Vishay Intertechnology
Annual Report 2016

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KVISHAY INTERTECHNOLOGY INC - VSHFiled: February 17, 2017 (period: December 31, 2016)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-Ký ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934For the transition period from _______ to _______Commission file number 1-7416Vishay Intertechnology, Inc.(Exact name of registrant as specified in its charter)Delaware38-1686453(State or other jurisdiction ofincorporation or organization)(IRS employer identification no.)63 Lancaster AvenueMalvern, Pennsylvania 19355-2143(Address of principal executive offices)(610) 644-1300(Registrant's telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Common Stock, $0.10 par valueNew York Stock Exchange(Title of class)(Exchange on which registered)Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ☐Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ýNote – Checking the box above will not relieve any registrant required to file reports under Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit andpost such files). Yes ý No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to thebest of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ýIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "largeaccelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filerý Accelerated filer☐ Non-accelerated filer☐ Smaller reporting company☐ Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ýThe aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of theregistrant's most recently completed second fiscal quarter ($12.34 on July 2, 2016), assuming conversion of all of its Class B common stock held by non-affiliates into commonstock of the registrant, was $1,674,000,000. There is no non-voting stock outstanding.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.As of February 15, 2016, registrant had 133,946,330 shares of its common stock and 12,129,227 shares of its Class B common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant's definitive proxy statement, which will be filed within 120 days of December 31, 2016, are incorporated byreference into Part III.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.This page intentionally left blank.2Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Vishay Intertechnology, Inc.Form 10-K for the year ended December 31, 2016CONTENTSPART I Item 1. Business5Item 1A. Risk Factors16Item 1B. Unresolved Staff Comments22Item 2. Properties23Item 3. Legal Proceedings24Item 4. Mine Safety Disclosures25Executive Officers of the Registrant26 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities27Item 6. Selected Financial Data29Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations31Item 7A. Quantitative and Qualitative Disclosures About Market Risk59Item 8. Financial Statements and Supplementary Data61Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure61Item 9A. Controls and Procedures61Item 9B. Other Information62 PART III Item 10. Directors, Executive Officers, and Corporate Governance62Item 11. Executive Compensation62Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters62Item 13. Certain Relationships and Related Transactions, and Director Independence62Item 14. Principal Accounting Fees and Services62 PART IV Item 15. Exhibits, Financial Statement Schedules63 SIGNATURES66 Consolidated Financial Statements Reports of Independent Registered Public Accounting FirmF-2Consolidated Balance Sheets as of December 31, 2016 and 2015F-4Consolidated Statements of Operations for the years ended December 31, 2016, 2015, and 2014F-6Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015, and 2014F-7Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014F-8Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, 2015, and 2014F-9Notes to the Consolidated Financial StatementsF-103Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.This page intentionally left blank.4Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART IItem 1. BUSINESSOur BusinessVishay Intertechnology, Inc. ("Vishay," the "Company," "we," "us," or "our") is a leading global manufacturer and supplier ofdiscrete semiconductors and passive components. Semiconductors include MOSFETs, diodes, and optoelectronic components. Passivecomponents include resistive products, capacitors, and inductors. Discrete semiconductors and passive components are essentialelements of virtually every type of electronic circuit. They support the microprocessor chips and other integrated circuits ("ICs") thatcoordinate and control the functions of electronic devices and equipment. We offer our customers "one-stop shop" access to one of themost comprehensive electronic component product lines of any manufacturer in the United States, Europe, and Asia.Our semiconductor components are used for a wide variety of functions, including power control, power conversion, powermanagement, signal switching, signal routing, signal blocking, signal amplification, two-way data transfer, one-way remote control,and circuit isolation. Our passive components are used to restrict current flow, suppress voltage increases, store and discharge energy,control alternating current ("AC") and voltage, filter out unwanted electrical signals, and perform other functions. Our components areused in virtually every type of product that contains electronic circuitry, in the industrial, computing, automotive, consumer,telecommunications, power supplies, military, aerospace, and medical markets.The Vishay StoryIn the 1950's, the late Dr. Felix Zandman, Vishay's founder, was issued patents for his PhotoStress® coatings and instruments, used toreveal and measure the distribution of stresses in structures such as airplanes and cars under live load conditions. His research in thisarea led him to develop Bulk Metal® foil resistors – ultra-precise, ultra-stable resistors with performance far beyond any other resistoravailable to date.In 1962, Dr. Zandman, with a loan from the late Alfred P. Slaner, founded Vishay to develop and manufacture Bulk Metal foilresistors. Concurrently, J.E. Starr developed foil resistance strain gages, which also became part of Vishay. Throughout the 1960's and1970's, Vishay established itself as a technical and market leader in foil resistors, PhotoStress products, and strain gages. Theseproducts were included with the measurements and foil resistor businesses that we spun off into an independent, publicly-tradedcompany named Vishay Precision Group, Inc. ("Vishay Precision Group" or "VPG") through a tax-free stock dividend to ourstockholders on July 6, 2010.In 1985, Vishay began to expand its product line through various strategic acquisitions, including the resistor companies DaleElectronics, Draloric Electronic, and Sfernice. In the early 1990's, Vishay applied its acquisition strategy to the capacitor market, withthe major acquisitions of Sprague Electric, Roederstein, and Vitramon. In 2002, Vishay acquired BCcomponents, the former passivecomponents business of Philips Electronics and Beyschlag, which greatly enhanced Vishay's global market position in passivecomponents. Over the years, we have made several smaller passive components acquisitions to gain market share, penetrate differentgeographic markets, enhance new product development, round out our product lines, or grow our high margin niche businesses. Theseinclude Electro-Films, Cera-Mite, and Spectrol in 2000; Tansitor and North American Capacitor Company (Mallory) in 2001; the thinfilm interconnect business of Aeroflex in 2004; Phoenix do Brasil in 2006; the wet tantalum capacitor business of KEMETCorporation in 2008; the resistor businesses of Huntington Electric in 2011; HiRel Systems in 2012; MCB Industrie in 2013; and HolyStone Polytech in 2014.In the late 1990's, Vishay began expanding its product lines to include discrete semiconductors. In 1998, Vishay acquired theSemiconductor Business Group of TEMIC, which included Telefunken and an 80.4% interest in Siliconix, producers of MOSFETs,RF transistors, diodes, optoelectronics, and power and analog switching integrated circuits. Vishay's next semiconductor acquisitioncame in 2001, with the purchase of the infrared components business of Infineon Technologies, which was followed the same year byVishay's acquisition of General Semiconductor, a leading global manufacturer of rectifiers and diodes. In 2005, Vishay made asuccessful tender offer for the minority interest in Siliconix. In 2007, Vishay acquired the Power Control Systems business ofInternational Rectifier, further enhancing our product offerings. These acquisitions propelled Vishay into the top ranks of discretesemiconductor manufacturers. In 2014, Vishay increased its position in optoelectronic sensors through its acquisition of Capella, afabless IC design company specializing in optoelectronic components.We continue to implement the vision, strategy, and culture articulated by Dr. Zandman as we continue to work tirelessly to enhancevalue for our stockholders.Vishay was incorporated in Delaware in 1962 and maintains its principal executive offices at 63 Lancaster Avenue, Malvern,Pennsylvania 19355-2143. Our telephone number is (610) 644-1300.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.5Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our Competitive StrengthsGlobal Technology LeaderWe were founded based on the inventions of Dr. Felix Zandman and we continue to emphasize technological innovation as a driver ofgrowth. Many of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, anddeveloped by Dr. Zandman, our engineers, and our scientists. We are currently a worldwide technology and market leader inwirewound and other power resistors, leaded film resistors, thin film SMD resistors, wet and conformal-coated tantalum capacitors,capacitors for power electronics, power rectifiers, low-voltage power MOSFETs, and infrared components.Research and Development Provides Customer-Driven Growth SolutionsWe maintain strategically placed application and product support centers where proximity to customers and our manufacturinglocations enables us to more easily gauge and satisfy the needs of local markets. The breadth of our product portfolio along with theproximity of our field application engineers to customers provides increased opportunities to have our components selected anddesigned into new end products by customers in all relevant market segments. We also maintain research and development personneland promote programs at a number of our production facilities to develop new products and new applications of existing products, andto improve manufacturing processes and technologies. We plan to grow our business and increase earnings per share, in part, throughaccelerating the development of new products and technologies and increasing design-in opportunities by expanding our technicalresources for providing solutions to customers.Operational ExcellenceWe are a leading manufacturer in our industry, with a broad product portfolio, access to a wide range of end markets and saleschannels, and geographic diversity. We have solid, well-established relationships with our customers and strong distribution channels.Our senior management team is highly experienced, with deep industry knowledge. Over the past two decades, our management teamhas successfully restructured our company and integrated several acquisitions. We can adapt our operations to changing economicconditions, as demonstrated by our ability to remain profitable and generate cash through the volatile economic cycle of the recent past.Broad Market PenetrationWe have one of the broadest product lines of discrete semiconductors and passive components among our competitors. Our broadproduct portfolio allows us to penetrate markets in all industry segments and all regions, which reduces our exposure to a particular endmarket or geographic location. We plan to grow our business and increase earnings per share, in part, through improving marketpenetration by expanding manufacturing facilities for our most successful products, increasing technical resources, and developingmarkets for specialty products in Asia. Our net revenues for the following applicable periods were attributable to customers in thefollowing regions: Years Ended December 31, 2016 2015 2014 Asia 41% 40% 39%Europe 35% 34% 37%Americas 24% 26% 24%The share of net revenues by end market was as follows: Years Ended December 31, 2016 2015 2014 Industrial 34% 35% 34%Automotive 28% 26% 24%Telecommunications 8% 10% 10%Computing 7% 8% 9%Consumer Products 7% 7% 9%Power Supplies 6% 5% 5%Military and Aerospace 6% 5% 5%Medical 4% 4% 4%Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.6Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Strong Track Record of Growth through AcquisitionsSince 1985, we have expanded our product line through various strategic acquisitions, growing from a small manufacturer of precisionresistors and resistance strain gages to one of the world's largest manufacturers and suppliers of a broad line of electronic components.We have successfully integrated the acquired companies within our existing management and operational structure, reducing selling,general, and administrative expenses through the integration or elimination of redundant sales and administrative functions, creatingmanufacturing synergies, while improving customer service. We plan to grow our business and increase earnings per share, in part,through targeted acquisitions. We have often targeted high margin niche business acquisitions. We also target strategic acquisitions ofbusinesses with technology and engineering capabilities that we can use to grow our business.Strong Free Cash Flow GenerationWe refer to the amount of cash generated from operations in excess of our capital expenditure needs and net of proceeds from the saleof assets as "free cash" (see "Overview" included in Item 7, "Management's Discussion and Analysis of Financial Condition andResults of Operations" for "free cash" definition and reconciliation to generally accepted accounting principles ("GAAP")). Due toour strong operational management, cost control measures, efficient capital expenditures, broad product portfolio, and strong marketposition, we have generated positive "free cash" in each of the past 20 years and "free cash" in excess of $80 million in each of thepast 15 years. We expect the benefits of our restructuring and other cost cutting measures (see "Cost Management" included in Item 7,"Management's Discussion and Analysis of Financial Condition and Results of Operations") to contribute to our "free cash" generationgoing forward.Financial Strength and FlexibilityAs of December 31, 2016, our cash and short-term investment balance exceeded our debt balance by $741.4 million. We alsomaintain a credit facility, which provides a revolving commitment of up to $640 million through December 10, 2020, of which $490.1million was available as of December 31, 2016. Our net cash position and short-term investment balance, available revolvingcommitment, and strong "free cash" flow generation provide financial strength and flexibility and reduce our exposure to futureeconomic uncertainties.Our Key ChallengesEconomic EnvironmentOur business and operating results have been and will continue to be impacted by the global economy and the local economies inwhich our customers operate. Our revenues are dependent on end markets that are impacted by fluctuating consumer and industrialdemand, and our operating results can be adversely affected by reduced demand in those markets.CompetitionOur business is highly competitive worldwide, with low transportation costs and few import barriers. Our major competitors, some ofwhich are larger than us, have significant financial resources and technological capabilities. To continue to grow our businesssuccessfully, we need to continually develop, introduce, and market new and innovative products, modify existing products, respond totechnological change, and customize certain products to meet customer requirements.Continuous Innovation and Protection of Intellectual PropertyOur ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of ourtechnology. Although we have been awarded, have filed applications for, or have licenses to use, numerous patents in the UnitedStates and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihoodthat pending patents will be issued.Continuing to Grow through AcquisitionsOur long-term historical growth in revenues and net earnings has resulted in large part from our strategy of growth throughacquisitions. For this strategy to remain successful, we need to continue to identify attractive and available acquisition candidates,complete acquisitions on favorable terms, and integrate new businesses, manufacturing processes, employees, and logisticalarrangements into our existing management and operating infrastructure.For a more detailed discussion of the risks and uncertainties inherent in our business, which could materially and adversely affect ourbusiness, results of operations or financial condition, see "Risk Factors" in Item 1A.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.7Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Key Business StrategiesSince our first acquisition in 1985, we have pursued a business strategy that principally consists of the following elements:Invest in Innovation to Drive GrowthWe plan to continue to use our research and development ("R&D"), engineering, and product marketing resources to continually rollout new and innovative products. As part of our plan to foster intensified internal growth, we have increased our worldwide R&D andengineering technical staff, and increased our technical field sales force in Asia to increase opportunities to design-in our products inlocal markets. Our ability to react to changing customer needs and industry trends will continue to be key to our success. We intend toleverage our insights into customer demand to continually develop new innovative products within our existing lines and to modify ourexisting core products to make them more appealing, addressing changing customer needs and industry trends.We are directing increased funding and are focusing on developing products to capitalize on the connectivity, mobility, andsustainability growth drivers of our business.Cost ManagementWe place a strong emphasis on controlling our costs. We focus on controlling fixed costs and reducing variable costs. When ourongoing cost management activites are not adequate, we take actions to maintain our cost competitiveness including restructuring ourbusiness to improve efficiency and operating performance.Growth through Strategic AcquisitionsWe plan to continue to expand within the electronic components industry, through the acquisition of other manufacturers of electroniccomponents that have established positions in major markets, reputations for product innovation, quality, and reliability, strongcustomer bases, and product lines with which we have substantial marketing and technical expertise.Customer Service ExcellenceWe maintain significant production facilities in those regions where we market the bulk of our products in order to enhance the serviceand responsiveness that we provide to our customers. We aim to further strengthen our relationships with customers and strategicpartners by providing broad product lines that allow us to provide "one-stop shop" service, whereby they can streamline their designand purchasing processes by ordering multiple types of products.Our growth plan was designed based on the tenets of the key business strategies listed above.8Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ProductsWe design, manufacture, and market electronic components that cover a wide range of functions and technologies. Our productportfolio includes:MOSFETs SegmentResistors & Inductors SegmentMOSFETsFilm Resistors• Low-Voltage TrenchFET® Power MOSFETs• Metal Film Resistors• Medium-Voltage Power MOSFETs• Thin Film Resistors• High-Voltage Planar MOSFETs• Thick Film Resistors• High-Voltage Super Junction MOSFETs• Power Thick Film Resistors• Automotive-Grade MOSFETs• Metal Oxide Film ResistorsICs• Carbon Film Resistors• VRPower® DrMOS Integrated Power StagesWirewound Resistors• Power Management and Power Control ICs• Vitreous, Cemented, and Housed Resistors• Smart Load Switches• Braking and Neutral Grounding Resistors• Analog Switches and Multiplexers• Custom Load Banks Power Metal Strip® ResistorsDiodes SegmentBattery Management ShuntsRectifiersCrowbar and Steel Blade Resistors• Schottky RectifiersThermo Fuses• Ultra-Fast Recovery RectifiersChip Fuses• Standard and Fast Recovery RectifiersPyrotechnic Initiators / Igniters• High-Power Rectifiers/DiodesVariable Resistors• Bridge Rectifiers• Cermet Variable ResistorsSmall-Signal Diodes• Wirewound Variable Resistors• Schottky and Switching Diodes• Conductive Plastic Variable Resistors• Zener Diodes• Contactless Potentiometers• RF PIN Diodes• Hall Effect Position SensorsProtection Diodes• Precision Magnetic Encoders• TVS TransZorb® and PAR® (uni-directional, bi-directional)Networks/Arrays• ESD Protection Diodes (including arrays)Non-Linear ResistorsThyristors/SCR• NTC Thermistors• Phase-Control Thyristors• PTC Thermistors• Fast Thyristors• Thin Film RTDsIGBTs• Varistors• Field Stop TrenchMagnetics• Punch Through Trench• InductorsPower Modules• Wireless Charging Coils• Input Modules (diodes and thyristors)• Planar Devices• Output & Switching Modules (contain MOSFETs, IGBTs, anddiodes)• Transformers• Custom Modules• Custom Magnetics ConnectorsOptoelectronic Components Segment Infrared Emitters and DetectorsCapacitors SegmentOptical SensorsTantalum Capacitors• Proximity• Molded Chip Tantalum Capacitors• Ambient Light• Molded Chip Polymer Tantalum Capacitors• Light Index (RGBW, UV, IR)• Tantalum MAP Capacitors• Humidity• Polymer Tantalum MAP Capacitors• Quadrant Sensors• Coated Chip Tantalum Capacitors• Transmissive• Solid Through-Hole Tantalum Capacitors• Reflective• Wet Tantalum CapacitorsInfrared Remote Control ReceiversCeramic CapacitorsOptocouplers• Multilayer Chip Capacitors• Phototransistor, Photodarlington• Disc Capacitors• Linear• Multilayer Chip RF Capacitors• Phototriac• Chip Antennas• High Speed• Thin Film Capacitors• IGBT and MOSFET DriverFilm CapacitorsSolid-State RelaysPower CapacitorsSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.LEDs and 7-Segment DisplaysHeavy-Current CapacitorsInfrared Data Transceiver ModulesAluminum Electrolytic CapacitorsCustom ProductsENYCAPTM Energy Storage CapacitorsWe promote our ability to provide "one-stop shop" service to customers, whereby they can streamline their design and purchasingprocesses by ordering multiple types of products from Vishay. Our technical sales force consisting of field application engineers offerscustomers the complete breadth of the Vishay portfolio for their applications. We aim to use this broad portfolio to increaseopportunities to have our components selected and "designed in" to new end products.9Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Product SegmentsOur products can be divided into two general classes: semiconductors and passive components. Semiconductors are sometimes referredto as "active components" because they require power to function whereas passive components do not require power to function. Oursemiconductor and passive components products are further categorized based on their functionality for financial reporting purposes. See Note 15 to our consolidated financial statements for additional information on revenues, income, and total assets by segment.SemiconductorsOur semiconductor products include metal oxide semiconductor field-effect transistors ("MOSFETs"), Diodes, and OptoelectronicComponents. Semiconductors are typically used to perform functions such as switching, amplifying, rectifying, routing, or transmittingelectrical signals, power conversion, and power management.MOSFETs SegmentMOSFETs function as solid state switches to control power. Our MOSFETs business includes both the commodity and non-commodity markets in which we believe that we enjoy a good reputation and strong brand recognition (Siliconix). MOSFETsapplications include mobile phones, notebook and desktop computers, tablet computers, digital cameras, televisions, DC/DC andAC/DC switch mode power supplies, solar inverters, automotive and industrial systems. We are a leader in low-voltage TrenchFETMOSFETs and also offer high-voltage MOSFETs. Our MOSFETs product line includes low- and medium-voltage TrenchFETMOSFETs, high-voltage planar MOSFETs, high voltage Super Junction MOSFETs, power integrated circuits (power ICs), andintegrated function power devices. We are one of the technology leaders in MOSFETs, with a tradition of innovation in wafer design,packaging, and performance.Diodes SegmentDiodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostatic dischargedamage; or provide electromagnetic interference filtering. Our Diodes business is a solid business with a strong market presence inboth the commodity and non-commodity markets. The products that comprise our Diodes business represent our broadest product lineand include rectifiers, small signal diodes, protection diodes, thyristors/SCRs and power modules. The primary application of rectifiers,found inside the power supplies of virtually all electronic equipment, is to derive DC power from the AC supply. Vishay is theworldwide leader in rectifiers, having a broad technology base and a good position in automotive, industrial, computing and consumermarkets. Our rectifier innovations include TMBS® using Trench MOS barrier Schottky rectifier technology, which reduces power lossand improves the efficiency of end systems and eSMP®, the best in class high-current density surface mount packages. Our wideselection of small signal diodes consist of the following functions: switching, tuning, band-switching, RF attenuation and voltageregulation (Zener). They are available in various glass and plastic packaging options and generally are used in electronic circuits,where small currents and high frequencies are involved. Vishay is also one of the market leaders for TVS (transient voltage suppressor)diodes. The portfolio of protection diodes includes ESD protection and EMI filter. Our thyristors or SCR (silicon-controlled rectifiers)are very popular in the industrial high-voltage AC power control applications. The fast growing markets of solar inverter and HEV/EVare the focus of our power modules business (IGBT or MOSFET modules). These modules can be customized to fit in differentcustomer design requirements.Optoelectronic Components SegmentOptoelectronic components emit light, detect light, or do both. Our Optoelectronic Components business has a strong market presencein both the commodity and non-commodity markets. Our broad range of standard and customer specific optoelectronic componentsincludes infrared ("IR") emitters and detectors, IR remote control receivers, optocouplers, solid-state relays, optical sensors, light-emitting diodes ("LEDs"), 7-segment displays, and IR data transceiver modules (IrDA®). Our IR remote control receivers aredesigned for use in infrared remote control, data transmission, and light barrier applications in end products including televisions, set-top boxes, notebook computers, and audio systems. We are the leading manufacturer of IR remote control receivers. Our optocouplerselectrically isolate input and output signals. Uses include switch-mode power supplies, consumer electronics, telecommunicationsequipment, solar inverters, and industrial systems. Our IR data transceiver modules are used for short range, two-way, high-speed, andsecure wireless data transfer between electronic devices such as home medical appliances, mobile phones, industrial data loggers, andmetering. Our optical sensors product line was considerably strengthened by our acquisition of Capella in 2014. Our optical sensorsproducts include ambient light sensors, optical encoders, integrated photodiode and I/V amplifiers, proximity sensors, color sensors,and UV sensors. Applications include telecommunications, mobile phones, smartphone, handheld devices, digital cameras, laptops,desktop computers, LED backlighting, office automation equipment, household electrical appliance and automotive electronics. OurLEDs are designed for backlighting and illumination in automotive and other applications. Our LEDs include ultra-bright as well assmall surface-mount packages, with products available in all standard colors including white.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.10Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Passive ComponentsOur passive components include resistors, capacitors, and magnetics such as inductors and transformers. Passive components are usedto store electrical charges, to limit or resist electrical current, and to help in filtering, surge suppression, measurement, timing, andtuning applications.Resistors and Inductors SegmentResistors and inductors both impede electric current. Resistors are basic components used in all forms of electronic circuitry to adjustand regulate levels of voltage and current. Inductors use an internal magnetic field to change alternating current phase and resistalternating current. Our Resistors and Inductors business is our original business. We maintain the broadest portfolio of resistorproducts worldwide. Under current market conditions, the business is solid, predictable, and growing at relatively stable selling prices. We are a market leader with a strong technology base, many specialty products, and strong brand recognition (such as our Dale,Draloric, Beyschlag, Sfernice, and HiRel Systems brands). We focus on higher value markets in specialized industries, whilemaintaining a complete portfolio of commodity products. We do not aim to be the volume leader in commodity markets.Resistors vary widely in precision and cost, and are manufactured from numerous materials and in many forms. Linear resistivecomponents are classified as variable or fixed, depending on whether or not their resistance is adjustable. Non-linear resistors functionby varying in resistance under influence of temperature (thermistors) or voltage (varistors). They can be used in temperature-measuringapplications or as current or voltage-limiting devices. We manufacture virtually all types of fixed resistors, both in discrete and networkforms, as well as many variable types.Vishay resistor innovations include Power Metal Strip® technology. These resistors feature very low resistance and are used tomeasure changes in current flow (current sensing) or divert current flow (shunting).Inductor applications include controlling AC current and voltage, filtering out unwanted electrical signals, and energy storage. Vishayinductor innovations include IHLP® low-profile, high-current inductor technology with industry-leading specifications, which ispatented and generates royalty revenue. Our low-profile, high-current inductors save circuit board space and power in voltage regulatormodule ("VRM") and DC to DC converter applications. In addition, we are a worldwide leader in custom magnetic solutions focusingon high performance and high reliability. This field has been substantially strengthened, with the 2012 acquisition of HiRel Systems,broadening our portfolio, customer, and market segment reach.Capacitors SegmentCapacitors store energy and discharge it when needed. Our Capacitors business consists of a broad range of reliable, high-qualityproducts. We have a strong presence worldwide in specialty markets based on our product performance and reliability and strongbrand recognition (including our Sprague, Vitramon, Roederstein, BCcomponents, and ESTA brands). We focus on higher valuemarkets in specialized industries, while maintaining a complete portfolio of commodity products. We do not aim to be the volumeleader in commodity markets. Capacitors are used in almost all electronic circuits. They store energy and discharge it when needed.Important applications for capacitors include electronic filtering for linear and switching power supplies; decoupling and bypass ofelectronic signals for integrated circuits and circuit boards; and frequency control, timing and conditioning of electronic signals for abroad range of applications.We manufacture products based on all major capacitor technologies: tantalum (molded chip tantalum, coated chip tantalum, solidthrough-hole tantalum, wet tantalum, and polymer), ceramic (multilayer chip and ceramic disc), film, power, heavy-current, andaluminum electrolytic. Our capacitors range from tiny surface-mount devices for hearing aids and mobile devices to large powercorrection capacitors used in renewable energy, heavy industry, and electrical power grids. We are a recognized technology leader inmany product ranges, securing our strong position in military and medical markets, and in a wide range of industrial and automotiveapplications. Our wet tantalum and MicroTan™ technologies are market leaders.11Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Military QualificationsWe have qualified certain of our products under various military specifications approved and monitored by United States governmentagencies, and under certain European military specifications. Qualification levels are based in part upon the rate of failure of products.In order to maintain the classification level of a product, we must continuously perform tests on the product and the results of these testsmust be reported to the government agencies. If the product fails to meet the requirements for the applicable classification level, theproduct's classification may be reduced to a lower level. During the time that the classification level is reduced for a product withmilitary application, net revenues and earnings attributable to that product may be adversely affected.Manufacturing OperationsIn order to better serve our customers, we maintain production facilities in locations where we market the bulk of our products, such asthe United States, Germany, and Asia. To optimize production efficiencies, we have whenever practicable established manufacturingfacilities in countries, such as the Czech Republic, Hungary, India, Israel, Malaysia, Mexico, the People's Republic of China, and thePhilippines, where we can benefit from lower labor and tax costs and also benefit from various government incentives, including grantsand tax relief.One of our most sophisticated manufacturing operations is the production of power semiconductor components. This manufacturingprocess involves two phases of production: wafer fabrication and assembly (or packaging). Wafer fabrication subjects silicon wafers tovarious thermal, metallurgical, and chemical process steps that change their electrical and physical properties. These process stepsdefine cells or circuits within numerous individual devices (termed "dies" or "chips") on each wafer. Assembly is the sequence ofproduction steps that divides the wafer into individual chips and encloses the chips in structures (termed "packages") that make themusable in a circuit. Both wafer fabrication and assembly phases incorporate wafer level and device level electrical testing to ensure thatdevice design integrity has been achieved.In the United States, our manufacturing facilities are located in California, Minnesota, Nebraska, New Hampshire, New York, RhodeIsland, South Dakota, Vermont, and Wisconsin. In Asia, our main manufacturing facilities are located in the People's Republic ofChina, the Republic of China (Taiwan), India, and Malaysia. In Europe, our main manufacturing facilities are located in Germany,France, and the Czech Republic. We have substantial manufacturing facilities in Israel. We also have manufacturing facilities inAustria, Dominican Republic, Japan, Hungary, Italy, Mexico, Portugal, and the Philippines. Over the past several years, we haveinvested substantial resources to increase the efficiency of our plants, which we believe will further reduce production costs.All of our manufacturing operations have received ISO 9001 certification. ISO 9001 is a comprehensive set of quality programstandards developed by the International Standards Organization. See Note 15 to our consolidated financial statements for financial information by geographic area.Sources of SuppliesAlthough most materials incorporated in our products are available from a number of sources, certain materials, including plastics andmetals, are available only from a relatively limited number of suppliers or are subject to significant price volatility.Silicon wafers are the most important raw material for the manufacturing of our semiconductor products. Silicon wafers aremanufactured from high-purity silicon, a metalloid. There have at times been industry-wide shortages of high-purity silicon resultingprimarily from growing demand of the electronic component and solar power industries, and limited growth in high-purity siliconmanufacturing capacities. Shifts in demand for high-purity silicon and in turn, silicon wafers, have resulted in significant fluctuation inprices of silicon wafers.We are a major consumer of the world's annual production of tantalum, a metal used in the manufacturing of tantalum capacitors.There are few suppliers that process tantalum ore into capacitor grade tantalum powder.Certain materials, in addition to tantalum and including tin, tungsten, and gold are available only from a relatively limited number ofsuppliers, the source for which may be in the Democratic Republic of the Congo ("DRC") or an adjoining country. We are workingtoward the elimination of materials that directly or indirectly finance or benefit armed groups in the DRC or adjoining countries fromour supply chain.Palladium, a metal used to produce multi-layer ceramic capacitors, is currently found primarily in South Africa and Russia. Palladiumis a commodity metal that is subject to price volatility. We periodically enter into short-term commitments to purchase palladium.Certain metals used in the manufacture of our products, such as copper, are traded on active markets, and can be subject to significantSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.price volatility. Our policy is to enter into short-term commitments to purchase defined portions of annual consumption of these metalsif market prices decline below budget.12Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Inventory and BacklogWe manufacture both standardized products and those designed and produced to meet customer specifications. We maintain aninventory of standardized components and monitor the backlog of outstanding orders for our products.We include in our backlog only open orders that we expect to ship in the next twelve months. Many of our customers encounteruncertain and changing demand for their products. They typically order products from us based on their forecasts. If demand fallsbelow customers' forecasts, or if customers do not control their inventory effectively, they may cancel or reschedule the shipmentsincluded in our backlog, in many instances without the payment of any penalty. Therefore, our backlog at any point in time is notnecessarily indicative of the results to be expected for future periods.Customers and MarketingWe sell our products to original equipment manufacturers ("OEMs"), electronic manufacturing services ("EMS") companies, whichmanufacture for OEMs on an outsourcing basis, and independent distributors that maintain large inventories of electronic componentsfor resale to OEMs and EMS companies. The distribution of sales by customer type for 2016 is shown below:Distributors 55%OEMs 37%EMS companies 8%Our sales organizations are regionally based. While our sales and support procedures are typically similar across all regions, we remainflexible in our ability to offer programs tailored to our customers' specific support requirements in each local area. The aim of our salesorganizations is supporting our customers across all product lines, developing new design wins, negotiating contracts, and providinggeneral commercial support as would normally be expected of a large multi-national sales force.We have an established Strategic Global Account program, which provides each of our top customers with a dedicated StrategicGlobal Account Manager. Our Strategic Global Account Managers are typically highly experienced salesmen or saleswomen who arecapable of providing key customers with the coordination and management visibility required in a complex multi-product businessrelationship. They typically coordinate the sales, pricing, contract, logistic, quality, and other aspects of the customer's businessrequirements. The Strategic Global Account Manager normally is the focal point of communication between Vishay and our maincustomers. We maintain a similar program for our strategic distributors as well.We work with our customers so that our products are incorporated into the design of electronic equipment at the earliest stages ofdevelopment and to provide technical and applications support. In addition to our staff of direct field sales personnel, independentmanufacturers' representatives, and distributors, our Business Development group maintains teams of dedicated Field ApplicationEngineers ("FAEs") to assist our customers in solving technical problems and in developing products to meet specific customerapplication needs using our entire product portfolio to provide support for our customers' engineering needs. Organized by marketsegment, our Business Development FAEs bring specific knowledge of component applications in their areas of expertise in theautomotive, telecommunications, computer, consumer/entertainment, industrial, peripherals, digital consumer, and other marketsegments. With the ultimate goal of a Vishay "design-in" – the process by which our customers specify a Vishay component in theirproducts – this program offers our customers enhanced access to all Vishay technologies while at the same time increasing designwins, and ultimately sales, for us. Most importantly, the process is closely monitored via a proprietary database developed by ourBusiness Development group. Our database captures specific design activities and allows for real-time measurement of new businesspotential for our management team.Our top 30 customers have been relatively stable despite not having long-term commitments to purchase our products. With selectedcustomers, we have signed longer term (greater than one year) contracts for specific products. Net revenues from our top 30 customersrepresent approximately 70% of our total net revenues. No single customer comprises more than 10% of our total net revenues.In certain areas we also work with sales representatives. The commission expense for these sales representatives is not material.Research and DevelopmentMany of our products and manufacturing techniques, technologies, and packaging methods have been invented, designed, anddeveloped by Dr. Felix Zandman, our engineers, and our scientists. We maintain strategically placed design centers where proximity tocustomers enables us to more easily gauge and satisfy the needs of local markets. These design centers are located predominantly in theUnited States, Germany, Italy, Israel, the People's Republic of China, France, and the Republic of China (Taiwan).We also employ research and development personnel and promote programs at a number of our production facilities to develop newSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.products and new applications of existing products and to improve manufacturing processes and technologies. This decentralizedsystem encourages product development at individual manufacturing facilities, closer to our customers.13Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CompetitionWe face strong competition in various product lines from both domestic and foreign manufacturers. Our primary competitors byproduct type include:·MOSFETs: Infineon, NXP Semiconductors, ON Semiconductor, Rohm, STMicroelectronics, Toshiba.·Diodes: Diodes, Inc., Infineon, NXP Semiconductors, ON Semiconductor, STMicroelectronics.·Optoelectronic Components: Avago, OSRAM Opto Semiconductors, Rohm, Sharp, Toshiba.·Resistors and Inductors: KOA, Murata, Panasonic, Rohm, TDK-EPCOS, Yageo.·Capacitors: AVX, KEMET, Murata, Nichicon, Panasonic, TDK-EPCOS, Yageo.There are many other companies that produce products in the markets in which we compete.Our competitive position depends on our ability to maintain a competitive advantage on the basis of product quality, know-how,proprietary data, market knowledge, service capability, technological innovation, business reputation, and price competitiveness. Oursales and marketing programs aim to compete by offering our customers a broad range of world-class technologies and products,superior global sales and distribution support, and a secure and multi-location source of product supply.Recently there has been a considerable amount of consolidation acitivity in the electronic component industry, some of which involvedour primary competitors. We view the industry consolidation as an opportunity for us to gain business as an independent second-source supplier.Patents and LicensesWe have made a significant investment in securing intellectual property protection for our technology and products. We seek to protectour technology by, among other things, filing patent applications for technology considered important to the development of ourbusiness. We also rely upon trade secrets, unpatented know-how, continuing technological innovation, and the aggressive pursuit oflicensing opportunities to help develop and maintain our competitive position.Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of ourtechnology. Although we have been awarded, have filed applications for, or have been licensed under, numerous patents in the UnitedStates and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihoodthat pending patents will be issued.We require all of our technical, research and development, sales and marketing, and management employees and most consultants andother advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us.These agreements provide that all confidential information developed or made known to the entity or individual during the course ofthe entity's or individual's relationship with us is to be kept confidential and not disclosed to third parties except in specificcircumstances. Substantially all of our technical, research and development, sales and marketing, and management employees haveentered into agreements providing for the assignment to us of rights to inventions made by them while employed by us.When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights throughlegal action, and we intend to continue to do so. See Item 3, "Legal Proceedings."Although we have numerous United States and foreign patents covering certain of our products and manufacturing processes, noparticular patent is considered individually material to our business.EmployeesAs of December 31, 2016, we employed approximately 22,100 full time employees, of whom approximately 91% were locatedoutside the United States. Our future success is substantially dependent on our ability to attract and retain highly qualified technicaland administrative personnel. Some of our employees outside the United States are members of trade unions, and employees at oneU.S. facility are represented by a trade union. Our relationship with our employees is generally good. However, no assurance can begiven that, if we continue to restructure our operations and/or reduce employee hours in response to changing economic conditions,labor unrest or strikes will not occur.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.14Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Environment, Health and SafetyWe have adopted an Environmental Health and Safety Corporate Policy that commits us to achieve and maintain compliance withapplicable environmental laws, to promote proper management of hazardous materials for the safety of our employees and theprotection of the environment, and to minimize the hazardous materials generated in the course of our operations. This policy isimplemented with accountability directly to the Board of Directors. In addition, our manufacturing operations are subject to variousfederal, state, and local laws restricting discharge of materials into the environment.We are involved in environmental remediation programs at various sites currently or formerly owned by us and our subsidiaries bothwithin and outside of the U.S., in addition to involvement as a potentially responsible party ("PRP") at Superfund sites. Certainobligations as a PRP have arisen in connection with business acquisitions. The remediation programs are on-going and the ultimatecost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation ofapplicable laws and regulations and alternative cleanup methods. See Item 3, "Legal Proceedings."We are not involved in any pending or threatened proceedings that would require curtailment of our operations. We continually expendfunds to ensure that our facilities comply with applicable environmental regulations. While we believe that we are in materialcompliance with applicable environmental laws, we cannot accurately predict future developments and do not necessarily haveknowledge of all past occurrences on sites that we currently occupy. More stringent environmental regulations may be enacted in thefuture, and we cannot determine the modifications, if any, in our operations that any such future regulations might require, or the costof compliance with such regulations. Moreover, the risk of environmental liability and remediation costs is inherent in the nature of ourbusiness and, therefore, there can be no assurance that material environmental costs, including remediation costs, will not arise in thefuture.With each acquisition, we attempt to identify potential environmental concerns and to minimize, or obtain indemnification for, theenvironmental matters we may be required to address. In addition, we establish reserves for specifically identified potentialenvironmental liabilities. We believe that the reserves we have established are adequate. Nevertheless, we have in the past and may inthe future inherit certain pre-existing environmental liabilities, generally based on successor liability doctrines. Although we have neverbeen involved in any environmental matter that has had a material adverse impact on our overall operations, there can be no assurancethat in connection with any past or future acquisition we will not be obligated to address environmental matters that could have amaterial adverse impact on our operations.Company Information and WebsiteWe file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission("SEC") under the Securities Exchange Act of 1934. The public may read and copy any materials that we file with the SEC at theSEC's Public Reference Room at Station Place, 100 F Street, N.E., Washington, DC 20549. The public may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website thatcontains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically withthe SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.In addition, our company website can be found on the Internet at www.vishay.com. The website contains information about us and ouroperations. Copies of each of our filings with the SEC on Form 10-K, Form 10-Q, and Form 8-K, and all amendments to those reports,can be viewed and downloaded free of charge as soon as reasonably practicable after the reports and amendments are electronicallyfiled with or furnished to the SEC. To view the reports, access ir.vishay.com and click on "SEC Filings."The following corporate governance related documents are also available on our website:·Corporate Governance Principles·Code of Business Conduct and Ethics·Code of Ethics Applicable to the Company's Chief Executive Officer, Chief Financial Officer, Principal AccountingOfficer or Controller and Financial Managers·Audit Committee Charter·Nominating and Corporate Governance Committee Charter·Compensation Committee Charter·Policy on Director Attendance at Annual Meetings·Nominating and Corporate Governance Committee Policy Regarding Qualification of Directors·Procedures for Securityholders' Submissions of Nominating Recommendations·Securityholder Communications with Directors and Interested Party Communication with Non-Management Directors·Whistleblower and Ethics Hotline ProceduresSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.·Related Party Transaction PolicyTo view these documents, access ir.vishay.com and click on "Corporate Governance."Any of the above documents can also be obtained in print by any stockholder upon request to our Investor Relations Department at thefollowing address:Corporate Investor RelationsVishay Intertechnology, Inc.63 Lancaster AvenueMalvern, PA 19355-214315Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 1A. RISK FACTORSFrom time to time, information provided by us, including but not limited to statements in this report, or other statements made by or onour behalf, may contain "forward-looking" information within the meaning of the Private Securities Litigation Reform Act of 1995.Such statements involve a number of risks, uncertainties, and contingencies, many of which are beyond our control, which may causeactual results, performance, or achievements to differ materially from those anticipated. Set forth below are important factors that couldcause our results, performance, or achievements to differ materially from those in any forward-looking statements made by us or on ourbehalf. