated financial statements of Teradyne and the notes thereto included elsewhere herein.

	2016
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
	(1)(5)			(2)(5)			(3)(5)			(4)(5)
	(in thousands, except per share amounts)
Revenues:
Products	$	358,139		$	456,832		$	334,610		$	303,667
Services		72,855			74,960			75,865			76,322
Total revenues		430,994			531,792			410,475			379,989
Cost of revenues:
Cost of products		167,555			215,795			148,266			127,481
Cost of services		33,107			33,127			34,850			33,502
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		200,662			248,922			183,116			160,983
Gross profit		230,332			282,870			227,359			219,006
Operating expenses:
Engineering and development		73,464			76,109			71,400			70,052
Selling and administrative		79,174			81,425			78,794			76,289
Acquired intangible assets amortization		19,994			16,244			8,487			7,923
Acquired intangible assets impairment		—			83,339			—			—
Goodwill impairment		—			254,946			—			—
Restructuring and other		1,587			2,608			12,177			5,570
Total operating expenses		174,219			514,671			170,858			159,834
Income (loss) from operations		56,113			(231,801	)		56,501			59,172
Non-operating (income) expense:
Interest income		(1,642	)		(1,666	)		(2,892	)		(3,095	)
Interest expense		710			691			633			1,604
Other (income) expense, net		(147	)		(9	)		(921	)		1,779
Income (loss) before income taxes		57,192			(230,817	)		59,681			58,884
Income tax provision (benefit)		7,206			(7,271	)		(4,113	)		(7,461	)
Net income (loss)	$	49,986		$	(223,546	)	$	63,794		$	66,345
Net income (loss) per common share—basic	$	0.24		$	(1.10	)	$	0.32		$	0.33
Net income (loss) per common share—diluted	$	0.24		$	(1.10	)	$	0.31		$	0.33
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(2) Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

(3) Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(4) Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

(5) Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

	2015
	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
				(3)			(4)			(1)(2)
	(in thousands, except per share amounts)
Revenues:
Products	$	272,325		$	437,243		$	386,488		$	244,510
Services		70,076			75,496			79,506			73,934
Total revenues		342,401			512,739			465,994			318,444
Cost of revenues:
Cost of products		118,996			181,491			170,963			120,322
Cost of services		30,982			32,680			36,405			32,096
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)		149,978			214,171			207,368			152,418
Gross profit		192,423			298,568			258,626			166,026
Operating expenses:
Engineering and development		71,450			75,832			74,027			70,941
Selling and administrative		72,041			77,073			77,481			79,718
Acquired intangible assets amortization		13,808			15,258			20,053			19,911
Restructuring and other		—			(385	)		261			5,204
Total operating expenses		157,299			167,778			171,822			175,774
Income (loss) from operations		35,124			130,790			86,804			(9,748	)
Non-operating (income) expense:
Interest income		(1,816	)		(1,674	)		(1,708	)		(2,017	)
Interest expense		162			444			508			762
Other (income) expense, net		(5,660	)		(116	)		596			364
Income (loss) before income taxes		42,438			132,136			87,408			(8,857	)
Income tax provision (benefit)		9,651			29,257			15,955			(8,216	)
Net income (loss)	$	32,787		$	102,879		$	71,453		$	(641	)
Net income (loss) per common share—basic	$	0.15		$	0.48		$	0.34		$	(0.00	)
Net income (loss) per common share—diluted	$	0.15		$	0.48		$	0.34		$	(0.00	)
Cash dividend declared per common share	$	0.06		$	0.06		$	0.06		$	0.06

(1) Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

(2) In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: “Accounting Policies” for a discussion of Teradyne’s accounting policy.

(3) Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

(4) Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

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The Company - Additional information (Detail) - Universal Robots	Jun. 11, 2015 USD ($)
Business Acquisition [Line Items]
Cash paid to acquire outstanding common and preferred stock	$ 283,800,000
Arrangement range of outcomes value high	$ 65,000,000

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Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred Revenue Arrangement
Extended warranty	$ 46,753	$ 46,499	$ 43,300	$ 34,909
Equipment maintenance and training	39,037	30,616
Customer advances, undelivered elements and other	22,151	34,157
Total deferred revenue and customer advances	$ 107,941	$ 111,272

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Warranty Accrual Included in Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Product Warranty Liability [Line Items]
Balance at beginning of period	$ 6,925	$ 8,942	$ 6,660
Acquisition		409
Accruals for warranties issued during the period	14,291	11,539	15,406
Accruals related to pre-existing warranties	(1,354)	(3,159)	(2,008)
Settlements made during the period	(12,659)	(10,806)	(11,116)
Balance at end of period	$ 7,203	$ 6,925	$ 8,942

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Extended Product Warranty Included in Short and Long-Term Deferred Revenue and Customer Advances (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Product Warranty Liability [Line Items]
Balance at beginning of period	$ 46,499	$ 43,300	$ 34,909
Acquisition		870
Deferral of new extended warranty revenue	27,182	28,549	29,519
Recognition of extended warranty deferred revenue	(26,928)	(26,220)	(21,128)
Balance at end of period	$ 46,753	$ 46,499	$ 43,300

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Schedule of Prepayments (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Prepaid And Other Current Assets [Line Items]
Contract manufacturer prepayments	$ 77,017	$ 66,283
Prepaid maintenance and other services	7,676	8,481
Prepaid taxes	4,664	3,781
Other prepayments	19,097	12,974
Total prepayments	$ 108,454	$ 91,519

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Useful Lives of Assets (Detail)	12 Months Ended
	Dec. 31, 2016
Buildings
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	40 years
Building Improvements | Minimum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	5 years
Building Improvements | Maximum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	10 years
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Useful lives, description	Lesser of lease term or 10 years
Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	10 years
Test Systems Manufactured Internally
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	6 years
Machinery and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	3 years
Machinery and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	5 years
Software | Minimum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	3 years
Software | Maximum
Property, Plant and Equipment [Line Items]
Useful lives, maximum years	5 years

XML

Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Summary Of Significant Accounting Policies [Line Items]
Depreciation over life to cost of revenues and selling and administrative expenses, years	6 years
Net book value of internally manufactured test systems sold	$ 11.4	$ 50.7	$ 9.7
Advertising costs	6.4	3.3	1.9
Gains (losses) on foreign currency transactions	$ 8.0	$ 2.5	$ 0.9
Convertible Notes
Summary Of Significant Accounting Policies [Line Items]
Initial debt conversion price	$ 5.48		$ 5.48
Shares that would be issued upon conversion	34.7		34.7
Convertible Notes Hedge Warrant
Summary Of Significant Accounting Policies [Line Items]
Initial debt conversion price	$ 7.67		$ 7.67
Shares that would be issued upon conversion	34.7		34.7

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Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
New Accounting Pronouncements or Change in Accounting Principle
Excess tax benefit recorded in additional paid in capital	$ 6,087	$ 4,625	$ 209
ASU 2016-09
New Accounting Pronouncements or Change in Accounting Principle
Cumulative effect adjustment to increase retained earnings and deferred tax assets	39,000
Excess tax benefit recorded in additional paid in capital	$ 6,100	$ 4,600	$ 200

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Acquisitions - Additional Information (Detail) - USD ($)			1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	12 Months Ended
	Jun. 11, 2015	Oct. 31, 2014	Jan. 31, 2017	Dec. 31, 2014	Mar. 31, 2016	Oct. 04, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
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		$ 15,000,000
EBITDA contingent consideration amount, percentage					100.00%		100.00%
Maximum payment per earn-out							$ 25,000,000
Goodwill, not deductible for tax purposes	$ 221,100,000
Revenues						$ 41,900,000
Income (loss) before income taxes						$ (7,600,000)
Net income								$ 199,784,000	$ 61,078,000
Universal Robots | Fair Value Adjustment to Inventory
Business Acquisition [Line Items]
Net income								1,600,000	1,600,000
Universal Robots | Acquisition Related Costs
Business Acquisition [Line Items]
Net income								$ 1,000,000	1,000,000
Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total purchase price		$ 21,243,000
Cash paid to acquire outstanding common and preferred stock		19,400,000
Contingent consideration		$ 1,800,000
Revenues				$ 600,000
Income (loss) before income taxes				$ (800,000)
Net income									$ 82,169,000
Discount rate		4.70%
Goodwill, expected tax deduction		$ 10,500,000
Avionics Interface Technologies, LLC | Subsequent Event
Business Acquisition [Line Items]
Payments of contingent consideration			$ 1,100,000

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Allocation of Final Purchase Price (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Jun. 11, 2015	Dec. 31, 2014	Oct. 31, 2014
Business Acquisition [Line Items]
Goodwill	$ 223,343	$ 488,413		$ 273,438
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
Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Goodwill					$ 10,516
Intangible assets					9,080
Current assets					2,452
Non-current assets					359
Accounts payable and current liabilities					(1,164)
Total purchase price					$ 21,243

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Components of Intangible Assets and Their Estimated Useful Lives at Acquisition Date (Detail) - USD ($) $ in Thousands			12 Months Ended
	Jun. 11, 2015	Oct. 31, 2014	Dec. 31, 2015
Universal Robots
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 121,590		$ 121,600
Total intangible assets, estimated useful life, years	5 years 7 months 6 days
Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 9,080
Total intangible assets, estimated useful life, years		4 years 9 months 18 days
Developed technology | Universal Robots
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 89,240
Total intangible assets, estimated useful life, years	4 years 10 months 24 days
Developed technology | Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 2,580
Total intangible assets, estimated useful life, years		4 years 9 months 18 days
Trademarks and tradenames | Universal Robots
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 22,920
Total intangible assets, estimated useful life, years	10 years
Trademarks and tradenames | Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 380
Total intangible assets, estimated useful life, years		5 years
Customer Relationships | Universal Robots
Business Acquisition [Line Items]
Total intangible assets, fair value	$ 9,430
Total intangible assets, estimated useful life, years	2 years
Customer Relationships | Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 5,630
Total intangible assets, estimated useful life, years		5 years
Non-compete Agreements | Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 320
Total intangible assets, estimated useful life, years		4 years
Customer backlog | Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Total intangible assets, fair value		$ 170
Total intangible assets, estimated useful life, years		3 months 18 days

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Pro Forma Results Under Acquisition (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Universal Robots
Business Acquisition [Line Items]
Revenue	$ 1,657,626	$ 1,686,689
Net income	$ 199,784	$ 61,078
Net income per common share, basic	$ 0.94	$ 0.30
Net income per common share, diluted	$ 0.94	$ 0.27
Avionics Interface Technologies, LLC
Business Acquisition [Line Items]
Revenue		$ 1,655,038
Net income		$ 82,169
Net income per common share, basic		$ 0.40
Net income per common share, diluted		$ 0.37

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Composition of Inventories, Net (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Raw material	$ 58,530	$ 73,117
Work-in-process	22,946	32,825
Finished goods	54,482	47,646
Inventories, net	$ 135,958	$ 153,588

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Inventories - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Inventory reserves	$ 116.0	$ 119.4

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Property Plant and Equipment, Net (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Land	$ 16,561	$ 16,561
Buildings	98,031	108,797
Machinery and equipment	601,835	595,445
Furniture and fixtures, and software	82,897	82,612
Leasehold improvements	46,612	43,328
Construction in progress	3,032	2,630
Property, Plant and Equipment, Gross, Total	848,968	849,373
Less: accumulated depreciation	595,147	575,959
Property, plant and equipment, net	$ 253,821	$ 273,414

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Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Depreciation of property, plant and equipment	$ 64,782	$ 68,181	$ 73,390
Machinery and equipment	601,835	595,445
Accumulated depreciation	595,147	575,959
Test Systems Leased By Customers
Property, Plant and Equipment [Line Items]
Machinery and equipment	19,400	20,400
Accumulated depreciation	$ 10,500	$ 8,500

