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Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2017

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

		2017								2016
		United States				Foreign				United States				Foreign
		(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year		$	353,616			$	60,738			$	351,117			$	62,290
Service cost			2,239				818				2,302				761
Interest cost			13,151				852				13,630				1,185
Actuarial loss			12,702				262				6,053				5,621
Benefits paid			(18,682	)			(994	)			(19,486	)			(1,385	)
Settlements			—				(28,560	)			—				—
Expenses paid			—				(40	)			—				(609	)
Non-U.S. currency movement			—				6,277				—				(7,125	)
End of year			363,026				39,353				353,616				60,738
Change in plan assets:
Fair value of plan assets:
Beginning of year			307,304				27,571				298,404				28,141
Company contributions			4,462				883				4,489				867
Actual return on plan assets			31,422				737				23,897				5,142
Benefits paid			(18,682	)			(994	)			(19,486	)			(1,148	)
Settlements			—				(28,560	)			—				—
Expenses paid			—				(40	)			—				(609	)
Non-U.S. currency movement			—				1,710				—				(4,822	)
End of year			324,506				1,307				307,304				27,571
Funded status		$	(38,520	)		$	(38,046	)		$	(46,312	)		$	(33,167	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

		2017								2016
		United States				Foreign				United States				Foreign
		(in thousands)
Retirement plans assets		$	17,491			$	—			$	7,712			$	—
Accrued employees’ compensation and withholdings			(2,524	)			(863	)			(2,591	)			(772	)
Retirement plans liabilities			(53,487	)			(37,183	)			(51,433	)			(32,395	)
Funded status		$	(38,520	)		$	(38,046	)		$	(46,312	)		$	(33,167	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

		2017								2016
		United States				Foreign				United States				Foreign
		(in thousands)
Prior service cost, before tax		$	58			$	—			$	127			$	—
Deferred taxes			539				—				514				—
Total recognized in other comprehensive income, net of tax		$	597			$	—			$	641			$	—

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

		2017								2016
		United States				Foreign				United States				Foreign
		(in millions)
Projected benefit obligation		$	56.0			$	39.4			$	54.0			$	34.3
Accumulated benefit obligation			51.6				34.7				48.0				30.1
Fair value of plan assets			—				1.3				—				1.1

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2017, 2016, and 2015, Teradyne’s net periodic pension (income) cost was comprised of the following:

		2017								2016								2015
		United States				Foreign				United States				Foreign				United States				Foreign
		(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost		$	2,239			$	818			$	2,302			$	761			$	2,462			$	1,006
Interest cost			13,151				852				13,630				1,185				13,142				1,444
Expected return on plan assets			(12,008	)			(165	)			(13,830	)			(443	)			(14,517	)			(781	)
Amortization of prior service cost			70				—				96				—				134				—
Net actuarial (gain) loss			(6,712	)			(310	)			(4,013	)			815				10,596				8,415
Curtailment			—				—				—				—				—				(634	)
Total net periodic pension (income) cost		$	(3,260	)		$	1,195			$	(1,815	)		$	2,318			$	11,817			$	9,450
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost			(70	)			—				(96	)			—				(134	)			—
Total recognized in other comprehensive income			(70	)			—				(96	)			—				(134	)			—
Total recognized in net periodic pension (income) cost and other comprehensive income		$	(3,330	)		$	1,195			$	(1,911	)		$	2,318			$	11,683			$	9,450

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

		2017								2016								2015
		United States				Foreign				United States				Foreign				United States				Foreign
Discount rate			3.9	%			1.8	%			4.0	%			2.3	%			3.7	%			2.6	%
Expected return on plan assets			4.0				2.0				4.8				2.0				4.8				2.6
Salary progression rate			2.6				2.7				2.7				3.2				2.9				3.2

Weighted Average Assumptions to Determine Pension Obligations at December 31:

		2017								2016
		United States				Foreign				United States				Foreign
Discount rate			3.4	%			1.8	%			3.9	%			1.8	%
Salary progression rate			2.3				2.7				2.6				2.7

Weighted Average Pension Asset Allocations by Category

The following table provides weighted average pension asset allocation by asset category at December 31, 2017 and 2016:

		2017								2016
		United States				Foreign				United States				Foreign
Fixed income securities			88.1	%			—	%			88.1	%			—	%
Equity securities			9.9				—				9.9				—
Other			2.0				100.0				2.0				100.0
			100.0	%			100.0	%			100.0	%			100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:		Policy Index:		Target Allocation
U.S. corporate fixed income		Bloomberg Barclays U.S. Corporate A or Better Index			76	%
Global equity		MSCI World Minimum Volatility Index			10
U.S. government fixed income		Bloomberg Barclays U.S. Long Government Bond Index			8
High yield fixed income		Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Cap Index			5
Cash		Citigroup Three Month U.S. Treasury Bill Index			1

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2017 and December 31, 2016 were as follows:

		December 31, 2017
		United States																Foreign
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
		(in thousands)
Fixed income securities:
Corporate debt securities		$	—			$	260,294			$	—			$	260,294			$	—			$	—			$	—			$	—
U.S. government debt securities			—				25,709				—				25,709				—				—				—				—
Global equity			—				32,120				—				32,120				—				—				—				—
Group annuity insurance contracts			—				—				3,166				3,166				—				—				—				—
Other			—				—				—				—				—				1,307				—				1,307
Cash and cash equivalents			3,217				—				—				3,217				—				—				—				—
Total		$	3,217			$	318,123			$	3,166			$	324,506			$	—			$	1,307			$	—			$	1,307

The pension plan assets identified as Level 3 above are related to group annuity insurance contracts held by the U.S. Plan. The fair value of these assets was calculated using the present value of future pension payments due under the group annuity insurance contracts.