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider thefollowing to be a complete discussion of all potential risks or uncertainties.Risks relating to our business generallyOur business is cyclical and future periods of decline and recovery are not predictable.The electronic component industry is highly cyclical and experiences periods of decline from time to time. We and others in theelectronic component industry have experienced these conditions in the recent past and cannot predict when we may experience suchdownturns in the future. Market conditions, such as a decline in product demand on a global basis, could result in order cancellationsand deferrals, lower average selling prices, and a material and adverse impact on our results of operations. These declines in demandare driven by market conditions in the end markets for our products. Changes in the demand mix, needed technologies, and these endmarkets may adversely affect our ability to match our products, inventory, and capacity to meet customer demand and could adverselyaffect our operating results and financial condition. A slowdown in demand or recessionary trends in the global economy makes itmore difficult for us to predict our future sales and manage our operations, and could adversely impact our results of operations.We have incurred and will continue to incur restructuring costs and associated asset write-downs.To remain competitive, particularly when business conditions are difficult, we sometimes attempt to reduce our cost structure byrestructuring our existing businesses, where we seek to achieve synergies, eliminate redundant facilities and staff positions, and moveoperations, where possible, to jurisdictions with lower labor costs. In 2013 and 2015, we announced various cost reduction programsas part of our continuous efforts to improve efficiency and operating performance. The programs primarily focus on enhancing thecompetitiveness of our MOSFETs segment, reducing selling, general, and administrative expenses company-wide, and improving theperformance of certain product lines within our Capacitors and Resistors & Inductors segments. In 2016, we announced an extensionof the 2013 MOSFETs Enhanced Competitiveness Program. We incur accelerated depreciation expenses related to assets that will nolonger be used after the associated restructuring programs are implemented. The expenses associated with the programs have been andwill continue to be recorded as they become recognizable under GAAP. Complete implementation of all of the programs is expectedto occur before the end of 2017.Additionally, our long-term strategy includes growing through the integration of acquired businesses, and GAAP requires plant closureand employee termination costs that we incur in connection with our acquisition activities to be recorded as expenses in ourconsolidated statement of operations, as such expenses are incurred. For this reason, we expect to have some level of futurerestructuring expenses due to acquisitions.Our business is cyclical, and in periods of a rising economy we may experience intense demand for our products. If our restructuringactivities result in us not being able to satisfy the intense demand from our customers during a rising economy and our competitorssufficiently expand production, we could lose customers and/or market share. These losses could have an adverse effect on ouroperations, financial condition, and results of operations.In the past we have grown through successful integration of acquired businesses, but this may not continue.Our long-term historical growth in revenues and net earnings has resulted in large part from our strategy of expansion throughacquisitions. Despite our plan to continue to grow, in part, through targeted acquisitions, we may be unable to continue to identify,have the financial capabilities to acquire, or successfully complete transactions with suitable acquisition candidates. We are subject tovarious U.S. and foreign competition laws and regulations that may affect our ability to complete certain acquisitions. Also, if anacquired business fails to operate as anticipated, cannot be successfully integrated with our other businesses, or we cannot effectivelymitigate the assumed, contingent, and unknown liabilities acquired, our results of operations, financial condition, enterprise value,market value, and prospects could all be materially adversely affected.To remain successful, we must continue to innovate, and our investments in new technologies may not prove successful.Our future operating results are dependent on our ability to continually develop, introduce, and market new and innovative products, tomodify existing products, to respond to technological change, and to customize certain products to meet customer requirements. ThereSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.are numerous risks inherent in this process, including the risks that we will be unable to anticipate the direction of technological changeor that we will be unable to develop and market new products and applications in a timely fashion to satisfy customer demands. If thisoccurs, we could lose customers and experience adverse effects on our financial condition and results of operations.In addition to our own research and development initiatives, we periodically invest in technology start-up enterprises, in which we mayacquire a controlling or noncontrolling interest but whose technology would be available to be commercialized by us. There arenumerous risks in investments of this nature including the limited operating history of such start-up entities, their need for capital, andtheir limited or absence of production experience, as well as the risk that their technologies may prove ineffective or fail to gainacceptance in the marketplace. Certain of our historical investments in start-up companies have not succeeded, and there can be noassurance that our current and future investments in start-up enterprises will prove successful.16Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Certain acquisitions will increase the risks inherent in our business.Our 2014 acquisition of Capella Microsystems (Taiwan) Inc. is unique compared to our past acquisitions. Most of our previousacquisitions were established businesses with substantial tangible assets. As a fabless design business, most of the assets acquired inthe Capella transaction were intangible. The Capella business has not performed as expected. As a result, it was determined in 2015that the depreciable and amortizable long-lived assets of Capella were not recoverable, and we recorded impairment charges of $57.6million in 2015 to write-down the related assets to their fair value. If the acquired business continues to not perform as expected, wemay be required to record further impairment charges related to those intangible assets, with limited ability to monetize any of thoseassets. There are significant risks specific to the acquired business that could result in it continuing to not perform as expected.As a fabless design business, Capella is substantially dependent on independent third-party foundries and subcontractors tomanufacture its products. If Capella cannot obtain sufficient capacity commitments, if Capella's foundries and subcontractors sufferfinancial instability, liquidity issues, or insolvency proceedings affecting their ability to manufacture our products, or if Capella'sfoundries and subcontractors experience production delays for other reasons, the supply of its products could be disrupted, which couldadversely affect our business. If demand for its products increases significantly, we have no assurances that Capella's third-partyfoundries and subcontractors will be able to increase their manufacturing capacity to a level that meets our requirements, potentiallypreventing us from meeting our customer demand and harming our business and customer relationships. Also, even if Capella'sfoundries and subcontractors are able to meet our increased demand, those third-party manufacturers may decide to charge significantlyhigher wafer prices to us, which could reduce our gross margin or require us to offset the increased costs by increasing prices to ourcustomers, either of which could harm our business and operating results.Capella's future success is substantially dependent on our ability to attract and retain highly qualified technical personnel. We could bematerially adversely affected if the turnover rates for engineers and other key personnel increases significantly or we are unsuccessfulin attracting, motivating and retaining qualified personnel. Should we lose one or more engineers who are key to a project's completionduring the course of a particular project, the completion of such project may be delayed which could negatively affect customerrelationships and goodwill and have a material adverse effect on our results of operations.Capella's historical customer base is concentrated among a few key customers, and is focused on end-users in the consumer productsindustry. The delay, significant reduction in, or loss of, orders from these large customers or the consumer products industry, ordemands of price concessions from these customers could have a material adverse effect on our net revenues and results of operations,or could result in significant volatility in our results of operations.Significant fluctuations in interest rates could adversely affect our results of operations and financial position.We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. Our credit facility bearsinterest at variable rates based on LIBOR. A significant increase in LIBOR would significantly increase our interest expense. Ageneral increase in interest rates would be largely offset by an increase in interest income earned on our cash and short-term investmentbalances, which are currently greater than our debt balances. However, there can be no assurance that the interest rate earned on cashand short-term investments will move in tandem with the interest rate paid on our variable rate debt.Our debt levels have increased and may continue to increase, which could adversely affect the perception in the financial markets ofour financial condition.The recorded value of our outstanding debt increased from approximately $347 million as of December 31, 2008 to approximately$357 million as of December 31, 2016, primarily due to the issuance of convertible senior debentures, the proceeds from the sale ofwhich we used to fund repurchases of our common stock. The carrying value of our convertible senior debentures will continue toincrease as the discount associated with the debentures is amortized. Additionally, we and our subsidiaries may incur substantialadditional debt in the future, subject to the conditions contained in our existing debt instruments, some of which may be secured debt.The marketplace could react negatively to our current debt levels which in turn could affect our share price and also make it moredifficult to obtain financing in the future.Future acquisitions could require us to issue additional indebtedness or equity.If we were to undertake a substantial acquisition for cash, the acquisition would likely need to be financed in part through bankborrowings or the issuance of public or private debt. This acquisition financing would likely decrease our ratio of earnings to fixedcharges and adversely affect other leverage criteria. Under our existing credit facility, we are required to obtain the lenders' consent forcertain additional debt financing and to comply with other covenants including the application of specific financial ratios. We cannotSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.make any assurances that the necessary acquisition financing would be available to us on acceptable terms if and when required. If wewere to undertake an acquisition for equity, the acquisition may have a dilutive effect on the interests of the holders of our commonstock.Our existing credit facility restricts our current and future operations and requires compliance with certain financial covenants.Our existing credit facility includes restrictions on, among other things, incurring indebtedness, incurring liens on assets, makinginvestments and acquisitions, making asset sales, and paying cash dividends and making other restricted payments. Our existing creditfacility also requires us to comply with other covenants, including the maintenance of specific financial ratios. If we are not incompliance with all of such covenants, the credit facility could be terminated by the lenders, and all amounts outstanding pursuant tothe credit facility could become immediately payable. Additionally, our convertible senior debentures due 2040, due 2041, and due2042 have cross-default provisions that could accelerate repayment in the event the indebtedness under the credit facility is accelerated.17Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our results are sensitive to raw material availability, quality, and cost.Many of our products require the use of raw materials that are produced in only a limited number of regions around the world or areavailable from only a limited number of suppliers. Our results of operations may be materially adversely affected if we have difficultyobtaining these raw materials, the quality of available raw materials deteriorates, or there are significant price increases for these rawmaterials. The determination that any of the raw materials used in our products are conflict minerals originating from the DemocraticRepublic of the Congo or adjoining countries could increase the probability that we will encounter the challenges noted above, incuradditional expenses to comply with government regulations, and face public scrutiny. For periods in which the prices of these rawmaterials are rising, we may be unable to pass on the increased cost to our customers, which would result in decreased margins for theproducts in which they are used. For periods in which the prices are declining, we may be required to write down our inventorycarrying cost of these raw materials, because we record our inventory at the lower of cost or market. Depending on the extent of thedifference between market price and our carrying cost, this write-down could have a material adverse effect on our results ofoperations.From time to time there have been short-term market shortages of certain raw materials used in our products. While these shortageshave not historically adversely affected our ability to increase production of products containing these materials, they have historicallyresulted in higher raw material costs for us. We cannot make any assurances that any of these market shortages in the future would notadversely affect our ability to increase production, particularly during periods of growing demand for our products. To assureavailability of raw materials in times of shortage, we may enter into long-term supply contracts for these materials, which may provecostly, unnecessary, and burdensome when the shortage abates.We may not have adequate facilities to satisfy future increases in demand for our products.Our business is cyclical and in periods of a rising economy, we may experience intense demand for our products. During such periods,we may have difficulty expanding our manufacturing to satisfy demand. Factors which could limit such expansion include delays inprocurement of manufacturing equipment, shortages of skilled personnel, and physical constraints on expansion of our facilities. If weare unable to meet our customers' requirements and our competitors sufficiently expand production, we could lose customers and/ormarket share. These losses could have an adverse effect on our financial condition and results of operations. Also, capacity that we addduring upturns in the business cycle may result in excess capacity during periods when demand for our products recede, resulting ininefficient use of capital which could also adversely affect us.Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of ourtechnology.Protection of intellectual property often involves complex legal and factual issues. We will be able to protect our proprietary rights fromunauthorized use by third parties only to the extent that our proprietary technologies are covered by valid and enforceable patents or areeffectively maintained as trade secrets. We have applied, and will continue to apply, for patents covering our technologies andproducts, as we deem appropriate. However, our applications may not result in issued patents. Also, our existing patents and any futurepatents may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products.Others may independently develop similar or alternative technologies, design around our patented technologies, or may challenge orseek to invalidate our patents. Also, the legal system in certain countries in which we operate may not provide or may not continue toprovide sufficient, intellectual property legal protections and remedies.Litigation regarding patent and other intellectual property rights is prevalent in the electronic components industry, particularly thediscrete semiconductor sector. We have on occasion been notified that we may be infringing on patent and other intellectual propertyrights of others. In addition, customers purchasing components from us have rights to indemnification under certain circumstances ifsuch components violate the intellectual property rights of others. Further, we have observed that in the current business environment,electronic component and semiconductor companies have become more aggressive in asserting and defending patent claims againstcompetitors. We will continue to vigorously defend our intellectual property rights, and may become party to disputes regarding patentlicensing and cross patent licensing. Although licenses are generally offered in such situations and we have successfully resolved thesesituations in the past, there can be no assurance that we will not be subject to future litigation alleging intellectual property rightsinfringement, or that we will be able to obtain licenses on acceptable terms. An unfavorable outcome regarding one of these matterscould have a material adverse effect on our business and results of operations.We face intense competition in our business, and we market our products to an increasingly concentrated group of customers.Our business is highly competitive worldwide, with low transportation costs and few import barriers. We compete principally on thebases of product quality and reliability, availability, customer service, technological innovation, timely delivery, and price. Theelectronic component industry has become increasingly concentrated and globalized in recent years and our major competitors, some ofwhich are larger than us, have significant financial resources and technological capabilities.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Our customers have become increasingly concentrated in recent years, and as a result, their buying power has increased and they havehad greater ability to negotiate favorable pricing and terms. This trend has adversely affected our average selling prices, particularly forcommodity components.Our backlog is subject to customer cancellation.Many of the orders that comprise our backlog may be canceled by our customers without penalty. Our customers may on occasiondouble and triple order components from multiple sources to ensure timely delivery when demand exceeds global supply. They oftencancel orders when business is weak and inventories are excessive, a situation that we experienced during the recent period ofeconomic slowdown. Therefore, we cannot be certain that the amount of our backlog accurately reflects the level of orders that we willultimately deliver. Our results of operations could be adversely impacted if customers cancel a material portion of orders in ourbacklog.18Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Future changes in our environmental liability and compliance obligations may harm our ability to operate or increase our costs.Our operations, products and/or product packaging are subject to environmental laws and regulations governing air emissions,wastewater discharges, the handling, disposal and remediation of hazardous substances, wastes and certain chemicals used orgenerated in our manufacturing processes, employee health and safety labeling or other notifications with respect to the content or otheraspects of our processes, products or packaging, restrictions on the use of certain materials in or on design aspects of our products orproduct packaging, and responsibility for disposal of products or product packaging. We establish reserves for specifically identifiedpotential environmental liabilities. Nevertheless, we have in the past and may in the future inherit certain pre-existing environmentalliabilities, generally based on successor liability doctrines, or otherwise incur environmental liabilities. We are involved in remediationprograms and related litigation at various current and former properties and at third-party disposal sites both within and outside of theU.S., including involvement as a potentially responsible party at Superfund sites. Although we have never been involved in anyenvironmental matter that has had a material adverse impact on our overall operations, there can be no assurance that in connectionwith any past or future acquisition, future developments, including related to our remediation programs, or otherwise, we will not beobligated to address environmental matters that could have a material adverse impact on our results of operations. In addition, morestringent environmental regulations may be enacted in the future, and we cannot presently determine the modifications, if any, in ouroperations that any such future regulations might require, or the cost of compliance with these regulations. In order to resolve liabilitiesat various sites, we have entered into various administrative orders and consent decrees, some of which may be, under certainconditions, reopened or subject to renegotiation.Our products are sold to or used in goods sold to the U.S. government and other governments. By virtue of such sales, we are subjectto various regulatory requirements and risks in the event of non-compliance.We sell products under prime and subprime contracts with the U.S. government and other governments. Many of these products areused in military applications. Government contractors must comply with specific procurement regulations and other requirements.These requirements, although customary in government contracts, impact our performance and compliance costs. Failure to complywith these regulations and requirements could result in contract modifications or termination, and the assessment of penalties and fines,which could negatively impact our results of operations and financial condition. Our failure to comply with these regulations andrequirements could also lead to suspension or debarment, for cause, from government contracting or subcontracting for a period oftime. Among the causes for debarment are violations of various statutes, including those related to procurement integrity, exportcontrol, government security regulations, employment practices, protection of the environment, accuracy of records and the recordingof costs, and foreign corruption. The termination of a government contract as a result of any of these acts could have a negative impacton our results of operations and financial condition and could have a negative impact on our reputation and ability to procure othergovernment contracts in the future.We have qualified certain of our products under various military specifications approved and monitored by the United States DefenseElectronic Supply Center and under certain European military specifications. These products are assigned certain classification levels.In order to maintain the classification level of a product, we must continuously perform tests on the products and the results of thesetests must be reported to governmental agencies. If a product fails to meet the requirements of the applicable classification level, itsclassification may be reduced to a lower level. A decrease in the classification level for a product with a military application could havean adverse impact on the net revenues and earnings attributable to that product.Our future success is substantially dependent on our ability to attract and retain highly qualified technical, managerial, marketing,finance, and administrative personnel.Rapid changes in technologies, frequent new product introductions, and declining average selling prices over product life cyclesrequire us to attract and retain highly qualified personnel to develop and manufacture products that feature technological innovationsand bring them to market on a timely basis. Our complex operations also require us to attract and retain highly qualified administrativepersonnel in functions such as legal, tax, accounting, financial reporting, auditing, and treasury. The market for personnel with suchqualifications is highly competitive. While we have employment agreements with certain of our executives, we have not entered intoemployment agreements with all of our key personnel.The loss of the services of or the failure to effectively recruit qualified personnel could have a material adverse effect on our business.Interruptions in our information technology systems could adversely affect our business.We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business.Any significant system or network disruption, including, but not limited to, new system implementations, computer viruses, securitybreaches, facility issues or energy blackouts could have a material adverse impact on our operations and results of operations. Suchnetwork disruption could result in a loss of the confidentiality of our intellectual property or the release of sensitive competitiveinformation or customer or employee personal data. Any loss of such information could harm our competitive position, result in a lossSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.of customer confidence, and cause us to incur significant costs to remedy the damages caused by the disruptions or security breaches.We have implemented protective measures to prevent against and limit the effects of system or network disruptions, but there can be noassurance that such measures will be sufficient to prevent or limit the damage from any future disruptions and any such disruptioncould have a material adverse impact on our business and results of operations.Third-party service providers, such as foundries, subcontractors, distributors, and vendors have access to certain portions of oursensitive data. In the event that these service providers do not properly safeguard our data that they hold, security breaches and loss ofour data could result. Any such loss of data by our third-party service providers could have a material adverse impact on our businessand results of operations.19Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Risks relating to Vishay's operations outside the United StatesWe are subject to the risks of political, economic, and military instability in countries outside the United States in which we operate.We have substantial operations outside the United States, and approximately 76% of our revenues during 2016 were derived from salesto customers outside the United States. Certain of our assets are located, and certain of our products are produced, in countries whichare subject to risks of social, political, economic, and military instability. This instability could result in wars, riots, nationalization ofindustry, currency fluctuation, and labor unrest. These conditions could have an adverse impact on our ability to operate in theseregions and, depending on the extent and severity of these conditions, could materially and adversely affect our overall financialcondition, results of operations, and our ability to access our liquidity.Our business has been in operation in Israel for 46 years, where we have substantial manufacturing operations. Although we havenever experienced any material interruption in our operations attributable to these factors, in spite of several Middle East crises,including wars, our financial condition and results of operations might be adversely affected if events were to occur in the Middle Eastthat interfered with our operations in Israel.Our global operations are subject to extensive anti-corruption laws and other regulations.The U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit companies and their intermediariesfrom making improper payments or providing anything of value to improperly influence foreign government officials for the purposeof obtaining or retaining business, or obtaining an unfair advantage. Recent years have seen a substantial increase in the globalenforcement of anti-corruption laws. Our continued operation and expansion outside the United States, including in developingcountries, could increase the risk of such violations or violations under other regulations relating to limitations on or licenses requiredfor sales made to customers located in certain countries. Violations of these laws may result in severe criminal or civil sanctions, coulddisrupt our business, and result in a material adverse effect on our reputation, business and results of operations or financial condition.We attempt to improve profitability by controlling labor costs, but these activities could result in labor unrest or considerable expense.Historically, our primary labor cost controlling strategy was to transfer manufacturing operations to countries with lower productioncosts, such as the Czech Republic, Hungary, India, Israel, Malaysia, Mexico, the People's Republic of China, and the Philippines. Webelieve that our manufacturing footprint is suitable to serve our customers and end markets, while maintaining lower manufacturingcosts. We do not anticipate further transferring any significant existing operations to lower-labor-cost countries; however, acquiredoperations may be transferred to lower-labor-cost countries when integrated into Vishay. Currently, our primary labor cost controllingstrategy involves reducing hours and limiting the use of subcontractors and foundries when demand for our products decreases.Shifting operations to lower-labor-cost countries, reducing hours, or limiting the use of subcontractors and foundries could result inproduction inefficiencies, higher costs, and/or strikes or other types of labor unrest.We are subject to foreign currency exchange rate risks which may impact our results of operations.We are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than thefunctional currencies of certain subsidiaries. From time to time, we utilize forward contracts to hedge a portion of projected cash flowsfrom these exposures.Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locationsin Asia in local currencies. Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but thesesubsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent thatthe costs incurred and the revenues earned in a particular currency offset one another. Our exposure to foreign currency risk is morepronounced in situations where, for example, production labor costs are predominantly paid in local currencies while the sales revenuefor those products is denominated in U.S. dollars. This is particularly the case for products produced in Israel, the Czech Republic, andChina.A change in the mix of the currencies in which we transact our business could have a material effect on results of operations.Furthermore, the timing of cash receipts and disbursements could have a material effect on our results of operations, particularly if thereare significant changes in exchange rates in a short period of time.Approximately 99% of our cash and cash equivalents and short-term investments balances were held by our non-U.S. subsidiaries.We generate a significant amount of cash and profits from our non-U.S. subsidiaries. As of December 31, 2016, $1,084.5 million ofour cash and cash equivalents and short-term investments were held by subsidiaries outside of the United States. Cash dividends tostockholders, share repurchases, and interest payments on our debt instruments need to be paid by the U.S. parent company, VishaySource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Intertechnology, Inc. Our U.S. subsidiaries have other operating cash needs. Except as described in Note 5 to our consolidatedfinancial statements, earnings generated by foreign subsidiaries are expected to be reinvested outside of the United States indefinitely. If additional cash is needed to be repatriated to the United States, in addition to various foreign country laws regulating the exportationof the cash and profits, we would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), state income taxes,incremental foreign income taxes, and withholding taxes payable to various foreign jurisdictions.20Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Risks related to our capital structureThe holders of our Class B common stock have effective voting control of our company.We have two classes of common stock: common stock and Class B common stock. The holders of common stock are entitled to onevote for each share held, while the holders of Class B common stock are entitled to 10 votes for each share held. At December 31,2016, the holders of Class B common stock held approximately 47.5% of the voting power of Vishay. The ownership of Class Bcommon stock is highly concentrated, and holders of Class B common stock effectively can cause the election of directors and approveother actions as stockholders. As a result of the passing of our founder and former Executive Chairman, Dr. Felix Zandman, Mrs.Ruta Zandman (a member of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (ourExecutive Chairman) and Ziv Shoshani (a member of our Board of Directors), approximately 89.5% of our Class B common stock and42.6% of the total voting power of our capital stock as of December 31, 2016.We have a staggered board of directors which could make a takeover of Vishay difficult.Along with the voting power of the Class B common stock, our staggered board of directors might discourage, delay, or prevent achange in control of our company by a third party and could discourage proxy contests and make it more difficult for stockholders toelect directors and take other corporate actions. Also, as a consequence of our staggered board, directors may not be removed withoutcause, even though a majority of stockholders may wish to do so.Our reluctance to issue substantial additional shares in order not to dilute the interests of our existing stockholders could impedegrowth.Our overall long-term business strategy has historically included a strong focus on acquisitions financed alternatively through cash onhand, the incurrence of indebtedness, and the issuance of equity, directly or indirectly by refinancing acquisition debt. We may in thefuture be presented with attractive investment or strategic opportunities that, because of their size and our financial condition at thetime, would require the issuance of substantial additional amounts of our common stock. Some or all of our holders of Class Bcommon stock may exert considerable influence over our policies, business and affairs, and in any corporate transaction or othermatter, including those described above. If such opportunities were to arise, our Board of Directors may consider the potentiallydilutive effect on the interests and voting power of our existing stockholders, including our Class B stockholders. Any resultingreluctance to issue additional shares could impede our future growth.Our outstanding convertible debentures may impact the trading price of our common stock.We believe that many investors in, and potential purchasers of, convertible debt instruments employ, or seek to employ, a convertiblearbitrage strategy with respect to these instruments. Investors that employ a convertible arbitrage strategy with respect to convertibledebt instruments typically implement that strategy by selling short the common stock underlying the convertible instrument anddynamically adjusting their short position while they hold the instrument. The implementation of this strategy by investors in ourconvertible debentures, as well as related market regulatory actions, could have a significant impact on the trading prices of ourcommon stock, and the trading prices and liquidity of our convertible debentures. The price of our common stock and our convertibledebentures could also be affected by possible sales of our common stock by investors who view our convertible debentures as moreattractive means of equity participation in us.21Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Risks related to the spin-off of the Vishay Precision GroupVishay Precision Group is using the Vishay name under license from us, which could result in product and market confusion or theloss of certain of our rights to the Vishay name.VPG has a worldwide, perpetual and royalty-free license from us to use the "Vishay" mark as part of its corporate name and inconnection with the manufacture, sale, and marketing of the products and services that comprise its measurements and foil resistorsbusinesses. The license of the Vishay name to VPG is important because we anticipate that the success of VPG will depend in nosmall measure on the reputation of the Vishay brand for these products and services built over many years. Nonetheless, there existsthe risk that the use by VPG could cause confusion in the marketplace over the products of the two companies, that any negativepublicity associated with a product or service of VPG following the spin-off could be mistakenly attributed to our company or that wecould lose our own rights to the "Vishay" mark if we fail to impose sufficient controls on VPG's use of the mark.General Economic and Business RisksIn addition to the risks relating specifically to our business, a variety of other factors relating to general conditions could cause actualresults, performance, or achievements to differ materially from those expressed in any of our forward-looking statements. These factorsinclude:·overall economic and business conditions;·competitive factors in the industries in which we conduct our business;·changes in governmental regulation;·changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations;·changes in GAAP or interpretations of GAAP by governmental agencies and self-regulatory groups;·interest rate fluctuations, foreign currency rate fluctuations, and other capital market conditions; and·economic and political conditions in international markets, including governmental changes and restrictions on the ability totransfer capital across borders.Our common stock, traded on the New York Stock Exchange, has in the past experienced, and may continue to experience, significantfluctuations in price and volume. We believe that the financial performance and activities of other publicly traded companies in theelectronic component industry could cause the price of our common stock to fluctuate substantially without regard to our operatingperformance.We operate in a continually changing business environment, and new factors emerge from time to time. Other unknown andunpredictable factors also could have a material adverse effect on our future financial condition and results of operations.Item 1B. UNRESOLVED STAFF COMMENTSNone.22Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 2. PROPERTIESAt December 31, 2016, our business had 49 manufacturing locations. Our manufacturing facilities include owned and leased locations.Some locations include both owned and leased facilities in the same location. The list of manufacturing facilities below excludesmanufacturing facilities that are presently idle due to our restructuring activities. See Note 4 to our consolidated financial statements forfurther information related to our restructuring efforts, as well as additional information in "Cost Management" included in Item 7,"Management's Discussion and Analysis of Financial Condition and Results of Operations."In the opinion of management, our properties and equipment generally are in good operating condition and are adequate for our presentneeds. Owning many of our manufacturing facilities provides us meaningful financial and operating benefits, including long-termstability and a necessary buffer for economic downturns. We do not anticipate difficulty in renewing existing leases as they expire or infinding alternative facilities.The principal locations of our owned manufacturing facilities, along with available space including administrative offices, are asfollows:Owned LocationsBusiness Segment Approx. AvailableSpace (Square Feet) United States Santa Clara, CAMOSFETs 227,000Columbus, NEResistors & Inductors 158,000Yankton, SDResistors & Inductors 58,000Warwick, RIResistors & Inductors 55,000Bennington, VTCapacitors 54,000Niagara Falls, NYResistors & Inductors 38,000Marshall, MNResistors & Inductors 22,000 Non-U.S. Israel DimonaResistors & Inductors and Capacitors 404,000Migdal Ha'EmekCapacitors 288,000Be'er ShevaResistors & Inductors and Capacitors 276,000People's Republic of China TianjinDiodes 374,000ShanghaiOptoelectronic Components 195,000Xi'anMOSFETS and Diodes 121,000Germany SelbResistors & Inductors and Capacitors 306,000HeideResistors & Inductors 161,000LandshutCapacitors 72,000FichtelbergResistors & Inductors 24,000Czech Republic BlatnaCapacitors 191,000Dolni RychnovResistors & Inductors and Capacitors 182,000PrachaticeResistors & Inductors 91,000VolaryResistors & Inductors 35,000Melaka, MalaysiaOptoelectronic Components 480,000Republic of China (Taiwan) TaipeiDiodes 366,000KaohsiungMOSFETs 52,000France NiceResistors & Inductors 215,000Chateau GontierResistors & Inductors 84,000HyeresResistors & Inductors 65,000Loni, IndiaResistors & Inductors and Capacitors 350,000Famalicao, PortugalCapacitors 167,000Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Miharu, JapanCapacitors 163,000Vocklabruck, AustriaDiodes 153,000Manila, PhilippinesDiodes and Optoelectronic Components 144,000Turin, ItalyDiodes 127,000Budapest, HungaryDiodes 116,000Juarez, MexicoResistors & Inductors 57,00023Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The principal locations of our leased manufacturing facilities, along with available space including administrative offices, are asfollows:Leased LocationsBusiness Segment Approx. AvailableSpace (Square Feet) United States Ontario, CAResistors & Inductors 46,000Milwaukee, WIResistors & Inductors 42,000Dover, NHResistors & Inductors 35,000Duluth, MNResistors & Inductors 10,000 Non-U.S. People's Republic of China DanshuiCapacitors 446,000ShanghaiMOSFETS 296,000ZhuhaiResistors & Inductors 129,000Klagenfurt, AustriaCapacitors 130,000Juarez, MexicoResistors & Inductors 128,000Germany ItzehoeMOSFETs 207,000HeilbronnDiodes and Optoelectronic Components 48,000Mumbai, IndiaDiodes 34,000Santo Domingo, Dominican RepublicResistors & Inductors 16,000Prestice, Czech RepublicResistors & Inductors 13,000Item 3. LEGAL PROCEEDINGSFrom time to time we are involved in routine litigation incidental to our business. Management believes that such matters, eitherindividually or in the aggregate, should not have a material adverse effect on our business or financial condition.Antitrust Class Action ComplaintsVishay Polytech Co., Ltd. ("VPC"), a subsidiary of Vishay which was purchased from Holy Stone Enterprises Co., Ltd. ("HolyStone") in June 2014, is a named defendant, among other manufacturers, in purported antitrust class action complaints in the UnitedStates and Canada. The complaints allege restraints of trade in aluminum and tantalum electrolytic capacitors, and in some cases, filmcapacitors, and seek injunctive relief and unspecified joint and several treble damages. Vishay Intertechnology, Inc. is a party to similarcases filed in Canada.Holy Stone has agreed to indemnify Vishay and VPC for losses, including penalties and expenses associated with the litigation andinvestigation described above. Notwithstanding this indemnity obligation, the Company and VPC intend to defend vigorously againstthe civil complaints.Since August 2015, the Company has been named as a defendant in a purported antitrust class action complaint in Canada allegingrestraints of trade in resistors by the Company and other unaffiliated manufacturers, and seeking injunctive relief and unspecified jointand several treble damages. The Company intends to defend vigorously against the complaint.24Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Intellectual Property MattersWe are engaged in discussions with various parties regarding patent licensing and cross patent licensing issues. In addition, we haveobserved that in the current business environment, electronic component and semiconductor companies have become more aggressivein asserting and defending patent claims against competitors. We are a party to disputes alleging infringement of third-party patents. We will continue to vigorously defend our intellectual property rights.When we believe other companies are misappropriating our intellectual property rights, we vigorously enforce those rights throughlegal action, and we intend to continue to do so. During the past few years, we settled several suits which we had initiated to enforceour intellectual property rights. We are receiving royalties on sales of these companies' products which use our technology. We arecontinuing to assert our legal rights against other parties which we believe are misappropriating our intellectual property rights.Environmental MattersVishay is involved in environmental remediation programs at various sites currently or formerly owned by Vishay and its subsidiariesboth within and outside of the U.S., in addition to involvement as a potentially responsible party ("PRP") at Superfund sites. Certainobligations as a PRP have arisen in connection with business acquisitions. The remediation programs are on-going and the ultimatecost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation ofapplicable laws and regulations, and alternative cleanup methods. See also Note 13 to our consolidated financial statements.On October 13, 2016, a Vishay subsidiary in Taiwan received a notice from the Taiwan Environmental Protection Bureau ("EPB")regarding its findings related to the facility's wastewater management systems. Vishay was fined approximately $641,000. TheCompany believes it has successfully remediated the issue, though it remains subject to ongoing monitoring and testing by the EPB.Item 4. MINE SAFETY DISCLOSURESNone.25Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXECUTIVE OFFICERS OF THE REGISTRANTThe following table sets forth certain information regarding our executive officers as of February 17, 2017:NameAge Positions HeldMarc Zandman*55 Executive Chairman of the Board, Chief BusinessDevelopment Officer, and President, Vishay IsraelLtd.Dr. Gerald Paul*67 Chief Executive Officer, President, and DirectorLori Lipcaman59 Executive Vice President and Chief Financial OfficerJohan Vandoorn59 Executive Vice President and Chief Technical OfficerDavid Valletta56 Executive Vice President Worldwide SalesJoel Smejkal50 Executive Vice President and Business Head PassiveComponentsClarence Tse58 Executive Vice President and Business HeadSemiconductorsWerner Gebhardt58 Executive Vice President Global Human Resources * Member of the Executive Committee of the Board of Directors.Marc Zandman was appointed Executive Chairman of the Board and Chief Business Development Officer effective June 5, 2011. Mr.Zandman has served as a Director of Vishay since 2001 and President of Vishay Israel Ltd. since 1998. Mr. Zandman previously wasVice Chairman of the Board from 2003 to June 2011, and Chief Administration Officer from 2007 to June 2011. Mr. Zandman wasGroup Vice President of Vishay Measurements Group from 2002 to 2004. Mr. Zandman has served in various other capacities withVishay since 1984. He is the son of the late Dr. Felix Zandman, Vishay's Founder. Mr. Zandman controls, on a shared basis with RutaZandman and Ziv Shoshani, approximately 33.6% of the total voting power of our capital stock as of December 31, 2015. He also isnon-executive Chairman of Vishay Precision Group, Inc., an independent, publicly-traded company spun-off from VishayIntertechnology in 2010.Dr. Gerald Paul was appointed Chief Executive Officer effective January 1, 2005. Dr. Paul has served as a Director of the Companysince 1993, and has been President of the Company since March 1998. Dr. Paul also was Chief Operating Officer from 1996 to 2006.Dr. Paul previously was an Executive Vice President of the Company from 1996 to 1998, and President of Vishay ElectronicComponents, Europe from 1994 to 1996. Dr. Paul has been Managing Director of Vishay Electronic GmbH, a subsidiary of theCompany, since 1991. Dr. Paul has been employed by Vishay and a predecessor company since 1978.Lori Lipcaman was appointed Executive Vice President and Chief Financial Officer of the Company effective September 1, 2011. Ms.Lipcaman had been appointed Executive Vice President Finance and Chief Accounting Officer in September 2008. Previously, sheserved as Vishay's Corporate Senior Vice President, Operations Controller, from March 1998 to September 2008. Prior to that, sheserved in various positions of increasing responsibility in finance and controlling since joining the Company in May 1989.Johan Vandoorn was appointed Executive Vice President and Chief Technical Officer effective August 1, 2011. Mr. Vandoorn isresponsible for Vishay's technical development and internal growth programs. Mr. Vandoorn has held various positions of increasingresponsibility since Vishay's acquisition of BCcomponents Holdings BV ("BCcomponents") in 2002, including Executive VicePresident – Passive Components (2006 – 2012). Mr. Vandoorn had been Vice President – Global Operations of BCcomponents from2000 until its acquisition by Vishay, and previously worked for Philips Components ("Philips") from 1980 until Philips sold theBCcomponents business to a private equity firm in 1998.David Valletta serves as Vishay's Executive Vice President – Worldwide Sales, a position he has held since 2007. Mr. Valletta hasheld various positions of increasing responsibility since Vishay's acquisition of Vitramon in 1994. Prior to joining Vitramon, Mr.Valletta also worked for AVX Corporation. His experience with Vishay includes various positions within the Americas region indirect and distribution sales management and global sales responsibility for the Company's key strategic customers.Joel Smejkal was appointed Executive Vice President and Business Head Passive Components effective January 1, 2017. Mr.Smejkal has held various positions of increasing responsibility since joining Vishay in 1990 including Senior Vice President GlobalDistribution Sales (2012 - 2016). Mr. Smejkal's experience with Vishay includes worldwide and divisional leadership roles inengineering, marketing, operations and sales. He was a product developer of 18 U.S. Patents for the Power Metal Strip® resistortechnology and brings significant business development, marketing and sales experience.Clarence Tse was appointed Executive Vice President and Business Head Semiconductors effective January 1, 2017. Mr. Tse hasheld various positions of increasing responsibility since Vishay's acquisition of Siliconix/Telefunken in 1998, including Senior ViceSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.President, Diodes Division (2008 - 2016), Senior Vice President, Power Diodes Division (2002 - 2008) and Vice President, Financeand Administration Asia (1998 - 2001). Mr. Tse was first hired by Siliconix in 1985.Werner Gebhardt was appointed Executive Vice President Global Human Resources effective January 1, 2017. Mr. Gebhardt hasheld various positions of increasing responsibility since Vishay's acquisition of Draloric Electronic GmbH ("Draloric") in 1987,including Sr. Vice President Global Human Resources (2011 - 2014) and Administrative President Europe (2006 - 2011). Mr.Gebhardt's experience with Vishay includes leadership roles in Administration and Human Resources. Mr. Gebhardt had beenemployed by Draloric since 1975.26Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.PART IIItem 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, ANDISSUER PURCHASES OF EQUITY SECURITIESOur common stock is listed on the New York Stock Exchange under the symbol VSH. The following table sets forth the high and lowsales prices for our common stock as reported on the New York Stock Exchange composite tape for the indicated fiscal quarters.Holders of record of our common stock totaled approximately 1,000 at February 15, 2017. Because many of the shares of our commonstock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficialowners represented by these stockholders of record.In 2014, the Company's Board of Directors instituted a quarterly cash dividend program and declared the first cash dividend in thehistory of Vishay. Cash dividends of $0.0625 per share of common stock and Class B common stock were paid in each fiscal quarterof 2016 and cash dividends of $0.0600 per share of common stock and Class B common stock were paid in each fiscal quarter of2015. We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends remains subject toauthorization of our Board of Directors.The following table sets forth, for the indicated periods, the high and low sales prices of our common stock and the quarterly cashdividends declared. Common stock price range Dividends declared 2016 2015 per share High Low High Low 2016 2015 Fourth quarter $16.75 $13.66 $12.32 $9.83 $0.0625 $0.0600 Third quarter $14.28 $11.68 $12.03 $9.22 $0.0625 $0.0600 Second quarter $13.51 $11.53 $13.95 $11.59 $0.0625 $0.0600 First quarter $12.78 $9.96 $14.61 $12.68 $0.0625 $0.0600 At February 15, 2017, we had outstanding 12,129,227 shares of Class B common stock, par value $.10 per share, each of whichentitles the holder to ten votes. The Class B common stock generally is not transferable except in certain very limited instances, andthere is no market for those shares. The Class B common stock is convertible, at the option of the holder, into common stock on a sharefor share basis. As a result of the passing of our founder and former Executive Chairman, Dr. Felix Zandman, Mrs. Ruta Zandman (amember of our Board of Directors) controls the voting of, solely or on a shared basis with Marc Zandman (our Executive Chairman)and Ziv Shoshani (a member of our Board of Directors) approximately 89.5% of our Class B common stock and 42.6% of the totalvoting power of our capital stock.Certain of our debt obligations contain restrictions as to the payment of cash dividends. See "Financial Condition, Liquidity, andCapital Resources" included in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."On May 2, 2016, our Board of Directors approved a stock repurchase plan, authorizing us to repurchase, in the aggregate, up to $100million of our outstanding common stock. The stock repurchase plan will expire on May 2, 2017. The stock repurchase plan does notobligate us to acquire any particular amount of common stock, and it may be terminated or suspended at our direction in accordancewith the plan. The following table provides information about repurchases of the Company's common stock during the three-monthperiod ended December 31, 2016:Period TotalNumber ofSharesPurchased AveragePrice Paidper Share(includingcommisson) TotalNumber ofSharesPurchasedas Part ofPubliclyAnnouncedProgram Total DollarAmountPurchasedUnder theProgram MaximumDollarValue ofShares thatMay Yet BePurchasedUnder theProgram October 2 - October 29 334,323 $13.96 334,323 $4,666,313 $78,352,970 October 30 - November 26 108,276 $13.96 108,276 $1,511,525 $76,841,445 November 27 - December 31 - $- - $- $76,841,445 Total 442,599 $13.96 442,599 $6,177,838 $76,841,445 Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.27Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Stock Performance GraphThe line graph below compares the cumulative total stockholder return on Vishay's common stock over a 5-year period with thereturns on the Standard & Poor's MidCap 400 Stock Index (of which Vishay is a component), the Standard & Poor's 500 Stock Index,and the Philadelphia Semiconductor Index. The line graph assumes that $100 had been invested at December 31, 2011 and assumesthat all dividends were reinvested. Base Years Ending December 31, Period Company Name / Index2011 2012 2013 2014 2015 2016 Vishay Intertechnology, Inc.100 118.24 147.50 159.96 139.04 190.40S&P 500 Index100 116.00 153.57 174.60 177.01 198.18S&P MidCap 400 Index100 117.88 157.37 172.74 168.98 204.03Philadelphia SemiconductorIndex100 107.21 152.06 198.61 195.45 272.3028Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 6. SELECTED FINANCIAL DATAThe following table sets forth selected consolidated financial information as of and for the fiscal years ended December 31, 2016,2015, 2014, 2013, and 2012. This table should be read in conjunction with our consolidated financial statements and the related notesthereto included elsewhere in this Form 10-K (in thousands, except per share amounts): As of and for the years ended December 31, 2016 (1) 2015 (2) 2014 (3) 2013 (4) 2012 (5) Statement of Operations Data: Net revenues $2,323,431 $2,300,488 $2,493,282 $2,370,979 $2,230,097 Costs of products sold 1,753,648 1,758,268 1,881,990 1,803,719 1,703,424 Gross profit 569,783 542,220 611,292 567,260 526,673 Selling, general, and administrative expenses 367,987 362,226 385,696 368,542 349,625 Restructuring and severance costs 19,199 19,215 20,897 2,814 - Impairment of intangible assets 1,559 57,600 - - - Impairment of goodwill - 5,380 - - - U.S. pension settlement charges 79,321 - 15,588 - - Executive compensation charges (credit) - - - (1,778) - Gain on sale of property - - - - (12,153)Operating income 101,717 97,799 189,111 197,682 189,201 Other income (expense) Interest expense (25,623) (25,685) (24,457) (23,130) (22,604)Other 4,716 7,976 2,489 1,853 3,440 Gain on early extinguishment of debt 4,597 - - - - Gain (loss) related to Tianjin explosion 8,809 (5,350) - - - Total other income (expense) (7,501) (23,059) (21,968) (21,277) (19,164) Income before taxes and noncontrolling interest 94,216 74,740 167,143 176,405 170,037 Income taxes 44,843 182,473 49,300 52,636 46,506 Net earnings (loss) 49,373 (107,733) 117,843 123,769 123,531 Noncontrolling interest 581 781 214 789 793 Net earnings (loss) attributable to Vishay stockholders $48,792 $(108,514) $117,629 $122,980 $122,738 Basic earnings (loss) per share attributable to Vishaystockholders: $0.33 $(0.73) $0.80 $0.85 $0.82 Diluted earnings (loss) per share attributable toVishay stockholders: $0.32 $(0.73) $0.77 $0.81 $0.79 Weighted average shares outstanding – basic 147,152 147,700 147,567 144,963 149,117 Weighted average shares outstanding – diluted 150,697 147,700 153,716 151,417 155,844 Cash dividends per share $0.25 $0.24 $0.24 $- $- Balance Sheet Data: Total assets $3,077,801 $3,152,986 $3,274,151 $3,224,455 $3,006,263 Long-term debt, less current portion 357,023 436,738 444,055 352,227 382,917 Working capital 1,407,622 1,429,768 1,461,686 1,510,032 1,354,797 Total Vishay stockholders' equity 1,565,517 1,622,476 1,825,366 1,872,756 1,623,328 _________________________________________________________29Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(1) Includes $19,199,000 of restructuring and severance costs, $79,321,000 of non-cash pension settlement charges, $1,559,000 ofintangible asset impairment charges, a $4,597,000 gain on early extinguishment of debt, a $8,809,000 gain on the settlement ofinsurance claims related to the Tianjin explosion, $34,853,000 tax expense from accumulated other comprehensive income as aresult of the pension settlement, $8,704,000 tax benefit due to the effects of changes in uncertain tax positions, and $3,553,000 taxbenefits related to the planned repatriation of foreign earnings to the United States. These items, net of their tax consequences, hada negative $0.53 effect on earnings per share attributable to Vishay stockholders. These items are more fully described in the notesto the consolidated financial statements.