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Long-Term Debt | 9 Months Ended
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Sep. 28, 2013
Long-Term Debt [Abstract] |
Long-Term Debt | Note 5 – Long-Term Debt Long-term debt consists of the following:
|  | September 28, 2013 |  |  | December 31, 2012 |
Credit facility |  | $ | 110,000 |  |  | $ | 89,000 |
Exchangeable unsecured notes, due 2102 |  |  | 38,642 |  |  |  | 95,042 |
Convertible senior debentures, due 2040 |  |  | 101,319 |  |  |  | 100,166 |
Convertible senior debentures, due 2041 |  |  | 51,978 |  |  |  | 51,399 |
Convertible senior debentures, due 2042 |  |  | 57,935 |  |  |  | 57,324 |
|  |  | 359,874 |  |  |  | 392,931 |
Less current portion |  |  | - |  |  |  | - |
|  | $ | 359,874 |  |  | $ | 392,931 |
Credit Facility The Company maintains a credit facility with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent (the "Credit Facility"). On August 8, 2013, the Company entered into an Amended and Restated Credit Agreement, which provides an aggregate commitment of $640,000 of revolving loans available until August 8, 2018. The original credit agreement became effective December 1, 2010 and was scheduled to expire on December 1, 2015. The Credit Facility, as amended and restated, also provides for the ability of Vishay to request up to $50,000 of incremental revolving commitments, subject to the satisfaction of certain conditions. Borrowings under the Credit Facility bear interest at the London Interbank Offered Rate ("LIBOR") plus an interest margin. The applicable interest margin is based on the Company's leverage ratio. Based on the Company's current leverage ratio, borrowings bear interest at LIBOR plus 1.75%. The interest rate on the Company's borrowings will increase to LIBOR plus 2.00% if the Company's leverage ratio equals or exceeds 2.50 to 1 and will decrease to LIBOR plus 1.50% if the Company's leverage ratio decreases below 1.50 to 1. Vishay is also required to pay facility fees on the entire commitment amount based on the Company's leverage ratio. Based on the Company's current leverage ratio, the facility fee is 0.35% per annum. Such facility fee will increase to 0.50% per annum if the Company's leverage ratio equals or exceeds 2.50 to 1 and will decrease to 0.30% per annum if the leverage ratio decreases below 1.50 to 1. The August 8, 2013 Amended and Restated Credit Agreement also removes certain restrictions related to the incurrence and repayment of certain intercompany indebtedness, mergers, liquidations, and transfers of ownership of wholly owned subsidiaries that were present in the original credit agreement. These changes will enable the Company to streamline its complex subsidiary structure and provide greater operating flexibility. The borrowings under the Credit Facility are secured by a lien on substantially all assets, 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, assets located outside of the United States and deposit and securities accounts), of Vishay and certain significant subsidiaries located in the United States, 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 and certain subsidiaries. The Credit Facility also limits or restricts the Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective 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. The Credit Facility permits the Company to repurchase shares of its common stock up to a permitted capacity, 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) $300,000 of available liquidity, as defined in the Credit Facility. The permitted capacity to repurchase shares of the Company's outstanding common stock under the Credit Facility increases each quarter by an amount equal to 20% of net income. At September 28, 2013, the Credit Facility allows the Company to repurchase up to $198,592 of its common stock. The amount and timing of any future stock repurchases remains subject to authorization of the Company's Board of Directors. 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, material 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, the Company's obligations under the credit facility may be accelerated and the lending commitments under the credit facility terminated. 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 of Vishay Precision Group, Inc. ("VPG"), 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. Under the terms of the put and call agreement the holders may at any time put the notes to Vishay in exchange for shares of Vishay's common stock, and Vishay may call the notes in exchange for cash or for shares of its common stock at any time after January 2, 2018. Subsequent to the spin-off of VPG, the put/call rate of the Vishay notes is $15.39 per share of common stock. Effective August 26, 2013, a holder of the notes exercised its option to exchange $56,400 principal amount of the notes for 3,664,729 shares of Vishay common stock. Following this transaction, Vishay had outstanding exchangeable unsecured notes with a principal amount of $38,642, which are exchangeable for an aggregate of 2,511,742 shares of Vishay common stock. Convertible Senior Debentures Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The following table summarizes some key facts and terms regarding the three series of outstanding convertible senior debentures:
|  | Due 2040 |  |  | Due 2041 |  |  | Due 2042 |
Issuance date |  | November 9, 2010 |  |  | May 13, 2011 |  |  | May 31, 2012 |
Maturity date |  |  | November 15, 2040 |  |  | May 15, 2041 |  |  | June 1, 2042 |
Principal amount |  | $ | 275,000 |  |  | $ | 150,000 |  |  | $ | 150,000 |
Cash coupon rate (per annum) |  |  | 2.25 | % |  |  | 2.25 | % |  |  | 2.25 | %
Nonconvertible debt borrowing rate at issuance (per annum) |  |  | 8.00 | % |  |  | 8.375 | % |  |  | 7.50 | %
Initial conversion rate (per $1 principal amount) |  |  | 72.0331 |  |  |  | 52.5659 |  |  |  | 84.6937 |
Effective conversion price (per share) |  | $ | 13.88 |  |  | $ | 19.02 |  |  | $ | 11.81 |
130% of the conversion price (per share) |  | $ | 18.04 |  |  | $ | 24.73 |  |  | $ | 15.35 |
Call date |  |  | November 20, 2020 |  |  | May 20, 2021 |  |  | June 7, 2022 |
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 are reflected in the Company's consolidated condensed balance sheets as follows:
|  | Principal amount of the debentures |  |  | Unamortized discount |  |  | Embedded derivative |  |  | Carrying value of liability component |  |  | Equity component - net carrying value |
September 28, 2013 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 275,000 |  |  |  | (174,110 | ) |  |  | 429 |  |  | $ | 101,319 |  |  | $ | 110,094 |
Due 2041 |  | $ | 150,000 |  |  |  | (98,321 | ) |  |  | 299 |  |  | $ | 51,978 |  |  | $ | 62,246 |
Due 2042 |  | $ | 150,000 |  |  |  | (92,274 | ) |  |  | 209 |  |  | $ | 57,935 |  |  | $ | 57,874 |
Total |  | $ | 575,000 |  |  | $ | (364,705 | ) |  | $ | 937 |  |  | $ | 211,232 |  |  | $ | 230,214 |
December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 275,000 |  |  |  | (175,456 | ) |  |  | 622 |  |  | $ | 100,166 |  |  | $ | 110,094 |
Due 2041 |  | $ | 150,000 |  |  |  | (99,000 | ) |  |  | 399 |  |  | $ | 51,399 |  |  | $ | 62,246 |
Due 2042 |  | $ | 150,000 |  |  |  | (92,958 | ) |  |  | 282 |  |  | $ | 57,324 |  |  | $ | 57,874 |
Total |  | $ | 575,000 |  |  | $ | (367,414 | ) |  | $ | 1,303 |  |  | $ | 208,889 |  |  | $ | 230,214 |
Interest is payable on the debentures semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized as additional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debt borrowing rate at the time of issuance. In addition to ordinary interest, contingent interest will accrue in certain circumstances relating to the trading price of the debentures and under certain other circumstances beginning ten years subsequent to issuance. Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the fiscal quarters ended:
|  |  |  | Contractual coupon interest |  |  | Non-cash amortization of debt discount |  |  | Non-cash amortization of deferred financing costs |  |  | Non-cash change in value of derivative liability |  |  | Total interest expense related to the debentures |
|  |  | September 28, 2013 |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Due 2040 |  | $ | 1,547 |  |  |  | 458 |  |  |  | 22 |  |  |  | (30 | ) |  | $ | 1,997 |
|  |  | Due 2041 |  | $ | 844 |  |  |  | 231 |  |  |  | 11 |  |  |  | (13 | ) |  | $ | 1,073 |
|  |  | Due 2042 |  | $ | 844 |  |  |  | 233 |  |  |  | 13 |  |  |  | 3 |  |  | $ | 1,093 |
|  |  | Total |  | $ | 3,235 |  |  | $ | 922 |  |  | $ | 46 |  |  | $ | (40 | ) |  | $ | 4,163 |
|  |  | September 29, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Due 2040 |  | $ | 1,547 |  |  |  | 423 |  |  |  | 22 |  |  |  | 47 |  |  | $ | 2,039 |
|  |  | Due 2041 |  | $ | 844 |  |  |  | 213 |  |  |  | 12 |  |  |  | (19 | ) |  | $ | 1,050 |
|  |  | Due 2042 |  | $ | 844 |  |  |  | 216 |  |  |  | 13 |  |  |  | (13 | ) |  | $ | 1,060 |
|  |  | Total |  | $ | 3,235 |  |  | $ | 852 |  |  | $ | 47 |  |  | $ | 15 |  |  | $ | 4,149 |
Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the nine fiscal months ended:
|  |  |  | Contractual coupon interest |  |  | Non-cash amortization of debt discount |  |  | Non-cash amortization of deferred financing costs |  |  | Non-cash change in value of derivative liability |  |  | Total interest expense related to the debentures |
|  |  | September 28, 2013 |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Due 2040 |  | $ | 4,641 |  |  |  | 1,346 |  |  |  | 66 |  |  |  | (193 | ) |  | $ | 5,860 |
|  |  | Due 2041 |  | $ | 2,532 |  |  |  | 679 |  |  |  | 35 |  |  |  | (100 | ) |  | $ | 3,146 |
|  |  | Due 2042 |  | $ | 2,532 |  |  |  | 684 |  |  |  | 40 |  |  |  | (73 | ) |  | $ | 3,183 |
|  |  | Total |  | $ | 9,705 |  |  | $ | 2,709 |  |  | $ | 141 |  |  | $ | (366 | ) |  | $ | 12,189 |
|  |  | September 29, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | Due 2040 |  | $ | 4,641 |  |  |  | 1,244 |  |  |  | 66 |  |  |  | 14 |  |  | $ | 5,965 |
|  |  | Due 2041 |  | $ | 2,532 |  |  |  | 626 |  |  |  | 36 |  |  |  | 15 |  |  | $ | 3,209 |
|  |  | Due 2042 |  | $ | 1,135 |  |  |  | 290 |  |  |  | 18 |  |  |  | 29 |  |  | $ | 1,472 |
|  |  | Total |  | $ | 8,308 |  |  | $ | 2,160 |  |  | $ | 120 |  |  | $ | 58 |  |  | $ | 10,646 |

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
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