XML 127 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.6

CHANGE IN ACCOUNTING PRINCIPLE | 62 Months Ended
--- | ---
Dec. 31, 2012
CHANGE IN ACCOUNTING PRINCIPLE | C. CHANGE IN ACCOUNTING PRINCIPLE Effective January 1, 2012, Teradyne changed the method of recognizing actuarial gains and losses for its defined benefit pension plans and postretirement benefit plan and calculating the expected return on plan assets for its defined benefit pension plans. Historically, Teradyne recognized net actuarial gains and losses in accumulated other comprehensive income within shareholders’ equity on the consolidated balance sheets on an annual basis and amortized them into operating results over the average remaining years of service of the plan participants, to the extent such gains and losses were outside of a range (“corridor”). Teradyne has elected to immediately recognize 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. In addition, Teradyne used to calculate the expected return on plan assets using a calculated market-related value of plan assets. Effective January 1, 2012, Teradyne elected to calculate the expected return on plan assets using the fair value of the plan assets. Teradyne believes that this new method is preferable as it eliminates the delay in recognizing gains and losses in its operating results and it will improve the transparency by faster recognition of the effects of economic and interest rate trends on plan obligation and investments. These actuarial gains and losses are generally measured annually as of December 31 and, accordingly, will be recorded during the fourth quarter of each year or upon any interim remeasurement of the plans. In accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 250, Accounting Changes and Error Corrections, all prior periods presented in this Annual Report on Form 10-K have been adjusted to apply the new accounting method retrospectively. Had these changes not been made, net income for the year ended December 31, 2012 would have been $207.0 million compared to $217.0 million actually recorded. Diluted earnings per share would have been $0.90 compared to $0.94 for the year ended December 31, 2012. The effects of the change in accounting principle on the condensed consolidated financial statements for 2011 and 2010 are presented below. We have condensed the comparative financial statements for financial statement line items that were not affected by the change in accounting principle. Condensed Consolidated Balance Sheets
|  | December 31, 2011 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  | $ | 2,188,639 |  |  | $ | — |  |  | $ | 2,188,639 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Total liabilities |  |  | 683,579 |  |  |  | — |  |  |  | 683,579 |
Shareholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 22,948 |  |  |  | — |  |  |  | 22,948 |
Additional paid-in capital |  |  | 1,293,130 |  |  |  | — |  |  |  | 1,293,130 |
Accumulated other comprehensive (loss) income |  |  | (129,875 | ) |  |  | 134,621 |  |  |  | 4,746 |
Retained earnings |  |  | 318,857 |  |  |  | (134,621 | ) |  |  | 184,236 |
Total shareholders’ equity |  |  | 1,505,060 |  |  |  | — |  |  |  | 1,505,060 |
Total liabilities and shareholders’ equity |  | $ | 2,188,639 |  |  | $ | — |  |  | $ | 2,188,639 |
Condensed Consolidated Statements of Operations
|  | For the Year Ended December 31, 2011 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands, except per share amounts) |
Net revenues |  | $ | 1,429,061 |  |  | $ | — |  |  | $ | 1,429,061 |
Cost of revenues |  |  | 715,368 |  |  |  | 1,870 |  |  |  | 717,238 |
Gross profit |  |  | 713,693 |  |  |  | (1,870 | ) |  |  | 711,823 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Engineering and development |  |  | 195,600 |  |  |  | 2,198 |  |  |  | 197,798 |