(2) Includes $19,215,000 of restructuring and severance costs, $57,600,000 of intangible asset impairment charges, $5,380,000 ofgoodwill impairment charges, a loss of $5,350,000 related to the Tianjin explosion, a $163,954,000 tax expense related to theplanned repatriation of foreign earnings to the United States, a $8,888,000 tax benefit due to the effects of changes in valuationallowances, and a $2,629,000 tax benefit due to the effects of changes in uncertain tax positions. These items, net of their taxconsequences, had a negative $1.45 effect on earnings (loss) per share attributable to Vishay stockholders. These items are morefully described in the notes to the consolidated financial statements.(3) Includes the results of Holy Stone Polytech, from June 11, 2014, and the results of Capella from September 1, 2014, including thenoncontrolling interest for the period before full control was obtained. Also includes $20,897,000 of restructuring and severancecosts, $15,588,000 of U.S. pension plan non-cash settlement charges, a $25,706,000 tax expense related to a planned repatriationof foreign earnings to the United States, a $25,706,000 tax benefit due to the effects of changes in uncertain tax positions, and a$1,228,000 one-time tax benefit related to tax law changes. These items, net of their tax consequences, had a negative $0.15 effecton earnings per share attributable to Vishay stockholders. These items are more fully described in the notes to the consolidatedfinancial statements.(4)Includes the results of MCB Industrie, from June 13, 2013. Also includes a net pretax reversal of stock-based compensationexpense recognized for the performance-based RSUs scheduled to vest on January 1, 2014, which were originally reported as aseparate line item upon the cessation of employment of certain former executive officers in 2011 of $1,778,000, a $2,867,000 one-time tax benefit due to a new law enacted in Israel in July 2013 which effectively increases the corporate income tax rate on certaintypes of income earned after January 1, 2014, and, therefore, increases our deferred tax assets, and a $1,330,000 one-time taxbenefit due to the retroactive enactment of the American Taxpayer Relief Act of 2012 that was signed into law on January 2, 2013,partially offset by $2,814,000 of restructuring and severance costs. These items, net of their related tax consequences, had apositive $0.02 effect on earnings per share attributable to Vishay stockholders.(5)Includes the results of HiRel Systems LLC from January 13, 2012. Also includes net pretax gain on the sale of property inBelgium vacated as a result of restructuring in prior years of $12,153,000 and a $4,036,000 one-time tax benefit related to therelease of deferred tax valuation allowances in Israel following a merger of several of our wholly-owned subsidiaries in Israelwhich will allow for the realization of these tax benefits. These items, net of their related tax consequences, had a positive $0.08effect on earnings per share attributable to Vishay stockholders.Management believes that stating the impact on net earnings of items such as goodwill and intangible assets impairment charges,restructuring and severance costs, material pension settlement charges, executive compensation charges (credits), material gains andlosses on sales of property, special tax items, and other items is meaningful to investors because it provides insight with respect tointrinsic operating results of the Company.30Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSOverviewVishay Intertechnology, Inc. is a global manufacturer and supplier of semiconductors and passive components, including powerMOSFETs, power integrated circuits, transistors, diodes, optoelectronic components, resistors, capacitors, and inductors. Discretesemiconductors and passive components manufactured by Vishay are used in virtually all types of electronic products, including thosein the industrial, computing, automotive, consumer electronic products, telecommunications, power supplies, military/aerospace, andmedical industries.We operate in five product segments, MOSFETs, Diodes, Optoelectronic Components, Resistors & Inductors, and Capacitors.Since 1985, we have pursued a business strategy of growth through focused research and development and acquisitions. Through thisstrategy, we have grown to become one of the world's largest manufacturers of discrete semiconductors and passive components. Weexpect to continue our strategy of acquisitions while also maintaining a prudent capital structure.We are focused on enhancing stockholder value and improving earnings per share. In addition to our growth plan, we also haveopportunistically repurchased our stock. In 2014, our Board of Directors instituted a quarterly dividend payment program and declaredthe first cash dividend in the history of Vishay. In December 2015, we amended our credit facility to increase our ability to repurchaseshares of stock or pay cash dividends. Although we have no current plans, we will continue to evaluate attractive stock repurchaseopportunities. On May 2, 2016, our Board of Directors approved a stock repurchase plan, authorizing us to repurchase, in theaggregate, up to $100 million of our outstanding common stock. The stock repurchase plan will expire on May 2, 2017. The stockrepurchase plan does not obligate us to acquire any particular amount of common stock, and it may be terminated or suspended at theCompany's direction in accordance with the plan. The Company repurchased 1,752,454 shares of stock for $23.2 million since theinception of the plan. We will continue to evaluate attractive stock repurchase opportunities.As part of the amendment and restatement of the revolving credit facility in December 2015, we completed an evaluation of ouranticipated domestic cash needs over the next several years and our most efficient use of liquidity, with consideration of the amount ofcash that can be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. As a result of that evaluation,during the fourth quarter of 2015, we recognized income tax expense of $164.0 million, including U.S. federal and state income taxes,incremental foreign income taxes, and withholding taxes payable to foreign jurisdictions, on $300 million of foreign earnings which weexpect to repatriate to the U.S. over the next several years. We repatriated $46 million to the U.S. in 2016 pursuant to this plan.Our business and operating results have been and will continue to be impacted by worldwide economic conditions. Our revenues aredependent on end markets that are impacted by consumer and industrial demand, and our operating results can be adversely affected byreduced demand in those global markets. For several years, we implemented aggressive cost reduction programs. We continue tomonitor the current economic environment and its potential effects on our customers and the end markets that we serve. Additionally,we continue to closely monitor our costs, inventory, and capital resources to respond to changing conditions and to ensure we have themanagement, business processes, and resources to meet our future needs. In the first fiscal quarter of 2016, we substantially completedthe implementation of targeted cost reduction programs that began in the fourth fiscal quarter of 2013. The cost reduction programsinitiated in 2015 continue as planned. As a result of a review of recent financial results and outlook for our MOSFETs segmentfollowing the recent completion of production transfers, we determined to implement further cost reductions for the MOSFETssegment. In November 2016, we announced an extension of the MOSFETs Enhanced Competitiveness Program. Our cost reductionprograms are more fully described in Note 4 to the consolidated financial statements and in "Cost Management" below. See additionalinformation regarding our competitive strengths and key challenges as disclosed in Part 1.We recorded non-cash intangible asset impairment charges of $1.6 million and $57.6 million in 2016 and 2015, respectively, and anon-cash goodwill impairment charge of $5.4 million in 2015. The goodwill and intangible assets impairment tests are more fullydescribed in Note 3 to the consolidated financial statements.On August 12, 2015, a major explosion occurred in the port of Tianjin, China. We own and operate a diodes manufacturing facility inTianjin near the port. The shockwave of the explosion resulted in some damage to the facility and caused a temporary shutdown. Asmore fully described in Note 8 to the consolidated financial statements, we recorded a loss of $5.4 million related to this incident in2015. The temporary shutdown adversely impacted revenues and margins of our Diodes segment (and total Vishay) for the yearended December 31, 2015. We received insurance payments totaling $13.4 million and recognized a gain of $8.8 million related tothis incident and the insurance proceeds received in 2016.In December 2016, we completed the termination and settlement of our qualified U.S. pension plan. The settlement resulted in a non-cash pre-tax charge of $79.3 million to recognize the unrecognized actuarial items related to the pension plan recorded in accumulatedSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.other comprehensive income. The pension plan termination and settlement is more fully described in Note 11 to the consolidatedfinancial statements. We utilize several financial metrics, including net revenues, gross profit margin, segment operating income, end-of-period backlog,book-to-bill ratio, inventory turnover, change in average selling prices, net cash and short-term investments (debt), and free cashgeneration to evaluate the performance and assess the future direction of our business. (See further discussion in "Financial Metrics"and "Financial Condition, Liquidity, and Capital Resources.") Net revenues in the fourth fiscal quarter of 2016 decreased versus theprior fiscal quarter, but increased versus the prior year quarter. Net revenues for 2016 increased versus 2015 and operating resultsimproved. Continued strong orders resulted in an increase in many key financial metrics compared to the prior quarter and the fourthfiscal quarter of 2015.Net revenues for the year ended December 31, 2016 were $2.323 billion, compared to net revenues of $2.300 billion and $2.493billion for the years ended December 31, 2015 and 2014, respectively. Net earnings attributable to Vishay stockholders for the yearended December 31, 2016 were $48.8 million, or $0.32 per diluted share, compared to net loss attributable to Vishay stockholders of$108.5 million, or $0.73 per share for the year ended December 31, 2015, and net earnings attributable to Vishay stockholders of$117.6 million, or $0.77 per diluted share, for the year ended December 31, 2014.31Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We define adjusted net earnings as net earnings determined in accordance with GAAP adjusted for various items that managementbelieves are not indicative of the intrinsic operating performance of our business. We define free cash as the cash flows generated fromcontinuing operations less capital expenditures plus net proceeds from the sale of property and equipment. The reconciliations belowinclude certain financial measures which are not recognized in accordance with GAAP, including adjusted net earnings, adjustedearnings per share, and free cash. These non-GAAP measures should not be viewed as alternatives to GAAP measures ofperformance or liquidity. Non-GAAP measures such as adjusted net earnings, adjusted earnings per share, and free cash do not haveuniform definitions. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by othercompanies. Management believes that adjusted net earnings and adjusted earnings per share are meaningful because they provideinsight with respect to our intrinsic operating results. Management believes that free cash is a meaningful measure of our ability to fundacquisitions, repay debt, and otherwise enhance stockholder value through stock repurchases or dividends.Net earnings (loss) attributable to Vishay stockholders for the years ended December 31, 2016, 2015, and 2014 include items affectingcomparability. The items affecting comparability are (in thousands, except per share amounts): Years ended December 31, 2016 2015 2014 GAAP net earnings (loss) attributable to Vishay stockholders $48,792 $(108,514) $117,629 Reconciling items affecting operating margin: Restructuring and severance costs $19,199 $19,215 $20,897 Impairment of intangible assets 1,559 57,600 - Impairment of goodwill - 5,380 - U.S. pension settlement charges 79,321 - 15,588 Reconciling items affecting other income (expense): Gain on early extinguishment of debt $(4,597) $- $- Loss (gain) related to Tianjin explosion (8,809) 5,350 - Reconciling items affecting tax expense (benefit): Effects of cash repatriation program $(3,553) $163,954 $25,706 Additional tax expense from AOCI - pension plans 34,853 - - Effects of tax law changes - - (1,228)Effects of changes in valuation allowances - (8,888) - Effects of changes in uncertain tax positions (8,704) (2,629) (25,706)Tax effects of pre-tax items above (29,901) (22,468) (11,618) Adjusted net earnings $128,160 $109,000 $141,268 Adjusted weighted average diluted shares outstanding 150,697 151,329 153,716 Adjusted earnings per diluted share * $0.85 $0.72 $0.92 * Includes add-back of interest on exchangeable notes in periods where the notes are dilutive.Although the term "free cash" is not defined in GAAP, each of the elements used to calculate free cash is presented as a line item onthe face of our consolidated statements of cash flows prepared in accordance with GAAP. Years ended December 31, 2016 2015 2014 Net cash provided by continuing operating activities $295,967 $245,331 $297,037 Proceeds from sale of property and equipment 5,701 2,049 2,889 Less: Capital expenditures (134,635) (147,142) (156,974)Free cash $167,033 $100,238 $142,952 Our results for 2016 represent the effects of a strong business environment, sustained high order volume, our cost reduction programs,and our growth initiatives. Our percentage of euro-based sales approximates our percentage of euro-based expenses so the negativeforeign currency impact on revenues was substantially offset by the positive impact on expenses. Our pre-tax results were consistentwith expectations based on our business model. Our results for 2015 represent the effects of a weaker business environment in severalSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.of our customer end markets versus 2014. Our revenue results for the year ended December 31, 2015 were negatively affected byforeign currency effects, especially from the euro, and the temporary shutdown of our diodes manufacturing facility in Tianjin, China.32Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Financial MetricsWe utilize several financial metrics to evaluate the performance and assess the future direction of our business. These key financialmeasures and metrics include net revenues, gross profit margin, operating margin, segment operating income, end-of-period backlog,and the book-to-bill ratio. We also monitor changes in our inventory turnover and our or publicly available average selling prices("ASP").Gross profit margin is computed as gross profit as a percentage of net revenues. Gross profit is generally net revenues less costs ofproducts sold, but also deducts certain other period costs, particularly losses on purchase commitments and inventory write-downs.Losses on purchase commitments and inventory write-downs have the impact of reducing gross profit margin in the period of thecharge, but result in improved gross profit margins in subsequent periods by reducing costs of products sold as inventory is used. Grossprofit margin is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixedcosts.Operating margin is computed as gross profit less operating expenses as a percentage of net revenues. We evaluate business segmentperformance on segment operating margin. Only dedicated, direct selling, general, and administrative expenses of the segments areincluded in the calculation of segment operating income. Segment operating margin is computed as operating income less items such asrestructuring and severance costs, asset write-downs, goodwill and indefinite-lived intangible asset impairments, inventory write-downs, gain or losses on purchase commitments, global operations, sales and marketing, information systems, finance andadministrative groups, and other items, expressed as a percentage of net revenues. We believe that evaluating segment performanceexcluding such items is meaningful because it provides insight with respect to intrinsic operating results of the segment. Operatingmargin is clearly a function of net revenues, but also reflects our cost management programs and our ability to contain fixed costs.End-of-period backlog is one indicator of future revenues. We include in our backlog only open orders that we expect to ship in thenext twelve months. If demand falls below customers' forecasts, or if customers do not control their inventory effectively, they maycancel or reschedule the shipments that are included in our backlog, in many instances without the payment of any penalty. Therefore,the backlog is not necessarily indicative of the results to be expected for future periods.An important indicator of demand in our industry is the book-to-bill ratio, which is the ratio of the amount of product ordered during aperiod as compared with the product that we ship during that period. A book-to-bill ratio that is greater than one indicates that ourbacklog is building and that we are likely to see increasing revenues in future periods. Conversely, a book-to-bill ratio that is less thanone is an indicator of declining demand and may foretell declining revenues.We focus on our inventory turnover as a measure of how well we are managing our inventory. We define inventory turnover for afinancial reporting period as our costs of products sold for the four fiscal quarters ending on the last day of the reporting period dividedby our average inventory (computed using each fiscal quarter-end balance) for this same period. A higher level of inventory turnoverreflects more efficient use of our capital.Pricing in our industry can be volatile. Using our and publicly available data, we analyze trends and changes in average selling pricesto evaluate likely future pricing. The erosion of average selling prices of established products is typical for semiconductor products. We attempt to offset this deterioration with ongoing cost reduction activities and new product introductions. Our specialty passivecomponents are more resistant to average selling price erosion. All pricing is subject to governing market conditions.33Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The quarter-to-quarter trends in these financial metrics can also be an important indicator of the likely direction of our business. Thefollowing table shows net revenues, gross profit margin, operating margin, end-of-period backlog, book-to-bill ratio, inventoryturnover, and changes in ASP for our business as a whole during the five fiscal quarters beginning with the fourth fiscal quarter of2015 through the fourth fiscal quarter of 2016 (dollars in thousands): 4th Quarter2015 1st Quarter2016 2ndQuarter2016 3rd Quarter2016 4th Quarter2016 Net revenues $555,928 $570,606 $590,051 $591,955 $570,819 Gross profit margin 22.6% 24.1% 24.8% 26.0% 23.2% Operating margin (1) 5.4% 7.1% 8.4% 9.7% -8.0% End-of-period backlog $514,500 $571,600 $579,800 $608,100 $653,400 Book-to-bill ratio 0.97 1.08 1.02 1.04 1.11 Inventory turnover 3.90 4.00 4.20 4.20 4.40 Change in ASP vs. prior quarter -0.7% -1.2% -0.7% -0.9% -1.2%_______________(1) Operating margin for the fourth fiscal quarter of 2015 and the first, second, third, and fourth fiscal quarters of 2016 includes $9.8 million, $6.5 million,$4.5 million, $1.2 million and $7.1 million, respectively, of restructuring and severance expenses (see Note 4 to our consolidated financial statements).Operating margin for the fourth fiscal quarter of 2016 includes $79.3 million of pension settlement charges (see Note 11 to our consolidated financialstatements). Operating margin for the third fiscal quarter of 2016 includes $1.6 million of intangible asset impairment charges (see Note 3 to ourconsolidated financial statements).See "Financial Metrics by Segment" below for net revenues, book-to-bill ratio, and gross profit margin broken out by segment.Revenues for the fourth fiscal quarter of 2016 decreased versus the third fiscal quarter of 2016, partially due to currency effects. Orderlevels recovered in 2016 and sustained a high level throughout the year. The continued strong order level increased the backlog andbook-to-bill ratio. Our average selling prices continue to decline primarily due to our commodity semiconductor products and theeffects of growing our Resistors & Inductors business in Asia. Gross profit margin decreased versus the prior fiscal quarter, but increased versus the fourth fiscal quarter of 2015. The fluctuations areprimarily volume-driven with decreasing average selling prices burdening each period. Gross profit margins for the periods prior to thesecond fiscal quarter of 2016 were negatively impacted by additional depreciation associated with our MOSFETs cost reductionprogram.The book-to-bill ratio increased to 1.11 in the fourth fiscal quarter of 2016 from 1.04 in the third fiscal quarter of 2016. The book-to-bill ratios for distributors and original equipment manufacturers ("OEM") were 1.16 and 1.04, respectively, versus ratios of 1.10 and0.98, respectively, during the third fiscal quarter of 2016.34Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Financial Metrics by SegmentThe following table shows net revenues, book-to-bill ratio, gross profit margin, and segment operating margin broken out by segmentfor the five fiscal quarters beginning with the fourth fiscal quarter of 2015 through the fourth fiscal quarter of 2016 (dollars inthousands): 4th Quarter2015 1st Quarter2016 2ndQuarter2016 3rd Quarter2016 4th Quarter2016 MOSFETs Net revenues $104,119 $100,933 $102,219 $101,687 $101,497 Book-to-bill ratio 0.90 1.14 0.94 1.03 1.14 Gross profit margin 12.8% 12.5% 11.6% 16.2% 17.0% Segment operating margin 4.7% 2.6% 2.5% 7.4% 9.4% Diodes Net revenues $134,776 $135,384 $142,118 $141,127 $135,291 Book-to-bill ratio 0.97 1.05 1.02 1.06 1.22 Gross profit margin 22.8% 24.1% 26.2% 25.8% 21.1% Segment operating margin 18.7% 19.7% 22.2% 22.6% 17.7% Optoelectronic Components Net revenues $67,943 $62,775 $68,059 $72,801 $68,491 Book-to-bill ratio 0.91 1.09 1.15 0.98 0.99 Gross profit margin 28.2% 30.6% 31.8% 33.3% 32.1% Segment operating margin 21.3% 21.8% 23.3% 27.9% 25.9% Resistors & Inductors Net revenues $166,664 $183,494 $192,799 $192,041 $185,503 Book-to-bill ratio 1.03 1.10 1.02 0.99 1.08 Gross profit margin 27.8% 30.4% 29.7% 30.6% 27.5% Segment operating margin 23.0% 25.6% 25.2% 27.0% 23.7% Capacitors Net revenues $82,426 $88,020 $84,856 $84,299 $80,037 Book-to-bill ratio 0.99 1.01 1.03 1.20 1.03 Gross profit margin 19.3% 19.4% 21.3% 21.3% 17.1% Segment operating margin 13.2% 12.8% 14.9% 15.7% 11.5%__________35Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Acquisition ActivityAs part of our growth strategy, we seek to expand through targeted acquisitions of other manufacturers of electronic components thathave established positions in major markets, reputations for product quality and reliability, and product lines with which we havesubstantial marketing and technical expertise. This includes exploring opportunities to acquire targets to gain market share, penetratedifferent geographic markets, enhance new product development, round out our existing product lines, or grow our high margin nichemarket businesses. Acquisitions of passive components businesses would likely be made to strengthen and broaden our position as aspecialty product supplier; acquisitions of discrete semiconductor businesses would be made to increase market share and to generatesynergies. To limit our financial exposure, we have implemented a policy not to pursue acquisitions if our post-acquisition debt wouldexceed 2.5x our pro forma earnings before interest, taxes, depreciation, and amortization ("EBITDA"). For these purposes, wecalculate pro forma EBITDA as the adjusted EBITDA of Vishay and the target for Vishay's four preceding fiscal quarters, with a proforma adjustment for savings which management estimates would have been achieved had the target been acquired by Vishay at thebeginning of the four fiscal quarter period.Our growth plan targets adding, through acquisitions, an average of approximately $100 million of revenues per year. Depending onthe opportunities available, we might make several smaller acquisitions or a few larger acquisitions. We intend to make suchacquisitions using mainly cash, rather than debt or equity, although we do have capacity under our revolving credit facility if necessary.We are not currently targeting acquisitions with a purchase price larger than $500 million.There is no assurance that we will be able to identify and acquire additional suitable acquisition candidates at price levels and on termsand conditions we consider acceptable.2016 ActivitiesIn the fourth fiscal quarter of 2015, we deposited the $6.8 million purchase price of Sonntag Electronic GmbH ("Sonntag"). Theacquisition was effective January 1, 2016. Sonntag is a distributor of electronic components in Germany.2015 ActivitiesWe did not complete any acquisitions during the year ended December 31, 2015.2014 ActivitiesOn June 11, 2014, we acquired Holy Stone Polytech Co., Ltd. ("Holy Stone Polytech" or "Vishay Polytech Co. Ltd."), a Japanesemanufacturer of tantalum capacitors and formerly a subsidiary of Holy Stone Enterprise Co. Ltd., for $20.6 million, net of cashacquired. We are using the technology acquired to begin to penetrate the polymer tantalum capacitor market. For financial reportingpurposes, the results and operations of Holy Stone Polytech have been included in the Capacitors segment since June 11, 2014.On July 11, 2014, we entered into an agreement to acquire Capella for approximately NT$6,051 million or $205 million at then-current exchange rates. Capella is a fabless IC design company specializing in optoelectronic sensors that was publicly traded inTaiwan. As a first step in the acquisition, we launched a tender offer for Capella's outstanding shares. We acquired the remainingoutstanding shares of Capella pursuant to the merger agreement on December 31, 2014. The acquisition has strengthened the in-housedesign capabilities of our entire optoelectronic components business.Upon the close of the tender offer, we controlled Capella and began consolidating it in our financial statements. For financial reportingpurposes, the results and operations of Capella have been included in the Optoelectronic Components segment. The interest of theshares not tendered are presented as noncontrolling interest in our consolidated financial statements for the period from the conclusionof the tender offer until they were acquired on December 31, 2014.Due to the nature of Capella's business, $74.5 million of the purchase price was allocated to definite-lived intangible assets. While westill expect that the addition of Capella will, in the mid- and long-term, add considerable value through the creation of an in-housedesign capability, the business has not performed as expected in its traditional end-market of smart phones. Accordingly, werecognized intangible asset impairment charges of $57.6 million in the third fiscal quarter of 2015 to write-down the acquired Capellaassets to their fair value. See Note 3 to our consolidated financial statements for further information on the impairment charge.36Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Cost ManagementWe place a strong emphasis on controlling our costs, and use various measures and metrics to evaluate our cost structure.We define variable costs as expenses that vary with respect to quantity produced. Fixed costs do not vary with respect to quantityproduced over the relevant time period. Contributive margin is calculated as net revenue less variable costs. It may be expressed indollars or as a percentage of net revenue. Management uses this measure to determine the amount of profit to be expected for anychange in revenues. While these measures are typical cost accounting measures, none of these measures are recognized in accordancewith GAAP. The classification of expenses as either variable or fixed is judgemental and other companies might classify suchexpenses differently. These measures, as calculated by Vishay, may not be comparable to similarly titled measures used by othercompanies.We closely monitor variable costs and seek to achieve the contributive margin in our business model. Over a period of many years, wehave generally maintained a contributive margin of between 45% - 47% of revenues. The erosion of average selling prices,particularly of our semiconductor products, that is typical of our industry, and inflation negatively impact contributive margin and driveus to continually seek ways to reduce our variable costs. Our variable cost reduction efforts include increasing the efficiency in ourproduction facilities by expending capital for automation, reducing materials costs, materials substitution, increasing wafer size andshrinking dies to maximize efficiency in our semiconductor production processes, and other yield improvement activities.Our cost management strategy also includes a focus on controlling fixed costs recorded as costs of products sold or selling, general,and administrative expenses and maintaining our break-even point (adjusted for acquisitions). We seek to limit increases in selling,general, and administrative expenses to the rate of inflation, excluding foreign currency exchange effects and substantially independentof sales volume changes. At constant fixed costs, we would expect each $1 million increase in revenues to increase our operatingincome by approximately $450,000 to $470,000. Sudden changes in the business conditions, however, may not allow us to quicklyadapt our manufacturing capacity and cost structure.Occasionally, our ongoing cost containment activities are not adequate and we must take actions to maintain our cost competitiveness. We incurred significant restructuring expenses in our past to reduce our cost structure. Historically, our primary cost reductiontechnique was through the transfer of production to the extent possible from high-labor-cost countries to lower-labor-cost countries. We believe that our manufacturing footprint is suitable to serve our customers and end markets, while maintaining lower manufacturingcosts. Since 2013, our cost reduction programs have primarily focused on reducing fixed costs, including selling, general, andadministrative expenses.In the fourth fiscal quarter of 2013, we announced various cost reduction programs as part of our continuous efforts to improveefficiency and operating performance. We recorded $9.3 million of restructuring and severance expenses in 2016 for the expenses thatwere recognizable under GAAP during the period and $38.5 million of restructuring and severance expenses since these cost reductionprograms were implemented.The programs initiated in 2013 primarily focused on a plan to enhance the competitiveness of our MOSFETs segment and a voluntaryseparation / early retirement offer to certain employees Company-wide. We also implemented two other smaller cost reductionprograms concerning the manufacturing of products within our Diodes segment. The programs in total were designed to lower costs byapproximately $36 million per year.The voluntary separation / early retirement offer was made to employees worldwide who were eligible because they met jobclassification, age, and/or years-of-service criteria as of October 31, 2013. The program was substantially completed in 2014.The total costs associated with the voluntary separation / early retirement program were approximately $13.4 million. We realized anannual reduction in fixed costs of approximately $10 million, split approximately 35% in manufacturing and 65% in selling, general,and administrative expenses.Two other smaller cost reduction programs relate to the transfer of production of certain products within our Diodes segment, whichwere initiated in the third fiscal quarter of 2014. Both programs are connected to production moves, in order to take advantage oflower labor costs in one program and from the consolidation of manufacturing locations in the other. We realized annual cost savingsof approximately $3 million.We completed the initally planned production transfer as part of the MOSFETs Enhanced Competitiveness Program in the first fiscalquarter of 2016. The production transfer occurred over a period of approximately two years. The manufacture of wafers for certaincritical products has been transferred into a more cost-efficient fab. As a consequence, certain other wafer manufacturing previouslyoccurring in-house has been transferred to third-party foundries. We have incurred and may continue to incur other exit costsassociated with the production transfer, including certain contract termination costs.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.37Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The initially-planned production transfer achieved the expected improvement in contributive margin percentage and fixed costreduction; however, as a result of a decrease in net revenues since the plan was first initiated, gross margin for the MOSFETs segmentremains below 20%.As a result of a review of recent financial results and outlook for our MOSFETs segment following the recent completion ofproduction transfers, we determined to implement further cost reductions for the MOSFETs segment.On November 7, 2016, we announced an extension of the MOSFETs Enhanced Competitiveness Program. The extended programincludes various cost reduction initiatives, primarily the transfer of all remaining manufacturing operations at our Santa Clara,California facility to other Vishay facilities or third-party subcontractors.The production transfers will be completed in steps by the end of 2017. We expect to incur cash charges of approximately $4 millionto $8 million, primarily related to severance, to implement these steps. We expect to realize savings of approximately $8 million to $9million as a result of these initiatives. We expect to maintain our R&D and management presence in the Silicon Valley area, even afterthe cessation of manufacturing operations there.The total cash charges for the MOSFETs Enhanced Competitiveness Program are expected to be $23 million to $27 million.Programs were also initiated in 2015. The programs initiated in 2015 include a plan to reduce selling, general, and administrative costscompany-wide, and targeted streamlining and consolidation of production for certain product lines within our Capacitors and Resistors& Inductors segments. The programs in total are expected to lower costs by approximately $35 million annually (at current volumes)when fully implemented, at expected cash costs of approximately $30 million. The implementation of these programs will not impactplanned R&D activities, or our growth initiatives in Asian markets. We recorded $9.9 million of restructuring and severance expensesin 2016 for expenses that were recognizable under GAAP during the period and $23.7 million of restructuring and severance expensessince these programs were initiated. The remaining expenses associated with these programs will be recorded as they becomerecognizable under GAAP.The programs announced in 2015 are expected to reduce selling, general, and administrative costs by approximately $17 millionannually. These selling, general, and administrative cost reductions were substantially implemented by the end of 2016. We firstsolicited volunteers to accept a voluntary separation / early retirement offer. The voluntary separation benefits varied by country andjob classification, but generally offered a cash loyalty bonus. Additional involuntary terminations were necessary to achieve the costreduction targets. We began to realize cost savings as a result of these programs in 2016.The targeted plans to streamline and consolidate production of certain product lines are expected to decrease costs of products sold byapproximately $18 million annually (at current volumes). These plans include the Zwolle, Netherlands aluminum capacitors facilityclosure announced on June 30, 2015.Except for the Zwolle and Santa Clara facilities described above, no other facility closures are currently expected pursuant to theseprograms.Except for the distinct and targeted programs noted above, we do not anticipate any other material restructuring activities in 2017. Webelieve that we can substantially maintain our trained workforce, even at lower manufacturing activity levels, by reducing hours andlimiting the use of subcontractors and foundries. However, a sluggish business environment for the electronics industry or therecurrence of a significant economic downturn may require us to implement additional restructuring initiatives.Our long-term strategy includes growth through the integration of acquired businesses, and GAAP requires plant closure and employeetermination costs that we incur in connection with our acquisition activities to be recorded as expenses in our consolidated statement ofoperations, as such expenses are incurred. We have not incurred any material plant closure or employee termination costs related toany of the businesses acquired since 2011, but we expect to have some level of future restructuring expenses due to acquisitions.Even as we seek to manage our costs, we continue to pursue our growth plans through investing in capacities for strategic productlines, and through increasing our resources for R&D, technical marketing, and field application engineering; supplemented byopportunistic acquisitions of specialty businesses.Growth PlanWe are focused on enhancing stockholder value and improving earnings per share by growing our business and opportunisticallyrepurchasing our stock. We plan to grow our business through intensified internal growth supplemented by opportunistic acquisitions,while at the same time maintaining a prudent capital structure. To foster intensified internal growth, we have increased our worldwideR&D and engineering technical staff; we are expanding critical manufacturing capacities; we are increasing our technical field salesSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.force in Asia to increase our market access to the industrial segment and increase the design-in of our products in local markets; and weare directing increased funding and focus on developing products to capitalize on the connectivity, mobility, and sustainability growthdrivers of our business. These efforts as well as our broad and innovative product portfolio and strong position in distributionworldwide have us positioned very well in case of a dramatic upturn in the economy. Our growth plan also targets adding, throughacquisitions, $100 million of revenues per year on average. Since 2011, we have acquired the specialty product businesses ofHuntington Electric, HiRel Systems, LLC, and MCB Industrie. In 2014, we made strategic acquisitions of Holy Stone Polytech andCapella and plan to use the technology and engineering capabilities acquired to further grow our business. We continue to exploreadditional acquisition opportunities despite the current economic volatility.38Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.GoodwillSee Notes 1 and 3 to our consolidated financial statements for a description of our goodwill impairment tests.In light of a sustained decline in market capitalization for Vishay and our peer group companies, and other factors (including the costreduction programs announced during the third fiscal quarter of 2015 as described above and more fully in Note 4 to our consolidatedfinancial statements), we determined that interim goodwill and indefinite-lived impairment tests were required as of the end of the thirdfiscal quarter of 2015. We recorded a goodwill impairment charge of $5.4 million to write-off the goodwill balance of our Capacitorsreporting unit as a result of these tests.We perform our annual goodwill impairment test as of the first day of the fiscal fourth quarter. The interim impairment test performedas of October 3, 2015, the last day of the third fiscal quarter, was effectively the annual impairment test for 2015. No goodwillimpairment was identified as a result of the 2016 annual impairment test.The recorded impairment charge is non-cash in nature and does not affect our liquidity, cash flows from operating activities, or debtcovenants, and will not have a material impact on future operations.Impairment of Long-Lived Assets and Indefinite-Lived Intangible AssetsSee Notes 1 and 3 to our consolidated financial statements for a description of our long-lived assets and indefinite-lived intangibleassets impairment tests.As a result of a review of recent financial results and outlook for the MOSFETs segment following the completion of productiontransfers, we determined that an interim indefinite-lived impairment test was required for our Siliconix tradenames as of the end of thethird fiscal quarter of 2016.As a result of this analysis, we determined that our Siliconix tradenames, with a carrying value of $20.4 million, were impaired. Werecorded an impairment charge of $1.6 million to write-down the tradenames to their fair value. The tradenames are no longerconsidered indefinite-lived and the remaining value will be amortized over the 10 year estimated remaining useful life.In light of a sustained decline in market capitalization for Vishay and our peer group companies, and other factors (including the costreduction programs announced during the third fiscal quarter of 2015 as described above and more fully in Note 4 to our consolidatedfinancial statements), we determined that interim goodwill and indefinite-lived impairment tests were required as of the end of the thirdfiscal quarter of 2015.Prior to completing the interim assessment of goodwill for impairment, we performed a recoverability test of certain depreciable andamortizable long-lived assets. As a result of those assessments, it was determined that the depreciable and amortizable assets associatedwith our Capella business were not recoverable, and we recorded impairment charges totaling $57.6 million to write-down the relatedassets to their fair value.We perform our annual indefinite-lived asset impairment test as of the first day of the fiscal fourth quarter. The interim impairment testsperformed as of October 1, 2016 and October 3, 2015, the last days of the fiscal third quarters of 2016 and 2015, respectively, wereeffectively the annual impairment tests for 2016 and 2015.The recorded impairment charges are non-cash in nature and do not affect our liquidity, cash flows from operating activities, or debtcovenants, and will not have a material impact on future operations.39Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Foreign Currency TranslationWe are exposed to foreign currency exchange rate risks, particularly due to transactions in currencies other than the functionalcurrencies of certain subsidiaries. We occasionally use forward exchange contracts to economically hedge a portion of our projectedcash flows from these exposures.GAAP requires that entities identify the "functional currency" of each of their subsidiaries and measure all elements of the financialstatements in that functional currency. A subsidiary's functional currency is the currency of the primary economic environment inwhich it operates. In cases where a subsidiary is relatively self-contained within a particular country, the local currency is generallydeemed to be the functional currency. However, a foreign subsidiary that is a direct and integral component or extension of the parentcompany's operations generally would have the parent company's currency as its functional currency. We have both situations amongour subsidiaries.Foreign Subsidiaries which use the Local Currency as the Functional CurrencyWe finance our operations in Europe and certain locations in Asia in local currencies, and accordingly, these subsidiaries utilize thelocal currency as their functional currency. For those subsidiaries where the local currency is the functional currency, assets andliabilities on the consolidated balance sheets have been translated at the rate of exchange as of the balance sheet date. Translationadjustments do not impact the results of operations and are reported as a separate component of stockholders' equity. The significantstrengthening of the U.S. dollar versus the euro in the fourth fiscal quarter of 2016 had significant impacts on our balance sheet.For those subsidiaries where the local currency is the functional currency, revenues and expenses are translated at the averageexchange rate for the year. While the translation of revenues and expenses into U.S. dollars does not directly impact the consolidatedstatement of operations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expensesincurred in those foreign currencies. On a weighted average basis for the full year 2016 versus 2015, the U.S. dollar was relativelyunchanged versus relevant foreign currencies, with the translation of foreign currency revenues and expenses into U.S. dollars havingan immaterial impact on reported revenues and expenses versus 2015. The U.S. dollar in 2016 and 2015 was significantly strongerversus 2014, with the translation of foreign currency revenues and expenses into U.S. dollars decreasing reported revenues andexpenses versus 2014.Foreign Subsidiaries which use the U.S. Dollar as the Functional CurrencyOur operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, these subsidiariesutilize the U.S. dollar as their functional currency. For those foreign subsidiaries where the U.S. dollar is the functional currency, allforeign currency financial statement amounts are remeasured into U.S. dollars. Exchange gains and losses arising from remeasurementof foreign currency-denominated monetary assets and liabilities are included in the results of operations. While these subsidiariestransact most business in U.S. dollars, they may have significant costs, particularly payroll-related, which are incurred in the localcurrency. The cost of products sold and selling, general, and administrative expense for the year ended December 31, 2016 have beenfavorably impacted (compared to the prior year) by local currency transactions of subsidiaries which use the U.S. dollar as theirfunctional currency.See Item 7A for additional discussion of foreign currency exchange risk and forward contracts used to mitigate certain foreign currencyrisks.40Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Critical Accounting Policies and EstimatesOur significant accounting policies are summarized in Note 1 to our consolidated financial statements. We identify here a number ofpolicies that entail significant judgments or estimates.Revenue RecognitionWe recognize revenue on product sales during the period when the sales process is complete. This generally occurs when products areshipped to the customer in accordance with terms of an agreement of sale, title and risk of loss have been transferred, collectibility isreasonably assured, and pricing is fixed or determinable. For the portion of sales where title and risk of loss passes at point of delivery,we recognize revenue upon delivery to the customer, assuming all other criteria for revenue recognition are met. We historically havehad agreements with distributors that provided limited rights of product return. We have modified these arrangements to allowdistributors a limited credit for unsaleable products, which we term a "scrap allowance." Consistent with industry practice, we alsohave a "stock, ship and debit" program whereby we consider, and grant at our discretion, requests by distributors for credits onpreviously purchased products that remain in distributors' inventory, to enable the distributors to offer more competitive pricing. Inaddition, we have contractual arrangements whereby we provide distributors with protection against price reductions that we initiateafter the sale of product to the distributor and prior to resale by the distributor.We record end of period accruals for each of the programs based upon our estimate of future credits under the programs that will beattributable to sales recorded through the end of the period. We calculate reductions of revenue attributable to each of the programsduring any period by computing the change in the accruals from the prior period and adding the credits actually given to distributorsduring the period under the programs. These procedures require the exercise of significant judgments, but we believe they enable us toreasonably estimate future credits under the programs.Recording and monitoring of our sales accruals takes place at our subsidiaries and divisions, with input from sales and marketingpersonnel and review, assessment, and, if necessary, adjustment by corporate management. While our subsidiaries and divisions utilizedifferent methodologies based on their individual experiences, all of the methodologies take into account certain elements thatmanagement considers relevant, such as sales to distributors during the relevant period, inventory levels at the distributors, current andprojected market trends and conditions, recent and historical activity under the relevant programs, changes in program policies, andopen requests for credits. In our judgment, the different methodologies provide us with equally reliable estimates upon which to baseour accruals. We do not track the credits that we record against specific products sold from distributor inventories, so as to directlycompare revenue reduction for credits recorded during any period with credits ultimately awarded in respect of products sold duringthat period. Nevertheless, we believe that we have an adequate basis to assess the reasonableness and reliability of our estimates.See Note 1 to our consolidated financial statements for information regarding recent revenue recognition guidance that has not yet beenadopted.Inventories and Purchase CommitmentsWe value our inventories at the lower of cost or market, with cost determined under the first-in, first-out method and market basedupon net realizable value. The valuation of our inventories requires our management to make market estimates. For work in processgoods, we are required to estimate the cost to completion of the products and the prices at which we will be able to sell the products.For finished goods, we must assess the prices at which we believe the inventory can be sold. Inventories are also adjusted for estimatedobsolescence and written down to net realizable value based upon estimates of future demand, technology developments and marketconditions.Certain metals used in the manufacture of our products are traded on active markets, and can be subject to significant price volatility.Our policy is to enter into short-term commitments to purchase defined portions of annual consumption of these metals if market pricesdecline below budget. We record losses and related liabilities when the contractually obligated purchase price under our purchasecommitments exceed quoted market prices for the metals.GoodwillSee Notes 1 and 3 to our consolidated financial statements for a description of our goodwill impairment tests.The determination of the fair value of the reporting units and the allocation of that value to individual assets and liabilities within thosereporting units required for a quantitative goodwill impairment test requires us to make significant estimates and assumptions measuredat a point in time. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer groupcompanies; control premiums appropriate for acquisitions in the industries in which we compete; the discount rate; terminal growthrates; and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures. The allocation requiresSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.several analyses to determine fair value of assets and liabilities including, among others, completed technology, tradenames, in-processresearch and development, customer relationships, and certain property and equipment (valued at replacement costs).Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. Inaddition, changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact oneither the fair value of the reporting unit or the amount of the goodwill impairment charge.41Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Impairment of Long-Lived Assets and Indefinite-Lived Intangible AssetsSee Notes 1 and 3 to our consolidated financial statements for a description of our long-lived assets and indefinite-lived intangibleassets impairment analyses.The evaluation of the recoverability of long-lived assets, and the determination of their fair value, requires us to make significantestimates and assumptions measured at a point in time. These estimates and assumptions primarily include, but are not limited to: theidentification of the asset group at the lowest level of independent cash flows and the principal asset of the group; the discount rate;terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.The evaluation of the fair value of indefinite-lived trademarks also requires us to make significant estimates and assumptions. Theseestimates and assumptions primarily include, but are not limited to: the assumed market-royalty rate; the discount rate; terminal growthrates; and forecasts of revenue.Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition,changes in underlying assumptions would have a significant impact on the conclusion that an asset group's carrying value isrecoverable, that an indefinite-lived asset is not impaired, or the determination of any impairment charge if it was determined that theasset values were indeed impaired.Accounts ReceivableOur accounts receivable represent a significant portion of our current assets. We are required to estimate the collectibility of ourreceivables and to establish allowances for the amount of receivables that will prove uncollectible. We base these allowances on ourhistorical collection experience, the length of time our receivables are outstanding, the financial circumstances of individual customers,and general business and economic conditions. Due to our large number of customers and their dispersion across many countries andindustries, we have limited exposure to concentrations of credit risk. As of December 31, 2016, one customer comprised 15.4% of ouraccounts receivable balance. This customer comprised 14.6% of our accounts receivable balance as of December 31, 2015. No othercustomer accounted for more than 10% of our accounts receivable balance as of December 31, 2016 or December 31, 2015. Wecontinually monitor the credit risks associated with our accounts receivable and adjust the allowance for uncollectible accountsaccordingly. We believe that our accounts receivable credit risk exposure beyond such allowance is not material to the financialstatements.Pension and Other Postretirement BenefitsOur defined benefit plans are concentrated in the United States, Germany, and the Republic of China (Taiwan). At December 31,2016, our U.S. plans include various non-qualified plans. As further described below, our U.S. plan qualified under the EmployeeRetirement Income Security Act of 1974 ("ERISA") was terminated and settled in 2016. The table below summarizes informationabout our pension and other postretirement benefit plans. This information should be read in conjunction with Note 11 to ourconsolidated financial statements (amounts in thousands): Benefitobligation Plan assets Fundedposition Informallyfundedassets Net position Unrecognizedactuarialitems U.S. non-qualified pension plans $38,914 $- $(38,914) $25,285 $(13,629) $7,313 German pension plans 167,925 - (167,925) 3,969 (163,956) 55,572 Taiwanese pension plans 62,762 40,018 (22,744) - (22,744) 17,796 Other pension plans 35,740 26,072 (9,668) - (9,668) 8,992 OPEB plans 14,272 - (14,272) - (14,272) (813)Other retirement obligations 11,497 - (11,497) - (11,497) - $331,110 $66,090 $(265,020) $29,254 $(235,766) $88,860 Accounting for defined benefit pension and other postretirement plans involves numerous assumptions and estimates. The discount rateat which obligations could effectively be settled and the expected long-term rate of return on plan assets are two critical assumptions inmeasuring the cost and benefit obligations of our pension and other postretirement benefit plans. Other important assumptions includethe anticipated rate of future increases in compensation levels, estimated mortality, and for certain postretirement medical plans,increases or trends in health care costs. Management reviews these assumptions at least annually. We use independent actuaries andinvestment advisers to assist us in formulating assumptions and making estimates. These assumptions are updated periodically toreflect the actual experience and expectations on a plan specific basis as appropriate.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In the U.S., we utilize published long-term high quality bonds to determine the discount rate at the measurement date. In Germany andthe Republic of China (Taiwan), we utilize published long-term government bond rates to determine the discount rate at themeasurement date. We utilize bond yields at various maturity dates that reflect the timing of expected future benefit payments. Webelieve the discount rates selected are the rates at which these obligations could effectively be settled.42Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Non-qualified plans in the U.S. are considered by law to be unfunded. However, the Company maintains assets in a rabbi trust to fundbenefit payments under certain of these plans. Such assets would be subject to creditor claims under certain conditions. (See alsoNotes 11 and 18 to our consolidated financial statements.)Many of our non-U.S. plans are unfunded based on local laws and customs. For those non-U.S. plans that do maintain investments,their asset holdings are primarily cash and fixed income securities, based on local laws and customs. Some non-U.S. plans alsoinformally fund their plans by holding certain available-for-sale investments. Such assets would be subject to creditor claims undercertain conditions. (See also Note 18 to our consolidated financial statements.)We set the expected long-term rate of return based on the expected long-term average rates of return to be achieved by the underlyinginvestment portfolios. In establishing this rate, we consider historical and expected returns for the asset classes in which the plans areinvested, advice from pension consultants and investment advisors, and current economic and capital market conditions. The expectedreturn on plan assets is incorporated into the computation of pension expense. The difference between this expected return and theactual return on plan assets is deferred. The net deferral of past asset losses (gains) affects the calculated value of plan assets and,ultimately, future pension expense (income).During the fourth fiscal quarter of 2008, we adopted amendments to our principal U.S. defined benefit pension plans, such thateffective January 1, 2009, the plans were frozen. Pursuant to these amendments, no new employees may participate in the plans, nofurther participant contributions were required or permitted, and no further benefits accrued after December 31, 2008. Accordingly, netperiodic pension cost for U.S. plans no longer include any service cost.During the third fiscal quarter of 2014, we executed two partial-settlement transactions to reduce the risk associated with our U.S.qualified pension obligations. These transactions reduced the number of participants the plan is obligated to pay by approximately1,500 and also resulted in the recognition of non-cash settlement charges aggregating $15.6 million, representing previouslyunrecognized actuarial items.In the second fiscal quarter of 2015, we began the process of terminating the Vishay Retirement Plan, our remaining U.S. qualifiedpension plan. We completed the termination and settlement of the Vishay Retirement Plan in December 2016. The termination andsettlement required no additional cash contributions. Excess plan assets will be transferred to a qualified definedcontribution retirement plan. We recognized pre-tax non-cash settlement charges aggregating $79.3 million, representing previouslyunrecognized actuarial items.We continue to seek to de-risk our global pension exposures. Such actions could result in increased net periodic pension cost due tolower expected rates of return on plan assets and/or possible additional charges to recognize unamortized actuarial items if all or aportion of the obligations were to be settled.We believe that the current assumptions used to estimate plan obligations and annual expenses are appropriate. However, if economicconditions change or if our investment strategy changes, we may be inclined to change some of our assumptions, and the resultingchange could have a material impact on the consolidated statements of operations and on the consolidated balance sheet.43Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Income TaxesSee Note 1 to consolidated financial statements for a description of our income tax policies.We have recorded deferred tax assets representing future tax benefits, but may not be able to realize these future tax benefits in certainjurisdictions. Significant judgment is required in determining the expected future realizability of these deferred tax assets. Weperiodically evaluate the realizability of our deferred tax assets by assessing the valuation allowance and by adjusting the amount ofsuch allowance, if necessary. The factors used to assess the likelihood of realization include deferred tax liabilities, our forecast offuture taxable income, and available tax planning strategies that could be implemented to realize the net deferred tax assets. We havegenerally recognized net deferred tax assets only where there is a recent history of taxable income and forecasts of future taxableincome.We generate a significant amount of cash and profits from our non-U.S. subsidiaries, and our provision for income taxes is based onvarious assertions regarding future use of that cash and profits. Such assertions require us to consider a wide variety of U.S. federaland foreign tax laws, and the application of such laws to our operational and strategic needs.The cash repatriation program described below is expected to occur over several years, and the deferred tax liability is based on theavailable sources of cash, applicable tax rates, and other factors and circumstances, as of each respective balance sheet date. Changesin the underlying facts and circumstances result in changes in the deferred tax liability balance, which are recorded as tax benefit orexpense. During 2016, we recognized a $3.6 million tax benefit for periodic remeasurement of the deferred tax liability related to thecash repatriation program. During the fourth fiscal quarter of 2015, we recognized income tax expense, including U.S. federal and state income taxes, incrementalforeign income taxes, and withholding taxes payable to foreign jurisdictions, on $300 million of foreign earnings (including $20million of 2015 earnings and $280 million of earnings from prior periods). We recognized this tax expense in 2015 following anevaluation of our anticipated domestic cash needs over the next several years and our most efficient use of liquidity, and withconsideration of the amount of cash that can be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions.During 2014, the Company recognized income tax expense on foreign earnings in anticipation of a repatriation intended to repay $53million of borrowings on its revolving credit facility used for the Capella acquisition. The tax provision for the year ended December31, 2014 included all U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxes payable to foreignjurisdictions. That repatriation was completed in 2015.Except as described above, as of December 31, 2016, no provision has been made for U.S. federal and state income taxes of foreignearnings, which are deemed to be reinvested outside the United States indefinitely. Upon distribution of those earnings in the form ofdividends or otherwise, we would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), state income taxes,incremental foreign taxes and withholding taxes payable to various foreign jurisdictions.We and our subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple state and foreign jurisdictions. In 2014,the U.S. Internal Revenue Service concluded its examination of our U.S. federal tax returns through the 2011 tax year. The tax returnsof principal non-U.S. subsidiaries which are currently under examination include Germany (2009 through 2012), India (2004 through2013), Israel (2013 through 2014), and Taiwan (2014). We and our subsidiaries also file income tax returns in other taxingjurisdictions in the U.S. and around the world, many of which are still open to examinations.During 2016 and 2014, certain tax examinations were completed and certain statutes of limitations lapsed. Our tax provisions for theyears ended December 31, 2016 and 2014 include tax benefits related to the resolution of these matters.Additional information about income taxes is included in Note 5 to our consolidated financial statements.44Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Results of OperationsStatement of operations' captions as a percentage of net revenues and the effective tax rates were as follows: Years ended December 31, 2016 2015 2014 Costs of products sold 75.5% 76.4% 75.5%Gross profit 24.5% 23.6% 24.5%Selling, general, and administrative expenses 15.8% 15.7% 15.5%Operating income 4.4% 4.3% 7.6%Income before taxes and noncontrolling interest 4.1% 3.2% 6.7%Net earnings (loss) attributable to Vishay stockholders 2.1% (4.7)% 4.7%________ Effective tax rate 47.6% 244.1% 29.5%Net RevenuesNet revenues were as follows (dollars in thousands): 2016 2015 2014 Net revenues $2,323,431 $2,300,488 $2,493,282 Change versus prior year $22,943 $(192,794) Percentage change versus prior year 1.0% -7.7% Changes in net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Change in volume 4.3% -0.8%Decrease in average selling prices -3.1% -3.0%Foreign currency effects 0.0% -5.4%Acquisitions 0.0% 1.3%Other -0.2% 0.2%Net change 1.0% -7.7%We experienced a broad increase in demand for our products in 2016 compared to 2015. Our 2016 and 2015 net revenue results werenegatively impacted by foreign currency effects compared to 2014.We deduct, from the sales that we record to distributors, allowances for future credits that we expect to provide for returns, scrappedproduct, and price adjustments under various programs made available to the distributors. We make deductions corresponding toparticular sales in the period in which the sales are made, although the corresponding credits may not be issued until future periods. Weestimate the deductions based on sales levels to distributors, inventory levels at the distributors, current and projected market trends andconditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. Werecorded deductions from gross sales under our distributor incentive programs of $86.9 million, $83.1 million, and $89.6 million, forthe years ended December 31, 2016, 2015, and 2014, respectively, or, as a percentage of gross sales, 3.6%, 3.5%, and 3.5%,respectively. Actual credits issued under the programs for the years ended December 31, 2016, 2015, and 2014 were approximately$85.3 million, $84.0 million, and $87.9 million, respectively. Increases and decreases in these incentives are largely attributable to thethen-current business climate.Royalty revenues, included in net revenues on the consolidated statements of operations, were $0.3 million, $3.3 million, and $4.5million, for the years ended December 31, 2016, 2015, and 2014, respectively. The decrease is due to the expiration of certainlicensing agreements.Gross Profit and MarginsSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Gross profit margins for the year ended December 31, 2016 were 24.5%, as compared to 23.6% for the year ended December 31,2015. The increase is primarily due to higher volume, cost savings from our restructuring programs, and lower metals and materialsprices.Gross profit margins for the year ended December 31, 2015 were 23.6%, as compared to 24.5% for the year ended December 31,2014. The decrease was due primarily to lower volume and lower average selling prices.45Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SegmentsAnalysis of revenues and gross profit margins for our segments is provided below.MOSFETsNet revenues of the MOSFETs segment were as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net revenues $406,336 $426,683 $470,537 Change versus comparable prior year period $(20,347) $(43,854) Percentage change versus comparable prior year period -4.8% -9.3% Changes in MOSFETs segment net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Change in volume 1.3% -2.4%Decrease in average selling prices -6.0% -5.1%Foreign currency effects 0.1% -2.2%Other -0.2% 0.4%Net change -4.8% -9.3%Gross profit margins for the MOSFETs segment were as follows: Years ended December 31, 2016 2015 2014 Gross profit margin 14.3% 13.7% 12.7%The MOSFETs segment experienced another decrease in its revenues in 2016 versus the prior year. Net revenues were negativelyimpacted by declining selling prices, with only small offsetting volume increases in 2016 and a volume decrease in 2015. With theexception of the business with our Asian distributors, we experienced a decrease in net revenues in all other regions and saleschannels. The increase in business with Asian distributors is mostly attributable to our Integrated Circuit ("IC") products.The gross profit margin of 2016 has been negatively impacted by the recognition of expenses incurred on inventory produced last yeardue to the restructuring program that was sold this year. Despite this negative impact and lower average selling prices, the gross profitpercentage of 2016 increased slightly versus prior year due to cost reductions from our restructuring program and foreign currencyeffects. The gross profit margins for 2015 and 2014 were negatively impacted by additional depreciation associated with theMOSFETs cost reduction program.Typical pricing pressure continues, although slightly accelerating, for our established MOSFETs products. We have experiencedsignificant declines in average selling prices in both 2016 versus 2015 and 2015 versus 2014.In 2013, we announced a cost reduction program to enhance the competitiveness of our MOSFETs segment. The planned productiontransfers were substantially implemented by the end of the first fiscal quarter of 2016 and began to provide improvement in the thirdfiscal quarter of 2016.As a result of a review of financial results and outlook for the MOSFETs segment following the recent completion of productiontransfers, we have determined to implement further cost reductions. On November 7, 2016, we announced an extension of theMOSFETs Enhanced Competitiveness Program. The revised program includes various cost reduction initiatives, primarily the transferof all remaining manufacturing operations at its Santa Clara, California facility to other Vishay facilities or third-party subcontractors. We expect to maintain our R&D and management presence in the Silicon Valley area, even after the cessation of manufacturingoperations there.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The production transfers will be completed in steps by the end of 2017. We expect to incur cash charges of approximately $4 to $8million, primarily related to severance, to implement these steps, and expect to realize annualized cost savings of approximately $8 to$9 million as a result of these new initiatives. See "Cost Management" above and Note 4 to our consolidated financial statements.We also determined that an interim indefinite-lived impairment test was required as of the end of the third fiscal quarter of 2016. As aresult of that assessment, we recorded an impairment charge of $1.6 million to write-down our Siliconix tradenames to their fair value. See Note 3 to our consolidated financial statements.We continue to make capital and R&D investments in this business.46Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. DiodesNet revenues of the Diodes segment were as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net revenues $553,920 $533,931 $579,288 Change versus comparable prior year period $19,989 $(45,357) Percentage change versus comparable prior year period 3.7% -7.8% Changes in Diodes segment net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Change in volume 7.8% -0.2%Decrease in average selling prices -3.6% -3.5%Foreign currency effects 0.1% -4.4%Other -0.6% 0.3%Net change 3.7% -7.8%Gross profit margins for the Diodes segment were as follows: Years ended December 31, 2016 2015 2014 Gross profit margins 24.4% 22.4% 22.8%On August 12, 2015, a major explosion occurred in the port of Tianjin, China. We own and operate a diodes manufacturing facility inTianjin near the port. The shockwave of the explosion resulted in some damage to the facility and caused a temporary shutdown. Thetemporary shutdown adversely impacted 2015 revenues and margins of our Diodes segment (and total Vishay).Diodes net revenues for 2016 increased significantly versus the prior year. The net revenue increases are primarily due to volumeincreases versus the prior year, which was impacted by the aforementioned temporary shutdown. The volume increases were partiallyoffset by a moderate decline in average selling prices that is typical for our established Diodes products. The net revenue increaseswere predominantly in Asia and Europe.The gross profit margin increased versus the prior year primarily due to increases in sales volume, the effects of our cost reductionprograms, and positive foreign currency exchange rate impact on the Asian cost-of-sales, which were only partially offset by decliningaverage selling prices and general cost inflation.47Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Optoelectronic ComponentsNet revenues of the Optoelectronic Components segment were as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net revenues $272,126 $279,553 $258,248 Change versus comparable prior year period $(7,427) $21,305 Percentage change versus comparable prior year period -2.7% 8.2% Changes in Optoelectronic Components segment net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Increase in volume 1.3% 6.5%Decrease in average selling prices -3.8% -3.0%Acquisition 0.0% 11.5%Foreign currency effects 0.0% -6.0%Other -0.2% -0.8%Net change -2.7% 8.2%Gross profit margins for the Optoelectronic Components segment were as follows: Years ended December 31, 2016 2015 2014 Gross profit margin 32.0% 31.7% 35.3%The Optoelectronic Components segment net revenues for 2016 decreased slightly versus the prior year. Volume increases, particularlywith our European distributors and our American customers, could not fully offset the negative impact of declining average sellingprices.The gross profit margin increased slightly versus prior year despite the decrease in revenues. Cost reductions and favorable foreigncurrency exchange rate effects were partially offset by lower average selling prices and general cost inflation.The pricing pressure for our established Optoelectronic Components products increased in 2016. We experienced a moderate declinein average selling prices in 2016 versus 2015 and a slight decline in 2015 versus 2014.In 2014, we acquired Capella, a fabless IC design company specializing in optoelectronic products, in a two step transaction completedon December 31, 2014. Capella is included in the Optoelectronic Components segment results from the date we obtained control inSeptember 2014. Although the Capella business has not performed as expected, we still believe that the addition of Capella hasstrengthened the in-house design capabilities of our entire Optoelectronic Components business.In 2015, we recorded long-lived depreciable and amortizable asset impairment charges of $57.6 million in the OptoelectronicComponents segment. See Note 3 to our consolidated financial statements.48Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Resistors & InductorsNet revenues of the Resistors & Inductors segment were as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net revenues $753,837 $707,421 $759,616 Change versus comparable prior year period $46,416 $(52,195) Percentage change versus comparable prior year period 6.6% -6.9% Changes in Resistors & Inductors segment net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Increase in volume 8.7% 2.7%Decrease in average selling prices -1.9% -2.2%Foreign currency effects -0.1% -7.2%Other -0.1% -0.2%Net change 6.6% -6.9%Gross profit margins for the Resistors & Inductors segment were as follows: Years ended December 31, 2016 2015 2014 Gross profit margin 29.6% 29.5% 31.7%Net revenues of the Resistors & Inductors segment increased significantly in 2016 versus the prior year. All regions contributed to theincrease in net revenues, with Asia experiencing the biggest increase due to our growth initiatives in Asia. Distribution and theindustrial and automotive end markets contributed the most to the revenue increase. Book-to-bill remains high and capital spendingprojects are underway to meet increased demand.The gross profit margin of the Resistors & Inductors segment improved slightly over prior year. The significant cost reduction savingswere able to off-set declining selling prices, decreased royalty revenues, and general inflationary effects.Average selling prices have decreased slightly versus the prior years, consistent with our historical experience.In 2015, we announced global cost reduction programs which include targeted plans to streamline and consolidate certain productlines, including within our Resistors & Inductors segment. See "Cost Management" above and Note 4 to our consolidated financialstatements.49Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. CapacitorsNet revenues of the Capacitors segment were as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Net revenues $337,212 $352,900 $425,593 Change versus comparable prior year period $(15,688) $(72,693) Percentage change versus comparable prior year period -4.4% -17.1% Changes in Capacitors segment net revenues were attributable to the following: 2016 vs.2015 2015 vs.2014 Change attributable to: Decrease in volume -4.0% -10.5%Decrease in average selling prices -0.5% -1.3%Acquisition 0.0% 0.5%Foreign currency effects 0.0% -6.8%Other 0.1% 1.0%Net change -4.4% -17.1%Gross profit margins for the Capacitors segment were as follows: Years ended December 31, 2016 2015 2014 Gross profit margin 19.8% 18.9% 20.5%Net revenues of the Capacitors segment have decreased moderately in 2016 versus the prior year. All regions experienced a decrease. The industrial end market was stable, whereas distribution and the automotive end market experienced significant decreases. Netrevenues of the Capacitors segment continues to be negatively affected by the low activity level in the oil and gas industry as well asthe discontinuation of government subsidies for renewable energy projects.The gross profit margin of the Capacitors segment in 2016 has increased versus the prior year mainly due to material price savings andthe cost reduction program, which were able to offset the general cost inflation.Average selling prices decreased slightly versus the prior years.In 2015, we announced global cost reduction programs which include targeted plans to streamline and consolidate certain productlines, including within our Capacitors segment. See "Cost Management" above and Note 4 to our consolidated financial statements.In 2015, we recorded goodwill impairment charges of $5.4 million in the Capacitors segment. See Note 3 to our consolidated financialstatements.50Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Selling, General, and Administrative ExpensesSelling, general, and administrative ("SG&A") expenses are summarized as follows (dollars in thousands): Years ended December 31, 2016 2015 2014 Total SG&A expenses $367,987 $362,226 $385,696 as a percentage of sales 15.8% 15.7% 15.5%The overall increase in SG&A expenses in 2016 versus 2015 is primarily due to increased R&D expenses, higher environmentalremediation costs, and additional compensation costs in general, partially offset by lower amortization expense and our cost reductionprograms. The overall decrease in SG&A expenses in 2015 versus 2014 is primarily attributable to foreign currency exchange rateeffects, the benefits of our voluntary separation / early retirement program (see "Cost Management" above), and the non-repetition ofadditional SG&A expenses incurred in 2014 to close acquisitions, partially offset by SG&A expenses of acquired companies andadditional compensation costs in general.Several items included in SG&A expenses impact the comparability of these amounts, as summarized below (in thousands): Years ended December 31, 2016 2015 2014 Amortization of intangible assets $14,842 $21,829 $18,651 Net (gains) losses on sales of assets (4,054) (86) (195)The acquisitions of Holy Stone Polytech in the second fiscal quarter of 2014 and a controlling interest in Capella in the third fiscalquarter of 2014 increased our amortizable intangible assets balance by $78.2 million. We recognized indefinite-lived intangible assetimpairment charges of $1.6 in the third fiscal quarter of 2016 and amortizable intangible asset impairment charges of $57.6 million inthe third fiscal quarter of 2015. Additionally, the remaining value of our impaired Siliconix tradenames, which were previouslyconsidered indefinite-lived, will be amortized over their remaining useful life of 10 years. See Note 3 to our consolidated financialstatements.In 2013 and 2015, we announced restructuring programs targeting SG&A expenses. See Note 4 to our consolidated financialstatements and "Cost Management" above.51Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Other Income (Expense)2016 Compared to 2015Interest expense for the year ended December 31, 2016 increased by $0.1 million versus the year ended December 31, 2015. Theincrease is primarily due to higher average outstanding balances on our revolving credit facility and increased amortization of the debtdiscounts associated with our convertible senior debentures, partially offset by decreases in the estimated values of the embeddedderivatives associated with our convertible debentures.The following table analyzes the components of the line "Other" on the consolidated statements of operations (in thousands): Years ended December 31, 2016 2015 Change Foreign exchange gain (loss) $292 $3,180 $(2,888)Interest income 4,264 4,397 (133)Other 160 399 (239) $4,716 $7,976 $(3,260)2015 Compared to 2014Interest expense for the year ended December 31, 2015 increased by $1.2 million versus the year ended December 31, 2014. Theincrease is primarily due to higher outstanding balances on our revolving credit facility and increased amortization of the debt discountsassociated with our convertible senior debentures.The following table analyzes the components of the line "Other" on the consolidated statements of operations (in thousands): Years ended December 31, 2015 2014 Change Foreign exchange gain (loss) $3,180 $(1,115) $4,295 Interest income 4,397 4,939 (542)Other 399 (1,335) 1,734 $7,976 $2,489 $5,487 52Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Income TaxesFor the years ended December 31, 2016, 2015, and 2014, the effective tax rates were 47.6%, 244.1%, and 29.5%, respectively. Theeffective tax rates are generally less than the U.S. statutory rate primarily because of earnings in foreign jurisdictions and the release ofdeferred tax asset valuation allowances. While our effective tax rate is generally less than the U.S. statutory rate, the effective tax ratefor the year ended December 31, 2016 is impacted by the write-off of a deferred tax asset in AOCI related to the U.S. pension plansettlement, and the effective tax rate for the year ended December 31, 2015 is impacted by the tax-effect of the planned cashrepatriation described below, and by a write-off of non-deductible goodwill and an impairment charge in a lower tax-rate jurisdiction.Income tax expense for the years ended December 31, 2016, 2015, and 2014 include certain discrete tax items for the pension plansettlement, repatriation transactions, changes in uncertain tax positions, valuation allowances, tax rates, and other related items. Theseitems were $22.6 in 2016, $152.4 million in 2015, and $1.2 million (tax benefit) in 2014.For the year ended December 31, 2016, the discrete items include $34.9 million of additional tax expense related to the termination andsettlement of the Vishay Retirement Plan (see above and Notes 10 and 11 to the consolidated financial statements), $8.7 million (taxbenefit) for changes in uncertain tax positions largely related to statute expiration, and $3.6 million tax benefit for periodicremeasurement of the deferred tax liability related to the cash repatriation program described below. The cash repatriation program isexpected to occur over several years, and the deferred tax liability is based on the available sources of cash, applicable tax rates, andother factors and circumstances, as of each respective balance sheet date. Changes in the underlying facts and circumstances result inchanges in the deferred tax liability balance, which are recorded as tax benefit or expense.For the year ended December 31, 2015, the discrete items included $164.0 million of expense recorded in the fourth fiscal quarterprimarily to repatriate $300.0 million of foreign earnings to the United States, following an evaluation of our anticipated domestic cashneeds over the next several years and our most efficient use of liquidity, and with consideration of the amount of cash that can berepatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. It also includes $8.9 million (tax benefit) forchanges in valuation allowances and $2.6 million (tax benefit) for changes in uncertain tax positions.For the year ended December 31, 2014, the discrete items included $25.7 million of expense related to an expected repatriation of cashand profits of non-U.S. subsidiaries to the United States, primarily to repay amounts borrowed on the revolving credit facility toprovide future flexibility given the legal entity and the financial structure utilized for the Capella acquisition, a $25.7 million (taxbenefit) for changes in uncertain tax positions, and a $1.2 million (tax benefit) recorded in the fourth fiscal quarter due to the enactmentof The Tax Increase Prevention Act of 2014 that retroactively extended certain tax benefits from January 1, 2014 to December 31,2014.We operate in a global environment with significant operations in various locations outside the United States. Accordingly, theconsolidated income tax rate is a composite rate reflecting our earnings and the applicable tax rates in the various locations where weoperate. Part of our strategy has been to achieve cost savings through the transfer and expansion of manufacturing operations tocountries where we can take advantage of lower labor costs and available tax and other government-sponsored incentives. Accordingly, our effective tax rate is generally less than the U.S. statutory tax rate, except in 2016 and 2015 as described above. Changes in the effective tax rate are usually attributable to changes in the mix of pretax income among our various taxing jurisdictions,except in 2016 and 2015 as described above.Additional information about income taxes is included in Note 5 to our consolidated financial statements.53Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Financial Condition, Liquidity, and Capital ResourcesWe focus on our ability to generate cash flows from operations. The cash generated from operations is used to fund our capitalexpenditure plans, and cash in excess of our capital expenditure needs is available to fund our acquisition strategy, to reduce debtlevels, and to pay dividends and repurchase stock. We have generated cash flows from operations in excess of $200 million in each ofthe past 15 years, and cash flows from operations in excess of $100 million in each of the past 22 years.Management uses a non-GAAP measure, "free cash," to evaluate our ability to fund acquisitions, repay debt, and otherwise enhancestockholder value through stock repurchases or dividends. See "Overview" above for "free cash" definition and reconciliation toGAAP. Vishay has generated positive "free cash" in each of the past 20 years, and "free cash" in excess of $80 million in each of thepast 15 years. In this volatile economic environment, we continue to focus on the generation of free cash, including an emphasis oncost controls.We continued to generate positive cash flows from operations and free cash during the year ended December 31, 2016. Despite a slowstart in terms of free cash generation and also partly due to the unusual pension contributions, we generated free cash in 2016 in linewith our history. There is no assurance, however, that we will be able to continue to generate cash flows from operations and free cashat the same levels, or at all, going forward if the current economic environment worsens.Beginning in the fourth fiscal quarter of 2010, we have reacted to favorable market conditions to significantly reshape the company'scapital structure. We have completed three issuances of low-coupon convertible debentures since the fourth fiscal quarter of 2010, eachof which matures thirty years from the date of issuance. We utilized the proceeds of those debenture offerings to repurchaseapproximately 24% of our outstanding stock prior to implementing these initiatives.On May 2, 2016, our Board of Directors approved a stock repurchase plan, authorizing us to repurchase, in the aggregate, up to $100million of our outstanding common stock. The stock repurchase plan will expire on May 2, 2017. The stock repurchase plan does notobligate us to acquire any particular amount of common stock, and it may be terminated or suspended at our direction in accordancewith the plan. We have repurchased 1,752,454 shares of stock for $23.2 million since the inception of the plan.In 2016, we acquired, in two privately negotiated transactions, all of the outstanding exchangeable notes due 2102. The total purchaseprice for the two transactions was $34.0 million. The exchangeable unsecured notes were issued in 2002 in connection with anacquisition, and were subject to a put and call agreement dated December 13, 2002. The repurchased notes had been exchangeable forapproximately 2.5 million shares of our common stock.We also entered into a new, larger, revolving credit facility in 2010, which was amended and restated on August 8, 2013, and furtheramended and restated on December 10, 2015. The amended and restated credit facility provides an aggregate commitment of $640million of revolving loans available until December 10, 2020, and we have the ability to request up to $50 million of incrementalrevolving commitments, subject to the satisfaction of certain conditions. The previous credit agreement was scheduled to mature onAugust 8, 2018. At December 31, 2016 and December 31, 2015, $143 million and $190 million, respectively, were outstanding underour credit facility.The amended and restated credit facility allows an unlimited amount of defined "Restricted Payments," which include cash dividendsto stockholders and share repurchases, provided our pro forma leverage ratio is less than 2.25 to 1. If our leverage ratio is greater than2.25 to 1, the credit facility allows such payments up to $75 million per annum (subject to a cap of $225 million for the term of thefacility). The amended and restated credit facility provides us with significantly more flexibility to execute these transactions, and ourability to utilize some of our foreign-source income for these types of transactions provides even further financial flexibility.Borrowings under the credit facility bear interest at LIBOR plus an interest margin. The applicable interest margin is based on ourleverage ratio. Based on our current leverage ratio, borrowings bear interest at LIBOR plus 1.75%. The interest rate on our borrowingswill increase to LIBOR plus 2.00% if our leverage ratio equals or exceeds 2.50 to 1 and will decrease to LIBOR plus 1.50% if ourleverage ratio decreases below 1.50 to 1.We also pay a fee, also based on our leverage ratio, on undrawn amounts. The undrawn commitment fee, based on our currentleverage ratio, is 0.35% per annum. Such undrawn commitment fee will increase to 0.50% per annum if our leverage ratio equals orexceeds 2.50 to 1 and will decrease to 0.30% per annum if our leverage ratio decreases below 1.50 to 1. Prior to the December 10,2015 amendment and restatement, the credit agreement required Vishay to pay facility fees on the entire commitment amount.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, orarising under the laws of, any country other than the United States, assets located outside of the United States and deposit andsecurities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certainSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.significant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. Certain of our subsidiaries arepermitted to borrow under the credit facility, subject to the satisfaction of specified conditions. Any borrowings by these subsidiariesunder the credit facility will be guaranteed by Vishay and certain subsidiaries.The credit facility also limits or restricts us, from, among other things, incurring indebtedness, incurring liens on assets, makinginvestments and acquisitions, and making asset sales, and making other restricted payments (assuming our leverage ratio is greater than2.25 to 1), and requires us to comply with other covenants, including the maintenance of specific financial ratios.54Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The financial maintenance covenants include (a) an interest expense coverage ratio of not less than 2.00 to 1; and (b) a leverage ratio ofnot more than 3.25 to 1 (and a pro forma ratio of 2.75 to 1 on the date of incurrence of additional debt). The computation of these ratiosis prescribed in Article VI of the Credit Agreement between Vishay Intertechnology, Inc. and JPMorgan Chase Bank, N.A., which hasbeen filed with the SEC as Exhibit 10.1 to our current report on Form 8-K filed December 10, 2015.We were in compliance with all financial covenants under the credit facility at December 31, 2016. Our interest expense coverageratio and leverage ratio were 12.17 to 1 and 1.97 to 1, respectively. We expect to continue to be in compliance with these covenantsbased on current projections.If we are not in compliance with all of the required financial covenants, the credit facility could be terminated by the lenders, and allamounts outstanding pursuant to the credit facility could become immediately payable. Additionally, our convertible senior debenturesdue 2040, due 2041, and due 2042 have cross-default provisions that could accelerate repayment in the event the indebtedness underthe credit facility is accelerated.The balance of our revolving credit facility was $190 million at December 31, 2015. We borrowed $378 million and repaid $425million on our credit facility during the year ended December 31, 2016. The average outstanding balance on our credit facilitycalculated at fiscal month-ends was $199.8 million and the highest amount outstanding on our credit facility at a month end was $248million during the year ended December 31, 2016.Prior to three months before the maturity date, our convertible senior debentures are convertible by the holders under certaincircumstances. The convertible debentures due 2042 became convertible subsequent to the December 31, 2016 evaluation of theconversion criteria, due to the sale price of our common stock exceeding 130% of the conversion price for the applicable period in thefourth fiscal quarter of 2016. Such debentures will remain convertible until April 1, 2017, at which time the conversion criteria will bereevaluated. At the direction of our Board of Directors, we intend, upon conversion, to repay the principal amount of the convertibledebentures in cash and settle any additional amounts in shares of our common stock. We intend to finance the principal amount of anyconverted debentures using borrowings under our credit facility. Accordingly, the debt component of the convertible debentures due2042 continues to be classified as a non-current liability on the consolidated balance sheets.Management expects to periodically pay down the balance of our revolving credit facility with available cash or use the credit facilityto meet short-term financing needs. We expect that cash on-hand and cash flows from operations will be sufficient to meet our longer-term financing needs related to normal operating requirements, regular dividend payments, and our research and development andcapital expenditure plans. Additional acquisition activity, share repurchases, or conversion of our convertible debentures may requireadditional borrowing under our credit facility or may otherwise require us to incur additional debt. No principal payments on ouroutstanding debt are due before the maturity of our revolving credit facility in December 2020.As of December 31, 2016, substantially all of our cash and cash equivalents and short-term investments were held in countries outsideof the United States. Certain payments, such as cash dividends to stockholders, share repurchases, and interest payments on our debtinstruments need to be paid by the U.S. parent company, Vishay Intertechnology, Inc. Our U.S. subsidiaries have other operating cashneeds.Our substantially undrawn credit facility provides us with significant liquidity in the United States.As part of the amendment and restatement of the revolving credit facility in December 2015, we completed an evaluation of ouranticipated domestic cash needs over the next several years and our most efficient use of liquidity, with consideration of the amount ofcash that can be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. As a result of that evaluation,during the fourth quarter of 2015, we recognized income tax expense, including U.S. federal and state income taxes, incrementalforeign income taxes, and withholding taxes payable to foreign jurisdictions, on $300 million of foreign earnings which we expect torepatriate to the U.S. over the next several years. We repatriated $46.0 million pursuant to this program in 2016.Except as described above, earnings generated by foreign subsidiaries are expected to be reinvested outside of the United Statesindefinitely. If additional cash is needed to be repatriated to the United States, in addition to various foreign country laws regulatingthe exportation of the cash and profits, we would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), stateincome taxes, incremental foreign income taxes, and withholding taxes payable to various foreign jurisdictions.We invest a portion of our excess cash in highly liquid, high-quality instruments with maturities greater than 90 days, but less than 1year, which we classify as short-term investments on our consolidated balance sheets. As these investments were funded using aportion of excess cash and represent a significant aspect of our cash management strategy, we include the investments in the calculationof net cash and short-term investments (debt).Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The interest rates on our short-term investments average 0.4% and are approximately 4 basis points higher than interest rates on ourcash accounts. The interest rates on our short-term investments were negatively impacted by the low interest rate environment inEurope. Transactions related to these investments are classified as investing activities on our consolidated statements of cash flows.55Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.The following table summarizes the components of net cash and short-term investments (debt) at December 31, 2016 and 2015,respectively (in thousands): December31, 2016 December31, 2015 Credit Facility $143,000 $190,000 Exchangeable unsecured notes, due 2102 - 38,642 Convertible senior debentures, due 2040* 108,120 106,011 Convertible senior debentures, due 2041* 55,442 54,424 Convertible senior debentures, due 2042* 61,341 60,320 Deferred financing costs (10,880) (12,659)Total debt 357,023 436,738 Cash and cash equivalents 471,781 475,507 Short-term investments 626,627 619,040 Net cash and short-term investments (debt) $741,385 $657,809 *Represents the carrying amount of the convertible debentures, which is comprised of the principal amount of the debentures, net of the unamortizeddiscount and the associated embedded derivative liability."Net cash and short-term investments (debt)" does not have a uniform definition and is not recognized in accordance with GAAP. Thismeasure should not be viewed as an alternative to GAAP measures of performance or liquidity. However, management believes thatan analysis of "net cash and short-term investments (debt)" assists investors in understanding aspects of our cash and debt management.The measure, as calculated by us, may not be comparable to similarly titled measures used by other companies.Our financial condition as of December 31, 2016 continued to be strong, with a current ratio (current assets to current liabilities) of 4.1to 1, unchanged from December 31, 2015. The decrease in inventory and increase in trade accounts payable was offset bydecreases in accrued expenses. Our ratio of total debt to Vishay stockholders' equity was 0.23 to 1 at December 31, 2016 as comparedto a ratio of 0.27 to 1 at December 31, 2015. The decrease in the ratio is primarily due to the repurchase of exchangeable notes andcredit facility repayments.Cash flows provided by operating activities were $296.0 million for the year ended December 31, 2016, as compared to cash flowsprovided by operations of $245.3 million for the year ended December 31, 2015. The improvement in operating cash flows isprimarily due to the increase in net earnings. Cash flows provided by operating activities for the year ended December 31, 2016 werenegatively impacted by $17.0 million of cash contributions to our Taiwanese pension plans and restructuring payments of $33.0million.Cash paid for property and equipment for the year ended December 31, 2016 was $134.6 million, as compared to $147.1 million forthe year ended December 31, 2015. We expect capital spending of approximately $150 million in 2017.Cash paid for dividends to our common and Class B common stockholders totalled $36.7 million and $35.4 million for the years endedDecember 31, 2016 and 2015, respectively. We expect dividend payments in 2017 to total approximately $36.5 million. However,any future dividend declaration and payment remains subject to authorization by our Board of Directors.Cash paid for the purchase and deposits for businesses, net of cash acquired for the year ended December 31, 2015 was $6.8 million. The amount represents a deposit made in the fourth fiscal quarter of 2015, for the acquisition Sonntag, which was effective January 1,2016.56Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Contractual Commitments and Off-Balance Sheet ArrangementsAs of December 31, 2016 we had contractual obligations as follows (in thousands): Payments due by period Total Year 1 Years2-3 Years4-5 More than5 Long-term debt $718,000 $- $- $143,000 $575,000 Interest payments on long-term debt 336,547 18,204 36,408 30,849 251,086 Operating and capital leases 66,704 24,851 21,377 9,779 10,697 Letters of credit 6,864 - - 6,864 - Expected pension and postretirement plan funding 192,873 17,558 40,020 37,216 98,079 Estimated costs to complete construction in progress 43,383 43,383 - - - Uncertain tax positions 17,595 6,809 - - 10,786 Purchase commitments 53,796 37,010 16,786 - - Other long-term liabilities 50,739 1,800 900 - 48,039 Total contractual cash obligations $1,486,501 $149,615 $115,491 $227,708 $993,687 Commitments for long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts and capitalizeddeferred financing costs associated with our convertible debentures due 2040, due 2041, and due 2042 are excluded from thecalculation of long-term debt commitments in the table above.Commitments for interest payments on long-term debt are cash commitments based on the stated maturity dates of each agreement andinclude fees under our revolving credit facility, which expires on December 10, 2020. Commitments for interest payments on long-term debt exclude non-cash interest expense related to the amortization of the discount associated with our convertible debentures due2040, due 2041, and due 2042.Various factors could have a material effect on the amount of future principal and interest payments. Among other things,approximately $575 million of our outstanding debt instruments are convertible into or exchangeable for common stock. Also,although we intend to net share settle our convertible senior debentures due 2040, due 2041, and due 2042, we have the option to settlethese instruments in shares of common stock pursuant to the indenture governing these debentures. Additionally, interest commitmentsfor our revolving credit facility are based on the rate prevailing at December 31, 2016, but actual rates are variable and are certain tochange over time.Our consolidated balance sheet at December 31, 2016 includes liabilities associated with uncertain tax positions in multiple taxingjurisdictions where we conduct business. Due to the uncertain and complex application of tax regulations, combined with the difficultyin predicting when tax audits throughout the world may be concluded, we cannot make reliable estimates of the timing of theremaining cash outflows relating to these liabilities. Accordingly, we have classified the amount recorded as a current liability aspayable within one year, and the remaining uncertain tax positions are classified as payments due after five years, although actualtiming of payments may be sooner.There are certain guarantees and indemnifications extended among Vishay and VPG in accordance with the terms of the MasterSeparation and Distribution Agreement and the Tax Matters Agreement. The guarantees primarily relate to certain contingent taxliabilities included in the Tax Matters Agreement. See Note 19 to our consolidated financial statements for further discussion of the TaxMatters Agreement. These obligations are included in the uncertain tax positions disclosed above, but were not material to us as ofDecember 31, 2016.Expected pension and postretirement plan funding is based on a projected schedule of benefit payments under the plans.We maintain long-term foundry arrangements with subcontractors to ensure access to external front-end capacity for our semiconductorproducts. The purchase commitments in the table above represent the estimated minimum commitments for silicon wafers under thesearrangements. Our actual purchases in future periods are expected to be greater than these minimum commitments.Other long-term liabilities in the table above include obligations that are reflected on our consolidated balance sheets as of December31, 2016. We include the current portion of the long-term liabilities in the table above. Other long-term liabilities for which we areunable to reasonably estimate the timing of the settlement are classified as payments due after five years in the table above, althoughactual timing of payments may be sooner.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.For a further discussion of our long-term debt, pensions and other postretirement benefits, leases, uncertain tax positions, and purchasecommitments, see Notes 5, 6, 11, and 13 to our consolidated financial statements.We do not participate in, nor have we created, any off-balance sheet variable interest entities or other off-balance sheet financing, otherthan the operating leases described above.57Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.InflationNormally, inflation does not have a significant impact on our operations as our products are not generally sold on long-term contracts. Consequently, we can adjust our selling prices, to the extent permitted by competition and other market conditions, to reflect costincreases caused by inflation.See also "Commodity Price Risk" included in Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" for additionalrelated information.Recent Accounting PronouncementsSee Note 1 to our consolidated financial statements for information about recent accounting pronouncements.58Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKMarket Risk DisclosureWe are exposed to certain financial risks, including fluctuations in foreign currency exchange rates, interest rates, and commodityprices. We manage our exposure to these market risks through internally established policies and procedures and, when deemedappropriate, through the use of derivative financial instruments. Our policies do not allow speculation in derivative instruments forprofit or execution of derivative instrument contracts for which there are no underlying exposures. We do not use financial instrumentsfor trading purposes and we are not a party to any leveraged derivatives. We monitor our underlying market risk exposures on anongoing basis and believe that we can modify or adapt our hedging strategies as needed.Interest Rate RiskWe are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. On a selective basis, we havein the past entered into interest rate swap or cap agreements to reduce the potential negative impact that increases in interest rates couldhave on our outstanding variable rate debt. As of December 31, 2016, 2015, and 2014 we did not have any outstanding interest rateswap or cap agreements.The interest paid on our credit facility is based on a LIBOR spread. At December 31, 2016, we had $143.0 million outstanding underthe revolving credit facility. The present amounts outstanding under the revolving credit commitment bears interest at LIBOR plus1.75%.Our convertible senior debentures due 2040, due 2041, and due 2042 bear interest at a fixed rate, and accordingly are not subject tointerest rate fluctuation risks.At December 31, 2016, we have $471.8 million of cash and cash equivalents and $626.6 million of short-term investments, which earninterest at various variable rates.Based on the debt and cash positions at December 31, 2016, we would expect a 50 basis point increase or decrease in interest rates toincrease or decrease our annualized net earnings by approximately $3.3 million.See Note 6 to our consolidated financial statements for additional information about our long-term debt. Also see "Economic Outlookand Impact on Operations and Future Financial Results" included in Item 7, "Management's Discussion and Analysis of FinancialCondition and Results of Operations" for additional discussion of market risks.Foreign Exchange RiskWe are exposed to foreign currency exchange rate risks, particularly due to market values of transactions in currencies other than thefunctional currencies of certain subsidiaries. We use forward exchange contracts to economically hedge a portion of these exposures. We entered into forward contracts with highly-rated financial institutions to mitigate the foreign currency risk associated withintercompany loans denominated in a currency other than the legal entity's functional currency. The notional amount of the forwardcontracts was $100 million as of December 31, 2016. The forward contracts are short-term in nature and are expected to be renewedat our discretion until the intercompany loans are repaid. We have not designated the forward contracts as hedges for accountingpurposes, and as such the change in the fair value of contracts is recognized in our consolidated statements of operations as acomponent of other income (expense). We do not utilize derivatives or other financial instruments for trading or other speculativepurposes.Our significant foreign subsidiaries are located in Germany, Israel, and Asia. We finance our operations in Europe and certain locationsin Asia in local currencies. Our operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, but thesesubsidiaries also have significant transactions in local currencies. Our exposure to foreign currency risk is mitigated to the extent thatthe costs incurred and the revenues earned in a particular currency offset one another. Our exposure to foreign currency risk is morepronounced in Israel, the Czech Republic, and China because the percentage of expenses denominated in Israeli shekels, Czechkoruna, and Chinese renminbi to total expenses is much greater than the percentage of sales denominated in Israeli shekels, Czechkoruna, and Chinese renminbi to total sales. Therefore, if the Israeli shekel, Czech koruna, and Chinese renminbi strengthen against allor most of our other major currencies, our operating profit is reduced. Where possible, we maintain local currency denominated cashbalances in these countries approximately equal to the local currency liabilities to naturally hedge our exposures. We also have aslightly higher percentage of euro-denominated sales than expenses. Therefore, when the euro strengthens against all or most of ourother major currencies, our operating profit is slightly increased. Accordingly, we monitor several important cross-rates.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.59Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.We have performed sensitivity analyses of our consolidated foreign exchange risk as of December 31, 2016 and 2015, using a modelthat measures the change in the values arising from a hypothetical 10% adverse movement in foreign currency exchange rates relativeto the U.S. dollar, with all other variables held constant. The foreign currency exchange rates we used were based on market rates ineffect at December 31, 2016 and 2015. The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreigncurrency exchange rates would impact our net earnings by approximately $9.1 million and $7.8 million at December 31, 2016 andDecember 31, 2015, respectively, although individual line items in our consolidated statement of operations would be materiallyaffected. For example, a 10% weakening in all foreign currencies would decrease the U.S. dollar equivalent of operating incomegenerated in foreign currencies, which would be offset by foreign exchange gains of our foreign subsidiaries that have significanttransactions in U.S. dollars or have the U.S. dollar as their functional currency.A change in the mix of the currencies in which we transact our business could have a material effect on the estimated impact of thehypothetical 10% movement in the value of the U.S. dollar. Furthermore, the timing of cash receipts and disbursements could result inmaterially different actual results versus the hypothetical 10% movement in the value of the U.S. dollar, particularly if there aresignificant changes in exchange rates in a short period of time.Commodity Price RiskAlthough most materials incorporated in our products are available from a number of sources, certain materials are available only froma relatively limited number of suppliers or are subject to significant price volatility. Our results of operations may be materially andadversely affected if we have difficulty obtaining these raw materials, the quality of available raw materials deteriorates, or there aresignificant price changes for these raw materials. The determination that any of the raw materials used in our products are conflictminerals originating from the Democratic Republic of the Congo and adjoining countries could increase the probability that we willencounter the challenges noted above, incur additional expenses to comply with government regulations, and face public scrutiny. Forperiods in which the prices of these raw materials are rising, we may be unable to pass on the increased cost to our customers whichwould result in decreased margins for the products in which they are used. For periods in which the prices are declining, we may berequired to write down our inventory carrying cost of these raw materials, since we record our inventory at the lower of cost or market.Depending on the extent of the difference between market price and our carrying cost, this write-down could have a material adverseeffect on our net earnings. We also may need to record losses for adverse purchase commitments for these materials in periods ofdeclining prices.Silicon wafers are the most important raw material for the manufacturing of our semiconductor products. Silicon wafers aremanufactured from high-purity silicon, a metalloid. There have at times been industry-wide shortages of high-purity silicon resultingprimarily from growing demand of the electronic component and solar power industries, and limited growth in high-purity siliconmanufacturing capacities. Shifts in demand for high-purity silicon and in turn, silicon wafers, have resulted in significant fluctuation inprices of silicon wafers.We are a major consumer of the world's annual production of tantalum, a metal used in the manufacturing of tantalum capacitors.There are few suppliers that process tantalum ore into capacitor grade tantalum powder.Palladium, a metal used to produce multi-layer ceramic capacitors, is currently found primarily in South Africa and Russia. Palladiumis a commodity metal that is subject to price volatility. We periodically enter into short-term commitments to purchase palladium.Certain metals used in the manufacture of our products, such as copper, are traded on active markets, and can be subject to significantprice volatility. Our policy is to enter into short-term commitments to purchase defined portions of annual consumption of these metalsif market prices decline below budget.We estimate that a 10% increase or decrease in the costs of raw materials subject to commodity price risk would decrease or increaseour net earnings by $5.1 million, assuming that such changes in our costs have no impact on the selling prices of our products and thatwe have no pending commitments to purchase metals at fixed prices.60Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAThe financial statements required by this Item are included herein, commencing on page F-1 of this report.Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone.Item 9A. CONTROLS AND PROCEDURESConclusion Regarding the Effectiveness of Disclosure Controls and ProceduresAn evaluation was performed under the supervision and with the participation of our management, including the Chief ExecutiveOfficer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls andprocedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934,as amended. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as ofthe end of the period covered by this annual report to ensure that information required to be disclosed in reports that we file or submitunder the Exchange Act is: (1) recorded, processed, summarized, and reported within the time periods specified in the SEC's rules andforms; and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timelydecisions regarding required disclosure.Management's Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term isdefined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management,including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as ofDecember 31, 2016 based on the 2013 framework set forth in Internal Control – Integrated Framework issued by the Committee ofSponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internalcontrol over financial reporting was effective as of December 31, 2016.Ernst & Young LLP has issued an attestation report on the effectiveness of our internal control over financial reporting, as stated intheir report which is included herein on page F-3.Changes in Internal Control Over Financial ReportingThere were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting.CertificationsThe certifications of our CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2to this Annual Report on Form 10-K. We have also filed with the New York Stock Exchange the most recent Annual Certification asrequired by Section 303A.12(a) of the New York Stock Exchange Listed Company Manual.61Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 9B. OTHER INFORMATIONNone.Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCEWe have a code of ethics applicable to our Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer orController, and financial managers. The text of this code has been posted on our website. To view the code, go to our website atir.vishay.com and click on Corporate Governance. You can obtain a printed copy of this code, free of charge, by contacting us at thefollowing address:Corporate Investor RelationsVishay Intertechnology, Inc.63 Lancaster AvenueMalvern, PA 19355-2143It is our intention to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or any waiver from,a provision of this code by posting such information on our website, at the aforementioned address and location.Certain information required under this Item with respect to our Executive Officers is set forth in Part I hereof under the caption"Executive Officers of the Registrant."Other information required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days ofDecember 31, 2016, our most recent fiscal year end, and is incorporated herein by reference.Item 11. EXECUTIVE COMPENSATIONInformation required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days ofDecember 31, 2016, our most recent fiscal year end, and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERSInformation required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days ofDecember 31, 2016, our most recent fiscal year end, and is incorporated herein by reference.Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEInformation required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days ofDecember 31, 2016, our most recent fiscal year end, and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICESInformation required under this Item will be contained in our definitive proxy statement, which will be filed within 120 days ofDecember 31, 2016, our most recent fiscal year end, and is incorporated herein by reference.62Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a) Documents Filed as Part of Form 10-K1.Financial StatementsThe Consolidated Financial Statements for the year ended December 31, 2016 are filed herewith. See Index to theConsolidated Financial Statements on page F-1 of this report.2.Financial Statement SchedulesAll financial statement schedules for which provision is made in the applicable accounting regulation of the Securities andExchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.3.Exhibits 3.1Corrected Amended and Restated Certificate of Incorporation of Vishay Intertechnology, Inc. dated June5, 2012. Incorporated by reference to Exhibit 3.1 to our current report on Form 8-K filed June 5, 2012. 3.2Amended and Restated Bylaws dated June 1, 2011. Incorporated by reference to Exhibit 3.2 to our currentreport on Form 8-K filed June 2, 2011. 3.3First Amendment to Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.1 to ourCurrent Report on Form 8-K, filed on August 11, 2015. 4.1Note Instrument, dated as of December 13, 2002. Incorporated by reference to Exhibit 4.3 to our currentreport on Form 8-K filed December 23, 2002. 4.2Indenture, dated as of November 9, 2010, by and between Vishay Intertechnology, Inc. and WilmingtonTrust Company, as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-Kfiled November 9, 2010. 4.3Indenture, dated as of May 13, 2011, by and between Vishay Intertechnology, Inc. and Wilmington TrustCompany, as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filedMay 13, 2011. 4.4Indenture, dated as of May 31, 2012, by and between Vishay Intertechnology, Inc. and Union Bank,N.A., as Trustee. Incorporated by reference to Exhibit 4.1 to our current report on Form 8-K filed May 31,2012. 10.1†Vishay Intertechnology Section 162(m) Cash Bonus Plan as amended and restated on February 21, 2012.Incorporated by reference to Annex A to our Proxy Statement, dated April 5, 2012, for our 2012 AnnualMeeting of Stockholders, filed April 5, 2012. 10.2†Vishay Intertechnology, Inc. 1998 Stock Option Program. Incorporated by reference to our ProxyStatement, dated April 16, 1998, for our 1998 Annual Meeting of Stockholders. 10.3†Amendment to Section 4.1 of Vishay's 1998 Stock Option Program. Incorporated by reference to ProposalThree, included in our Proxy Statement, dated April 16, 2007, for our 2007 Annual Meeting ofStockholders. 10.4†Vishay Intertechnology, Inc. 2007 Stock Incentive Program. Incorporated by reference to Annex A to ourProxy Statement, dated April 5, 2013, for our 2013 Annual Meeting of Stockholders. 10.5†Amended and Restated Vishay Intertechnology, Inc. 2007 Stock Incentive Program. Incorporated byreference to Annex A to our definitive proxy statement, dated April 4, 2014, for our 2014 Annual Meetingof Stockholders. 10.6Securities Investment and Registration Rights Agreement by and among Vishay Intertechnology, Inc. andthe Original Holders (as defined), dated as of December 13, 2002. Incorporated by reference to Exhibit 4.4to our current report on Form 8-K filed December 23, 2002. 10.7Note Purchase Agreement between Vishay Intertechnology, Inc. and Subscribers (as defined), dated as ofDecember 13, 2002. Incorporated by reference to Exhibit 4.2 to our current report on Form 8-K filedDecember 23, 2002. 10.8Put and Call Agreement between Vishay Intertechnology, Inc. and the Initial Holders (as defined), datedas of December 13, 2002. Incorporated by reference to Exhibit 4.5 to our current report on Form 8-K filedDecember 23, 2002. 10.9Press release, dated July 21, 2010, announcing the terms of the replacement notes to be issued to holders ofVishay's exchangeable floating-rate unsecured notes due 2102 and revised terms of its outstandingwarrants as required due to the spin-off of Vishay Precision Group, Inc. on July 6, 2010. Incorporated byreference to Exhibit 99 to our current report on Form 8-K filed July 22, 2010.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.10†Employment agreement, between Vishay Europe GmbH (an indirect wholly owned subsidiary of VishayIntertechnology, Inc.) and Dr. Gerald Paul. Incorporated by reference to Exhibit 10.3 to our quarterlyreport on Form 10-Q for the fiscal quarter ended October 2, 2004. 10.11†Amendment to Employment Agreement, dated August 8, 2010, between Vishay Europe GmbH (anindirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated byreference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. 10.12†Amendment to Employment Agreement, dated August 28, 2011, between Vishay Europe GmbH (anindirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dr. Gerald Paul. Incorporated byreference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1,2011. 10.13†Employment Agreement between Vishay Israel Ltd. (a wholly owned subsidiary of VishayIntertechnology, Inc.) and Marc Zandman. Incorporated by reference to Exhibit 10.2 to our quarterlyreport on Form 10-Q for the fiscal quarter ended October 2, 2004.63Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.14†Amendment to Employment Agreement, dated August 8, 2010, between Vishay Israel Ltd. (a whollyowned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference toExhibit 10.6 to our quarterly report on Form 10-Q for the fiscal quarter ended July 3, 2010. 10.15†Amendment to Employment Agreement, dated August 30, 2011, between Vishay Israel Ltd. (a whollyowned subsidiary of Vishay Intertechnology, Inc.) and Marc Zandman. Incorporated by reference toExhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2011. 10.16†Compensation Matters Agreement, dated August 23, 2011, between Vishay Intertechnology, Inc. and LoriLipcaman. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscalquarter ended October 1, 2011. 10.17†Amendment to Compensation Matters Agreement, dated March 4, 2014, between Vishay Europe GmbH(an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Lori Lipcaman. Incorporatedby reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the fiscal quarter ended March 29,2014. 10.18†Second Amendment to Compensation Matters Agreement, dated March 3, 2015, between Vishay EuropeGmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Lori Lipcaman. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter endedApril 4, 2015. 10.19†Compensation Matters Agreement, dated November 11, 2011, between Vishay Intertechnology, Inc. andDieter Wunderlich. Incorporated by reference to Exhibit 10.30 to our 2011 annual report on Form 10-K. 10.20†Amendment to Compensation Matters Agreement, dated March 4, 2014, between Vishay ElectronicGmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and Dieter Wunderlich. Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the fiscal quarter endedMarch 29, 2014. 10.21†Second Amendment to Compensation Matters Agreement, dated March 3, 2015, between VishayElectronic GmbH (an indirect wholly owned subsidiary of Vishay Intertechnology, Inc.) and DieterWunderlich. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscalquarter ended April 4, 2015. 10.22†Termination Agreement, dated November 14, 2016, between Vishay Electronic GmbH (an indirect whollyowned subsidiary of Vishay Intertechnology, Inc.) and Dieter Wunderlich. Incorporated by reference toExhibit 10.1 to our current report on Form 8-K filed November 16, 2016. 10.23†Amendment to Executive Officer Restricted Stock Unit Agreement, dated November 14, 2016, betweenVishay Intertechnology, Inc. and Dieter Wunderlich. Incorporated by reference to Exhibit 10.2 to ourcurrent report on Form 8-K filed November 16, 2016. 10.24†Terms and Conditions of Johan Vandoorn Employment Agreement, dated January 16, 2012. Incorporatedby reference to Exhibit 10.31 to our 2011 annual report on Form 10-K. 10.25†Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March 4, 2014. Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the fiscal quarter endedMarch 29, 2014. 10.26†Second Amendment to Terms and Conditions of Johan Vandoorn Employment Agreement, dated March3, 2015. Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the fiscalquarter ended April 4, 2015. 10.27†Employment Agreement between Vishay Americas, Inc. (a wholly owned subsidiary of VishayIntertechnology, Inc.) and David Valletta dated November 21, 2011. Incorporated by reference to Exhibit10.32 to our 2011 annual report on Form 10-K. 10.28†Amendment to Employment Agreement between Vishay Americas, Inc. (a wholly owned subsidiary ofVishay Intertechnology, Inc.) and David Valletta dated March 4, 2014. Incorporated by reference toExhibit 10.4 to our quarterly report on Form 10-Q for the fiscal quarter ended March 29, 2014. 10.29†Second Amendment to Employment Agreement between Vishay Americas, Inc. (a wholly ownedsubsidiary of Vishay Intertechnology, Inc.) and David Valletta dated March 3, 2015. Incorporated byreference to Exhibit 10.5 to our quarterly report on Form 10-Q for the fiscal quarter ended April 4, 2015. 10.30†Vishay Intertechnology, Inc. Key Employee Wealth Accumulation Plan (as amended and restated,effective January 1, 2017). Incorporated by reference to Exhibit 10.1 to our current report on Form 8-Kfiled December 23, 2016. 10.31Technology License Agreement, dated as of April 1, 2007, by and between International RectifierCorporation and Vishay Intertechnology, Inc. Incorporated by reference to Exhibit 99.1 to InternationalRectifier Corporation's current report on Form 8-K filed April 9, 2007. 10.32Technology License Back Agreement, dated as of April 1, 2007, by and between Vishay Intertechnology,Inc. and International Rectifier Corporation. Incorporated by reference to Exhibit 99.2 to InternationalRectifier Corporation's current report on Form 8-K filed April 9, 2007.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.33Confidential Settlement Agreement and Release, Amendment No. 1 to Transition Buy Back Die SupplyAgreement, Amendment No. 2 to Technology License Agreement, Amendment No. 7 to Master PurchaseAgreement, and Amendment No. 3 to Asset Purchase Agreement, dated June 25, 2009, by and betweenVishay Intertechnology, Inc. and International Rectifier Corporation. Incorporated by reference to Exhibit10.1 to International Rectifier Corporation's current report on Form 8-K/A filed July 29, 2009. 10.34Master Separation and Distribution Agreement, dated June 22, 2010, by and among VishayIntertechnology, Inc. and Vishay Precision Group, Inc. Incorporated by reference to Exhibit 10.1 to ourcurrent report on Form 8-K filed June 23, 2010. 10.35Employee Matters Agreement, dated June 22, 2010, by and among Vishay Intertechnology, Inc. andVishay Precision Group, Inc. Incorporated by reference to Exhibit 10.2 to our current report on Form 8-Kfiled June 23, 2010.64Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.36Tax Matters Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and VishayIntertechnology, Inc. Incorporated by reference to Exhibit 10.1 to Vishay Precision Group, Inc.'s currentreport on Form 8-K filed July 7, 2010. 10.37Trademark License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and VishayIntertechnology, Inc. Incorporated by reference to Exhibit 10.2 to Vishay Precision Group, Inc.'s currentreport on Form 8-K filed July 7, 2010. 10.38*Supply Agreement, dated July 6, 2010, between Vishay Advanced Technology, Ltd. And Vishay DaleElectronics, Inc. Incorporated by reference to Exhibit 10.4 to Vishay Precision Group, Inc.'s current reporton Form 8-K filed July 7, 2010. 10.39*Patent License Agreement, dated July 6, 2010, between Vishay Precision Group, Inc. and Vishay DaleElectronics, Inc. Incorporated by reference to Exhibit 10.6 to Vishay Precision Group, Inc.'s current reporton Form 8-K filed July 7, 2010. 10.40*Supply Agreement, dated July 6, 2010, between Vishay Dale Electronics, Inc. and Vishay AdvancedTechnology, Ltd. Incorporated by reference to Exhibit 10.8 to Vishay Precision Group, Inc.'s currentreport on Form 8-K filed July 7, 2010. 10.41*Supply Agreement, dated July 6, 2010, between Vishay Measurements Group, Inc. and Vishay S.A.Incorporated by reference to Exhibit 10.9 to Vishay Precision Group, Inc.'s current report on Form 8-Kfiled July 7, 2010. 10.42*Manufacturing Agreement, dated July 6, 2010, between Vishay S.A. and Vishay Precision Foil GmbH.Incorporated by reference to Exhibit 10.10 to Vishay Precision Group, Inc.'s current report on Form 8-Kfiled July 7, 2010. 10.43Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and Vishay PrecisionFoil GmbH. Incorporated by reference to Exhibit 10.11 to Vishay Precision Group, Inc.'s current report onForm 8-K filed July 7, 2010. 10.44*Supply Agreement, dated July 6, 2010, between Vishay Precision Foil GmbH and Vishay S.A.Incorporated by reference to Exhibit 10.12 to Vishay Precision Group, Inc.'s current report on Form 8-Kfiled July 7, 2010. 10.45*Intellectual Property License Agreement, dated July 6, 2010, between Vishay S.A. and VishayMeasurements Group, Inc. Incorporated by reference to Exhibit 10.13 to Vishay Precision Group, Inc.'scurrent report on Form 8-K filed July 7, 2010. 10.46Lease Agreement between Vishay Alpha Electronics Corporation and Vishay Japan Co., Ltd.Incorporated by reference to Exhibit 10.14 to Vishay Precision Group, Inc.'s current report on Form 8-Kfiled July 7, 2010. 10.47Credit Agreement, dated as of December 1, 2010, as amended and restated as of August 8, 2013, asfurther amended and restated December 10, 2015, among Vishay Intertechnology, Inc. and JPMorganChase Bank, N.A., as administrative agent and the lenders and other parties thereto. Incorporated byreference to Exhibit 10.1 to our current report on Form 8-K filed December 10, 2015. 10.48†Vishay Intertechnology, Inc. Form of Executive Officer Restricted Stock Unit Agreement. Incorporatedby reference to Exhibit 10.2 to our Current Report on Form 8-K, filed on May 21, 2014. 10.49†Vishay Intertechnology, Inc. Form of Restricted Stock Unit Agreement. Incorporated by reference toExhibit 10.3 to our Current Report on Form 8-K, filed on May 21, 2014. 10.50†Vishay Intertechnology, Inc. Form of Executive Officer Phantom Stock Unit Agreement. Incorporated byreference to Exhibit 10.4 to our Current Report on Form 8-K, filed on May 21, 2014. 21**Subsidiaries of the Registrant. 23.1**Consent of Independent Registered Public Accounting Firm. 31.1**Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer. 31.2**Certification pursuant to Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer. 32.1**Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer. 32.2**Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer. 101**Interactive Data File (Annual Report on Form 10-K, for the year ended December 31, 2016, furnished inXBRL (eXtensible Business Reporting Language)).__________________* Confidential treatment has been requested by, and accorded to, VPG with respect to certain portions of this Exhibit. Omitted portions have been filedseparately by VPG with the Securities and Exchange Commission.** Filed herewith.† Denotes a management contract or compensatory plan, contract, or arrangement.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.65Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.SIGNATURESPursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.VISHAY INTERTECHNOLOGY, INC.By:/s/ Gerald Paul Dr. Gerald Paul President and Chief Executive Officer February 17, 2017 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the Registrant and in the capacities and on the dates indicated below.SignatureTitleDatePrincipal Executive Officer: /s/ Gerald PaulPresident, Chief Executive Officer,February 17, 2017Dr. Gerald Pauland Director Principal Financial and Accounting Officer: /s/ Lori LipcamanExecutive Vice President and ChiefFebruary 17, 2017Lori LipcamanFinancial Officer Board of Directors: /s/ Marc ZandmanExecutive Chairman ofFebruary 17, 2017Marc Zandmanthe Board of Directors /s/ Abraham LudomirskiDirectorFebruary 17, 2017Dr. Abraham Ludomirski /s/ Frank D. MaierDirectorFebruary 17, 2017Frank D. Maier /s/ Ronald M. RuzicDirectorFebruary 17, 2017Ronald M. Ruzic /s/ Ziv ShoshaniDirectorFebruary 17, 2017Ziv Shoshani /s/ Timothy V. TalbertDirectorFebruary 17, 2017Timothy V. Talbert /s/ Thomas C. WertheimerDirectorFebruary 17, 2017Thomas C. Wertheimer /s/ Ruta ZandmanDirectorFebruary 17, 2017Ruta Zandman 66Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Vishay Intertechnology, Inc.Index to Consolidated Financial StatementsReports of Independent Registered Public Accounting FirmF-2 Audited Consolidated Financial Statements Consolidated Balance SheetsF-4Consolidated Statements of OperationsF-6Consolidated Statements of Comprehensive IncomeF-7Consolidated Statements of Cash FlowsF-8Consolidated Statements of Stockholders' EquityF-9Notes to the Consolidated Financial StatementsF-10F-1Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Report of Independent Registered Public Accounting Firmon the Consolidated Financial StatementsThe Board of Directors and Stockholders of Vishay Intertechnology, Inc.:We have audited the accompanying consolidated balance sheets of Vishay Intertechnology, Inc. as of December 31, 2016 and 2015,and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the threeyears in the period ended December 31, 2016. These financial statements are the responsibility of Vishay Intertechnology, Inc.'smanagement. Our responsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position ofVishay Intertechnology, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for eachof the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), VishayIntertechnology, Inc.'s internal control over financial reporting as of December 31, 2016, based on criteria established in InternalControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013framework) and our report dated February 17, 2017 expressed an unqualified opinion thereon./s/ Ernst & Young LLPPhiladelphia, PennsylvaniaFebruary 17, 2017F-2Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Report of Independent Registered Public Accounting Firmon Internal Control over Financial ReportingThe Board of Directors and Stockholders of Vishay Intertechnology, Inc.:We have audited Vishay Intertechnology, Inc.'s internal control over financial reporting as of December 31, 2016, based on criteriaestablished in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (2013 framework) (the COSO criteria). Vishay Intertechnology, Inc.'s management is responsible for maintainingeffective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reportingincluded in Item 9A, "Management's Report on Internal Control Over Financial Reporting." Our responsibility is to express an opinionon the company's internal control over financial reporting based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control overfinancial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. Webelieve that our audit provides a reasonable basis for our opinion.A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effecton the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projectionsof any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate.In our opinion, Vishay Intertechnology, Inc. maintained, in all material respects, effective internal control over financial reporting as ofDecember 31, 2016, based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), theconsolidated balance sheets of Vishay Intertechnology, Inc. as of December 31, 2016 and 2015, and the related consolidatedstatements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period endedDecember 31, 2016 and our report dated February 17, 2017 expressed an unqualified opinion thereon./s/ Ernst & Young LLP Philadelphia, PennsylvaniaFebruary 17, 2017F-3Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.VISHAY INTERTECHNOLOGY, INC.Consolidated Balance Sheets(In thousands, except share amounts) December31, 2016 December31, 2015 Assets Current assets: Cash and cash equivalents $471,781 $475,507 Short-term investments 626,627 619,040 Accounts receivable, net of allowances for doubtful accounts of $1,772 and $1,828, respectively 274,027 272,559 Inventories: Finished goods 109,075 108,869 Work in process 162,311 201,045 Raw materials 109,859 110,657 Total inventories 381,245 420,571 Prepaid expenses and other current assets 110,792 99,815 Total current assets 1,864,472 1,887,492 Property and equipment, at cost: Land 89,753 89,593 Buildings and improvements 570,932 562,171 Machinery and equipment 2,283,222 2,380,299 Construction in progress 71,777 79,910 Allowance for depreciation (2,166,813) (2,246,677)Property and equipment, net 848,871 865,296 Goodwill 141,407 138,244 Other intangible assets, net 84,463 103,258 Other assets 138,588 158,696 Total assets $3,077,801 $3,152,986 Continues on following page.F-4Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.VISHAY INTERTECHNOLOGY, INC.Consolidated Balance Sheets (continued)(In thousands, except share amounts) December31, 2016 December31, 2015 Liabilities and equity Current liabilities: Notes payable to banks $3 $4 Trade accounts payable 174,107 157,210 Payroll and related expenses 114,576 113,976 Other accrued expenses 149,131 164,336 Income taxes 19,033 22,198 Total current liabilities 456,850 457,724 Long-term debt, less current portion 357,023 436,738 Deferred income taxes 286,797 305,413 Other liabilities 59,725 60,450 Accrued pension and other postretirement costs 257,789 264,618 Total liabilities 1,418,184 1,524,943 Commitments and contingencies Redeemable convertible debenutres 88,659 - Stockholders' equity: Preferred stock, par value $1.00 per share: authorized - 1,000,000 shares; none issued Common stock, par value $0.10 per share: authorized - 300,000,000 shares; 133,846,801 and135,460,811 shares outstanding 13,385 13,546 Class B convertible common stock, par value $0.10 per share: authorized - 40,000,000 shares;12,129,227 and 12,129,227 shares outstanding 1,213 1,213 Capital in excess of par value 1,952,988 2,058,492 (Accumulated deficit) retained earnings (307,417) (319,448)Accumulated other comprehensive income (loss) (94,652) (131,327)Total Vishay stockholders' equity 1,565,517 1,622,476 Noncontrolling interests 5,441 5,567 Total equity 1,570,958 1,628,043 Total liabilities, temporary equity, and equity $3,077,801 $3,152,986 See accompanying notes.F-5Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.VISHAY INTERTECHNOLOGY, INC.Consolidated Statements of Operations(In thousands, except per share amounts) Years ended December 31, 2016 2015 2014 Net revenues $2,323,431 $2,300,488 $2,493,282 Costs of products sold 1,753,648 1,758,268 1,881,990 Gross profit 569,783 542,220 611,292 Selling, general, and administrative expenses 367,987 362,226 385,696 Restructuring and severance costs 19,199 19,215 20,897 Impairment of intangible assets 1,559 57,600 - Impairment of goodwill - 5,380 - U.S. pension settlement charges 79,321 - 15,588 Operating income 101,717 97,799 189,111 Other income (expense): Interest expense (25,623) (25,685) (24,457)Other 4,716 7,976 2,489 Gain on early extinguishment of debt 4,597 - - Gain (loss) related to Tianjin explosion 8,809 (5,350) - Total other income (expense) (7,501) (23,059) (21,968) Income before taxes 94,216 74,740 167,143 Income tax expense 44,843 182,473 49,300 Net earnings (loss) 49,373 (107,733) 117,843 Less: net earnings attributable to noncontrolling interests 581 781 214 Net earnings (loss) attributable to Vishay stockholders $48,792 $(108,514) $117,629 Basic earnings (loss) per share attributable to Vishay stockholders: $0.33 $(0.73) $0.80 Diluted earnings (loss) per share attributable to Vishay stockholders: $0.32 $(0.73) $0.77 Weighted average shares outstanding - basic 147,152 147,700 147,567 Weighted average shares outstanding - diluted 150,697 147,700 153,716 Cash dividends per share $0.25 $0.24 $0.24 See accompanying notes.F-6Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.VISHAY INTERTECHNOLOGY, INC.Consolidated Statements of Comprehensive Income(In thousands) Years ended December 31, 2016 2015 2014 Net earnings (loss) $49,373 $(107,733) $117,843 Other comprehensive income (loss), net of tax Pension and other post-retirement actuarial items 71,926 19,338 (25,842) Foreign currency translation adjustment (35,863) (80,106) (106,295) Unrealized gain (loss) on available-for-sale securities 612 (1,419) 1,363 Other comprehensive income (loss) 36,675 (62,187) (130,774) Comprehensive income (loss) 86,048 (169,920) (12,931) Less: comprehensive income attributable to noncontrolling interests 581 781 214 Comprehensive income (loss) attributable to Vishay stockholders $85,467 $(170,701) $(13,145)See accompanying notes.F-7Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. VISHAY INTERTECHNOLOGY, INC.Consolidated Statements of Cash Flows(In thousands) Years ended December 31, 2016 2015 2014 Operating activities Net earnings (loss) $49,373 $(107,733) $117,843 Adjustments to reconcile net earnings (loss) to net cash provided by operatingactivities: Depreciation and amortization 159,363 176,169 179,455 (Gain) loss on disposal of property and equipment (4,054) (86) (195)Accretion of interest on convertible debentures 4,610 4,264 3,943 Inventory write-offs for obsolescence 22,619 21,384 21,394 Impairment of goodwill and intangible assets 1,559 62,980 - U.S. pension settlement charges 79,321 - 15,588 Pensions and other postretirement benefits, net of contributions (3,282) (3,543) (16,145)Gain on early extinguishment of debt (4,597) - - Deferred income taxes (2,519) 118,447 15,663 Other (2,220) 698 (2,269)Net change in operating assets and liabilities, net of effects of businesses acquired (4,206) (27,249) (38,240)Net cash provided by operating activities 295,967 245,331 297,037 Investing activities Capital expenditures (134,635) (147,142) (156,974)Proceeds from sale of property and equipment 5,701 2,049 2,889 Purchase and deposits for businesses, net of cash acquired - (6,750) (197,986)Purchase of short-term investments (555,250) (486,949) (495,762)Maturity of short-term investments 532,601 345,397 485,306 Sale of short-term investments - 503 13,658 Sale of other investments - 400 - Other investing activities 2,942 (4,884) 617 Net cash used in investing activities (148,641) (297,376) (348,252) Financing activities Debt issuance costs - (3,693) - Principal payments on long-term debt and capital leases (34,044) - (11)Net proceeds (payments) on revolving credit lines (47,000) (10,000) 86,000 Common stock repurchases (23,159) - - Dividends paid to common stockholders (33,693) (32,506) (32,477)Dividends paid to Class B common stockholders (3,032) (2,911) (2,911)Net changes in short-term borrowings (723) (14) 16 Distributions to noncontrolling interests (707) (725) (547)Acquisition of noncontrolling interests in Capella - - (21,067)Proceeds from stock options exercised 356 - 50 Excess tax benefit from RSUs vested - 21 - Other financing activites - - (1,324)Net cash provided by (used in) financing activities (142,002) (49,828) 27,729 Effect of exchange rate changes on cash and cash equivalents (9,050) (14,792) (24,690) Net decrease in cash and cash equivalents (3,726) (116,665) (48,176) Cash and cash equivalents at beginning of year 475,507 592,172 640,348 Cash and cash equivalents at end of year $471,781 $475,507 $592,172 See accompanying notesF-8Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.VISHAY INTERTECHNOLOGY, INC.Consolidated Statements of Stockholders' Equity(In thousands, except share amounts) CommonStock Class BConvertibleCommonStock Capital inExcess ofPar Value RetainedEarnings(AccumulatedDeficit) AccumulatedOtherComprehensiveIncome (Loss) Total VishayStockholders'Equity NoncontrollingInterests TotalEquity Balance atJanuary 1,2014 $13,520 $1,213 $2,054,087 $(257,698) $61,634 $1,872,756 $5,440 $1,878,196 Net earnings - - - 117,629 - 117,629 214 117,843 Othercomprehensiveincome (loss) - - - - (130,774) (130,774) - (130,774)Noncontrollinginterest inbusinessacquired - - - - - - 21,895 21,895 Distributions tononcontrollinginterests - - - - - - (547) (547)Acquisition ofnoncontrollinginterests - - 424 - - 424 (21,491) (21,067)Restricted stockissuances(117,895shares) 12 - (384) - - (372) - (372)Dividendsdeclared($0.24 pershare) - - 28 (35,416) - (35,388) - (35,388)Stockcompensationexpense - - 2,392 - - 2,392 - 2,392 Stock optionsexercised(4,337 shares) - - 50 - - 50 - 50 Tax effects ofstock plan - - (1,351) - - (1,351) - (1,351)Balance atDecember 31,2014 $13,532 $1,213 $2,055,246 $(175,485) $(69,140) $1,825,366 $5,511 $1,830,877 Net earnings(loss) - - - (108,514) - (108,514) 781 (107,733)Othercomprehensiveincome (loss) - - - - (62,187) (62,187) - (62,187)Distributions tononcontrollinginterests - - - - - - (725) (725)Restricted stockissuances(136,498shares) 14 - (653) - - (639) - (639)Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Dividendsdeclared($0.24 pershare) - - 32 (35,449) - (35,417) - (35,417)Stockcompensationexpense - - 3,846 - - 3,846 - 3,846 Tax effects ofstock plan - - 21 - - 21 - 21 Balance atDecember 31,2015 $13,546 $1,213 $2,058,492 $(319,448) $(131,327) $1,622,476 $5,567 $1,628,043 Net earnings - - - 48,792 - 48,792 581 49,373 Othercomprehensiveincome (loss) - - - - 36,675 36,675 - 36,675 Distributions tononcontrollinginterests - - - - - - (707) (707)Common stockrepurchase(1,752,454shares) (175) - (22,984) - - (23,159) - (23,159)Temporaryequityreclassification - - (88,659) - - (88,659) - (88,659)Restricted stockissuances(110,825shares) 11 - (553) - - (542) - (542)Dividendsdeclared($0.25 pershare) - - 36 (36,761) - (36,725) - (36,725)Stockcompensationexpense - - 6,380 - - 6,380 - 6,380 Stock optionsexercised(27,619shares) 3 - 353 - - 356 - 356 Tax effects ofstock plan - - (77) - - (77) - (77)Balance atDecember 31,2016 $13,385 $1,213 $1,952,988 $(307,417) $(94,652) $1,565,517 $5,441 $1,570,958 See accompanying notes.F-9Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts) Vishay Intertechnology, Inc. ("Vishay" or the "Company") is a global manufacturer and supplier of semiconductors and passivecomponents, including power MOSFETs, power integrated circuits, transistors, diodes, optoelectronic components, resistors,capacitors, and inductors. Semiconductors and electronic components manufactured by the Company are used in virtually all types ofelectronic products, including those in the industrial, computing, automotive, consumer electronics products, telecommunications,power supplies, military/aerospace, and medical industries.Note 1 – Summary of Significant Accounting PoliciesUse of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP")requires management to make estimates and assumptions that affect the amounts reported on the consolidated financial statements andaccompanying notes. Actual results could differ significantly from those estimates.Principles of ConsolidationThe consolidated financial statements include the accounts of Vishay and all of its subsidiaries in which a controlling financial interestis maintained. For those consolidated subsidiaries in which the Company's ownership is less than 100 percent, the outsidestockholders' interests are shown as noncontrolling interest in the accompanying consolidated balance sheets. Investments in affiliatesover which the Company has significant influence but not a controlling interest are carried on the equity basis. Investments in affiliatesover which the Company does not have significant influence are accounted for by the cost method. All intercompany transactions,accounts, and profits are eliminated. Revenue RecognitionThe Company recognizes revenue on product sales during the period when the sales process is complete. This generally occurs whenproducts are shipped to the customer in accordance with terms of an agreement of sale, title and risk of loss have been transferred,collectibility is reasonably assured, and pricing is fixed or determinable. For the portion of sales where title and risk of loss passes atpoint of delivery, the Company recognizes revenue upon delivery to the customer, assuming all other criteria for revenue recognitionare met. The Company historically has had agreements with distributors that provided limited rights of product return. The Companyhas modified these arrangements to allow distributors a limited credit for unsaleable products, which it terms a "scrap allowance."Consistent with industry practice, the Company also has a "stock, ship and debit" program whereby it considers requests bydistributors for credits on previously purchased products that remain in distributors' inventory, to enable the distributors to offer morecompetitive pricing. In addition, the Company has contractual arrangements whereby it provides distributors with protection againstprice reductions initiated by the Company after product is sold by the Company to the distributor and prior to resale by the distributor.The Company records a reduction of revenue during each period, and records a related accrued expense for the period, based upon itsestimate of product returns, scrap allowances, "stock, ship and debit" credits, and price protection credits that will be attributable tosales recorded through the end of the period. The Company makes these estimates based upon sales levels to its distributors during theperiod, inventory levels at the distributors, current and projected market conditions, and historical experience under the programs.While the Company utilizes a number of different methodologies to estimate the accruals, all of the methodologies take into accountsales levels to distributors during the relevant period, inventory levels at the distributors, current and projected market trends andconditions, recent and historical activity under the relevant programs, changes in program policies, and open requests for credits. Theseprocedures require the exercise of significant judgments. The Company believes that it has a reasonable basis to estimate future creditsunder the programs.Royalty revenues, included in net revenues on the consolidated statements of operations, were $259, $3,323, and $4,525 for the yearsended December 31, 2016, 2015, and 2014, respectively. The Company records royalty revenue in accordance with agreed uponterms when performance obligations are satisfied, the amount is fixed or determinable, and collectibility is reasonably assured. Vishayearns royalties at the point of sale of products which incorporate licensed intellectual property. Accordingly, the amount of royaltiesrecognized is determined based on periodic reporting to Vishay by its licensees, and based on judgments and estimates by Vishaymanagement, which management considers reasonable.F-10Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 1 - Summary of Significant Accounting Policies (continued)Shipping and Handling CostsShipping and handling costs are included in costs of products sold.Research and Development ExpensesResearch and development costs are expensed as incurred. The amount charged to expense for research and development (exclusive ofpurchased in-process research and development) aggregated $66,842, $64,193, and $65,299, for the years ended December 31, 2016,2015, and 2014, respectively. The Company spends additional amounts for the development of machinery and equipment for newprocesses and for cost reduction measures.Income TaxesThe provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under thisapproach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities arerecovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change indeferred taxes during the year. Deferred taxes result from differences between the financial and tax bases of the Company's assets andliabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances have been establishedfor deferred tax assets which the Company believes do not meet GAAP criteria of "more likely than not" to be realized. This criterionrequires a level of judgment regarding future taxable income, which may be revised due to changes in market conditions, tax laws, orother factors. If the Company's assumptions and estimates change in the future, valuation allowances established may be increased,resulting in increased tax expense. Conversely, if the Company is ultimately able to utilize all or a portion of the deferred tax assets forwhich a valuation allowance has been established, then the related portion of the valuation allowance can be released, resulting indecreased tax expense.Except as described in Note 5, earnings generated by foreign subsidiaries are expected to be reinvested outside of the United Statesindefinitely. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. incometaxes (subject to an adjustment for foreign tax credits), state income taxes, incremental foreign taxes and withholding taxes payable tovarious foreign jurisdictions.The Company and its subsidiaries are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment isrequired in evaluating the Company's tax positions and determining its provision for income taxes. During the ordinary course ofbusiness, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishesreserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. Thesereserves are established when the Company believes that certain positions might be challenged despite the Company's belief that its taxreturn positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances and theprovision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.These accruals for tax-related uncertainties are based on management's best estimate of potential tax exposures. When particularmatters arise, a number of years may elapse before such matters are audited by tax authorities and finally resolved. Favorableresolution of such matters could be recognized as a reduction to the Company's effective tax rate in the year of resolution. Unfavorableresolution of any particular issue could increase the effective tax rate and may require the use of cash in the year of resolution. Theamount included in current liabilities on the accompanying consolidated balance sheets reflect only amounts expected to be settled incash within one year.Cash, Cash Equivalents, and Short-Term InvestmentsCash and cash equivalents includes demand deposits and highly liquid investments with maturities of three months or less whenpurchased. Highly liquid investments with original maturities greater than three months, but less than one year are classified as short-term investments. At December 31, 2016 and 2015, the Company's short-term investments were comprised of time deposits withfinancial institutions whose original maturity exceeds three months, but less than one year.F-11Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 1 – Summary of Significant Accounting Policies (continued)Allowance for Doubtful AccountsThe Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to makerequired payments. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk thatare based on historical trends and an evaluation of the impact of current and projected economic conditions. The Company evaluatesthe past-due status of its trade receivables based on contractual terms of sale. If the financial condition of the Company's customerswere to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Bad debtexpense (income realized upon subsequent collection) was $61, $(152), and $(424) for the years ended December 31, 2016, 2015, and2014, respectively.InventoriesInventories are stated at the lower of cost, determined by the first-in, first-out method, or market. Inventories are adjusted for estimatedobsolescence and written down to net realizable value based upon estimates of future demand, technology developments, and marketconditions.Property and EquipmentProperty and equipment is carried at cost and is depreciated principally by the straight-line method based upon the estimated usefullives of the assets. Machinery and equipment are being depreciated over useful lives of seven to ten years. Buildings and buildingimprovements are being depreciated over useful lives of twenty to forty years. Construction in progress is not depreciated until theassets are placed in service. The estimated cost to complete construction in progress at December 31, 2016 was approximately$43,383. Depreciation of capital lease assets is included in total depreciation expense. Depreciation expense was $144,521, $154,340,and $160,804 for the years ended December 31, 2016, 2015, and 2014, respectively. Gains and losses on the disposal of assets whichdo not qualify for presentation as discontinued operations are included in the determination of operating margin (within selling, general,and administrative expenses). Individually material gains and losses on disposal are separately disclosed in the notes to theconsolidated financial statements.Goodwill and Other Intangible AssetsGoodwill represents the excess of the cost of a business acquired over the fair value of the related net assets at the date of acquisition. Certain of the Company's tradenames were assigned indefinite useful lives. Goodwill and indefinite-lived intangible assets are notamortized but rather are tested for impairment at least annually. These tests are performed more frequently whenever events or changesin circumstances indicate that the assets might be impaired. The Company's business segments (see Note 15) represent its reportingunits for goodwill impairment testing purposes. See Note 3 for further information on the impairment tests performed in 2016 and2015.Definite-lived intangible assets are amortized over their estimated useful lives. Patents and acquired technology are being amortizedover useful lives of seven to twenty-five years. Capitalized software is amortized over periods of three to ten years, primarily includedin costs of products sold on the consolidated statements of operations. Customer relationships are amortized over useful lives of five totwenty years. Noncompete agreements are amortized over periods of three to ten years. The Company continually evaluates thereasonableness of the useful lives of these assets.GAAP prescribes a two-step quantitative method for determining goodwill impairment. The Company has the option of performing aqualitative assessment before performing the two-step quantitative impairment test. If it is determined, on the basis of qualitative factors,that the fair value of the reporting unit is not more likely than not less than the carrying amount, the two-step quantitative impairmenttest is not required. If it is determined that the fair value of the reporting unit is more likely than not less than the carrying amount, thetwo-step quantitative impairment test is required. In the first step, the Company determines the fair value of the reporting unit andcompares that fair value to the net book value of the reporting unit. The fair value of the reporting unit is determined using variousvaluation techniques, including a comparable companies market multiple approach and a discounted cash flow analysis (an incomeapproach).If the net book value of the reporting unit were to exceed the fair value, the Company would then perform the second step of thequantitative impairment test, which requires allocation of the reporting unit's fair value to all of its assets and liabilities in a mannersimilar to a purchase price allocation, with any residual fair value being allocated to goodwill. An impairment charge will beSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.recognized only when the implied fair value of a reporting unit's goodwill is less than its carrying amount.The Company has the option of performing a qualitative assessment of indefinite-lived intangible assets before performing aquantitative impairment test. Upon determining that an intangible asset classified as indefinite-lived is impaired, the Companyreassesses the useful life of the impaired assets and begins to amortize the remaining carrying value over that useful life if it isdetermined that the asset no longer has an indefinite useful life. As of December 31, 2016, the Company has no indefinite-livedintangible assets. See Note 3 for further information.F-12Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 1 – Summary of Significant Accounting Policies (continued)Impairment of Long-Lived AssetsThe carrying value of long-lived assets held-and-used, other than goodwill and indefinite-lived intangible assets, is evaluated whenevents or changes in circumstances indicate the carrying value may not be recoverable or the useful life has changed. The carryingvalue of a long-lived asset group is considered impaired when the total projected undiscounted cash flows from such asset group areseparately identifiable and are less than the carrying value. In that event, a loss is recognized based on the amount by which thecarrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined primarily using presentvalue techniques based on projected cash flows from the asset group. Losses on long-lived assets held-for-sale, other than goodwilland indefinite-lived intangible assets, are determined in a similar manner, except that fair market values are reduced for anticipateddisposal costs.See Note 3 for further information on the impairment tests performed in 2016 and 2015.Available-for-Sale SecuritiesShort-term investments and other assets reported on the consolidated balance sheets include time deposits with financial institutionswhose original maturity exceeds three months, but less than one year and investments in marketable securities which are classified asavailable-for-sale. These assets include assets that are held in trust related to the Company's non-qualified pension and deferredcompensation plans (see Note 11) and assets that are intended to fund a portion of the Company's other postretirement benefitobligations outside of the U.S. These assets are reported at fair value, based on quoted market prices as of the end of the reportingperiod. Unrealized gains and losses are reported, net of their related tax consequences, as a component of accumulated othercomprehensive income in stockholders' equity until sold. At the time of sale, the assets that are held in trust related to the Company'snon-qualified pension and deferred compensation plans, any gains (losses) calculated by the specific identification method arerecognized as a reduction (increase) to benefits expense, within selling, general, and administrative expenses.Financial InstrumentsThe Company uses financial instruments in the normal course of its business, including from time to time, derivative financialinstruments. Additionally, from time to time, the Company enters into contracts that are not considered derivative financial instrumentsin their entirety, but that include embedded derivative features. The convertible senior debentures due 2040, due 2041, and due 2042contain embedded derivatives that are recorded at fair value on a recurring basis. At December 31, 2016 and 2015, outstandingderivative instruments were not material.The Company reports derivative instruments on the consolidated balance sheet at their fair values. The accounting for changes in fairvalue depends upon the purpose of the derivative instrument and whether it is designated and qualifies for hedge accounting. Forinstruments designated as hedges, the effective portion of gains or losses is reported in other comprehensive income (loss) and theineffective portion, if any, is reported in current period net earnings (loss). Changes in the fair values of derivative instruments that arenot designated as hedges, including embedded derivatives, are recorded in current period net earnings (loss).The Company has in the past used interest rate swap agreements to modify variable rate obligations to fixed rate obligations, therebyreducing exposure to market rate fluctuations. The Company uses financial instruments such as forward exchange contracts to mitigatea portion, but not all, of the risk associated with its firm commitments denominated in foreign currencies. The purpose of theCompany's foreign currency management is to minimize the effect of exchange rate changes on actual cash flows from foreigncurrency denominated transactions.Other financial instruments include cash and cash equivalents, held-to-maturity short-term investments, accounts receivable, and notespayable. The carrying amounts of these financial instruments reported on the consolidated balance sheets approximate their fair valuesdue to the short-term nature of these assets and liabilities.Stock-Based CompensationCompensation costs related to stock-based payment transactions are recognized in the consolidated financial statements. The amount ofcompensation cost is measured based on the grant-date fair value of the equity (or liability) instruments issued. Compensation cost isrecognized over the period that an officer, employee, or non-employee director is required to provide service in exchange for theaward. For options and restricted stock units subject to graded vesting, the Company recognizes expense over the service period forSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.each separately vesting portion of the award as if the award was, in-substance, multiple awards. The Company recognizescompensation cost for restricted stock units ("RSUs") that are expected to vest and records cumulative adjustments in the period thatthe expectation changes.F-13Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 1 – Summary of Significant Accounting Policies (continued)Foreign Currency TranslationThe Company has significant operations outside of the United States. The Company finances its operations in Europe and certainlocations in Asia in local currencies, and accordingly, these subsidiaries utilize the local currency as their functional currency. TheCompany's operations in Israel and most significant locations in Asia are largely financed in U.S. dollars, and accordingly, thesesubsidiaries utilize the U.S. dollar as their functional currency.For those subsidiaries where the local currency is the functional currency, assets and liabilities on the consolidated balance sheets havebeen translated at the rate of exchange as of the balance sheet date. Translation adjustments do not impact the consolidated results ofoperations and are reported as a separate component of stockholders' equity. Revenues and expenses are translated at the averageexchange rate for the year. While the translation of revenues and expenses into U.S. dollars does not directly impact the statement ofoperations, the translation effectively increases or decreases the U.S. dollar equivalent of revenues generated and expenses incurred inthose foreign currencies.For those foreign subsidiaries where the U.S. dollar is the functional currency, all foreign currency financial statement amounts areremeasured into U.S. dollars. Exchange gains and losses arising from remeasurement of foreign currency-denominated monetary assetsand liabilities are included in the consolidated results of operations.Commitments and ContingenciesLiabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines,penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/orremediation can be reasonably estimated. The costs for a specific environmental remediation site are discounted if the aggregateamount of the obligation and the amount and timing of the cash payments for that site are fixed or reliably determinable based uponinformation derived from the remediation plan for that site. Accrued liabilities for environmental matters recorded at December 31,2016 and 2015 do not include claims against third parties.Restructuring and Severance CostsRestructuring and severance costs reflect charges resulting from cost reduction programs implemented by the Company. Restructuringand severance costs include exit costs, severance benefits pursuant to an on-going arrangement, voluntary termination compensationunder a defined program, and any related pension curtailment and settlement charges.The Company recognizes expense for one-time benefits only after management has committed to a plan, the plan is sufficientlydetailed to provide the number, classification, and location of employees to be terminated as well as the expected completion date, theplan has been sufficiently communicated to employees such that they are able to determine the type and amount of benefits they willreceive if terminated, and it is unlikely that the plan will be significantly changed or withdrawn. If an employee is not required torender service beyond a minimum retention period, the Company recognizes expense once the aforementioned criteria have been met.If an employee is required to render service beyond a minimum retention period, the Company recognizes expense over the period thatthe employee is required to render future service.The Company recognizes expense for on-going benefit arrangements when the liability is reasonably estimable and consideredprobable.The Company recognizes expense for voluntary separation / early retirement when the employee delivers an irrevocable voluntarytermination notice pursuant to a defined company program.The Company recognizes other exit costs as incurred.Self-Insurance ProgramsThe Company uses a combination of insurance and self-insurance mechanisms to provide for the potential liabilities for workers'compensation, general liability, property damage, director and officers' liability, and vehicle liability.As part of its self-insurance program for certain risks, the Company created a wholly-owned captive insurance entity in 2007. AtSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.December 31, 2016, the captive insurance entity provides only property and general liability insurance, although it is licensed to alsoprovide casualty and directors' and officers' insurance. The captive insurance entity had $5,000 accrued related to the Tianjin explosionat December 31, 2015 (See Note 8), and had no amounts accrued for outstanding claims at December 31, 2016.Certain cash and investments held by the captive insurance entity are restricted primarily for the purpose of potential insurance claims.Restricted cash of $10,211 and $11,627 is included in other noncurrent assets at December 31, 2016 and 2015, respectively,representing required statutory reserves of the captive insurance entity.F-14Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 1 – Summary of Significant Accounting Policies (continued)Convertible DebenturesThe Company separately accounts for the liability and equity components of convertible debt instruments that may be settled in cash ina manner that reflects the Company's nonconvertible debt borrowing rate. The liability component at issuance is recognized at fairvalue, based on the fair value of a similar instrument that does not have a conversion feature. A discount is recorded if debentures areissued at a coupon rate which is below the rate of a similar instrument that did not have a conversion feature at issuance. The equitycomponent is based on the excess of the principal amount of the debentures over the fair value of the liability component, afteradjusting for an allocation of debt issuance costs and the deferred tax impact, and is recorded as capital in excess of par. Debt discountsare amortized as additional non-cash interest expense over the expected life of the debt.Recent Accounting PronouncementsRecent Accounting Guidance AdoptedIn September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The ASU is the result ofthe FASB's simplification initiative intended to improve GAAP by reducing costs and complexity while maintaining or enhancing theusefulness of related financial statement information. The ASU eliminates the requirement for an acquirer in a business combination toaccount for measurement-period adjustments retrospectively, and to instead recognize measurement-period adjustments during theperiod in which the acquirer determines the amount, including the effect on earnings of any amounts which would have been recordedin previous periods if the accounting had been completed at the acquisition date. The Company adopted the ASU effective January 1,2016. The ASU had no effect on the Company's results of operations or liquidity.In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (SubTopic 205-40):Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The ASU requires the Company's managementto evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's abilityto continue as a going concern within one year after the date that the financial statements are issued. The Company adopted the ASUeffective December 31, 2016. The ASU had no effect on the Company's results of operations or liquidity.Recent Accounting Guidance Not Yet AdoptedIn May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU is the result of aconvergence project between the FASB and the International Accounting Standards Board to clarify the principles for recognizingrevenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The ASU removesinconsistencies and weaknesses in revenue requirements; provides a more robust framework for addressing revenue issues; improvescomparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets; provides more usefulinformation to users of financial statements through expanded disclosure requirements; and simplifies the preparation of financialstatements by reducing the number of requirements to which an entity must refer. The ASU is effective for the Company for interimand annual periods beginning on or after January 1, 2018, with the ability to early adopt on January 1, 2017. The Company intends toretrospectively adopt the ASU effective January 1, 2018. Based on work performed to date, the adoption of the ASU is not expectedto have a material impact on the Company's results of operations.In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU is the result of a project between the FASBand the International Accounting Standards Board to increase transparency and comparability among organizations by recognizinglease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Upon adoption of theASU, the Company will recognize lease assets and liabilities for its operating leases which are not currently reported on itsconsolidated balance sheets. The ASU is effective for the Company for interim and annual periods beginning on or after January 1,2019, with the ability to early adopt. The Company is currently evaluating the effect of the ASU on its lease contracts.In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to EmployeeShare-Based Payment Accounting. The ASU is the result of the FASB's simplification initiative intended to improve GAAP byreducing costs and complexity while maintaining or enhancing the usefulness of related financial statement information. The ASUsimplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes,forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is effectivefor the Company for interim and annual periods beginning on or after January 1, 2017, with the ability to early adopt. The Company isSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.currently evaluating the effect of the ASU on its employee share-based payment accounting.In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losseson Financial Instruments. The ASU replaces the incurred loss impairment methodology in current GAAP with a methodology thatreflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform creditloss estimates. The ASU is effective for the Company for interim and annual periods beginning on or after January 1, 2020, with theability to early adopt for interim and annual periods beginning on or after January 1, 2019. The Company is currently evaluating theeffect of the ASU on its financial assets measured at amortized cost.ReclassificationsCertain prior year amounts have been reclassified. Such reclassifications had no effect on reported net earnings (loss) attributable toVishay stockholders, total assets, stockholders' equity, or the statements of cash flows.F-15Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 2 - Acquisition and Divestiture ActivitiesAs part of its growth strategy, the Company seeks to expand through targeted acquisitions of other manufacturers of electroniccomponents that have established positions in major markets, reputations for product quality and reliability, and product lines withwhich the Company has substantial marketing and technical expertise.Year ended December 31, 2016In the fourth fiscal quarter of 2015, the Company deposited the $6,750 purchase price of Sonntag Electronic GmbH ("Sonntag"). Thepurchase price, net of cash acquired was $5,450. The acquisition was effective January 1, 2016. Sonntag is a distributor of electroniccomponents in Germany. The inclusion of this business did not have a material impact on the Company's consolidated results for theyear ended December 31, 2016. After allocating the purchase price to the assets acquired and liabilities assumed based on anestimation of their fair values at the date of acquisition, the Company recorded goodwill of $3,485 related to this acquisition. Thegoodwill related to this acquisition is included in the Resistors & Inductors reporting unit for goodwill impairment testing.Had this acquisition occurred as of the beginning of the periods presented in these consolidated financial statements, the pro formastatements of operations would not be materially different than the consolidated statements of operations presented. Year ended December 31, 2015Vishay did not complete any acquisitions during the year ended December 31, 2015.Year ended December 31, 2014Holy Stone Polytech Co., Ltd.On June 11, 2014, Vishay acquired Holy Stone Polytech Co., Ltd. ("Holy Stone Polytech"), a Japanese manufacturer of tantalumcapacitors and formerly a subsidiary of Holy Stone Enterprise Co. Ltd., for $20,576, net of cash acquired. The Company is using thetechnology acquired to begin to penetrate the polymer tantalum capacitor market. For financial reporting purposes, the results ofoperations of Holy Stone Polytech have been included in the Capacitors segment since June 11, 2014. The inclusion of this businessdid not have a material impact on the Company's consolidated results for the year ended December 31, 2014. Based on an estimate oftheir fair values, the Company allocated $3,736 of the purchase price to definite-lived intangible assets. After allocating the purchaseprice to the assets acquired and liabilities assumed based on an estimation of their fair values at the date of acquisition, the Companyrecorded goodwill of $6,328 related to this acquisition. The goodwill related to this acquisition is included in the Capacitors reportingunit for goodwill impairment testing. See Note 3 for further information.Capella Microsystems Inc.On July 11, 2014, Vishay entered into an agreement to acquire Capella for approximately $205,000. Capella is a fabless IC designcompany specializing in optoelectronic products. As a first step in the acquisition, Vishay launched a tender offer for Capella'soutstanding shares. A total of 38,703,705 shares of Capella, or 88.95% of outstanding shares, were tendered and accepted by Vishay.The offer period expired on September 1, 2014. Pursuant to the terms of the tender offer, Vishay paid NT$139 for each share tendered.The aggregate purchase price was $180,167. Capella had cash and short-term investments on hand of $50,195 at the date ofacquisition. Vishay funded the acquisition with cash on hand and $53,000 of borrowings under its credit facility. Subsequent to theacquisition of the noncontrolling interest in December 31, 2014, the Company repatriated cash from the current earnings of non-U.S.subsidiaries to the United States primarily to repay those borrowings on the revolving credit facility, and also to realign the acquiredentity structure to have Capella's U.S. subsidiary directly owned by Vishay Intertechnology, Inc. The acquisition has strengthened thein-house design capabilities of our entire optoelectronic components business.Upon the close of the tender offer, Vishay controlled Capella and began consolidating it in its financial statements. For financialreporting purposes, the results and operations and net assets of Capella are included in the Optoelectronic Components segment. Capella's results were not material to the Company's consolidated results for the year ended December 31, 2014.Vishay acquired the remaining outstanding shares of Capella on December 31, 2014 pursuant to the merger agreement. In connectionwith the closing of the merger, all remaining holders of Capella common stock other than Vishay and its subsidiaries received the sameconsideration for their shares as the holders who tendered their shares in the tender offer, or $21,067 in the aggregate.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.In evaluating the acquisition of Capella, the Company focused primarily on the ability to synergize Capella's optoelectronics designcapabilities with Vishay's existing optoelectronics product lines and customers. As a result, the fair value of the acquired assets,including identified intangible assets, corresponds to a relatively smaller portion of the acquisition price, with the Company recording asubstantial amount of goodwill associated with the acquisition.The Company recognized intangible asset impairment charges of $57,600 in the third fiscal quarter of 2015 to write-down acquiredCapella assets to their fair value. See Note 3 for further information on the impairment charges.The Company recognized $843 of acquisition costs classified as a component of selling, general, and administrative expenses in itsconsolidated statements of operations for the year ended December 31, 2014.F-16Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 2 - Acquisition and Divestiture Activities (continued)Pro Forma ResultsThe unaudited pro forma results would have been as follows, assuming the 2014 acquisitions had occurred as of January 1, 2014: Year ended December31, 2014 Pro forma net revenues $2,522,010 Pro forma net earnings attributable to Vishay stockholders 114,510 Pro forma basic earnings per share attributable to Vishay stockholders $0.78 Pro forma diluted earnings per share attributable to Vishay stockholders $0.75 The pro forma information presented for the year ended December 31, 2014 was adjusted to exclude acquisition-related costs incurredin 2014. The pro forma information also includes adjustments for interest expense that would have been incurred to finance theacquisition, amortization of acquired intangible assets (excluding effects of the 2015 impairment charges), depreciation of acquiredproperty and equipment, and tax related effects.The unaudited pro forma results are not necessarily indicative of the results that would have been attained had the acquisition occurredon January 1, 2014.F-17Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 3 – Goodwill and Other Intangible AssetsAs a result of a review of recent financial results and outlook for the MOSFETs segment following the recent completion of productiontransfers, Vishay determined that an interim indefinite-lived intangible asset impairment test was required for its Siliconix tradenames asof the end of the third fiscal quarter of 2016.As a result of this analysis, the Company determined that its Siliconix tradenames, with a carrying value of $20,359, were impaired. The Company recorded an impairment charge of $1,559 to write-down the tradenames to their fair value. The tradenames are nolonger considered indefinite-lived and the remaining value will be amortized over the 10 year estimated remaining useful life.The fair value of indefinite-lived trademarks is measured as the discounted cash flow savings realized from owning such tradenamesand not having to pay a royalty for their use. The evaluation of the fair value of indefinite-lived trademarks requires us to makesignificant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: the assumed market-royalty rate; the discount rate; terminal growth rates; and forecasts of revenue.In light of a sustained decline in market capitalization for Vishay and its peer group companies, and other factors (including the costreduction programs announced during the third fiscal quarter of 2015 as described in Note 4), Vishay determined that interim goodwilland indefinite-lived impairment tests were required as of the end of the third fiscal quarter of 2015.Prior to completing the interim assessment of goodwill for impairment, the Company performed a recoverability test of certaindepreciable and amortizable long-lived assets. As a result of those assessments, it was determined that the depreciable and amortizableassets associated with the Company's Capella business were not recoverable, and the Company recorded impairment charges totaling$57,600 to write-down the related assets to their fair value.After completing step one of the goodwill impairment test, it was determined that the estimated fair value of the Capacitors reportingunit was less than the net book value of that reporting unit, requiring the completion of the second step of the impairment evaluation. Upon completion of the step two analysis for the Capacitors reporting unit, the Company recorded a full goodwill impairment chargeof $5,380.The fair value of long-lived assets is measured primarily using present value techniques based on projected cash flows from the assetgroup. The evaluation of the recoverability of long-lived assets, and the determination of their fair value, requires the Company tomake significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: theidentification of the asset group at the lowest level of independent cash flows and the principal asset of the group; the discount rate;terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, and capital expenditures.The fair value of reporting units for goodwill impairment testing purposes is measured primarily using present value techniques basedon projected cash flows from the reporting unit. The calculated results are evaluated for reasonableness using comparable companydata. The determination of the fair value of the reporting units and the allocation of that value to individual assets and liabilities withinthose reporting units requires the Company to make significant estimates and assumptions. These estimates and assumptions primarilyinclude, but are not limited to: the selection of appropriate peer group companies; control premiums appropriate for acquisitions in theindustries in which the Company competes; the discount rate; terminal growth rates; and forecasts of revenue, operating income,depreciation and amortization, and capital expenditures. The allocation requires several analyses to determine fair value of assets andliabilities including, among others, completed technology, tradenames, customer relationships, and certain property and equipment.Due to the inherent uncertainty involved in making these estimates, actual financial results could differ from those estimates. Changesin assumptions concerning future financial results or other underlying assumptions could have a significant impact on either the fairvalue of the reporting unit or the amount of the goodwill impairment charge; could have a significant impact on the conclusion that anasset group's carrying value is recoverable, that an indefinite-lived asset is not impaired, or the determination of any impairment chargeif it was determined that the asset values were indeed impaired.The Company performs its annual goodwill and indefinite-lived impairment test as of the first day of the fiscal fourth quarter. Theinterim impairment tests performed as the last day of the third fiscal quarters of 2016 and 2015, were effectively the annual impairmenttests for 2016 and 2015. The recorded impairment charges are non-cash in nature and do not affect Vishay's liquidity, cash flows from operating activities, ordebt covenants, and will not have a material impact on future operations.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.F-18Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 3 – Goodwill and Other Intangible Assets (continued)The changes in the carrying amount of goodwill by segment for the years ended December 31, 2016 and 2015 were as follows: OptoelectronicComponents Resistors &Inductors Capacitors Total Balance at January 1, 2015 $96,849 $42,146 $5,364 $144,359 Goodwill impairment charges - - (5,380) (5,380)Exchange rate effects - (751) 16 (735)Balance at December 31, 2015 $96,849 $41,395 $- $138,244 Sonntag acquisition - 3,485 - 3,485 Exchange rate effects - (322) - (322)Balance at December 31, 2016 $96,849 $44,558 $- $141,407 Other intangible assets are as follows: December 31, 2016 2015 Intangible Assets Subject to Amortization (Definite-lived): Patents and acquired technology $93,395 $93,606 Capitalized software 53,807 53,401 Customer relationships 84,905 85,418 Tradenames 53,680 35,493 Non-competition agreements 1,266 2,261 287,053 270,179 Accumulated amortization: Patents and acquired technology (81,807) (76,258)Capitalized software (49,388) (47,394)Customer relationships (42,787) (37,989)Tradenames (27,460) (23,798)Non-competition agreements (1,148) (1,841) (202,590) (187,280)Net Intangible Assets Subject to Amortization 84,463 82,899 Intangible Assets Not Subject to Amortization (Indefinite-lived): Tradenames - 20,359 $84,463 $103,258 Amortization expense (excluding capitalized software) was $14,842, $21,829, and $18,651, for the years ended December 31, 2016,2015, and 2014, respectively.Estimated annual amortization expense of intangible assets on the balance sheet at December 31, 2016 for each of the next five years isas follows:2017 $15,884 2018 11,096 2019 7,332 2020 6,567 2021 5,787 F-19Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 4 – Restructuring and Related ActivitiesThe Company places a strong emphasis on controlling its costs and combats general price inflation by continuously improving itsefficiency and operating performance. When the ongoing cost containment activities are not adequate, the Company takes actions tomaintain its cost competitiveness.The Company incurred significant restructuring costs in its past to reduce its cost structure. Historically, the Company's primary costreduction technique was through the transfer of production from high-labor-cost countries to lower-labor-cost countries. Since 2013,the Company's cost reduction programs have primarily focused on reducing fixed costs, including selling, general, and administrativeexpenses.In 2013, the Company announced various cost reduction programs. These programs were substantially implemented by the end of thefirst fiscal quarter of 2016, with some additional costs incurred in the remainder of 2016. Many of the severance costs were recognizedratably over the required stay periods. In November 2016, the Company announced an extension of one of these programs.In 2015, the Company announced additional global cost reduction programs. These programs include a facility closure in theNetherlands. The cash costs of these programs, primarily severance, are expected to aggregate to approximately $30,000. Completeimplementation of these programs is expected to occur before the end of 2017.The following table summarizes restructuring and related expenses which were recognized during the years ended December 31, 2016,2015, and 2014 and reported on a separate line in the accompanying consolidated statements of operations: Years ended December 31, 2016 2015 2014 MOSFETs Enhanced Competitiveness Program $9,744 $5,367 $6,025 Voluntary Separation / Retirement Program - 95 12,792 Modules Production Transfer (463) - 2,080 Global Cost Reduction Programs 9,918 13,753 - Total $19,199 $19,215 $20,897 MOSFETs Enhanced Competitiveness ProgramOver a period of approximately 2 years and in a period of discrete steps, the manufacture of wafers for a substantial share of productswas transferred into a more cost-efficient fab. As a consequence, certain other manufacturing previously occurring in-house wastransferred to third-party foundries. This transfer of production was substantially completed by the end of the first fiscal quarter of2016.Employees generally were required to remain with the Company during the production transfer period. Accordingly, the Companyaccrued these severance costs ratably over the respective employees' remaining service periods. The Company has incurred and maycontinue to incur other exit costs associated with the production transfer, including certain contract termination costs.As a result of a review of recent financial results and outlook for the Company's MOSFETs segment following the recent completionof production transfers, the Company has determined to implement further cost reductions for the MOSFETs segment.On November 7, 2016, the Company announced an extension of the MOSFETs Enhanced Competitiveness Program. The revisedprogram includes various cost reduction initiatives, primarily the transfer of all remaining manufacturing operations at its Santa Clara,California facility to other Vishay facilities or third-party subcontractors. The production transfers will be completed in steps by theend of 2017. The Company expects to incur cash charges of approximately $4,000 to $8,000, primarily related to severance, toimplement these additional steps. The total cash charges for the MOSFETs Enhanced Competitiveness Program are expected to be$23,000 to $27,000. The Company expects to maintain its R&D and management presence in the Silicon Valley area, even after thecessation of manufacturing operations there.F-20Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 4 – Restructuring and Related Activities (continued)The following table summarizes the activity to date related to this program:Expense recorded in 2013 $2,328 Cash paid (267)Balance at December 31, 2013 $2,061 Expense recorded in 2014 6,025 Cash paid (856)Balance at December 31, 2014 $7,230 Expense recorded in 2015 5,367 Cash paid (426)Foreign currency translation 1 Balance at December 31, 2015 $12,172 Expense recorded in 2016 9,744 Cash paid (15,686)Foreign currency translation 2 Balance at December 31, 2016 $6,232 Severance benefits are generally paid in a lump sum at cessation of employment. Other exit costs of $5,763 are included in theexpenses incurred in 2016 in the table above. The entire amount of the liability is considered current and is included in other accruedexpenses in the accompanying consolidated balance sheets.Voluntary Separation / Retirement ProgramThe voluntary separation / early retirement program was offered to employees worldwide who were eligible because they met jobclassification, age, and years-of-service criteria as of October 31, 2013. The program benefits varied by country and job classification,but generally included a cash loyalty bonus based on years of service. All employees eligible for the program have left the Company.These employees generally were not aligned with any particular segment. The effective separation / retirement date for most employeeswho accepted the offer was June 30, 2014 or earlier, with a few exceptions to allow for a transition period.The following table summarizes the activity to date related to this program:Expense recorded in 2013 $486 Cash paid (98)Foreign currency translation 3 Balance at December 31, 2013 $391 Expense recorded in 2014 12,792 Cash paid (8,054)Foreign currency translation (455)Balance at December 31, 2014 $4,674 Expense recorded in 2015 95 Cash paid (3,166)Foreign currency translation (258)Balance at December 31, 2015 $1,345 Cash paid (816)Foreign currency translation - Balance at December 31, 2016 $529 The payment terms vary by country, but generally were paid in a lump sum at cessation of employment. Certain participants are beingpaid in installments. The entire amount of the liability is considered current and is included in other accrued expenses in theaccompanying consolidated balance sheets.F-21Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 4 – Restructuring and Related Activities (continued)Modules Production TransferIn an effort to reduce costs and streamline production of its module products within its Diodes segment, the Company committed totwo smaller cost reduction programs related to the transferring of production of certain of its products.The Company recorded restructuring and severance costs of $2,080 for the year ended December 31, 2014 related to these productiontransfer programs. Substantially all amounts related to these programs have been paid as of December 31, 2016. Global Cost Reduction ProgramsThe global cost reduction programs announced in 2015 include a plan to reduce selling, general, and administrative costs company-wide, and targeted streamlining and consolidation of production for certain product lines within its Capacitors and Resistors &Inductors segments.The following table summarizes the activity to date related to this program:Expense recorded in 2015 $13,753 Cash paid (986)Foreign currency translation (150)Balance at December 31, 2015 $12,617 Expense recorded in 2016 9,918 Cash paid (16,237)Foreign currency translation (34)Balance at December 31, 2016 $6,264 The following table summarizes the expense recognized by segment related to this program: Years ended December 31, 2016 2015 Diodes $788 $133 Optoelectronic Components 936 215 Resistors & Inductors 5,173 5,972 Capacitors 687 5,209 Unallocated Selling, General, and Administrative Expenses 2,334 2,224 Total $9,918 $13,753 Severance benefits are generally paid in a lump sum at cessation of employment. The current portion of the liability is $5,890 and isincluded in other accrued expenses in the accompanying consolidated balance sheet. The non-current portion of the liability isincluded in other liabilities in the accompanying consolidated balance sheet.F-22Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 5 – Income TaxesIncome (loss) from continuing operations before taxes and noncontrolling interests consists of the following components: Years ended December 31, 2016 2015 2014 Domestic $(135,953) $(40,929) $(50,106)Foreign 230,169 115,669 217,249 $94,216 $74,740 $167,143 Significant components of income taxes are as follows: Years ended December 31, 2016 2015 2014 Current: Federal $358 $290 $(27,031)State and local 5 163 386 Foreign 46,999 63,573 60,282 47,362 64,026 33,637 Deferred: Federal 6,163 78,933 7,999 State and local (3,039) 311 204 Foreign (5,643) 39,203 7,460 (2,519) 118,447 15,663 Total income tax expense $44,843 $182,473 $49,300 F-23Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 5 – Income Taxes (continued)Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts for income tax purposes. Significant components of the Company's deferred tax assetsand liabilities are as follows: December 31, 2016 2015 Deferred tax assets: Pension and other retiree obligations $47,104 $40,322 Inventories 7,691 7,848 Net operating loss carryforwards 183,562 183,298 Tax credit carryforwards 25,432 23,512 Other accruals and reserves 29,401 35,176 Total gross deferred tax assets 293,190 290,156 Less valuation allowance (165,269) (167,932) 127,921 122,224 Deferred tax liabilities: Tax over book depreciation (1,025) (4,038)Earnings not permanently reinvested (139,165) (162,667)Convertible debentures (203,641) (188,978)Other - net (10,646) (9,245)Total gross deferred tax liabilities (354,477) (364,928) Net deferred tax assets (liabilities) $(226,556) $(242,704)The Company makes significant judgments regarding the realizability of its deferred tax assets (principally net operating losses). Thecarrying value of deferred tax assets is based on the Company's assessment that it is more likely than not that the Company will realizethese assets after consideration of all available positive and negative evidence.A reconciliation of income tax expense at the U.S. federal statutory income tax rate to actual income tax provision is as follows: Years ended December 31, 2016 2015 2014 Tax at statutory rate $32,976 $26,159 $58,500 State income taxes, net of U.S. federal tax benefit (1,972) 309 384 Effect of foreign operations (26,551) (13,212) (27,372)Tax on earnings not permanently reinvested (3,553) 163,699 25,728 Unrecognized tax benefits (8,453) (1,353) (21,603)Change in valuation allowance on non-U.S. deferred tax assets 991 (8,888) - Foreign income taxable in the U.S. 18,442 7,025 13,499 Termination of U.S. pension 34,853 - - Tax effect of impairment charges (454) 8,305 - Other (1,436) 429 164 Total income tax expense $44,843 $182,473 $49,300 F-24Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 5 – Income Taxes (continued)Income tax expense for the years ended December 31, 2016, 2015, and 2014 includes certain discrete tax items for changes inuncertain tax positions, valuation allowances, tax rates, and other related items. These items total $22,596, $152,437, and $1,228 (taxbenefit) in 2016, 2015, and 2014, respectively.For the year ended December 31, 2016, the discrete items include $34,853 of additional tax expense related to the termination andsettlement of the Vishay Retirement Plan (see Notes 10 and 11), $8,704 (tax benefit) for changes in uncertain tax positions relatedlargely to statute expiration, and $3,553 (tax benefit) for periodic remeasurement of the deferred tax liability related to the cashrepatriation program described below. The cash repatriation program is expected to occur over several years, and the deferred taxliability is based on the available sources of cash, applicable tax rates, and other factors and circumstances, as of each respectivebalance sheet date. Changes in the underlying facts and circumstances result in changes in the deferred tax liability balance, which arerecorded as tax benefit or expense.For the year ended December 31, 2015, the discrete items include $163,954 of expense recorded in the fourth fiscal quarter primarilyto repatriate $300,000 of foreign earnings to the United States, following an evaluation of the Company's anticipated domestic cashneeds over the next several years and the Company's most efficient use of liquidity, and with consideration of the amount of cash thatcan be repatriated to the U.S. efficiently with lesser withholding taxes in foreign jurisdictions. They also include $8,888 (tax benefit)for changes in valuation allowances and $2,629 (tax benefit) for changes in uncertain tax positions.For the year ended December 31, 2014, the discrete items included $25,706 of expense related to an expected repatriation of cash andprofits of non-U.S. subsidiaries to the United States, primarily to repay amounts borrowed on the revolving credit facility to providefuture flexibility given the legal entity and the financial structure utilized for the Capella acquisition, a $25,706 (tax benefit) for changesin uncertain tax positions, and a $1,228 (tax benefit) recorded in the fourth fiscal quarter due to the enactment of The Tax IncreasePrevention Act of 2014.At December 31, 2016, the Company had the following significant net operating loss carryforwards for tax purposes: Expires Austria $14,862 Noexpiration Belgium 150,327 Noexpiration Brazil 12,534 Noexpiration Germany 22,916 Noexpiration Israel 27,666 Noexpiration Japan 5,295 2018 -2025 Netherlands 19,019 2017 -2025 The Republic of China (Taiwan) 9,019 2024 -2026 United States 90,247 2033 -2036 California 55,407 2020 -2036 Pennsylvania 721,824 2018 -2036 At