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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2014
Income (loss) Before Income Taxes | The components of income (loss) before income taxes and the provision for income taxes as shown in the consolidated statements of operations were as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
|  | (in thousands) |
Income (loss) before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | (151,889 | ) |  | $ | 79,229 |  |  | $ | 112,008 |
Non-U.S. |  |  | 247,265 |  |  |  | 122,693 |  |  |  | 153,968 |
|  | $ | 95,376 |  |  | $ | 201,922 |  |  | $ | 265,976 |
Provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 5,197 |  |  | $ | 18,051 |  |  | $ | 22,695 |
Non-U.S. |  |  | 28,157 |  |  |  | 22,509 |  |  |  | 18,261 |
State |  |  | 678 |  |  |  | (269 | ) |  |  | (12 | )
|  |  | 34,032 |  |  |  | 40,291 |  |  |  | 40,944 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (20,449 | ) |  |  | (1,692 | ) |  |  | 8,158 |
Non-U.S. |  |  | (404 | ) |  |  | (1,386 | ) |  |  | 5,997 |
State |  |  | 925 |  |  |  | (238 | ) |  |  | (6,172 | )
|  |  | (19,928 | ) |  |  | (3,316 | ) |  |  | 7,983 |
Total provision for income taxes: |  | $ | 14,104 |  |  | $ | 36,975 |  |  | $ | 48,927 |
Reconciliation of Effective Tax Rate | A reconciliation of the effective tax rate for the years 2014, 2013 and 2012 follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
U.S. statutory federal tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
Foreign taxes |  |  | (58.1 | ) |  |  | (11.4 | ) |  |  | (10.5 | )
Goodwill impairment |  |  | 36.3 |  |  |  | — |  |  |  | — |
U.S. research and development credit |  |  | (7.9 | ) |  |  | (7.2 | ) |  |  | — |
Uncertain tax positions |  |  | 7.9 |  |  |  | 4.2 |  |  |  | (1.2 | )
Other permanent items |  |  | 3.4 |  |  |  | (0.1 | ) |  |  | (2.8 | )
Valuation allowance |  |  | — |  |  |  | 0.4 |  |  |  | (0.5 | )
State income taxes, net of federal tax benefit |  |  | (0.1 | ) |  |  | 0.1 |  |  |  | (1.7 | )
Other, net |  |  | (1.7 | ) |  |  | (2.7 | ) |  |  | 0.1 |
|  |  | 14.8 | % |  |  | 18.3 | % |  |  | 18.4 | %
Deferred Tax Assets (Liabilities) | Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2014 and 2013 were as follows:
|  | 2014 |  |  | 2013 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 10,989 |  |  | $ | 14,679 |
Tax credits |  |  | 50,554 |  |  |  | 65,210 |
Pension liability |  |  | 30,036 |  |  |  | 22,966 |
Inventory valuations |  |  | 29,105 |  |  |  | 38,452 |
Accruals |  |  | 23,323 |  |  |  | 17,828 |
Equity compensation |  |  | 11,131 |  |  |  | 10,498 |
Deferred revenue |  |  | 10,242 |  |  |  | 12,379 |
Vacation accrual |  |  | 7,425 |  |  |  | 7,291 |
Other |  |  | 1,725 |  |  |  | 2,613 |
Gross deferred tax assets |  |  | 174,530 |  |  |  | 191,916 |
Less: valuation allowance |  |  | (41,737 | ) |  |  | (40,386 | )
Total deferred tax assets |  |  | 132,793 |  |  |  | 151,530 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Marketable securities |  |  | (1,599 | ) |  |  | (794 | )
Intangible assets |  |  | (64,871 | ) |  |  | (89,268 | )
Excess of tax over book depreciation |  |  | (24,905 | ) |  |  | (24,458 | )
Total deferred tax liabilities |  |  | (91,375 | ) |  |  | (114,520 | )
Net deferred assets |  | $ | 41,418 |  |  | $ | 37,010 |
Operating Loss Carryforwards | At December 31, 2014, Teradyne had operating loss carryforwards that expire in the following years:
|  | U.S. Federal Operating Loss Carryforwards |  |  | State Operating Loss Carryforwards |  |  | Foreign Operating Loss Carryforwards |
|  | (in thousands) |
2015 |  | $ | — |  |  | $ | 1 |  |  | $ | — |
2016 |  |  | — |  |  |  | 56 |  |  |  | — |
2017 |  |  | — |  |  |  | 738 |  |  |  | — |
2018 |  |  | — |  |  |  | 679 |  |  |  | — |
2019 |  |  | — |  |  |  | 133 |  |  |  | — |
2020-2025 |  |  | 10,698 |  |  |  | 2,686 |  |  |  | — |
2026-2028 |  |  | — |  |  |  | 676 |  |  |  | — |
Beyond 2028 |  |  | 806 |  |  |  | 3,055 |  |  |  | 115 |
Non-expiring |  |  | — |  |  |  | — |  |  |  | 8,460 |
Total |  | $ | 11,504 |  |  | $ | 8,024 |  |  | $ | 8,575 |
Unrecognized Tax Benefits | Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2014, 2013 and 2012 were as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
|  | (in thousands) |
Beginning balance, as of January 1 |  | $ | 21,203 |  |  | $ | 18,666 |  |  | $ | 19,391 |
Additions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  | 8,414 |  |  |  | 4,586 |  |  |  | 459 |
Tax positions for prior years |  |  | 3,781 |  |  |  | 2,112 |  |  |  | 2,259 |
Reductions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (2,480 | ) |  |  | (4,161 | ) |  |  | (3,443 | )
Settlements with tax authorities |  |  | (500 | ) |  |  | — |  |  |  | — |
Ending Balance as of December 31 |  | $ | 30,418 |  |  | $ | 21,203 |  |  | $ | 18,666 |

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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 + Details
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