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Financial Instruments | 12 Months Ended
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Dec. 31, 2016
Financial Instruments | G. FINANCIAL INSTRUMENTS Cash Equivalents Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Marketable Securities Teradyne’s available-for-sale securities are classified as Level 1 and Level 2. Contingent consideration is classified as Level 3. The vast majority of Level 2 securities are fixed income securities priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities. Realized gains recorded in 2016, 2015 and 2014 were $1.6 million, $1.7 million and $2.4 million, respectively. Realized losses recorded in 2016 and 2015 were $0.5 million and $0.4 million, respectively. There were no realized losses recorded in 2014. Realized gains are included in interest income, and realized losses are included in interest expense. Unrealized gains and losses are included in accumulated other comprehensive income (loss). The cost of securities sold is based on the specific identification method. During the years ended December 31, 2016 and 2015, there were no transfers in or out of Level 1, Level 2 or Level 3 financial instruments. 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, 2016 and 2015:
|  | December 31, 2016 |
|  | 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 |  | $ | 214,722 |  |  | $ | — |  |  | $ | — |  |  | $ | 214,722 |
Cash equivalents |  |  | 37,458 |  |  |  | 55,704 |  |  |  | — |  |  |  | 93,162 |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  |  | — |  |  |  | 900,038 |  |  |  | — |  |  |  | 900,038 |
Commercial paper |  |  | — |  |  |  | 161,630 |  |  |  | — |  |  |  | 161,630 |
Corporate debt securities |  |  | — |  |  |  | 100,153 |  |  |  | — |  |  |  | 100,153 |
Certificates of deposit and time deposits |  |  | — |  |  |  | 82,133 |  |  |  | — |  |  |  | 82,133 |
U.S. government agency securities |  |  | — |  |  |  | 42,014 |  |  |  | — |  |  |  | 42,014 |
Equity and debt mutual funds |  |  | 18,171 |  |  |  | — |  |  |  | — |  |  |  | 18,171 |
Non-U.S. government securities |  |  | — |  |  |  | 728 |  |  |  | — |  |  |  | 728 |
Total |  | $ | 270,351 |  |  | $ | 1,342,400 |  |  | $ | — |  |  | $ | 1,612,751 |
Derivative assets |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
Total |  | $ | 270,351 |  |  | $ | 1,342,401 |  |  | $ | — |  |  | $ | 1,612,752 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration |  | $ | — |  |  | $ | — |  |  | $ | 38,332 |  |  | $ | 38,332 |
Derivative liabilities |  |  | — |  |  |  | 131 |  |  |  | — |  |  |  | 131 |
Total |  | $ | — |  |  | $ | 131 |  |  | $ | 38,332 |  |  | $ | 38,463 |
Reported as follows:
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 252,180 |  |  | $ | 55,704 |  |  | $ | — |  |  | $ | 307,884 |
Marketable securities |  |  | — |  |  |  | 871,024 |  |  |  | — |  |  |  | 871,024 |
Long-term marketable securities |  |  | 18,171 |  |  |  | 415,672 |  |  |  | — |  |  |  | 433,843 |
Prepayments |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
|  | $ | 270,351 |  |  | $ | 1,342,401 |  |  | $ | — |  |  | $ | 1,612,752 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  | $ | — |  |  | $ | 131 |  |  | $ | — |  |  | $ | 131 |
Contingent consideration |  |  | — |  |  |  | — |  |  |  | 1,050 |  |  |  | 1,050 |
Long-term contingent consideration |  |  | — |  |  |  | — |  |  |  | 37,282 |  |  |  | 37,282 |
|  | $ | — |  |  | $ | 131 |  |  | $ | 38,332 |  |  | $ | 38,463 |
|  | 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 |
Changes in the fair value of Level 3 contingent consideration for the years ended December 31, 2016 and 2015 were as follows:
|  | Contingent Consideration |
|  | (in thousands) |
Balance at December 31, 2014 |  | $ | 3,350 |
Acquisition of Universal Robots |  |  | 31,597 |
Fair value adjustment of Universal Robots (1) |  |  | 5,339 |
Fair value adjustment of AIT (2) |  |  | (1,250 | )
Fair value adjustment of ZTEC (3) |  |  | (1,600 | )
Balance at December 31, 2015 |  |  | 37,436 |
Payments (4) |  |  | (15,000 | )
Fair value adjustment of AIT (5) |  |  | 550 |
Fair value adjustment of Universal Robots (5) |  |  | 15,346 |
Balance at December 31, 2016 |  | $ | 38,332 |
(1) | During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $5.3 million primarily due to an increase in forecasted revenues.