December 31, 2016, the Company had the following significant tax credit carryforwards available:Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Expires U.S. Foreign Tax Credit $11,093 2020 -2022 U.S. Federal Research Credit 1,986 2034 -2036 California Research Credit 12,353 Noexpiration F-25Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 5 – Income Taxes (continued)At December 31, 2016, no provision has been made for U.S. federal and state income taxes on approximately $2,484,372 of foreignearnings, which are deemed to be reinvested outside of the United States indefinitely. Upon distribution of those earnings in the formof dividends or otherwise, the Company would be subject to U.S. income taxes (subject to an adjustment for foreign tax credits), stateincome taxes, incremental foreign income taxes, and withholding taxes payable to various foreign countries. Determination of theamount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with itshypothetical calculation.During the fourth fiscal quarter of 2015, the Company recognized income tax expense, including U.S. federal and state income taxes,incremental foreign income taxes, and withholding taxes payable to foreign jurisdictions, on $300,000 of foreign earnings, (including$20,000 of 2015 earnings and $280,000 of earnings from prior periods). This tax expense was recognized in 2015 following anevaluation of the Company's anticipated domestic cash needs over the next several years and the Company's most efficient use ofliquidity, and with consideration of the amount of cash that can be repatriated to the U.S. efficiently with lesser withholding taxes inforeign jurisdictions. The Company repatriated $46,000 pursuant to this program in 2016.During 2014, the Company recognized income tax expense on foreign earnings in anticipation of a repatriation intended to pay$53,000 of borrowings on its revolving credit facility used for the Capella acquisition (see Note 2). The tax provision for the yearended December 31, 2014 included all U.S. federal and state income taxes, incremental foreign income taxes, and withholding taxespayable to foreign jurisdictions. That repatriation was completed in 2015.Net income taxes paid were $58,788, $49,301, and $62,051 for the years ended December 31, 2016, 2015, and 2014, respectively.See Note 19 for a discussion of the tax-related uncertainties for the pre-spin-off period of Vishay Precision Group, Inc. ("VPG"),which was spun off on July 6, 2010.F-26Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 5 – Income Taxes (continued)The following table summarizes changes in the liabilities associated with unrecognized tax benefits: Years ended December 31, 2016 2015 2014 Balance at beginning of year $23,527 $26,583 $45,877 Addition based on tax positions related to the current year 1,553 1,439 1,641 Addition based on tax positions related to prior years 1,047 1,894 6,484 Currency translation adjustments (96) (1,370) (1,387)Reduction based on tax positions related to prior years - - - Reduction for settlements (1,210) (4,879) (3,556)Reduction for lapses of statute of limitation (8,016) (140) (22,476)Balance at end of year $16,805 $23,527 $26,583 All of the unrecognized tax benefits of $16,805 and $23,527, as of December 31, 2016 and 2015, respectively, would reduce theeffective tax rate if recognized.The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2016 and2015, the Company had accrued interest and penalties related to the unrecognized tax benefits of $1,638 and $3,887, respectively.During the years ended December 31, 2016, 2015, and 2014, the Company recognized $542, $785, and $1,839, respectively, ininterest and penalties.The Company and its subsidiaries file U.S. federal income tax returns, as well as tax returns in multiple state and foreign jurisdictions. During the years ended December 31, 2016 and 2015, certain tax examinations were completed and certain statutes of limitationslapsed. The tax provision for those years includes adjustments related to the resolution of these matters, as reflected in the table above. The tax returns of other non-U.S. subsidiaries which are currently under examination include Germany (2009 through 2012), India(2004 through 2013), Israel (2013 through 2014), and Taiwan (2014). The Company and its subsidiaries also file income tax returnsin other taxing jurisdictions in the U.S. and around the world, many of which are still open to examinations.The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of tax payments that resultfrom such examinations. These events could cause large fluctuations in the balance sheet classification of current and non-currentunrecognized tax benefits. The Company believes that in the next 12 months it is reasonably possible that certain income taxexaminations will conclude or the statutes of limitation on certain income tax periods open to examination will expire, or both. Giventhe uncertainties described above, the Company can only determine an estimate of potential decreases in unrecognized tax benefitsranging from $57 to $6,866.F-27Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 6 – Long-Term DebtLong-term debt consists of the following: December31, 2016 December31, 2015 Credit facility $143,000 $190,000 Exchangeable unsecured notes, due 2102 - 38,642 Convertible senior debentures, due 2040 108,120 106,011 Convertible senior debentures, due 2041 55,442 54,424 Convertible senior debentures, due 2042 61,341 60,320 Deferred financing costs (10,880) (12,659) 357,023 436,738 Less current portion - - $357,023 $436,738 Credit FacilityThe Company maintains a credit facility with a consortium of banks led by JPMorgan Chase Bank, N.A., as administrative agent (the"Credit Facility"). On December 10, 2015, the Company entered into an Amended and Restated Credit Agreement, which provides anaggregate commitment of $640,000 of revolving loans available until December 10, 2020. The credit agreement initially becameeffective December 1, 2010 and was first amended and restated on August 8, 2013. The Credit Facility, as amended and restated, alsoprovides for the ability of Vishay to request up to $50,000 of incremental revolving commitments, subject to the satisfaction of certainconditions.Borrowings under the Amended and Restated Credit Facility bear interest at LIBOR plus an interest margin. The applicable interestmargin is based on Vishay's leverage ratio. Based on Vishay's current leverage ratio, borrowings bear interest at LIBOR plus 1.75%. Vishay also pays a fee, also based on its leverage ratio, on undrawn amounts. The undrawn commitment fee, based on Vishay'scurrent leverage ratio, is 0.35% per annum. The previous credit agreement required Vishay to pay facility fees on the entirecommitment amount.The Amended and Restated Credit Facility allows an unlimited amount of defined "Restricted Payments," which include cashdividends and share repurchases, provided the Company's pro forma leverage ratio is less than 2.25 to 1. If the Company's leverageratio is greater than 2.25 to 1, the Amended and Restated Credit Facility allows such payments up to $75,000 per annum (subject to acap 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, orarising under the laws of, any country other than the United States, assets located outside of the United States and deposit andsecurities accounts), of Vishay and certain significant subsidiaries located in the United States, and pledges of stock in certainsignificant domestic and foreign subsidiaries; and are guaranteed by certain significant subsidiaries. Certain of the Company'ssubsidiaries are permitted to borrow under the Credit Facility, subject to the satisfaction of specified conditions. Any borrowings bythese subsidiaries under the Credit Facility are guaranteed by Vishay and certain subsidiaries. The Credit Facility also limits or restrictsthe Company and its subsidiaries, from, among other things, incurring indebtedness, incurring liens on its respective assets, makinginvestments and acquisitions, making asset sales, and making other restricted payments (assuming the Company's leverage ratio isgreater than 2.25 to 1), and requires the Company to comply with other covenants, including the maintenance of specific financialratios.The Amended and Restated Credit Facility also removes certain restrictions related to intercompany transactions. These changes areexpected to enable the Company to streamline its complex subsidiary structure and provide greater operating flexibility.F-28Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 6 – Long-Term Debt (continued)The Credit Facility also contains customary events of default, including, but not limited to, failure to pay principal or interest, failure topay or default under other material debt, material misrepresentation or breach of warranty, violation of certain covenants, a change ofcontrol, the commencement of bankruptcy proceedings, the insolvency of Vishay or certain of its significant subsidiaries, and therendering of a judgment in excess of $25,000 against Vishay or certain of its significant subsidiaries. Upon the occurrence of an eventof default under the Credit Facility, the Company's obligations under the credit facility may be accelerated and the lendingcommitments under the credit facility terminated.At December 31, 2016 and 2015, there was $490,136 and $442,745, respectively, available under the Credit Facility. Letters of credittotaling $6,864 and $7,255 were outstanding at December 31, 2016 and 2015, respectively.Convertible Senior DebenturesVishay currently has three issuances of convertible senior debentures outstanding with generally congruent terms. The quarterly cashdividend program of the Company results in adjustments to the conversion rate and effective conversion price for each issuance of theCompany'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 debenturesfollowing the adjustment made to the conversion rate of the debentures on the ex-dividend date of the December 22, 2016 dividendpayment: Due 2040 Due 2041 Due 2042 Issuance date November 9,2010 May 13,2011 May 31,2012 Maturity date November15, 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 December 6, 2016 (per $1 principal amount) 76.1163 55.5456 89.4945 Effective conversion price effective December 6, 2016 (per share) $13.14 $18.00 $11.17 130% of the conversion price (per share) $17.08 $23.40 $14.52 Call date November20, 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% ofthe conversion price for a specified period; (2) the trading price of the debentures falls below 98% of the product of the sale price ofVishay's common stock and the conversion rate for a specified period; (3) Vishay calls any or all of the debentures for redemption, atany time prior to the close of business on the third scheduled trading day immediately preceding the redemption date; or (4) upon theoccurrence of specified corporate events.The convertible debentures due 2042 became convertible subsequent to the December 31, 2016 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 fourth fiscalquarter of 2016. The debentures due 2042 will remain convertible until April 1, 2017, at which time the conversion criteria will bereevaluated. At the direction of its Board of Directors, the Company intends, upon future conversion of any of the convertible seniordebentures, to repay the principal amounts of the convertible senior debentures in cash and settle any additional amounts in shares ofVishay common stock. The excess of the amount that the Company would pay to the holders of the debentures due 2042 uponconversion over the carrying value of the liability component of the debentures currently convertible has been reclassifed as temporaryequity on the consolidated financial statements. The Company intends to finance the principal amount of any converted debenturesusing borrowings under its credit facility. Accordingly, the debt component of the convertible debentures due 2042 continues to beclassified as a non-current liability on the consolidated balance sheets.Vishay must provide additional shares upon conversion if there is a "fundamental change" in the business as defined in the indenturegoverning the debentures.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Vishay may not redeem the debentures prior to the respective call dates. On or after the call date and prior to the maturity date, Vishaymay redeem for cash all or part of the debentures at a redemption price equal to 100% of the principal amount of the debentures to beredeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if the last reported sale price of Vishay's commonstock has been at least 150% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading dayperiod prior to the date on which Vishay provides notice of redemption.F-29Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 6 – Long-Term Debt (continued)GAAP requires an issuer to separately account for the liability and equity components of the instrument in a manner that reflects theissuer's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The resulting discount on thedebt 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 consolidatedbalance sheets as follows: Principalamount ofthedebentures Unamortizeddiscount Embeddedderivative Carryingvalue ofliabilitycomponent Equitycomponent(includingtemporaryequity) - netcarryingvalue 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 December 31, 2015 Due 2040 $275,000 (169,565) 576 $106,011 $110,094 Due 2041 $150,000 (96,014) 438 $54,424 $62,246 Due 2042 $150,000 (89,982) 302 $60,320 $57,874 Total $575,000 $(355,561) $1,316 $220,755 $230,214 Interest is payable on the debentures semi-annually at the cash coupon rate; however, the remaining debt discount is being amortized asadditional non-cash interest expense using an effective annual interest rate equal to the Company's estimated nonconvertible debtborrowing rate at the time of issuance. In addition to ordinary interest, contingent interest will accrue in certain circumstances relatingto 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 statements of operations for the years ended December 31: Contractualcouponinterest Non-cashamortizationof debtdiscount Non-cashamortizationof deferredfinancingcosts Non-cashchange invalue ofderivativeliability Totalinterestexpenserelated tothedebentures 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 2015 Due 2040 $6,188 2,120 88 50 $8,446 Due 2041 $3,375 1,078 47 97 $4,597 Due 2042 $3,375 1,066 54 64 $4,559 Total $12,938 $4,264 $189 $211 $17,602 Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.2014 Due 2040 $6,188 1,960 88 35 $8,271 Due 2041 $3,375 993 47 (8) $4,407 Due 2042 $3,375 990 54 41 $4,460 Total $12,938 $3,943 $189 $68 $17,138 F-30Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 6 – Long-Term Debt (continued)Exchangeable Unsecured Notes, due 2102On December 13, 2002, Vishay issued $105,000 in nominal (or principal) amount of its floating rate unsecured exchangeable notesdue 2102 in connection with an acquisition. The notes are governed by a note instrument and a put and call agreement dated December13, 2002. The notes could be put to Vishay in exchange for shares of its common stock and, under certain circumstances, could becalled by Vishay for similar consideration.Under the terms of the put and call agreement, by reason of the spin-off of VPG on July 6, 2010, Vishay was required to take action sothat the existing notes were deemed exchanged as of the date of the spin-off, for a combination of new notes of Vishay reflecting alower 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 retainedthe liability for an aggregate $95,042 principal amount of exchangeable notes effective July 6, 2010. The assumption of a portion ofthe 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 could have, at any time, put the notes to Vishay in exchange for shares ofVishay's common stock, and Vishay could have called the notes in exchange for cash or for shares of its common stock at any timeafter January 2, 2018. Subsequent to the spin-off of VPG, the put/call rate of the Vishay notes was $15.39 per share of common stock.The payment of quarterly cash dividends did not affect the put/call rate of the notes (See Note 7).In 2013, a holder of the notes exercised its option to exchange $56,400 principal amount of the notes for 3,664,729 shares of Vishaycommon stock. Following this transaction, Vishay had outstanding exchangeable unsecured notes with a principal amount of $38,642,which were exchangeable for an aggregate of 2,511,742 shares of Vishay common stock.On June 28, 2016 and March 31, 2016, pursuant to agreements dated June 13, 2016 and March 10, 2016, respectively, the Companyacquired from holders $12,436 and $26,206, respectively, principal amount of the Company's floating rate exchangeable unsecurednotes due 2102. The purchase price for these privately negotiated transactions was $11,449 and $22,595, respectively. Vishayrecognized gains on early extinguishment of debt of $4,597 presented as a separate line item in the accompanying consolidatedstatement of operations for the year ended December 31, 2016.Following the June 28, 2016 transaction, no exchangeable unsecured notes are outstanding.Other Borrowings InformationAggregate annual maturities of long-term debt, based on the terms stated in the respective agreements, are as follows:2017 $- 2018 - 2019 - 2020 143,000 2021 - Thereafter 575,000 The annual maturities of long-term debt are based on the amount required to settle the obligation. Accordingly, the discounts associatedwith the convertible debentures due 2040, due 2041, and due 2042 are excluded from the calculation of the annual maturities of long-term debt in the table above.At December 31, 2016, the Company had committed and uncommitted short-term credit lines with various U.S. and foreign banksaggregating approximately $11,000, with substantially no amounts borrowed. At December 31, 2015, the Company had committedand uncommitted short-term credit lines with various U.S. and foreign banks aggregating approximately $13,700, with substantially noamounts borrowed.Interest paid was $19,316, $19,134, and $18,394 for the years ended December 31, 2016, 2015, and 2014, respectively.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.See Note 18 for further discussion on the fair value of the Company's long-term debt.F-31Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 7 – Stockholders' EquityThe Company's Class B common stock carries 10 votes per share while the common stock carries 1 vote per share. Class B shares aretransferable only to certain permitted transferees while the common stock is freely transferable. Class B shares are convertible on aone-for-one basis at any time into shares of common stock. Transfers of Class B shares other than to permitted transferees result in theautomatic conversion of the Class B shares into common stock.The Board of Directors may only declare dividends or other distributions with respect to the common stock or the Class B commonstock if it grants such dividends or distributions in the same amount per share with respect to the other class of stock. Stock dividendsor distributions on any class of stock are payable only in shares of stock of that class. Shares of either common stock or Class Bcommon stock cannot be split, divided, or combined unless the other is also split, divided, or combined equally.In 2014, the Company's Board of Directors approved the initiation of a quarterly cash dividend program. Cash dividends were paidquarterly in 2016 and 2015 as follows:Record datePayment date Amount(per share) Record datePayment date Amount(per share) March 11, 2016March 29, 2016 $0.0625 March 12, 2015March 25, 2015 $0.0600 June 15, 2016June 29, 2016 $0.0625 June 11, 2015June 25, 2015 $0.0600 September 15, 2016September 29, 2016 $0.0625 September 2, 2015September 24, 2015 $0.0600 December 8, 2016December 22, 2016 $0.0625 December 3, 2015December 22, 2015 $0.0600 The Amended and Restated Credit Facility allows an unlimited amount of defined "Restricted Payments," which include cashdividends and share repurchases, provided the Company's pro forma leverage ratio is less than 2.25 to 1. If the Company's leverageratio is greater than 2.25 to 1, the Amended and Restated Credit Facility allows such payments up to $75,000 per annum (subject to acap of $225,000 for the term of the facility). The amount and timing of any future stock repurchases or cash dividends remains subjectto authorization of the Company's Board of Directors.At December 31, 2016, the Company had reserved shares of common stock for future issuance as follows:Restricted stock units outstanding 1,004,000 Phantom stock units outstanding 145,000 Common stock options outstanding 77,000 2007 Stock Incentive Program - available to grant 3,474,000 Convertible senior debentures, due 2040* 23,585,258 Convertible senior debentures, due 2041* 9,470,490 Convertible senior debentures, due 2042* 15,350,865 Conversion of Class B common stock 12,129,227 65,235,840 ___________________*At December 31, 2016, the convertible senior debentures due 2040, due 2041, and due 2042 are convertible into 20,931,983, 8,331,840, and 13,424,175shares, respectively, of Vishay common stock. The Company has reserved adequate shares to ensure it could issue the maximum amount of shares to bedelivered upon a make-whole fundamental change as defined in the indentures governing the debentures.F-32Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts) Note 8 – Other Income (Expense)The caption "Other" on the consolidated statements of operations consists of the following: Years ended December 31, 2016 2015 2014 Foreign exchange gain (loss) $292 $3,180 $(1,115)Interest income 4,264 4,397 4,939 Other 160 399 (1,335) $4,716 $7,976 $2,489 On August 12, 2015, a major explosion occurred in the port of Tianjin, China. Vishay owns and operates a diodes manufacturingfacility in Tianjin near the port. The shockwave of the explosion resulted in some damage to the facility and caused a temporaryshutdown. Full production resumed on September 8, 2015. As a result of this incident, the Company recorded, as a separate line on the accompanying consolidated statement of operations for theyear ended December 31, 2015, a loss of $5,350 related to these items, which represented the insurance deductible and certain costswhich were considered to be not recoverable.The Company's insurance coverage generally provides for replacement cost of damaged items. Any amount received in excess of thebook value is treated as a gain. The Company also had business interruption claims under its insurance policies. The Company didnot record any gains on damaged property or business interruption income until all contingencies were resolved.During 2016, the Company received proceeds totaling $13,406 under its various insurance policies, of which $4,911 is classified asproceeds from the sale of property and equipment on the accompanying consolidated statement of cash flows, and the remainder isconsidered cash flows from operating activities. The Company recorded, as a separate line on the accompanying consolidatedstatement of operations for the year ended December 31, 2016, a gain of $8,809, equal to the proceeds received less the costs incurredfor inventory, property, and equipment damage (at net book value) and related repair and clean-up costs.Note 9 – Other Accrued ExpensesOther accrued expenses consist of the following: December 31, 2016 2015 Sales returns and allowances $34,479 $33,086 Goods received, not yet invoiced 30,987 30,193 Accrued restructuring 12,655 26,791 Other 71,010 74,266 $149,131 $164,336 F-33Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 10 – Accumulated Other Comprehensive Income (Loss)The cumulative balance of each component of other comprehensive income (loss) and the income tax effects allocated to eachcomponent are as follows: Pension andother post-retirementactuarialitems Currencytranslationadjustment Unrealizedgain (loss) onavailable-for-salesecurities Total Balance at January 1, 2014 $(129,918) $190,998 $554 $61,634 Other comprehensive income before reclassifications (60,602) (106,295) 2,175 $(164,722)Tax effect 18,117 - (758) $17,359 Other comprehensive income before reclassifications, net of tax (42,485) (106,295) 1,417 $(147,363)Amounts reclassified out of AOCI 25,604 - (78) $25,526 Tax effect (8,961) - 24 $(8,937)Amounts reclassified out of AOCI, net of tax 16,643 - (54) $16,589 Net comprehensive income (loss) $(25,842) $(106,295) $1,363 $(130,774)Balance at December 31, 2014 $(155,760) $84,703 $1,917 $(69,140)Other comprehensive income before reclassifications 15,169 (80,106) (1,503) $(66,440)Tax effect (4,196) - 526 $(3,670)Other comprehensive income before reclassifications, net of tax 10,973 (80,106) (977) $(70,110)Amounts reclassified out of AOCI 12,869 - (680) $12,189 Tax effect (4,504) - 238 $(4,266)Amounts reclassified out of AOCI, net of tax 8,365 - (442) $7,923 Net comprehensive income (loss) $19,338 $(80,106) $(1,419) $(62,187)Balance at December 31, 2015 $(136,422) $4,597 $498 $(131,327)Other comprehensive income before reclassifications (32,398) (35,863) 941 $(67,320)Tax effect 9,815 - (329) $9,486 Other comprehensive income before reclassifications, net of tax (22,583) (35,863) 612 $(57,834)Amounts reclassified out of AOCI 91,014 - - $91,014 Tax effect 3,495 - - $3,495 Amounts reclassified out of AOCI, net of tax 94,509 - - $94,509 Net comprehensive income (loss) $71,926 $(35,863) $612 $36,675 Balance at December 31, 2016 $(64,496) $(31,266) $1,110 $(94,652)Reclassifications of pension and other post-retirement actuarial items out of AOCI, including the recognition of the settlement chargefor the termination of the Vishay Retirement Plan in 2016, are included in the computation of net periodic benefit cost (see Note11). Historically, valuation allowances were recorded against the deferred taxes associated with certain unrecognized pension andother postretirement actuarial items. Changes in estimates related to these valuation allowances are recorded in the statement ofoperations and do not affect accumulated other comprehensive income until the underlying pension or other postretirement benefit planis extinguished. As a result of the termination and settlement of the Vishay Retirement Plan, the Company recorded $34,853 ofadditional income tax expense and the related reclassification adjustment within accumulated other comprehensive income related tochanges in estimates recorded in 2010. The amount of unrealized gains (losses) on available-for-sale securities reclassified out of AOCI as a result of sales of securities held bythe Company's rabbi trust used to fund a deferred compensation plan was $0, $680, and $24 for the years ended December 31, 2016,2015, and 2014, respectively. These reclassifications are recorded as a component of compensation expense within Selling, General,and Administrative expenses on the consolidated statements of operations. The pre-tax amount of unrealized gains (losses) onavailable-for-sale securities reclassified out of AOCI as a result of sales of available-for-sale securities was $0, $0, and $54 for theyears ended December 31, 2016, 2015, and 2014, respectively. These reclassifications are recorded as a component of Other Incomeon the consolidated statements of operations. The tax effect of the reclassifications of unrealized gains (losses) on available-for-salesecurities is recorded as a component of Income Tax Expense on the consolidated statements of operations.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Other comprehensive income (loss) includes Vishay's proportionate share of other comprehensive income (loss) of nonconsolidatedsubsidiaries accounted for under the equity method.F-34Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement BenefitsThe Company maintains various retirement benefit plans. GAAP requires employers to recognize the funded status of a benefit plan,measured as the difference between plan assets at fair value and the benefit obligation, in its balance sheet. The recognition of thefunded status on the balance sheet requires employers to recognize actuarial items (such as actuarial gains and losses, prior servicecosts, and transition obligations) as a component of other comprehensive income, net of tax.The following table summarizes amounts recorded on the consolidated balance sheets associated with these various retirement benefitplans: December 31, 2016 2015 Included in "Other assets": U.S. pension plans $- $21,202 Non-U.S. pension plans 248 159 Total included in other assets $248 $21,361 Included in "Payroll and related expenses": U.S. pension plans $(35) $(51)Non-U.S. pension plans (6,405) (6,089)U.S. other postretirement plans (717) (701)Non-U.S. other postretirement plans (322) (224)Total included in payroll and related expenses $(7,479) $(7,065)Accrued pension and other postretirement costs: U.S. pension plans $(38,879) $(37,181)Non-U.S. pension plans (194,180) (203,361)U.S. other postretirement plans (6,930) (7,208)Non-U.S. other postretirement plans (6,303) (6,264)Other retirement obligations (11,497) (10,604)Total accrued pension and other postretirement costs $(257,789) $(264,618)Accumulated other comprehensive loss: U.S. pension plans $7,313 $76,141 Non-U.S. pension plans 82,360 73,216 U.S. other postretirement plans (2,287) (3,129)Non-U.S. other postretirement plans 1,474 1,446 Total accumulated other comprehensive loss* $88,860 $147,674 * - Amounts included in accumulated other comprehensive loss are presented in this table pre-tax.Defined Benefit Pension PlansU.S. Pension PlansThe Company maintains several defined benefit pension plans which covered most full-time U.S. employees. These include pensionplans which are "qualified" under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code,and "non-qualified" pension plans which provide defined benefits primarily to U.S. employees whose benefits under the qualifiedpension plan would be limited by ERISA and the Internal Revenue Code. Pension benefits earned are generally based on years ofservice and compensation during active employment.The Society of Actuaries Retirement Plans Experience Committee issued new mortality tables and a new mortality improvement scalein 2014. The new mortality tables and mortality improvement scale are based on a recent study of mortality experience in the UnitedStates, and reflect improved retiree longevity. The use of the new mortality tables and mortality improvement scale increased theCompany's projected benefit obligations by approximately $24,000 in 2014 and will increase future net periodic pension cost. Anupdated mortality improvement scale issued by the Society of Actuaries in 2015 reduced the Company's benefit obligation byapproximately $8,000, which mitigates the increased future net periodic pension cost resulting from the new mortality tables. Anupdated mortality improvement scale issued by the Society of Actuaries in 2016 did not have a material effect.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.F-35Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Qualified U.S. Pension PlansThe qualified U.S. pension plans historically included both contributory and non-contributory plans. The Company's principalqualified U.S. pension plan (the Vishay Retirement Plan) was funded through Company and participant contributions to an irrevocabletrust fund. The Company's other qualified U.S. pension plans, which were assumed as a result of past acquisitions, were funded onlythrough Company contributions.In 2008, the Company adopted amendments to the Vishay Retirement Plan such that effective January 1, 2009, the plan was frozen.Pursuant to these amendments, no new employees could participate in the plan, no further participant contributions were required orpermitted, and no further benefits accrued after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid toemployees upon retirement, and the Company has made additional cash contributions to the plan to fund this accumulated benefitobligation. To mitigate the loss in benefits of these employees, effective January 1, 2009, the Company increased the Company-matchportion of its 401(k) defined contribution savings plan for employees impacted by the pension freeze.The Company's other qualified U.S. pension plans had all been effectively frozen in prior years. All of the Company's qualified U.S.pension plans have been merged into the Vishay Retirement Plan.During the third fiscal quarter of 2014, the Company executed two partial-settlement transactions to reduce the risk associated with itsU.S. qualified pension obligations. These transactions included the purchase of annuity contracts for approximately 700 participantspursuant to an arrangement inherited in a past acquisition and a special limited-time voluntary lump-sum payment offer to certainformer employees who were deferred vested participants of the plan not currently receiving periodic payments of their pension benefit.A total of 800 participants accepted the voluntary lump-sum offer. The plan is no longer obligated to pay any benefits to the 1,500participants covered by these two settlement transactions. These former participants represented approximately 23% of the totalparticipants prior to executing these transactions. These partial-settlement transactions were funded entirely with plan assets andresulted in the recognition of non-cash settlement charges aggregating $15,588, representing previously unrecognized actuarial items.These non-cash charges are presented on a separate line in the accompanying consolidated statements of operations.In the second fiscal quarter of 2015, the Company began the process of terminating the Vishay Retirement Plan. During the third fiscalquarter of 2016, the Company received a favorable determination letter from the U.S. Internal Revenue Service ("IRS"), and met allother applicable IRS and Pension Benefit Guarantee Corporation requirements. The termination and settlement occurred in December2016. Plan participants had their benefits either converted into a lump sum cash payment or an annuity contract placed with aninsurance carrier. The settlement resulted in a non-cash charge of $79,321 to recognize the unrecognized actuarial items related to theVishay Retirement Plan recorded in accumulated other comprehensive income. These non-cash charges are presented on a separateline in the accompanying consolidated statements of operations. The termination and settlement required no additional cashcontributions. Excess plan assets will be transferred to a qualified defined contribution retirement plan, and are presented on theaccompanying reconciliation as a negative Company contribution.F-36Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Non-qualified U.S. Pension PlansThe Company's principal non-qualified U.S. pension plan (the Vishay Non-qualified Retirement Plan) was a contributory pension plandesigned to provide similar defined benefits to covered U.S. employees whose benefits under the Vishay Retirement Plan would belimited by ERISA and the Internal Revenue Code. The Vishay Non-qualified Retirement Plan is identical in construction to the VishayRetirement Plan, except that the plan is not qualified under ERISA.The Vishay Non-qualified Retirement Plan, like all non-qualified plans, is considered to be unfunded. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claimsunder certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assetsheld in trust related to the non-qualified pension plan were $22,896 and $21,137 at December 31, 2016 and 2015, respectively.In 2008, the Company adopted amendments to the Vishay Non-Qualified Retirement Plan such that effective January 1, 2009, the planwas frozen. Pursuant to these amendments, no new employees may participate in the plans, no further participant contributions wererequired or permitted, and no further benefits shall accrue after December 31, 2008. Benefits accumulated as of December 31, 2008will be paid to employees upon retirement, and the Company will likely need to make additional cash contributions to the rabbi trust tofund this accumulated benefit obligation. To mitigate the loss in benefits of these employees, effective January 1, 2009, the Companyincreased the Company-match portion of its 401(k) defined contribution savings plan for employees impacted by the pension freeze.The Company also maintains other pension plans which provide supplemental defined benefits primarily to former U.S. employeeswhose benefits under qualified pension plans were limited by ERISA. These non-qualified plans are all non-contributory plans, and areconsidered to be unfunded.In 2004, the Company entered into an employment agreement with Dr. Felix Zandman, its Executive Chairman and then-ChiefExecutive Officer. Pursuant to this agreement, the Company is providing an annual retirement benefit of approximately $614 to hissurviving spouse. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund benefit payments under this plan.Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they areaccounted for as other noncurrent assets. Assets held in trust related to this non-qualified pension plan were $2,389 and $2,995 atDecember 31, 2016 and 2015, respectively.In 2010, the Compensation Committee determined to modify Dr. Gerald Paul's and the Compensation Committee recommended to theBoard of Directors, and the Board of Directors determined to modify Mr. Marc Zandman's employment arrangements such that uponany termination (other than for cause) after attaining age 62, the executive would be entitled to the same payments and benefits hewould have received if his respective employment was terminated by Vishay without cause or by the respective executive for goodreason. These modifications were included in formal amendments signed on August 8, 2010. The expense associated with themodifications to the employment arrangements of Dr. Gerald Paul and Mr. Marc Zandman effectively represents a defined retirementbenefit that will be recognized over the remaining service period of the individuals.Non-U.S. Pension PlansThe Company provides pension and similar benefits to employees of certain non-U.S. subsidiaries consistent with local practices.Pension benefits earned are generally based on years of service and compensation during active employment.F-37Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to U.S. and non-U.S.pension plans: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Change in benefit obligation: Benefit obligation at beginning of year $274,122 $260,554 $301,475 $289,663 Service cost - 3,291 - 3,265 Interest cost 11,788 5,475 11,657 5,636 Plan amendments - 291 - 267 Transfer from equity affiliate - 358 - - Actuarial (gains) losses 19,916 17,202 (23,099) (1,871)Benefits paid (15,625) (12,607) (15,911) (12,230)Curtailments and settlements (251,287) - - - Currency translation - (8,137) - (24,176)Benefit obligation at end of year $38,914 $266,427 $274,122 $260,554 Change in plan assets: Fair value of plan assets at beginning of year $258,092 $51,263 $273,644 49,156 Actual return on plan assets 14,068 2,588 (5,439) 1,159 Transfer from equity affiliate - 358 - - Company contributions (5,248) 27,311 5,798 15,621 Benefits paid (15,625) (12,607) (15,911) (12,230)Curtailments and settlements (251,287) - - - Currency translation - (2,823) - (2,443)Fair value of plan assets at end of year $- $66,090 $258,092 $51,263 Funded status at end of year $(38,914) $(200,337) $(16,030) $(209,291)The plan assets are stated at fair value. See Note 18 for further discussion of the valuation of the plan assets.Amounts recognized on the consolidated balance sheet consist of the following: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Other assets $- $248 $21,202 $159 Accrued benefit liability - currrent (35) (6,405) (51) (6,089)Accrued benefit liability - non-current (38,879) (194,180) (37,181) (203,361)Accumulated other comprehensive loss 7,313 82,360 76,141 73,216 $(31,601) $(117,977) $60,111 $(136,075)F-38Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Actuarial items consist of the following: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Unrecognized net actuarial loss $6,241 $82,360 $74,926 $73,216 Unamortized prior service cost 1,072 - 1,215 - $7,313 $82,360 $76,141 $73,216 The following table sets forth additional information regarding the projected and accumulated benefit obligations: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Accumulated benefit obligation, all plans $38,914 $247,838 $274,122 $242,054 Plans for which the accumulated benefit obligation exceeds planassets: Projected benefit obligation $38,914 $253,390 $37,232 $247,960 Accumulated benefit obligation 38,914 240,793 37,232 234,910 Fair value of plan assets - 56,649 - 39,463 The following table sets forth the components of net periodic pension cost: Years ended December 31, 2016 2015 2014 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Service cost net of employeecontributions $- $3,291 $- $3,265 $- $3,275 Interest cost 11,788 5,475 11,657 5,636 13,821 8,555 Expected return on plan assets (11,302) (2,117) (13,566) (1,798) (14,892) (2,109)Amortization of actuarial losses 6,513 4,733 8,175 5,131 7,166 2,700 Amortization of prior service cost(credit) 144 261 64 (282) (56) (5)Curtailment and settlement losses 79,321 841 - 452 15,588 1,137 Net periodic pension cost $86,464 $12,484 $6,330 $12,404 $21,627 $13,553 F-39Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)See Note 10 for the pretax, tax effect and after tax amounts included in other comprehensive income during the years ended December31, 2016, 2015, and 2014. The estimated actuarial items for the defined benefit pensions plans that will be amortized fromaccumulated other comprehensive loss into net periodic pension cost during 2017 is $6,400.The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: 2016 2015 U.S. Plans Non-U.S.Plans U.S. Plans Non-U.S.Plans Discount rate 4.25% 1.76% 4.50% 2.30%Rate of compensation increase 0.00% 2.12% 0.00% 1.99%The following weighted average assumptions were used to determine the net periodic pension costs for the years ended December 31,2016 and 2015: Years ended December 31, 2016 2015 U.S. Plans Non-U.S.Plans U.S. Plans Non-U.S.Plans Discount rate 4.50% 2.30% 4.00% 2.15%Rate of compensation increase 0.00% 1.99% 0.00% 1.97%Expected return on plan assets 4.50% 3.38% 5.00% 3.86%The plans' expected return on assets is based on management's expectations of long-term average rates of return to be achieved by theunderlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the assetclasses in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capitalmarket conditions.The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higherreturn, more volatile equity securities, and lower return, less volatile fixed income securities and is adjusted for the expected duration ofthe obligation and the funded status of the plan. At December 31, 2015, the Company's U.S. defined benefit plans were invested indiversified portfolios of fixed income securities and cash due to the pending termination and settlement of the plans. Investmentallocations are made across a range of securities, maturities and credit quality. The Company's non-U.S. defined benefit planinvestments are based on local laws and customs. Most plans invest in cash and local government fixed income securities, althoughplans in certain countries have investments in equity securities. The plans do not invest in securities of Vishay or its subsidiaries. Negative investment returns could ultimately affect the funded status of the plans, requiring additional cash contributions. See Note 18for further information on the fair value of the plan assets by asset category.Estimated future benefit payments are as follows: U.S.Plans Non-U.S.Plans 2017 $1,765 $14,754 2018 1,776 13,659 2019 7,664 14,860 2020 2,929 14,373 2021 2,959 14,624 2022-2026 15,435 77,493 The Company's anticipated 2017 contributions for defined benefit pension plans will approximate the expected benefit paymentsdisclosed above.F-40Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Other Postretirement BenefitsIn the U.S., the Company maintains unfunded non-pension postretirement plans, including medical benefits for certain executives andtheir surviving spouses, which are funded as costs are incurred. The Company also maintains two unfunded non-pensionpostretirement plans at two European subsidiaries.The following table sets forth a reconciliation of the benefit obligation, plan assets, and accrued benefit cost related to U.S. and non-U.S. non-pension defined benefit postretirement plans: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Change in benefit obligation: Benefit obligation at beginning of year $7,909 $6,488 $8,677 $7,283 Service cost 126 268 121 273 Interest cost 340 143 333 147 Plan curtailments and settlements - - - (25)Actuarial (gains) losses (25) 171 (550) (50)Benefits paid (703) (221) (672) (389)Currency translation - (224) - (751)Benefit obligation at end of year $7,647 $6,625 $7,909 $6,488 Fair value of plan assets at end of year $- $- $- $- Funded status at end of year $(7,647) $(6,625) $(7,909) $(6,488)Amounts recognized on the consolidated balance sheet consist of the following: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Accrued benefit liability - current $(717) $(322) $(701) $(224)Accrued benefit liability - non-current (6,930) (6,303) (7,208) (6,264)Accumulated other comprehensive income (2,287) 1,474 (3,129) 1,446 $(9,934) $(5,151) $(11,038) $(5,042)F-41Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Actuarial items consist of the following: December 31, 2016 December 31, 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Unrecognized net actuarial loss (gain) $(1,303) $1,474 $(1,308) $1,446 Unamortized prior service (credit) cost (984) - (1,821) - $(2,287) $1,474 $(3,129) $1,446 The following table sets forth the components of net periodic benefit cost: Years ended December 31, 2016 2015 2014 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Service cost $126 $268 $121 $273 $115 $307 Interest cost 340 143 333 147 351 244 Amortization of actuarial (gains)losses (30) 68 90 76 (140) 38 Amortization of prior service credit (837) - (837) - (824) - Net periodic benefit cost (benefit) $(401) $479 $(293) $496 $(498) $589 The estimated actuarial items for the other postretirement benefit plans that will be amortized from accumulated other comprehensiveloss into net periodic benefit cost during 2017 are not material and approximate the amounts amortized in 2016.The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years: 2016 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Discount rate 4.25% 1.50% 4.50% 2.31%Rate of compensation increase 0.00% 2.58% 0.00% 2.69%The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31,2016 and 2015: Years ended December 31, 2016 2015 U.S.Plans Non-U.S.Plans U.S.Plans Non-U.S.Plans Discount rate 4.50% 2.31% 4.00% 2.25%Rate of compensation increase 0.00% 2.69% 0.00% 2.87%The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirementbenefit obligation is not material.F-42Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 11 – Pensions and Other Postretirement Benefits (continued)Estimated future benefit payments are as follows: U.S.Plans Non-U.S.Plans 2017 $717 $322 2018 709 275 2019 699 378 2020 681 580 2021 656 414 2022-2026 2,695 2,456 As the plans are unfunded, the Company's anticipated contributions for 2017 are equal to its estimated benefits payments.Other Retirement ObligationsThe Company participates in various other defined contribution and government-mandated retirement plans based on local law orcustom. The Company periodically makes required contributions for certain of these plans, whereas other plans are unfundedretirement bonus plans which will be paid at the employee's retirement date. At December 31, 2016 and 2015, the consolidatedbalance sheets include $11,497 and $10,604, respectively, within accrued pension and other postretirement costs related to these plans.The Company's U.S. employees are eligible to participate in 401(k) savings plans, which provide for Company matching undervarious formulas. The Company's matching expense for the plans was $5,039, $5,369, and $5,285 for the years ended December 31,2016, 2015, and 2014, respectively. No material amounts are included on the consolidated balance sheets at December 31, 2016 and2015 related to unfunded 401(k) contributions.Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2016, 2015, and 2014, theseemployees could defer a portion of their compensation until retirement, or elect shorter deferral periods. The Company maintains aliability within other noncurrent liabilities on its consolidated balance sheets related to these deferrals. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund payments under this plan. Rabbi trust assets are subject to creditor claims undercertain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held intrust related to the deferred compensation plan at December 31, 2016 and 2015 were approximately $16,632 and $15,717,respectively.F-43Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 12 – Stock-Based CompensationThe Company has various stockholder-approved programs which allow for the grant of share-based compensation to officers,employees, and non-employee directors.The amount of compensation cost related to stock-based payment transactions is measured based on the grant-date fair value of theequity instruments issued. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricingmodel. The Company determines compensation cost for restricted stock units ("RSUs"), phantom stock units, and restricted stockbased on the grant-date fair value of the underlying common stock adjusted for expected dividends paid over the required vestingperiod for non-participating awards. Compensation cost is recognized over the period that an officer, employee, or non-employeedirector provides service in exchange for the award.The following table summarizes share-based compensation expense recognized: Years ended December 31, 2016 2015 2014 Restricted stock units $6,263 $3,705 $2,261 Phantom stock units 117 141 131 Stock options - - - Total $6,380 $3,846 $2,392 The Company recognizes compensation cost for RSUs that are expected to vest and records cumulative adjustments in the period thatthe expectation changes.The following table summarizes unrecognized compensation cost and the weighted average remaining amortization periods atDecember 31, 2016 (amortization periods in years): UnrecognizedCompensationCost WeightedAverageRemainingAmortizationPeriods Restricted stock units $2,413 0.7 Phantom stock units - 0.0 Stock options - 0.0 Total $2,413 The Company currently expects all performance-based RSUs to vest and all of the associated unrecognized compensation cost forperformance-based RSUs presented in the table above to be recognized.F-44Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 12 – Stock-Based Compensation (continued)2007 Stock Incentive ProgramThe Company's 2007 Stock Incentive Program (the "2007 Program"), as amended and restated, was approved by Vishay'sstockholders at Vishay's Annual Meeting of Stockholders on May 20, 2014. The 2007 Program permits the grant of up to 6,500,000shares of restricted stock, unrestricted stock, RSUs, stock options, and phantom stock units, to officers, employees, and non-employeedirectors of the Company. Such instruments are available for grant until May 20, 2024.At December 31, 2016, the Company has reserved 3,474,000 shares of common stock for future grants of equity awards pursuant tothe 2007 Program. If any outstanding awards are forfeited by the holder or cancelled by the Company, the underlying shares would beavailable for regrant to others.Restricted Stock UnitsEach RSU entitles the recipient to receive a share of common stock when the RSU vests.RSU activity for the years ended December 31, 2016, 2015, and 2014 is presented below (number of RSUs in thousands): Years ended December 31, 2016 2015 2014 Number ofRSUs WeightedAverageGrant-dateFair Value Number ofRSUs WeightedAverageGrant-dateFair Value Number ofRSUs WeightedAverageGrant-dateFair Value Outstanding: Beginning of year 1,028 $13.24 1,147 $12.75 1,059 $13.40 Granted 353 11.35 349 13.60 336 13.48 Vested* (155) 12.27 (182) 11.41 (146) 15.87 Cancelled or forfeited (222) 13.19 (286) 12.89 (102) 17.45 End of year 1,004 $12.74 1,028 $13.24 1,147 $12.75 Expected to vest 1,004 806 649 * The number of RSUs vested includes shares that the Company withheld on behalf of employees to satisfy statutory tax withholding requirements.The number of performance-based RSUs scheduled to vest increases ratably based on the achievement of defined performance criteriabetween the established target and maximum levels. RSUs with performance-based vesting criteria are expected to vest as follows(number of RSUs in thousands):Vesting Date Expected toVest Not Expectedto Vest Total January 1, 2017** 192 - 192 January 1, 2018 202 - 202 January 1, 2019 213 - 213 ** The performance vesting criteria for the performance-based RSUs with a vesting date of January 1, 2017 were achieved.In the event of (i) any termination (other than for cause) after attaining retirement age (as defined in the respective executive'semployment arrangement), the executive's outstanding RSUs shall immediately vest and the outstanding performance-based RSUsshall vest on their normal vesting date to the extent applicable performance criteria are realized; and (ii) a change of control of Vishay,all of such executive's outstanding RSUs and performance-based RSUs shall immediately vest. In the event of voluntary terminationby the executive prior to attaining retirement age or termination for cause, the executive's outstanding RSUs and performance-basedRSUs will be forfeited.