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Long-Term Debt | 6 Months Ended
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Jul. 01, 2017
Long-Term Debt [Abstract] |
Long-Term Debt | Note 4 – Long-Term Debt Long-term debt consists of the following:
|  | July 1, 2017 |  |  | December 31, 2016 |
Credit facility |  | $ | 133,000 |  |  | $ | 143,000 |
Convertible senior debentures, due 2040 |  |  | 109,291 |  |  |  | 108,120 |
Convertible senior debentures, due 2041 |  |  | 56,072 |  |  |  | 55,442 |
Convertible senior debentures, due 2042 |  |  | 61,956 |  |  |  | 61,341 |
Deferred financing costs |  |  | (9,990 | ) |  |  | (10,880 | )
|  |  | 350,329 |  |  |  | 357,023 |
Less current portion |  |  | - |  |  |  | - |
|  | $ | 350,329 |  |  | $ | 357,023 |
Convertible Senior Debentures Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The quarterly cash dividend program of the Company results in adjustments to the conversion rate and effective conversion price for each issuance of the Company's convertible senior debentures effective as of the ex-dividend date of each cash dividend. The following table summarizes some key facts and terms regarding the three series of outstanding convertible senior debentures following the adjustment made to the conversion rate of the debentures on the ex-dividend date of the June 29, 2017 dividend payment:
|  | 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 | %
Conversion rate effective June 13, 2017 (per $1 principal amount) |  |  | 76.6985 |  |  |  | 55.9705 |  |  |  | 90.1791 |
Effective conversion price effective June 13, 2017 (per share) |  | $ | 13.04 |  |  | $ | 17.87 |  |  | $ | 11.09 |
130% of the conversion price (per share) |  | $ | 16.95 |  |  | $ | 23.23 |  |  | $ | 14.42 |
Call date |  | November 20, 2020 |  |  | May 20, 2021 |  |  | June 7, 2022 |
Prior to three months before the maturity date, the holders may only convert their debentures under the following circumstances: (1) during any fiscal quarter after the first full quarter subsequent to issuance, if the sale price of Vishay common stock reaches 130% of the conversion price 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. The convertible debentures due 2042 became convertible subsequent to the December 31, 2016 evaluation of the conversion criteria, remained convertible subsequent to the April 1, 2017 evaluation, and remain convertible subsequent to the July 1, 2017 evaluation, due to the sale price of Vishay's common stock exceeding 130% of the conversion price for the applicable periods in the fourth fiscal quarter of 2016 and first and second fiscal quarters of 2017. The debentures due 2042 will remain convertible until September 30, 2017, at which time the conversion criteria will be reevaluated. At the direction of its Board of Directors, the Company intends, upon future conversion of any of the convertible senior debentures, to repay the principal amounts of the convertible senior debentures in cash and settle any additional amounts in shares of Vishay common stock. The excess of the amount that the Company would pay to the holders of the debentures due 2042 upon conversion over the carrying value of the liability component of the debentures currently convertible has been reclassified as temporary equity on the consolidated condensed financial statements. The Company intends to finance the principal amount of any converted debentures using borrowings under its credit facility. Accordingly, the debt component of the convertible debentures due 2042 continues to be classified as a non-current liability on the consolidated condensed balance sheets. 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 (including temporary equity) - net carrying value |
July 1, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 275,000 |  |  |  | (166,058 | ) |  |  | 349 |  |  | $ | 109,291 |  |  | $ | 110,094 |
Due 2041 |  | $ | 150,000 |  |  |  | (94,221 | ) |  |  | 293 |  |  | $ | 56,072 |  |  | $ | 62,246 |
Due 2042 |  | $ | 150,000 |  |  |  | (88,228 | ) |  |  | 184 |  |  | $ | 61,956 |  |  | $ | 57,874 |
Total |  | $ | 575,000 |  |  | $ | (348,507 | ) |  | $ | 826 |  |  | $ | 227,319 |  |  | $ | 230,214 |
December 31, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 275,000 |  |  |  | (167,273 | ) |  |  | 393 |  |  | $ | 108,120 |  |  | $ | 110,094 |
Due 2041 |  | $ | 150,000 |  |  |  | (94,843 | ) |  |  | 285 |  |  | $ | 55,442 |  |  | $ | 62,246 |
Due 2042 |  | $ | 150,000 |  |  |  | (88,835 | ) |  |  | 176 |  |  | $ | 61,341 |  |  | $ | 57,874 |
Total |  | $ | 575,000 |  |  | $ | (350,951 | ) |  | $ | 854 |  |  | $ | 224,903 |  |  | $ | 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 |
July 1, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 1,547 |  |  |  | 613 |  |  |  | 22 |  |  |  | (19 | ) |  | $ | 2,163 |
Due 2041 |  | $ | 844 |  |  |  | 314 |  |  |  | 12 |  |  |  | 6 |  |  | $ | 1,176 |
Due 2042 |  | $ | 844 |  |  |  | 306 |  |  |  | 14 |  |  |  | 12 |  |  | $ | 1,176 |
Total |  | $ | 3,235 |  |  | $ | 1,233 |  |  | $ | 48 |  |  | $ | (1 | ) |  | $ | 4,515 |
July 2, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 1,547 |  |  |  | 567 |  |  |  | 22 |  |  |  | (41 | ) |  | $ | 2,095 |
Due 2041 |  | $ | 844 |  |  |  | 289 |  |  |  | 13 |  |  |  | (72 | ) |  | $ | 1,074 |
Due 2042 |  | $ | 844 |  |  |  | 283 |  |  |  | 14 |  |  |  | (14 | ) |  | $ | 1,127 |
Total |  | $ | 3,235 |  |  | $ | 1,139 |  |  | $ | 49 |  |  | $ | (127 | ) |  | $ | 4,296 |
Interest expense related to the debentures is reflected on the consolidated condensed statements of operations for the six 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 |
July 1, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 3,094 |  |  |  | 1,215 |  |  |  | 44 |  |  |  | (44 | ) |  | $ | 4,309 |
Due 2041 |  | $ | 1,688 |  |  |  | 622 |  |  |  | 24 |  |  |  | 8 |  |  | $ | 2,342 |
Due 2042 |  | $ | 1,688 |  |  |  | 607 |  |  |  | 27 |  |  |  | 8 |  |  | $ | 2,330 |
Total |  | $ | 6,470 |  |  | $ | 2,444 |  |  | $ | 95 |  |  | $ | (28 | ) |  | $ | 8,981 |
July 2, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 3,094 |  |  |  | 1,123 |  |  |  | 44 |  |  |  | (35 | ) |  | $ | 4,226 |
Due 2041 |  | $ | 1,688 |  |  |  | 573 |  |  |  | 24 |  |  |  | (34 | ) |  | $ | 2,251 |
Due 2042 |  | $ | 1,688 |  |  |  | 563 |  |  |  | 27 |  |  |  | (31 | ) |  | $ | 2,247 |
Total |  | $ | 6,470 |  |  | $ | 2,259 |  |  | $ | 95 |  |  | $ | (100 | ) |  | $ | 8,724 |

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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 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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