<SEC-DOCUMENT>0001193125-16-588619.txt : 20160615
<SEC-HEADER>0001193125-16-588619.hdr.sgml : 20160615
<ACCEPTANCE-DATETIME>20160512140209
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ACCESSION NUMBER:		0001193125-16-588619
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20160512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TERADYNE, INC
		CENTRAL INDEX KEY:			0000097210
		STANDARD INDUSTRIAL CLASSIFICATION:	INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825]
		IRS NUMBER:				042272148
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		600 RIVERPARK DRIVE
		CITY:			NORTH READING
		STATE:			MA
		ZIP:			01864
		BUSINESS PHONE:		978-370-2700

	MAIL ADDRESS:	
		STREET 1:		600 RIVERPARK DRIVE
		CITY:			NORTH READING
		STATE:			MA
		ZIP:			01864

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TERADYNE INC
		DATE OF NAME CHANGE:	19920703
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May&nbsp;12, 2016 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>VIA EDGAR AND OVERNIGHT MAIL </U></B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and
Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">One Station Place </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, NE </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, DC 20549 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attention: Martin James </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>RE:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Teradyne, Inc. </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Form 10-K for the Fiscal Year Ended December&nbsp;31, 2015 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Filed February&nbsp;29, 2016 </B></TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>File No.&nbsp;001-06462 </B></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ladies and Gentlemen: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Teradyne, Inc. (the &#147;Company&#148;) is responding to the comments of the Staff (the &#147;Staff&#148;) of the Division of Corporation
Finance of the Securities and Exchange Commission (the &#147;Commission&#148;) in your letter (the &#147;Comment Letter&#148;) dated April&nbsp;28, 2016 to Mr.&nbsp;Gregory R. Beecher, the Company&#146;s Chief Financial Officer, with respect to the
Company&#146;s Form 10-K for the year ended December&nbsp;31, 2015. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The responses set forth below and supplementary information have been
organized in the same manner in which the Staff&#146;s comments were presented in the Comment Letter. A copy of this response letter is also being filed with the Commission through EDGAR. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form 10-K for the year Ended December&nbsp;31, 2015 </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Critical Accounting Policies and Estimates </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Goodwill,
Intangible Assets and Long-Lived Assets, page 24 </U></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>COMMENT 1:</I></B><I> We note that you have $262.9 million of goodwill associated with your
Wireless Test segment as of December&nbsp;31, 2015. Given the goodwill impairment of $98.9 million in 2014 for this segment, please tell us your consideration of the requirements of Item&nbsp;303(a)(3)(ii) of Regulation S-K, which requires a
description of a known uncertainty and the guidance in Section V of Release 33-8350, which states that under the existing MD&amp;A disclosure requirements, you should address material implications of uncertainties associated with the methods,
assumptions and estimates underlying the company&#146;s critical accounting measurements.</I> </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Page 2 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May&nbsp;12, 2016 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>RESPONSE 1: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company considered the requirements of Item&nbsp;303(a)(3)(ii) of Regulation S-K and Section V of Release 33-8350 in preparing its
disclosures within management&#146;s discussion and analysis for its Form 10-K for the fiscal year ended December&nbsp;31, 2015. The Company concluded that the disclosures under Section V of Release 33-8350 were not necessary since both of the
Company&#146;s reporting units, for which a step one impairment analysis was performed, had a fair value that exceeded the respective carrying value by at least 20% and we considered that there was not a reasonable likelihood that the impairment
risk was particularly sensitive to changes in assumptions and estimates as of December&nbsp;31, 2015. The Company did include on page 22 and 30 of its Form 10-K within the overview and results of operations sections, respectively, of
management&#146;s discussion and analysis the following disclosure related to its Wireless Test segment: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">&#147;In the fourth quarter of
2014, we performed our annual goodwill impairment test and recorded a goodwill impairment charge of $98.9 million in our Wireless Test segment as a result of decreased projected demand attributable to an estimated smaller future wireless test market
due to reuse of wireless test equipment, price competition and different testing techniques. Further reductions in the size of the wireless test market may occur, which may result in additional goodwill impairment charges, increased risk of excess
and obsolete inventories, asset write-offs and restructuring charges.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company evaluates its disclosures on a quarterly basis
and will continue to review its disclosures with respect to the risk of impairment associated with goodwill, intangible and long-lived assets. The Company has included the following disclosure in critical accounting policies and estimates in its
Form 10-Q for the quarter ended April&nbsp;3, 2016: </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>&#147;Goodwill, Intangible and Long-Lived Assets </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">We performed our last goodwill impairment test during the fourth quarter of 2015. We performed step one of the two step
impairment test for our Wireless Test and Defense/Aerospace reporting units and the step zero assessment for our Industrial Automation reporting unit. The step one tests resulted in each of the reporting unit&#146;s fair value exceeding its carrying