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.F-45Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 12 – Stock-Based Compensation (continued)Phantom Stock UnitsThe 2007 Program authorizes the grant of phantom stock units to the extent provided for in the Company's employment agreementswith certain executives. Each phantom stock unit entitles the recipient to receive a share of common stock at the individual'stermination of employment or any other future date specified in the applicable employment agreement. Phantom stock units participatein dividend distribution on the same basis as the Company's common stock and Class B common stock. Dividend equivalents areissued in the form of additional units of phantom stock. The phantom stock units are fully vested at all times.The following table summarizes the Company's phantom stock units activity for the years ended December 31, 2016, 2015, and 2014(number of phantom stock units in thousands): Years ended December 31, 2016 2015 2014 NumberofPhantomStock Units Grant-dateFair Valueper Unit NumberofPhantomStock Units Grant-dateFair Valueper Unit NumberofPhantomStock Units Grant-dateFair Valueper Unit Outstanding: Beginning of year 132 119 107 Granted 10 $11.71 10 $14.09 10 $13.12 Dividend equivalents issued 3 3 2 Redeemed for common stock - - - End of year 145 132 119 F-46Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 12 – Stock-Based Compensation (continued)Stock OptionsIn addition to stock options outstanding pursuant to the 2007 Program, during the periods presented, the Company had stock optionsoutstanding under previous stockholder-approved stock option programs.Under the 1998 Stock Option Program, certain executive officers and key employees were granted options. On March 16, 2008, thestockholder approval for the 1998 Stock Option Program expired. While no additional options may be granted pursuant to this plan, atDecember 31, 2016, 70,000 options issued under the 1998 Program remain outstanding and may be exercised in future periods.As of December 31, 2016, 77,000 options were outstanding. As of December 31, 2015 and 2014, 105,000 options were outstanding.Since December 31, 2013, all outstanding options have vested and are exercisable. As of December 31, 2016, the weighted-averageremaining contractual life of all exercisable options is 0.39 years and the exercise price of all exercisable options is $16.29.The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. There were nooptions granted in 2016, 2015, or 2014.The pretax aggregate intrinsic value (the difference between the closing stock price on the last trading day of 2016 of $16.20 per shareand the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had alloption holders exercised their options on December 31, 2016 was zero because all outstanding options have exercise prices in excessof market value. This amount changes based on changes in the market value of the Company's common stock. During the yearsended December 31, 2016 and 2014, 27,619 and 4,337 options were exercised, respectively. The weighted average exercise prices forthe options exercised in 2016 and 2014 were $12.90 and $11.62, respectively. The total intrinsic value of options exercised during theyears ended December 31, 2016 and 2014 was $85 and $18, respectively. No options were exercised during the year endedDecember 31, 2015.F-47Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 13 – Commitments and ContingenciesLeasesThe Company uses various leased facilities and equipment in its operations. In the normal course of business, operating leases aregenerally renewed or replaced by other leases. Certain operating leases include escalation clauses.Total rental expense under operating leases was $27,431, $27,210, and $28,088 for the years ended December 31, 2016, 2015, and2014, respectively.Future minimum lease payments for operating leases with initial or remaining noncancelable lease terms in excess of one year are asfollows:2017 $24,851 2018 13,093 2019 8,284 2020 5,597 2021 4,182 Thereafter 10,697 Environmental MattersThe Company is subject to various federal, state, local, and foreign laws and regulations governing environmental matters, includingthe use, discharge, and disposal of hazardous materials. The Company's manufacturing facilities are believed to be in substantialcompliance with current laws and regulations. Complying with current laws and regulations has not had a material adverse effect onthe Company's financial condition.The Company has engaged environmental consultants and attorneys to assist management in evaluating potential liabilities related toenvironmental matters. Management assesses the input from these consultants along with other information known to the Company inits effort to continually monitor these potential liabilities. Management assesses its environmental exposure on a site-by-site basis,including those sites where the Company has been named as a "potentially responsible party." Such assessments include theCompany's share of remediation costs, information known to the Company concerning the size of the hazardous waste sites, their yearsof operation, and the number of past users and their financial viability.The Company has accrued environmental liabilities of $7,783 as of December 31, 2016 relating to environmental matters related to itsGeneral Semiconductor subsidiary. The Company has also accrued approximately $7,675 at December 31, 2016 for otherenvironmental matters. The liabilities recorded for these matters total $15,458, of which $8,623 is included in other accrued liabilitieson the consolidated balance sheet, and $6,835 is included in other noncurrent liabilities on the consolidated balance sheet.While the ultimate outcome of these matters cannot be determined, management does not believe that the final disposition of thesematters will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flowsbeyond the amounts previously provided for in the consolidated financial statements. The Company's present and past facilities havebeen in operation for many years. These facilities have used substances and have generated and disposed of wastes which are or mightbe considered hazardous. Therefore, it is possible that additional environmental issues may arise in the future, which the Companycannot now predict.LitigationThe Company is a party to various claims and lawsuits arising in the normal course of business. The Company is of the opinion thatthese litigations or claims will not have a material negative effect on its consolidated financial position, results of operations, or cashflows.Semiconductor Foundry AgreementsThe Company's Siliconix subsidiary maintains long-term foundry agreements with subcontractors to ensure access to external front-endcapacity.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Since 2004, Siliconix has maintained long-term foundry arrangements for semiconductor manufacturing with Tower Semiconductor,pursuant to which Siliconix transferred certain technology to Tower Semiconductor and committed to purchase a minimum amount ofsemiconductor wafers. The Company has minimum purchase commitments pursuant to the current arrangement of $37,010 and$16,786 for 2017 and 2018, respectively. The minimum purchase commitments are based on a 18-month rolling forecast, andaccordingly, the 2018 minimum purchase commitments will likely increase. The Company has the option to purchase wafers inaddition to the minimum commitment and, accordingly, actual purchases may be different than the amounts disclosed above.F-48Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 13 – Commitments and Contingencies (continued)Product Quality ClaimsThe Company is a party to various product quality claims in the normal course of business. The Company provides warranties for itsproducts which offer replacement of defective products. Annual warranty expenses are generally not significant. The Companyperiodically receives claims which arise from consequential damages which result from a customer's installation of an alleged defectiveVishay component into the customer's product. Although not covered by its stated warranty, Vishay may occasionally reimburse thecustomer for these consequential damages in limited circumstances.Executive Employment AgreementsThe Company has employment agreements with certain of its senior executives. These employment agreements provide incrementalcompensation in the event of termination. The Company does not provide any severance or other benefits specifically upon a changein control.F-49Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 14 – Current Vulnerability Due to Certain ConcentrationsMarket ConcentrationsWhile no single customer comprises greater than 10% of consolidated net revenues, a material portion of the Company's revenues arederived from the worldwide industrial, automotive, telecommunications, and computing markets. These markets have historicallyexperienced wide variations in demand for end products. If demand for these end products should decrease, the producers thereofcould reduce their purchases of the Company's products, which could have an adverse effect on the Company's results of operationsand financial position.While no single customer comprises greater than 10% of consolidated net revenues, certain subsidiaries and product lines havecustomers which comprise greater than 10% of the subsidiary's or product line's net revenues. The loss of one of these customerscould have a material effect on the results of operations of the subsidiary or product line and financial position of the subsidiary, whichcould result in an impairment charge which could be material to the Company's consolidated financial statements.Credit Risk ConcentrationsFinancial instruments with potential credit risk consist principally of cash and cash equivalents, short-term investments, accountsreceivable, and notes receivable. Concentrations of credit risk with respect to receivables are generally limited due to the Company'slarge number of customers and their dispersion across many countries and industries. As of December 31, 2016, one customercomprised 15.4% of the Company's accounts receivable balance. This customer comprised 14.6% of the Company's accountsreceivable balance as of December 31, 2015. No other customer comprised greater than 10% of the Company's accounts receivablebalance as of December 31, 2016 or December 31, 2015. The Company continually monitors the credit risks associated with itsaccounts receivable and adjusts the allowance for uncollectible accounts accordingly. The credit risk exposure associated with theaccounts receivable is limited by the allowance and is not considered material to the financial statements.The Company maintains cash and cash equivalents and short-term investments with various major financial institutions. The Companyis exposed to credit risk related to the potential inability to access liquidity in financial institutions where its cash and cash equivalentsand short-term investments are concentrated. As of December 31, 2016, the following financial institutions held over 10% of theCompany's combined cash and cash equivalents and short-term investments balance:Bank of Tokyo Mitsubishi* 12.4%Bank Leumi* 10.6%Deutsche Bank 10.6%___________________________________________________*Participant in Credit Facility Sources of SuppliesMany of the Company's products require the use of raw materials that are produced in only a limited number of regions around theworld or are available from only a limited number of suppliers. The Company's consolidated results of operations may be materiallyand adversely affected if there are significant price increases for these raw materials, the Company has difficulty obtaining these rawmaterials, or the quality of available raw materials deteriorates. For periods in which the prices of these raw materials are rising, theCompany may be unable to pass on the increased cost to the Company's customers, which would result in decreased margins for theproducts in which they are used. For periods in which the prices are declining, the Company may be required to write down itsinventory carrying cost of these raw materials which, depending on the extent of the difference between market price and its carryingcost, could have a material adverse effect on the Company's net earnings.Vishay is a major consumer of the world's annual production of tantalum. Tantalum, a metal purchased in powder or wire form, is theprincipal material used in the manufacture of tantalum capacitors. There are few suppliers that process tantalum ore into capacitor gradetantalum powder.From time to time, there have been short-term market shortages of raw materials utilized by the Company. While these shortages havenot historically adversely affected the Company's ability to increase production of products containing these raw materials, they havehistorically resulted in higher raw material costs for the Company. The Company cannot assure that any of these market shortages inthe future would not adversely affect the Company's ability to increase production, particularly during periods of growing demand forthe Company's products.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.F-50Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 14 – Current Vulnerability Due to Certain Concentrations (continued)Certain raw materials used in the manufacture of the Company's products, such as gold, copper, palladium, and other metals, are tradedon active markets and can be subject to significant price volatility. To ensure adequate supply and to provide cost certainty, theCompany's policy is to enter into short-term commitments to purchase defined portions of annual consumption of the raw materialsutilized by the Company if market prices decline below budget. If after entering into these commitments, the market prices for theseraw materials decline, the Company must recognize losses on these adverse purchase commitments.Recently enacted rules in the U.S. on conflict minerals, which include tantalum, tungsten, tin, and gold, all of which are used in theCompany's products, could result in increased prices and decreased supply of conflict minerals, which could negatively affect theCompany's consolidated results of operations.Geographic ConcentrationThe Company has operations outside the United States, and approximately 76% of revenues earned during 2016 were derived fromsales to customers outside the United States. Additionally, as of December 31, 2016, $1,084,453 of the Company's cash and cashequivalents and short-term investments were held by subsidiaries outside of the United States. Some of the Company's products areproduced and cash and cash equivalents and short-term investments are held in countries which are subject to risks of political,economic, and military instability. This instability could result in wars, riots, nationalization of industry, currency fluctuations, andlabor unrest. These conditions could have an adverse impact on the Company's ability to operate in these regions and, depending onthe extent and severity of these conditions, could materially and adversely affect the Company's overall financial condition, operatingresults, and ability to access its liquidity when needed.As of December 31, 2016 the Company's cash and cash equivalents and short-term investments were concentrated in the followingcountries:Germany 40.6%Israel 24.0%United States 9.4%The Republic of China (Taiwan) 8.0%Singapore 7.7%People's Republic of China 5.9%Other Asia 2.2%Other Europe 1.6%Other 0.6% Certain of the Company's non-U.S. subsidiaries have cash and cash equivalents and short-term investments deposited in U.S. financialinstitutions.Vishay has been in operation in Israel for 46 years. The Company has never experienced any material interruption in its operationsattributable to these factors, in spite of several Middle East crises, including wars.F-51Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 15 –Segment and Geographic DataVishay is a global manufacturer and supplier of electronic components. Vishay operates, and its chief operating decision maker makesstrategic and operating decisions with regards to assessing performance and allocating resources based on, five reporting segments:MOSFETs, Diodes, Optoelectronic Components, Resistors & Inductors, and Capacitors. These segments represent groupings ofproduct lines based on their functionality:● Metal oxide semiconductor field effect transistors ("MOSFETs") function as solid state switches to control power.● Diodes route, regulate, and block radio frequency, analog, and power signals; protect systems from surges or electrostaticdischarge damage; or provide electromagnetic interference filtering.● Optoelectronic components emit light, detect light, or do both.● Resistors and inductors both impede electric current. Resistors are basic components used in all forms of electronic circuitry toadjust and regulate levels of voltage and current. Inductors use an internal magnetic field to change alternating current phase andresist alternating current.● Capacitors store energy and discharge it when needed.Vishay's reporting segments generate substantially all of their revenue from product sales to the industrial, automotive,telecommunications, computing, consumer products, power supplies, military and aerospace, and medical end markets. A smallportion of revenues are from royalties.The Company evaluates business segment performance on operating income, exclusive of certain items ("segment operating income"). Only dedicated, direct selling, general, and administrative expenses of the segments are included in the calculation of segmentoperating income. The Company's calculation of segment operating income excludes such selling, general, and administrative costs asglobal operations, sales and marketing, information systems, finance and administration groups, as well as restructuring and severancecosts, goodwill and long-lived asset impairment charges, and other items. Management believes that evaluating segment performanceexcluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. These itemsrepresent reconciling items between segment operating income and consolidated operating income. Business segment assets are theowned or allocated assets used by each business.The Company also regularly evaluates gross profit by segment to assist in the analysis of consolidated gross profit. The Companyconsiders segment operating income to be the more important metric because it more fully captures the business operations of thesegments.F-52Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 15 –Segment and Geographic Data (continued)The following tables set forth business segment information: MOSFETs Diodes OptoelectronicComponents Resistors &Inductors Capacitors Corporate /Other Total Year ended December 31, 2016: Product sales $406,336 $553,920 $272,126 $753,578 $337,212 $- $2,323,172 Royalty revenues - - - 259 - - $259 Total revenue $406,336 $553,920 $272,126 $753,837 $337,212 $- $2,323,431 Gross Profit $58,155 $134,937 $87,022 $222,786 $66,883 $- $569,783 Segment Operating Income $22,254 $113,995 $67,548 $191,283 $46,338 $- $441,418 Depreciation expense $34,531 $35,335 $15,549 $32,240 $17,817 $9,049 $144,521 Capital expenditures 22,430 29,860 18,276 47,006 14,410 2,653 $134,635 Total Assets as of December31, 2016: $389,482 $714,898 $312,423 $905,795 $495,225 $259,978 $3,077,801 Year ended December 31, 2015: Product sales $426,672 $533,931 $279,553 $704,109 $352,900 $- $2,297,165 Royalty revenues 11 - - 3,312 - - $3,323 Total revenue $426,683 $533,931 $279,553 $707,421 $352,900 $- $2,300,488 Gross Profit $58,626 $119,762 $88,625 $208,384 $66,823 $- $542,220 Segment Operating Income $21,366 $95,887 $68,410 $173,805 $44,863 $- $404,331 Depreciation expense $47,172 $35,526 $14,118 $30,576 $18,168 $8,780 $154,340 Capital expenditures 29,289 38,971 21,853 38,169 14,763 4,097 $147,142 Total Assets as of December31, 2015: $477,984 $718,548 $325,600 $839,249 $543,507 $248,098 $3,152,986 Year ended December 31, 2014: Product sales $470,377 $579,288 $258,248 $755,251 $425,593 $- $2,488,757 Royalty revenues 160 - - 4,365 - - $4,525 Total revenue $470,537 $579,288 $258,248 $759,616 $425,593 $- $2,493,282 Gross Profit $59,614 $132,021 $91,165 $241,090 $87,402 $- $611,292 Segment Operating Income $21,095 $106,068 $73,463 $203,343 $62,460 $- $466,429 Depreciation expense $53,939 $39,592 $13,266 $32,380 $20,524 $1,103 $160,804 Capital expenditures 33,672 41,713 23,008 42,950 12,694 2,937 $156,974 Total Assets as of December31, 2014: $499,550 $732,502 $422,257 $812,664 $605,281 $201,897 $3,274,151 ________________F-53Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 15 –Segment and Geographic Data (continued) Years ended December 31, 2016 2015 2014 Reconciliation: Segment Operating Income $441,418 $404,331 $466,429 Restructuring and Severance Costs (19,199) (19,215) (20,897)Impairment of Intangible Assets (1,559) (57,600) - Impairment of Goodwill - (5,380) - U.S. Pension Settlement Charges (79,321) - (15,588)Unallocated Selling, General, and Administrative Expenses (239,622) (224,337) (240,833)Consolidated Operating Income (Loss) $101,717 $97,799 $189,111 Unallocated Other Income (Expense) (7,501) (23,059) (21,968)Consolidated Income Before Taxes $94,216 $74,740 $167,143 See Note 4 for restructuring and severance costs segment information.The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographicarea: Years ended December 31, 2016 2015 2014 United States $542,506 $560,973 $590,145 Germany 746,657 719,246 821,005 Other Europe 83,744 88,553 107,598 Israel 10,007 12,597 13,871 Asia 940,517 919,119 960,663 $2,323,431 $2,300,488 $2,493,282 The following table summarizes property and equipment based on physical location: December 31, 2016 2015 United States $94,589 $94,512 Germany 120,223 122,817 Czech Republic 29,912 33,352 Other Europe 83,041 85,566 Israel 104,824 107,715 People's Republic of China 183,158 182,411 Republic of China (Taiwan) 124,724 126,780 Other Asia 105,400 109,815 Other 3,000 2,328 $848,871 $865,296 F-54Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 16 – Earnings Per ShareBasic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented.Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include thepotentially dilutive effect of stock options and restricted stock units (see Note 12), convertible debt instruments (see Note 6), and otherpotentially dilutive securities.The following table sets forth the computation of basic and diluted earnings per share attributable to Vishay stockholders (shares inthousands): Years ended December 31, 2016 2015 2014 Numerator: Numerator for basic earnings (loss) per share: Net earnings (loss) attributable to Vishay stockholders $48,792 $(108,514) $117,629 Interest savings assuming conversion of dilutive convertible and exchangeable notes,net of tax 38 - 59 Numerator for diluted earnings (loss) per share: Net earnings (loss) attributed to Vishay stockholders - diluted $48,830 $(108,514) $117,688 Denominator: Denominator for basic earnings (loss) per share: Weighted average shares 147,009 147,570 147,448 Outstanding phantom stock units 143 130 119 Adjusted weighted average shares - basic 147,152 147,700 147,567 Effect of dilutive securities: Convertible and exchangeable debt instruments 3,219 - 5,890 Restricted stock units 323 - 252 Other 3 - 7 Dilutive potential common shares 3,545 - 6,149 Denominator for diluted earnings (loss) per share: Adjusted weighted average shares - diluted 150,697 147,700 153,716 Basic earnings (loss) per share attributable to Vishay stockholders $0.33 $(0.73) $0.80 Diluted earnings (loss) per share attributable to Vishay stockholders $0.32 $(0.73) $0.77 F-55Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 16 – Earnings Per Share (continued)Diluted earnings per share for the years presented do not reflect the following weighted average potential common shares, as the effectwould be antidilutive (in thousands): Years ended December 31, 2016 2015 2014 Convertible and exchangeable notes: Convertible Senior Debentures, due 2040 10,312 20,477 - Convertible Senior Debentures, due 2041 8,249 8,151 7,944 Convertible Senior Debentures, due 2042 - 13,133 - Exchangeable Unsecured Notes, due 2102 - 2,512 - Weighted average employee stock options 91 105 77 Weighted average other 512 1,014 706 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. The convertible debenturesdue 2042 are convertible subsequent to the December 31, 2016 evaluation of the conversion criteria. In periods that the debentures arenot convertible, the certain conditions which could trigger conversion of the remaining debentures have been deemed to be non-substantive, and accordingly, the Company has always assumed the conversion of these instruments in its diluted earnings per sharecomputation 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 convertiblesenior debentures, due 2040, due 2041, and due 2042, 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 tooptions and warrants) rather than the "if converted method" otherwise required for convertible debt. Under the "treasury stockmethod," Vishay calculates the number of shares issuable under the terms of the debentures based on the average market price ofVishay common stock during the period, and that number is included in the total diluted shares figure for the period. If the averagemarket price is less than $13.14, no shares are included in the diluted earnings per share computation for the convertible seniordebentures due 2040, if the average market price is less than $18.00, no shares are included in the diluted earnings per sharecomputation for the convertible senior debentures due 2041, and if the average market price is less than $11.17, no shares are includedin the diluted earnings per share computation for the convertible senior debentures due 2042.F-56Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 17 – Additional Cash Flow InformationChanges in operating assets and liabilities, net of effects of businesses acquired consists of the following: Years ended December 31, 2016 2015 2014 Accounts receivable $(4,120) $(11,250) $(731)Inventories 13,760 (30,302) (23,753)Prepaid expenses and other current assets (12,180) (5,203) (5,031)Accounts payable 17,839 (13,419) 9,339 Other current liabilities (19,505) 32,925 (18,064)Net change in operating assets and liabilities $(4,206) $(27,249) $(38,240)F-57Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 18 – Fair Value MeasurementsThe fair value measurement accounting guidance establishes a valuation hierarchy of the inputs used to measure fair value. Thishierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a briefdescription of those three levels:Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Theseinclude quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets orliabilities in markets that are not active.Level 3: Unobservable inputs that reflect the Company's own assumptions.An asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair valuemeasurement.The following table provides the financial assets and liabilities carried at fair value measured on a recurring basis as of December 31,2016 and 2015: Total FairValue Level 1 Level 2 Level 3 December 31, 2016 Assets: Assets held in rabbi trusts $41,917 $27,297 $14,620 $- Available for sale securities $3,969 3,969 - - Non - U.S. Defined Benefit Pension Plan Assets: Equity securities $9,963 9,963 - - Fixed income securities $12,780 12,780 - - Cash $43,347 43,347 - - $111,976 $97,356 $14,620 $- Liabilities: Embedded derivative - convertible debentures due 2040 $(393) - - (393)Embedded derivative - convertible debentures due 2041 $(285) - - (285)Embedded derivative - convertible debentures due 2042 $(176) - - (176) $(854) $- $- $(854) December 31, 2015 Assets: Assets held in rabbi trusts $39,849 $25,906 $13,943 $- Available for sale securities $3,604 3,604 - - U.S. Defined Benefit Pension Plan Assets: Fixed income securities $255,804 254,555 1,249 - Cash $2,288 2,288 - - Non - U.S. Defined Benefit Pension Plan Assets: Equity securities $9,302 9,302 - - Fixed income securities $13,416 13,416 - - Cash $28,545 28,545 - - $352,808 $337,616 $15,192 $- Liabilities: Embedded derivative - convertible debentures due 2040 $(576) - - (576)Embedded derivative - convertible debentures due 2041 $(438) - - (438)Embedded derivative - convertible debentures due 2042 $(302) - - (302) $(1,316) $- $- $(1,316)Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.F-58Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 18 – Fair Value Measurements (continued)In accordance with ASC Subtopic 350-20, and as described in Note 3, the Company performed nonrecurring fair value measurementsof its indefinite-lived Siliconix tradenames and its Capacitors segment goodwill balance as of the last day of its third fiscal quarters of2016 and 2015, respectively. As a result of the fair value measurements, the Siliconix tradenames with a carrying value of $20,359were written down to their fair value of $18,800, resulting in an impairment charge of $1,559, and the goodwill of the Capacitorssegment with a carrying value of was $5,380 was written down to its implied value of zero, resulting in an impairment charge of$5,380 recorded in the accompanying consolidated statements of operations for the years ended December 31, 2016 and 2015,respectively.In accordance with ASC Subtopic 360-10, and as described in Note 3, the Company performed a nonrecurring fair value measurementof its Capella business long-lived intangible assets as of the last day of its third fiscal quarter of 2015. As a result of the fair valuemeasurement, the long-lived intangible assets of its Capella business with carrying values of $68,500, were written down to their fairvalues of $10,900, resulting in a total impairment charge of $57,600, recorded in the accompanying consolidated statement ofoperations for the year ended December 31, 2015.The Company's nonrecurring fair value measurements of its Siliconix tradenames, goodwill, and long-lived intangible assets areconsidered Level 3 measurements. See Note 3 for further information on the measurements and inputs.The Company maintains non-qualified trusts, referred to as "rabbi" trusts, to fund payments under deferred compensation and non-qualified pension plans. Rabbi trust assets consist primarily of marketable securities, classified as available-for-sale, and company-owned life insurance assets. The marketable securities held in the rabbi trusts are valued using quoted market prices on the last businessday of the year. The company-owned life insurance assets are valued in consultation with the Company's insurance brokers using thevalue of underlying assets of the insurance contracts. The fair value measurement of the marketable securities held in the rabbi trust isconsidered a Level 1 measurement and the measurement of the company-owned life insurance assets is considered a Level 2measurement within the fair value hierarchy.The Company maintains defined benefit retirement plans in certain of its U.S. and non-U.S. subsidiaries. The assets of the plans aremeasured at fair value.Equity securities held by the U.S. defined benefit retirement plans consist of various mutual funds and exchange traded funds that arevalued based on quoted market prices on the last business day of the year. The fair value measurement of the mutual funds andexchange traded funds securities is considered a Level 1 measurement within the fair value hierarchy.Fixed income securities held by the U.S. defined benefit retirement plans consist of exchange traded funds and a short-term investmentfund. The exchange traded funds are valued based on quoted market prices on the last business day of the year. The fair valuemeasurement of the exchange traded funds securities is considered a Level 1 measurement within the fair value hierarchy. The short-term investment fund strictly invests in short-term investments, including commercial paper, certificates of deposit, U.S. governmentagency and instrumentality obligations, U.S. government obligations, corporate notes, and funding agreements. The maturity date of allinvestments held by the short-term investment fund is within one year from the financial statement date. There are no redemptionrestrictions on the plan's investment. The fair value of the short-term investment fund has been estimated using the net asset value pershare of the investment. The fair value measurement of the short-term investment fund is considered a Level 2 measurement within thefair value hierarchy.Equity securities held by the non-U.S. defined benefit retirement plans consist of equity securities that are valued based on quotedmarket prices on the last business day of the year. The fair value measurement of the equity securities is considered a Level 1measurement within the fair value hierarchy.Fixed income securities held by the non-U.S. defined benefit retirement plans consist of government bonds in the Philippines and Indiaand corporate notes that are valued based on quoted market prices on the last business day of the year. The fair value measurement ofthe fixed income securities is considered a Level 1 measurement within the fair value hierarchy.Cash held by the U.S. and non-U.S. defined benefit retirement plans consists of demand deposits on account in various financialinstitutions to fund current benefit payments. The carrying amount of the cash approximates its fair value.The Company holds available for sale investments in debt securities that are intended to fund a portion of its pension and otherpostretirement benefit obligations outside of the U.S. The investments are valued based on quoted market prices on the last businessSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.day of the year. The fair value measurement of the investments is considered a Level 1 measurement within the fair value hierarchy.The convertible senior debentures, due 2040, due 2041, and due 2042, issued by the Company on November 9, 2010, May 13, 2011,and May 31, 2012, respectively, contain embedded derivative features that GAAP requires to be bifurcated and remeasured eachreporting period. Each quarter, the change in the fair value of the embedded derivative features, if any, is recorded in the consolidatedstatements of operations. The Company uses a derivative valuation model to derive the value of the embedded derivative features. Keyinputs into this valuation model are the Company's current stock price, risk-free interest rates, the stock dividend yield, the stockvolatility, and the debentures' credit spread over London Interbank Offered Rate (LIBOR). The first three aforementioned inputs arebased on observable market data and are considered Level 2 inputs while the last two aforementioned inputs are unobservable and thusrequire management's judgment and are considered Level 3 inputs. The fair value measurement is considered a Level 3 measurementwithin the fair value hierarchy.F-59Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 18 – Fair Value Measurements (continued)The Company enters into forward contracts with highly-rated financial institutions to mitigate the foreign currency risk associated withintercompany loans denominated in a currency other than the legal entity's functional currency. The notional amount of the forwardcontracts was $100,000 and $29,000 as of December 31, 2016 and 2015, respectively. The forward contracts are short-term in natureand are expected to be renewed at the Company's discretion until the intercompany loans are repaid. We have not designated theforward contracts as hedges for accounting purposes, and as such the changes in the fair value of the contracts are recognized on theconsolidated statements of operations as a component of other income (expense). The Company estimates the fair value of the forwardcontracts based on applicable and commonly used pricing models using current market information and is considered a Level 2measurement within the fair value hierachy. Due to the timing of the renewal of the forward contracts, the value of the forwardcontracts were immaterial as of December 31, 2016 and 2015. The Company does not utilize derivatives or other financial instrumentsfor trading or other speculative purposes.The fair value of the long-term debt, excluding the derivative liability and capitalized deferred financing costs, at December 31, 2016and 2015 is approximately $860,600 and $756,900, respectively, compared to its carrying value, excluding the derivative liability andcapitalized deferred financing costs, of $367,049 and $448,080, respectively. The Company estimates the fair value of its long-termdebt using a combination of quoted market prices for similar financing arrangements and expected future payments discounted at risk-adjusted rates, which are considered level 2 inputs.At December 31, 2016 and 2015, the Company's short-term investments were comprised of time deposits with financial institutionsthat have maturities that exceed 90 days from the date of acquisition; however they all mature within one year from the respectivebalance sheet dates. The Company's short-term investments are accounted for as held-to-maturity debt instruments, at amortized cost,which approximates their fair value. The investments are funded with excess cash not expected to be needed for operations prior tomaturity; therefore, the Company believes it has the intent and ability to hold the short-term investments until maturity. At eachreporting date, the Company performs an evaluation to determine if any unrealized losses are other-than-temporary. No other-than-temporary impairments have been recognized on these securities, and there are no unrecognized holding gains or losses for thesesecurities during the periods presented. There have been no transfers to or from the held-to-maturity classification. All decreases in theaccount balance are due to returns of principal at the securities' maturity dates. Interest on the securities is recognized as interest incomewhen earned.At December 31, 2016 and 2015, the Company's cash and cash equivalents were comprised of demand deposits, time deposits withmaturities of three months or less when purchased, and money market funds. The Company estimates the fair value of its cash, cashequivalents, and short-term investments using level 2 inputs. Based on the current interest rates for similar investments with comparablecredit risk and time to maturity, the fair value of the Company's cash, cash equivalents, and held-to-maturity short-term investmentsapproximate the carrying amounts reported on the consolidated balance sheets.The Company's financial instruments also include accounts receivable, short-term notes payable, and accounts payable. The carryingamounts for these financial instruments reported on the consolidated balance sheets approximate their fair values.F-60Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 19 – Related Party TransactionsVishay Precision Group, Inc.On July 6, 2010, Vishay completed the spin-off of its measurements and foil resistors businesses into an independent, publicly-tradedcompany to be named Vishay Precision Group, Inc. through a tax-free stock dividend to Vishay's stockholders. Vishay's commonstockholders received 1 share of VPG common stock for every 14 shares of Vishay common stock they held on the record date, June25, 2010, and Vishay's Class B common stockholders received 1 share of VPG Class B common stock for every 14 shares of VishayClass B common stock they held on the record date.Following the spin-off, VPG is an independent company and Vishay retains no ownership interest.Relationship with VPG after Spin-offFollowing the spin-off, VPG and Vishay operate separately, each as independent public companies. Vishay has no ownership interestin VPG. However, Ruta Zandman solely or on a shared basis with Marc Zandman and Ziv Shoshani, all of whom are members ofVishay's Board of Directors, control a large portion of the voting power of both Vishay and VPG. Marc Zandman, Vishay's ExecutiveChairman of the Board and an executive officer of Vishay, serves as the Chairman of VPG. Ziv Shoshani, CEO of VPG, serves as adirector of Vishay. Additionally, Timothy V. Talbert, a member of Vishay's Board of Directors is also a member of the Board ofDirectors of VPG.In connection with the completion of the spin-off, Vishay and its subsidiaries entered into several agreements with VPG and itssubsidiaries that govern the relationship of the parties following the spin-off. Among the agreements entered into with VPG and itssubsidiaries were a transition services agreement, several lease agreements, and supply agreements. None of the agreements have hadnor are expected to have a material impact on Vishay's financial position, results of operations, or liquidity. Some of these agreementshave expired and have not been renewed.Vishay also entered into a trademark license agreement with VPG pursuant to which Vishay granted VPG the license to use certaintrademarks, service marks, logos, trade names, entity names, and domain names which include the term "Vishay." The license grantedVPG the limited, exclusive, royalty-free right and license to use certain marks and names incorporating the term "Vishay" inconnection with the design, development, manufacture, marketing, provision and performance of certain VPG products that do notcompete with any products within Vishay's product range as constituted immediately following the separation and certain servicesprovided in connection with the products. The license cannot be terminated except as a result of willful misconduct or liquidationbankruptcy of VPG.Until the spin-off, VPG was included in Vishay's consolidated federal income tax returns and with Vishay and/or certain of Vishay'ssubsidiaries in applicable combined or unitary state and local income tax returns. In conjunction with the spin-off, Vishay and VPGentered a tax matters agreement under which Vishay generally will be liable for all U.S. federal, state, local, and foreign income taxesattributable to VPG with respect to taxable periods ending on or before the distribution date except to the extent that VPG has aliability for such taxes on its books at the time of the spin-off. Vishay is also principally responsible for managing any income taxaudits by the various tax jurisdictions for pre-spin-off periods. Vishay has fully indemnified VPG of tax exposures arising prior to thespin-off.F-61Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(dollars in thousands, except per share amounts)Note 20 – Summary of Quarterly Financial Information (Unaudited) 2016 2015 First Second Third Fourth First Second Third Fourth Statement of Operations data: Net revenues $570,606 $590,051 $591,955 $570,819 $593,436 $590,470 $560,654 $555,928 Gross profit 137,309 146,128 153,901 132,445 145,038 141,482 130,144 125,556 Operating income (loss) 40,548 49,408 57,229 (45,468) 47,558 44,170 (24,155) 30,226 Net earnings (loss) 28,152 33,229 36,596 (48,604) 30,925 26,518 (27,550) (137,626)Net earnings (loss)attributable tononcontrolling interests 138 143 156 144 226 250 116 189 Net earnings (loss)attributable to Vishaystockholders 28,014 33,086 36,440 (48,748) 30,699 26,268 (27,666) (137,815) Per Share data: Basic earnings (loss) pershare attributable toVishay stockholders (a) $0.19 $0.22 $0.25 $(0.33) $0.21 $0.18 $(0.19) $(0.93) Diluted earnings (loss) pershare attributable toVishay stockholders (a) $0.19 $0.22 $0.24 $(0.33) $0.20 $0.17 $(0.19) $(0.93) Certain Items Recorded during the Quarters: Operating income (loss): Restructuring andseverance costs $6,475 $4,467 $1,197 $7,060 $1,410 $5,660 $2,324 $9,821 Impairment of intangibleassets - - 1,559 - - - 57,600 - Impairment of goodwill - - - - - - 5,380 - U.S. pension settlementcharges - - - 79,321 - - - - Other income (expense): Gain on earlyextinguishment of debt $3,611 $986 $- $- $- $- $- $- Gain (loss) related toTianjin explosion - - - 8,809 - - (5,350) - Income tax expense: Tax effects of cashrepatriation program $(769) $(1,217) $(1,402) $(165) $- $- $- $163,954 Additional tax expensefrom AOCI - pensionplan - - - 34,853 - - - - Tax effects of changes inuncertain tax posistions - - - (8,704) - - - (2,629)Tax effects of changes invaluation allowances - - - - - - - (8,888) Quarter end date (b) April 2 July 2 October 1 December31 April 4 July 4 October 3 December31 Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.(a) May not add due to differences in weighted average share counts.(b) The Company reports interim financial information for 13-week periods beginning on a Sunday and ending on a Saturday, except for the first fiscalquarter, which always begins on January 1, and the fourth fiscal quarter, which always ends on December 31.F-62Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 21SUBSIDIARIES OF THE REGISTRANTNote: Names of Subsidiaries are indented under name of Parent. Subsidiaries are wholly owned unless otherwise noted. (Directors' orother shares required by statute in foreign jurisdictions and totaling less than 1% of equity are omitted.) Vishay Americas, Inc.Delaware Vishay Americas do Brasil, LTDABrazil Vishay Insurance, DACIreland Vishay France Holdings SASFrance Vishay MCB Industrie S.A.S.France Vishay Dale Electronics, LLCDelaware Electronica Dale de Mexico S.A. de C.V.Mexico Vishay HiRel Systems LLCDelaware Vishay HiRel Systems International, LLCDelaware Vishay HiRel Systems Asia LimitedHong Kong Vishay Sprague, Inc.Delaware Vishay Sprague Canada Holdings Inc.Canada Sprague Electric of Canada, Ltd.Canada Siliconix incorporatedDelaware Vishay Siliconix, LLCDelaware Siliconix Semiconductor, Inc.Delaware Siliconix Technology C.V.Netherlands(a)Vishay Siliconix Electronic Co. Ltd.The Republic of China (Taiwan) Shanghai Simconix Electronic Company Ltd.China(b)Vishay Semiconductor Italiana S.p.A.Italy Vishay Asia Logistics Pte. Ltd.Singapore Vishay Semiconductor India Pvt. Ltd.India Siliconix Singapore Pte LtdSingapore Vishay GSI, Inc.Delaware Vishay GSI Holdings, LLCDelaware Vishay General Semiconductor, L.P.Cayman Islands(c)Vishay General Semiconductor, LLCDelaware Vishay General Semiconductor of Taiwan, Ltd.The Republic of China (Taiwan) Vishay Asia GS Investments Pte., Ltd.Singapore ATC Corp.Delaware General Semiconductor Hong Kong Ltd.Hong Kong Vishay BCcomponents Holdings Ltd.Delaware Vishay BCcomponents B.V.Netherlands Vishay Capacitors Belgium NVBelgium Vishay Resistors Belgium BVBABelgium Vishay Components India Pvt. LtdIndia(d)Vishay BCcomponents Hong Kong Ltd.Hong Kong BCcomponents China LtdHong Kong Vishay Components (Huizhou) Co. Ltd.China(e)Vishay Intertechnology Asia Pte Ltd.Singapore Vishay Hong Kong Ltd.Hong Kong Vishay Japan K.K.Japan Vishay Korea Co. Ltd.Korea Vishay (Taiwan) Ltd.The Republic of China (Taiwan) Vishay Malaysia Sdn. Bhd.Malaysia Vishay Dutch Holdings B.V.Netherlands Vishay Capella Microsystems (Taiwan) LimitedThe Republic of China (Taiwan)(f) Capella Microsystems, Inc.California Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Subsidiaries of the Registrant (continued)Vishay Israel LimitedIsrael Z.T.R. Electronics Ltd.Israel ECOMAL Israel Ltd.Israel(g) Vishay Polytech Co. Ltd.JapanVishay Europe GmbHGermany(h)Vishay Europe Sales GmbHGermany Vishay BCcomponents Austria GmbHAustria Vishay Electronic GmbHGermany Vishay Siliconix Itzehoe GmbHGermany Roederstein Electronica Portugal Lda.Portugal(i)ECOMAL Europe GmbHGermany ECOMAL Sweden ABSweden ECOMAL Schweiz A.G.Switzerland ECOMAL Austria GmbHAustria Vishay Components, S.A.Spain ECOMAL Iberia S.A.U.Spain ECOMAL Nederland BVNetherlands ECOMAL Belgium BVBABelgium ECOMAL Ceska republika S.r.O.Czech Republic ECOMAL Denmark A/SDenmark ECOMAL Finland OYFinland ECOMAL France S.A.S.France ECOMAL UK Ltd.United Kingdom ECOMAL Italy s.r.l.Italy ECOMAL Elektronske Komponente d.o.o.Slovenia Vishay Electronic SPOL SROCzech Republic Ecomal Poland Sp. Z.o.o.Poland Ecomal Hungary Kft.Hungary Vishay S.A.France(j)Ultronix, Inc.Delaware E-Sil Components Ltd.United Kingdom Vishay Ltd.United Kingdom Vishay Semiconductor GmbHGermany Vishay (Phils.) Inc.Philippines Vishay Semiconductor Ges.mbHAustria(k)Vishay Asia Semiconductor Investments Pte. Ltd.Singapore Vishay Singapore Pte. Ltd.Singapore(l)Shanghai Vishay Semiconductors Ltd.China General Semiconductor (China) Co., Ltd.China Vishay Xi'an Micro-Electronics Co. Ltd.China Vishay China Co. Ltd.China Vishay HiRel Systems Zhuhai Electronics Co LtdChina Vishay Hungary Elektronikai KFTHungary Vishay Semiconductor Malaysia Sdn BhdMalaysia Vishay Phoenix do Brasil LtdaBrazil(m) Vishay Beyschlag Holding GmbHGermany Vishay BCcomponents Beyschlag GmbHGermany Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Subsidiaries of the Registrant (continued)(a) -Registrant's indirect ownership percentage in Siliconix Technology C.V. is 100%; 89% is owned by its wholly ownedsubsidiary Siliconix Incorporated, 10% is owned by its indirectly wholly owned subsidiary Siliconix Semiconductor, Inc., and1% is owned by its indirect wholly owned subsidiary Vishay Siliconix LLC.(b) -Registrant's indirect ownership percentage in Shanghai Simconix Electronic Company Ltd. is 96%.(c) -Registrant's indirect ownership percentage in Vishay General Semiconductor, L.P. is 100%; 1% is owned by its indirectlywholly owned subsidiary Vishay GSI Holdings, LLC, and 99% is owned by its wholly owned subsidiary Vishay GSI, Inc.(d) -Registrant's indirect ownership percentage in Vishay Components India Pvt Ltd. is 100%; 69% is owned directly and 31% isowned by its indirectly wholly owned subsidiary Vishay BCcomponents B.V.(e) -Registrant's indirect ownership percentage in Vishay Components (Huizhou) Co. Ltd. is 100%; 50% is owned by its indirectlywholly owned subsidiary BCcomponents China Ltd and 50% is owned by its indirectly wholly owned subsidiary VishayChina Co. Ltd.(f) -Registrant's indirect ownership percentage in Vishay Capella Microsystems (Taiwan) Limited is 100%, over 99.9% is ownedby its directly wholly owned subsidiary Vishay Dutch Holdings B.V. and less than 0.1% is owned directly.(g) -Registrant's indirect ownership percentage in Ecomal Israel Ltd. is 66.7%.(h) -Registrant's indirect ownership percentage in Vishay Europe GmbH is 100%; over 99.9% is owned directly or indirectly by itswholly owned subsidiary Vishay Israel Limited and its affiliates; and less than 0.1% is owned directly.(i) -Registrant's indirect ownership percentage in Roederstein Electronics Portugal Lda.is 100%; 70% is owned by its indirectlywholly owned subsidiary Vishay Europe GmbH and 30% is owned by its indirectly wholly owned subsidiary VishayElectronic GmbH.(j) -Registrant's indirect ownership percentage in Vishay S.A. is 99.9%.(k) -Registrant's indirect ownership percentage in Vishay Semiconductor Ges.mbH is 100%, 54% is owned by its indirectly whollyowned subsidiary Sprague Electric of Canada and 46% is owned by its indirectly wholly owned subsidiary VishaySemiconductor GmbH.(l) -Registrant's indirect ownership percentage in Vishay Singapore Pte. Ltd. is 100%, 48% is owned by its indirectly whollyowned subsidiary Vishay Asia Semiconductor Investments Pte. Ltd., 26% is owned by its indirectly wholly owned subsidiaryVishay Asia Semiconductor GS Investments Pte. Ltd., and 26% is owned by its indirectly wholly owned subsidiary SiliconixTechnology C.V.(m) -Registrant's indirect ownership percentage in Vishay Phoenix do Brazil LTDA is 100%, over 99.9% is owned by its indirectlywholly owned subsidiary Vishay Europe GmbH and less than 0.1% is owned by its indirectly wholly owned subsidiaryVishay Electronic GmbH. Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the following Registration Statements and in the related Prospectuses of VishayIntertechnology, Inc. of our reports dated February 17, 2017, with respect to the consolidated financial statements of VishayIntertechnology, Inc. and the effectiveness of internal control over financial reporting of Vishay Intertechnology, Inc., included in thisAnnual Report (Form 10-K) of Vishay Intertechnology, Inc. for the year ended December 31, 2016.RegistrationStatement NumberFormDescription 333-78045S-81997 Stock Option Program and 1998 Employee Stock Option Program ofVishay Intertechnology, Inc.333-144466S-82007 Stock Incentive Program of Vishay Intertechnology, Inc.333-178895S-8Vishay Intertechnology, Inc. Deferred Compensation Plan 333-196143S-82007 Stock Incentive Program of Vishay Intertechnology, Inc./s/ Ernst & Young LLP Philadelphia, Pennsylvania February 17, 2017Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 31.1CERTIFICATIONSI, Dr. Gerald Paul, certify that:1.I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred duringthe registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and reportfinancial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting.Date: February 17, 2017/s/ Gerald PaulDr. Gerald PaulChief Executive OfficerSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 31.2CERTIFICATIONSI, Lori Lipcaman, certify that:1.I have reviewed this Annual Report on Form 10-K of Vishay Intertechnology, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred duringthe registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and reportfinancial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting.Date: February 17, 2017/s/ Lori LipcamanLori LipcamanChief Financial OfficerSource: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dr. Gerald Paul, Chief ExecutiveOfficer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of2002, that:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company./s/ Gerald PaulDr. Gerald PaulChief Executive OfficerFebruary 17, 2017Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Vishay Intertechnology, Inc. (the "Company") on Form 10-K for the year ended December31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lori Lipcaman, Chief FinancialOfficer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of2002, that:(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company./s/ Lori LipcamanLori LipcamanChief Financial OfficerFebruary 17, 2017Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: VISHAY INTERTECHNOLOGY INC, 10-K, February 17, 2017Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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