Product Warranty

3 Months Ended

Mar. 31, 2013

G. Product Warranty

Teradyne generally provides a one-year warranty on its products commencing upon installation or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities.


	For the Three Months Ended
	March 31, 2013			April 1, 2012
	(in thousands)
Balance at beginning of period	$	9,786		$	8,153
Accruals for warranties issued during the period		1,423			3,776
Adjustments related to pre-existing warranties		(929	)		(260	)
Settlements made during the period		(3,205	)		(2,947	)

Balance at end of period	$	7,075		$	8,722

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 deferred revenue and customer advances and long-term other accrued liabilities.


	For the Three Months Ended
	March 31, 2013			April 1, 2012
	(in thousands)
Balance at beginning of period	$	26,987		$	12,742
Deferral of new extended warranty revenue		3,471			2,347
Recognition of extended warranty deferred revenue		(1,859	)		(2,162	)

Balance at end of period	$	28,599		$	12,927