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Segment Information
 6 Months Ended
Jun. 30, 2013
Segment Information

P. Segment Information

Teradyne has three operating segments (Semiconductor Test, Wireless Test and Systems Test), which are its reportable segments. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The Wireless Test segment includes operations related to design, manufacturing and marketing of wireless test products and services. The Systems Test segment includes operations related to design, manufacturing and marketing of products and services for military/aerospace instrumentation test, storage test and circuit-board test. Each operating segment has a segment manager who is directly accountable to and maintains regular contact with Teradyne’s chief operating decision maker (Teradyne’s chief executive officer) to discuss operating activities, financial results, forecasts, and plans for the segment.

Teradyne evaluates performance based on several factors, of which the primary financial measure is business segment income before income taxes. The accounting policies of the business segments are the same as those described in Note B “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2012. Segment information is as follows:

 

    Semiconductor
Test		     Wireless
Test		     Systems
Test		     Corporate
and
Eliminations		     Consolidated  
    (in thousands)  

Three months ended June 30, 2013:

          

Net revenues

   $ 292,431      $ 99,386      $ 37,072      $ —       $ 428,889   

Income (loss) before income taxes(1)(2)

     58,606        23,913        779        (2,941 )      80,357   

Three months ended July 1, 2012:

          

Net revenues

   $ 365,058      $ 111,928      $ 71,298      $ —       $ 548,284   

Income (loss) before income taxes(1)(2)

     91,249        51,139        11,628        (2,024 )      151,992   

Six months ended June 30, 2013:

          

Net revenues

   $ 503,937      $ 132,984      $ 72,335      $ —       $ 709,256   

Income (loss) before income taxes(1)(2)

     72,372        13,916        2,309        (9,666 )      78,931   

Six months ended July 1, 2012:

          

Net revenues

   $ 632,646      $ 143,256      $ 169,050      $ —       $ 944,952   

Income (loss) before income taxes(1)(2)

     126,247        38,827        33,606        (5,444 )      193,236   

 

(1) Pension and post retirement actuarial gains and losses, interest income, and interest expense and other are included in Corporate and Eliminations.
(2) Included in the income (loss) before income taxes for each of the segments are charges and credits for the three and six months ended June 30, 2013 and July 1, 2012 that include restructuring and other, and provision for excess and obsolete inventory, as follows:

Included in the Semiconductor Test segment are charges for the following:

 

     For the Three Months
Ended		      For the Six Months
Ended		  
     June 30, 
2013		      July 1, 
2012		      June 30, 
2013		      July 1, 
2012		  
     (in thousands)  

Cost of revenues—provision for excess and obsolete inventory

    $ 287       $ 5,957       $ 500       $ 6,169   

Restructuring and other

      —           286         —           286   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 287       $ 6,243       $ 500       $ 6,455   
  

 

 

     

 

 

     

 

 

     

 

 

  

Included in the Wireless Test segment are charges for the following:

 

    For the Three Months
Ended		     For the Six Months
Ended		  
    June 30, 
2013		     July 1, 
2012		     June 30, 
2013		     July 1, 
2012		  
    (in thousands)  

Cost of revenues—provision for excess and obsolete inventory

   $ 1,398      $ 1,643      $ 4,066      $ 2,116   

Cost of revenues—inventory step-up

     —          1,218        —          6,089   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 1,398      $ 2,861      $ 4,066      $ 8,205   
 

 

 

    

 

 

    

 

 

    

 

 

  

Included in the Systems Test segment are charges for the following:

 

    For the Three Months
Ended		     For the Six Months
Ended		  
    June 30, 
2013		     July 1, 
2012		     June 30, 
2013		     July 1, 
2012		  
    (in thousands)  

Cost of revenues—provision for excess and obsolete inventory

   $ 290      $ 1,753      $ 1,209      $ 2,642   

Restructuring and other

     131        —          375        —     
 

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 421      $ 1,753      $ 1,584      $ 2,642   
 

 

 

    

 

 

    

 

 

    

 

 

  

Included in Corporate and Eliminations are credits for the following:

 

     For the Three Months
Ended		     For the Six Months
Ended		  
     June 30, 
2013		      July 1, 
2012		     June 30, 
2013		      July 1, 
2012		  
     (in thousands)  

Restructuring and other

    $ —         $ (6,548 )    $ —         $ (8,406 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ —         $ (6,548 )    $ —         $ (8,406 )