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Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2015	Dec. 31, 2013	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Financial Instruments and Fair Value [Line Items]
Available-for-sale securities, realized loss			$ 500,000	$ 400,000	$ 0
Available-for-sale securities, realized gain			1,600,000	1,700,000	2,400,000
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses			732,979,000	601,660,000
Fair market value of investments with unrealized losses greater than one year			2,900,000	900,000
Aggregate loss of investments with unrealized losses greater than one year			300,000	500,000
Fair market value of investments with unrealized losses less than one year			730,100,000	600,800,000
Aggregate loss of investments with unrealized losses less than one year			2,500,000	3,600,000
Gains (losses) on foreign currency transactions			8,000,000	2,500,000	900,000
Realized (losses) gains on foreign currency contracts			$ (8,700,000)	(3,000,000)	$ (200,000)
Proceeds from sale of equity interest	$ 5,400,000	$ 34,200,000		$ 5,406,000
Accounts Receivable | Customer 1 | Minimum
Financial Instruments and Fair Value [Line Items]
Concentration risk, percentage			10.00%
Accounts Receivable | Customer 2 | Minimum
Financial Instruments and Fair Value [Line Items]
Concentration risk, percentage				10.00%
Foreign Currency Forward Contracts
Financial Instruments and Fair Value [Line Items]
Gains (losses) on foreign currency transactions			$ (100,000)	$ 0
Equity And Debt Mutual Funds
Financial Instruments and Fair Value [Line Items]
Available for sale securities with out contractual maturity date			18,000,000
Universal Robots
Financial Instruments and Fair Value [Line Items]
Maximum payment per earn-out			$ 25,000,000

XML

Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	$ 1,304,867	$ 743,624
U.S. Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	900,038	419,958
Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	100,153	161,634
U.S. Government Agency Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	42,014	83,952
Certificates of Deposit and Time Deposits
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	82,133	43,394
Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	161,630	20,308
Equity And Debt Mutual Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	18,171	13,954
Non-U.S. Government Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	728	424
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	1,612,751	1,008,329
Derivative assets	1	109
Total	1,612,752	1,008,438
Contingent consideration	38,332	37,436
Derivative liabilities	131	146
Total	38,463	37,582
Fair Value, Measurements, Recurring | Cash
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and cash equivalents	214,722	213,336
Fair Value, Measurements, Recurring | Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Cash and cash equivalents	93,162	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	900,038	419,958
Fair Value, Measurements, Recurring | Corporate Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	100,153	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	42,014	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	82,133	43,394
Fair Value, Measurements, Recurring | Commercial Paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Available for sale securities	161,630	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	18,171	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	728	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	270,351	276,531
Total	270,351	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	214,722	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	37,458	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	18,171	13,954
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total	1,342,400	731,798
Derivative assets	1	109
Total	1,342,401	731,907
Derivative liabilities	131	146
Total	131	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	55,704	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	900,038	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	100,153	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	42,014	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	82,133	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	161,630	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	728	424
Significant Unobservable Inputs (Level 3) | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Contingent consideration	38,332	37,436
Total	$ 38,332	$ 37,436

XML

Schedule of Reported Financial Assets and Liabilities (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	$ 1,612,752	$ 1,008,438
Liabilities	38,463	37,582
Other Current Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	131	146
Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	307,884	264,705
Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	871,024	477,696
Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	433,843	265,928
Prepayments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	1	109
Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	1,050	15,500
Long Term Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	37,282	21,936
Quoted Prices in Active Markets for Identical Instruments (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	270,351	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	252,180	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	18,171	13,954
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	1,342,401	731,907
Liabilities	131	146
Significant Other Observable Inputs (Level 2) | Other Current Liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	131	146
Significant Other Observable Inputs (Level 2) | Cash and Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	55,704	2,128
Significant Other Observable Inputs (Level 2) | Marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	871,024	477,696
Significant Other Observable Inputs (Level 2) | Long-term marketable securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	415,672	251,974
Significant Other Observable Inputs (Level 2) | Prepayments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	1	109
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	38,332	37,436
Significant Unobservable Inputs (Level 3) | Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	1,050	15,500
Significant Unobservable Inputs (Level 3) | Long Term Contingent Consideration
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Liabilities	$ 37,282	$ 21,936

XML

Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Detail) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period		$ 37,436		$ 3,350
Ending Balance		38,332		37,436
Payments	[1]	(15,000)
Universal Robots
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Acquisition				31,597
Fair value adjustment		15,346	[2]	5,339	[3]
Avionics Interface Technologies, LLC
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value adjustment		$ 550	[2]	(1,250)	[4]
ZTEC Instruments, Inc.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value adjustment	[5]			$ (1,600)

[1] During the year ended December 31, 2016, based on Universal Robots' calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.

[2] During the year ended December 31, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $15.3 million primarily due to an increase in forecasted revenues and a decrease in the discount rate. During the year ended 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenues. The AIT contingent consideration in the amount of $1.1 million was paid in January 2017.

[3] During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $5.3 million primarily due to an increase in forecasted revenues.

[4] During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was reduced by $1.3 million due to a decrease in the forecasted revenues.

[5] During the year ended December 31, 2015, the fair value measurement of the contingent consideration for the earn-out in connection with the acquisition of ZTEC Instruments, Inc. ("ZTEC") was reduced by $1.6 million, to $0, because Teradyne and the Securityholder Representative, on behalf of the ZTEC securityholders, agreed to terminate the earn-out prior to the end of the December 31, 2015 earn-out period, with no payout in connection with the resolution of indemnity claims asserted by both Teradyne and the Securityholder Representative.

XML

Schedule of Changes in Fair Value of Level 3 Contingent Consideration (Parenthetical) (Detail) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended							12 Months Ended
	Jan. 31, 2017	Dec. 31, 2016	Oct. 02, 2016	Apr. 03, 2016	Mar. 31, 2016	Dec. 31, 2015	Oct. 04, 2015	Jul. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jun. 11, 2015	Oct. 31, 2014
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Increase(decrease)in contingent consideration									$ 15,896	$ 2,489	$ (630)
Payments of contingent consideration									11,697
Universal Robots
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Increase(decrease)in contingent consideration		$ 5,400	$ 8,000	$ 1,200		$ 5,339			15,300	5,300
Contingent consideration												$ 31,600
Payments of contingent consideration					$ 15,000				$ 15,000
EBITDA contingent consideration amount, percentage		100.00%			100.00%				100.00%
Avionics Interface Technologies, LLC
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Increase(decrease)in contingent consideration						(300)	$ (1,000)		$ 600	(1,300)
Contingent consideration													$ 1,800
Avionics Interface Technologies, LLC | Subsequent Event
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Payments of contingent consideration	$ 1,100
ZTEC Instruments, Inc.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Increase(decrease)in contingent consideration								$ (1,600)		(1,600)	$ (600)
Contingent consideration						$ 0				$ 0

XML

Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument (Detail) - USD ($) $ in Thousands			12 Months Ended
		Oct. 31, 2014	Dec. 31, 2016	Jun. 11, 2015
Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration				$ 31,600
Avionics Interface Technologies, LLC
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		$ 1,800
Discount rate		4.70%
Significant Unobservable Inputs (Level 3) | Avionics Interface Technologies, LLC
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration	[1]		$ 1,050
Monte Carlo simulation model | Significant Unobservable Inputs (Level 3)
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration			15,981
Monte Carlo simulation model | Significant Unobservable Inputs (Level 3) | Universal Robots
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration			$ 21,301
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			10.80%
Discount rate			3.30%
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			10.80%
Discount rate			3.30%

[1] Teradyne paid this amount in January 2017.

XML

Schedule of Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands		Dec. 31, 2016	Dec. 31, 2015
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		$ 307,884	$ 264,705
Marketable securities		1,304,867	743,624
Derivative assets		1	109
Contingent consideration		38,332	37,436
Derivative liabilities		131	146
Convertible debt	[1]	486,754
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		307,884	264,705
Marketable securities		1,304,867	743,624
Derivative assets		1	109
Contingent consideration		38,332	37,436
Derivative liabilities		131	146
Convertible debt	[1]	352,669
Marketable securities		$ 1,304,867	$ 743,624

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

XML

Schedule of Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 1,304,711	$ 745,498
Available-for-sale marketable securities, Unrealized Gain	2,977	2,145
Available-for-sale marketable securities, Unrealized (Loss)	(2,821)	(4,019)
Available-for-sale marketable securities, Fair Market Value	1,304,867	743,624
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	732,979	601,660
U.S. Treasury Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	901,975	421,060
Available-for-sale marketable securities, Unrealized Gain	97	65
Available-for-sale marketable securities, Unrealized (Loss)	(2,034)	(1,167)
Available-for-sale marketable securities, Fair Market Value	900,038	419,958
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	572,284	379,434
Corporate Debt Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	99,708	163,297
Available-for-sale marketable securities, Unrealized Gain	1,065	902
Available-for-sale marketable securities, Unrealized (Loss)	(620)	(2,565)
Available-for-sale marketable securities, Fair Market Value	100,153	161,634
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	53,642	145,373
U.S. Government Agency Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	42,026	84,032
Available-for-sale marketable securities, Unrealized Gain	7	42
Available-for-sale marketable securities, Unrealized (Loss)	(19)	(122)
Available-for-sale marketable securities, Fair Market Value	42,014	83,952
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	13,461	55,120
Certificates of Deposit and Time Deposits
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	82,080	43,391
Available-for-sale marketable securities, Unrealized Gain	54	6
Available-for-sale marketable securities, Unrealized (Loss)	(1)	(3)
Available-for-sale marketable securities, Fair Market Value	82,133	43,394
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	7,760	10,527
Commercial Paper
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	161,672	20,298
Available-for-sale marketable securities, Unrealized Gain	24	11
Available-for-sale marketable securities, Unrealized (Loss)	(66)	(1)
Available-for-sale marketable securities, Fair Market Value	161,630	20,308
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	84,034	8,646
Equity And Debt Mutual Funds
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	16,505	12,996
Available-for-sale marketable securities, Unrealized Gain	1,724	1,119
Available-for-sale marketable securities, Unrealized (Loss)	(58)	(161)
Available-for-sale marketable securities, Fair Market Value	18,171	13,954
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	1,661	2,560
Non-U.S. Government Securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	745	424
Available-for-sale marketable securities, Unrealized Gain	6
Available-for-sale marketable securities, Unrealized (Loss)	(23)
Available-for-sale marketable securities, Fair Market Value	728	$ 424
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	$ 137

XML

Schedule of Reported Available for Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	$ 1,304,711	$ 745,498
Available-for-sale marketable securities, Unrealized Gain	2,977	2,145
Available-for-sale marketable securities, Unrealized (Loss)	(2,821)	(4,019)
Available-for-sale marketable securities, Fair Market Value	1,304,867	743,624
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	732,979	601,660
Marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	871,321	478,306
Available-for-sale marketable securities, Unrealized Gain	134	38
Available-for-sale marketable securities, Unrealized (Loss)	(431)	(648)
Available-for-sale marketable securities, Fair Market Value	871,024	477,696
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	423,128	374,785
Long-term marketable securities
Schedule of Available-for-sale Securities
Available-for-sale marketable securities, Cost	433,390	267,192
Available-for-sale marketable securities, Unrealized Gain	2,843	2,107
Available-for-sale marketable securities, Unrealized (Loss)	(2,390)	(3,371)
Available-for-sale marketable securities, Fair Market Value	433,843	265,928
Available-for-sale marketable securities, Fair Market Value of Investments with Unrealized Losses	$ 309,851	$ 226,875

XML

Contractual Maturities of Investments Held (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
Schedule of Available-for-sale Securities
Due within one year, cost	$ 871,321
Due after 1 year through 5 years, cost	365,873
Due after 5 years through 10 years, cost	12,839
Due after 10 years, cost	38,173
Total, cost	1,288,206
Due within one year, fair value	871,024
Due after 1 year through 5 years, fair value	365,451
Due after 5 years through 10 years, fair value	12,309
Due after 10 years, fair value	37,912
Total, fair value	$ 1,286,696

XML

Non-Financial Assets Measured At Fair Value On Non-Recurring Basis (Detail) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended	12 Months Ended
		Dec. 31, 2016	Jul. 03, 2016		Dec. 31, 2014	Jul. 03, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, impairment loss		$ 0	$ 254,946	[1],[2]	$ 98,897		$ 254,946	$ (254,946)	$ 98,897
Definite lived intangible assets, impairment loss			83,339	[1],[2]			$ 83,339	$ 98,200
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, fair value	[3]		7,976			$ 7,976
Definite lived intangible assets, fair value	[4]		5,750			5,750
Total			13,726			13,726
Goodwill, impairment loss	[3]					254,946
Definite lived intangible assets, impairment loss	[4]					83,339
Asset Impairment Charges, Total						338,285
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, fair value	[3]		7,976			7,976
Definite lived intangible assets, fair value	[4]		5,750			5,750
Total			$ 13,726			$ 13,726

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] In accordance with the provisions of ASC 350-20, "Goodwill" goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: "Goodwill and Intangible Assets" regarding goodwill impairment.

