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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

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:

		2018				2017				2016
Risk-free interest rate			2.2	%			1.5	%			1.0	%
Teradyne volatility-historical			26.8	%			26.6	%			27.0	%
NYSE Composite Index volatility-historical			12.4	%			13.4	%			13.1	%
Dividend yield			0.8	%			1.0	%			1.2	%

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:

		2018				2017				2016
Expected life (years)			5.0				5.0				5.0
Risk-free interest rate			2.4	%			2.0	%			1.4	%
Volatility-historical			26.4	%			27.8	%			32.9	%
Dividend yield			0.80	%			1.00	%			1.20	%

Stock Compensation Plan Activity

Stock compensation plan activity for the years 2018, 2017, and 2016 is as follows:

		2018				2017				2016
		(in thousands)
Restricted Stock Units:
Non-vested at January 1			3,174				3,778				4,070
Awarded			790				939				1,471
Vested			(1,382	)			(1,434	)			(1,530	)
Forfeited			(128	)			(109	)			(233	)
Non-vested at December 31			2,454				3,174				3,778
Stock Options:
Outstanding at January 1			531				926				1,121
Granted			69				111				130
Exercised			(94	)			(501	)			(324	)
Expired			—				(5	)			(2	)
Outstanding at December 31			506				531				926
Vested and expected to vest at December 31			506				531				926
Exercisable at December 31			256				233				598

Share Based Compensation Total Shares Available

Total shares available for the years 2018, 2017, and 2016:

		2018				2017				2016
		(in thousands)
Shares available:
Available for grant at January 1			8,605				9,546				10,914
Options granted			(69	)			(111	)			(130	)
Restricted stock units awarded			(790	)			(939	)			(1,471	)
Restricted stock units forfeited			128				109				233
Available for grant at December 31			7,874				8,605				9,546

Weighted-Average Restricted Stock Unit Award Date Fair Value

Weighted average restricted stock unit award date fair value information for the years 2018, 2017, and 2016 is as follows:

		2018				2017				2016
Non-vested at January 1		$	21.71			$	18.27			$	17.66
Awarded			45.99				28.91				18.95
Vested			20.20				17.90				17.36
Forfeited			24.67				20.35				17.80
Non-vested at December 31		$	29.22			$	21.71			$	18.27

Restricted Stock Unit Awards Aggregate Intrinsic Value

Restricted stock unit awards aggregate intrinsic value information at December 31 for the years 2018, 2017, and 2016 is as follows:

		2018				2017				2016
		(in thousands)
Vested		$	63,688			$	40,649			$	30,008
Outstanding			77,015				132,875				95,952
Expected to vest			77,187				130,594				91,871

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 2018, 2017, and 2016 is as follows:

		2018				2017				2016
Outstanding			0.92				1.00				1.04
Expected to vest			0.91				0.99				1.03

Weighted Average Stock Options Exercise Price

Weighted average stock options exercise price information for the year ended December 31, 2018 is as follows:

		2018
Outstanding at January 1		$	13.92
Options granted			47.70
Options exercised			10.89
Outstanding at December 31			19.06
Exercisable at December 31			8.31

Stock Option Aggregate Intrinsic Value Information

Stock option aggregate intrinsic value information for the years ended December 31, 2018, 2017, and 2016 is as follows:

		2018				2017				2016
		(in thousands)
Exercised		$	2,960			$	8,035			$	3,729
Outstanding			7,359				14,831				12,468
Vested and expected to vest			7,359				14,831				12,468
Exercisable			5,905				9,076				10,217

Stock Options Weighted Average Remaining Contractual Terms

Stock options weighted average remaining contractual terms (in years) information at December 31, for the years 2018, 2017, and 2016 is as follows:

		2018				2017				2016
Outstanding			3.6				4.1				3.9
Vested and expected to vest			3.6				4.1				3.9
Exercisable			2.4				2.8				3.2

Significant Option Groups Outstanding

Significant option groups outstanding at December 31, 2018 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			1.23				67			$	1.83				67			$	1.83
$2.67 – $3.28			2.20				103				2.69				103				2.69
$7.71 – $19.43			3.41				166				18.59				68				18.02
$28.56 – $47.70			5.62				170				36.30				18				28.56
							506			$	19.06				256			$	8.31

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

The following table provides the effect to income from operations for recording stock-based compensation for the years ended December 31, 2018, 2017, and 2016:

		2018				2017				2016
		(in thousands)
Cost of revenues		$	3,129			$	3,212			$	3,153
Engineering and development			9,181				9,370				9,458
Selling and administrative			21,267				21,515				18,139
Stock-based compensation			33,577				34,097				30,750
Income tax benefit			(12,036	)			(10,462	)			(8,752	)
Total stock-based compensation expense after income taxes		$	21,541			$	23,635			$	21,998

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