Selling and administrative |  |  | 233,711 |  |  |  | 1,608 |  |  |  | 235,319 |
Acquired intangible asset amortization |  |  | 40,465 |  |  |  | — |  |  |  | 40,465 |
Restructuring and other |  |  | 8,203 |  |  |  | (1,460 | ) |  |  | 6,743 |
Total operating expenses |  |  | 477,979 |  |  |  | 2,346 |  |  |  | 480,325 |
Income from operations |  |  | 235,714 |  |  |  | (4,216 | ) |  |  | 231,498 |
Interest income |  |  | 6,617 |  |  |  | — |  |  |  | 6,617 |
Interest expense and other |  |  | (23,694 | ) |  |  | — |  |  |  | (23,694 | )
Income from continuing operations before income taxes |  |  | 218,637 |  |  |  | (4,216 | ) |  |  | 214,421 |
Income tax benefit |  |  | (129,256 | ) |  |  | (280 | ) |  |  | (129,536 | )
Income from continuing operations |  |  | 347,893 |  |  |  | (3,936 | ) |  |  | 343,957 |
Income from discontinued operations before income taxes |  |  | 1,278 |  |  |  | — |  |  |  | 1,278 |
Benefit from income taxes |  |  | (267 | ) |  |  | — |  |  |  | (267 | )
Income from discontinued operations |  |  | 1,545 |  |  |  | — |  |  |  | 1,545 |
Gain on disposal of discontinued operations (net of tax of $4,578) |  |  | 24,371 |  |  |  | — |  |  |  | 24,371 |
Net income |  | $ | 373,809 |  |  | $ | (3,936 | ) |  | $ | 369,873 |
Net income per common share from continuing operations: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.88 |  |  | $ | (0.02 | ) |  | $ | 1.86 |
Diluted |  | $ | 1.53 |  |  | $ | (0.01 | ) |  | $ | 1.52 |
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.02 |  |  | $ | (0.02 | ) |  | $ | 2.00 |
Diluted |  | $ | 1.65 |  |  | $ | (0.02 | ) |  | $ | 1.63 |
Weighted average common shares—basic |  |  | 184,683 |  |  |  |  |  |  |  | 184,683 |
Weighted average common shares—diluted |  |  | 226,820 |  |  |  |  |  |  |  | 226,820 |
|  | For the Year Ended December 31, 2010 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands, except per share amounts) |
Net revenues |  | $ | 1,566,162 |  |  | $ | — |  |  | $ | 1,566,162 |
Cost of revenues |  |  | 710,196 |  |  |  | (1,617 | ) |  |  | 708,579 |
Gross profit |  |  | 855,966 |  |  |  | 1,617 |  |  |  | 857,583 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Engineering and development |  |  | 193,017 |  |  |  | (1,154 | ) |  |  | 191,863 |
Selling and administrative |  |  | 226,820 |  |  |  | (1,487 | ) |  |  | 225,333 |
Acquired intangible asset amortization |  |  | 29,250 |  |  |  | — |  |  |  | 29,250 |
Restructuring and other |  |  | (817 | ) |  |  | (2,983 | ) |  |  | (3,800 | )
Total operating expenses |  |  | 448,270 |  |  |  | (5,624 | ) |  |  | 442,646 |
Income from operations |  |  | 407,696 |  |  |  | 7,241 |  |  |  | 414,937 |
Interest income |  |  | 5,861 |  |  |  | — |  |  |  | 5,861 |
Interest expense and other |  |  | (24,451 | ) |  |  | — |  |  |  | (24,451 | )
Income from continuing operations before income taxes |  |  | 389,106 |  |  |  | 7,241 |  |  |  | 396,347 |
Provision for income taxes |  |  | 14,504 |  |  |  | 2,151 |  |  |  | 16,655 |
Income from continuing operations |  |  | 374,602 |  |  |  | 5,090 |  |  |  | 379,692 |
Income from discontinued operations before income taxes |  |  | 5,406 |  |  |  | — |  |  |  | 5,406 |
Provision for income taxes |  |  | 278 |  |  |  | — |  |  |  | 278 |
Income from discontinued operations |  |  | 5,128 |  |  |  | — |  |  |  | 5,128 |
Net income |  | $ | 379,730 |  |  | $ | 5,090 |  |  | $ | 384,820 |
Net income per common share from continuing operations: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.08 |  |  | $ | 0.03 |  |  | $ | 2.11 |
Diluted |  | $ | 1.71 |  |  | $ | 0.02 |  |  | $ | 1.73 |
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.11 |  |  | $ | 0.03 |  |  | $ | 2.14 |
Diluted |  | $ | 1.73 |  |  | $ | 0.02 |  |  | $ | 1.75 |
Weighted average common share—basic |  |  | 179,924 |  |  |  |  |  |  |  | 179,924 |