[4] In accordance with the provisions of ASC 360-10, "Property, Plant and Equipment," definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: "Goodwill and Intangible Assets" regarding definite lived intangible assets impairment.

XML

Non-Financial Assets Measured At Fair Value On Non-Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands		3 Months Ended					6 Months Ended	12 Months Ended
		Dec. 31, 2016		Jul. 03, 2016		Dec. 31, 2014	Jul. 03, 2016	Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, carrying value		$ 985,909				$ 781,058		$ 985,909		$ 996,033	$ 781,058
Goodwill, impairment loss		0		$ 254,946	[1],[2]	98,897		254,946		(254,946)	98,897
Definite lived intangible assets, carrying value		414,208	[3]					414,208	[3]	546,388
Definite lived intangible assets, impairment loss				83,339	[1],[2]			83,339		98,200
Wireless Test
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, carrying value		$ 361,819				$ 361,819		361,819		361,819	361,819
Goodwill, fair value				8,000			$ 8,000
Goodwill, impairment loss				254,946				254,946		$ (254,946)	$ 98,897
Definite lived intangible assets, impairment loss								$ 83,339
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, fair value	[4]			7,976			7,976
Goodwill, impairment loss	[4]						254,946
Definite lived intangible assets, fair value	[5]			5,750			5,750
Definite lived intangible assets, impairment loss	[5]						83,339
Fair Value, Measurements, Nonrecurring | Wireless Test
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Goodwill, carrying value				262,900			262,900
Goodwill, fair value				8,000			8,000
Goodwill, impairment loss				254,946
Definite lived intangible assets, carrying value				89,200			89,200
Definite lived intangible assets, fair value				5,800			$ 5,800
Definite lived intangible assets, impairment loss				$ 83,300

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

[4] In accordance with the provisions of ASC 350-20, "Goodwill" goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: "Goodwill and Intangible Assets" regarding goodwill impairment.

[5] In accordance with the provisions of ASC 360-10, "Property, Plant and Equipment," definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: "Goodwill and Intangible Assets" regarding definite lived intangible assets impairment.

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Schedule of Notional Amount of Derivatives (Detail) - Foreign Currency Forward Contracts - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	$ 14.5	$ (29.7)
Buy Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(34.7)	(71.9)
Sell Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	49.2	42.2
Japanese Yen
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(17.7)	(51.9)
Japanese Yen | Buy Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(17.7)	(51.9)
British Pound Sterling
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(1.3)	(9.5)
British Pound Sterling | Buy Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(1.3)	(9.5)
Korean Won
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(8.8)	(5.5)
Korean Won | Buy Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(8.8)	(5.5)
Taiwan Dollar
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(6.9)	(5.0)
Taiwan Dollar | Buy Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	(6.9)	(5.0)
Euro
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	25.2	27.2
Euro | Sell Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	25.2	27.2
Singapore Dollar
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	24.0	15.0
Singapore Dollar | Sell Position
Intercompany Foreign Currency Balance [Line Items]
Notional amounts	$ 24.0	$ 15.0

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Schedule of Derivative Instruments in Statement of Financial Position at Fair Value (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative assets (liabilities), net	$ (130)	$ (37)
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts | Prepayments
Derivatives, Fair Value [Line Items]
Derivative assets	1	109
Not Designated as Hedging Instrument | Foreign Currency Forward Contracts | Other Current Liabilities
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ (131)	$ (146)

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Schedule of Effect of Derivative Instruments in Statements of Operations Recognized (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other (income) expense, net
Derivative Instruments, Gain (Loss) [Line Items]
Foreign exchange contracts derivatives not designated as hedging instruments, Losses Recognized in Statement of Operations	$ 8,671	$ 3,047	$ 237

XML

Debt - Additional Information (Detail) $ / shares in Units, shares in Millions			12 Months Ended
	Dec. 12, 2016 USD ($) d $ / shares shares	Apr. 27, 2015 USD ($)	Dec. 31, 2016 USD ($) $ / shares	Dec. 31, 2015 USD ($)
Debt Instrument
Debt instrument, net proceeds after issuance costs			$ 450,800,000
Repurchase of common stock			146,331,000	$ 299,949,000
Term of loan, years		5 years
Pledge percentage of capital stock		65.00%
1.25% Convertible Senior Unsecured Notes Due December 15, 2023
Debt Instrument
Aggregate principal amount	$ 460,000,000		$ 460,000,000
Debt instrument, interest rate, stated percentage	1.25%
Debt instrument, net proceeds after issuance costs	$ 450,800,000
Payment for net cost of convertible note hedges net of warrant proceeds	33,000,000
Repurchase of common stock	$ 50,100,000
Repurchase of stock, shares | shares	2.0
Senior notes maturity date	Dec. 15, 2023
Debt instrument, frequency of periodic payment	Payable semiannually in arrears on June 15 and December 15 of each year
Debt instrument, date of first required payment	Jun. 15, 2017
Debt instrument, conversion option expiration date	Sep. 15, 2023
Debt instrument conversion ratio	0.0314102
Initial debt conversion price | $ / shares	$ 31.84		$ 31.84
Shares that would be issued upon conversion | shares	14.4
Strike price per share of warrant | $ / shares	$ 39.95
Debt instrument, convertible, carrying amount of equity component	$ 100,800,000		$ 100,800,000
Debt instrument, effective annual interest rate			5.00%
Financing cost	$ 7,200,000		$ 7,100,000
Debt issuance costs, amortization period			7 years
Unamortized discount			$ 107,300,000
Debt Instrument, convertible, remaining discount amortization period			7 years
1.25% Convertible Senior Unsecured Notes Due December 15, 2023 | Conversion option one
Debt Instrument
Trading days measurement period | d	20
Consecutive trading days measurement period	30 days
Percentage of conversion price	130.00%
1.25% Convertible Senior Unsecured Notes Due December 15, 2023 | Conversion option two
Debt Instrument
Trading days measurement period | d	5
Consecutive trading days measurement period	5 days
Percentage of closing sale price of common stock and conversion rate product	98.00%
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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Components of Convertible Senior Notes (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 12, 2016
Debt Instrument
Net carrying amount of convertible debt	$ 352,669
1.25% Convertible Senior Unsecured Notes Due December 15, 2023
Debt Instrument
Debt principal	460,000	$ 460,000
Unamortized discount including debt issuance cost	107,331
Net carrying amount of convertible debt	$ 352,669

XML

Interest Expense on Convertible Senior Notes (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Debt Instrument
Contractual interest expense on the coupon	$ 303
Amortization of the discount component and debt issue fees recognized as interest expense	688
Total interest expense on the convertible debt	$ 991

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Changes in Accumulated Other Comprehensive Income (Loss) Balances (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance,	$ 1,965,786	$ 2,078,980	$ 1,985,094
Other comprehensive (loss) income before reclassifications, net of tax of $0, $(1,667)	(11,125)	(11,834)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)	(945)	(999)
Other comprehensive (loss) income	(12,070)	(12,833)	689
Balance,	1,828,659	1,965,786	2,078,980
Foreign currency translation reclassification adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance,	(8,759)
Other comprehensive (loss) income before reclassifications, net of tax of $0, $(1,667)	(13,162)	(8,759)
Other comprehensive (loss) income	(13,162)	(8,759)
Balance,	(21,921)	(8,759)
Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance,	(1,414)	2,365
Other comprehensive (loss) income before reclassifications, net of tax of $0, $(1,667)	2,037	(3,075)
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)	(683)	(704)
Other comprehensive (loss) income	1,354	(3,779)
Balance,	(60)	(1,414)	2,365
Amortization of prior service credit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance,	2,029	2,324
Other comprehensive (loss) income before reclassifications, net of tax of $0, $(1,667)	59
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)	(321)	(295)	(295)
Other comprehensive (loss) income	(262)	(295)
Balance,	1,767	2,029	2,324
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance,	(8,144)	4,689	4,000
Amounts reclassified from accumulated other comprehensive income, net of tax of $(255), $(190)	(945)	(999)	(1,728)
Balance,	$ (20,214)	$ (8,144)	$ 4,689

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Changes in Accumulated Other Comprehensive Income (Loss) Balances (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amounts reclassified from accumulated other comprehensive income, tax	$ 190	$ 169	$ 169
Amounts reclassified from accumulated other comprehensive income, tax	(411)	(559)	(814)
Foreign currency translation adjustments, tax	0	0
Unrealized gains on marketable securities, tax	209	(459)	1,598
Retirement plans prior service benefit, tax	(778)	(622)	(453)
Foreign currency translation reclassification adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive (loss) income before reclassifications, tax	0	0
Other comprehensive income (loss), tax	0	0
Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive (loss) income before reclassifications, tax	923	(1,667)
Amounts reclassified from accumulated other comprehensive income, tax	(255)
Amounts reclassified from accumulated other comprehensive income, tax	(255)	(390)	(645)
Other comprehensive income (loss), tax	668	(2,057)
Amortization of prior service credit
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other comprehensive (loss) income before reclassifications, tax	34
Amounts reclassified from accumulated other comprehensive income, tax	(190)
Amounts reclassified from accumulated other comprehensive income, tax	(190)	(169)	$ (169)
Other comprehensive income (loss), tax	$ (156)	$ (169)

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Reclassification Out of Accumulated Other Comprehensive Income to Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended															12 Months Ended
	Dec. 31, 2016	[1],[2]	Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income	$ (3,095)		$ (2,892)		$ (1,666)		$ (1,642)		$ (2,017)		$ (1,708)		$ (1,674)		$ (1,816)	$ (9,296)	$ (7,214)	$ (6,259)
Reclassifications, net of tax																945	999
Unrealized Gains (Losses) on Marketable Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax																683	704
Amortization of prior service credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax																321	295	295
Prior service cost arising during period
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax																(59)
Retirement Plans Prior Service Credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax																262	295	295
Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, net of tax																945	999	1,728
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains (Losses) on Marketable Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest income																$ 683	$ 704	$ 1,433

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

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Reclassification Out of Accumulated Other Comprehensive Income to Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, tax	$ 411	$ 559	$ 814
Unrealized Gains (Losses) on Marketable Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, tax	255	390	645
Amortization of prior service credit
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, tax	190	169	169
Prior service cost arising during period
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Reclassifications, tax	$ (34)	$ 0	$ 0

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Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2016		Oct. 02, 2016	[2],[4]	Jul. 03, 2016		Apr. 03, 2016	[2],[5]	Dec. 31, 2015		Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Line Items]
Goodwill impairment charge	$ 0				$ 254,946	[1],[2]										$ 98,897	$ 254,946	$ (254,946)	$ 98,897
Intangible assets impairment					83,339	[1],[2]											83,339	98,200
Intangible assets remaining balance	100,401								$ 239,831								100,401	239,831
Acquired intangible assets amortization	$ 7,923	[2],[3]	$ 8,487		$ 16,244	[1],[2]	$ 19,994		$ 19,911	[6],[7]	$ 20,053		$ 15,258		$ 13,808		52,648	69,031	70,771
System Test
Goodwill and Intangible Assets Disclosure [Line Items]
Goodwill impairment charge																$ 0
Wireless Test
Goodwill and Intangible Assets Disclosure [Line Items]
Employee reduction, percentage					11.00%
Goodwill, fair value					$ 8,000
Goodwill impairment charge					254,946												254,946	$ (254,946)	$ 98,897
Intangible assets impairment																	$ 83,339
Intangible assets remaining balance					$ 5,000
Wireless Test | Sales Revenue, Segment | Customer Concentration Risk | Minimum
Goodwill and Intangible Assets Disclosure [Line Items]
Concentration risk, percentage					51.00%
Wireless Test | Sales Revenue, Segment | Customer Concentration Risk | Maximum
Goodwill and Intangible Assets Disclosure [Line Items]
Concentration risk, percentage					73.00%