(2) | During the year ended December 31, 2015, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was reduced by $1.3 million due to a decrease in the forecasted revenues.
(3) | During the year ended December 31, 2015, the fair value measurement of the contingent consideration for the earn-out in connection with the acquisition of ZTEC Instruments, Inc. (“ZTEC”) was reduced by $1.6 million, to $0, because Teradyne and the Securityholder Representative, on behalf of the ZTEC securityholders, agreed to terminate the earn-out prior to the end of the December 31, 2015 earn-out period, with no payout in connection with the resolution of indemnity claims asserted by both Teradyne and the Securityholder Representative.
(4) | During the year ended December 31, 2016, based on Universal Robots’ calendar year 2015 EBITDA results, Teradyne paid $15 million or 100% of the eligible EBITDA contingent consideration amount.
(5) | During the year ended December 31, 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots was increased by $15.3 million primarily due to an increase in forecasted revenues and a decrease in the discount rate. During the year ended 2016, the fair value of contingent consideration for the earn-out in connection with the acquisition of AIT was increased by $0.6 million due to an increase in forecasted revenues. The AIT contingent consideration in the amount of $1.1 million was paid in January 2017.
The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instrument:
Liability |  | December 31, 2016 Fair Value |  |  | Valuation Technique |  | Unobservable Inputs |  | Weighted Average |
|  | (in thousands) |  |  |  |  |  |  |  |
Contingent consideration (Universal Robots) |  | $ | 21,301 |  |  | Monte Carlo simulation |  | Revenues for the period July 1, 2015—December 31, 2017 volatility |  |  | 10.8% |
|  |  |  |  |  |  | Discount Rate |  |  | 3.3% |
|  | $15,981 |  |  | Monte Carlo simulation |  | Revenues for the period July 1, 2015—December 31, 2018 volatility |  |  | 10.8% |
|  |  |  |  |  |  | Discount Rate |  |  | 3.3% |
Contingent consideration (AIT) |  | $ | 1,050(1) |  |  |  |  |  |  |  |  |
(1) | Teradyne paid this amount in January 2017.
As of December 31, 2016, the significant unobservable inputs used in the Monte Carlo simulation to fair value the Universal Robots contingent consideration include forecasted revenues, revenue volatility and discount rate. Increases or decreases in the inputs would result in a higher or lower fair value measurement. The maximum payment for each of the two remaining Universal Robots earn-outs is $25.0 million. The carrying amounts and fair values of financial instruments at December 31, 2016 and 2015 were as follows:
|  | December 31, 2016 |  |  | December 31, 2015 |
|  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |  |  | Fair Value |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 307,884 |  |  | $ | 307,884 |  |  | $ | 264,705 |  |  | $ | 264,705 |
Marketable securities |  |  | 1,304,867 |  |  |  | 1,304,867 |  |  |  | 743,624 |  |  |  | 743,624 |
Derivative assets |  |  | 1 |  |  |  | 1 |  |  |  | 109 |  |  |  | 109 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration |  |  | 38,332 |  |  |  | 38,332 |  |  |  | 37,436 |  |  |  | 37,436 |
Derivative liabilities |  |  | 131 |  |  |  | 131 |  |  |  | 146 |  |  |  | 146 |
Convertible debt (1) |  |  | 352,669 |  |  |  | 486,754 |  |  |  | — |  |  |  | — |
(1) | The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note which includes the equity conversion features.