Weighted average common share—diluted |  |  | 226,807 |  |  |  |  |  |  |  | 226,807 |
Condensed Consolidated Statements of Comprehensive Income
|  | For the Year Ended December 31, 2011 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands) |
Net income |  | $ | 373,809 |  |  | $ | (3,936 | ) |  | $ | 369,873 |
Other comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation reclassification adjustment included in net income |  |  | 2,266 |  |  |  | — |  |  |  | 2,266 |
Unrealized gains on marketable securities |  |  | (3 | ) |  |  | — |  |  |  | (3 | )
Defined benefit pension and post-retirement plans: |  |  |  |  |  |  |  |  |  |  |  |
Actuarial losses arising during period, net of tax of ($3,427), $3,427 |  |  | (9,496 | ) |  |  | 9,496 |  |  |  | — |
Less: Amortization included in net periodic pension and postretirement costs: |  |  |  |  |  |  |  |  |  |  |  |
Actuarial losses, net of tax of $3,385, ($3,385) |  |  | 5,560 |  |  |  | (5,560 | ) |  |  | — |
Prior service costs, net of tax of $9 |  |  | 14 |  |  |  | — |  |  |  | 14 |
|  |  | 5,574 |  |  |  | (5,560 | ) |  |  | 14 |
Other comprehensive (loss) income |  |  | (1,659 | ) |  |  | 3,936 |  |  |  | 2,277 |
Comprehensive income |  | $ | 372,150 |  |  | $ | — |  |  | $ | 372,150 |
|  | For the Year Ended December 31, 2010 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands) |
Net income |  | $ | 379,730 |  |  | $ | 5,090 |  |  | $ | 384,820 |
Other comprehensive income, net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation reclassification adjustment included in net income |  |  | (349 | ) |  |  | — |  |  |  | (349 | )
Unrealized gains on marketable securities |  |  | 1,559 |  |  |  | — |  |  |  | 1,559 |
Defined benefit pension and post-retirement plans: |  |  |  |  |  |  |  |  |  |  |  |
Actuarial gains arising during period, net of tax of ($1,826), $1,826 |  |  | (288 | ) |  |  | 288 |  |  |  | — |
Prior service cost arising during period, net of tax of $0 |  |  | 3,279 |  |  |  | — |  |  |  | 3,279 |
Less: Amortization included in net periodic pension and post-retirement costs: |  |  |  |  |  |  |  |  |  |  |  |
Actuarial losses, net of tax of $133, ($133) |  |  | 5,378 |  |  |  | (5,378 | ) |  |  | — |
Prior service costs, net of tax of $0 |  |  | 310 |  |  |  | — |  |  |  | 310 |
|  |  | 5,688 |  |  |  | (5,378 | ) |  |  | 310 |
Other comprehensive income |  |  | 9,889 |  |  |  | (5,090 | ) |  |  | 4,799 |
Comprehensive income |  | $ | 389,619 |  |  | $ | — |  |  | $ | 389,619 |
Condensed Consolidated Statements of Cash Flows
|  | For the Year Ended December 31, 2011 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands) |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 373,809 |  |  | $ | (3,936 | ) |  | $ | 369,873 |
Less: Income from discontinued operations |  |  | 1,545 |  |  |  | — |  |  |  | 1,545 |
Less: Gain on disposal of discontinued operations |  |  | 24,371 |  |  |  | — |  |  |  | 24,371 |
Income from continuing operations |  |  | 347,893 |  |  |  | (3,936 | ) |  |  | 343,957 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 51,040 |  |  |  | — |  |  |  | 51,040 |
Amortization |  |  | 62,284 |  |  |  | (8,946 | ) |  |  | 53,338 |
Stock-based compensation |  |  | 32,337 |  |  |  | — |  |  |  | 32,337 |
Provision for excess and obsolete inventory |  |  | 11,601 |  |  |  | — |  |  |  | 11,601 |
Non cash charge for the sale of inventories revalued at the date of acquisition |  |  | 12,178 |  |  |  | — |  |  |  | 12,178 |
Retirement plan actuarial losses |  |  | — |  |  |  | 13,564 |  |  |  | 13,564 |
Deferred taxes |  |  | (146,669 | ) |  |  | (280 | ) |  |  | (146,949 | )
Other |  |  | 1,911 |  |  |  | (402 | ) |  |  | 1,509 |
Changes in operating assets and liabilities, net of businesses sold and acquired: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 66,367 |  |  |  | — |  |  |  | 66,367 |