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

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Changes in Carrying Amount of Goodwill by Segment (Detail) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2016	Jul. 03, 2016		Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jun. 11, 2015
Goodwill [Line Items]
Goodwill	$ 985,909			$ 781,058	$ 985,909	$ 996,033	$ 781,058
Accumulated impairment losses	(762,566)			(507,620)	(762,566)	(507,620)	(507,620)
Goodwill	223,343			273,438	223,343	488,413	273,438
Foreign currency translation adjustment						(10,124)	(6,153)
Goodwill impairment losses	0	$ 254,946	[1],[2]	98,897	254,946	(254,946)	98,897
Universal Robots
Goodwill [Line Items]
Goodwill								$ 221,128
Universal Robots acquisition							221,128
Industrial Automation
Goodwill [Line Items]
Goodwill	204,851				204,851	214,975
Goodwill	204,851				204,851	214,975
Foreign currency translation adjustment						(10,124)	(6,153)
Industrial Automation | Universal Robots
Goodwill [Line Items]
Universal Robots acquisition							221,128
System Test
Goodwill [Line Items]
Goodwill	158,699			158,699	158,699	158,699	158,699
Accumulated impairment losses	(148,183)			(148,183)	(148,183)	(148,183)	(148,183)
Goodwill	10,516			10,516	10,516	10,516	10,516
Goodwill impairment losses				0
Wireless Test
Goodwill [Line Items]
Goodwill	361,819			361,819	361,819	361,819	361,819
Accumulated impairment losses	(353,843)			(98,897)	(353,843)	(98,897)	(98,897)
Goodwill	7,976			262,922	7,976	262,922	262,922
Goodwill impairment losses		$ 254,946			254,946	(254,946)	98,897
Semiconductor Test
Goodwill [Line Items]
Goodwill	260,540			260,540	260,540	260,540	260,540
Accumulated impairment losses	$ (260,540)			$ (260,540)	$ (260,540)	$ (260,540)	$ (260,540)

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

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Schedule of Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016		Dec. 31, 2015
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 414,208	[1]	$ 546,388
Accumulated Amortization	306,868	[1],[2]	303,227	[3],[4]
Foreign Currency Translation Adjustment	(6,939)		(3,330)
Net Carrying Amount	$ 100,401		$ 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	$ 270,877	[1]	$ 382,262
Accumulated Amortization	206,376	[1],[2]	220,346	[3],[4]
Foreign Currency Translation Adjustment	(5,093)		(2,444)
Net Carrying Amount	$ 59,408		$ 159,472
Weighted Average Useful Life, years	6 years		6 years
Customer Relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 92,741	[1]	$ 110,602
Accumulated Amortization	76,707	[1],[2]	63,722	[3],[4]
Foreign Currency Translation Adjustment	(538)		(258)
Net Carrying Amount	$ 15,496		$ 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	$ 50,100	[1]	$ 53,034
Accumulated Amortization	23,435	[1],[2]	18,889	[3],[4]
Foreign Currency Translation Adjustment	(1,308)		(628)
Net Carrying Amount	$ 25,357		$ 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	[1]	$ 320
Accumulated Amortization	180	[1],[2]	100	[3],[4]
Net Carrying Amount	$ 140		$ 220
Weighted Average Useful Life, years	4 years		4 years
Customer backlog
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 170	[1]	$ 170
Accumulated Amortization	$ 170	[1],[2]	$ 170	[3],[4]
Weighted Average Useful Life, years	3 months 18 days		3 months 18 days

[1] During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

[2] In 2016, $48.1 million of amortizable intangible assets became fully amortized and has been eliminated from the gross carrying amount and accumulated amortization.

[3] During the year ended December 31, 2015, Teradyne recorded intangible assets in the amount of $121.6 million related to its Universal Robots acquisition.

[4] During the year ended December 31, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

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Schedule of Amortizable Intangible Assets (Parenthetical) (Detail) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
	Jun. 11, 2015	Jul. 03, 2016		Dec. 31, 2016		Dec. 31, 2015
Finite-Lived Intangible Assets
Fully amortized intangible assets wrote off		$ 83,339	[1],[2]	$ 83,339		$ 98,200
Gross Carrying Amount				414,208	[3]	546,388
Accumulated Amortization				306,868	[3],[4]	303,227	[5],[6]
Net Carrying Amount				100,401		239,831
Universal Robots
Finite-Lived Intangible Assets
Intangible assets	$ 121,590					$ 121,600
Wireless Test
Finite-Lived Intangible Assets
Fully amortized intangible assets wrote off				83,339
Net Carrying Amount		$ 5,000
Fully Amortized Intangibles
Finite-Lived Intangible Assets
Gross Carrying Amount				48,100
Accumulated Amortization				48,100
Net Carrying Amount				$ 0

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] During the year ended December 31, 2016, Teradyne recorded an $83.3 million impairment of Wireless Test amortizable intangible assets. The impairment assets have been eliminated from the gross carrying amount and accumulated amortization.

[4] In 2016, $48.1 million of amortizable intangible assets became fully amortized and has been eliminated from the gross carrying amount and accumulated amortization.

[5] During the year ended December 31, 2015, Teradyne recorded intangible assets in the amount of $121.6 million related to its Universal Robots acquisition.

[6] During the year ended December 31, 2015, Teradyne wrote off $98.2 million of fully amortized intangible assets.

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Schedule of Estimated Intangible Asset Amortization Expense (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets
2017	$ 28,986
2018	26,848
2019	23,037
2020	10,042
2021	3,435
Thereafter	$ 8,053

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Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Purchase Commitment, Excluding Long-term Commitment
Aggregate purchase commitments	$ 260.7
Purchase commitments less than one year	247.9
Rental expense under lease commitments	$ 18.8	$ 15.9	$ 16.0
Warranty period	1 year
Product warranty accrual	$ 7.2	6.9
Revenue deferrals related to extended warranties	$ 46.8	$ 46.5

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Non Cancelable Operating Lease Commitments (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
Commitments and Contingencies Disclosure [Line Items]
2017	$ 16,467
2018	15,258
2019	13,733
2020	9,374
2021	7,149
Beyond 2022	10,130
Total	$ 72,111

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Computation of Basic and Diluted Net (Loss) Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended															12 Months Ended
		Dec. 31, 2016	[1],[2]	Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net Income Loss Per Common Share
Net (loss) income for basic and diluted net income per share		$ 66,345		$ 63,794		$ (223,546)		$ 49,986		$ (641)		$ 71,453		$ 102,879		$ 32,787	$ (43,421)	$ 206,477	$ 81,272
Weighted average common shares-basic																	202,578	211,544	202,908
Incremental shares from assumed conversion of convertible notes	[10]																		5,013
Convertible note hedge warrant shares	[11]																		12,562
Employee stock purchase rights																		41	31
Dilutive potential common shares																		1,777	19,642
Weighted average common shares-diluted																	202,578	213,321	222,550
Net (loss) income per common share-basic		$ 0.33		$ 0.32		$ (1.10)		$ 0.24		$ 0.00		$ 0.34		$ 0.48		$ 0.15	$ (0.21)	$ 0.98	$ 0.40
Net (loss) income per common share-diluted		$ 0.33		$ 0.31		$ (1.10)		$ 0.24		$ 0.00		$ 0.34		$ 0.48		$ 0.15	$ (0.21)	$ 0.97	$ 0.37
Restricted Stock Units
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements																		1,130	1,092
Stock Options
Net Income Loss Per Common Share
Incremental shares attributable to share based payment arrangements																		606	944

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Incremental shares from the assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $5.48, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.

[11] Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $7.67, multiplied by 34.7 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. Teradyne's call option on its common stock (convertible note hedge transaction) was excluded from the calculation of diluted shares because the effect was anti-dilutive.

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Computation of Basic and Diluted Net (Loss) Income Per Common Share (Parenthetical) (Detail) - $ / shares shares in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2014
Convertible Notes
Net Income Loss Per Common Share
Initial debt conversion price	$ 5.48	$ 5.48
Shares that would be issued upon conversion	34.7	34.7
Convertible Notes Hedge Warrant
Net Income Loss Per Common Share
Initial debt conversion price	$ 7.67	$ 7.67
Shares that would be issued upon conversion	34.7	34.7

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Net Income Per Common Share - Additional Information (Detail) - shares shares in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net Income Loss Per Common Share
Exercise of stock options	0.2	0.3

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Restructuring and Other - Additional Information (Detail) $ in Thousands	3 Months Ended						12 Months Ended
	Dec. 31, 2016 USD ($)	Oct. 02, 2016 USD ($)	Apr. 03, 2016 USD ($)	Dec. 31, 2015 USD ($)	Oct. 04, 2015 USD ($)	Jul. 05, 2015 USD ($)	Dec. 31, 2016 USD ($) Employee	Dec. 31, 2015 USD ($) Employee	Dec. 31, 2014 USD ($) Employee
Restructuring Cost and Reserve
Other restructuring charges							$ 15,900	$ 3,600
Contingent consideration adjustment							15,896	2,489	$ (630)
Severance benefit and charges							2,100
Property, Plant and Equipment
Restructuring Cost and Reserve
Impairment of fixed assets and other expenses							4,200
Impairment of fixed assets and expenses related to the Japan earthquake
Restructuring Cost and Reserve
Property insurance, recovery							5,400
Impairment of fixed assets and expenses related to the Japan earthquake | Earthquake Related Expenses
Restructuring Cost and Reserve
Impairment of fixed assets and other expenses							1,200
Universal Robots
Restructuring Cost and Reserve
Contingent consideration adjustment	$ 5,400	$ 8,000	$ 1,200	$ 5,339			15,300	5,300
Acquisition related costs								1,000
Avionics Interface Technologies, LLC
Restructuring Cost and Reserve
Contingent consideration adjustment				$ (300)	$ (1,000)		600	(1,300)
Acquisition related costs									400
ZTEC Corporation and Avionics Interface Technologies LLC
Restructuring Cost and Reserve
Contingent consideration adjustment								(2,900)
ZTEC Instruments, Inc.
Restructuring Cost and Reserve
Contingent consideration adjustment						$ (1,600)		(1,600)	(600)
Semiconductor Test and Wireless Test
Restructuring Cost and Reserve
Severance benefit and charges							$ 6,000		$ 1,600
Reduction in employees headcount | Employee							146		43
Semiconductor Test and Wireless Test | Wireless Test
Restructuring Cost and Reserve
Reduction in employees headcount | Employee							102
Semiconductor Test and Wireless Test | Semiconductor Test
Restructuring Cost and Reserve
Reduction in employees headcount | Employee							44
System Test and Semiconductor Test
Restructuring Cost and Reserve
Severance benefit and charges								$ 1,500
Reduction in employees headcount | Employee								23

