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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2018
Schedule of Income (Loss) Before Income Taxes and Provision (Benefit) for Income Taxes from Operations | The components of income (loss) before income taxes and the provision (benefit) for income taxes as shown in the consolidated statements of operations were as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
|  | (in thousands) |
Income (loss) before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 189,691 |  |  | $ | 76,699 |  |  | $ | (341,018 | )
Non-U.S. |  |  | 278,110 |  |  |  | 447,713 |  |  |  | 285,958 |
|  | $ | 467,801 |  |  | $ | 524,412 |  |  | $ | (55,060 | )
Provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | (59,122 | ) |  | $ | 162,679 |  |  | $ | 7,750 |
Non-U.S. |  |  | 45,083 |  |  |  | 64,313 |  |  |  | 41,579 |
State |  |  | 1,721 |  |  |  | 2,623 |  |  |  | 1,968 |
|  |  | (12,318 | ) |  |  | 229,615 |  |  |  | 51,297 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | 29,252 |  |  |  | 43,687 |  |  |  | (51,482 | )
Non-U.S. |  |  | (1,243 | ) |  |  | (6,476 | ) |  |  | (9,240 | )
State |  |  | 331 |  |  |  | (106 | ) |  |  | (2,214 | )
|  |  | 28,340 |  |  |  | 37,105 |  |  |  | (62,936 | )
Total provision (benefit) for income taxes: |  | $ | 16,022 |  |  | $ | 266,720 |  |  | $ | (11,639 | )
Reconciliation of Effective Tax Rate | A reconciliation of the effective tax rate for the years 2018, 2017, and 2016 is as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
U.S. statutory federal tax rate |  |  | 21.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
U.S. transition tax |  |  | (10.5 | ) |  |  | 28.7 |  |  |  | — |
U.S. foreign derived intangible income |  |  | (1.8 | ) |  |  | — |  |  |  | — |
Impact of rate change on deferred tax |  |  | 0.3 |  |  |  | 6.9 |  |  |  | — |
Uncertain tax positions |  |  | 1.0 |  |  |  | 1.7 |  |  |  | (2.6 | )
Foreign taxes |  |  | (2.0 | ) |  |  | (16.3 | ) |  |  | 78.0 |
Foreign tax credits |  |  | (2.2 | ) |  |  | (2.2 | ) |  |  | 49.1 |
U.S. research and development credit |  |  | (2.2 | ) |  |  | (1.6 | ) |  |  | 15.8 |
Equity compensation |  |  | (1.2 | ) |  |  | (0.8 | ) |  |  | (2.7 | )
State income taxes, net of federal tax benefit |  |  | 0.1 |  |  |  | (0.4 | ) |  |  | 2.3 |
Domestic production activities deduction |  |  | — |  |  |  | (0.3 | ) |  |  | 2.3 |
Goodwill impairment |  |  | — |  |  |  | — |  |  |  | (162.1 | )
U.S. alternative minimum tax credit |  |  | — |  |  |  | — |  |  |  | 3.7 |
Inventory cost capitalization |  |  | — |  |  |  | — |  |  |  | 1.8 |
Other, net |  |  | 0.9 |  |  |  | 0.2 |  |  |  | 0.5 |
|  |  | 3.4 | % |  |  | 50.9 | % |  |  | 21.1 | %
Deferred Tax Assets (Liabilities) | Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2018 and 2017 were as follows:
|  | 2018 |  |  | 2017 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Tax credits |  | $ | 69,091 |  |  | $ | 76,083 |
Accruals |  |  | 23,449 |  |  |  | 27,508 |
Pension liabilities |  |  | 20,826 |  |  |  | 22,602 |
Inventory valuations |  |  | 18,514 |  |  |  | 17,793 |
Deferred revenue |  |  | 9,130 |  |  |  | 9,016 |
Equity compensation |  |  | 7,190 |  |  |  | 6,861 |
Vacation accrual |  |  | 4,772 |  |  |  | 4,747 |
Net operating loss carryforwards |  |  | 3,658 |  |  |  | 5,440 |
Marketable securities |  |  | 962 |  |  |  | — |
Other |  |  | 685 |  |  |  | 713 |
Gross deferred tax assets |  |  | 158,277 |  |  |  | 170,763 |
Less: valuation allowance |  |  | (69,852 | ) |  |  | (63,919 | )
Total deferred tax assets |  | $ | 88,425 |  |  | $ | 106,844 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  | $ | (24,211 | ) |  | $ | (16,120 | )
Depreciation |  |  | (14,028 | ) |  |  | (12,293 | )
Marketable securities |  |  | — |  |  |  | (1,125 | )
Total deferred tax liabilities |  | $ | (38,239 | ) |  | $ | (29,538 | )
Net deferred assets |  | $ | 50,186 |  |  | $ | 77,306 |
Operating Loss Carryforwards | At December 31, 2018, Teradyne had operating loss carryforwards that expire in the following years:
|  | State Operating Loss Carryforwards |  |  | Foreign Operating Loss Carryforwards |
| (in thousands) |
2019 |  | $ | 258 |  |  | $ | — |
2020 |  |  | 269 |  |  |  | — |
2021 |  |  | 2,977 |  |  |  | — |
2022 |  |  | 5,749 |  |  |  | — |
2023 |  |  | 6,241 |  |  |  | — |
2024-2028 |  |  | 4,672 |  |  |  | — |
2029-2033 |  |  | 22,724 |  |  |  | 44 |
Beyond 2033 |  |  | 5,305 |  |  |  | 72 |
Non-expiring |  |  | — |  |  |  | 4,389 |
Total |  | $ | 48,195 |  |  | $ | 4,505 |
Unrecognized Tax Benefits | Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2018, 2017, and 2016 were as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
|  | (in thousands) |
Beginning balance, as of January 1 |  | $ | 36,263 |  |  | $ | 38,958 |  |  | $ | 36,792 |
Additions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  | 4,716 |  |  |  | 8,208 |  |  |  | 9,766 |
Tax positions for prior years |  |  | 2,626 |  |  |  | 199 |  |  |  | 187 |
Reductions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (153 | ) |  |  | (10,573 | ) |  |  | (1,960 | )
Expiration of statutes |  |  | (57 | ) |  |  | (325 | ) |  |  | (3,532 | )
Settlements with tax authorities |  |  | — |  |  |  | (204 | ) |  |  | (2,295 | )
Ending balance as of December 31 |  | $ | 43,395 |  |  | $ | 36,263 |  |  | $ | 38,958 |

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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32537-109319 + Details
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