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Long-Term Debt | 12 Months Ended
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Dec. 31, 2018
Long-Term Debt [Abstract] |
Long-Term Debt | Note 6 – Long-Term Debt Long-term debt consists of the following:
|  | December 31, 2018 |  |  | December 31, 2017 |
Credit facility |  | $ | - |  |  | $ | 150,000 |
Convertible senior notes, due 2025 |  |  | 495,203 |  |  |  | - |
Convertible senior debentures, due 2040 |  |  | 539 |  |  |  | 110,412 |
Convertible senior debentures, due 2041 |  |  | 12,812 |  |  |  | 56,641 |
Convertible senior debentures, due 2042 |  |  | 923 |  |  |  | 62,518 |
Deferred financing costs |  |  | (14,968 | ) |  |  | (9,101 | )
|  |  | 494,509 |  |  |  | 370,470 |
Less current portion |  |  | - |  |  |  | - |
|  | $ | 494,509 |  |  | $ | 370,470 |
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"). The Credit Facility, as amended and restated, provides an aggregate commitment of $640,000 of revolving loans available until December 10, 2020, and 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 LIBOR plus an interest margin. The applicable interest margin is based on Vishay's leverage ratio. Based on Vishay's current leverage ratio, borrowings bear interest at LIBOR plus 1.50%. Vishay also pays a fee, also based on its leverage ratio, on undrawn amounts. The undrawn commitment fee, based on Vishay's current leverage ratio, is 0.30% per annum. The Credit Facility allows an unlimited amount of defined "Restricted Payments," which include cash dividends and share repurchases, provided the Company's pro forma leverage ratio is less than 2.25 to 1. If the Company's leverage ratio is greater than 2.25 to 1, the Credit Facility allows such payments up to $75,000 per annum (subject to a cap of $225,000 for the term of the facility). 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 making other restricted payments (assuming the Company's leverage ratio is greater than 2.25 to 1), and requires the Company to comply with other covenants, including the maintenance of specific financial ratios. 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. At December 31, 2018 and 2017, there was $636,211 and $486,211, respectively, available under the Credit Facility. Letters of credit totaling $3,789 were outstanding at both December 31, 2018 and 2017. Note 6 – Long-Term Debt (continued) Convertible Senior Notes due 2025 In June 2018, the Company issued $600,000 aggregate principal amount of 2.25% convertible senior notes due 2025 to qualified institutional investors. The Company used the net proceeds from this offering to repurchase $220,000 and $69,060 principal amounts of convertible senior debentures due 2040 and 2042, respectively, as further described below. 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 notes are reflected in the Company's consolidated balance sheets as follows:
|  | Principal amount of the notes |  |  | Unamortized discount |  |  | Carrying value of liability component |  |  | Equity component (including temporary equity) - net carrying value |
December 31, 2018 |  | $ | 600,000 |  |  |  | (104,797 | ) |  | $ | 495,203 |  |  | $ | 85,262 |
Interest is payable on the convertible notes due 2025 semi-annually in arrears on June 15 and December 15 of each year, beginning December 15, 2018, 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 5.50% based on the Company's estimated nonconvertible debt borrowing rate. Interest expense for the year ended December 31, 2018 related to the convertible notes due 2025 is reflected on the consolidated statement of operations as follows:
Contractual coupon interest |  |  | Non-cash amortization of debt discount |  |  | Non-cash amortization of deferred financing costs |  |  | Total interest expense related to the notes |
$ | 7,463 |  |  |  | 7,240 |  |  |  | 1,059 |  |  | $ | 15,762 |
