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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

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 December 31, 2015 and 2014:

		December 31, 2015
		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		$	213,336			$	—			$	—			$	213,336
Cash equivalents			49,241				2,128				—				51,369
Available for sale securities:
U.S. Treasury securities			—				419,958				—				419,958
Corporate debt securities			—				161,634				—				161,634
U.S. government agency securities			—				83,952				—				83,952
Certificates of deposit and time deposits			—				43,394				—				43,394
Commercial paper			—				20,308				—				20,308
Equity and debt mutual funds			13,954				—				—				13,954
Non-U.S. government securities			—				424				—				424
Total		$	276,531			$	731,798			$	—			$	1,008,329
Derivative assets			—				109				—				109
Total		$	276,531			$	731,907			$	—			$	1,008,438
Liabilities
Contingent consideration		$	—			$	—			$	37,436			$	37,436
Derivative liabilities			—				146				—				146
Total		$	—			$	146			$	37,436			$	37,582

Reported as follows:

		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	262,577			$	2,128			$	—			$	264,705
Marketable securities			—				477,696				—				477,696
Long-term marketable securities			13,954				251,974				—				265,928
Prepayments			—				109				—				109
		$	276,531			$	731,907			$	—			$	1,008,438
Liabilities
Other current liabilities		$	—			$	146			$	—			$	146
Contingent consideration			—				—				15,500				15,500
Long-term contingent consideration			—				—				21,936				21,936
		$	—			$	146			$	37,436			$	37,582

		December 31, 2014
		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		$	111,471			$	—			$	—			$	111,471
Cash equivalents			160,218				22,567				—				182,785
Available for sale securities:
U.S. Treasury securities			—				402,154				—				402,154
U.S. government agency securities			—				258,502				—				258,502
Corporate debt securities			—				141,467				—				141,467
Commercial paper			—				140,638				—				140,638
Certificates of deposit and time deposits			—				49,036				—				49,036
Equity and debt mutual funds			12,333				—				—				12,333
Non-U.S. government securities			—				446				—				446
Total		$	284,022			$	1,014,810			$	—			$	1,298,832
Derivative assets			—				220				—				220
Total		$	284,022			$	1,015,030			$	—			$	1,299,052
Liabilities
Contingent consideration		$	—			$	—			$	3,350			$	3,350
Derivative liabilities			—				369				—				369
Total		$	—			$	369			$	3,350			$	3,719

Reported as follows:

		(Level 1)				(Level 2)				(Level 3)				Total
		(in thousands)
Assets
Cash and cash equivalents		$	271,689			$	22,567			$	—			$	294,256
Marketable securities			—				533,787				—				533,787
Long-term marketable securities			12,333				458,456				—				470,789
Prepayments			—				220				—				220
		$	284,022			$	1,015,030			$	—			$	1,299,052
Liabilities
Other current liabilities		$	—			$	369			$	—			$	369
Contingent consideration			—				—				895				895
Long-term other accrued liabilities			—				—				2,455				2,455
		$	—			$	369			$	3,350			$	3,719

Schedule of Changes in Fair Value of Level 3 Contingent Consideration

Changes in the fair value of Level 3 contingent consideration for the years ended December 31, 2015 and 2014 were as follows:

		Contingent Consideration
		(in thousands)
Balance at December 31, 2013		$	2,230
Acquisition of AIT			1,750
Fair value adjustment of ZTEC			(630	)
Balance at December 31, 2014			3,350
Acquisition of Universal Robots			31,597
Fair value adjustment of ZTEC			(1,600	)
Fair value adjustment of AIT			(1,250	)
Fair value adjustment of Universal Robots			5,339
Balance at December 31, 2015		$	37,436

Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument

The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instrument:

Liability		December 31, 2015 Fair Value				Valuation Technique		Unobservable Inputs		Weighted Average
		(in thousands)
Contingent consideration (Universal Robots)		$	21,936			Monte Carlo simulation		Revenue for the period July 1, 2015—December 31, 2017 volatility		15%
								Discount Rate		5.5%
								Revenue for the period July 1, 2015—December 31, 2018 volatility		15%
								Discount Rate		5.5%
Contingent consideration (AIT)		$	500			Income approach- discounted cash flow		Revenue for calendar year 2016 probability		48%
								Discount rate		4.7%

Schedule of Carrying Amounts and Fair Values of Financial Instruments

The carrying amounts and fair values of financial instruments at December 31, 2015 and 2014 were as follows:

		December 31, 2015								December 31, 2014
		Carrying Value				Fair Value				Carrying Value				Fair Value
		(in thousands)
Assets
Cash and cash equivalents		$	264,705			$	264,705			$	294,256			$	294,256
Marketable securities			743,624				743,624				1,004,576				1,004,576
Derivative assets			109				109				220				220
Liabilities
Contingent consideration			37,436				37,436				3,350				3,350
Derivative liabilities			146				146				369				369

Schedule of Available-for-Sale Marketable Securities

The following tables summarize the composition of available for sale marketable securities at December 31, 2015 and 2014:

		December 31, 2015
		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		$	421,060			$	65			$	(1,167	)		$	419,958			$	379,434
Corporate debt securities			163,297				902				(2,565	)			161,634				145,373
U.S. government agency securities			84,032				42				(122	)			83,952				55,120
Certificates of deposit and time deposits			43,391				6				(3	)			43,394				10,527
Commercial paper			20,298				11				(1	)			20,308				8,646
Equity and debt mutual funds			12,996				1,119				(161	)			13,954				2,560
Non-U.S. government securities			424				—				—				424				—
		$	745,498			$	2,145			$	(4,019	)		$	743,624			$	601,660

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	478,306			$	38			$	(648	)		$	477,696			$	374,785
Long-term marketable securities			267,192				2,107				(3,371	)			265,928				226,875
		$	745,498			$	2,145			$	(4,019	)		$	743,624			$	601,660

		December 31, 2014
		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		$	402,197			$	362			$	(405	)		$	402,154			$	317,771
U.S. government agency securities			258,452				135				(85	)			258,502				104,642
Corporate debt securities			139,374				2,414				(321	)			141,467				96,998
Commercial paper			140,616				26				(4	)			140,638				41,747
Certificates of deposit and time deposits			49,048				11				(23	)			49,036				20,684
Equity and debt mutual funds			10,492				1,870				(29	)			12,333				1,234
Non-U.S. government securities			446				—				—				446				—
		$	1,000,625			$	4,818			$	(867	)		$	1,004,576			$	583,076

Reported as follows:

		Cost				Unrealized Gain				Unrealized (Loss)				Fair Market Value				Fair Market Value of Investments with Unrealized Losses
		(in thousands)
Marketable securities		$	533,833			$	99			$	(145	)		$	533,787			$	240,234
Long-term marketable securities			466,792				4,719				(722	)			470,789				342,842
		$	1,000,625			$	4,818			$	(867	)		$	1,004,576			$	583,076

Contractual Maturities of Investments Held

The contractual maturities of investments held at December 31, 2015 were as follows:

		Cost				Fair Value
		(in thousands)
Due within one year		$	478,306			$	477,696
Due after 1 year through 5 years			209,822				209,314
Due after 5 years through 10 years			5,183				5,179
Due after 10 years			39,191				37,481
Total		$	732,502			$	729,670

Assets Measured at Fair Value on Non-Recurring Basis

Assets measured at fair value on a non-recurring basis as of December 31, 2014 are summarized as follows:

						Fair Value Measurements at Reporting Period
		December 31, 2014				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Other Unobservable Inputs (Level 3)				Total Losses
		(in thousands)
Assets
Goodwill		$	273,438			$	—			$	—			$	273,438			$	98,897
Definite lived intangible assets			158,237				—				—				158,237				—
Long-lived assets held and used			10,189				—				10,189				—				—
		$	441,864			$	—			$	10,189			$	431,675			$	98,897

Schedule of Notional Amount of Derivatives

At December 31, 2015 and 2014, Teradyne had the following contracts to buy and sell non-U.S. currencies for U.S. dollars and other non-U.S. currencies with the following notional amounts:

		December 31, 2015												December 31, 2014
		Buy Position				Sell Position				Net Total				Buy Position				Sell Position				Net Total
		(in millions)
Japanese Yen		$	(51.9	)		$	—			$	(51.9	)		$	—			$	19.7			$	19.7
British Pound Sterling			(9.5	)			—				(9.5	)			—				11.7				11.7
Korean Won			(5.5	)			—				(5.5	)			—				4.4				4.4
Taiwan Dollar			(5.0	)			—				(5.0	)			(0.9	)			5.7				4.8
Euro			—				27.2				27.2				(30.6	)			—				(30.6	)
Singapore Dollar			—				15.0				15.0				—				—				—
Total		$	(71.9	)		$	42.2			$	(29.7	)		$	(31.5	)		$	41.5			$	10.0

Schedule of Derivative Instruments in Statement of Financial Position at Fair Value

The following table summarizes the fair value of derivative instruments as of December 31, 2015 and 2014:

		Balance Sheet Location		December 31, 2015				December 31, 2014
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Prepayments		$	109			$	220
Foreign exchange contracts		Other current liabilities			(146	)			(369	)
Total derivatives				$	(37	)		$	(149	)

Schedule of Effect of Derivative Instruments on Statement of Operations Recognized

The following table summarizes the effect of derivative instruments in the statement of operations recognized for the years ended December 31, 2015, 2014 and 2013. The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. For the years ended December 31, 2015, 2014, and 2013, gains (losses) from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $2.5 million, $(0.9) million, and $(6.9) million, respectively.

		Location of Losses (Gains) Recognized in Statement of Operations		December 31, 2015				December 31, 2014				December 31, 2013
				(in thousands)
Derivatives not designated as hedging instruments:
Foreign exchange contracts		Other (income) expense, net		$	3,047			$	237			$	(5,933	)
Total derivatives				$	3,047			$	237			$	(5,933	)

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