This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program, use of proceeds and potential dilution from the senior convertible notes offering, and the impact of the U.S. tax reform, export and tariff laws. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes, or the impact of the U.S. tax reform, export and tariff laws. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time. On May 16, 2019, Huawei and 68 of its affiliates, including HiSilicon, were added to the U.S. Department of Commerce Entity List under U.S. Export Administration Regulations (the “EAR”). This action by the U.S. Department of Commerce imposes new export licensing requirements on exports, re-exports, and in-country transfers of all U.S. - regulated products, software and technology to the designated Huawei entities.  While most of our products are not subject to the EAR and therefore not affected by the Entity List restrictions, certain of our products are currently manufactured in the U.S. and thus subject to the Entity List restrictions.  Compliance with the Entity List restrictions has not significantly impacted our sales, but could limit sales in the future.  Important factors that could cause actual results, earnings per share, use of cash, dividend payments, repurchases of common stock, or payment of the senior convertible notes to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow the Industrial Automation business; increased research and development spending; deterioration of Teradyne’s financial condition; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; 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; additional U.S. tax regulations or IRS guidance; the impact of any tariffs or export controls imposed in the U.S. or China; compliance with trade protection measures or export restrictions, including the addition of Huawei and HiSilicon to the U.S. Department of Commerce Entity List; 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, 2018 and the Quarterly Report on Form 10-Q for the period ended June 30, 2019. 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 THIRD FISCAL QUARTER OF 2019
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
							Quarter Ended									Nine Months Ended
							September 29, 2019			June 30, 2019			September 30, 2018			September 29, 2019			September 30, 2018
Net revenues							$	582,038		$	564,178		$	566,848		$	1,640,315		$	1,581,244
	Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)						237,000			240,260			233,155			683,724			670,385
Gross profit							345,038			323,918			333,693			956,591			910,859
Operating expenses:
	Selling and administrative (2)						109,166			108,811			100,199			319,990			290,115
	Engineering and development						77,804			81,434			77,049			236,030			226,799
	Acquired intangible assets amortization						9,647			10,083			11,142			30,363			28,633
	Restructuring and other (3)						(6,500)			(10,404)			1,710			(11,792)			3,785
			Operating expenses				190,117			189,924			190,100			574,591			549,332
Income from operations							154,921			133,994			143,593			382,000			361,527
	Interest and other expense (4)						3,188			2,817			2,749			5,111			4,852
Income before income taxes							151,733			131,177			140,844			376,889			356,675
	Income tax provision (5)						15,873			33,780			20,863			34,494			48,684
Net income							$	135,860		$	97,397		$	119,981		$	342,395		$	307,991
Net income per common share:
Basic							$	0.80		$	0.57		$	0.65		$	2.00		$	1.62
Diluted							$	0.75		$	0.55		$	0.63		$	1.92		$	1.57
Weighted average common shares - basic							169,641			171,241			185,744			171,471			190,576
Weighted average common shares - diluted (6)							180,494			178,590			190,505			178,685			196,300
Cash dividend declared per common share							$	0.09		$	0.09		$	0.09		$	0.27		$	0.27
(1)	Cost of revenues includes:						Quarter Ended									Nine Months Ended
							September 29, 2019			June 30, 2019			September 30, 2018			September 29, 2019			September 30, 2018
			Provision for excess and obsolete inventory				$	3,049		$	3,402		$	3,347		$	8,848		$	9,522
			Sale of previously written down inventory				(821)			(363)			(1,013)			(1,962)			(5,178)
			Inventory step-up				-			383			-			383			372
							$	2,228		$	3,422		$	2,334		$	7,269		$	4,716
(2)	For the quarter and nine months ended September 29, 2019, selling and administrative expenses include an equity charge of $2,109 for the modification of Teradyne's retired CFO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his July 17, 2019 retirement.
(3)	Restructuring and other consists of:						Quarter Ended									Nine Months Ended
							September 29, 2019			June 30, 2019			September 30, 2018			September 29, 2019			September 30, 2018
			Contingent consideration fair value adjustment				$	(7,759)		$	(11,671)		$	(768)		$	(16,460)		$	(9,236)
			Employee severance				808			803			1,667			2,410			7,945
			Acquisition related expenses and compensation				451			464			811			2,258			4,129
			Other				-			-			-			-			947
							$	(6,500)		$	(10,404)		$	1,710		$	(11,792)		$	3,785
(4)	Interest and other includes:						Quarter Ended									Nine Months Ended
							September 29, 2019			June 30, 2019			September 30, 2018			September 29, 2019			September 30, 2018
			Non-cash convertible debt interest				$	3,453		$	3,410		$	3,286		$	10,231		$	9,737
			Pension actuarial loss				-			448			267			448			196
							$	3,453		$	3,858		$	3,553		$	10,679		$	9,933
(5)	For the quarter ended June 30, 2019, income tax provision includes a $15 million tax provision related to the finalization of our toll tax charge. For the nine months ended September 29, 2019, income tax provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return and a $15 million tax provision related to the finalization of our toll tax charge.
(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 quarters ended September 29, 2019, June 30, 2019 and September 30, 2018, 5.8 million, 4.4 million and 3.0 million shares, respectively, have been included in diluted shares. For the nine months ended September 29, 2019 and September 30, 2018, 4.1 million and 3.4 million shares, respectively, have been included in diluted shares. For the three months ended September 29, 2019, June 30, 2019 and September 30, 2018, diluted shares also included 3.6 million, 1.8 million and 0.1 million shares, respectively, from the convertible note hedge transaction. For the nine months ended September 29, 2019 and September 30, 2018, diluted shares included 1.8 million and 0.6 million shares, respectively, from the convertible note hedge transaction.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
							September 29, 2019			December 31, 2018
Assets
	Cash and cash equivalents						$	593,939		$	926,752
	Marketable securities						342,538			190,096
	Accounts receivable, net						357,886			291,267
	Inventories, net						178,203			153,541
	Prepayments and other current assets						182,013			170,826
			Total current assets				1,654,579			1,732,482
	Property, plant and equipment, net						307,567			279,821
	Operating lease right-of-use assets, net						57,595			-
	Marketable securities						103,558			87,731
	Deferred tax assets						69,120			70,848
	Other assets						22,724			11,509
	Retirement plans assets						16,358			16,883
	Acquired intangible assets, net						96,573			125,482
	Goodwill						370,717			381,850
			Total assets				$	2,698,791		$	2,706,606
Liabilities
	Accounts payable						$	117,936		$	100,688
	Accrued employees' compensation and withholdings						127,912			148,566
	Deferred revenue and customer advances						95,936			77,711
	Other accrued liabilities						93,736			78,272
	Operating lease liabilities						18,386			-
	Contingent consideration						6,297			34,865
	Income taxes payable						33,508			36,185
			Total current liabilities				493,711			476,287
	Retirement plans liabilities						121,340			117,456
	Long-term deferred revenue and customer advances						42,592			32,750
	Deferred tax liabilities						15,390			20,662
	Long-term other accrued liabilities						9,803			37,547
	Long-term contingent consideration						11,783			35,678
	Long-term operating lease liabilities						46,813			-
	Long-term income taxes payable						83,782			83,891
	Debt						390,942			379,981
			Total liabilities				1,216,156			1,184,252
Shareholders' equity							1,482,635			1,522,354
			Total liabilities and shareholders' equity				$	2,698,791		$	2,706,606
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
							Quarter Ended						Nine Months Ended
							September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018
Cash flows from operating activities:
	Net income						$	135,860		$	119,981		$	342,395		$	307,991
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation				17,626			16,774			51,508			49,930
			Amortization				11,873			12,732			36,849			32,909
			Deferred taxes				(3,492)			7,130			(2,977)			24,442
			Stock-based compensation				10,713			7,702			28,822			25,327
			Provision for excess and obsolete inventory				3,049			3,347			8,848			9,522
			Contingent consideration fair value adjustment				(7,759)			(768)			(16,460)			(9,236)
			Retirement plans actuarial loss				-			267			448			196
			Gains on marketable securities				(417)			(1,182)			(4,158)			(420)
			Other				181			530			610			936
			Changes in operating assets and liabilities, net of businesses acquired:
					Accounts receivable		12,689			101,596			(66,789)			(77,807)
					Inventories		(11,696)			(12,834)			(14,143)			(34,117)
					Prepayments and other assets		949			(30,360)			(16,118)			(28,719)
					Accounts payable and other liabilities		35,231			24,279			20,807			16,124
					Deferred revenue and customer advances		11,953			(695)			27,779			9,823
					Retirement plans contributions		(1,361)			(1,071)			(3,775)			(3,244)
					Income taxes		(16,251)			(6,844)			(31,224)			(33,152)
Net cash provided by operating activities							199,148			240,584			362,422			290,505
Cash flows from investing activities:
	Purchases of property, plant and equipment						(37,092)			(25,606)			(96,048)			(88,269)
	Proceeds from government subsidy for property, plant and equipment						-			7,920			-			7,920
	Purchases of marketable securities						(121,358)			(162,450)			(605,539)			(809,521)
	Proceeds from sales of marketable securities						17,820			14,111			60,274			843,164
	Proceeds from maturities of marketable securities						160,279			464,238			393,472			934,100
	Proceeds from life insurance						2,639			1,126			2,912			1,126
	Purchase of investments and acquisition of businesses, net of cash acquired						-			1,158			(21,970)			(169,474)
Net cash provided by (used for) investing activities							22,288			300,497			(266,899)			719,046
Cash flows from financing activities:
	Issuance of common stock under stock purchase and stock option plans						14,191			10,278			29,280			20,959
	Repurchase of common stock						(121,560)			(201,468)			(368,782)			(562,263)
	Dividend payments						(15,250)			(16,638)			(46,269)			(51,320)
	Payments related to net settlement of employee stock compensation awards						(104)			(90)			(14,550)			(19,841)
	Payments of contingent consideration						-			-			(27,615)			(13,571)
Net cash used for financing activities							(122,723)			(207,918)			(427,936)			(626,036)
Effects of exchange rate changes on cash and cash equivalents							119			472			(400)			661
Increase (decrease) in cash and cash equivalents							98,832			333,635			(332,813)			384,176
Cash and cash equivalents at beginning of period							495,107			480,384			926,752			429,843
Cash and cash equivalents at end of period							$	593,939		$	814,019		$	593,939		$	814,019

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