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Schedule of Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligation (Detail) - USD ($) $ in Thousands	3 Months Ended					12 Months Ended
	Dec. 31, 2016	Oct. 02, 2016	Jul. 03, 2016	Apr. 03, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure
Actuarial gain (loss)	$ 2,000	$ (700)	$ 700	$ 1,200	$ (17,700)
Ending Balance	334,900					$ 334,900
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Projected benefit obligation, Beginning of year				351,117		351,117	$ 367,619
Service cost						2,302	2,462	$ 2,218
Interest cost						13,630	13,142	12,875
Actuarial gain (loss)						6,053	(13,221)
Benefits paid						(19,486)	(18,885)
Projected benefit obligation, End of year	353,616				351,117	353,616	351,117	367,619
Beginning Balance				298,404		298,404	316,072
Company contributions						4,489	10,517
Benefits paid						(19,486)	(18,885)
Actual return on plan assets						23,897	(9,300)
Benefits paid						(19,486)	(18,885)
Settlements						0	0
Ending Balance	307,304				298,404	307,304	298,404	316,072
Funded status	(46,312)				(52,713)	(46,312)	(52,713)
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Projected benefit obligation, Beginning of year				62,290		62,290	58,210
Service cost						761	1,006	897
Interest cost						1,185	1,444	1,837
Actuarial gain (loss)						5,621	7,498
Benefits paid						(1,385)	(859)
Curtailment							(634)
Plan participants' contributions							64
Expenses paid						(609)	(43)
Non-U.S. currency movement						(7,125)	(4,439)
Projected benefit obligation, End of year	60,738				62,290	60,738	62,290	58,210
Beginning Balance				28,141		28,141	29,511
Company contributions						867	808
Plan participants' contributions							64
Benefits paid						(1,385)	(859)
Actual return on plan assets						5,142	(136)
Benefits paid						(1,148)	(859)
Settlements						0	0
Expenses paid						(609)	(43)
Non-U.S. currency movement						(4,822)	(1,204)
Ending Balance	27,571				28,141	27,571	28,141	29,511
Funded status	(33,167)				(34,149)	(33,167)	(34,149)
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Projected benefit obligation, Beginning of year				$ 6,030		6,030	7,162
Service cost						37	48	59
Interest cost						218	237	335
Plan amendments						(93)
Actuarial gain (loss)						5	(648)
Benefits paid						(687)	(769)
Projected benefit obligation, End of year	5,510				6,030	5,510	6,030	$ 7,162
Company contributions						687	769
Benefits paid						(687)	(769)
Funded status	$ (5,510)				$ (6,030)	$ (5,510)	$ (6,030)

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Schedule of Amounts Recorded within Statements of Financial Position (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Retirement plans assets	$ 7,712	$ 636
Accrued employees' compensation and withholdings	(2,591)	(2,564)
Retirement plans liabilities	(51,433)	(50,785)
Funded status	(46,312)	(52,713)
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Accrued employees' compensation and withholdings	(772)	(695)
Retirement plans liabilities	(32,395)	(33,454)
Funded status	(33,167)	(34,149)
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Accrued employees' compensation and withholdings	(571)	(692)
Retirement plans liabilities	(4,939)	(5,338)
Funded status	$ (5,510)	$ (6,030)

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Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure
Deferred taxes	$ (9,808)	$ (10,597)	$ (12,018)
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Prior service cost, before tax	127	224
Deferred taxes	514	479
Total recognized in other comprehensive income, net of tax	641	703
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Prior service cost, before tax	(1,118)	(1,632)
Deferred taxes	(1,292)	(1,100)
Total recognized in other comprehensive income, net of tax	$ (2,410)	$ (2,732)

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Retirement Plans - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure
Accumulated other comprehensive income (loss), prior service cost expected to be recognized in 2017	$ 100
Fair value of pension plans assets totaled	$ 334,900
United States Plans
Defined Benefit Plan Disclosure
Percentage of expected return on plan assets assumption	4.80%
Discount rate utilized to determine future pension obligations	3.90%	4.00%
Fair value of pension plans assets totaled	$ 307,300
Contribution to defined benefit pension plans	1,900	$ 8,000
Contribution to defined benefit pension plans in 2016	1,900
U.K. Defined Benefit Pension Plan
Defined Benefit Plan Disclosure
Fair value of pension plans assets totaled	26,500
Taiwan Defined Benefit Pension Plan
Defined Benefit Plan Disclosure
Fair value of pension plans assets totaled	1,100
U.S. Supplemental Executive Defined Benefit Pension Plan
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	2,600	2,500
Contribution to defined benefit pension plans in 2016	2,600
Non-United States Subsidiaries
Defined Benefit Plan Disclosure
Contribution to defined benefit pension plans	900	800
Contribution to defined benefit pension plans in 2016	800
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Accumulated benefit obligation for defined benefit pension plans	$ 342,900	$ 340,100
Percentage of expected return on plan assets assumption	4.80%	4.80%	5.00%
Discount rate utilized to determine future pension obligations	3.90%	4.00%
Fair value of pension plans assets totaled	$ 307,304	$ 298,404	$ 316,072
Contribution to defined benefit pension plans	4,489	10,517
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Accumulated benefit obligation for defined benefit pension plans	$ 56,600	$ 56,600
Percentage of expected return on plan assets assumption	2.00%	2.60%	3.40%
Discount rate utilized to determine future pension obligations	1.80%	2.30%
Fair value of pension plans assets totaled	$ 27,571	$ 28,141	$ 29,511
Contribution to defined benefit pension plans	867	$ 808
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Accumulated other comprehensive income (loss), prior service cost expected to be recognized in 2017	$ (500)
Discount rate utilized to determine future pension obligations	3.90%	3.90%	3.50%
Contribution to defined benefit pension plans	$ 687	$ 769

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Schedule of Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Projected benefit obligation	$ 54.0	$ 53.3
Accumulated benefit obligation	48.0	47.3
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Projected benefit obligation	34.3	35.2
Accumulated benefit obligation	30.1	29.5
Fair value of plan assets	$ 1.1	$ 1.0

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Schedule of Net Periodic Pension and Postretirement (income) Cost (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure
Net actuarial (gain) loss	$ (3,203)	$ 17,732	$ 46,564
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Service cost	2,302	2,462	2,218
Interest cost	13,630	13,142	12,875
Expected return on plan assets	(13,830)	(14,517)	(12,500)
Amortization of prior service cost	96	134	135
Net actuarial (gain) loss	(4,013)	10,596	43,168
Total net periodic pension (income) cost	(1,815)	11,817	45,896
Prior service cost	(96)	(134)	(135)
Total recognized in other comprehensive income	(96)	(134)	(135)
Total recognized in net periodic pension (income) cost and other comprehensive income	(1,911)	11,683	45,761
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Service cost	761	1,006	897
Interest cost	1,185	1,444	1,837
Expected return on plan assets	(443)	(781)	(868)
Net actuarial (gain) loss	815	8,415	4,651
Curtailment		(634)
Total net periodic pension (income) cost	2,318	9,450	6,517
Total recognized in net periodic pension (income) cost and other comprehensive income	2,318	9,450	6,517
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Service cost	37	48	59
Interest cost	218	237	335
Amortization of prior service cost	(607)	(598)	(598)
Net actuarial (gain) loss	5	(648)	(1,255)
Total net periodic pension (income) cost	(347)	(961)	(1,459)
Prior service benefit	(93)
Prior service credit	607	598	598
Total recognized in other comprehensive income	514	598	598
Total recognized in net periodic pension (income) cost and other comprehensive income	$ 167	$ (363)	$ (861)

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Schedule of Weighted Average - Assumptions to Determine Net Periodic Pension Cost (Detail)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Discount rate	4.00%	3.70%	4.50%
Expected return on plan assets	4.80%	4.80%	5.00%
Salary progression rate	2.70%	2.90%	3.00%
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Discount rate	2.30%	2.60%	3.80%
Expected return on plan assets	2.00%	2.60%	3.40%
Salary progression rate	3.20%	3.20%	3.50%
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Discount rate	3.90%	3.50%	4.10%
Initial health care cost trend rate	7.50%	7.50%	8.00%
Ultimate health care cost trend rate	5.00%	5.00%	5.00%
Year in which ultimate health care cost trend rate is reached	2023	2022	2020

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Schedule of Weighted Average Assumptions to Determine Pension Obligations (Detail)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Discount rate	3.90%	4.00%
Salary progression rate	2.60%	2.70%
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Discount rate	1.80%	2.30%
Salary progression rate	2.70%	3.20%
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
Discount rate	3.90%	3.90%	3.50%
Initial medical trend	7.30%	7.50%	7.50%
Ultimate health care trend	5.00%	5.00%	5.00%
Medical cost trend rate decrease to ultimate rate in year	2023	2023	2022

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Schedule of Weighted Average Pension Assets Allocations by Category (Detail)	Dec. 31, 2016	Dec. 31, 2015
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Total	100.00%	100.00%
United States Pension Plans, Defined Benefit | Fixed income securities
Defined Benefit Plan Disclosure
Total	88.10%	88.60%
United States Pension Plans, Defined Benefit | Equity securities
Defined Benefit Plan Disclosure
Total	9.90%	9.80%
United States Pension Plans, Defined Benefit | Other than Securities Investment
Defined Benefit Plan Disclosure
Total	2.00%	1.60%
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Total	100.00%	100.00%
Foreign Pension Plans, Defined Benefit | Other than Securities Investment
Defined Benefit Plan Disclosure
Total	100.00%	100.00%

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Schedule of Target Assets Allocation (Detail)	12 Months Ended
	Dec. 31, 2016
Barclays Corporate A or Better Index | U.S. corporate fixed income
Defined Benefit Plan Disclosure
Target assets allocation percentage	76.00%
MSCI World Minimum Volatility Index | Global equity Securities
Defined Benefit Plan Disclosure
Target assets allocation percentage	10.00%
Barclays U.S. Long Government/Credit Bond Index | U.S. government fixed income
Defined Benefit Plan Disclosure
Target assets allocation percentage	8.00%
Barclays Corporate High Yield Issuer Cap Index | High yield fixed income
Defined Benefit Plan Disclosure
Target assets allocation percentage	5.00%
Citi Group Three Month Treasury Bill Index | Cash
Defined Benefit Plan Disclosure
Target assets allocation percentage	1.00%

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Schedule of Fair Value of Pensions Plan Assets by Asset Category (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure
Total	$ 334,900
Group Annuity Insurance Contracts | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure
Total	29,456	$ 29,392	$ 2,990
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Total	307,304	298,404	316,072
United States Pension Plans, Defined Benefit | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Defined Benefit Plan Disclosure
Total	3,023	1,773
United States Pension Plans, Defined Benefit | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	301,210	293,649
United States Pension Plans, Defined Benefit | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure
Total	3,071	2,982
United States Pension Plans, Defined Benefit | Corporate Debt Securities
Defined Benefit Plan Disclosure
Total	246,528	240,695
United States Pension Plans, Defined Benefit | Corporate Debt Securities | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	246,528	240,695
United States Pension Plans, Defined Benefit | US Government Debt Securities
Defined Benefit Plan Disclosure
Total	24,322	23,761
United States Pension Plans, Defined Benefit | US Government Debt Securities | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	24,322	23,761
United States Pension Plans, Defined Benefit | Global equity Securities
Defined Benefit Plan Disclosure
Total	30,360	29,193
United States Pension Plans, Defined Benefit | Global equity Securities | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	30,360	29,193
United States Pension Plans, Defined Benefit | Group Annuity Insurance Contracts
Defined Benefit Plan Disclosure
Total	3,071	2,982
United States Pension Plans, Defined Benefit | Group Annuity Insurance Contracts | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure
Total	3,071	2,982
United States Pension Plans, Defined Benefit | Cash and Cash Equivalents
Defined Benefit Plan Disclosure
Total	3,023	1,773
United States Pension Plans, Defined Benefit | Cash and Cash Equivalents | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Defined Benefit Plan Disclosure
Total	3,023	1,773
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
Total	27,571	28,141	$ 29,511
Foreign Pension Plans, Defined Benefit | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Defined Benefit Plan Disclosure
Total	62	702
Foreign Pension Plans, Defined Benefit | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	1,124	1,029
Foreign Pension Plans, Defined Benefit | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure
Total	26,385	26,410
Foreign Pension Plans, Defined Benefit | Group Annuity Insurance Contracts
Defined Benefit Plan Disclosure
Total	26,385	26,410
Foreign Pension Plans, Defined Benefit | Group Annuity Insurance Contracts | Significant Unobservable Inputs (Level 3)
Defined Benefit Plan Disclosure
Total	26,385	26,410
Foreign Pension Plans, Defined Benefit | Other
Defined Benefit Plan Disclosure
Total	1,124	1,029
Foreign Pension Plans, Defined Benefit | Other | Significant Other Observable Inputs (Level 2)
Defined Benefit Plan Disclosure
Total	1,124	1,029
Foreign Pension Plans, Defined Benefit | Cash and Cash Equivalents
Defined Benefit Plan Disclosure
Total	62	702
Foreign Pension Plans, Defined Benefit | Cash and Cash Equivalents | Quoted Prices in Active Markets for Identical Instruments (Level 1)
Defined Benefit Plan Disclosure
Total	$ 62	$ 702