The fair values of accounts receivable, net and accounts payable approximate the carrying amount due to the short term nature of these instruments. The following tables summarize the composition of available for sale marketable securities at December 31, 2016 and 2015:
|  | December 31, 2016 |
|  | 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 |  | $ | 901,975 |  |  | $ | 97 |  |  | $ | (2,034 | ) |  | $ | 900,038 |  |  | $ | 572,284 |
Commercial paper |  |  | 161,672 |  |  |  | 24 |  |  |  | (66 | ) |  |  | 161,630 |  |  |  | 84,034 |
Corporate debt securities |  |  | 99,708 |  |  |  | 1,065 |  |  |  | (620 | ) |  |  | 100,153 |  |  |  | 53,642 |
Certificates of deposit and time deposits |  |  | 82,080 |  |  |  | 54 |  |  |  | (1 | ) |  |  | 82,133 |  |  |  | 7,760 |
U.S. government agency securities |  |  | 42,026 |  |  |  | 7 |  |  |  | (19 | ) |  |  | 42,014 |  |  |  | 13,461 |
Equity and debt mutual funds |  |  | 16,505 |  |  |  | 1,724 |  |  |  | (58 | ) |  |  | 18,171 |  |  |  | 1,661 |
Non-U.S. government securities |  |  | 745 |  |  |  | 6 |  |  |  | (23 | ) |  |  | 728 |  |  |  | 137 |
|  | $ | 1,304,711 |  |  | $ | 2,977 |  |  | $ | (2,821 | ) |  | $ | 1,304,867 |  |  | $ | 732,979 |
Reported as follows:
|  | Cost |  |  | Unrealized Gain |  |  | Unrealized (Loss) |  |  | Fair Market Value |  |  | Fair Market Value of Investments with Unrealized Losses |
|  | (in thousands) |
Marketable securities |  | $ | 871,321 |  |  | $ | 134 |  |  | $ | (431 | ) |  | $ | 871,024 |  |  | $ | 423,128 |
Long-term marketable securities |  |  | 433,390 |  |  |  | 2,843 |  |  |  | (2,390 | ) |  |  | 433,843 |  |  |  | 309,851 |
|  | $ | 1,304,711 |  |  | $ | 2,977 |  |  | $ | (2,821 | ) |  | $ | 1,304,867 |  |  | $ | 732,979 |
|  | 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 |
As of December 31, 2016, the fair market value of investments with unrealized losses totaled $733.0 million. Of this value, $2.9 million had unrealized losses of $0.3 million greater than one year and $730.1 million had unrealized losses of $2.5 million for less than one year. As of December 31, 2015, the fair market value of investments with unrealized losses totaled $601.7 million. Of this value, $0.9 million had unrealized losses of $0.5 million greater than one year and $600.8 million had unrealized losses of $3.6 million for less than one year. Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments, at December 31, 2016 and 2015, were temporary. The contractual maturities of investments held at December 31, 2016 were as follows:
|  | Cost |  |  | Fair Value |
|  | (in thousands) |
Due within one year |  | $ | 871,321 |  |  | $ | 871,024 |
Due after 1 year through 5 years |  |  | 365,873 |  |  |  | 365,451 |
Due after 5 years through 10 years |  |  | 12,839 |  |  |  | 12,309 |
Due after 10 years |  |  | 38,173 |  |  |  | 37,912 |
Total |  | $ | 1,288,206 |  |  | $ | 1,286,696 |
Contractual maturities of investments held at December 31, 2016, exclude $18 million of equity and debt mutual funds as they do not have a contractual maturity date. The following table sets forth by fair value hierarchy Teradyne’s non-financial assets that were measured at fair value on a non-recurring basis as of July 3, 2016:
|  |  |  |  | July 3, 2016 |  |  |  |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Other Unobservable Inputs (Level 3)) |  |  | Total |  |  | Total Losses |
|  | (in thousands) |
Goodwill (1) |  | $ | — |  |  | $ | — |  |  | $ | 7,976 |  |  | $ | 7,976 |  |  | $ | 254,946 |
Definite lived intangible assets (2) |  |  | — |  |  |  | — |  |  |  | 5,750 |  |  |  | 5,750 |  |  |  | 83,339 |
|  | $ | — |  |  | $ | — |  |  | $ | 13,726 |  |  | $ | 13,726 |  |  | $ | 338,285 |
(1) | In accordance with the provisions of ASC 350-20, “Goodwill” goodwill in the Wireless Test reporting unit with a carrying amount of $262.9 million was written down in the second quarter of 2016 to its implied fair value of $8.0 million, resulting in an impairment charge of $254.9 million. See Note J: “Goodwill and Intangible Assets” regarding goodwill impairment.
(2) | In accordance with the provisions of ASC 360-10, “Property, Plant and Equipment,” definite lived intangible assets in the Wireless Test reporting unit with a carrying amount of $89.2 million were written down in the second quarter of 2016 to their implied fair value of $5.8 million, resulting in an impairment charge of $83.3 million. See Note J: “Goodwill and Intangible Assets” regarding definite lived intangible assets impairment.
