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 warranty balance below is included in other accrued liabilities.


	For the Three Months Ended						For the Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
	(in thousands)
Balance at beginning of period	$	7,075		$	8,722		$	9,786		$	8,154
Accruals for warranties issued during the period		3,684			5,649			5,107			9,425
Adjustments related to pre-existing warranties		(869	)		403			(1,798	)		143
Settlements made during the period		(2,539	)		(3,727	)		(5,744	)		(6,675	)

Balance at end of period	$	7,351		$	11,047		$	7,351		$	11,047

When Teradyne receives revenue for extended warranty beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The extended warranty balance below is included in short- and long-term deferred revenue and customer advances.


	For the Three Months Ended						For the Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
	(in thousands)
Balance at beginning of period	$	28,599		$	12,927		$	26,987		$	12,742
Deferral of new extended warranty revenue		8,734			9,935			12,205			12,282
Recognition of extended warranty deferred revenue		(2,479	)		(2,108	)		(4,338	)		(4,270	)

Balance at end of period	$	34,854		$	20,754		$	34,854		$	20,754