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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Estimated Fair Value of TSR Performance-Based Restricted Stock Unit Awards Assumptions

The fair value was estimated using the Monte Carlo simulation model with the following assumptions:

		2017				2016				2015
Risk-free interest rate			1.5	%			1.0	%			0.8	%
Teradyne volatility-historical			26.6	%			27.0	%			28.2	%
NYSE Composite Index volatility-historical			13.4	%			13.1	%			—
Philadelphia Semiconductor Index volatility-historical			—				—				19.7	%
Dividend yield			1.0	%			1.2	%			1.3	%

Fair Value of Stock Options Using Assumptions

The fair value of the stock options at grant date was estimated using the Black-Scholes option-pricing model with the following assumptions:

		2017				2016				2015
Expected life (years)			5.0				5.0				4.0
Risk-free interest rate			2.0	%			1.4	%			1.1	%
Volatility-historical			27.8	%			32.9	%			33.4	%
Dividend yield			1.0	%			1.2	%			1.3	%

Stock Compensation Plan Activity

Stock compensation plan activity for the years 2017, 2016, and 2015 follows:

		2017				2016				2015
		(in thousands)
Restricted Stock Units:
Non-vested at January 1			3,778				4,070				4,352
Awarded			939				1,471				1,681
Vested			(1,434	)			(1,530	)			(1,679	)
Forfeited			(109	)			(233	)			(284	)
Non-vested at December 31			3,174				3,778				4,070
Stock Options:
Outstanding at January 1			926				1,121				1,507
Granted			111				130				132
Exercised			(501	)			(324	)			(518	)
Forfeited			—				—				—
Expired			(5	)			(2	)			—
Outstanding at December 31			531				926				1,121
Vested and expected to vest at December 31			531				926				1,121
Exercisable at December 31			233				598				779

Share Based Compensation Total Shares Available

Total shares available for the years 2017, 2016, and 2015:

		2017				2016				2015
		(in thousands)
Shares available:
Available for grant at January 1			9,546				10,914				12,443
Options granted			(111	)			(130	)			(132	)
Restricted stock units awarded			(939	)			(1,471	)			(1,681	)
Restricted stock units forfeited			109				233				284
Additional shares reserved			—				—				—
Available for grant at December 31			8,605				9,546				10,914

Weighted-Average Restricted Stock Unit Award Date Fair Value

Weighted average restricted stock unit award date fair value information for the years 2017, 2016, and 2015 follows:

		2017				2016				2015
Non-vested at January 1		$	18.27			$	17.66			$	17.35
Awarded			28.91				18.95				17.66
Vested			17.90				17.36				16.93
Forfeited			20.35				17.80				17.28
Non-vested at December 31		$	21.71			$	18.27			$	17.66

Restricted Stock Unit Awards Aggregate Intrinsic Value

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2017, 2016, and 2015 follows:

		2017				2016				2015
		(in thousands)
Vested		$	40,649			$	30,008			$	32,200
Outstanding			132,875				95,952				84,129
Expected to vest			130,594				91,871				79,611

Restricted Stock Units Weighted Average Remaining Contractual Terms

Restricted stock units weighted average remaining contractual terms (in years) information at December 31, for the years 2017, 2016, and 2015 follows:

		2017				2016				2015
Outstanding			1.00				1.04				1.09
Expected to vest			0.99				1.03				1.08

Weighted Average Stock Options Exercise Price

Weighted average stock options exercise price information for the year ended December 31, 2017 follows:

		2017
Outstanding at January 1		$	11.93
Options granted			28.56
Options exercised			13.60
Options forfeited			3.04
Options cancelled			—
Outstanding at December 31			13.92
Exercisable at December 31			2.95

Stock Option Aggregate Intrinsic Value Information

Stock option aggregate intrinsic value information for the years ended December 31, 2017, 2016, and 2015 follows:

		2017				2016				2015
		(in thousands)
Exercised		$	8,035			$	3,729			$	7,255
Outstanding			14,831				12,468				11,729
Vested and expected to vest			14,831				12,468				11,729
Exercisable			9,076				10,217				10,716

Stock Options Weighted Average Remaining Contractual Terms

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2017, 2016, and 2015 follows:

		2017				2016				2015
Outstanding			4.1				3.9				4.2
Vested and expected to vest			4.1				3.9				4.2
Exercisable			2.8				3.2				3.9

Significant Option Groups Outstanding

Significant option groups outstanding at December 31, 2017 and related weighted average price and remaining contractual life information follow:

		Options Outstanding												Options Exercisable
Range Of Exercise Prices		Weighted- Average  Remaining Contractual Life (Years)				Shares				Weighted- Average Exercise Price				Shares				Weighted- Average Exercise Price
		(shares in thousands)
$1.48 – $2.58			2.19				99			$	1.81				99			$	1.81
$2.67 – $7.71			3.17				126				2.89				126				2.89
$18.10 – $19.43			4.48				194				18.91				8				18.51
$28.56			6.08				112				28.56				—				—
							531			$	13.92				233			$	2.95

Effect to Income (Loss) from Operations for Recording Stock-Based Compensation

The effect to income from operations for recording stock-based compensation for the years ended December 31 was as follows:

		2017				2016				2015
		(in thousands)
Cost of revenues		$	3,212			$	3,153			$	3,065
Engineering and development			9,370				9,458				9,362
Selling and administrative			21,515				18,139				18,024
Stock-based compensation			34,097				30,750				30,451
Income tax benefit			(10,462	)			(8,752	)			(8,528	)
Total stock-based compensation expense after income taxes		$	23,635			$	21,998			$	21,923

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