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INCOME TAXES (Tables) | 62 Months Ended
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Dec. 31, 2012
Income (Loss) from Continuing Operations Before Income Taxes | The components of income (loss) from continuing operations before income taxes and the provision (benefit) for income taxes from continuing operations as shown in the consolidated statements of operations were as follows:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
Income from continuing operations before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 112,008 |  |  | $ | 68,943 |  |  | $ | 120,330 |
Non-U.S. |  |  | 153,968 |  |  |  | 145,478 |  |  |  | 276,017 |
|  | $ | 265,976 |  |  | $ | 214,421 |  |  | $ | 396,347 |
Provision (benefit) for income taxes from continuing operations: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 22,695 |  |  | $ | 3,668 |  |  | $ | (1,555 | )
Non-U.S. |  |  | 18,261 |  |  |  | 23,994 |  |  |  | 16,547 |
State |  |  | (12 | ) |  |  | 760 |  |  |  | 553 |
|  |  | 40,944 |  |  |  | 28,422 |  |  |  | 15,545 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | 8,158 |  |  |  | (139,929 | ) |  |  | — |
Non-U.S. |  |  | 5,997 |  |  |  | (10,549 | ) |  |  | 1,110 |
State |  |  | (6,172 | ) |  |  | (7,480 | ) |  |  | — |
|  |  | 7,983 |  |  |  | (157,958 | ) |  |  | 1,110 |
Total provision (benefit) for income taxes from continuing operations: |  | $ | 48,927 |  |  | $ | (129,536 | ) |  | $ | 16,655 |
Provision (Benefit) for Income Taxes from Continuing Operations | The total income tax provision (benefit) for the years ended December 31, 2012, 2011 and 2010 was as follows:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
Continuing operations |  | $ | 48,927 |  |  | $ | (129,536 | ) |  | $ | 16,655 |
Discontinued operations |  |  | — |  |  |  | 4,311 |  |  |  | 278 |
Total income tax provision (benefit) |  | $ | 48,927 |  |  | $ | (125,225 | ) |  | $ | 16,933 |
Total Income Tax Provision (Benefit) | Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2012 and 2011 were as follows:
|  | 2012 |  |  | 2011 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 36,674 |  |  | $ | 37,899 |
Tax credits |  |  | 64,123 |  |  |  | 76,248 |
Inventory valuations |  |  | 50,886 |  |  |  | 42,760 |
Pension liability |  |  | 28,674 |  |  |  | 21,119 |
Research and development |  |  | 284 |  |  |  | 10,028 |
Accruals |  |  | 14,246 |  |  |  | 13,817 |
Equity compensation |  |  | 9,355 |  |  |  | 8,729 |
Vacation accrual |  |  | 6,452 |  |  |  | 6,267 |
Other |  |  | 282 |  |  |  | 398 |
Deferred revenue |  |  | 15,118 |  |  |  | 35,869 |
Gross deferred tax assets |  |  | 226,094 |  |  |  | 253,134 |
Less: valuation allowance |  |  | (55,446 | ) |  |  | (51,066 | )
Total deferred tax assets |  |  | 170,648 |  |  |  | 202,068 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Marketable securities |  |  | (996 | ) |  |  | (827 | )
Intangible assets |  |  | (114,730 | ) |  |  | (144,925 | )
Excess of tax over book depreciation |  |  | (22,446 | ) |  |  | (18,417 | )
Total deferred tax liabilities |  |  | (138,172 | ) |  |  | (164,169 | )
Net deferred assets |  | $ | 32,476 |  |  | $ | 37,899 |
Operating Loss Carryforwards | At December 31, 2012, Teradyne had operating loss carryforwards that expire in the following years:
|  | U.S. Federal Operating Loss Carryforwards |  |  | State Net Operating Loss Carryforwards |  |  | Foreign Net Operating Loss Carryforwards |
|  | (in thousands) |
2013 |  | $ | — |  |  | $ | 2,708 |  |  | $ | — |
2014 |  |  | — |  |  |  | 2 |  |  |  | — |
2015 |  |  | — |  |  |  | 2 |  |  |  | — |
2016 |  |  | — |  |  |  | 58 |  |  |  | — |
2017 |  |  | — |  |  |  | 847 |  |  |  | — |
2018-2023 |  |  | 22,354 |  |  |  | 3,592 |  |  |  | — |
2024-2026 |  |  | — |  |  |  | 269 |  |  |  | 9 |
Beyond 2026 |  |  | — |  |  |  | 3,667 |  |  |  | 622 |
Non-expiring |  |  | — |  |  |  | — |  |  |  | 8,038 |
Total |  | $ | 22,354 |  |  | $ | 11,145 |  |  | $ | 8,669 |
Reconciliation of Effective Tax Rate | A reconciliation of the effective tax rate for the years 2012, 2011 and 2010 follows:
|  | 2012 |  |  | 2011 |  |  | 2010 |
U.S. statutory federal tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal tax benefit |  |  | (1.7 | ) |  |  | — |  |  |  | 0.4 |
Foreign taxes |  |  | (11.5 | ) |  |  | (12.6 | ) |  |  | (13.9 | )
Valuation allowance |  |  | (0.5 | ) |  |  | (87.7 | ) |  |  | (17.4 | )
Other U.S. permanent items |  |  | (2.8 | ) |  |  | 5.7 |  |  |  | — |
Other, net |  |  | (0.1 | ) |  |  | (0.8 | ) |  |  | 0.1 |
|  |  | 18.4 | % |  |  | (60.4 | )% |  |  | 4.2 | %
Unrecognized Tax Benefits | Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2012, 2011 and 2010 were as follows:
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (in thousands) |
Beginning balance, as of January 1 |  | $ | 19,678 |  |  | $ | 12,028 |  |  | $ | 12,767 |
Additions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  | 459 |  |  |  | 6,131 |  |  |  | 106 |
Tax positions for prior years |  |  | 1,402 |  |  |  | 1,296 |  |  |  | 2,435 |
Acquired tax positions |  |  | — |  |  |  | 1,388 |  |  |  | — |
Reductions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (4,072 | ) |  |  | (1,165 | ) |  |  | (3,280 | )
Settlements with tax authorities |  |  | — |  |  |  | — |  |  |  | — |
Ending Balance as of December 31 |  | $ | 17,467 |  |  | $ | 19,678 |  |  | $ | 12,028 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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