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Schedule of Defined Benefit Plans Disclosures (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Defined Benefit Plan Disclosure
Ending Balance	$ 334,900
Significant Unobservable Inputs (Level 3) | Group Annuity Insurance Contracts
Defined Benefit Plan Disclosure
Beginning Balance	29,392	$ 2,990
Purchases of group annuity insurance contracts	709	27,313
Interest and market value adjustments	5,308	(825)
Benefits paid	(611)	(67)
Other	(634)	(19)
Non-U.S. currency movement	(4,708)
Ending Balance	$ 29,456	$ 29,392

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Schedule of Expected Future Benefit Payments (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
United States Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
2017	$ 19,205
2018	18,568
2019	19,046
2020	19,768
2021	20,390
2022-2026	111,334
Foreign Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure
2017	788
2018	754
2019	780
2020	1,054
2021	882
2022-2026	5,209
Postretirement Benefit Plans
Defined Benefit Plan Disclosure
2017	571
2018	529
2019	456
2020	409
2021	367
2022-2026	$ 1,536

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Schedule of One Percent Point Change in assumed Health Care Cost Trends Rate (Detail) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Defined Benefit Plan Disclosure
Effect of one percentage point increase on total service and interest cost components	$ 2
Effect of one percentage point increase on postretirement benefit obligations	44
Effect of one percentage point decrease on total service and interest cost components	(2)
Effect of one percentage point decrease on postretirement benefit obligations	$ (42)

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Stock Based Compensation - Additional Information (Detail) - USD ($)	1 Months Ended							12 Months Ended
	Jan. 31, 2017	Jul. 31, 2016	Jan. 31, 2016	Jul. 31, 2015	Jan. 31, 2015	Jul. 31, 2014	Jan. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of common stock price paid								85.00%
Stock options term								7 years
Restricted stock unit awards granted								1,471,000	1,681,000	1,870,000
Weighted average grant date fair value of restricted stock units granted								$ 18.68	$ 17.36	$ 18.41
Stock options granted								130,000	132,000	89,000
Weighted average grant date fair value								$ 5.30	$ 4.43	$ 5.49
Tax benefit from compensation expense								$ 8,752,000	$ 8,528,000	$ 11,537,000
Total unrecognized expense related to non-vested restricted stock unit awards and stock options								$ 40,600,000
Unrecognized expense related to non-vested restricted stock unit awards and stock options expected to be recognized over weighted average period, in years								2 years 3 months 18 days
Stock based compensation expense							$ 6,600,000	$ 30,750,000	$ 30,451,000	$ 40,307,000
Maximum percent of shares allowed to purchase								10.00%
Fair market value								$ 25,000
Maximum number of shares allowed to purchase								6,000
Common stock issued to employees		500,000	500,000	500,000	500,000	500,000
Value of common stock issued to employees per share		$ 16.74	$ 17.57	$ 16.40	$ 16.82	$ 16.66
Number of shares available for grant								9,546,000	10,914,000	12,443,000	14,213,000
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Percentage of common stock price paid								100.00%
Period of stock granted to employees and executive officers vest in equal annual installments								4 years
Cash received from employees, employee stock options exercises								$ 2,900,000	$ 2,800,000	$ 6,700,000
Tax benefit from compensation expense								$ 800,000	$ 2,100,000	$ 5,700,000
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock unit awards granted								1,471,000	1,681,000	1,870,000
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 annual installments								4 years
Restricted Stock Units | Director
Share-based Compensation Arrangement by Share-based Payment Award
Period of stock granted to employees and executive officers vest in equal annual installments								1 year
Percentage of awards vesting on the first anniversary of grant date								100.00%
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								100,000	200,000	100,000
Weighted average grant date fair value of restricted stock units granted								$ 20.29	$ 18.21	$ 22.06
Estimated annual dividend amount per share								0.24	0.24	0.24
Stock price								$ 19.43	$ 18.10	$ 19.16
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%
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award
Number of shares available for grant								3,900,000
PBIT Performance-Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Total shareholder return performance measurement period			3 years
PBIT 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%
PBIT 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%
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award
Common stock issued to employees	400,000
Value of common stock issued to employees per share	$ 21.59

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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	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Risk-free interest rate	0.97%	0.77%	0.75%
Expected historical volatility	27.00%	28.20%	36.10%
Dividend yield	1.24%	1.33%	1.25%
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%	24.60%

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Schedule of Estimated Fair Value of Stock Options Grant Using Black Scholes Option Pricing Model (Detail) - Stock Options	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Expected life (years)	5 years	4 years	4 years
Risk-free interest rate	1.40%	1.10%	1.20%
Volatility-historical	32.90%	33.40%	38.80%
Dividend yield	1.24%	1.33%	1.25%

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Schedule of Stock Compensation Plan Activity (Detail) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Awarded	1,471	1,681	1,870
Forfeited	(233)	(284)	(189)
Outstanding at January 1	1,121	1,507	2,706
Granted	130	132	89
Exercised	(324)	(518)	(1,248)
Forfeited			(38)
Expired	(2)		(2)
Outstanding at December 31	926	1,121	1,507
Vested and expected to vest at December 31	926	1,121	1,507
Exercisable at December 31	598	779	1,089
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award
Non-vested at January 1	4,070	4,352	4,636
Awarded	1,471	1,681	1,870
Vested	(1,530)	(1,679)	(1,965)
Forfeited	(233)	(284)	(189)
Non-vested at December 31	3,778	4,070	4,352

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Schedule of Share Based Compensation Total Shares Available (Detail) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Available for grant at January 1	10,914	12,443	14,213
Options granted	(130)	(132)	(89)
Restricted stock units awarded	(1,471)	(1,681)	(1,870)
Restricted stock units forfeited	233	284	189
Available for grant at December 31	9,546	10,914	12,443

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Schedule of Weighted-Average Restricted Stock Unit Award Fair Value (Detail) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Non-vested at January 1	$ 17.46	$ 17.24	$ 15.60
Awarded	18.68	17.36	18.41
Vested	17.21	16.85	14.38
Forfeited	17.57	17.08	16.97
Non-vested at December 31	$ 18.03	$ 17.46	$ 17.24

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Schedule of Restricted Stock Unit Awards Aggregate Intrinsic Value (Detail) - Restricted Stock Units - USD ($) $ / shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Vested	$ 30,008	$ 32,200	$ 37,160
Outstanding	$ 95,952	$ 84,129	$ 86,113
Expected to vest	$ 91,871	$ 79,611	$ 81,582

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Schedule of Restricted Stock Units Weighted Average Remaining Contractual Terms (Detail) - Restricted Stock Units	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Outstanding	1 year 15 days	1 year 1 month 2 days	1 year 1 month 10 days
Expected to vest	1 year 11 days	1 year 29 days	1 year 1 month 6 days

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Schedule of Weighted Average Stock Options Exercise Price (Detail)	12 Months Ended
	Dec. 31, 2016 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award
Outstanding at January 1	$ 10.21
Options granted	19.43
Options exercised	9.06
Options expired	3.07
Outstanding at December 31	11.93
Exercisable at December 31	$ 8.32

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Schedule of Stock Option Aggregated Intrinsic Value Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Exercised	$ 3,729	$ 7,255	$ 17,847
Outstanding	12,468	11,729	17,936
Vested and expected to vest	12,468	11,729	17,936
Exercisable	$ 10,217	$ 10,716	$ 16,101

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Schedule of Stock Options Weighted Average Remaining Contractual Terms (Detail)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award
Outstanding	3 years 10 months 24 days	4 years 2 months 12 days	4 years 6 months
Vested and expected to vest	3 years 10 months 24 days	4 years 2 months 12 days	4 years 6 months
Exercisable	3 years 2 months 12 days	3 years 10 months 24 days	4 years 2 months 12 days

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Schedule of Significant Option Groups Outstanding (Detail) shares in Thousands	12 Months Ended
	Dec. 31, 2016 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Shares | shares	926
Options Exercisable, Shares | shares	598
Options Outstanding, Weighted-Average Exercise Price	$ 11.93
Options Exercisable, Weighted-Average Exercise Price	$ 8.32
$1.48 - $2.67
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 8 months 27 days
Options Outstanding, Shares | shares	294
Options Exercisable, Shares | shares	294
Range Of Exercise Prices, Lower Limit	$ 1.48
Range Of Exercise Prices, Upper Limit	2.67
Options Outstanding, Weighted-Average Exercise Price	2.31
Options Exercisable, Weighted-Average Exercise Price	$ 2.31
$3.23 - $7.71
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	1 year 9 months 7 days
Options Outstanding, Shares | shares	75
Options Exercisable, Shares | shares	75
Range Of Exercise Prices, Lower Limit	$ 3.23
Range Of Exercise Prices, Upper Limit	7.71
Options Outstanding, Weighted-Average Exercise Price	4.26
Options Exercisable, Weighted-Average Exercise Price	$ 4.26
$16.23 - $18.10
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	3 years 6 months 4 days
Options Outstanding, Shares | shares	338
Options Exercisable, Shares | shares	185
Range Of Exercise Prices, Lower Limit	$ 16.23
Range Of Exercise Prices, Upper Limit	18.10
Options Outstanding, Weighted-Average Exercise Price	17.18
Options Exercisable, Weighted-Average Exercise Price	$ 16.87
$19.16 - $19.43
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted-Average Remaining Contractual Life (Years)	5 years 3 months 4 days
Options Outstanding, Shares | shares	219
Options Exercisable, Shares | shares	44
Range Of Exercise Prices, Lower Limit	$ 19.16
Range Of Exercise Prices, Upper Limit	19.43
Options Outstanding, Weighted-Average Exercise Price	19.32
Options Exercisable, Weighted-Average Exercise Price	$ 19.16

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Stock Based Compensation (Detail) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 6,600	$ 30,750	$ 30,451	$ 40,307
Income tax benefit		(8,752)	(8,528)	(11,537)
Total stock-based compensation expense after income taxes		21,998	21,923	28,770
Cost Of Revenues
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation		3,153	3,065	3,675
Engineering And Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation		9,458	9,362	10,146
Selling and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation		$ 18,139	$ 18,024	$ 26,486

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Savings Plan - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Savings Plan [Line Items]
Savings plan maximum percentage of employees contribution allowable	20.00%
Percentage of employer contributions vested per year	25.00%
Maximum employment period considered for vesting of employers' contribution, in years	4 years
U.S. Qualified Pension Plan
Savings Plan [Line Items]
Maximum percentage of matching contributions made by the employer	100.00%	100.00%	100.00%
Percentage of employer match on employee contribution	4.00%	4.00%	4.00%
Savings Plan
Savings Plan [Line Items]
Amounts charged to statements of operations	$ 14.5	$ 13.5	$ 12.8

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Schedule of (Loss) Income Before Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended															12 Months Ended
	Dec. 31, 2016	[1],[2]	Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Income Tax Disclosure [Line Items]
U.S.																$ (341,018)		$ 56,270		$ (151,889)
Non-U.S.																285,958		196,854		247,265
(Loss) income before income taxes	$ 58,884		$ 59,681		$ (230,817)		$ 57,192		$ (8,857)		$ 87,408		$ 132,136		$ 42,438	$ (55,060)	[10],[11]	$ 253,124	[10],[11]	$ 95,376	[10],[11]

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

[11] Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

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Schedule of (Benefit) Provision for Income Taxes from Operations (Detail) - USD ($) $ in Thousands	3 Months Ended															12 Months Ended
	Dec. 31, 2016	[1],[2]	Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Line Items]
Current, U.S. Federal																$ 7,750	$ 16,635	$ 5,197
Current, Non-U.S.																41,579	35,707	28,157
Current, State																1,968	1,429	678
Current, Total																51,297	53,771	34,032
Deferred, U.S. Federal																(51,482)	(574)	(20,449)
Deferred, Non-U.S.																(9,240)	(7,761)	(404)
Deferred, State																(2,214)	1,211	925
Deferred, Total																(62,936)	(7,124)	(19,928)
Total (benefit) provision for income taxes	$ (7,461)		$ (4,113)		$ (7,271)		$ 7,206		$ (8,216)		$ 15,955		$ 29,257		$ 9,651	$ (11,639)	$ 46,647	$ 14,104

