XML 51 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Long-Term Debt
 9 Months Ended
Sep. 27, 2014
Long-Term Debt [Abstract]  
Long-Term Debt
Note 6 – Long-Term Debt

Long-term debt consists of the following:

 
 
September 27,
2014
  
December 31,
2013
 
 
 
  
 
Credit facility
 
$
187,000
  
$
114,000
 
Exchangeable unsecured notes, due 2102
  
38,642
   
38,642
 
Convertible senior debentures, due 2040
  
103,364
   
101,846
 
Convertible senior debentures, due 2041
  
52,966
   
52,264
 
Convertible senior debentures, due 2042
  
58,908
   
58,159
 
 
  
440,880
   
364,911
 
Less current portion
  
-
   
-
 
 
 
$
440,880
  
$
364,911
 

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 September 18, 2014 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 August 26, 2014 (per $1 principal amount)
  
72.8961
   
53.1957
   
85.7084
 
Effective conversion price effective August 26, 2014 (per share)
 
$
13.72
  
$
18.80
  
$
11.67
 
130% of the conversion price (per share)
 
$
17.84
  
$
24.44
  
$
15.17
 
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 September 27, 2014 evaluation of the conversion criteria, due to the sale price of Vishay's common stock exceeding 130% of the conversion price for the applicable period in the third fiscal quarter of 2014.  The debentures due 2042 will remain convertible until December 31, 2014, at which time the conversion criteria will be reevaluated.  At the direction of its Board of Directors, the Company intends, upon conversion, to repay the principal amounts of the convertible senior debentures due 2042 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 upon conversion over the carrying value of the liability component of the debentures currently convertible has been reclassifed as temporary equity in the condensed 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 2042 continues to be classified as a non-current liability in 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
 
September 27, 2014
 
  
  
  
  
 
Due 2040
 
$
275,000
   
(172,189
)
  
553
  
$
103,364
  
$
110,094
 
Due 2041
 
$
150,000
   
(97,348
)
  
314
  
$
52,966
  
$
62,246
 
Due 2042
 
$
150,000
   
(91,301
)
  
209
  
$
58,908
  
$
57,874
 
Total
 
$
575,000
  
$
(360,838
)
 
$
1,076
  
$
215,238
  
$
230,214
 
 
                    
December 31, 2013
                    
Due 2040
 
$
275,000
   
(173,645
)
  
491
  
$
101,846
  
$
110,094
 
Due 2041
 
$
150,000
   
(98,085
)
  
349
  
$
52,264
  
$
62,246
 
Due 2042
 
$
150,000
   
(92,038
)
  
197
  
$
58,159
  
$
57,874
 
Total
 
$
575,000
  
$
(363,768
)
 
$
1,037
  
$
212,269
  
$
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 27, 2014
 
  
  
  
  
 
Due 2040
 
$
1,547
   
495
   
22
   
93
  
$
2,157
 
Due 2041
 
$
844
   
251
   
11
   
(29
)
 
$
1,077
 
Due 2042
 
$
844
   
251
   
13
   
13
  
$
1,121
 
Total
 
$
3,235
  
$
997
  
$
46
  
$
77
  
$
4,355
 
 
                    
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
 

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 27, 2014
 
  
  
  
  
 
Due 2040
 
$
4,641
   
1,456
   
66
   
62
  
$
6,225
 
Due 2041
 
$
2,532
   
737
   
35
   
(35
)
 
$
3,269
 
Due 2042
 
$
2,532
   
737
   
40
   
12
  
$
3,321
 
Total
 
$
9,705
  
$
2,930
  
$
141
  
$
39
  
$
12,815
 
 
                    
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
 

Exchangeable Unsecured Notes, due 2102

Quarterly cash dividends do not result in an adjustment to the put/call rate of the Company's exchangeable unsecured notes due 2102; therefore, the cash dividend payments in the first, second, and third fiscal quarters of 2014 had no effect on the exchangeable notes due 2102.