The convertible notes due 2025 will mature on June 15, 2025, unless earlier repurchased or converted. Prior to December 15, 2024, such conversion is subject to the satisfaction of certain conditions set forth below. The convertible notes due 2025 are not redeemable by the Company before the maturity date. Prior to December 15, 2024, the holders may only convert their notes under the following circumstances: (1) during any fiscal quarter after the fiscal quarter ending September 29, 2018, if the sale price of Vishay common stock reaches 130% of the conversion price for a specified period (initially $40.94); (2) the trading price of the notes falls below 98% of the product of the sale price of Vishay's common stock and the conversion rate for a specified period; or (3) upon the occurrence of specified corporate transactions. The convertible notes due 2025 are initially convertible into cash, shares of Vishay common stock, or a combination thereof, at the Company's option, at a conversion rate of 31.7536 shares of common stock per $1,000 principal amount of notes. This initial conversion price represents a premium of 27.5% to the closing price of Vishay's common stock on June 8, 2018, which was $24.70 per share. The conversion rate of the convertible notes is not adjusted for quarterly cash dividends equal to or less than $0.085 per share of common stock. This represents an initial effective conversion price of approximately $31.49 per share. At the direction of its Board of Directors, Vishay intends, upon conversion, to repay the principal amount of the notes 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 notes. Note 6 – Long-Term Debt (continued) Convertible Senior Debentures Vishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The Company used substantially all of the net proceeds of the June 2018 issuance of convertible senior notes due 2025 to repurchase $220,000 and $69,060 principal amounts of convertible senior debentures due 2040 and due 2042, respectively. The net carrying value of the debentures repurchased were $89,276 and $29,037, respectively. In accordance with the authoritative accounting guidance for convertible debentures, the aggregate repurchase payment of $584,991 was allocated between the liability ($133,647) and equity (including temporary equity, $451,344) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchases. As a result, the Company recognized a loss on extinguishment of convertible debentures of $17,309, including the write-off of a portion of unamortized debt issuance costs. The Company used a substantial portion of the cash repatriated to the United States in the third fiscal quarter of 2018 (see Note 5) to repurchase $53,690, $116,922, and $78,772 principal amounts of convertible senior debentures due 2040, due 2041, and due 2042, respectively. The net carrying value of the debentures repurchased were $22,018, $45,157, and $33,466, respectively. In accordance with the authoritative accounting guidance for convertible debentures, the aggregate repurchase payment of $376,004 was allocated between the liability ($108,059) and equity (including temporary equity, $267,945) components of the convertible debentures, using the Company's nonconvertible debt borrowing rate at the time of the repurchases. As a result, the Company recognized a loss on extinguishment of convertible debentures of $9,274, including the write-off of a portion of unamortized debt issuance costs. 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 December 20, 2018 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 |  | $ | 1,310 |  |  | $ | 33,078 |  |  | $ | 2,168 |
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 December 5, 2018 (per $1 principal amount) |  |  | 78.3806 |  |  |  | 57.1981 |  |  |  | 92.1569 |
Effective conversion price effective December 5, 2018 (per share) |  | $ | 12.76 |  |  | $ | 17.48 |  |  | $ | 10.85 |
130% of the conversion price (per share) |  | $ | 16.59 |  |  | $ | 22.72 |  |  | $ | 14.11 |
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, and have remained convertible for each subsequent quarterly evaluation through the December 31, 2018 evaluation, due to the sale price of Vishay's common stock exceeding 130% of the conversion price for the applicable periods. The convertible debentures due 2040 became convertible subsequent to the September 30, 2017 evaluation of the conversion criteria, and have remained convertible for each subsequent quarterly evaluation through the December 31, 2018 evaluation, due to the sale price of Vishay's common stock exceeding 130% of the conversion price for the applicable periods. The debentures due 2040 and due 2042 will remain convertible until December 31, 2018, 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 2040 and 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 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 2040 and due 2042 continues to be classified as a non-current liability on the consolidated balance sheets. Note 6 – Long-Term Debt (continued) 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 the respective call dates. On or after the call date 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. 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 accompanying consolidated 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 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 1,310 |  |  |  | (772 | ) |  |  | 1 |  |  | $ | 539 |  |  | $ | 528 |