value by at least 20%. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">We estimate the fair value of a reporting unit using the results derived from an income approach, a
discounted cash flow analysis, and a market approach using the market comparable method which is based on revenue and earnings multiples from comparable companies. Estimating a reporting unit&#146;s fair value requires significant judgment and
assumptions including projected future cash flows, revenue, market size, market growth, Teradyne&#146;s market share, market multiples, discount rates and consideration of market valuations of comparable companies. These judgments and assumptions
reflect our best estimates, but these items involve inherent uncertainties based on market and customer conditions. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Page 3 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May&nbsp;12, 2016 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">The fair value estimate for our Wireless Test reporting
unit involves forecasting the size of the wireless test market in future years and our market share which are significant judgments and assumptions due to our significant customer concentration in our Wireless Test segment. Forecasting the size of
the wireless test market in future years and our market share includes estimating end product shipment volumes, new wireless technology introductions and customer buying patterns. As of April&nbsp;3, 2016 and December&nbsp;31, 2015, our Wireless
Test segment had $262.9 million of goodwill. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">In the fourth quarter of 2014, we recorded a goodwill impairment charge of
$98.9 million in our Wireless Test segment as a result of decreased demand attributable to an estimated smaller wireless test market due to reuse of wireless test equipment, price competition and different testing techniques. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">Further reductions in the size of the wireless test market or our share of the wireless test market may occur which may result
in additional goodwill impairment charges.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Results of Operations, page 26 </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I></I><B><I>COMMENT 2:</I></B><I> We note from statements made by your CEO and CFO during your January&nbsp;28, 2016 earnings call that your business
typically experiences a downward trend in revenue during odd years as compared to even years, but in 2015, it appears that you overcame this historical odd-year decline. In future filings, please discuss any known trends affecting your business.
Include an analysis of any deviations from these trends and whether you believe these trends will likely continue. Refer to Regulation S-K Item&nbsp;303(a)(3)(iii). </I></P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>RESPONSE 2: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In future filings, the
Company will disclose any known trends affecting its business including an analysis of any deviations from these trends and whether the Company believes these trends will likely continue. The Company has included the following disclosure in the
overview section of its management&#146;s discussion and analysis in its Form 10-Q for the quarter ended April&nbsp;3, 2016: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">&#147;In recent years, this cyclical demand has become an even/odd year trend where demand has increased in even years and
decreased in odd years due principally to demand swings in the mobility market of our Semiconductor Test business. In 2015, the even/odd year trend continued, but had less of an impact on our annual revenue due to the sale in 2015 of testers that
were previously leased to customers in 2014. We expect the even/odd year demand trend in the mobility market to most likely lessen in the future due to slower smart phone unit growth, along with rising device complexity and the reduced impact of
parallel test in our Semiconductor Test business.&#148; </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Page 4 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">May&nbsp;12, 2016 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item&nbsp;8. Financial Statements </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note I. Goodwill and Intangible Assets, page 69 </U></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I></I><B><I>COMMENT 3:</I></B><I> In future filings, please revise the table showing the changes in the carrying amount of goodwill to include any impairment
losses recognized during the period as a separate line item. Refer to ASC 350-20-50-1(e). </I></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><B>RESPONSE 3: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">In future filings, the Company will revise the table showing the changes in the carrying amount of goodwill to include any impairment losses
recognized during the period as a separate line item. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;
*&nbsp;&nbsp;&nbsp;&nbsp; * </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Acknowledgement </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company acknowledges that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company is responsible for the adequacy and accuracy of the disclosure in the filing; </TD></TR></TABLE>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and </TD></TR></TABLE>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If you have any questions with regard to these responses, need further supplemental information or would like to discuss any of the information covered in
this letter, please contact the undersigned at (978)&nbsp;370-2952. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Sincerely,</P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">TERADYNE, INC.</P></TD></TR>
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<TD HEIGHT="16"></TD></TR>
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<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000">/s/ Gregory R. Beecher</TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Gregory R. Beecher</P> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">Vice President and Chief
Financial Officer</P></TD></TR>
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