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Financial Instruments and Derivatives (Tables) | 6 Months Ended
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Jun. 30, 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 June 30, 2013 and December 31, 2012.
|  | June 30, 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 |  | $ | 115,442 |  |  | $ | — |  |  | $ | — |  |  | $ | 115,442 |
Cash equivalents |  |  | 107,988 |  |  |  | 4,171 |  |  |  | — |  |  |  | 112,159 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  |  | 382,871 |  |  |  | — |  |  |  | — |  |  |  | 382,871 |
U.S. government agency securities |  |  | — |  |  |  | 261,598 |  |  |  | — |  |  |  | 261,598 |
Commercial paper |  |  | — |  |  |  | 97,667 |  |  |  | — |  |  |  | 97,667 |
Corporate debt securities |  |  | — |  |  |  | 50,161 |  |  |  | — |  |  |  | 50,161 |
Equity and debt mutual funds |  |  | 11,360 |  |  |  | — |  |  |  | — |  |  |  | 11,360 |
Certificates of deposit and time deposits |  |  | — |  |  |  | 257 |  |  |  | — |  |  |  | 257 |
Non-U.S. government securities |  |  | — |  |  |  | 80 |  |  |  | — |  |  |  | 80 |
Total |  |  | 617,661 |  |  |  | 413,934 |  |  |  | — |  |  |  | 1,031,595 |
Derivatives |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 7 |
Total |  | $ | 617,661 |  |  | $ | 413,941 |  |  | $ | — |  |  | $ | 1,031,602 |
Reported as follows:
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 223,430 |  |  | $ | 4,171 |  |  | $ | — |  |  | $ | 227,601 |
Marketable securities |  |  | 289,230 |  |  |  | 211,918 |  |  |  | — |  |  |  | 501,148 |
Long-term marketable securities |  |  | 105,001 |  |  |  | 197,845 |  |  |  | — |  |  |  | 302,846 |
Prepayments and other current assets |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 7 |
|  | $ | 617,661 |  |  | $ | 413,941 |  |  | $ | — |  |  | $ | 1,031,602 |
|  | 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 and six months ended June 30, 2013 were as follows:
|  | Contingent consideration |
|  | (in thousands) |
Balance at December 31, 2012 |  | $ | 388 |
Payments |  |  | (313 | )
Balance at March 31, 2013 |  |  | 75 |
Payments |  |  | (75 | )
Balance at June 30, 2013 |  | $ | — |
Schedule of Carrying Amounts and Fair Values of Financial Instruments | The carrying amounts and fair values of financial instruments at June 30, 2013 and December 31, 2012 were as follows:
|  | June 30, 2013 |  |  | December 31, 2012 |
|  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |  |  | Fair Value |
|  | (in thousands) |
Cash and cash equivalents |  | $ | 227,601 |  |  | $ | 227,601 |  |  | $ | 338,920 |  |  | $ | 338,920 |
Marketable securities |  |  | 803,994 |  |  |  | 803,994 |  |  |  | 667,388 |  |  |  | 667,388 |
Convertible debt(1) |  |  | 177,532 |  |  |  | 610,726 |  |  |  | 169,896 |  |  |  | 589,000 |
Japan loan |  |  | 2,033 |  |  |  | 2,033 |  |  |  | 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 June 30, 2013 and December 31, 2012:
|  | June 30, 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 |  | $ | 382,884 |  |  | $ | 144 |  |  | $ | (157 | ) |  | $ | 382,871 |  |  | $ | 166,301 |
U.S. government agency securities |  |  | 261,870 |  |  |  | 129 |  |  |  | (401 | ) |  |  | 261,598 |  |  |  | 130,310 |
Commercial paper |  |  | 97,660 |  |  |  | 14 |  |  |  | (7 | ) |  |  | 97,667 |  |  |  | 18,722 |
Corporate debt securities |  |  | 50,043 |  |  |  | 1,032 |  |  |  | (914 | ) |  |  | 50,161 |  |  |  | 11,926 |
Equity and debt mutual funds |  |  | 9,761 |  |  |  | 1,647 |  |  |  | (48 | ) |  |  | 11,360 |  |  |  | 892 |
Certificates of deposit and time deposits |  |  | 257 |  |  |  | — |  |  |  | — |  |  |  | 257 |  |  |  | — |
Non-U.S. government securities |  |  | 80 |  |  |  | — |  |  |  | — |  |  |  | 80 |  |  |  | — |
|  | $ | 802,555 |  |  | $ | 2,966 |  |  | $ | (1,527 | ) |  | $ | 803,994 |  |  | $ | 328,151 |
Reported as follows:
|  | Cost |  |  | Unrealized Gain |  |  | Unrealized (Loss) |  |  | Fair Market Value |  |  | Fair Market Value of Investments with Unrealized Losses |
|  | (in thousands) |
Marketable securities |  | $ | 501,007 |  |  | $ | 170 |  |  | $ | (29 | ) |  | $ | 501,148 |  |  | $ | 135,029 |
Long-term marketable securities |  |  | 301,548 |  |  |  | 2,796 |  |  |  | (1,498 | ) |  |  | 302,846 |  |  |  | 193,122 |
|  | $ | 802,555 |  |  | $ | 2,966 |  |  | $ | (1,527 | ) |  | $ | 803,994 |  |  | $ | 328,151 |
|  | 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 June 30, 2013 were as follows:
|  | June 30, 2013 |
|  | Cost |  |  | Fair Market Value |
|  | (in thousands) |
Due within one year |  | $ | 501,007 |  |  | $ | 501,148 |
Due after 1 year through 5 years |  |  | 275,543 |  |  |  | 276,815 |
Due after 5 years through 10 years |  |  | 2,968 |  |  |  | 3,024 |
Due after 10 years |  |  | 23,037 |  |  |  | 23,007 |
Total |  | $ | 802,555 |  |  | $ | 803,994 |
Schedule of Derivative Instruments in Statement of Financial Position at Fair Value | The following table summarizes the fair value of derivative instruments at June 30, 2013 and December 31, 2012.
|  | Balance Sheet Location |  |  | June 30, 2013 |  |  | December 31, 2012 |
|  |  |  |  | (in thousands) |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  | Prepayments and other current assets |  |  | $ | 7 |  |  | $ | 121 |
|  |  |  |  |  | $ | 7 |  |  | $ | 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 and six months ended June 30, 2013 and July 1, 2012. The table does not reflect the corresponding (losses) gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies, which were $(1.8) million, $2.5 million, $(4.6) million, and $(0.4) million, respectively for the three and six months ended June 30, 2013 and July 1, 2012.
|  | Location of Gains (Losses) Recognized in Statement of Operations |  |  | For the Three Months Ended |  |  | For the Six Months Ended |
|  | June 30, 2013 |  |  | July 1, 2012 |  |  | June 30, 2013 |  |  | July 1, 2012 |
|  |  |  |  | (in thousands) |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  | Interest expense and other |  |  | $ | 1,818 |  |  | $ | (2,360 | ) |  | $ | 4,067 |  |  | $ | 520 |
|  |  |  |  |  | $ | 1,818 |  |  | $ | (2,360 | ) |  | $ | 4,067 |  |  | $ | 520 |

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- Definition Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27290-111563 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27357-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27337-111563 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27198-111563 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62586-112803 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27161-111563 + Details
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