Derivatives Teradyne conducts business in a number of foreign countries, with certain transactions denominated in local currencies. The purpose of Teradyne’s foreign currency management is to minimize the effect of exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. Teradyne does not use derivative financial instruments for trading or speculative purposes. To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings, and is used to offset the change in value of the monetary assets and liabilities denominated in foreign currencies. At December 31, 2016 and 2015, 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, 2016 |  |  | December 31, 2015 |
|  | Buy Position |  |  | Sell Position |  |  | Net Total |  |  | Buy Position |  |  | Sell Position |  |  | Net Total |
|  | (in millions) |
Japanese Yen |  | $ | (17.7 | ) |  | $ | — |  |  | $ | (17.7 | ) |  | $ | (51.9 | ) |  | $ | — |  |  | $ | (51.9 | )
Korean Won |  |  | (8.8 | ) |  |  | — |  |  |  | (8.8 | ) |  |  | (5.5 | ) |  |  | — |  |  |  | (5.5 | )
Taiwan Dollar |  |  | (6.9 | ) |  |  | — |  |  |  | (6.9 | ) |  |  | (5.0 | ) |  |  | — |  |  |  | (5.0 | )
British Pound Sterling |  |  | (1.3 | ) |  |  | — |  |  |  | (1.3 | ) |  |  | (9.5 | ) |  |  | — |  |  |  | (9.5 | )
Euro |  |  | — |  |  |  | 25.2 |  |  |  | 25.2 |  |  |  | — |  |  |  | 27.2 |  |  |  | 27.2 |
Singapore Dollar |  |  | — |  |  |  | 24.0 |  |  |  | 24.0 |  |  |  | — |  |  |  | 15.0 |  |  |  | 15.0 |
Total |  | $ | (34.7 | ) |  | $ | 49.2 |  |  | $ | 14.5 |  |  | $ | (71.9 | ) |  | $ | 42.2 |  |  | $ | (29.7 | )
The fair value of the outstanding contracts was a loss of $0.1 million and $0.0 million, at December 31, 2016 and 2015, respectively. In 2016, 2015 and 2014, Teradyne recorded net realized losses related to foreign currency forward contracts hedging net monetary assets and liabilities of $8.7 million, $3.0 million and $0.2 million, respectively. Gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in other (income) expense, net. The following table summarizes the fair value of derivative instruments as of December 31, 2016 and 2015:
|  | Balance Sheet Location |  | December 31, 2016 |  |  | December 31, 2015 |
|  |  |  | (in thousands) |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Prepayments |  | $ | 1 |  |  | $ | 109 |
Foreign exchange contracts |  | Other current liabilities |  |  | (131 | ) |  |  | (146 | )
Total derivatives |  |  |  | $ | (130 | ) |  | $ | (37 | )
The following table summarizes the effect of derivative instruments in statements of operations recognized for the years ended December 31, 2016, 2015 and 2014. 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, 2016 and 2015, gains from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $8.0 million and $2.5 million, respectively. For the year ended December 31, 2014, losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies were $0.9 million.
|  | Location of Losses Recognized in Statements of Operations |  | December 31, 2016 |  |  | December 31, 2015 |  |  | December 31, 2014 |
|  |  |  | (in thousands) |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other (income) expense, net |  | $ | 8,671 |  |  | $ | 3,047 |  |  | $ | 237 |
See Note H: “Debt” regarding derivatives related to the convertible senior notes. Concentration of Credit Risk Financial instruments which potentially subject Teradyne to concentrations of credit risk consist principally of cash equivalents, marketable securities, forward currency contracts and accounts receivable. Teradyne’s cash equivalents consist primarily of money market funds invested in U.S. Treasuries and government agencies. Teradyne’s fixed income available-for-sale marketable securities have a minimum rating of AA by one or more of the major credit rating agencies. Teradyne places foreign currency forward contracts with high credit-quality financial institutions in order to minimize credit risk exposure. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of geographically dispersed customers. Teradyne performs ongoing credit evaluations of its customers’ financial condition and from time to time may require customers to provide a letter of credit from a bank to secure accounts receivable. There were no customers who accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2016. One customer accounted for more than 10% of Teradyne’s accounts receivable balance as of December 31, 2015. Equity Interest On November 1, 2013, in connection with the acquisition of Empirix, Inc. by Thoma Bravo LLC, Teradyne sold its equity interest in Empirix, Inc., a private company, and received cash proceeds of $34.2 million which was recorded as a gain in other (income) expense, net in the fourth quarter of 2013. An additional $5.4 million of cash proceeds that was held in escrow for 15 months, for potential indemnifications to the buyer, was paid to Teradyne in February 2015 and it was recorded as a gain in other (income) expense, net in the first quarter of 2015.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=66048111&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=73719730&loc=d3e13433-108611 + Details
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