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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
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:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (in thousands) |
Income before income taxes: |  |  |  |  |  |  |  |  |
U.S. |  | $ | 307,997 |  |  | $ | 385,968 |  |  | $ | 403,451 |
Non-U.S. |  |  | 217,575 |  |  |  | 454,417 |  |  |  | 757,504 |
|  | $ | 525,572 |  |  | $ | 840,385 |  |  | $ | 1,160,955 |
Provision (benefit) for income taxes: |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |
U.S. Federal |  | $ | 58,063 |  |  | $ | 86,692 |  |  | $ | 58,218 |
Non-U.S. |  |  | 54,037 |  |  |  | 74,204 |  |  |  | 105,153 |
State |  |  | 2,362 |  |  |  | 2,681 |  |  |  | 300 |
|  |  | 114,462 |  |  |  | 163,577 |  |  |  | 163,671 |
Deferred: |  |  |  |  |  |  |  |  |
U.S. Federal |  |  | (27,459 | ) |  |  | (36,739 | ) |  |  | (15,106 | )
Non-U.S. |  |  | (8,584 | ) |  |  | 1,232 |  |  |  | (4,300 | )
State |  |  | (1,599 | ) |  |  | (3,186 | ) |  |  | 2,101 |
|  |  | (37,642 | ) |  |  | (38,693 | ) |  |  | (17,305 | )
Total provision for income taxes: |  | $ | 76,820 |  |  | $ | 124,884 |  |  | $ | 146,366 |
Reconciliation of Effective Tax Rate | A reconciliation of the effective tax rate for the years 2023, 2022 and 2021 is as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. statutory federal tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Foreign taxes |  |  | 2.5 |  |  |  | (1.9 | ) |  |  | (4.5 | )
Non-deductible officers’ compensation |  |  | 1.1 |  |  |  | 1.3 |  |  |  | 0.8 |
U.S. global intangible low-taxed income |  |  | 0.8 |  |  |  | 1.2 |  |  |  | 0.6 |
State income taxes, net of federal tax benefit |  |  | 0.1 |  |  |  | (0.1 | ) |  |  | 0.2 |
U.S. research and development credit |  |  | (4.2 | ) |  |  | (1.8 | ) |  |  | (1.4 | )
U.S. foreign derived intangible income |  |  | (3.9 | ) |  |  | (3.1 | ) |  |  | (2.3 | )
Foreign tax credits |  |  | (3.3 | ) |  |  | (1.0 | ) |  |  | (0.5 | )
Equity compensation |  |  | (0.4 | ) |  |  | (1.1 | ) |  |  | (1.0 | )
Other, net |  |  | 0.9 |  |  |  | 0.4 |  |  |  | (0.3 | )
|  |  | 14.6 | % |  |  | 14.9 | % |  |  | 12.6 | %
Deferred Tax Assets (Liabilities) | Significant components of Teradyne’s deferred tax assets (liabilities) as of December 31, 2023 and 2022 were as follows:
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Deferred tax assets: |  |  |  |  |  |
Tax credits |  | $ | 112,571 |  |  | $ | 105,503 |
Research and development |  |  | 82,571 |  |  |  | 47,760 |
Accruals |  |  | 25,644 |  |  |  | 30,747 |
Pension liabilities |  |  | 24,997 |  |  |  | 21,335 |
Lease liabilities |  |  | 21,167 |  |  |  | 18,679 |
Inventory valuations |  |  | 19,289 |  |  |  | 22,554 |
Deferred revenue |  |  | 13,807 |  |  |  | 14,909 |
Equity compensation |  |  | 7,179 |  |  |  | 6,578 |
Vacation accrual |  |  | 6,096 |  |  |  | 5,856 |
Net operating loss carryforwards |  |  | 5,737 |  |  |  | 1,857 |
Investment impairment |  |  | 3,292 |  |  |  | 3,292 |
Intangible assets |  |  | 2,323 |  |  |  | 350 |
Marketable securities |  |  | 128 |  |  |  | 2,283 |
Other |  |  | 953 |  |  |  | 2,520 |
Gross deferred tax assets |  |  | 325,754 |  |  |  | 284,223 |
Less: valuation allowance |  |  | (109,251 | ) |  |  | (103,807 | )
Total deferred tax assets |  | $ | 216,503 |  |  | $ | 180,416 |
Deferred tax liabilities: |  |  |  |  |  |
Right of use assets |  | $ | (19,016 | ) |  | $ | (16,607 | )
Depreciation |  |  | (16,681 | ) |  |  | (19,078 | )
Contingent consideration |  |  | (5,214 | ) |  |  | (5,214 | )
Total deferred tax liabilities |  | $ | (40,911 | ) |  | $ | (40,899 | )
Net deferred assets |  | $ | 175,592 |  |  | $ | 139,517 |
Operating Loss Carryforwards | At December 31, 2023, Teradyne had tax effected operating loss carryforwards that expire in the following years:
|  | State Operating Loss Carryforwards |  |  | Foreign Operating Loss Carryforwards |
|  | (in thousands) |
2024 |  | $ | 6 |  |  | $ | — |
2025 |  |  | 4 |  |  |  | — |
2026 |  |  | — |  |  |  | — |
2027 |  |  | — |  |  |  | — |
2028 |  |  | 23 |  |  |  | 83 |
2029-2033 |  |  | 121 |  |  |  | 500 |
2034-2038 |  |  | 31 |  |  |  | — |
Beyond 2038 |  |  | — |  |  |  | — |
Non-expiring |  |  | 30 |  |  |  | 4,939 |
Total |  | $ | 215 |  |  | $ | 5,522 |
Unrecognized Tax Benefits | Teradyne’s gross unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021 were as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (in thousands) |
Beginning balance as of January 1 |  | $ | 15,608 |  |  | $ | 14,465 |  |  | $ | 17,903 |
Additions: |  |  |  |  |  |  |  |  |
Tax positions for current year |  |  | — |  |  |  | 1,398 |  |  |  | 1,417 |
Tax positions for prior years |  |  | 3,024 |  |  |  | 13 |  |  |  | 30 |
Reductions: |  |  |  |  |  |  |  |  |
Tax positions for prior years |  |  | (26 | ) |  |  | (56 | ) |  |  | (1,639 | )
Expiration of statutes |  |  | — |  |  |  | (212 | ) |  |  | (3,246 | )
Ending balance as of December 31 |  | $ | 18,606 |  |  | $ | 15,608 |  |  | $ | 14,465 |

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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 -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-15 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15A -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-15A Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 19 -SubTopic 10 -Topic 740 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-19 + Details
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