Teradyne Reports Fourth Quarter and Fiscal Year 2014 Results

• Q4’14 Revenue of $323 million, up 13% year over year and full year revenue up 15%
• Quarterly cash dividend of $0.06 and $500 million share repurchase program announced

NORTH READING, Mass.--(BUSINESS WIRE)-- Teradyne, Inc. (NYSE: TER):

			Q4’14			Q4’13				Q3’14				FY 2014				FY 2013
Orders (mil)			$332			$290				$273				$1,682				$1,434
Revenue (mil)			$323			$285				$478				$1,648				$1,428
Non-GAAP EPS			$0.14			$0.07				$0.44				$1.23				$1.06
GAAP EPS			($0.48)			$0.09				$0.38				$0.37				$0.70

Teradyne, Inc. (NYSE: TER) reported revenue of $323 million for the fourth quarter of 2014 of which $237 million was in Semiconductor Test, $46 million in System Test and $40 million in Wireless Test. On a non-GAAP basis, Teradyne’s net income in the fourth quarter was $31.1 million, or $0.14 per diluted share, which excluded a Wireless Test goodwill impairment charge of $99 million, pension actuarial losses of $47 million as well as acquired intangible asset amortization and discrete income tax adjustments. GAAP net loss for the fourth quarter was ($103.8) million or ($0.48) per share.

Orders in the fourth quarter of 2014 were $332 million of which $226 million were in Semiconductor Test, $67 million in System Test and $39 million in Wireless Test.

For the fiscal year, Teradyne reported revenue of $1,648 million of which $1,301 million was in Semiconductor Test, $185 million in Wireless Test, and $162 million in System Test. On a non-GAAP basis, Teradyne’s net income for 2014 was $265.6 million, or $1.23 per diluted share which excluded the charges noted above, a first quarter 2014 CEO retirement equity charge, and non-cash convertible debt interest. GAAP net income for the year was $81.3 million or $0.37 per share and GAAP operating profit declined 49%. Cash provided by operating activities for 2014 was $493 million and purchases of property, plant and equipment were $170 million.

“The fourth quarter wraps up a very strong year for Teradyne from both a market share and cash flow perspective,” said CEO and President Mark Jagiela. “Revenues grew 15% driven by strong System-on-a-Chip (SOC) demand, our operating profit grew 26%, and we generated over $300 million in free cash flow. Despite an expected softening of SOC test demand in 2015, our cycle hardened operating model, combined with our long term outlook for the markets we serve, provides us the confidence to substantially increase our capital return plans for 2015.”

Teradyne announced that its Board of Directors has approved a share repurchase program authorizing the Company to repurchase up to $500 million of its common stock through open market or private transactions. The $500 million authorization replaces the Company’s existing repurchase program announced in 2010.

The Board of Directors has also declared a quarterly cash dividend of $0.06 per share, payable on March 24, 2015 to shareholders of record as of the close of business on February 27, 2015.

“We intend to execute $300 million of the repurchase authorization this year,” Jagiela continued. “Our strong balance sheet and expectations for future cash generation provide Teradyne the flexibility to return capital to shareholders through a significant share repurchase program and a quarterly cash dividend while continuing to invest in future growth and strategic business development opportunities.”

Guidance for the first quarter of 2015 is revenue of $320 million to $345 million, with non-GAAP net income of $0.09 to $0.14 per diluted share and GAAP net income of $0.07 to $0.11 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, gain on the sale of an equity investment, and the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the fourth quarter 2014 results, along with management's business outlook, will follow at 10 a.m. ET, Thursday, January 29. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available at www.teradyne.com/investors at 10 a.m. ET. A replay of the call will also be available on the Teradyne website.

Non-GAAP Results

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude goodwill impairment charge, acquired intangible asset amortization, retired CEO equity charge, non-cash convertible debt interest, discrete income tax adjustments, pension and post retirement actuarial gains and losses, restructuring and other, and a gain from the sale of an equity investment, and, prior to January 1, 2014, included income taxes on a cash basis [cash taxes reflected the usage of prior year favorable tax attributes (e.g. NOLs and credits) against current year tax liability]. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP measures presented to provide meaningful supplemental information regarding Teradyne's baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes pension and post retirement actuarial gains and losses. GAAP requires that this item be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Prior to September 29, 2014, non-GAAP diluted shares included the impact of Teradyne’s call option and warrant on its shares. Management believes each of these non-GAAP measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP financial measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne

Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test semiconductors, wireless products, data storage and complex electronic systems which serve consumer, communications, industrial and government customers. In 2014, Teradyne had revenue of $1.65 billion and currently employs approximately 3,900 people worldwide. For more information, visit www.teradyne.com. Teradyne (R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.

