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Long-Term Debt | 6 Months Ended
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Jun. 30, 2012
Long-Term Debt [Abstract] |
Long-Term Debt | Note 6 – Long-Term Debt Long-term debt consists of the following:
|  | June 30, 2012 |  | December 31, 2011
Credit facility | $160,000 |  | $155,000
Exchangeable unsecured notes, due 2102 | 95,042 |  | 95,042
Convertible senior debentures, due 2040 | 99,251 |  | 98,463
Convertible senior debentures, due 2041 | 50,996 |  | 50,549
Convertible senior debentures, due 2042 | 56,884 |  | -
| 462,173 |  | 399,054
Less current portion | - |  | -
| $462,173 |  | $399,054
Amendment of Credit Facility On April 3, 2012, Vishay amended its credit agreement and entered into an incremental facility agreement that increases the total credit facility commitment from $450,000 to $528,000. The incremental revolving commitments have terms and conditions identical to the terms and conditions of the existing commitments under the credit facility. Vishay paid an amendment fee of $390 to complete this amendment. The other material terms and conditions of the credit agreement have not been changed. The credit agreement, as amended, will expire on December 1, 2015. Convertible Senior Debentures, due 2042 On May 31, 2012, Vishay issued $150,000 principal amount of 2.25% convertible senior debentures due 2042 to qualified institutional investors. Vishay used the net proceeds from this offering, together with cash on hand, to repurchase 13,948,687 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 2042 are reflected in the Company’s consolidated condensed balance sheets as follows:
|  | June 30, 2012 |
Liability component: |  |  |
Principal amount of the debentures |  | $ | 150,000 |
Unamortized discount |  |  | (93,394 | )
Embedded derivative |  |  | 278 |
Carrying value of liability component |  | $ | 56,884 |
Equity component - net carrying value |  | $ | 57,874 |
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 7.50% based on the Company’s estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, beginning on June 1, 2022, 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 2042 is reflected on the consolidated condensed statement of operations as follows:
|  | Fiscal quarter and six fiscal months ended |
|  | June 30, 2012 |
Contractual coupon interest |  | $ | 291 |
Non-cash amortization of debt discount |  |  | 74 |
Non-cash amortization of deferred financing costs |  |  | 5 |
Non-cash change in value of derivative liability |  |  | 42 |
Total interest expense related to the debentures |  | $ | 412 |
Prior to March 1, 2042, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ending September 29, 2012 if the sale price of Vishay common stock reaches 130% of the conversion price (currently, $15.35) 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 June 30, 2012. 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 84.6937 shares of common stock per $1,000 principal amount of debentures. This represents an initial effective conversion price of approximately $11.81 per share. This initial conversion price represents a premium of 13.75% to the closing price of Vishay’s common stock on the date the offering commenced, which was $10.38 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 June 7, 2022, except in connection with certain tax-related events. On or after June 7, 2022 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 2041 On May 13, 2011, Vishay issued $150,000 principal amount of 2.25% convertible senior debentures due 2041 to qualified institutional investors. 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 2041 are reflected in the Company’s consolidated condensed balance sheets as follows:
|  | June 30, 2012 |  |  | December 31, 2011 |
Liability component: |  |  |  |  |  |
Principal amount of the debentures |  | $ | 150,000 |  |  | $ | 150,000 |
Unamortized discount |  |  | (99,430 | ) |  |  | (99,843 | )
Embedded derivative |  |  | 426 |  |  |  | 392 |
Carrying value of liability component |  | $ | 50,996 |  |  | $ | 50,549 |
Equity component - net carrying value |  | $ | 62,246 |  |  | $ | 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 condensed statements of operations as follows:
|  | Fiscal quarters ended |  |  | Six fiscal months ended |
|  | June 30, 2012 |  |  | July 2, 2011 |  |  | June 30, 2012 |  |  | July 2, 2011 |
Contractual coupon interest |  | $ | 844 |  |  | $ | 441 |  |  | $ | 1,688 |  |  | $ | 441 |
Non-cash amortization of debt discount |  |  | 209 |  |  |  | 102 |  |  |  | 413 |  |  |  | 102 |
Non-cash amortization of deferred financing costs |  |  | 12 |  |  |  | 6 |  |  |  | 24 |  |  |  | 6 |
Non-cash change in value of derivative liability |  |  | 109 |  |  |  | 2 |  |  |  | 34 |  |  |  | 2 |
Total interest expense related to the debentures |  | $ | 1,174 |  |  | $ | 551 |  |  | $ | 2,159 |  |  | $ | 551 |
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. 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 condensed balance sheets as follows:
|  | June 30, 2012 |  |  | December 31, 2011 |
Liability component: |  |  |  |  |  |
Principal amount of the debentures |  | $ | 275,000 |  |  | $ | 275,000 |
Unamortized discount |  |  | (176,310 | ) |  |  | (177,131 | )
Embedded derivative |  |  | 561 |  |  |  | 594 |
Carrying value of liability component |  | $ | 99,251 |  |  | $ | 98,463 |
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 condensed statements of operations as follows:
|  | Fiscal quarters ended |  |  | Six fiscal months ended |
|  | June 30, 2012 |  |  | July 2, 2011 |  |  | June 30, 2012 |  |  | July 2, 2011 |
Contractual coupon interest |  | $ | 1,547 |  |  | $ | 1,547 |  |  | $ | 3,094 |  |  | $ | 3,094 |
Non-cash amortization of debt discount |  |  | 414 |  |  |  | 383 |  |  |  | 821 |  |  |  | 759 |
Non-cash amortization of deferred financing costs |  |  | 22 |  |  |  | 22 |  |  |  | 44 |  |  |  | 44 |
Non-cash change in value of derivative liability |  |  | 71 |  |  |  | 69 |  |  |  | (33 | ) |  |  | 8 |
Total interest expense related to the debentures |  | $ | 2,054 |  |  | $ | 2,021 |  |  | $ | 3,926 |  |  | $ | 3,905 |

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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 Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 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 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. + Details
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