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v3.22.4

Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Schedule of Income (Loss) Before Income Taxes and Provision (Benefit) for Income Taxes from Operations | The components of income before income taxes and the provision (benefit) for income taxes as shown in the consolidated statements of operations were as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in thousands) |
Income before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 385,968 |  |  | $ | 403,451 |  |  | $ | 312,153 |
Non-U.S. |  |  | 454,417 |  |  |  | 757,504 |  |  |  | 588,862 |
|  | $ | 840,385 |  |  | $ | 1,160,955 |  |  | $ | 901,015 |
Provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 86,692 |  |  | $ | 58,218 |  |  | $ | 58,678 |
Non-U.S. |  |  | 74,204 |  |  |  | 105,153 |  |  |  | 75,193 |
State |  |  | 2,681 |  |  |  | 300 |  |  |  | (1,315 | )
|  |  | 163,577 |  |  |  | 163,671 |  |  |  | 132,556 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (36,739 | ) |  |  | (15,106 | ) |  |  | (12,604 | )
Non-U.S. |  |  | 1,232 |  |  |  | (4,300 | ) |  |  | (5,127 | )
State |  |  | (3,186 | ) |  |  | 2,101 |  |  |  | 2,043 |
|  |  | (38,693 | ) |  |  | (17,305 | ) |  |  | (15,688 | )
Total provision for income taxes: |  | $ | 124,884 |  |  | $ | 146,366 |  |  | $ | 116,868 |
Reconciliation of Effective Tax Rate | A reconciliation of the effective tax rate for the years 2022, 2021 and 2020 is as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
U.S. statutory federal tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Non-deductible officers’ compensation |  |  | 1.3 |  |  |  | 0.8 |  |  |  | 0.5 |
U.S. global intangible low-taxed income |  |  | 1.2 |  |  |  | 0.6 |  |  |  | 2.1 |
U.S. foreign derived intangible income |  |  | (3.1 | ) |  |  | (2.3 | ) |  |  | (2.2 | )
Foreign taxes |  |  | (1.9 | ) |  |  | (4.5 | ) |  |  | (5.6 | )
U.S. research and development credit |  |  | (1.8 | ) |  |  | (1.4 | ) |  |  | (1.3 | )
Equity compensation |  |  | (1.1 | ) |  |  | (1.0 | ) |  |  | (0.8 | )
Foreign tax credits |  |  | (1.0 | ) |  |  | (0.5 | ) |  |  | (1.2 | )
State income taxes, net of federal tax benefit |  |  | (0.1 | ) |  |  | 0.2 |  |  |  | 0.3 |
Other, net |  |  | 0.4 |  |  |  | (0.3 | ) |  |  | 0.2 |
|  |  | 14.9 | % |  |  | 12.6 | % |  |  | 13.0 | %
Deferred Tax Assets (Liabilities) | Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2022 and 2021 were as follows:
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |  |  |
Tax credits |  | $ | 105,503 |  |  | $ | 98,378 |
Research and development |  |  | 47,760 |  |  |  | — |
Accruals |  |  | 30,747 |  |  |  | 41,459 |
Inventory valuations |  |  | 22,554 |  |  |  | 20,991 |
Pension liabilities |  |  | 21,335 |  |  |  | 28,722 |
Lease liability |  |  | 18,679 |  |  |  | 16,484 |
Deferred revenue |  |  | 14,909 |  |  |  | 11,164 |
Equity compensation |  |  | 6,578 |  |  |  | 6,630 |
Vacation accrual |  |  | 5,856 |  |  |  | 6,050 |
Investment impairment |  |  | 3,292 |  |  |  | 3,292 |
Marketable securities |  |  | 2,283 |  |  |  | — |
Net operating loss carryforwards |  |  | 1,857 |  |  |  | 1,721 |
Intangible assets |  |  | 350 |  |  |  | — |
Other |  |  | 2,520 |  |  |  | 774 |
Gross deferred tax assets |  |  | 284,223 |  |  |  | 235,665 |
Less: valuation allowance |  |  | (103,807 | ) |  |  | (97,170 | )
Total deferred tax assets |  | $ | 180,416 |  |  | $ | 138,495 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | (19,078 | ) |  | $ | (10,691 | )
Right-of-use assets |  |  | (16,607 | ) |  |  | (14,738 | )
Contingent consideration |  |  | (5,214 | ) |  |  | (5,214 | )
Intangible assets |  |  | — |  |  |  | (8,531 | )
Marketable securities |  |  | — |  |  |  | (3,220 | )
Total deferred tax liabilities |  | $ | (40,899 | ) |  | $ | (42,394 | )
Net deferred assets |  | $ | 139,517 |  |  | $ | 96,101 |
Operating Loss Carryforwards | At December 31, 2022, Teradyne had tax effected operating loss carryforwards that expire in the following years:
|  | State Operating Loss Carryforwards |  |  | Foreign Operating Loss Carryforwards |
|  | (in thousands) |
2023 |  | $ | 222 |  |  | $ | — |
2024 |  |  | 6 |  |  |  | — |
2025 |  |  | 4 |  |  |  | — |
2026 |  |  | — |  |  |  | — |
2027 |  |  | — |  |  |  | — |
2028-2032 |  |  | 299 |  |  |  | 676 |
2033-2037 |  |  | 44 |  |  |  | 3 |
Beyond 2037 |  |  | 24 |  |  |  | — |
Non-expiring |  |  | 29 |  |  |  | 550 |
Total |  | $ | 628 |  |  | $ | 1,229 |
Unrecognized Tax Benefits | Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 were as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in thousands) |
Beginning balance as of January 1 |  | $ | 14,465 |  |  | $ | 17,903 |  |  | $ | 21,180 |
Additions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  | 1,398 |  |  |  | 1,417 |  |  |  | 1,082 |
Tax positions for prior years |  |  | 13 |  |  |  | 30 |  |  |  | 66 |
Reductions: |  |  |  |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (56 | ) |  |  | (1,639 | ) |  |  | (2,989 | )
Expiration of statutes |  |  | (212 | ) |  |  | (3,246 | ) |  |  | (1,436 | )
Ending balance as of December 31 |  | $ | 15,608 |  |  | $ | 14,465 |  |  | $ | 17,903 |

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- Definition Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI https://asc.fasb.org/extlink&oid=121826272&loc=SL6600010-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32718-109319 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32840-109319 + Details
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