		December 31, 2016
		United States																Foreign
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
		(in thousands)
Fixed income securities:
Corporate debt securities		$	—			$	246,528			$	—			$	246,528			$	—			$	—			$	—			$	—
U.S. government debt securities			—				24,322				—				24,322				—				—				—				—
Global equity			—				30,360				—				30,360				—				—				—				—
Group annuity insurance contracts			—				—				3,071				3,071				—				—				26,385				26,385
Other			—				—				—				—				—				1,124				—				1,124
Cash and cash equivalents			3,023				—				—				3,023				62				—				—				62
Total		$	3,023			$	301,210			$	3,071			$	307,304			$	62			$	1,124			$	26,385			$	27,571

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

		United States				Foreign
		(in thousands)
2018		$	19,387			$	886
2019			19,022				887
2020			19,688				1,253
2021			20,246				1,002
2022			20,994				952
2023-2027			110,214				6,294

Group Annuity Insurance Contracts

Changes in Fair Value of Pension Assets

Changes in the fair value of Level 3 group annuity insurance contracts for the years ended December 31, 2017 and 2016 were as follows:

		Group Annuity Insurance Contracts
		(in thousands)
Balance at December 31, 2015		$	29,392
Purchases of group annuity insurance contracts			709
Interest and market value adjustments			5,308
Benefits paid			(611	)
Other			(634	)
Non-U.S. currency movement			(4,708	)
Balance at December 31, 2016			29,456
Settlements			(28,560	)
Interest and market value adjustments			959
Benefits paid			(244	)
Other			(61	)
Non-U.S. currency movement			1,616
Balance at December 31, 2017		$	3,166

Postretirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of the postretirement assets and obligations are shown below:

		2017				2016
		(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year		$	5,510			$	6,030
Service cost			34				37
Interest cost			201				218
Actuarial loss			398				5
Special termination benefits			591				—
Benefits paid			(557	)			(687	)
Plan amendments			—				(93	)
End of year			6,177				5,510
Change in plan assets:
Fair value of plan assets:
Beginning of year			—				—
Company contributions			557				687
Benefits paid			(557	)			(687	)
End of year			—				—
Funded status		$	(6,177	)		$	(5,510	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

		2017				2016
		(in thousands)
Accrued employees’ compensation and withholdings		$	(591	)		$	(571	)
Retirement plans liability			(5,586	)			(4,939	)
Funded status		$	(6,177	)		$	(5,510	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

		2017				2016
		(in thousands)
Prior service credit, before tax		$	(622	)		$	(1,118	)
Deferred taxes			(1,472	)			(1,292	)
Total recognized in other comprehensive income, net of tax		$	(2,094	)		$	(2,410	)

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2017, 2016, and 2015, Teradyne’s net periodic postretirement benefit cost (income) was comprised of the following:

		2017				2016				2015
		(in thousands)
Components of Net Periodic Postretirement Benefit Cost (income):
Service cost		$	34			$	37			$	48
Interest cost			201				218				237
Amortization of prior service credit			(496	)			(607	)			(598	)
Net actuarial loss (gain)			398				5				(648	)
Special termination benefits			591				—				—
Total net periodic postretirement benefit cost (income)			728				(347	)			(961	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service cost			—				(93	)			—
Reversal of amortization items:
Prior service credit			496				607				598
Total recognized in other comprehensive income			496				514				598
Total recognized in net periodic postretirement cost (income) and other comprehensive income		$	1,224			$	167			$	(363	)

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

		2017				2016				2015
Discount rate			3.9	%			3.9	%			3.5	%
Initial health care cost trend rate			7.3				7.5				7.5
Ultimate health care cost trend rate			5.0				5.0				5.0
Year in which ultimate health care cost trend rate is reached			2023				2023				2022

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

		2017				2016				2015
Discount rate			3.4	%			3.9	%			3.9	%
Initial medical trend			7.9				7.3				7.5
Ultimate health care trend			4.5				5.0				5.0
Medical cost trend rate decrease to ultimate rate in year			2026				2023				2023

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

		Benefit Payments
		(in thousands)
2018		$	591
2019			597
2020			535
2021			502
2022			439
2023-2027			1,665

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2017 would have the following effects:

		1 Percentage Point Increase				1 Percentage Point Decrease
		(in thousands)
Effect on total service and interest cost components		$	3			$	(3	)
Effect on postretirement benefit obligations			64				(60	)

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