Earnings Per Share

9 Months Ended

Oct. 01, 2011

Note 9 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (in thousands, except per share amounts):

	Fiscal quarters ended				Nine fiscal months ended
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010

Numerator:
Numerator for basic earnings per share:
Net earnings	$	50,487	$	89,799	$	207,869	$	211,878

Adjustment to the numerator for continuing operations and net earnings:

Interest savings assuming conversion of dilutive convertible and exchangeable notes, net of tax		38		82		132		175

Numerator for diluted earnings per share:
Net earnings	$	50,525	$	89,881	$	208,001	$	212,053

Denominator:
Denominator for basic earnings per share:
Weighted average shares		157,149		186,648		161,061		186,652

Effect of dilutive securities:
Convertible and exchangeable debt instruments		6,176		6,176		8,368		6,176
Employee stock options		13		7		138		6
Other		470		231		472		246
Dilutive potential common shares		6,659		6,414		8,978		6,428

Denominator for diluted earnings per share:
Adjusted weighted average shares		163,808		193,062		170,039		193,080

Basic earnings per share attributable to Vishay stockholders	$	0.32	$	0.48	$	1.29	$	1.14

Diluted earnings per share attributable to Vishay stockholders	$	0.31	$	0.47	$	1.22	$	1.10

Diluted earnings per share for the periods presented do not reflect the following weighted average potential common shares that would have an antidilutive effect or have unsatisfied performance conditions (in thousands):

	Fiscal quarters ended		Nine fiscal months ended
	October 1, 2011	October 2, 2010	October 1, 2011	October 2, 2010
Convertible and exchangeable notes:
Convertible Senior Debentures, due 2040	19,809	-	6,603	-
Convertible Senior Debentures, due 2041	7,885	-	4,072	-
Convertible Subordinated Notes, due 2023	-	29	-	68
Weighted average employee stock options	359	2,606	121	2,599
Weighted average warrants	8,824	8,824	8,824	8,824
Weighted average other	138	39	92	45

In periods in which they are dilutive, if the potential common shares related to the exchangeable notes are included in the computation, the related interest savings, net of tax, assuming conversion/exchange is added to the net earnings used to compute earnings per share.

The Company’s convertible debt instruments are only convertible upon the occurrence of certain events. While none of these events has occurred as of October 1, 2011, certain conditions which could trigger conversion have been deemed to be non-substantive, and accordingly, the Company has always assumed the conversion of these instruments in its diluted earnings per share computation during periods in which they are dilutive.

At the direction of its Board of Directors, the Company intends, upon conversion, to repay the principal amounts of the convertible senior debentures, due 2040 and due 2041, in cash and settle any additional amounts in shares of Vishay common stock. Accordingly, the debentures are included in the diluted earnings per share computation using the “treasury stock method” (similar to options and warrants) rather than the “if converted method” otherwise required for convertible debt. Under the “treasury stock method,” Vishay calculates the number of shares issuable under the terms of the notes based on the average market price of Vishay common stock during the period, and that number is included in the total diluted shares figure for the period. If the average market price is less than $13.88, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2040, and if the average market price is less than $19.02, no shares are included in the diluted earnings per share computation for the convertible senior debentures due 2041.

The Company purchased 99.6% of the outstanding convertible subordinated notes due 2023 pursuant to the option of the holders to require the Company to repurchase their notes on August 1, 2008. The remaining notes, with an aggregate principal amount of $1,870,000, were redeemed at Vishay’s option on August 1, 2010.

The Company waived its rights to settle the principal amount of the convertible subordinated notes, due 2023, in shares of Vishay common stock. Accordingly, the notes were included in the diluted earnings per share computation using the “treasury stock method” (similar to options and warrants) rather than the “if converted method” otherwise required for convertible debt. If the average market price was less than $21.28, no shares were included in the diluted earnings per share computation. The convertible subordinated notes were anti-dilutive for the fiscal quarter and nine fiscal months ended October 2, 2010 and therefore are not included in the computation of diluted earnings per share.