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended															12 Months Ended
	Dec. 31, 2016		Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015		Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Line Items]
Total (benefit) provision for income taxes	$ (7,461,000)	[1],[2]	$ (4,113,000)		$ (7,271,000)		$ 7,206,000		$ (8,216,000)	[6],[7]	$ 15,955,000		$ 29,257,000		$ 9,651,000	$ (11,639,000)	$ 46,647,000	$ 14,104,000
Effective tax rate																21.10%	18.40%	14.80%
Tax savings due to the tax holiday																$ 17,000,000	$ 11,500,000	$ 13,200,000
Tax savings due to the tax holiday, per share																$ 0.08	$ 0.05	$ 0.06
Tax holiday expiration date																December 31, 2020
Valuation allowance amount decrease/increase																$ 5,300,000
Valuation allowance includes net deferred tax assets	48,369,000								43,039,000							48,369,000	$ 43,039,000
Tax credit carryforwards, approximately	134,600,000															134,600,000
Tax credits carryforwards	57,313,000								44,684,000							57,313,000	44,684,000
Unrecognized tax benefits	38,958,000								36,792,000							38,958,000	36,792,000	$ 30,418,000	$ 21,203,000
Unrecognized tax benefits, if recognized would impact effective tax rate	27,600,000															27,600,000
Unrecognized tax benefits, if recognized would impact deferred taxes	11,400,000															11,400,000
Decrease in unrecognized tax benefits	800,000															800,000
Accrued interest and penalties	400,000								$ 500,000							400,000	500,000
Interest and penalties related to income tax																100,000	$ 200,000	$ 200,000
Deferred tax liability not been established	1,020,000,000															1,020,000,000
Do Not Expire
Income Taxes [Line Items]
Alternative minimum tax credits carryforwards	8,700,000															8,700,000
United States
Income Taxes [Line Items]
Tax credits carryforwards, business	45,300,000															45,300,000
Tax credits carryforwards	39,100,000															$ 39,100,000
United States | Earliest Tax Year
Income Taxes [Line Items]
Tax credit carryforward, expiration date																2017
United States | Latest Tax Year
Income Taxes [Line Items]
Tax credit carryforward, expiration date																2036
State and Local Jurisdiction
Income Taxes [Line Items]
Tax credits carryforwards	80,600,000															$ 80,600,000
State and Local Jurisdiction | Earliest Tax Year
Income Taxes [Line Items]
Tax credit carryforward, expiration date																2017
State and Local Jurisdiction | Latest Tax Year
Income Taxes [Line Items]
Tax credit carryforward, expiration date																2031
State and Local Jurisdiction | Do Not Expire
Income Taxes [Line Items]
Tax credits carryforwards	$ 47,400,000															$ 47,400,000

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

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Schedule of Reconciliation of Effective Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Line Items]
U.S. statutory federal tax rate	35.00%	35.00%	35.00%
Foreign taxes	127.10%	(16.50%)	(58.10%)
U.S. research and development credit	15.80%	(3.00%)	(7.90%)
Domestic production activities deduction	2.30%	(1.00%)	(0.50%)
State income taxes, net of federal tax benefit	2.30%	0.40%	(0.10%)
Equity compensation	(2.70%)	0.60%	(1.80%)
Uncertain tax positions	(2.60%)	2.20%	7.90%
Goodwill impairment	(162.10%)		36.30%
Other, net	6.00%	0.70%	4.00%
Effective tax rate, Total	21.10%	18.40%	14.80%

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Schedule of Components of Deferred Tax Assets Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Line Items]
Tax credits	$ 57,313	$ 44,684
Pension liabilities	31,581	31,742
Inventory valuations	31,227	29,445
Accruals	27,247	26,563
Deferred revenue	12,806	10,232
Equity compensation	9,922	9,674
Vacation accrual	7,874	7,354
Net operating loss carryforwards	5,244	7,989
Other	630	502
Gross deferred tax assets	183,844	168,185
Less: valuation allowance	(48,369)	(43,039)
Total deferred tax assets	135,475	125,146
Intangible assets	(22,887)	(68,433)
Depreciation	(17,117)	(20,541)
Marketable securities	(210)	(458)
Total deferred tax liabilities	(40,214)	(89,432)
Net deferred assets	$ 95,261	$ 35,714

XML

Summary of Operating Loss Carryforwards (Detail) $ in Thousands	Dec. 31, 2016 USD ($)
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	$ 86,593
Foreign Operating Loss Carryforwards	6,529
2017
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	10,245
2018
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	8,562
2019
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	983
2020
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	1,248
2021
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	3,549
2022-2026
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	18,044
2027-2031
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	38,498
Beyond 2031
Operating Loss Carryforwards [Line Items]
State Operating Loss Carryforwards	5,464
Foreign Operating Loss Carryforwards	129
Non-Expiring
Operating Loss Carryforwards [Line Items]
Foreign Operating Loss Carryforwards	$ 6,400

XML

Schedule of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Line Items]
Beginning balance as of January 1	$ 36,792	$ 30,418	$ 21,203
Tax positions for current year, Additions	9,766	6,626	8,414
Tax positions for prior years, Additions	187	792	3,781
Expiration of statutes, Reductions	(3,532)
Settlements with tax authorities, Reductions	(2,295)	(336)	(500)
Tax positions for prior years, Reductions	(1,960)	(708)	(2,480)
Ending balance as of December 31	$ 38,958	$ 36,792	$ 30,418

XML

Operating Segment, Geographic and Significant Customer Information - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2016 Customer Segment	Dec. 31, 2015 Customer	Dec. 31, 2014 Customer
Segment Reporting Information [Line Items]
Operating segments | Segment	4
Number of customer accounted for more than ten percent of consolidated revenue | Customer	2	1	0
Semiconductor Test | Consolidated Revenue | Customer Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk, percentage	25.00%	23.00%	22.00%
Semiconductor Test | Customer 1 | Consolidated Revenue | Revenue from Rights Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk, percentage	12.00%	13.00%

XML

Schedule of Segment Information (Detail) - USD ($) $ in Thousands		3 Months Ended															12 Months Ended
		Dec. 31, 2016		Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015		Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Segment Reporting Information [Line Items]
Revenues		$ 379,989	[1],[2]	$ 410,475		$ 531,792		$ 430,994		$ 318,444	[6],[7]	$ 465,994		$ 512,739		$ 342,401	$ 1,753,250	[10]	$ 1,639,578	[10]	$ 1,647,824	[10]
Income (loss) before taxes		58,884	[1],[2]	$ 59,681		$ (230,817)		$ 57,192		(8,857)	[6],[7]	$ 87,408		$ 132,136		$ 42,438	(55,060)	[11],[12]	253,124	[11],[12]	95,376	[11],[12]
Total assets	[13]	2,762,493								2,548,674							2,762,493		2,548,674		2,538,520
Property additions																	85,272		89,878		168,982
Depreciation and amortization expense																	120,009		140,773		152,544
Semiconductor Test
Segment Reporting Information [Line Items]
Revenues																	1,368,169		1,201,530		1,300,790
Income (loss) before taxes	[11],[12]																311,939		260,154		255,803
Total assets	[13]	557,546								610,869							557,546		610,869		580,501
Property additions																	70,543		79,052		159,783
Depreciation and amortization expense																	58,087		64,415		84,990
Wireless Test
Segment Reporting Information [Line Items]
Revenues																	96,204		184,572		184,535
Income (loss) before taxes	[11],[12]																(371,409)		(13,830)		(116,196)
Total assets	[13]	62,366								427,880							62,366		427,880		478,974
Property additions																	4,186		3,133		3,730
Depreciation and amortization expense																	25,921		53,440		53,308
System Test
Segment Reporting Information [Line Items]
Revenues																	189,846		211,584		162,499
Income (loss) before taxes	[11],[12]																28,916		25,101		12,116
Total assets	[13]	110,361								102,547							110,361		102,547		95,105
Property additions																	3,788		6,228		5,469
Depreciation and amortization expense																	6,551		4,391		5,399
Industrial Automation
Segment Reporting Information [Line Items]
Revenues																	99,031		41,892
Income (loss) before taxes	[11],[12]																(16,783)		(7,574)
Total assets	[13]	317,635								344,260							317,635		344,260
Property additions																	6,755		1,465
Depreciation and amortization expense																	26,869		14,500
Corporate And Eliminations
Segment Reporting Information [Line Items]
Income (loss) before taxes	[11],[12]																(7,723)		(10,727)		(56,347)
Total assets	[13]	$ 1,714,585								$ 1,063,118							1,714,585		1,063,118		1,383,940
Depreciation and amortization expense																	$ 2,581		$ 4,027		$ 8,847

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Revenues attributable to a country are based on location of customer site.

[11] Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

[12] Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

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

XML

Schedule of Segment Reporting Information by Segment Charges (Detail) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended															12 Months Ended
		Jan. 31, 2014	Dec. 31, 2016		Oct. 02, 2016		Jul. 03, 2016		Apr. 03, 2016		Dec. 31, 2015		Oct. 04, 2015		Jul. 05, 2015		Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Goodwill impairment charge			$ 0				$ 254,946	[1],[2]									$ 98,897	$ 254,946	$ (254,946)	$ 98,897
Acquired intangible assets impairment charge							83,339	[1],[2]										83,339	98,200
Restructuring and other			5,570	[2],[3]	$ 12,177	[2],[4]	2,608	[1],[2]	$ 1,587	[2],[5]	$ 5,204	[6],[7]	$ 261	[8]	$ (385)	[9]		21,942	5,080	1,365
Contingent consideration adjustment																		15,896	2,489	(630)
Property insurance recovery																		(5,363)
Other (income) expense, net-Gain from the sale of an equity investment																			(5,406)
Stock based compensation expense		$ 6,600																30,750	30,451	40,307
Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment							1,400
Building impairment and other expenses							4,200
Selling and Administrative
Segment Reporting Information [Line Items]
Stock based compensation expense																		18,139	18,024	26,486
Universal Robots
Segment Reporting Information [Line Items]
Contingent consideration adjustment			$ 5,400		$ 8,000				$ 1,200		5,339							15,300	5,300
Acquisition related costs																			1,000
Universal Robots | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment							800
Avionics Interface Technologies, LLC
Segment Reporting Information [Line Items]
Contingent consideration adjustment											$ (300)		$ (1,000)					600	(1,300)
Acquisition related costs																				400
Avionics Interface Technologies, LLC | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment							600
ZTEC Instruments, Inc.
Segment Reporting Information [Line Items]
Contingent consideration adjustment															$ (1,600)				(1,600)	(600)
System Test
Segment Reporting Information [Line Items]
Goodwill impairment charge																	$ 0
Cost of revenues-inventory charge																		630	8,324	2,125
Restructuring and other																		(49)	1,037	742
Corporate And Eliminations
Segment Reporting Information [Line Items]
Restructuring and other																				198
Total																		15,896	(1,813)	6,538
Corporate And Eliminations | Restructuring and other
Segment Reporting Information [Line Items]
Property insurance recovery																		(5,363)
Acquisition related costs																			1,104	372
Corporate And Eliminations | Other (income) expense, net
Segment Reporting Information [Line Items]
Other (income) expense, net-Gain from the sale of an equity investment																			(5,406)
Corporate And Eliminations | Selling and Administrative
Segment Reporting Information [Line Items]
Stock based compensation expense	[10]																			6,598
Corporate And Eliminations | Impairment of fixed assets and expenses related to the Japan earthquake | Restructuring and other
Segment Reporting Information [Line Items]
Building impairment and other expenses																		5,363
Corporate And Eliminations | Universal Robots | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment																		15,346	5,339
Corporate And Eliminations | Avionics Interface Technologies, LLC | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment																		550	(1,250)
Corporate And Eliminations | ZTEC Instruments, Inc. | Restructuring and other
Segment Reporting Information [Line Items]
Contingent consideration adjustment																			(1,600)	(630)
Industrial Automation
Segment Reporting Information [Line Items]
Cost of revenues-inventory charge	[11]																		1,567
Restructuring and other																		585
Wireless Test
Segment Reporting Information [Line Items]
Goodwill impairment charge							$ 254,946											254,946	(254,946)	98,897
Acquired intangible assets impairment charge																		83,339
Cost of revenues-inventory charge																		7,207	2,500	5,679
Restructuring and other																		2,650		565
Semiconductor Test
Segment Reporting Information [Line Items]
Cost of revenues-inventory charge																		9,656	10,508	14,389
Restructuring and other																		$ 2,860	$ 499	$ 490

[1] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Expense related to the January 2014 retirement of Teradyne's former chief executive officer; see Note O: "Stock-Based Compensation."

