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Financial Instruments and Derivatives (Tables)

3 Months Ended

Mar. 31, 2013

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 March 31, 2013 and December 31, 2012.

		March 31, 2013
		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		$	118,176			$	—			$	—			$	118,176
Cash equivalents			179,798				7,245				—				187,043
Available-for-sale securities:
U.S. Treasury securities			315,107				—				—				315,107
U.S. government agency securities			—				211,341				—				211,341
Commercial paper			—				65,349				—				65,349
Corporate debt securities			—				47,704				—				47,704
Equity and debt mutual funds			11,189				—				—				11,189
Certificates of deposit and time deposits			—				259				—				259
Non-U.S. government securities			—				85				—				85
Total		$	624,270			$	331,983			$	—			$	956,253
Liabilities
Contingent consideration		$	—			$	—			$	75			$	75
Derivatives			—				475				—				475
Total		$	—			$	475			$	75			$	550

Reported as follows:

		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	297,974			$	7,245			$	—			$	305,219
Marketable securities			232,452				172,329				—				404,781
Long-term marketable securities			93,844				152,409				—				246,253
		$	624,270			$	331,983			$	—			$	956,253
Liabilities
Other accrued liabilities		$	—			$	475			$	75			$	550
		$	—			$	475			$	75			$	550

		December 31, 2012
		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		$	139,354			$	—			$	—			$	139,354
Cash equivalents			183,039				16,527				—				199,566
Available-for-sale securities:
U.S. Treasury securities			312,116				—				—				312,116
U.S. government agency securities			—				217,655				—				217,655
Commercial paper			—				70,434				—				70,434
Corporate debt securities			—				55,755				—				55,755
Equity and debt mutual funds			9,717				—				—				9,717
Certificates of deposit and time deposits			—				1,627				—				1,627
Non-U.S. government securities			—				84				—				84
Total			644,226				362,082				—				1,006,308
Derivatives			—				121				—				121
Total		$	644,226			$	362,203			$	—			$	1,006,429
Liabilities
Contingent consideration		$	—			$	—			$	388			$	388
Total		$	—			$	—			$	388			$	388

Reported as follows:

		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	322,393			$	16,527			$	—			$	338,920
Marketable securities			239,192				192,324				—				431,516
Long-term marketable securities			82,641				153,231				—				235,872
Prepayments and other current assets			—				121				—				121
		$	644,226			$	362,203			$	—			$	1,006,429
Liabilities
Other accrued liabilities		$	—			$	—			$	388			$	388
		$	—			$	—			$	388			$	388

Schedule of Changes in Fair Value of Level 3 Financial Assets

Changes in the fair value of Level 3 contingent consideration for the three months ended March 31, 2013 were as follows:

		Contingent consideration
		(in thousands)
Balance at December 31, 2012		$	388
Payments			(313	)
Balance at March 31, 2013		$	75

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at March 31, 2013 and December 31, 2012 were as follows:

		March 31, 2013								December 31, 2012
		Carrying Value				Fair Value				Carrying Value				Fair Value
		(in thousands)
Cash and cash equivalents		$	305,219			$	305,219			$	338,920			$	338,920
Marketable securities			651,034				651,034				667,388				667,388
Convertible debt(1)			173,648				564,294				169,896				589,000
Japan loan			3,187				3,187				3,491				3,491

(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 feature.

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available-for-sale marketable securities at March 31, 2013 and December 31, 2012:

		March 31, 2013
		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		$	314,902			$	231			$	(26	)		$	315,107			$	2,827
U.S. government agency securities			211,108				235				(2	)			211,341				8,013
Commercial paper			65,341				13				(5	)			65,349				15,484
Corporate debt securities			45,867				1,937				(100	)			47,704				16,307
Equity and debt mutual funds			9,626				1,577				(14	)			11,189				726
Certificates of deposit and time deposits			259				—				—				259				—
Non-U.S. government securities			85				—				—				85				—
		$	647,188			$	3,993			$	(147	)		$	651,034			$	43,357

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	404,576			$	212			$	(7	)		$	404,781			$	23,651
Long-term marketable securities			242,612				3,781				(140	)			246,253				19,706
		$	647,l88			$	3,993			$	(147	)		$	651,034			$	43,357

		December 31, 2012
		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		$	311,915			$	216			$	(15	)		$	312,116			$	1,018
U.S. government agency securities			217,396				262				(3	)		$	217,655				9,018
Commercial paper			70,431				9				(6	)			70,434				25,209
Corporate debt securities			53,405				2,414				(64	)			55,755				23,255
Equity and debt mutual funds			8,767				961				(11	)			9,717				600
Certificates of deposit and time deposits			1,627				—				—				1,627				—
Non-U.S. government securities			84				—				—				84				—
		$	663,625			$	3,862			$	(99	)		$	667,388			$	59,100

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	431,324			$	203			$	(11	)		$	431,516			$	41,110
Long-term marketable securities			232,301				3,659				(88	)			235,872				17,990
		$	663,625			$	3,862			$	(99	)		$	667,388			$	59,100

Contractual Maturities of Available-for-Sale Marketable Securities

The contractual maturities of available-for-sale marketable securities at March 31, 2013 were as follows:

		March 31, 2013
		Cost				Fair Market Value
		(in thousands)
Due within one year		$	404,576			$	404,781
Due after 1 year through 5 years			221,440				223,236
Due after 5 years through 10 years			2,684				2,895
Due after 10 years			18,488				20,122
Total		$	647,188			$	651,034

Schedule of Derivative Instruments In Statement Of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments at March 31, 2013 and December 31, 2012.

		Balance Sheet Location		March 31, 2013				December 31, 2012
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Prepayments and other current assets		$	—			$	121
Foreign exchange contracts		Other accrued liabilities			475				—
				$	475			$	121

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments recognized in the statement of operations during the three months ended March 31, 2013 and April 1, 2012. The table does not reflect the corresponding gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies.

		Location of Gains Recognized in Statement of Operations				For the Three Months Ended
						March 31, 2013				April 1, 2012
						(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts			Interest expense and other			$	2,248			$	2,880
						$	2,248			$	2,880

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