Inventories |  |  | (615 | ) |  |  | — |  |  |  | (615 | )
Other assets |  |  | (22,600 | ) |  |  | — |  |  |  | (22,600 | )
Deferred revenue and customer advances |  |  | (68,359 | ) |  |  | — |  |  |  | (68,359 | )
Accounts payable and other accrued expenses |  |  | (48,222 | ) |  |  | — |  |  |  | (48,222 | )
Retirement plan contributions |  |  | (11,851 | ) |  |  | — |  |  |  | (11,851 | )
Accrued income taxes |  |  | (8,727 | ) |  |  | — |  |  |  | (8,727 | )
Net cash provided by continuing operations |  | $ | 278,568 |  |  | $ | — |  |  | $ | 278,568 |
Net cash used for discontinued operations |  |  | (4,804 | ) |  |  | — |  |  |  | (4,804 | )
Net cash provided by operating activities |  |  | 273,764 |  |  |  | — |  |  |  | 273,764 |
Net cash used for investing activities |  |  | (81,457 | ) |  |  | — |  |  |  | (81,457 | )
Net cash used for financing activities |  |  | (16,308 | ) |  |  | — |  |  |  | (16,308 | )
Increase in cash and cash equivalents |  |  | 175,999 |  |  |  | — |  |  |  | 175,999 |
Cash and cash equivalents at beginning of year |  |  | 397,737 |  |  |  | — |  |  |  | 397,737 |
Cash and cash equivalents at end of year |  | $ | 573,736 |  |  | $ | — |  |  | $ | 573,736 |
|  | For the Year Ended December 31, 2010 |
|  | Originally Reported |  |  | Effect of Accounting Change |  |  | As Adjusted |
|  | (in thousands) |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 379,730 |  |  | $ | 5,090 |  |  | $ | 384,820 |
Less: Income from discontinued operations |  |  | 5,128 |  |  |  | — |  |  |  | 5,128 |
Income from continuing operations |  |  | 374,602 |  |  |  | 5,090 |  |  |  | 379,692 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | 52,810 |  |  |  | — |  |  |  | 52,810 |
Amortization |  |  | 46,217 |  |  |  | (5,511 | ) |  |  | 40,706 |
Stock-based compensation |  |  | 29,777 |  |  |  | — |  |  |  | 29,777 |
Provision for excess and obsolete inventory |  |  | 5,971 |  |  |  | — |  |  |  | 5,971 |
Retirement plan actuarial losses |  |  | — |  |  |  | (1,351 | ) |  |  | (1,351 | )
Deferred taxes |  |  | (3,670 | ) |  |  | 2,151 |  |  |  | (1,519 | )
Other |  |  | 2,907 |  |  |  | (379 | ) |  |  | 2,528 |
Changes in operating assets and liabilities, net of businesses sold: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (50,418 | ) |  |  | — |  |  |  | (50,418 | )
Inventories |  |  | 3,715 |  |  |  | — |  |  |  | 3,715 |
Other assets |  |  | 8,460 |  |  |  | — |  |  |  | 8,460 |
Deferred revenue and customer advances |  |  | 72,744 |  |  |  | — |  |  |  | 72,744 |
Accounts payable and other accrued expenses |  |  | 62,201 |  |  |  | — |  |  |  | 62,201 |
Retirement plan contributions |  |  | (52,452 | ) |  |  | — |  |  |  | (52,452 | )
Accrued income taxes |  |  | 8,465 |  |  |  | — |  |  |  | 8,465 |
Net cash provided by continuing operations |  |  | 561,329 |  |  |  | — |  |  |  | 561,329 |
Net cash provided by discontinued operations |  |  | 4,957 |  |  |  | — |  |  |  | 4,957 |
Net cash provided by operating activities |  |  | 566,286 |  |  |  | — |  |  |  | 566,286 |
Net cash used for investing activities |  |  | (627,660 | ) |  |  | — |  |  |  | (627,660 | )
Net cash provided by financing activities |  |  | 42,374 |  |  |  | — |  |  |  | 42,374 |
Decrease in cash and cash equivalents |  |  | (19,000 | ) |  |  | — |  |  |  | (19,000 | )
Cash and cash equivalents at beginning of year |  |  | 416,737 |  |  |  | — |  |  |  | 416,737 |
Cash and cash equivalents at end of year |  | $ | 397,737 |  |  | $ | — |  |  | $ | 397,737 |

X
- Definition Change In Accounting Principle [Text Block] + References No definition available. + Details
Name: | ter_ChangeInAccountingPrincipleTextBlock
Namespace Prefix: | ter_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration