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Long-Term Debt | 12 Months Ended
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Dec. 31, 2011
Long-Term Debt [Abstract] |
Long-Term Debt | Note 6 – Long-Term Debt Long-term debt consists of the following:
|  | December 31, 2011 |  |  | December 31, 2010 |
Credit facility |  | $ | 155,000 |  |  | $ | 240,000 |
Exchangeable unsecured notes, due 2102 |  |  | 95,042 |  |  |  | 95,042 |
Convertible senior debentures, due 2040 |  |  | 98,463 |  |  |  | 96,640 |
Convertible senior debentures, due 2041 |  |  | 50,549 |  |  |  | - |
|  |  | 399,054 |  |  |  | 431,682 |
Less current portion |  |  | - |  |  |  | - |
|  | $ | 399,054 |  |  | $ | 431,682 |
Credit Facility The Company maintains a credit facility with a consortium of banks led by JPMorgan as administrative agent (the “Credit Facility”). On December 1, 2010, Vishay borrowed $240,000 under the Credit Facility to repay all of the outstanding amounts under its previously existing revolving credit facility with a consortium of banks led by Comerica Bank that was scheduled to expire on April 20, 2012. The Company repaid $85,000 of the outstanding balance of the Credit Facility in year ended December 31, 2011. The Credit Facility provides a commitment of up to $450,000 through December 1, 2015. The Credit Facility also provides for the ability of Vishay to request up to $100,000 of incremental revolving commitments, subject to the satisfaction of certain conditions. Borrowings under the Credit Facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on Vishay’s then current leverage ratio. Based on the Company’s current leverage ratio, borrowings bear interest at LIBOR plus 1.65%. The interest rate on the Company’s borrowings will increase if the Company’s leverage ratio increases to 1.50 to 1. Vishay is also required to pay facility commitment fees of 0.35% per annum on the entire commitment amount. The borrowings under the Credit Facility are secured by a lien on substantially all assets located in the United States, including accounts receivable, inventory, machinery and equipment, and general intangibles (but excluding real estate, intellectual property registered or licensed for use in, or arising under the laws of, any country other than the United States, and bank and securities accounts) of Vishay and certain significant domestic subsidiaries, and pledges of stock in certain significant domestic and foreign subsidiaries and are guaranteed by certain significant subsidiaries. Certain of the Company’s subsidiaries are permitted to borrow under the Credit Facility, subject to the satisfaction of specified conditions. Any borrowings by these subsidiaries under the Credit Facility are guaranteed by Vishay. The Credit Facility also restricts the Company from, among other things, incurring indebtedness, incurring liens on its assets, making investments and acquisitions, making asset sales, and paying cash dividends and making other restricted payments, and requires the Company to comply with other covenants, including the maintenance of specific financial ratios. On September 8, 2011, Vishay entered into an amendment to the Credit Facility. The amendment effectively permits up to $300,000 of additional share repurchases, conditioned upon Vishay maintaining (i) a pro forma leverage ratio of 2.75 to 1.00, (ii) a pro forma interest expense coverage ratio of 2.00 to 1.00, and (iii) $400,000 of available liquidity, as defined in the amendment. The amount and timing of any future stock repurchases remains subject to authorization of Vishay’s Board of Directors. Other significant terms and conditions of the Credit Facility have not changed. The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure to pay or default under other material debt, misrepresentation or breach of warranty, violation of certain covenants, a change of control, the commencement of bankruptcy proceedings, the insolvency of Vishay or certain of its significant subsidiaries, and the rendering of a judgment in excess of $25,000 against Vishay or certain of its significant subsidiaries. Upon the occurrence of an event of default under the Credit Facility, Vishay’s obligations under the credit facility may be accelerated and the lending commitments under the credit facility terminated. At December 31, 2011 and 2010, there was $286,995 and $210,000, respectively, available under the Credit Facility. Letters of credit totaling $8,005 were outstanding at December 31, 2011. Convertible Senior Debentures, due 2041 On May 13, 2011, Vishay issued $150,000 principal amount of 2.25% convertible senior debentures due 2041 to qualified institutional investors. Vishay used the net proceeds from this offering, together with cash on hand, to repurchase 8,620,689 shares of common stock for an aggregate purchase price of $150,000. GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on the debt is amortized as non-cash interest expense in future periods. The carrying values of the liability and equity components of the convertible debentures due 2041 are reflected in the Company’s consolidated balance sheet as follows:
|  | December 31, 2011 |
Liability component: |  |  |
Principal amount of the debentures |  | $ | 150,000 |
Unamortized discount |  |  | (99,843 | )
Embedded derivative |  |  | 392 |
Carrying value of liability component |  | $ | 50,549 |
Equity component - net carrying value |  | $ | 62,246 |
Interest is payable on the debentures semi-annually at a rate of 2.25% per annum; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate of 8.375% based on the Company’s estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, beginning on May 15, 2021, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances. Interest expense related to the convertible debentures due 2041 is reflected on the consolidated statements of operations as follows:
|  | Year ended |
|  | December 31, 2011 |
Contractual coupon interest |  | $ | 2,128 |
Non-cash amortization of debt discount |  |  | 498 |
Non-cash amortization of deferred financing costs |  |  | 29 |
Non-cash change in value of derivative liability |  |  | 181 |
Total interest expense related to the debentures |  | $ | 2,836 |
Prior to February 15, 2041, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending October 1, 2011 if the sale price of Vishay common stock reaches 130% of the conversion price (currently, $24.73) for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay’s common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. None of these conditions had occurred as of December 31, 2011. The debentures are initially convertible, subject to certain conditions, into cash, shares of Vishay’s common stock or a combination thereof, at Vishay’s option, at an initial conversion rate of 52.5659 shares of common stock per $1,000 principal amount of debentures. This represents an initial effective conversion price of approximately $19.02 per share. This initial conversion price represents a premium of 12.5% to the closing price of Vishay’s common stock on the date the offering commenced, which was $16.91 per share. At the direction of its Board of Directors, Vishay intends, upon conversion, to repay the principal amount of the debentures in cash and settle any additional amounts in shares. Vishay must provide additional shares upon conversion if there is a “fundamental change” in the business as defined in the indenture governing the debentures. Vishay may not redeem the debentures prior to May 20, 2021, except in connection with certain tax-related events. On or after May 20, 2021 and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption. Convertible Senior Debentures, due 2040 On November 9, 2010, Vishay issued $275,000 principal amount of 2.25% convertible senior debentures due 2040 to qualified institutional investors. Vishay used the net proceeds from this offering, together with net borrowings under its credit facility and cash on hand, to repurchase 21,721,959 shares of common stock for an aggregate purchase price of $275,000. GAAP requires an issuer to separately account for the liability and equity components of a convertible debt instrument in a manner that reflects the issuer’s nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on the debt is amortized as non-cash interest expense in future periods. The carrying values of the liability and equity components of the convertible debentures due 2040 are reflected in the Company’s consolidated balance sheets as follows:
|  | December 31, 2011 |  |  | December 31, 2010 |
Liability component: |  |  |  |  |  |
Principal amount of the debentures |  | $ | 275,000 |  |  | $ | 275,000 |
Unamortized discount |  |  | (177,131 | ) |  |  | (178,679 | )
Embedded derivative |  |  | 594 |  |  |  | 319 |
Carrying value of liability component |  | $ | 98,463 |  |  | $ | 96,640 |
Equity component - net carrying value |  | $ | 110,094 |  |  | $ | 110,094 |
Interest is payable on the debentures semi-annually at a rate of 2.25% per annum; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate of 8.00% based on the Company’s estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, beginning on November 15, 2020, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances. Interest expense related to the convertible debentures due 2040 is reflected on the consolidated statements of operations as follows:
|  | Years ended December 31, |
|  | 2011 |  |  | 2010 |
Contractual coupon interest |  | $ | 6,188 |  |  | $ | 773 |
Non-cash amortization of debt discount |  |  | 1,548 |  |  |  | 188 |
Non-cash amortization of deferred financing costs |  |  | 88 |  |  |  | 11 |
Non-cash change in value of derivative liability |  |  | 275 |  |  |  | (55 | )
Total interest expense related to the debentures |  | $ | 8,099 |  |  | $ | 917 |
Prior to April 15, 2040, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending April 2, 2011 if the sale price of Vishay common stock reaches 130% of the conversion price (currently, $18.04) for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price of Vishay’s common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, at any time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. None of these conditions had occurred as of December 31, 2011. The debentures are initially convertible, subject to certain conditions, into cash, shares of Vishay’s common stock or a combination thereof, at Vishay’s option, at an initial conversion rate of 72.0331 shares of common stock per $1,000 principal amount of debentures. This represents an initial effective conversion price of approximately $13.88 per share. This initial conversion price represents a premium of 12.5% to the closing price of Vishay’s common stock on November 3, which was $12.34 per share. At the direction of its Board of Directors, Vishay intends, upon conversion, to repay the principal amount of the debentures in cash and settle any additional amounts in shares. Vishay must provide additional shares upon conversion if there is a “fundamental change” in the business as defined in the indenture governing the debentures. Vishay may not redeem the debentures prior to November 20, 2020, except in connection with certain tax-related events. On or after November 20, 2020 and prior to the maturity date, Vishay may redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay’s common stock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which Vishay provides notice of redemption. Exchangeable Unsecured Notes, due 2102 On December 13, 2002, Vishay issued $105,000 in nominal (or principal) amount of its floating rate unsecured exchangeable notes due 2102 in connection with an acquisition. The notes are governed by a note instrument and a put and call agreement dated December 13, 2002. The notes may be put to Vishay in exchange for shares of its common stock and, under certain circumstances, may be called by Vishay for similar consideration. Under the terms of the put and call agreement, by reason of the spin-off, Vishay was required to take action so that the existing notes are deemed exchanged as of the date of the spin-off, for a combination of new notes of Vishay reflecting a lower principal amount of the notes and new notes issued by VPG. Based on the relative trading prices of Vishay and VPG common stock on the ten trading days following the spin-off, Vishay retained the liability for an aggregate $95,042 principal amount of exchangeable notes effective July 6, 2010. The assumption of a portion of the liability by VPG was recorded as a reduction in parent net investment just prior to the completion of the spin-off. The notes are subject to a put and call agreement under which the holders may at any time put the notes to Vishay in exchange for 6,176,471 shares of Vishay’s common stock in the aggregate, and Vishay may call the notes in exchange for cash or for shares of its common stock at any time after January 2, 2018. The put/call rate of the Vishay notes is $15.39 per share of common stock. The notes bear interest at LIBOR. Interest continues to be payable quarterly on March 31, June 30, September 30, and December 31 of each calendar year. The interest rate could be further reduced to 50% of LIBOR if the price of Vishay’s common stock is above $40.73 per share for thirty or more consecutive trading days. Convertible Subordinated Notes, due 2023 In 2003, Vishay sold $500,000 aggregate principal amount of 3-5/8% convertible subordinated notes due 2023. Holders of substantially all (99.6%) of the 3-5/8% notes exercised their option to require Vishay to repurchase their notes on August 1, 2008. The remaining notes, with an aggregate principal amount of $1,870, were redeemed at Vishay’s option on August 1, 2010. Other Borrowings Information Aggregate annual maturities of long-term debt, based on the terms stated in the respective agreements, are as follows:
2011 |  | $ | - |
2012 |  |  | - |
2013 |  |  | - |
2014 |  |  | - |
2015 |  |  | 155,000 |
Thereafter |  |  | 520,042 |
The annual maturities of long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts associated with the convertible debentures due 2040 and due 2041 are excluded from the calculation of the annual maturities of long-term debt in the table above. In 2010, the Company repaid a $13,500 Israeli bank loan and the balance of a $90,000 term loan under a previous credit facility. In 2009, the Company paid $25,000 of scheduled principal payments on the term loan. At December 31, 2011, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $15,500, which was substantially unused. At December 31, 2010, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $33,300, which was substantially unused. At December 31, 2010, the Company had letters of credit outstanding totaling approximately $8,200. These letters of credit were replaced in 2011 by letters of credit issued under the Credit Facility. Interest paid was $14,084, $9,120, and $10,243 for the years ended December 31, 2011, 2010, and 2009, respectively. See Note 18 for further discussion on the fair value of the Company’s long-term debt.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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