Safe Harbor Statement

This release contains forward-looking statements regarding future business prospects, Teradyne’s results of operations, market conditions, the payment of a quarterly dividend and the repurchase of Teradyne common stock pursuant to a share repurchase program. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, future payment of dividends or future repurchases of common stock. You can identify these forward-looking statements based on the context of the statements and by the fact that they use words such as “will,” “anticipate,” “expect,” “project,” “intend,” “plan,” “believe,” “target” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. There can be no assurance that management’s estimates of Teradyne’s future results or other forward looking statements will be achieved or that dividends will be declared in the future. Additionally, the share repurchase program may be suspended or discontinued at any time. Important factors that could cause actual results, dividend payments, or repurchases of common stock to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand; increased research and development spending; deterioration of Teradyne’s financial condition, the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in the company’s best interests and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Quarterly Report on Form 10-Q for the period ended September 28, 2014. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management's views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne's views as of any date subsequent to the date of this release.

TERADYNE, INC. REPORT FOR FOURTH FISCAL QUARTER OF 2014
CONDENSED CONSOLIDATED OPERATING STATEMENTS
(In thousands, except per share amounts)
						Quarter Ended													Twelve Months Ended
						December 31, 2014				September 28, 2014				December 31, 2013					December 31, 2014				December 31, 2013
Net revenues						$	323,236			$	478,010			$	285,301				$	1,647,824			$	1,427,933
		Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) (2)					163,010				216,889				125,444					769,016				619,132
Gross profit							160,226				261,121				159,857					878,808				808,801
Operating expenses:
		Engineering and development (1)					79,188				71,953				64,613					291,639				264,055
		Selling and administrative (1) (3)					91,157				73,064				69,523					319,713				279,560
		Acquired intangible asset amortization					15,957				18,271				18,284					70,771				72,447
		Goodwill impairment					98,897				-				-					98,897				-
		Restructuring and other (4)					1,198				(405	)			600					1,365				2,080
				Operating expenses			286,397				162,883				153,020					782,385				618,142
(Loss) income from operations							(126,171	)			98,238				6,837					96,423				190,659
		Interest and other (5)					1,358				2,432				28,602					(1,047	)			11,263
(Loss) income before income taxes							(124,813	)			100,670				35,439					95,376				201,922
		Income tax (benefit) provision					(21,002	)			17,721				13,096					14,104				36,975
Net (loss) income						$	(103,811	)		$	82,949			$	22,343				$	81,272			$	164,947
Net (loss) income per common share:
Basic						$	(0.48	)		$	0.40			$	0.12				$	0.40			$	0.86
Diluted						$	(0.48	)		$	0.38			$	0.09				$	0.37			$	0.70
Weighted average common shares - basic							216,532				207,381				191,525					202,908				190,772
Weighted average common shares - diluted (6)							216,532				218,333				236,903					222,550				235,599
Cash dividend declared per common share						$	0.06			$	0.06			$	-				$	0.18			$	-
Net orders						$	331,993			$	273,043			$	289,653				$	1,681,950			$	1,434,145
(1)		In the first quarter of 2012, we changed our accounting method from delayed recognition of actuarial gains and losses for our defined benefit pension plans and other post retirement benefit plans to immediate recognition. We elected to immediately recognize net actuarial gains and losses and the change in the fair value of plan assets in our operating results in the year in which they occur. Below are the pension losses (gains) included in our operating results:
						Quarter Ended													Twelve Months Ended
						December 31, 2014				September 28, 2014				December 31, 2013					December 31, 2014				December 31, 2013
				Cost of revenues		$	12,713			$	-			$	(2,717	)			$	12,713			$	(3,052	)
				Engineering and development			12,223				-				(3,747	)				12,223				(4,406	)
				Selling and administrative			21,628				-				(2,517	)				21,628				(2,882	)
						$	46,564			$	-			$	(8,981	)			$	46,564			$	(10,340	)
(2)		Cost of revenues includes:				Quarter Ended													Twelve Months Ended
						December 31, 2014				September 28, 2014				December 31, 2013					December 31, 2014				December 31, 2013
				Provision for excess and obsolete inventory		$	688			$	6,434			$	6,976				$	22,193			$	16,592
				Sale of previously written down inventory			(3,332	)			(6,332	)			(861	)				(13,058	)			(9,795	)
						$	(2,644	)		$	102			$	6,115				$	9,135			$	6,797
(3)		For the twelve months ended December 31, 2014, selling and administrative expenses include an equity charge of $6,598 for the modification of Teradyne's retired CEO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his January 31, 2014 retirement.
(4)		Restructuring and other consists of:				Quarter Ended													Twelve Months Ended
						December 31, 2014				September 28, 2014				December 31, 2013					December 31, 2014				December 31, 2013
				Employee severance		$	826			$	225			$	600				$	1,623			$	2,528
				Acquisition costs			372				-				-					372				-
				Contingent consideration fair value adjustment			-				(630	)			-					(630	)			-
				Facility related			-				-				-					-				(448	)
						$	1,198			$	(405	)		$	600				$	1,365			$	2,080
(5)		Interest and other includes:				Quarter Ended													Twelve Months Ended
						December 31, 2014				September 28, 2014				December 31, 2013					December 31, 2014				December 31, 2013
				Non-cash convertible debt interest expense		$	-			$	-			$	4,158				$	4,290			$	15,814
				Gain from sale of an equity investment			-				-				(34,212	)				-				(34,212	)
						$	-			$	-			$	(30,054	)			$	4,290			$	(18,398	)
(6)		Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarter ended December 31, 2013, and for the twelve months ended December 31, 2014 and December 31, 2013, 23.5 million, 5.0 million and 23.3 million shares, respectively, have been included in diluted shares.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
						December 31, 2014				December 31, 2013 (1)
						(unaudited)
Assets
		Cash and cash equivalents				$	294,256			$	341,638
		Marketable securities					533,787				586,882
		Accounts receivable					151,034				157,642
		Inventories					105,129				137,939
		Deferred tax assets					57,239				72,478
		Prepayments					95,819				136,374
		Other current assets					6,582				7,324
				Total current assets			1,243,846				1,440,277
		Net property, plant and equipment					329,038				275,236
		Marketable securities					470,789				271,078
		Deferred tax assets					7,494				5,217
		Other assets					10,419				14,591
		Retirement plans assets					12,896				9,342
		Intangible assets					190,600				252,291
		Goodwill					273,438				361,792
				Total assets		$	2,538,520			$	2,629,824
Liabilities
		Accounts payable				$	47,763			$	62,874
		Accrued employees' compensation and withholdings					100,994				95,619
		Deferred revenue and customer advances					71,603				55,404
		Other accrued liabilities					51,997				63,712
		Accrued income taxes					20,049				11,360
		Current debt					-				186,663
				Total current liabilities			292,406				475,632
		Retirement plans liabilities					108,460				91,517
		Long-term deferred revenue and customer advances					19,929				13,756
		Deferred tax liabilities					23,315				40,686
		Long-term other accrued liabilities					15,430				23,139
				Total liabilities			459,540				644,730
Shareholders' equity							2,078,980				1,985,094
							.
				Total liabilities and shareholders' equity		$	2,538,520			$	2,629,824

(1) The December 31, 2013 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
					Quarter Ended									Twelve Months Ended
					December 31, 2014				December 31, 2013					December 31, 2014				December 31, 2013
Cash flows from operating activities:
	Net (loss) income				$	(103,811	)		$	22,343				$	81,272			$	164,947
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				20,558				15,444					73,390				57,317
		Amortization				17,032				23,875					79,154				93,370
		Stock-based compensation				8,434				9,385					40,307				36,612
		Goodwill impairment				98,897				-					98,897				-
		Provision for excess and obsolete inventory				688				6,976					22,193				16,592
		Deferred taxes				(3,435	)			14,927					(12,182	)			(4,284	)
		Gain from sale of equity investment				-				(34,212	)				-				(34,212	)
		Contingent consideration fair value adjustment				-				-					(630	)			-
		Tax benefit related to stock options and restricted stock units				4,334				(5,111	)				(597	)			(7,419	)
		Retirement plans actuarial losses (gains)				46,564				(8,981	)				46,564				(10,340	)
		Impairment loss on property, plant and equipment				-				-					-				1,074
		Other				1,395				(1,055	)				3,505				33
		Changes in operating assets and liabilities:
			Accounts receivable			171,730				52,307					8,060				(3,656	)
			Inventories			12,905				(13,024	)				51,172				21,170
			Prepayments and other assets			(6,247	)			(23,260	)				41,537				(49,572	)
			Accounts payable and accrued expenses			(65,433	)			15,222					(36,324	)			15,205
			Deferred revenue and customer advances			7,767				(19,730	)				22,033				(28,979	)
			Retirement plans contributions			(30,635	)			(1,971	)				(33,916	)			(5,540	)
			Accrued income taxes			(1,308	)			(12,102	)				8,900				1,648
Net cash provided by operating activities						179,435				41,033					493,335				263,966
Cash flows from investing activities:
	Purchases of property, plant and equipment					(23,965	)			(23,806	)				(170,317	)			(106,731	)
	Purchases of marketable securities					(734,687	)			(511,942	)				(1,578,743	)			(1,170,506	)
	Acquisition of businesses, net of cash acquired					(19,419	)			(14,999	)				(19,419	)			(14,999	)
	Proceeds from the sale of an equity investment					-				34,212					-				34,212
	Proceeds from maturities of marketable securities					74,793				114,598					570,358				516,499
	Proceeds from sales of marketable securities					623,669				125,523					859,729				458,491
	(Purchases of) proceeds from life insurance					(207	)			(307	)				4,184				(307	)
Net cash used for investing activities						(79,816	)			(276,721	)				(334,208	)			(283,341	)
Cash flows from financing activities:
	Issuance of common stock under stock option and stock purchase plans					261				818					21,291				17,596
	Tax benefit related to stock options and restricted stock units					(4,334	)			5,111					597				7,419
	Dividend payments					(12,994	)			-					(37,422	)			-
	Payments of long-term debt					-				(1,471	)				(190,975	)			(2,534	)
	Payments of contingent consideration					-				-					-				(388	)
Net cash (used for) provided by financing activities						(17,067	)			4,458					(206,509	)			22,093
Increase (decrease) in cash and cash equivalents						82,552				(231,230	)				(47,382	)			2,718
Cash and cash equivalents at beginning of period						211,704				572,868					341,638				338,920
Cash and cash equivalents at end of period					$	294,256			$	341,638				$	294,256			$	341,638

GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
						Quarter Ended
						December 31, 2014				% of Net Revenues											September 28, 2014				% of Net Revenues											December 31, 2013				% of Net Revenues
Net revenues						$	323.2														$	478.0														$	285.3
Gross profit - GAAP						$	160.2			49.6	%										$	261.1			54.6	%										$	159.9			56.0	%
		Pension mark-to-market adjustments (1)					12.7			3.9	%											-			-												(2.7	)		-0.9	%
Gross profit - non-GAAP						$	172.9			53.5	%										$	261.1			54.6	%										$	157.2			55.1	%
(Loss) Income from operations - GAAP						$	(126.2	)		-39.0	%										$	98.2			20.5	%										$	6.8			2.4	%
		Acquired intangible asset amortization					16.0			5.0	%											18.3			3.8	%											18.3			6.4	%
		Goodwill impairment (2)					98.9			30.6	%											-			-												-			-
		Restructuring and other (3)					1.2			0.4	%											(0.4	)		-0.1	%											0.6			0.2	%
		Pension mark-to-market adjustments (1)					46.6			14.4	%											-			-												(9.0	)		-3.2	%
Income from operations - non-GAAP						$	36.5			11.3	%										$	116.1			24.3	%										$	16.7			5.9	%
													Net Income per Common Share															Net Income per Common Share															Net Income per Common Share
						December 31, 2014				% of Net Revenues			Basic				Diluted				September 28, 2014				% of Net Revenues			Basic				Diluted				December 31, 2013				% of Net Revenues			Basic				Diluted
Net (loss) income - GAAP						$	(103.8	)		-32.1	%		$	(0.48	)		$	(0.48	)		$	82.9			17.3	%		$	0.40			$	0.38			$	22.3			7.8	%		$	0.12			$	0.09
		Acquired intangible asset amortization					16.0			5.0	%			0.07				0.07				18.3			3.8	%			0.09				0.08				18.3			6.4	%			0.10				0.08
		Goodwill impairment (2)					98.9			30.6	%			0.46				0.45				-			-				-				-				-			-				-				-
		Restructuring and other (3)					1.2			0.4	%			0.01				0.01				(0.4	)		-0.1	%			(0.00	)			(0.00	)			0.6			0.2	%			0.00				0.00
		Pension mark-to-market adjustments (1)					46.6			14.4	%			0.22				0.21				-			-				-				-				(9.0	)		-3.2	%			(0.05	)			(0.04	)
		Exclude discrete tax adjustments (4)					1.5			0.5	%			0.01				0.01				(1.6	)		-0.3	%			(0.01	)			(0.01	)			-			-				-				-
		Tax effect of non-GAAP adjustments					(29.3	)		-9.1	%			(0.14	)			(0.13	)			(3.4	)		-0.7	%			(0.02	)			(0.02	)			-			-				-				-
		Income tax adjustment (5)					-			-				-				-				-			-				-				-				11.1			3.9	%			0.06				0.05
		Interest and other (6)					-			-				-				-				-			-				-				-				(30.0	)		-10.5	%			(0.16	)			(0.13	)
		Convertible share adjustment					-			-				-				-				-			-				-				-				-			-				-				0.02
Net income - non-GAAP						$	31.1			9.6	%		$	0.14			$	0.14			$	95.8			20.0	%		$	0.46			$	0.44			$	13.3			4.7	%		$	0.07			$	0.07
GAAP and non-GAAP weighted average common shares - basic							216.5															207.4															191.5
GAAP weighted average common shares - diluted							216.5															218.3															236.9
		Include GAAP dilutive shares					2.3															-															-
		Exclude dilutive shares from convertible note					-															-															(42.4	)
Non-GAAP weighted average common shares - diluted							218.8															218.3															194.5
(1)		Actuarial losses (gains) recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
(2)		Goodwill impairment related to Teradyne's Wireless Test business segment.
(3)		Restructuring and other consists of:
						Quarter Ended
						December 31, 2014															September 28, 2014															December 31, 2013
			Employee severance			$	0.8														$	0.2														$	0.6
			Acquisition costs				0.4															-															-
			Contingent consideration fair value adjustment				-															(0.6	)														-
						$	1.2														$	(0.4	)													$	0.6
(4)		For the quarters ended December 31, 2014 and September 28, 2014, adjustment to exclude discrete income tax items.
(5)		For the quarter ended December 31, 2013, adjustment to record income taxes on a cash basis. Cash taxes reflect the usage of prior year favorable tax attributes (e.g. NOLs and credits) against current year tax liability.
(6)		For the quarter ended December 31, 2013, Interest and other included non-cash convertible debt interest expense and a gain from the sale of an equity investment.
						Years Ended
						December 31, 2014				% of Net Revenues											December 31, 2013				% of Net Revenues
Net Revenues						$	1,647.8														$	1,427.9
Gross profit - GAAP						$	878.8			53.3	%										$	808.8			56.6	%
		Pension mark-to-market adjustments (1)					12.7			0.8	%											(3.1	)		-0.2	%
Gross profit - non-GAAP						$	891.5			54.1	%										$	805.7			56.4	%
