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Income Taxes (Tables)

12 Months Ended

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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