Segment Information

6 Months Ended

Jun. 30, 2019

U. SEGMENT INFORMATION

Teradyne has four reportable segments (Semiconductor Test, System Test, Industrial Automation and Wireless Test). Each of the Semiconductor Test, System Test, and Wireless Test segments is also an individual operating segment. The Industrial Automation reportable segment consists of operating segments with discrete financial information, which have been combined into one reportable segment as they share similar economic characteristics, types of products, production processes, distribution channels, and currency risks. The Semiconductor Test segment includes operations related to the design, manufacturing and marketing of semiconductor test products and services. The System Test segment includes operations related to the design, manufacturing and marketing of products and services for defense/aerospace instrumentation test, storage test and circuit-board test. The Industrial Automation segment includes operations related to the design, manufacturing and marketing of collaborative robotic arms, autonomous mobile robots and advanced robotic control software. The Wireless Test segment includes operations related to the design, manufacturing and marketing of wireless test products and services.

Teradyne evaluates performance based on several factors, of which the primary financial measure is business segment income (loss) before income taxes. The accounting policies of the business segments in effect are described in Note B: “Accounting Policies” in Teradyne’s Annual Report on Form 10-K for the year ended December 31, 2018, and Note B: “Accounting Policies” in this filing for any changes in the three and six months ended June 30, 2019.

Segment information for the three and six months ended June 30, 2019 and July 1, 2018 is as follows:


	Semiconductor Test		Industrial Automation			System Test		Wireless Test		Corporate and Other			Consolidated
	(in thousands)
Three Months Ended June 30, 2019
Revenues	$	374,898	$	74,726		$	73,407	$	41,236	$	(89	)	$	564,178
Income (loss) before income taxes (1)(2)		91,355		(3,730	)		23,535		10,930		9,087			131,177
Total assets (3)		745,073		601,676			123,460		93,232		1,108,073			2,671,514
Three Months Ended July 1, 2018
Revenues	$	360,088	$	62,057		$	69,682	$	35,212	$	(110	)	$	526,929
Income (loss) before income taxes (1)(2)		91,159		(2,922	)		20,352		10,308		1,115			120,012
Total assets (3)		765,484		597,293			107,199		77,638		1,384,106			2,931,720
Six Months Ended June 30, 2019
Revenues	$	715,751	$	140,862		$	131,627	$	70,277	$	(240	)	$	1,058,277
Income (loss) before income taxes (1)(2)		174,404		(9,025	)		38,875		14,558		6,344			225,156
Total assets (3)		745,073		601,676			123,460		93,232		1,108,073			2,671,514
Six Months Ended July 1, 2018
Revenues	$	733,416	$	110,891		$	112,702	$	57,719	$	(332	)	$	1,014,396
Income (loss) before income taxes (1)(2)		179,238		(2,138	)		26,240		10,772		1,719			215,831
Total assets (3)		765,484		597,293			107,199		77,638		1,384,106			2,931,720

(1)	Included in Corporate and Other are: contingent consideration adjustments, severance charges, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, acquisition related charges, and pension and postretirement plans actuarial losses.

(2)	Included in the income (loss) before income taxes for each of the segments are charges and credits related to restructuring and other and inventory charges.

(3)	Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.

Included in the Semiconductor Test segment are charges in the following line items in the statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(in thousands)
Cost of revenues—inventory charge	$	2,278	$	1,613	$	3,452	$	3,779
Restructuring and other—employee severance		357		2,179		924		5,940

Included in the Industrial Automation segment are charges in the following line items in the statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(in thousands)
Restructuring and other—acquisition related expenses and compensation	$	434	$	—	$	1,695	$	—
Restructuring and other—employee severance		202		218		297		338
Cost of revenues—inventory charge		—		—		416		—

Included in the System Test segment are charges in the following line item in the statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(in thousands)
Cost of revenues—inventory charge	$	295	$	256	$	763	$	576

Included in the Wireless Test segment are charges in the following line items in the statements of operations:


	For the Three Months Ended				For the Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(in thousands)
Cost of revenues—inventory charge	$	829	$	627	$	1,168	$	1,463

Included in Corporate and Other are charges and credits in the following line items in the statements of operations:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018
	(in thousands)
Restructuring and other—MiR contingent consideration adjustment	$	(11,671	)	$	—		$	(8,668	)	$	—
Restructuring and other—Universal Robots contingent consideration adjustment		—			(3,500	)		—			(8,468	)
Restructuring and other—acquisition related expenses and compensation		—			2,544			—			3,318