Income from operations - GAAP						$	96.4			5.9	%										$	190.7			13.4	%
		Acquired intangible asset amortization					70.8			4.3	%											72.4			5.1	%
		Goodwill impairment (2)					98.9			6.0	%											-			-
		Equity modification charge (3)					6.6			0.4	%											-			-
		Restructuring and other (4)					1.4			0.1	%											2.1			0.1	%
		Pension mark-to-market adjustments (1)					46.6			2.8	%											(10.3	)		-0.7	%
Income from operations - non-GAAP						$	320.7			19.5	%										$	254.9			17.9	%
													Net Income per Common Share															Net Income per Common Share
						December 31, 2014				% of Net Revenues			Basic				Diluted				December 31, 2013				% of Net Revenues			Basic				Diluted
Net income - GAAP						$	81.3			4.9	%		$	0.40			$	0.37			$	164.9			11.5	%		$	0.86			$	0.70
		Acquired intangible asset amortization					70.8			4.3	%			0.35				0.32				72.4			5.1	%			0.38				0.31
		Goodwill impairment (2)					98.9			6.0	%			0.49				0.44				-			-				-				-
		Pension mark-to-market adjustments (1)					46.6			2.8	%			0.23				0.21				(10.3	)		-0.7	%			(0.05	)			(0.04	)
		Equity modification charge (3)					6.6			0.4	%			0.03				0.03				-			-				-				-
		Restructuring and other (4)					1.4			0.1	%			0.01				0.01				2.1			0.1	%			0.01				0.01
		Interest and other (5)					4.3			0.3	%			0.02				0.02				(18.4	)		-1.3	%			(0.10	)			(0.08	)
		Exclude discrete tax adjustments (6)					(3.0	)		-0.2	%			(0.01	)			(0.01	)			-			-				-				-
		Tax effect of non-GAAP adjustments					(41.3	)		-2.5	%			(0.20	)			(0.19	)			-			-				-				-
		Income tax adjustment (7)					-			-				-				-				4.8			0.3	%			0.03				0.02
		Convertible share adjustment (8)					-			-				-				0.02				-			-				-				0.14
Net income - non-GAAP						$	265.6			16.1	%		$	1.31			$	1.23			$	215.5			15.1	%		$	1.13			$	1.06
GAAP and non-GAAP weighted average common shares - basic							202.9															190.8
GAAP weighted average common shares - diluted							222.6															235.6
		Exclude dilutive shares from convertible note					(5.0	)														(23.3	)
Non-GAAP weighted average common shares - diluted (8)							217.6															212.3
(1)		Actuarial losses (gains) recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
(2)		Goodwill impairment related to Teradyne's Wireless Test business segment.
(3)		For the year ended December 31, 2014, selling and administrative expenses include an equity charge for the modification of Teradyne's retired CEO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his January 31, 2014 retirement.
(4)		Restructuring and other consists of:
						Years Ended
						December 31, 2014															December 31, 2013
		Employee severance				$	1.6														$	2.5
		Acquisition costs					0.4															-
		Contingent consideration fair value adjustment					(0.6	)														-
		Facility related					-															(0.4	)
						$	1.4														$	2.1
(5)		For the years ended December 31, 2014 and 2013, Interest and other included non-cash convertible debt interest expense. For the year ended December 31, 2013, Interest and other included a gain from the sale of an equity investment.
(6)		For the year ended December 31, 2014, adjustment to exclude discrete income tax items.
(7)		For the year ended December 31, 2013, adjustment to record income taxes on a cash basis. Cash taxes reflects the usage of prior year favorable tax attributes (e.g. NOLs and credits) against current year tax liability.
(8)		For the years ended December 31, 2014 and 2013, the calculation of non-GAAP diluted earnings per share gives benefit to the Company's call option on its stock for 34.7 million shares at $5.48. As a result 5.0 million and 23.3 million shares, respectively, have been excluded from non-GAAP diluted shares. For the years ended December 31, 2014 and 2013, net interest expense of approximately $2.0 million and $9.4 million, respectively, have been added back to non-GAAP net income for the non-GAAP diluted earnings per share calculation.

GAAP to Non-GAAP Reconciliation of First Quarter 2015 guidance:
GAAP and non-GAAP first quarter revenue guidance:				$320 million				to		$345 million
GAAP net income per diluted share				$	0.07					$	0.11
	Exclude acquired intangible asset amortization				0.06						0.06
	Exclude gain from the sale of an equity investment				(0.02	)					(0.02	)
	Tax effect of non-GAAP adjustments				(0.01	)					(0.01	)
Non-GAAP net income per diluted share				$	0.09					$	0.14

For press releases and other information of interest to investors, please visit Teradyne's homepage at http://www.teradyne.com.

Teradyne, Inc.
Andy Blanchard, 978-370-2425
Vice President of Corporate Relations

Source: Teradyne, Inc.