Due 2041 |  | $ | 33,078 |  |  |  | (20,333 | ) |  |  | 67 |  |  | $ | 12,812 |  |  | $ | 13,725 |
Due 2042 |  | $ | 2,168 |  |  |  | (1,247 | ) |  |  | 2 |  |  | $ | 923 |  |  | $ | 839 |
Total |  | $ | 36,556 |  |  | $ | (22,352 | ) |  | $ | 70 |  |  | $ | 14,274 |  |  | $ | 15,092 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 275,000 |  |  |  | (164,794 | ) |  |  | 206 |  |  | $ | 110,412 |  |  | $ | 110,094 |
Due 2041 |  | $ | 150,000 |  |  |  | (93,573 | ) |  |  | 214 |  |  | $ | 56,641 |  |  | $ | 62,246 |
Due 2042 |  | $ | 150,000 |  |  |  | (87,600 | ) |  |  | 118 |  |  | $ | 62,518 |  |  | $ | 57,874 |
Total |  | $ | 575,000 |  |  | $ | (345,967 | ) |  | $ | 538 |  |  | $ | 229,571 |  |  | $ | 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. Note 6 – Long-Term Debt (continued) Interest expense related to the debentures is reflected on the accompanying consolidated statements of operations for the years ended December 31:
|  | 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 |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 3,150 |  |  |  | 1,340 |  |  |  | 45 |  |  |  | 81 |  |  | $ | 4,616 |
Due 2041 |  | $ | 3,156 |  |  |  | 1,285 |  |  |  | 45 |  |  |  | 43 |  |  | $ | 4,529 |
Due 2042 |  | $ | 2,321 |  |  |  | 904 |  |  |  | 36 |  |  |  | 4 |  |  | $ | 3,265 |
Total |  | $ | 8,627 |  |  | $ | 3,529 |  |  | $ | 126 |  |  | $ | 128 |  |  | $ | 12,410 |
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 6,188 |  |  |  | 2,479 |  |  |  | 88 |  |  |  | (187 | ) |  | $ | 8,568 |
Due 2041 |  | $ | 3,375 |  |  |  | 1,270 |  |  |  | 47 |  |  |  | (71 | ) |  | $ | 4,621 |
Due 2042 |  | $ | 3,375 |  |  |  | 1,235 |  |  |  | 54 |  |  |  | (58 | ) |  | $ | 4,606 |
Total |  | $ | 12,938 |  |  | $ | 4,984 |  |  | $ | 189 |  |  | $ | (316 | ) |  | $ | 17,795 |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Due 2040 |  | $ | 6,188 |  |  |  | 2,292 |  |  |  | 88 |  |  |  | (183 | ) |  | $ | 8,385 |
Due 2041 |  | $ | 3,375 |  |  |  | 1,171 |  |  |  | 47 |  |  |  | (153 | ) |  | $ | 4,440 |
Due 2042 |  | $ | 3,375 |  |  |  | 1,147 |  |  |  | 54 |  |  |  | (126 | ) |  | $ | 4,450 |
Total |  | $ | 12,938 |  |  | $ | 4,610 |  |  | $ | 189 |  |  | $ | (462 | ) |  | $ | 17,275 |
Exchangeable Unsecured Notes, due 2102 In 2016, the Company acquired from holders the remaining $38,642 principal amount of the Company's floating rate exchangeable unsecured notes due 2102 in two separate transactions. The aggregate purchase price for the privately negotiated transactions was $34,045. Vishay recognized gains on early extinguishment of debt of $4,597 presented as a separate line item in the accompanying consolidated statement of operations for the year ended December 31, 2016. There are no exchangeable unsecured notes outstanding. Other Borrowings Information Aggregate annual maturities of long-term debt, based on the terms stated in the respective agreements, are as follows:
2019 |  | $ | - |
2020 |  |  | - |
2021 |  |  | - |
2022 |  |  | - |
2023 |  |  | - |
Thereafter |  |  | 636,556 |
The annual maturities of long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts associated with the convertible debt instruments are excluded from the calculation of the annual maturities of long-term debt in the table above. At December 31, 2018, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $7,000, with substantially no amounts borrowed. At December 31, 2017, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $15,000, with substantially no amounts borrowed. Interest paid was $23,859, $21,216, and $19,316 for the years ended December 31, 2018, 2017, and 2016, 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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