[11] Included in the cost of revenues for the year ended December 31, 2015 is the cost for purchase accounting inventory step-up.

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Schedule of Revenues by Country (Detail) - USD ($) $ in Thousands		3 Months Ended															12 Months Ended
		Dec. 31, 2016	[1],[2]	Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers		$ 379,989		$ 410,475		$ 531,792		$ 430,994		$ 318,444		$ 465,994		$ 512,739		$ 342,401	$ 1,753,250	[10]	$ 1,639,578	[10]	$ 1,647,824	[10]
TAIWAN
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																653,076		436,389		495,942
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																221,948		217,386		213,104
CHINA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																174,876		264,898		292,145
KOREA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																147,882		120,224		145,608
JAPAN
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																135,978		128,228		63,761
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																117,671		111,903		111,043
MALAYSIA
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																103,472		76,707		83,910
SINGAPORE
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																73,172		105,216		119,421
PHILIPPINES
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																54,705		96,103		68,662
THAILAND
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																43,097		59,104		44,117
Rest Of The World
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from unaffiliated customers	[10]																$ 27,373		$ 23,420		$ 10,111

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Revenues attributable to a country are based on location of customer site.

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Schedule of Long-Lived Assets by Geographic Area (Detail) - USD ($) $ in Thousands		Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets		$ 253,821	$ 273,414
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets		189,195	198,424
Foreign
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	[1]	$ 64,626	$ 74,990

[1] As of December 31, 2016 and 2015, long-lived assets attributable to Singapore were $31.5 million and $39.9 million, respectively.

XML

Schedule of Long-Lived Assets by Geographic Area (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 253,821	$ 273,414
SINGAPORE
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 31,500	$ 39,900

XML

Stock Repurchase Program - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jan. 31, 2015
Stock Repurchase Programs [Line Items]
Stock repurchase program, authorized amount		$ 500,000,000
Cumulative repurchases, shares		22.5
Cumulative repurchases, value		$ 446,000,000
Common stock average price		$ 19.87
Repurchase of stock, value		$ 146,331,000	$ 299,949,000
January Twenty Fifteen Share Repurchase Program
Stock Repurchase Programs [Line Items]
Stock repurchase program termination date		Dec. 31, 2016
Maximum
Stock Repurchase Programs [Line Items]
Stock repurchase program, authorized amount				$ 500,000,000
Scenario, Forecast | Minimum
Stock Repurchase Programs [Line Items]
Repurchase of stock, value	$ 200,000,000

XML

Subsequent Events - Additional Information (Detail) - Subsequent Event	1 Months Ended
	Jan. 31, 2017 $ / shares
Subsequent Event [Line Items]
Cash Dividends payable, amount per share	$ 0.07
Cash Dividends payable, date to be paid	Mar. 20, 2017
Cash Dividends payable, record date	Feb. 24, 2017

XML

Consolidated Quarterly Statements of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Dec. 31, 2016		Oct. 02, 2016	[2],[3]	Jul. 03, 2016	[2],[4]	Apr. 03, 2016	[2],[5]	Dec. 31, 2015	[6],[7]	Oct. 04, 2015	[8]	Jul. 05, 2015	[9]	Apr. 05, 2015	Dec. 31, 2014	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2014
Quarterly Financial Information [Line Items]
Products	$ 303,667	[1],[2]	$ 334,610		$ 456,832		$ 358,139		$ 244,510		$ 386,488		$ 437,243		$ 272,325		$ 1,453,248		$ 1,340,566		$ 1,364,024
Services	76,322	[1],[2]	75,865		74,960		72,855		73,934		79,506		75,496		70,076		300,002		299,012		283,800
Total revenues	379,989	[1],[2]	410,475		531,792		430,994		318,444		465,994		512,739		342,401		1,753,250	[10]	1,639,578	[10]	1,647,824	[10]
Cost of products	127,481	[1],[2]	148,266		215,795		167,555		120,322		170,963		181,491		118,996		659,097		591,772		640,787
Cost of services	33,502	[1],[2]	34,850		33,127		33,107		32,096		36,405		32,680		30,982		134,586		132,163		128,229
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)	160,983	[1],[2]	183,116		248,922		200,662		152,418		207,368		214,171		149,978		793,683		723,935		769,016
Gross profit	219,006	[1],[2]	227,359		282,870		230,332		166,026		258,626		298,568		192,423		959,567		915,643		878,808
Engineering and development	70,052	[1],[2]	71,400		76,109		73,464		70,941		74,027		75,832		71,450		291,025		292,250		291,639
Selling and administrative	76,289	[1],[2]	78,794		81,425		79,174		79,718		77,481		77,073		72,041		315,682		306,313		319,713
Acquired intangible assets amortization	7,923	[1],[2]	8,487		16,244		19,994		19,911		20,053		15,258		13,808		52,648		69,031		70,771
Acquired intangible assets impairment					83,339												83,339		98,200
Goodwill impairment	0				254,946											$ 98,897	254,946		(254,946)		98,897
Restructuring and other	5,570	[1],[2]	12,177		2,608		1,587		5,204		261		(385)				21,942		5,080		1,365
Total operating expenses	159,834	[1],[2]	170,858		514,671		174,219		175,774		171,822		167,778		157,299		1,019,582		672,674		782,385
Income (loss) from operations	59,172	[1],[2]	56,501		(231,801)		56,113		(9,748)		86,804		130,790		35,124		(60,015)		242,969		96,423
Interest income	(3,095)	[1],[2]	(2,892)		(1,666)		(1,642)		(2,017)		(1,708)		(1,674)		(1,816)		(9,296)		(7,214)		(6,259)
Interest expense	1,604	[1],[2]	633		691		710		762		508		444		162		3,637		1,876		6,934
Other (income) expense, net	1,779	[1],[2]	(921)		(9)		(147)		364		596		(116)		(5,660)		704		(4,817)		372
Income (loss) before income taxes	58,884	[1],[2]	59,681		(230,817)		57,192		(8,857)		87,408		132,136		42,438		(55,060)	[11],[12]	253,124	[11],[12]	95,376	[11],[12]
Income tax provision (benefit)	(7,461)	[1],[2]	(4,113)		(7,271)		7,206		(8,216)		15,955		29,257		9,651		(11,639)		46,647		14,104
Net income (loss)	$ 66,345	[1],[2]	$ 63,794		$ (223,546)		$ 49,986		$ (641)		$ 71,453		$ 102,879		$ 32,787		$ (43,421)		$ 206,477		$ 81,272
Net income (loss) per common share-basic	$ 0.33	[1],[2]	$ 0.32		$ (1.10)		$ 0.24		$ 0.00		$ 0.34		$ 0.48		$ 0.15		$ (0.21)		$ 0.98		$ 0.40
Net income (loss) per common share-diluted	0.33	[1],[2]	0.31		(1.10)		0.24		0.00		0.34		0.48		0.15		(0.21)		0.97		0.37
Cash dividend declared per common share	$ 0.06	[1],[2]	$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.06		$ 0.24		$ 0.24		$ 0.18

[1] Restructuring and other includes a $5.4 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[2] Teradyne recorded pension and post retirement net actuarial (gains) losses of $(1.2) million, $(0.7) million, $0.7 million and $(2.0) million for the first, second, third and fourth quarter in 2016, respectively. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[3] Restructuring and other includes an $8.0 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[4] Restructuring and other includes $4.2 million for an impairment of fixed assets, $0.9 million for expenses related to an earthquake in Kumamoto, Japan, and $1.4 million for the increase in the fair value of contingent consideration liability of which $0.8 million related to Universal Robots, and $0.6 million related to AIT, partially offset by $5.1 million of property insurance recovery related to the Japan earthquake.

[5] Restructuring and other includes a $1.2 million fair value adjustment to increase the Universal Robots acquisition contingent consideration.

[6] In the fourth quarter ended December 31, 2015, Teradyne recorded pension and post retirement net actuarial losses of $17.7 million. See Note B: "Accounting Policies" for a discussion of Teradyne's accounting policy.

[7] Restructuring and other includes a $5.3 million fair value adjustment to increase the Universal Robots acquisition contingent consideration, and a $(0.3) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[8] Restructuring and other includes a $(1.0) million fair value adjustment to decrease the AIT acquisition contingent consideration.

[9] Restructuring and other includes a $(1.6) million fair value adjustment to decrease the ZTEC acquisition contingent consideration.

[10] Revenues attributable to a country are based on location of customer site.

[11] Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges, goodwill impairment charges and acquired intangible assets impairment charge.

[12] Interest income, interest expense, other (income) expense, net, contingent consideration adjustments and pension and postretirement plans actuarial gains and losses are included in Corporate and Eliminations.

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Consolidated Quarterly Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended							12 Months Ended
	Dec. 31, 2016	Oct. 02, 2016	Jul. 03, 2016	Apr. 03, 2016	Dec. 31, 2015	Oct. 04, 2015	Jul. 05, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration								$ 15,896	$ 2,489	$ (630)
Pension and post retirement net actuarial losses (gain)	$ (2,000)	$ 700	$ (700)	$ (1,200)	$ 17,700
Restructuring and other
Quarterly Financial Information [Line Items]
Building impairment and other expenses			4,200
Changes to fair value of contingent consideration			1,400
Universal Robots
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration	$ 5,400	$ 8,000		$ 1,200	5,339			15,300	5,300
Universal Robots | Restructuring and other
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration			800
Avionics Interface Technologies, LLC
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration					$ (300)	$ (1,000)		600	(1,300)
Avionics Interface Technologies, LLC | Restructuring and other
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration			600
ZTEC Instruments, Inc.
Quarterly Financial Information [Line Items]
Changes to fair value of contingent consideration							$ (1,600)		$ (1,600)	$ (600)
Impairment of fixed assets and expenses related to the Japan earthquake
Quarterly Financial Information [Line Items]
Property insurance recovery								5,400
Impairment of fixed assets and expenses related to the Japan earthquake | Restructuring and other
Quarterly Financial Information [Line Items]
Property insurance recovery			5,100
Impairment of fixed assets and expenses related to the Japan earthquake | Earthquake Related Expenses
Quarterly Financial Information [Line Items]
Building impairment and other expenses								$ 1,200
Impairment of fixed assets and expenses related to the Japan earthquake | Earthquake Related Expenses | Restructuring and other
Quarterly Financial Information [Line Items]
Building impairment and other expenses			$ 900

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Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Allowance for Doubtful Accounts
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	$ 2,407	$ 2,491	$ 2,912
Additions Charged to Cost and Expenses			55
Deductions	51	84	476
Balance at End of Period	2,356	2,407	2,491
Inventory Reserve
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	119,376	111,252	115,857
Additions Charged to Cost and Expenses	17,493	21,332	22,193
Other	4,417	1,680	7,064
Deductions	25,270	14,888	33,862
Balance at End of Period	116,016	119,376	111,252
Valuation Allowance of Deferred Tax Assets
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	43,039	41,737	40,386
Additions Charged to Cost and Expenses	5,413	1,322	1,380
Deductions	83	20	29
Balance at End of Period	$ 48,369	$ 43,039	$ 41,737